SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
For Registration of Certain Classes of Securities
Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934
THE YORK WATER COMPANY
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1242500
(State of incorporation (I.R.S. Employer
or organization) Identification No.)
130 Market Street
York, Pennsylvania 17405
(Address of principal executive offices) (Zip Code)
If this Form relates to the registration of a class of debt
securities and is effective upon filing pursuant to General
Instruction A(c)(1), please check the following box.
If this Form relates to the registration of a class of debt
securities and is to become effective simultaneously with the
effectiveness of a concurrent registration statement under the
Securities Act of 1933 pursuant to General Instruction A(c)(2),
please check the following box.
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None None
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Stock Purchase Rights
(Title of class)<PAGE>
Item 1. Description of Registrant's Securities to be
Registered.
On January 25, 1999, the Board of Directors of The York
Water Company (the "Company") declared a dividend distribution of
one Right for each outstanding share of Common Stock (each, a
"Common Share"), of the Company to shareholders of record at the
close of business on February 1, 1999. Each Right entitles the
registered holder under the circumstances described herein to
purchase from the Company a unit consisting of one one-hundredth
of a share (a "Unit") of the Series A Junior Participating
Preferred Stock, no par value, of the Company (the "Preferred
Shares"), or a combination of securities and assets of equivalent
value, at a Purchase Price of $75.00 per Unit, subject to
adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the
Company and American Stock Transfer & Trust Company, as Rights
Agent.
Initially, ownership of the Rights will be evidenced by
the Common Share certificates representing shares then
outstanding, and no separate Rights Certificates will be
distributed. The Rights will separate from the Common Shares and
a distribution date will occur (a "Distribution Date") upon the
earlier of (i) ten business days following a public announcement
that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to
acquire, beneficial ownership of 15% or more of the outstanding
Common Shares (the "Stock Acquisition Date"), or (ii) within ten
business days (or such later date as may be determined by the
Board of Directors prior to such time as any person or group of
affiliated persons becomes an Acquiring Person) following the
commencement of a tender offer or exchange offer that would
result in a person or group beneficially owning 15% or more of
the outstanding Common Shares. Until the Distribution Date, (i)
the Rights will be evidenced by the Common Share certificates and
will be transferred with and only with such Common Share
certificates, (ii) new Common Share certificates issued after
January 25, 1999 will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of
any certificates for Common Shares outstanding will also
constitute the transfer of the Rights associated with the Common
Shares represented by such certificate.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on January 24,
2009, unless earlier redeemed by the Company as described below
or unless a transaction under Section 13(d) of the Rights
Agreement has occurred.
As soon as practicable after the Distribution Date,
Rights Certificates will be mailed to holders of record of the
Common Shares as of the close of business on the Distribution
Date and, thereafter, the separate Rights Certificates alone will
represent the Rights. Except as otherwise determined by the
Board of Directors and except in connection with the employee
stock purchase plan and dividend reinvestment plan, only Common
Shares issued after January 25, 1999 and prior to the
Distribution Date will be issued with Rights.
Except in the circumstances described below, after the
Distribution Date each Right will be exercisable into one one-
hundredth of a Preferred Share (a "Preferred Share Fraction").
Each Preferred Share Fraction carries voting and dividend rights
that are intended to produce the equivalent of one Common Share.
The voting and dividend rights of the Preferred Shares are
subject to adjustment in the event of dividends, subdivisions and
combinations with respect to the Common Shares of the Company.
In lieu of issuing certificates for Preferred Share Fractions
which are less than an integral multiple of one Preferred Share
(i.e. 100 Preferred Share Fractions), the Company may pay cash
representing the current market value of the Preferred Share
Fractions.
In the event that at any time following the Stock
Acquisition Date, (i) the Company is the surviving corporation in
a merger with an Acquiring Person and its Common Shares remain
outstanding, (ii) a person becomes the beneficial owner of more
than 15% of the then outstanding Common Shares other than
pursuant to a tender offer, share exchange or exchange offer that
provides fair value to all shareholders, (iii) an Acquiring
Person engages in one or more "self-dealing" transactions as set
forth in the Rights Agreement, or (iv) during such time as there
is an Acquiring Person an event occurs that results in such
Acquiring Person's ownership interest being increased by more
than 1% (e.g., a reverse stock split), each holder of a Right
will thereafter have the right to receive, upon exercise, Common
Shares (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to approximately
two times the exercise price of the Right. In lieu of requiring
payment of the Purchase Price upon exercise of the Rights
following any such event, the Company may permit the holders
simply to surrender the Rights, in which event they will be
entitled to receive Common Shares (and other property, as the
case may be) with a value equal to approximately 50% of what
could be purchased by payment of the full Purchase Price.
Notwithstanding any of the foregoing, following the occurrence of
any of the events set forth in clauses (i), (ii), (iii) or (iv)
of this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person who was involved in
the transaction giving rise to any such event will be null and
void. However, Rights are not exercisable following the
occurrence of any of the events set forth above until such time
as the Rights are no longer redeemable by the Company as set
forth below.
For example, at an exercise price of $75.00 per Right,
each Right not otherwise voided following an event set forth in
the preceding paragraph would entitle its holder to purchase
approximately $150.00 worth of Common Shares (or other
consideration, as noted above) for $75.00. Assuming that the
Common Shares had a per share market value of $20.00 at such
time, the holder of each valid Right would be entitled to
purchase 7.5 Common Shares for $75.00. Alternatively, the
Company could elect to issue Common Shares (with a value of
$75.00) without the payment of any consideration other than the
surrender of the Right.
In the event that, at any time following the Stock
Acquisition Date, (i) the Company is acquired in a merger or
other business combination transaction in which the Company is
not the surviving corporation (other than a merger effected
pursuant to or following completion of a Qualified Offer), or
(ii) 50% or more of the Company's assets or earning power is sold
or transferred, each holder of a Right (except Rights that
previously have been voided as set forth above) shall thereafter
have the right to receive, upon exercise, common shares of the
acquiring company having a value equal to approximately two times
the exercise price of the Right. Similar provision is made to
permit surrender of the Rights in exchange for approximately
one-half of the value otherwise purchasable. The events set
forth in this paragraph and in the second preceding paragraph are
referred to as the "Triggering Events."
The Purchase Price payable, and the number of Units of
Preferred Shares or other securities or property issuable upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) if holders of the Preferred Shares are
granted certain rights or warrants to subscribe for Preferred
Shares or convertible securities at less than the current market
price of the Preferred Shares, or (iii) upon the distribution to
holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular quarterly dividends) or of subscription
rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments amount to at
least 1% of the Purchase Price. No fractional Units will be
issued and, in lieu thereof, an adjustment in cash will be made
based on the market price of the Preferred Shares on the last
trading date prior to the date of exercise.
At any time until ten days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but
not in part, at a price of $0.01 per Right. Such ten-day
redemption period may be extended by the Board of Directors from
time to time so long as the Rights are still redeemable.
Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and the only
right of the holders of Rights will be to receive the $0.01
redemption price.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a shareholder of the Company, including,
without limitation, the right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to
shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the
Rights become exercisable for Preferred Shares (or other
consideration) of the Company or for common shares of the
acquiring company as set forth above.
Other than those provisions relating to the principal
economic terms of the Rights, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Company
prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board in
order to cure any ambiguity, to make changes that do not
adversely affect the interests of holders of Rights (excluding
the interests of any Acquiring Person), or to shorten or lengthen
any time period under the Rights Agreement; provided, however,
that no amendment to adjust the time period governing redemption
shall be made at such time as the Rights are not redeemable.
Under certain circumstances set forth in the Rights Agreement,
amendments will require the concurrence of a majority of the
Continuing Directors.
