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
PACIFIC CAPITAL BANCORP
--------------------------------------------------------
(Exact name of Registrant as specified in its charter)
California 95-3673456
-------------------------- --------------------------
(State of incorporation or organization) (IRS Employer Identification No.)
200 East Carrillo Street, Suite 300
Santa Barbara, California 93101
(Address of principal executive offices) (Zip Code)
If this Form related 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 related 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. /__/
If this Form related to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), please check the following box. /__/
If this Form related to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), 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 Share Purchase Rights
-------------------------------
(Title of Class)
<PAGE>
Item 1. DESCRIPTION OF SECURITIES TO BE REGISTERED
On December 14, 1999, pursuant to a Stockholders Rights Agreement (the
"Rights Agreement") between Pacific Capital Bancorp, a California corporation
(the "Company"), and Norwest Bank Minnesota, N.A., a national banking
association (the "Rights Agent"), the Company's Board of Directors declared a
dividend of one right (a "Right") to purchase one one-thousandth of a share of
the Company's Series A Preferred Stock ("Series A Preferred") for each
outstanding share of Common Stock, no par value ("Common Stock"), of the
Company. The dividend is payable on December 14, 1999 (the "Record Date") to
stockholders of record as of the close of business on that date. Each Right
entitles the registered holder to purchase from the Company one one-thousandth
of a share of Series A Preferred at an exercise price of $120.00 (the "Purchase
Price"), subject to adjustment.
The following summary of the principal terms of the Rights Agreement is
a general description only and is subject to the detailed terms and conditions
of the Rights Agreement. A copy of the Rights Agreement is attached as Exhibit 1
to this Registration Statement and is incorporated herein by reference.
Rights Evidenced by Common Stock Certificates
The Rights will not be exercisable until the Distribution Date (defined
below). Prior to the Distribution Date certificates for the Rights ("Rights
Certificates") will not be sent to shareholders and the Rights will attach to
and trade only together with the Common Stock. Accordingly, certificates for
Common Stock outstanding on the Record Date (together with the Summary of Rights
being distributed by the Company to shareholders of record) will evidence the
Rights related thereto, and certificates for Common Stock issued after the
Record Date will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender or transfer of any certificates for Common Stock,
outstanding as of the Record Date, even without notation or a copy of the
Summary of Rights, will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
Distribution Date
The Rights will separate from the Common Stock, Rights Certificates
will be issued and the Rights will become exercisable upon the Distribution
Date. The Distribution Date will occur upon the earlier of (a) the close of
business on the 20th business day after the Stock Acquisition Date (as defined
below) or (b) the close of business on the 20th business day after the date of
the commencement of a tender or exchange offer by any person (other than the
Company or any of its affiliates) pursuant to which such person would acquire
beneficial ownership of 15% or more of the Company's outstanding Common Stock.
Notwithstanding the foregoing, the Distribution Date shall not be deemed to have
occurred on the commencement of a tender or exchange offer if such tender or
exchange offer is for all outstanding shares of Common Stock at a price and on
terms determined by at least a majority of the members of the Board who are not
officers of the Company or any of its subsidiaries and who are Continuing
Directors (as defined below) to be (i) at a price which is fair to the Company's
stockholders and not inadequate and (ii) otherwise in the best interests of the
Company and its stockholders. (Such a tender or exchange offer is referred to in
the Rights Agreement as a "Qualifying Offer".)
The "Stock Acquisition Date" is the earlier of (a) the date of the
public announcement by the Company that any person, together with all of such
persons affiliates, has become the beneficial owner of 15% or more of the
Company's Common Stock then outstanding, or (b) the date on which any person
enters into an agreement with the Company or any of its subsidiaries providing
for an Acquisition Transaction (as defined below). An "Acquisition Transaction"
is defined as (a) a merger, consolidation or similar transaction involving the
Company or any of its subsidiaries, (b) a purchase of all or a substantial
portion of assets of the Company and its subsidiaries, or (c) a purchase or
other acquisition of securities representing 15% or more of the Company's Common
Stock then outstanding.