The issuance of the Preferred Shares upon exercise of
the Rights and the Common Shares upon conversion of the Preferred
Shares is conditioned on the registration by the Company of one
or more securities certificates with the Pennsylvania Public
Utility Commission ("PPUC"). On January 26, 1999, the Company
filed two securities certificates with the PPUC covering 250,000
Preferred Shares and 25,000,000 Common Shares of the Company,
respectively. The Rights may not be exercised pending
registration of such securities certificates by the PPUC. In
addition, the Company must obtain the approval of its
shareholders to an amendment to its articles of incorporation to
increase the number of authorized Common Shares to permit the
conversion of the Preferred Shares issuable upon exercise of the
Rights. The Company intends to seek shareholder approval of an
increase in the number of authorized Common Shares at its 1999
annual meeting of shareholders scheduled for May 1999. Pending
approval of such an increase, the Rights Agreement requires the
Company to issue securities of equivalent value upon exercise of
the Rights.
A copy of the Rights Agreement is being filed with the
Securities and Exchange Commission as an Exhibit to this
Registration Statement on Form 8-A. This summary description of
the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
Item 2. Exhibits.
1. Rights Agreement, dated as January 25, 1999, between
The York Water Company and American Stock Transfer &
Trust Company, as Rights Agent, which includes, as
Exhibit A thereto, the Certificate of Designation with
respect to Series A Junior Participating Preferred
Stock, as Exhibit B thereto, the form of Rights
Certificate and as Exhibit C thereto, the Summary of
Rights.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the registrant has duly caused
this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE YORK WATER COMPANY
By: /s/ William T. Morris
Name: William T. Morris
Title: President & CEO
Dated: January 26, 1999
<PAGE>
Exhibit Index
Exhibit Sequentially
Number Description Numbered Page
1. Rights Agreement, dated as of January
25, 1999, between The York Water
Company and American Stock Transfer &
Trust Company, as Rights Agent, which
includes, as Exhibit A thereto, the
Certificate of Designation of the
Board of Directors with respect to
Series A Junior Participating
Preferred Stock, as Exhibit B thereto,
the form of Rights Certificate and as
Exhibit C thereto, the Summary of
Rights.
<PAGE>
EXHIBIT 1
THE YORK WATER COMPANY
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Rights Agent
RIGHTS AGREEMENT
Dated as of January 25, 1999
<PAGE>
Table of Contents
Section Page
1. Certain Definitions. . . . . . . . . . . . . . . . . . . . 1
2. Appointment of Rights Agent. . . . . . . . . . . . . . . . 4
3. Issue of Rights Certificates. . . . . . . . . . . . . . . 5
4. Form of Rights Certificates. . . . . . . . . . . . . . . . 6
5. Countersignature and Registration. . . . . . . . . . . . . 7
6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates . . . . . . . . . . . . . . . . . . . . . . . 7
7. Exercise of Rights; Purchase Price; Expiration Date of
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 8
8. Cancellation and Destruction of Rights Certificates. . . . 9
9. Reservation and Availability of Capital Stock;
Registration of Securities . . . . . . . . . . . . . . . . 10
10. Preferred Share Record Date . . . . . . . . . . . . . . . 10
11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights . . . . . . . . . . . . . . . . . . . . . 11
12. Certificate of Adjusted Purchase Price or Number of Shares 17
13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. . . . . . . . . . . . . . . . . . . . . . . 17
14. Fractional Rights and Fractional Shares. . . . . . . . . . 18
15. Rights of Action . . . . . . . . . . . . . . . . . . . . . 19
16. Agreement of Rights Holders. . . . . . . . . . . . . . . . 20
17. Rights Certificate Holder Not Deemed a Shareholder . . . . 20
18. Concerning the Rights Agent. . . . . . . . . . . . . . . . 21
19. Merger or Consolidation or Change of American Stock
Transfer & Trust Company . . . . . . . . . . . . . . . . . 21
20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . 22
<PAGE>
21. Change of Rights Agent. . . . . . . . . . . . . . . . . . 24
22. Issuance of New Rights Certificates . . . . . . . . . . . 24
23. Redemption. . . . . . . . . . . . . . . . . . . . . . . . 25
24. Exchange. . . . . . . . . . . . . . . . . . . . . . . . . 26
25. Notice of Certain Events. . . . . . . . . . . . . . . . . 27
26. Notices. . . . . . . . . . . . . . . . . . . . . . . . . 28
27. Supplements and Amendments. . . . . . . . . . . . . . . . 29
28. Successors. . . . . . . . . . . . . . . . . . . . . . . . 29
29. Benefits of this Agreement. . . . . . . . . . . . . . . . 29
30. Severability. . . . . . . . . . . . . . . . . . . . . . . 29
31. Governing Law. . . . . . . . . . . . . . . . . . . . . . 29
32. Counterparts. . . . . . . . . . . . . . . . . . . . . . . 30
33. Descriptive Headings. . . . . . . . . . . . . . . . . . . 30
Exhibit A Form of Certificate of Designations
Exhibit B Form of Rights Certificate
Exhibit C Summary of Rights
<PAGE>
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of January 25, 1999 (the
"Agreement"), between THE YORK WATER COMPANY, a Pennsylvania
corporation (the "Company"), and AMERICAN STOCK TRANSFER & TRUST
COMPANY (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on January 25, 1999 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company
authorized and declared a dividend distribution of one Right for
each Common Share (as hereinafter defined) of the Company
outstanding at the close of business on February 1, 1999 (the
"Record Date") (which for these purposes shall include all Common
Shares presently entitled to receive dividends) and has
authorized the issuance of one Right for each Common Share of the
Company issued between the Record Date (whether originally issued
or delivered from the Company's treasury) and the Distribution
Date (as hereinafter defined), each Right initially representing
the right to purchase one one-hundredth of a Preferred Share (as
hereinafter defined) of the Company having the rights, powers and
preferences set forth in the form of Certificate of Designations
attached hereto as Exhibit A, upon the terms and subject to the
conditions hereinafter set forth (the "Rights"); and
WHEREAS, the Board of Directors of the Company has considered
whether approval of this Agreement and the distribution of the
Rights is in the best interests of the Company and all other
pertinent factors; and
WHEREAS, the Board of Directors of the Company has concluded
that approval of this Agreement and the distribution of the
Rights is in the best interests of the Company because the
existence of the Rights will help (i) reduce the risk of coercive
two-tiered, front-end loaded or partial offers that may not offer
fair value to all shareholders, (ii) mitigate against market
accumulators who through open market and/or private purchases may
achieve a position of substantial influence or control without
paying to selling or remaining shareholders a fair control
premium, (iii) deter market accumulators who are simply
interested in putting the Company into "play," (iv) restrict
self-dealing by a substantial shareholder, and (v) preserve the
Board of Directors' bargaining power and flexibility to deal with
third-party acquirors, to pursue the business strategies of the
Company and to otherwise seek to maximize long-term values for
all shareholders.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, and intending to be legally
bound hereby, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who
or which, together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of 15% or more of the
Common Shares then outstanding, but shall not include the
Company, any Subsidiary of the Company, any employee benefit plan
of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for
or pursuant to the terms of any such plan. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the
result of an acquisition of Common Shares by the Company which,
by reducing the number of Common Shares outstanding, increases
the proportionate number of Common Shares beneficially owned by
such Person to 15% or more of the Common Shares then outstanding;
provided, however, that if a Person shall become the Beneficial
Owner of 15% or more of the then outstanding Common Shares by
reason of Common Shares purchased by the Company and shall, after
such share purchases by the Company, become the Beneficial Owner
of any additional Common Shares, then such Person shall be deemed
to be an "Acquiring Person." Notwithstanding the foregoing, if a
majority of the Directors then in office 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 a sufficient number of Common Shares 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 to be an "Acquiring
Person" for purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as amended and in effect on the date hereof (the
"Exchange Act").
(c) A Person shall be deemed the "Beneficial
Owner" of, and shall be deemed to "beneficially own," any
securities:
(i) which such Person or any of such
Person's Affiliates or Associates beneficially owns,
directly or indirectly;
(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) pursuant to any agreement, arrangement or understanding
(other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion
rights, exchange rights, 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 or on behalf of such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for
purchase or exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that
a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security if the agreement, arrangement or
understanding to vote such security (1) arises solely from a
revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under
the Exchange Act, and (2) is not also then reportable by such
Person on Schedule 13D under the Exchange Act (or any comparable
or successor report); or
(iii) which are beneficially owned,
directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person
(or any of such Person's Affiliates or Associates) has
any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide
public offering of securities) for the purpose of
acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to Section
1(c)(ii)(B)) or disposing of any voting securities of
the Company.
Notwithstanding anything in this definition
of Beneficial Ownership to the contrary, the phrase "then
outstanding," when used with reference to a Person's Beneficial
Ownership of securities of the Company, shall mean the number of
such securities then issued and outstanding together with the
number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially
hereunder.
(d) "Business Day" shall mean any day other than
a Saturday, Sunday or a day on which banking institutions in the
Commonwealth of Pennsylvania are authorized or obligated by law
or executive order to close.
(e) "Close of Business" on any given date shall
mean 5:00 P.M., York, Pennsylvania on such date; provided,
however, that if such date is not a Business Day it shall mean
5:00 P.M., York, Pennsylvania time, on the next succeeding
Business Day.
(f) "Common Share" shall mean a share of Common
Stock of the Company and, to the extent that there are not a
sufficient number of Common Shares authorized to permit the full
exercise of the Rights, shares of any other class or series of
the Company designated for such purpose containing terms
substantially similar to the terms of the Common Shares, except
that "Common Share" when used with reference to any Person other
than the Company shall mean the shares of capital stock (for
equity interest) with the greatest voting power of such other
Person or, if such other Person is a Subsidiary of another
Person, the Person or Persons which ultimately control such
first-mentioned Person.
(h) "Distribution Date" shall have the meaning
set forth in Section 3 hereof.
(i) "Expiration Date" shall have the meaning set
forth in Section 7.
(j) "Person" shall mean any natural person, firm,
corporation, partnership business trust, limited liability
company, joint stock company, proprietorship, association, trust,
joint venture, unincorporated association or other legal entity
of whatever nature.
(k) "Preferred Share" shall mean a share of
Series A Junior Participating Preferred Stock, without par value,
of the Company having the rights and preferences set forth in the
Form of Certificate of Designations attached to this Agreement as
Exhibit A.
(l) "Stock Acquisition Date" shall mean the first
date of public announcement by the Company or an Acquiring Person
that an Acquiring Person has become an "Acquiring Person" as
defined in this Agreement.
(m) "Subsidiary" of any Person shall mean any
corporation or other entity of which a majority of the voting
power of the voting equity securities or equity interest is
owned, directly or indirectly, by such Person.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company
in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of
business on the tenth Business 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
any Person becomes an Acquiring Person) after the date of the
commencement by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan) of, or the first public
announcement of the intention of any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan
of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for
or pursuant to the terms of any such plan) to commence a tender
or exchange offer the consummation of which would result in any
Person becoming the Beneficial Owner of Common Shares aggregating
15% or more of the Common Shares then outstanding (the earlier of
(i) and (ii) being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the
certificates for the Common Shares registered in the names of the
holders thereof (which certificates for Common Shares shall be
deemed also to be Rights Certificates) and not by separate Rights
Certificates, and (y) the right to receive Rights Certificates
will be transferable only in connection with the transfer of
Common Shares. As soon as practicable after the Distribution
Date, the Rights Agent will send by first-class, insured, postage
prepaid mail, to each record holder of Common Shares as of the
close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, one or more
rights certificates, in substantially the form of Exhibit B
hereto (a "Rights Certificate"), evidencing one Right for each
Common Share so held. As of the Distribution Date, the Rights
will be evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the
Record Date, the Company will send a copy of a Summary of Rights,
in substantially the form of Exhibit C hereto (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record
holder of the Common Shares as of the close of business on the
Record Date, at the address of such holder shown on the records
of the Company. With respect to certificates for the Common
Shares outstanding as of the Record Date, until the Distribution
Date, beneficial interests in the Rights will be evidenced by
such certificates for the Common Shares registered in the name of
the holders thereof together with a copy of the Summary of Rights
attached thereto. Until the Distribution Date (or the Redemption
Date or the Expiration Date if earlier), the surrender for
transfer of any certificates representing Common Shares
outstanding on the Record Date, with or without a copy of the
Summary of Rights attached thereto, shall also constitute the
transfer of the Rights associated with such Common Shares
represented thereby.
(c) Certificates for Common Shares which become
outstanding (including, without limitation, reacquired Common
Shares referred to in the last sentence of this paragraph (c))
after the Record Date but prior to the earliest of the
Distribution Date or the Expiration Date shall have impressed on,
printed on, written on or otherwise affixed to them the following
legend:
"This certificate also evidences and entitles
a holder hereof to certain rights as set forth in the
Rights Agreement between The York Water Company (the
"Company") and American Stock Transfer & Trust Company
(the "Rights Agent") dated as of January 25, 1999 (the
"Rights Agreement"), and as the same may be amended
from time to time, the terms of which are hereby
incorporated herein by reference and a copy of which is
on file at the principal offices of the Company. Under
certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate
certificates and beneficial interests therein will no
longer be evidenced by this certificate. The Company
will mail to the holder of this certificate a copy of
the Rights Agreement, as in effect on the date of
mailing, without charge promptly after receipt of a
written request therefor. Under certain circumstances
set forth in the Rights Agreement, Rights issued to any
Person who becomes an Acquiring Person (as defined in
the Rights Agreement) may become null and void."
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated with
the Common Shares represented by such certificates shall be
evidenced by such certificates alone and the surrender for
transfer of any such certificate shall also constitute the
transfer of Rights associated with the Common Shares represented
thereby. In the event that the Company purchases or acquires any
Common Shares after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Shares shall be
deemed cancelled and retired so that the Company shall not be
entitled to exercise any Rights associated with the Common Shares
which are no longer outstanding.
Section 4. Form of Rights Certificates. The Rights
Certificates (and the forms of election to purchase and of
assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto and may
have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company
may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply
with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or
to conform to usage. Subject to the provisions of Section 22
hereof, the Rights Certificates shall entitle the holders thereof
to purchase such number of one one-hundredths of a Preferred
Share as shall be set forth therein at the price per one one-
hundredth of a Preferred Share set forth therein (the "Purchase
Price"), but the number of such one one-hundredths of a Preferred
Share and the Purchase Price shall be subject to adjustment as
provided herein.
Section 5. Countersignature and Registration. The
Rights Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its President or any Vice President,
either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall be
attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The Rights
Certificates shall be manually countersigned by the Rights Agent
and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of
the Rights Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance
and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued
and delivered by the Company with the same force and effect as
though the person who signed such Rights Certificates had not
ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any Person
who, at the actual date of the execution of such Rights
Certificate, shall be a proper officer of the Company to sign
such Rights Certificate, although at the date of the execution of
this Agreement any such Person was not such an officer.
Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration
and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the
date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange of Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates. Subject to the provisions of Section
14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the Close of Business on
the earlier of the Redemption Date or the Expiration Date, any
Rights Certificate or Certificates may be transferred, split up,
combined or exchanged for another Rights Certificate or Rights
Certificates (other than Rights Certificates representing Rights
that have become void pursuant to Section 11(a)(ii) hereof or
that have been exchanged pursuant to Section 24 hereof) may be
transferred, split up, combined or exchanged for another Rights
Certificate or Rights Certificates, entitling the registered
holder to purchase a like number of one one-hundredths of a
Preferred Share as the Rights Certificate or Rights Certificates
surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or
exchange any Rights Certificate or Rights Certificates shall make
such request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the principal
office of the Rights Agent. Thereupon the Rights Agent shall
countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange
of Rights Certificates.
Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case
of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation
of the Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner
in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.
(a) The registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after
the Distribution Date upon surrender of the Rights Certificate,
with the form of election to purchase and the certificate on the
reverse side thereof duly executed, to the Rights Agent at the
principal office of the Rights Agent, together with payment of
the aggregate Purchase Price for each one one-hundredth of a
Preferred Share as to which the Rights are exercised, at or prior
to the earliest of (i) the close of business on January 24, 2009
(the "Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption
Date"), or (iii) the time at which the Rights are exchanged as
provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth
of a Preferred Share purchasable pursuant to the exercise of a
Right shall initially be $75.00, and shall be subject to
adjustment from time to time as provided in Sections 11 and 13(a)
hereof and shall be payable in accordance with paragraph (c)
below.
(c) Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of election to
purchase duly executed and accompanied by payment of the Purchase
Price (except as provided in Section 11(o) hereof) for the shares
to be purchased and an amount equal to any applicable transfer
tax required to be paid by the holder of such Rights Certificate
in accordance with Section 9 hereof by certified check, cashier's
check or money order payable to the order of the Company, the
Rights Agent shall thereupon promptly (i) (A) requisition from
any transfer agent of the Preferred Shares certificates for the
number of Preferred Shares to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit
some or all of the total number of Preferred Shares with a
depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-
hundredths of a Preferred Share as are to be purchased (in which
case certificates for the Preferred Shares represented by such
receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the depositary
agent to comply with such request, (ii) when appropriate,
requisition from the Company the amount of cash (except as
provided in Section 11(o) hereof) to be paid in lieu of issuance
of fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or
names as may be designated by such holder and (iv) when
appropriate, after receipt, deliver such cash (except as provided
in Section 11(o) hereof) to or upon the order of the registered
holder of such Rights Certificate.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced
thereby, a new Rights Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to the registered holder of such Rights
Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the
purpose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or any of its agents, be
delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled
by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Rights Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the
Company, or shall, at the written request of the Company, destroy
such canceled Rights Certificates, and in such case shall deliver
a certificate of destruction thereof to the Company.
Section 9. Availability of Preferred Stock Securities.
The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued
Preferred Shares or any Preferred Shares held in its treasury,
the number of Preferred Shares that will be sufficient to permit
the exercise in full of all outstanding Rights in accordance with
Section 7. The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred
Shares delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such Preferred Shares (subject
to payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable shares.
The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the issuance
or delivery of the Rights Certificates or of any Preferred Shares
upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect
of any transfer or delivery of Rights Certificates to a person
other than, or the issuance or delivery of certificates or
depositary receipts for the Preferred Shares in a name other than
that of, the registered holder of the Rights Certificate
evidencing Rights surrendered for exercise or to issue or to
deliver any certificates or depositary receipts for Preferred
Shares upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such
tax is due.
Section 10. Preferred Share Record Date. Each person
in whose name any certificate for Preferred Shares is issued upon
the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Shares represented
thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preferred
Shares transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares
on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Shares transfer books of the
Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Rights Certificate shall not be entitled
to any rights of a holder of Preferred Shares for which the
Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights. The Purchase Price, the number and
kind of shares and other securities covered by each Right and the
number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a) (i) In the event the Company shall at any
time after the date of this Agreement (A) declare a dividend
on any security of the Company payable in Preferred Shares,
(B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of
shares, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such
date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital
stock which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Shares
transfer books of the Company were open, he would have owned
upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification.
(ii) Subject to Section 24 of this
Agreement, in the event any Person becomes an Acquiring
Person, each holder of a Right shall thereafter have a right
to receive, upon exercise thereof at a price equal to the
then current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is
then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of
Common Shares of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price
by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable and dividing that product
by (y) 50% of the then current per share market price of the
Company's Common Shares (determined pursuant to Section
11(d) hereof) on the date of the occurrence of such event.
In the event that any Person shall become an Acquiring
Person and the Rights shall then be outstanding, the Company
shall not take any action which would eliminate or diminish
the benefits intended to be afforded by the Rights.
From and after the occurrence of such event,
any Rights that are or were acquired or beneficially owned
by any Acquiring Person (or any Associate or Affiliate of
such Acquiring Person) shall be void and any holder of such
Rights shall thereafter have no right to exercise such
Rights under any provision of this Agreement. No Rights
Certificate shall be issued pursuant to Section 3 that
represents Rights beneficially owned by an Acquiring Person
whose Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate thereof; no Rights
Certificate shall be issued at any time upon the transfer of
any Rights to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate or
Affiliate thereof or to any nominee of such Acquiring
Person, Associate or Affiliate; and any Rights Certificate
delivered to the Rights Agent for transfer to an Acquiring
Person whose Rights would be void pursuant to the preceding
sentence shall be cancelled.
(iii) In the event that there shall not be
sufficient Common Shares issued but not outstanding or
authorized but unissued to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph
(ii), the Company shall take all such action as may be
necessary to authorize additional Common Shares for issuance
upon exercise of the Rights. In the event the Company
shall, after good faith effort, be unable to take all such
action as may be necessary to authorize such additional
Common Shares, the Company shall substitute, for each Common
Share that would otherwise be issuable upon exercise of a
Right, a number of Preferred Shares or fraction thereof such
that the current per share market price of one Preferred
Share multiplied by such number or fraction is equal to the
current per share market price of one Common Share as of the
date of issuance of such Preferred Shares or fraction
thereof.
(b) In case the Company shall fix a record date
for the issuance of rights, options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or
purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred
Shares or equivalent preferred shares at a price per Preferred
Share or equivalent preferred share (or having a conversion price
per share, if a security convertible into Preferred Shares or
equivalent preferred shares) less than the then current per share
market price of the Preferred Shares (as defined in Section
11(d)) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by
a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date plus the number
of Preferred Shares which the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred
shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of
which shall be the number of Preferred Shares outstanding on such
record date plus the number of additional Preferred Shares and/or
equivalent preferred shares 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 Company, whose determination shall be described in a
statement filed with the Rights Agent. Preferred Shares owned by
or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date
is fixed; and in the event that such rights, options or warrants
are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a record date
for a distribution to all holders of Preferred Shares (including
any such distribution made in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation) of evidences of indebtedness, assets (other than a
regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be
the then current per share market price of the Preferred Shares
on such record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights
or warrants applicable to one Preferred Share and the denominator
of which shall be such current per share market price of the
Preferred Shares. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(d) (i) For the purpose of any computation
hereunder, the "current per share market price" of any
security (a "Security" for the purpose of this Section
11(d)(i)) on any date shall be deemed to be the average of
the daily closing prices per share of such 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 current per share market price of
the Security is determined during a period following the
announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares
of such Security or securities convertible into such shares,
or (B) any subdivision, combination or reclassification of
such Security and prior to the expiration of 30 Trading Days
after the exdividend date for such dividend or distribution,
or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current
per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of
such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked
prices, regular way, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities
exchange on which the Security is listed or admitted to
trading or, if the Security is 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 Quotations System ("NASDAQ") or such other system
then in use, or, if on any such date the Security is 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 Security selected by the Board
of Directors of the Company. The term "Trading Day" shall
mean a day on which the principal national securities
exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the
Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) For the purpose of any computation
hereunder, the "current per share market price" of the
Preferred Shares shall be determined in accordance with the
method set forth in Section 11(d)(i). If the Preferred
Shares are not publicly traded, the "current per share
market price" of the Preferred Shares shall be conclusively
deemed to be the current per share market price of the
Common Shares as determined pursuant to Section 11(d)(i)
(appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date
hereof), multiplied by one hundred. If neither the Common
Shares nor the Preferred Shares are publicly held or so
listed or traded, "current per share market price" shall
mean the fair value per share as determined in good faith by
the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights
Agent.