The Board of Directors may, at any time and from time to time prior to
the Distribution Date, specify a later date for the Distribution Date, provided
that if any deferral of a Distribution Date would be authorized by the Board at
any time on or after the earliest of (a) the time that any person becomes an
Acquiring Person (as defined below) or (b) the date on which the Board elects to
redeem the Rights pursuant to Section 23(c) of the Rights Agreement, such
authorization of the deferral of the Distribution Date shall be effective only
if there is at least one Continuing Director then in office and only if a
majority of Continuing Directors then in office concurs with such authorization.
Under the Rights Agreement, a person is a Continuing Director if such person
either (i) is an existing member of the Board of Directors who neither has
acquired beneficial ownership of 15% or more of the outstanding Common Stock nor
is an affiliate of any person who has such beneficial ownership or (ii)
subsequently becomes a member of the Board and who neither has acquired
beneficial ownership of 15% or more of the outstanding Common Stock nor is an
affiliate of any person who has such beneficial ownership and such person's
election to the Board is approved by a vote of a majority of the Continuing
Directors.
The term "Acquiring Person" means (a) generally any person (other than
the Company and its subsidiaries or employee benefit plans) who, together with
all such person's affiliates and associates, is the beneficial owner of 15% or
more of the Company's Common Stock outstanding at the time in question, and (b)
any person, and any affiliate or associate of such person, who has entered into
any agreement or arrangement providing for an Acquisition Transaction.
Issuance of Rights Certificates; Expiration of Rights
As soon as practicable following the Distribution Date, separate Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and such separate Rights Certificates
alone will evidence the Rights from and after the Distribution Date. The Rights
will expire on the earlier of (i) November 30, 2009 (the "Final Expiration
Date") or (ii) redemption or exchange of the Rights as described below.
Exercise of the Rights
Following the Distribution Date, and until one of the further events
described below, holders of the Rights will be entitled to receive, upon
exercise and the payment of $120.00 per Right, one one-thousandth share of the
Series A Preferred.
Right to Buy Company Common Stock
Unless the Rights are earlier redeemed, in the event that any person
becomes the beneficial owner of 15% or more of the Company's Common Stock then
outstanding, then each holder of a Right which has not theretofore been
exercised (other than Rights beneficially owned by the Acquiring Person, which
will thereafter be void) will thereafter have the right to receive, upon
exercise of the Right such number of Common Stock of the Company as shall equal
the result obtained by (a) multiplying the then current Purchase Price by the
then number of one one-thousandths of a share of Series A Preferred for which a
Right was then exercisable and (b) dividing that product by 50% of the current
market price per share of the Company's Common Stock.
Right to Buy Acquiring Company Stock
Similarly, unless the Rights are earlier redeemed, in the event that,
after an Acquiring Person becomes the beneficial owner of 15% or more of the
Company's Common Stock then outstanding, (i) the Company is acquired in a merger
or other business combination transaction, or (ii) 50% or more of the Company's
consolidated assets or earning power are sold, proper provision must be made so
that each holder of a Right which has not theretofore been exercised (other than
Rights beneficially owned by the Acquiring Person, which will have become void)
will thereafter have the right to receive, upon exercise, of each Right such
number of shares of common stock of the acquiring company as shall be equal to
the result obtained by (a) multiplying the then current Purchase Price by the
number of one one-thousandths of a share of Series A Preferred for which a Right
is then exercisable and (b) dividing that product by 50% of the current market
price per share of the common stock of the acquiring party.
Exchange Provision
At any time after the acquisition by an Acquiring Person of 15% or more
of the Company's outstanding Common Stock and prior to the acquisition by such
Acquiring Person of 50% or more of the Company's outstanding Common Stock, the
Board of Directors of the Company may exchange the Rights (other than Rights
beneficially owned by the Acquiring Person), in whole or in part, at an exchange
ratio of one shares of Common Stock per Right.
Redemption
At any time on or prior to the close of business on the earlier of (i)
the 20th day following the Stock Acquisition Date or (ii) the Final Expiration
Date of the Rights, the Company may redeem the Rights in whole, but not in part,
at a price of $0.01 per Right. Notwithstanding the foregoing, in the event that
within 270 days of a public announcement by any person of an intent or proposal
to engage (without the current and continuing concurrence of the Company's Board
of Directors) in a transaction involving an acquisition of or business
combination with the Company or otherwise to become an Acquiring Person, there
is an election of directors (whether at one or more stockholder meetings and/or
pursuant to written stockholder consents) resulting in a majority of the Board
of Directors being comprised of persons who were not nominated by the Board of
Directors in office immediately prior to such election, then for a period of 180
days following such election (the "Special Period"), the Rights, if otherwise
then redeemable, will only be redeemable by the Board of Directors either (a) if
the Board has followed certain prescribed procedures or (b) in any other case,
provided that, if in any such other case the Board's decision regarding the
redemption of the Rights and any acquisition or business combination is
challenged as a breach of fiduciary duty of care or loyalty, the directors can
establish the entire fairness of such decision without the benefit of any
business judgement rule or other presumption. The procedures required under
clause (a) include: (i) the retention of an independent financial advisor, and
the receipt by the Board of (A) the views of such advisor regarding whether
redemption of the Rights will serve the best interests of the Company and its
stockholders, or (B) such advisor's statement that it is unable to express such
a view, setting forth the reasons therefor; and (ii) with respect to any pending
acquisition or business combination proposal (A) the implementation by the
Board, with the advice of its independent financial advisor, of a process and
procedures which the Board and such advisor conclude would be most likely to
result in the best value reasonably available to stockholders, (B) receipt of a
fairness opinion from such advisor, and the Board determining, and such advisor
confirming, that it has no reason to believe that a superior transaction is
reasonably available, and (C) execution of a definitive transaction agreement.
Adjustments to Prevent Dilution
The Purchase Price payable, the number of Rights, and the number of
shares of Series A Preferred or of Common Stock or other securities or property
issuable upon exercise of the Rights are subject to adjustment from time to time
in connection with the dilutive issuances by the Company as set forth in the
Rights Agreement. With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price.
Cash Paid Instead of Issuing Fractional Shares
The Company generally shall not be required to issue any fractions of a
Right. In lieu of any such fractional Rights, the fractional Rights otherwise
issuable shall be rounded to the nearest whole number of Rights with one-half of
a Right being rounded to the next highest whole Right. The Company shall not be
required to issue fractions of shares of Series A Preferred (other than
fractions which are integral multiples of one one-thousandth of a share of
Series A Preferred, which may, at the option of the Company, be evidenced by
depositary receipts) upon exercise of the Rights or to distribute certificates
which evidence fractional shares of Series A Preferred (other than fractions
which are integral multiples of one one-thousandth of a share of Series A
Preferred). In lieu of fractional shares of Series A Preferred that are not
integral multiples of one one-thousandth of a share of Series A Preferred, the
Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised an amount in cash equal to the same fraction of the
current market value of one one-thousandth of a share of Series A Preferred. The
Company shall not be required to issue fractions of shares of Common Stock upon
exercise of the Rights or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of fractional shares of Common Stock, the
Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised an amount in cash equal to the same fraction of the
current market value of one share of Common Stock.
No Stockholders' Rights Prior to Exercise
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company (other than any rights resulting from
such holder's ownership of Common Stock), including, without limitation, the
right to vote or to receive dividends.
Amendment of Rights Agreement
The provisions of the Rights Agreement may be supplemented or amended
by the Board of Directors in any manner prior to a person becoming an Acquiring
Person. After such date, the provisions of the Rights Agreement may be amended
by the Board in order to cure any ambiguity, defect or inconsistency, to make
changes which 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 that no amendment to adjust the
time period governing redemption shall be made at such time as the Rights are
not redeemable.
Rights and Preferences of the Series A Preferred
Series A Preferred purchasable upon exercise of the Rights will not be
redeemable. Each share of Series A Preferred will be entitled to an aggregate
dividend of 1,000 times the dividend declared per share of Common Stock. In the
event of the liquidation of the Company, the holders of the Series A Preferred
will be entitled to a minimum preferential liquidation payment equal to
$120,000.00 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment.