(e) No adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments which by reason of this Section 11(e) are
not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the
nearest one one-hundredth of a Common Share or one one-hundred
millionth of a Preferred Share, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later
than the earlier of (i) 3 years from the date of the transaction
that requires such adjustment, or (ii) the Expiration Date.
(f) 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 other than Preferred Shares, thereafter the number of such
other shares so receivable upon exercise of any Right and the
Purchase Price thereof 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
Shares contained in Sections 11(a) through (c), inclusive, and
the provisions of Sections 7, 9, 10 and 13 hereof with respect to
the Preferred Shares shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase
Price, the number of one one-hundredths of a Preferred Share
purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of
the Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately prior
to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a Preferred Share (calculated to the
nearest one one-millionth of a Preferred Share) obtained by (i)
multiplying (x) the number of one one-hundredths of a share
covered by a Right immediately prior to this adjustment, by (y)
the Purchase Price in effect immediately prior to such adjustment
of the Purchase Price, and (ii) dividing the product so obtained
by the Purchase Price in effect immediately after such adjustment
of the Purchase Price.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of
Rights in substitution for any adjustment in the number of one
one-hundredths of a Preferred Share 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 Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of
its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued,
shall be at least 10 days later than the date of the public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Rights Certificates held
by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so
to be distributed shall be issued, executed and countersigned in
the manner provided for herein and shall be registered in the
names of the holders of record of Rights Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in
the Purchase Price or the number of one one-hundredths of a
Preferred Share issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one one-
hundredths of a Preferred Share which were expressed in the
initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price of the Preferred Shares
issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue
fully paid and nonassessable Preferred Shares at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made
effective as of a record date for a specified event, the Company
may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record
date of the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise
over and above the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise on
the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the
Preferred Shares, issuance wholly for cash of any Preferred
Shares at less than the current market price, issuance wholly for
cash of Preferred Shares or securities which by their terms are
convertible into or exchangeable for Preferred Shares, dividends
on Preferred Shares payable in Preferred Shares or issuance of
rights, options or warrants referred to hereinabove in Section
11(b), hereafter made by the Company to holders of its Preferred
Shares shall not be taxable to such shareholders.
(n) In the event that at any time after the date
of this Agreement and prior to the Distribution Date, the Company
shall (i) declare or pay any dividend on the Common Shares
payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in
Common Shares) into a greater or lesser number of Common Shares,
then in any such case (A) the number of one one-hundredths of a
Preferred Share purchasable after such event upon proper exercise
of each Right shall be determined by multiplying the number of
one one-hundredths of a Preferred Share so purchasable
immediately prior to such event by a fraction, the numerator of
which is the number of Common Shares outstanding immediately
before such event and the denominator of which is the number of
Common Shares outstanding immediately after such event, and (B)
each Common Share outstanding immediately after such event shall
have issued with respect to it that number of Rights which each
Common Share outstanding immediately prior to such event had
issued with respect to it. The adjustments provided for in this
Section 11(n) shall be made successively whenever such a dividend
is declared or paid or such a subdivision, combination or
consolidation is effected.
(o) In the event that the Rights become exercisable
pursuant to Section 11(a)(ii), the Company, by action of a
majority of the members of the Board of Directors in office
at the time, may permit the Rights to be exercised for 50% of the
Common Shares (or cash or other securities or assets to be
substituted for Common Shares pursuant to Section 11(a)(iii))
that would otherwise be purchasable under Section 11(a), in
consideration of the surrender to the Company of the Rights so
exercised and without other payment of the Purchase Price.
Rights exercised under this Section 11(o) shall be deemed to have
been exercised in full and shall be cancelled.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Section 11 or 13 hereof, the Company shall promptly (a) prepare a
certificate setting forth such adjustment, and a brief statement
of the facts accounting for such adjustment, (b) file with the
Rights Agent and with each transfer agent for the Common Shares
or the Preferred Shares a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Rights Certificate in
accordance with Section 25 hereof.
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power. In the event, directly or
indirectly, at any time after a Person has become an Acquiring
Person, (a) the Company shall consolidate with, or merge with and
into, any other Person, (b) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall
be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Shares
shall be changed into or exchanged for stock or other securities
of any other Person (or the Company) or cash or any other
property, or (c) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other
Person other than the Company or one or more of its wholly-owned
Subsidiaries, then, and in each such case, proper provision shall
be made so that (i) each holder of a Right (except as otherwise
provided herein) shall thereafter have the right to receive, upon
the exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of
a Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common Shares of such other
Person (including the Company as successor thereto or as the
surviving corporation) as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right is then
exercisable and dividing that product by (B) 50% of the then
current per share market price of the Common Shares of such other
Person (determined pursuant to Section 11(d) hereof) on the date
of consummation of such consolidation, merger, sale or transfer;
(ii) the issuer of such Common Shares shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger,
sale or transfer, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such issuer; and (iv) such
issuer shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares in
accordance with Section 9 hereof) 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 the Common Shares thereafter deliverable
upon the exercise of the Rights. The Company shall not
consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such issuer shall have
executed and delivered to the Rights Agent a supplemental
agreement so providing. The Company shall not enter into any
transaction of the kind referred to in this Section 13 if at the
time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such
transaction, would eliminate or substantially diminish the
benefits intended to be afforded by the Rights. The provisions
of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights or to distribute Rights Certificates which
evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price 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, as
reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted
to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by
NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected
by the Board of Directors of the Company. If on any such date no
such market maker is making a market in the Rights, the fair
value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue
fractions of Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share)
upon exercise of the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than fractions which
are integral multiples of one one-hundredth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of
one one-hundredth of a Preferred Share may, at the election of
the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary
selected by it; provided, that such agreement shall provide that
the holders of such depositary receipts shall have all the
rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares that
are not integral multiples of one one-hundredth of a Preferred
Share, the Company shall pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of one Preferred Share. For the purposes of
this Section 14(b), the current market value of a Preferred Share
shall be the closing price of a Preferred Share (as determined
pursuant to the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the
Right expressly waives his right to receive any fractional Rights
or any fractional shares upon exercise of a Right (except as
provided above).
Section 15. Rights of Action. All rights of action in
respect of this Agreement, excepting the rights of action given
to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common
Shares), without the consent of the Rights Agent or of the holder
of any other Rights Certificate (or, prior to the Distribution
Date, of the Common Shares), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise
act in respect of, his right to exercise the Rights evidenced by
such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement
and 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 Rights Holders. Every holder
of a Right or a beneficial interest in a Right by accepting the
same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, beneficial
interests in the Rights will be transferable only in connection
with the transfer of Common Shares;
(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the principal office of the Rights
Agent, duly endorsed or accompanied by a proper instrument of
transfer;
(c) the Company and the Rights Agent may deem and
treat the person in whose name a Rights Certificate (or, prior to
the Distribution Date, the associated Common Share certificate)
is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the associated Common Share
certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent, shall be required to be affected by any notice
to the contrary.
Section 17. Rights Certificate Holder Not Deemed a
Shareholder. No holder, as such, of any Rights Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on
the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as
provided in Section 25 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company
agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of
its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss,
liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the
costs and expenses of defending against any claim of liability in
the premises.