Following the payment of such amount, no additional distributions shall be made
to the holders of shares of Series A Preferred unless, prior thereto, the
holders of Common Stock shall have received an amount per share equal to the
quotient obtained by dividing the amount paid to holders of Series A Preferred
by 1,000. Following the payment of each of these amounts, holders of Series A
Preferred and holders of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio of
1000 to 1 with respect to such Series A Preferred and Common Stock, on a per
share basis, respectively. In the event of a consolidation, merger or similar
transaction by the Company, the holders of the Series A Preferred will be
entitled to receive an amount per share equal to 1,000 times the aggregate
amount of cash, securities, or other property for which each shares of Common
Stock is exchanged in such transaction. Each share of Series A Preferred will
have 1,000 votes, voting together with the shares of Common Stock. These rights
are protected by customary anti-dilution provisions.
Because of the nature of the dividend, liquidation and voting rights of
the shares of Series A Preferred, the value of the one one-thousandth interest
in a share of Series A Preferred purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
Certain Anti-Takeover Effects
The Rights approved by the Board are designed to protect and maximize
the value of the outstanding equity interests in the Company and the long-term
strategic plan of the Company. Takeover attempts pose a threat to the Company's
long-term strategic plan and may include terms (including price) that do not
adequately reflect the inherent value of the Company or coercive tactics to
deprive the Company's Board of Directors and its stockholders of any real
opportunity to determine the destiny of the Company. The Rights have been
declared by the Board in order to deter such effects, including a gradual
accumulation of shares in the open market of a 15% or greater position to be
followed by a merger or a partial or two-tier tender offer that does not treat
all stockholders equally. Such tactics unfairly pressure stockholders, squeeze
them out of their investment without giving them any real choice and deprive
them of the full value of their shares.
The Rights generally may be redeemed by the Company at $0.01 per Right
as described above. Accordingly, the Rights should not interfere with any merger
or business combination approved by the Board of Directors as in the best
interests of the shareholders.
Issuance of the Rights does not in any way weaken the financial
strength of the Company or interfere with its business plans. The issuance of
the Rights themselves has no dilutive effect, will not affect reported earnings
per share, should not be taxable to the Company or to its shareholders, and will
not change the way in which the Company's shares are presently traded. The
Company's Board of Directors believes that the Rights represent a sound and
reasonable means of addressing the complex issues of corporate policy created by
the current takeover environment.
The Rights may have the effect of making more difficult or discouraging
an acquisition of the Company deemed undesirable by the Board of Directors. The
Rights may cause substantial dilution to a person who attempts to acquire the
Company on terms or in a manner not approved by the Company's Board of
Directors, except pursuant to an offer conditioned upon the negation, purchase
or redemption of the Rights.
Item 2. EXHIBITS.
1. Stockholders Rights Agreement, dated as of December 14, 1999
between Pacific Capital Bancorp and Norwest Bank Minnesota,
N.A., including the Certificate of Designation, the form of
Rights Certificate and the Summary of Rights attached thereto
as Exhibits A, B and C, respectively.
<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, thereto duly authorized.
Pacific Capital Bancorp
Date: December 14, 1999
By:
David W. Spainhour, President
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
1. Stockholders Rights Agreement, dated as of December 14, 1999
between Pacific Capital Bancorp and Norwest Bank Minnesota,
N.A., including the Certificate of Designation, the form of
Rights Certificate and the Summary of Rights attached thereto
as Exhibits A, B and C, respectively.
<PAGE>
PACIFIC CAPITAL BANCORP
AND
RIGHTS AGENT
STOCKHOLDERS RIGHTS AGREEMENT
DATED AS OF DECEMBER 14, 1999
<PAGE>
TABLE OF CONTENTS
Section 1. Certain Definitions. 1
Section 2. Appointment of Rights Agent. 6
Section 3. Issuance of Rights Certificates. 6
Section 4. Form of Rights Certificates. 8
Section 5. Countersignature and Registration. 9
Section 6. Transfer of Rights Certificates; Destroyed, Lost or
Stolen Rights Certificates. 10
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights. 10
Section 8. Cancellation and Destruction of Rights Certificates. 12
Section 9. Reservation and Availability of Capital Stock. 12
Section 10. Stockholders Rights. 14
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Rights. 14
Section 12. Certificate of Adjustment Purchase Price or Number
of Shares. 21
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power. 22
Section 14. Fractional Rights. 24
Section 15. Rights of Action. 25
Section 16. Agreement of Rights Holders. 25
Section 17. Rights Certificate Holder Not Deemed a Stockholder. 26
Section 18. Concerning the Rights Agent. 26
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. 26
Section 20. Duties of Rights Agent. 27
Section 21. Change of Rights Agent. 29
Section 22. Issuance of New Rights Certificates. 30
Section 23. Redemption and Termination. 30
Section 24. Exchange. 33
Section 25. Notice of Certain Events. 34
Section 26. Notices. 35
Section 27. Supplements and Amendments. 35
Section 28. Successors. 36
Section 29. Determination and Actions by the Board of Directors. 36
Section 30. Benefits of this Agreement. 37
Section 31. Severability. 37
Section 32. Governing Law. 37
Section 33. Counterparts. 37
Section 34. Descriptive Headings. 37
EXHIBITS
Exhibit A Form of Certificate of Determination
Exhibit B Form of Rights Certificates
Exhibit C Form of Summary of Rights
<PAGE>
STOCKHOLDERS RIGHTS AGREEMENT
STOCKHOLDERS RIGHTS AGREEMENT, dated as of December 14, 1999, (the
"Agreement"), between Pacific Capital Bancorp, a California corporation (the
"Company"), and Norwest Bank Minnesota, N.A., a national banking association
(the "Rights Agent"), with reference to the following facts.
A. On October 27, 1999, the Board determined it desirable and in the best
interests of the Company and its stockholders for the Company to approve and
adopt this Rights Agreement and to declare the distribution referred to in the
following recital clause;
B. On October 27, 1999, (the "Rights Dividend Declaration Date"), the
Board authorized and declared a dividend distribution of one Right (as
hereinafter defined) for each share of Common Stock outstanding at the close of
business on December 14, 1999 (the "Record Date") and has authorized the
issuance of one Right (as such number may hereafter be adjusted pursuant to the
provisions of Section 11(i) or Section 11(p) hereof) for each share of Common
Stock issued between the Record Date (whether originally issued or delivered
from the Company's treasury) and the Distribution Date (as hereinafter defined),
and under certain circumstances thereafter, each Right initially representing
the right to purchase one one-thousandth of a share of Series A Preferred Stock,
no par value, 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");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean:
(x) 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 shares of Common Stock then outstanding, but shall not include:
(i) the Company;
(ii) any Subsidiary of the Company;
(iii) 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;
(iv) any Person who becomes the Beneficial Owner of fifteen
percent (15%) or more of the shares of Common Stock then outstanding
as a result of a reduction in the number of shares of Common Stock
outstanding due to the repurchase of shares of Common Stock by the
Company unless and until such Person, after becoming aware that such
Person has become the Beneficial Owner of fifteen percent (15%) or
more of the then outstanding shares of Common Stock, acquires
beneficial ownership of additional shares of Common Stock
constituting one percent (1%) or more of the shares of Common Stock
then outstanding;
(v) any such Person who has reported or is required to report
such ownership (but less than 20%) on Schedule 13G under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and
in effect on the date of this Agreement (or any comparable or
successor report) or on Schedule 13D under the Exchange Act (or any
comparable or successor report) which Schedule 13D does not state
any intention to or reserves the right to control or influence the
management or policies of the Company or engage in any of the
actions specified in Item 4 of such Schedule (other than the
disposition of the Common Stock) and, within ten (10) Business Days
of being requested by the Company to advise it regarding the same,
certifies to the Company that such Person acquired shares of Common
Stock in excess of 14.9% inadvertently or without knowledge of the
terms of the Rights and who, together with all Affiliates and
Associates, thereafter does not acquire additional shares of Common
Stock while the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding; provided that if the Person requested
to so certify fails to do so within ten (10) Business Days, then
such Person shall become an Acquiring Person immediately after such
10-Business-Day period; or
(y) any Offering Person and any Affiliate or Associate of such
Offering Person, if such Offering Person or any Affiliate or Associate
thereof has entered into any agreement or arrangement providing for an
Acquisition Transaction (as defined in Section 1(r) hereof).
(b) "Adjustment Shares" shall have the meaning set forth in Section 11(a)(ii)
hereof.
(c) "Affected Transaction" shall have the meaning set forth in Section
23(c)(i)(B)(2) hereof.
(d) "Affiliate" and "Associate" shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act.