The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or
omitted by it in connection with, its administration of this
Agreement in reliance upon any Rights Certificate or certificate
for the Preferred Shares or Common Shares or for other securities
of the Company, 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, or otherwise upon the advice of counsel as set forth
in Section 20 hereof.
Section 19. Merger or Consolidation or Change of
American Stock Transfer & Trust Company. 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 stock transfer or corporate trust
powers 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 Rights Certificates so
countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in
the name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall
be changed and at such time any of the Rights Certificates shall
have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates or beneficial
interests in the Rights, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal
counsel (who may be legal counsel for the Company), and the
written 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
Company prior to taking or suffering any action hereunder, such
fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of
the Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder
only for its own negligence, bad faith or willful misconduct.
Anything in this Agreement to the contrary notwithstanding, in no
event shall the Rights Agent be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including
but not limited to lost profits).
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained
in this Agreement or in the Rights Certificates or be required to
verify the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement
or in any Rights Certificate; nor shall it be responsible for any
change in the exercisability of the Rights (including the Rights
becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner,
method or amount thereof) provided for in Section 3, 11, 13, 23
or 24, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after actual
notice that such change or adjustment is required); nor shall it
by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred
Shares to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any Preferred Shares will, when
issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance
of its duties hereunder from the Chairman of the Board, the
President, any Vice President, the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer of the
Company, and to apply to such officers for advice or instructions
in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer or for any delay
in acting while waiting for those instructions.
(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 Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not the
Rights Agent under this Agreement and none of such actions shall
constitute a breach of trust. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct; provided, however, that the
Rights Agent was not negligent in the selection and continued
employment thereof.
Section 21. Change of Rights Agent. The Rights Agent
or any successor Rights Agent may resign and be discharged from
its duties under this Agreement upon 30 days' notice in writing
mailed to the Company and to each transfer agent of the Common
Shares or Preferred Shares by registered or certified mail, and
to the holders of the Rights Certificates by first-class mail.
The Company may remove the Rights Agent or any successor Rights
Agent upon 30 days' notice in writing, mailed to the Rights Agent
or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights
Agent. If the Company shall fail to make such appointment within
a period of 30 days after giving notice of such removal or after
it has been notified in writing of such resignation or incapacity
by the resigning or incapacitated Rights Agent or by the holder
of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then the
registered holder of any Rights 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 Company or by such a court, shall be either (A) a corporation
organized and doing business under the laws of the United States
or of the State of New York (or of any other state of the United
States so long as such corporation is authorized to do business
as a banking institution in the State of New York), in good
standing, having an office in the State of New York, which is
authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by
federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at
least $50 million, or (B) an affiliate of such a corporation.
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
Company shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the
registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of
this Agreement.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at
its option, at any time prior to such time as any Person becomes
an Acquiring Person, redeem all but not less than all the then
outstanding Rights at a redemption price of $0.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption
Price"). The redemption of the Rights by the Board of Directors
may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may
establish.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights
pursuant to paragraph (a) of this Section 23, and without any
further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. The
Company shall promptly give public notice of any such redemption;
provided, however, that the failure to give, or any defect in,
any such notice shall not affect the validity of such redemption.
Within 10 days after such action of the Board of Directors
ordering the redemption of the Rights, the Company shall mail a
notice of redemption to all the holders of the then outstanding
Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for the Common Shares.
Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the
Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any
manner other than that specifically set forth in this Section 23
or in Section 24 hereof, and other than in connection with the
purchase of Common Shares prior to the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company 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 void pursuant to the provisions of Section 11(a)(ii)
hereof) for Common Shares at an exchange ratio of one Common
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 the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or any
such Subsidiary, or any entity holding Common Shares for or
pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial
Owner of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to paragraph (a) of this Section 24 and without any
further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Common Shares
equal to the number of such Rights held by such holder multiplied
by the Exchange Ratio. The Company shall promptly give public
notice of any such exchange; provided, however, that the failure
to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights
at their last addresses as they appear upon the registry books of
the Rights Agent. 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 Common Shares 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 void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such
action as may be necessary to authorize additional Common Shares
for issuance upon exchange of the Rights. In the event the
Company shall, after good faith effort, be unable to take all
such action as may be necessary to authorize such additional
Common Shares, the Company shall substitute, for each Common
Share that would otherwise be issuable upon exchange of a Right,
a number of Preferred Shares or fraction thereof such that the
current per share market price of one Preferred Share multiplied
by such number or fraction is equal to the current per share
market price of one Common Share as of the date of issuance of
such Preferred Shares or fraction thereof.
(d) The Company shall not be required to issue
fractions of Common Shares or to distribute certificates which
evidence fractional Common Shares. In lieu of such fractional
Common Shares, the Company shall pay to the registered holders of
the Rights Certificates with regard to which such fractional
Common Shares would otherwise be issuable an amount in cash equal
to the same fraction of the current market value of a whole
Common Share. For the purposes of this paragraph (d), the current
market value of a whole Common Share shall be the closing price
of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior
to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay
any dividend payable in stock of any class to the holders of its
Preferred Shares or to make any other distribution to the holders
of its Preferred Shares (other than a regular quarterly cash
dividend), (ii) to offer to the holders of its Preferred Shares
rights or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any
reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding
Preferred Shares), (iv) to effect any consolidation or merger
into or with, 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 50% or more of
the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Shares payable in
Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or
otherwise than by payment of dividends in Common Shares), then,
in each such case, the Company shall give to each holder of a
Rights Certificate, in accordance with Section 26 hereof, a
notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, or distribution of
rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution,
or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred
Shares, 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 the Preferred Shares 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 the Common Shares and/or
Preferred Shares, whichever shall be the earlier.
(b) In case the event set forth in Section
11(a)(ii) hereof shall occur, then the Company shall as soon as
practicable thereafter give to each holder of a Rights
Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which notice shall describe such
event and the consequences of such event to holders of Rights
under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the
holder of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid. Such notice shall be deemed given upon the earlier of
the date when received at, or the third Business Day after the
date when sent by first class mail, postage prepaid, to the
address set forth below (unless such address is changed by notice
to the other parties hereto).
<PAGE>
To the Company:
The York Water Company
130 East Market Street
York, Pennsylvania 17405
Attention: Corporate Secretary
To the Rights Agent:
American Stock Transfer & Trust Company
40 Wall Street
New York, NY 10005
Attention: Corporate Trust Department
Section 27. Supplements and Amendments. The Company
may from time to time supplement or amend this Agreement without
the approval of any holders of Rights Certificates in order to
cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with any
other provisions herein, or to make any other provisions with
respect to the Rights which the Company may deem necessary or
desirable, any such supplement or amendment to be evidenced by a
writing signed by the Company and the Rights Agent; provided,
however, that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended in any
manner which would adversely affect the interests of the holders
of Rights.
Section 28. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Shares) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered
holders of the Common Shares).
Section 30. 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 31. Governing Law. This Agreement, each Right
and each Rights Certificate issued hereunder shall be deemed to
be a contract made under the laws of the Commonwealth of
Pennsylvania and for all purposes shall be governed by and
construed in accordance with the laws of such jurisdiction
applicable to contracts made and to be performed entirely within
such jurisdiction.