(e) "Agreement" shall mean this Stockholders Rights Agreement.
(f) "Articles of Incorporation" shall mean the Company's Articles of
Incorporation, including all Certificates of Determination of the rights,
preferences and privileges of any series of capital stock, as in effect at the
time in question.
(g) A Person shall be deemed the "Beneficial Owner" of, and shall be deemed to
"beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or Associates,
directly or indirectly, owns or has the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not
in writing) or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided that a Person shall
not be deemed the "Beneficial Owner" of, or to "beneficially own," (A)
securities tendered pursuant to a tender or exchange offer made by or
on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange, or (B) securities issuable upon exercise of Rights at any
time prior to the occurrence of a Triggering Event (as hereinafter
defined), or (C) securities issuable upon exercise of Rights from and
after the occurrence of a Triggering Event which Rights were acquired
by such Person or any of such Person's Affiliates or Associates prior
to the Distribution Date (as hereinafter defined) or pursuant to
Section 3(a) or Section 22 hereof (the "Original Rights") or pursuant
to Section 11(i) or Section 11(p) hereof in connection with an
adjustment made with respect to any Original Rights;
(ii) which such Person or any of such Person's Affiliates or Associates,
directly or indirectly, has the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not
in writing; provided that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," any security under this
subparagraph (ii) as a result of an agreement, arrangement or
understanding (whether or not in writing) to vote such security if such
agreement, arrangement or understanding: (A) arises solely from a
revocable proxy or consent given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the
Exchange Act, and (B) 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 (whether or not in writing), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in the
proviso to subparagraph (ii) of this paragraph (d)) or disposing of any
voting securities of the Company; provided that nothing in this paragraph
(d) shall cause a Person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired or which such Person has the right to acquire through
such Person's participation in good faith in a firm commitment
underwriting until the expiration of forty days after the date of such
acquisition.
(h) "Business Day" shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in the State of California are authorized or
obligated by law or executive order to close.
(i) "Close of business" on any given date shall mean 5:00 P.M., Santa Barbara,
California, time, on such date; provided that if such date is not a Business
Day, it shall mean 5:00 P.M., Santa Barbara, California, time, on the next
succeeding Business Day.
(j) "Common Stock" shall mean the common stock, no par value per share, of the
Company, except that "Common Stock" when used with reference to any Person other
than the Company shall mean the capital stock of such Person with the greatest
voting power, or the equity securities or other equity interest having power to
control or direct the management, of such Person.
(k) "Common Stock Equivalents" shall have the meaning set forth in Section
11(a)(iii) hereof.
(l) "Company" shall mean Pacific Capital Bancorp, a California corporation.
(m) "Continuing Director" shall mean (i) any member of the Board, while such
Person is a member of the Board, who is not an Acquiring Person, or an Affiliate
or Associate of an Acquiring Person, or a representative of an Acquiring Person
or of any such Affiliate or Associate, and who was a member of the Board prior
to the date of this Agreement, or (ii) any Person who subsequently becomes a
member of the Board, while such Person is a member of the Board, who is not an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or Associate, if
such Person's nomination for election or election to the Board is recommended or
approved by a vote of a majority of the Continuing Directors.
(n) "Current Market Price" shall have the meaning set forth in Section 11(d)(i)
hereof.
(o) "Current Value" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(p) "Distribution Date" shall have the meaning set forth in Section 3(a) hereof.
(q) "Equivalent Preferred Stock" shall have the meaning set forth in Section
11(b) hereof.
(r) "Exchange Act" shall have the meaning set forth in Section 1(a) hereof.
(s) "Exchange Ratio" shall have the meaning set forth in Section 24 hereof.
(t) "Expiration Date" shall have the meaning set forth in Section 7(a) hereof.
(u) "Final Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(v) "Interest" shall have the meaning set forth in Section 23(c)(i)(B)(2)
hereof.