Section 32. 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 33. 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.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
THE YORK WATER COMPANY
By: /s/ William T. Morris
Name: William T. Morris
Title: President & CEO
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: /s/ Herbert Lemmer
Name: Herbert Lemmer
Title: Vice President<PAGE>
EXHIBIT A
FORM
OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
THE YORK WATER COMPANY
(Pursuant to Section 1522 of the
Pennsylvania Business Corporation Law)
________________________________________________________
The York Water Company, a Pennsylvania corporation
(hereinafter called the "Corporation"), hereby certifies that the
following resolutions were adopted by the Board of Directors of
the Corporation as required by Section 1522 of the Pennsylvania
Business Corporation Law at a meeting duly called and held on
January 25, 1999:
RESOLVED, that pursuant to the authority expressly vested in
the Board of Directors of the Corporation by the Certificate of
Incorporation of the Corporation, as amended, the Board of
Directors hereby fixes and determines the voting rights,
designations, preferences, qualifications, privileges,
limitations, restrictions, options, conversion rights and other
special or relative rights of the first series of the Series
Preferred Stock, without par value, which shall consist of
250,000 shares and shall be designated as Series A Junior
Participating Preferred Shares (the "Series A Preferred Shares").
Special Terms of the Series A Preferred Shares
Section 1. Dividends and Distributions.
(a) The rate of dividends payable per share of
Series A Preferred Shares on the first day of January, April,
July and October in each year or such other quarterly payment
date as shall be specified by the Board of Directors (each such
date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of the
Series A Preferred Shares, shall be (rounded to the nearest cent)
equal to the greater of (i) $4.50 or (ii) subject to the
provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times
the aggregate per share amount (payable in cash, based upon the
fair market value at the time the non-cash dividend or other
distribution is declared or paid as determined in good faith by
the Board of Directors) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the Common Stock,
without par value, of the Corporation 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 the Series A
Preferred Shares. Dividends on the Series A Preferred Shares
shall be paid out of funds legally available for such purpose.
In the event the Corporation shall at any time after January 25,
1999 (the "Rights Declaration Date") (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number of
shares, then in each such case the amounts to which holders of
Series A Preferred Shares were entitled immediately prior to such
event under clause (ii) of the preceding sentence shall be
adjusted by multiplying each such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Dividends shall begin to accrue and be cumulative
on outstanding Series A Preferred Shares from the Quarterly
Dividend Payment Date next preceding the date of issue of such
Series A Preferred Shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or
is a date after the record date for the determination of holders
of Series A Preferred Shares entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and
be cumulative from such quarterly Dividend Payment Date. Accrued
but unpaid dividends shall not bear interest. Dividends paid on
the Series A Preferred Shares 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.
Section 2. Voting Rights. In addition to any other voting
rights required by law, the holders of Series A Preferred Shares
shall have the following voting rights:
(a) Subject to the provision for adjustment
hereinafter set forth, each Series A Preferred Share shall
entitle the holder thereof to 100 votes on all matters submitted
to a vote of the shareholders of the Corporation. In the event
the Corporation shall at any time after the Rights Declaration
Date (i) declare any dividend on Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding shares of Common
Stock, or (iii) combine the outstanding shares of Common Stock
into a smaller number of shares, then in each such case the
number of votes per share to which holders of Series A Preferred
Shares were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator
of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding
immediately prior to such event.
(b) In the event that dividends upon the Series A
Preferred Shares shall be in arrears to an amount equal to six
full quarterly dividends thereon, the holders of such Series A
Preferred Shares shall become entitled to the extent hereinafter
provided to vote noncumulatively at all elections of directors of
the Corporation, and to receive notice of all shareholders'
meetings to be held for such purpose. At such meetings, to the
extent that directors are being elected, the holders of such
Series A Preferred Shares voting as a class shall be entitled
solely to elect two members of the Board of Directors of the
Corporation; and all other directors of the Corporation shall be
elected by the other shareholders of the Corporation entitled to
vote in the election of directors. Such voting rights of the
holders of such Series A Preferred Shares shall continue until
all accumulated and unpaid dividends thereon shall have been paid
or funds sufficient therefor set aside, whereupon all such voting
rights of the holders of shares of such series shall cease,
subject to being again revived from time to time upon the
reoccurrence of the conditions above described as giving rise
thereto.
At any time when such right to elect directors
separately as a class shall have so vested, the Corporation may,
and upon the written request of the holders of record of not less
than 20% of the then outstanding total number of shares of all
the Series A Preferred Shares having the right to elect directors
in such circumstances shall, call a special meeting of holders of
such Series A Preferred Shares for the election of directors. In
the case of such a written request, such special meeting shall be
held within 90 days after the delivery of such request, and, in
either case, at the place and upon the notice provided by law and
in the By-laws of the Corporation; provided, that the Corporation
shall not be required to call such a special meeting if such
request is received less than 120 days before the date fixed for
the next ensuing annual or special meeting of shareholders of the
Corporation. Upon the mailing of the notice of such special
meeting to the holders of such Series A Preferred Shares, or, if
no such meeting be held, then upon the mailing of the notice of
the next annual or special meeting of shareholders for the
election of directors, the number of directors of the Corporation
shall, ipso facto, be increased to the extent, but only to the
extent, necessary to provide sufficient vacancies to enable the
holders of such Series A Preferred Shares to elect the two
directors hereinabove provided for, and all such vacancies shall
be filled only by vote of the holders of such Series A Preferred
Shares as hereinabove provided. Whenever the number of directors
of the Corporation shall have been increased, the number as so
increased may thereafter be further increased or decreased in
such manner as may be permitted by the By-laws and without the
vote of the holders of Series A Preferred Shares, provided that
no such action shall impair the right of the holders of Series A
Preferred Shares to elect and to be represented by two directors
as herein provided.
So long as the holders of Series A Preferred Shares
are entitled hereunder to voting rights, any vacancy in the Board
of Directors caused by the death or resignation of any director
elected by the holders of Series A Preferred Shares, shall, until
the next meeting of shareholders for the election of directors,
in each case be filled by the remaining director elected by the
holders of Series A Preferred Shares having the right to elect
directors in such circumstances.
Upon termination of the voting rights of the holders
of any series of Series A Preferred Shares the terms of office of
all persons who shall have been elected directors of the
Corporation by vote of the holders of Series A Preferred Shares
or by a director elected by such holders shall forthwith
terminate.
(c) Except as otherwise provided herein, in the
Certificate of Incorporation of the Corporation or by law, the
holders of Series A Preferred Shares and the holders of Common
Stock (and the holders of shares of any other series or class
entitled to vote thereon) shall vote together as one class on all
matters submitted to a vote of shareholders of the Corporation.
Section 3. Reacquired Shares. Any Series A Preferred
Shares purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and canceled promptly after
the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued Series Preferred
Stock and may be reissued as part of a new series of Series
Preferred Stock to be created by resolution or resolutions of the
Board of Directors.
Section 4. Liquidation, Dissolution or Winding Up. In
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of
Series A Preferred Shares shall be entitled to receive the
greater of (a) $100 per share, plus accrued dividends to the date
of distribution, whether or not earned or declared, or (b) an
amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to
be distributed per share to holders of Common Stock. In the
event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding shares
of Common Stock, or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, then in each such
case the amount to which holders of Series A Preferred Shares
were entitled immediately prior to such event pursuant to clause
(b) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
Section 5. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case
the Series A Preferred Shares shall at the same time be similarly
exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 100
times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which
or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding shares
of Common Stock, or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, then in each such
case the amount set forth in the preceding sentence with respect
to the exchange or change of shares of Series A Preferred Shares
shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 6. No Redemption. The Series A Preferred Shares
shall not be redeemable.
Section 7. Ranking. The Series A Preferred Shares shall
rank junior to all other series of the Corporation's Series
Preferred Stock as to the payment of dividends and the
distribution of assets, unless the terms of any such series shall
provide otherwise.
Section 8. Fractional Shares. Series A Preferred Shares
may be issued in fractions of a share which shall entitle the
holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of
holders of Series A Preferred Shares.
<PAGE>
IN WITNESS WHEREOF, this Certificate of Designations is executed
on behalf of the Corporation this 25th day of January, 1999.
THE YORK WATER COMPANY
By: ____________________________
Name:
Title: <PAGE>
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R- ___________ Rights
NOT EXERCISABLE AFTER JANUARY 24, 2009 OR EARLIER
REDEMPTION BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
THE YORK WATER COMPANY
RIGHTS 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 January 25, 1999 (the "Rights Agreement"), between
The York Water Company, a Pennsylvania corporation (the
"Company"), and American Stock Transfer & Trust Company (the
"Rights Agent"), to purchase from the Company at any time prior
to 5:00 P.M. (New York, New York time) on January 24, 2009 at
the office or offices of the Rights Agent designated for such
purpose, or its successors as Rights Agent, one one-hundredth of
a fully paid, nonassessable share of Series A Junior
Participating Preferred Stock (the "Preferred Share") of the
Company, at a purchase price (the "Purchase Price") of $75.00 per
one one-hundredth of a Preferred Share (except as provided in
Section 11(o) of the Rights Agreement) upon presentation and
surrender of this Rights Certificate with the Form of Election to
Purchase duly executed. The number of Rights evidenced by this
Rights Certificate (and the number of one one-hundredths of a
Preferred Share which may be purchased upon exercise hereof) set
forth above, and the Purchase Price set forth above, are the
number and Purchase Price as of January 25, 1999, based on the
Preferred Shares as constituted at such date. As provided in the
Rights Agreement, the Purchase Price and the number of one one-
hundredths of a Preferred Share which may be purchased upon the
exercise of the Rights evidenced by this Rights Certificate are
subject to modification and adjustment upon the happening of
certain events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates. Copies of the Rights Agreement are on file
at the above-mentioned office of the Rights Agent and are also
available upon written request to the Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office of the
Rights Agent designated for such purpose, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a
like aggregate number of Preferred Shares as the Rights evidenced
by the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights
Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Rights
Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate (i) may be redeemed by the
Company at a redemption price of $0.01 per Right or (ii) may be
exchanged in whole or in part for Preferred Shares or shares of
the Company's Common Stock, without par value.
No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of a Preferred Share,
which may, as the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled
to vote or receive dividends or be deemed for any purpose the
holder of Preferred Shares or of any other securities of the
Company (including Common Shares) that 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 shareholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this Rights Certificate shall have
been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the
Rights Agent.
<PAGE>
WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal.
Dated as of ______________ ___, ____
ATTEST THE YORK WATER COMPANY
____________________ By: __________________
Secretary Title:
Countersigned
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:
Authorized Signature
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED ______________________________________________
hereby sells, assigns and transfers unto ________________________
_________________________________________________________________
(Please print name and address of transferee)
_________________________________________________________________
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint ______________________ Attorney, to transfer the within
Rights Certificate on the books of the within-named Company, with
full power of substitution.
Dated: _________________, ______
__________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible
guarantor institution (a bank, stockbroker, savings and loan
association or credit union with membership in an approved
signature guarantee medallion program) pursuant to Rule 17Ad-15
of the Securities Exchange Act of 1934.
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially owned by
an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
__________________________________
Signature
<PAGE>
[Form of Reverse Side of Rights Certificate -- Continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: THE YORK WATER COMPANY:
The undersigned hereby irrevocably elects to exercise
______________ Rights represented by this Rights Certificate to
purchase the Preferred Shares issuable upon the exercise of the
Rights and requests that certificates for such shares be issued
in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate
for the balance of such Rights shall be registered in the name of
and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: _____________, ____
_________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor
institution (a bank, stockbroker, savings and loan association or
credit union with membership in an approved signature guarantee
medallion program) pursuant to Rule 17Ad-15 of the Securities
Exchange Act of 1934.<PAGE>
[Form of Reverse Side of Rights Certificate -- continued]
The undersigned hereby certifies that the Rights
evidenced by this Rights Certificate are not beneficially owned
by an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
_________________________________
Signature
NOTICE
The signature in the Form of Assignment or Form of
Election to Purchase, as the case may be, must conform to the
name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in
the Form of Assignment or the Form of Election to Purchase, as
the case may be, is not completed, the Company and the Rights
Agent will deem the beneficial owner of the Rights evidenced by
this Rights Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and
such Assignment or Election to Purchase will not be honored.
<PAGE>
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On January 25, 1999, the Board of Directors of The York
Water Company (the "Company") declared a dividend distribution of
one Right for each outstanding share of Common Stock (each, a
"Common Share"), of the Company to shareholders of record at the
close of business on February 1, 1999. Each Right entitles the
registered holder to purchase from the Company a unit consisting
of one one-hundredth of a share of the Series A Junior
Participating Preferred Stock, without par value, of the Company
(the "Preferred Shares"), at a Purchase Price of $75.00 per one
one-hundredth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights
are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and American Stock Transfer & Trust Company,
as Rights Agent.
Until the earlier to occur of (i) 10 days following a
public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") have acquired
beneficial ownership of 15% or more of the outstanding Common
Shares or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time
as any person or group of affiliated persons becomes an Acquiring
Person) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by
a person or group of 15% or more of the outstanding Common Shares
(the earlier of such dates being called the "Distribution Date"),
the Rights will be evidenced, with respect to any of the Common
Share certificates outstanding as of the Record Date, by such
Common Share certificate with a copy of this Summary of Rights
attached thereto.
The Rights Agreement provides that, until the Distribution
Date (or earlier redemption or expiration of the Rights), the
Rights will be transferred with and only with the Common Shares.
Until the Distribution Date (or earlier redemption or expiration
of the Rights), new Common Share certificates issued after the
Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any
certificates for Common Shares outstanding as of the Record Date,
even without such notation or a copy of this Summary of Rights
being attached thereto, will also constitute the transfer of the
Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution
Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common
Shares as of the close of business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on January 24, 2009 (the "Expiration
Date"), unless the Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company, in each
case, as described below.
The Purchase Price payable, and the number of Preferred
Shares or other securities or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred
Shares at a price, or securities convertible into Preferred
Shares with a conversion price, less than the then-current market
price of the Preferred Shares or (iii) upon the distribution to
holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in Preferred
Shares) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights and the number of one
one-hundredths of a Preferred Share issuable upon exercise of
each Right are also subject to adjustment in the event of a stock
split of the Common Shares or a stock dividend on the Common
Shares payable in Common Shares or subdivisions, consolidations
or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Because of the nature of the Preferred Shares' dividend,
liquidation and voting rights, the value of the one one-hundredth
interest in a Preferred Share purchasable upon exercise of each
Right should approximate the value of one Common Share.
In the event that the Company is acquired in a merger
or other business combination transaction or 50% or more of its
consolidated assets or earning power are sold after a person or
group has become an Acquiring Person, proper provision will be
made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common
stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise
price of the Right. In the event that any person or group of
affiliated or associated persons becomes an Acquiring Person,
proper provision shall be made so that each holder of a Right,
other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), will thereafter have the right
to receive upon exercise that number of Common Shares having a
market value of two times the exercise price of the Right.
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 Common Shares, the Board of
Directors of the Company 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 Common
Share, or one one-hundredth of a Preferred Share (or of a share
of a class or series of the Company's preferred stock having
equivalent rights, preferences and privileges), per Right
(subject to adjustment).
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No fractional
Preferred Shares will be issued (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share,
which may, at the election of the Company, be evidenced by
depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Shares on
the last trading day prior to the date of exercise.
At any time prior to the acquisition by a person or group
of affiliated or associated persons of beneficial ownership of
15% or more of the outstanding Common Shares, the Board of
Directors of the Company may redeem the Rights in whole, but not
in part, at a price of $0.01 per Right (the "Redemption Price").
Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and the only
right of the holders of Rights will be to receive the redemption
price.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a shareholder of the Company, including,
without limitation, the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A dated January 25, 1999. A
copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to
the Rights Agreement, which is hereby incorporated herein by
reference.