(w) "Offering Person" shall mean any Person (other than the Company or any of
its Subsidiaries or any employee benefit plan of the Company or of any
Subsidiary of the Company or any Person appointed as trustee by the Company or
such Subsidiary pursuant to the terms of any such plan in such Person's capacity
as trustee) who, at the time of the first occurrence of either of the
circumstances described in clauses (i) and (ii) of Section 23(c) hereof:
(i) has commenced, or has publicly announced its intent to commence, a tender
or exchange offer if upon consummation thereof such Person, together with
all Affiliates and Associates of such Person, would be the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding,
(ii) has made by public announcement or by written communication that is or
becomes the subject of a public announcement, or has publicly announced
its intent to make, a proposal to the Company or its stockholders for
(x) a merger, consolidation or similar transaction involving the
Company or any of its Subsidiaries, (y) a purchase or other acquisition
of all or a substantial portion of the assets or deposits of the
Company and its Subsidiaries, or (z) a purchase or other acquisition of
securities representing 15% or more of the shares of Common Stock then
outstanding (any transaction of the type described in clauses (x), (y)
or (z) of this paragraph (ii), an "Acquisition Transaction"), or
(iii) has filed an application or notice with the Board of Governors of the
Federal Reserve System, or any other federal or state banking regulatory
authority, which application or notice seeks approval to engage in any
transaction constituting an Acquisition Transaction.
(x) "Person" shall mean any individual, firm, corporation, partnership, limited
liability company, limited liability partnership, trust, syndicate or other
entity and includes, without limitation, an unincorporated group of persons who,
by formal or informal agreement or arrangement (whether or not in writing), have
embarked on a common purpose or act.
(y) "Preferred Stock" shall mean shares of Series A Preferred Stock, no par
value, of the Company, and, to the extent that there is not a sufficient number
of shares of Series A Preferred Stock authorized to permit the full exercise of
the Rights, any other series of preferred stock of the Company designated for
such purpose containing terms substantially similar to the terms of the Series A
Preferred Stock.
(z) "Principal Party" shall have the meaning set forth in Section 13(b) hereof.
(aa) "Purchase Price" shall have the meaning set forth in Section 4(a) hereof.
(bb) "Qualifying Offer" shall have the meaning set forth in Section 11(a)(ii)
hereof.
(cc) "Record Date" shall mean December 14, 1999.
(dd) "Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.
(ee) "Rights Dividend Declaration Date" shall have the meaning at the beginning
of this Agreement.
(ff) "Rights" shall have the meaning set forth in Recital B at the beginning of
this Agreement.
(gg) "Rights Agent" shall have the meaning set forth in the parties clause at
the beginning of this Agreement.
(hh) "Rights Certificate" shall have the meaning set forth in Section 3(a)
hereof.
(ii) "Rights Dividend Declaration Date" shall have the meaning set forth in
Recital B at the beginning of this Agreement.
(jj) "Section 11(a)(ii) Event" shall mean any event described in Section
11(a)(ii) hereof.
(kk) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(ll) "Section 13 Event" shall mean any event described in clauses (x), (y) or
(z) of Section 13(a) hereof.
(mm) "Securities Act" means the Securities Act of 1933, as amended.
(nn) "Special Period" shall have the meaning set forth in Section 23(c)
hereof.
(a)
<PAGE>
(oo) "Spread" shall have the meaning set forth in Section 11(a)(iii) hereof.
(pp) "Stock Acquisition Date" shall mean the earlier of:
(i) the first date of public announcement by the Company that any Person has
become an Acquiring Person pursuant to clause (x) of the definition of
Acquiring Person, and
(ii) the date on which an Offering Person and/or any Affiliate or Associate
thereof has entered into an agreement or arrangement with the Company or
any Subsidiary of the Company providing for an Acquisition Transaction.
(qq) "Subsidiary" shall mean, with reference to any Person, any corporation or
other entity of which an amount of voting securities (or other ownership
interests having ordinary voting power) sufficient to elect at least a majority
of the directors (or other persons performing similar functions) of such
corporation or other entity is directly or indirectly beneficially owned or
otherwise controlled by such Person.
(rr) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ss) "Trading Day" shall have the meaning set forth in Section 11(d)(i) hereof.
(tt) "Transaction" shall have the meaning set forth in Section
23(c)(i)(B)(2) hereof.
(uu) "Triggering Event" shall mean any Section 11(a)(ii) Event or any Section 13
Event.
(vv) "Value Enhancement Procedures" shall have the meaning set forth in Section
23(d) hereof.
Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights
Agent to act as agent for the Company and the holders of the Rights (who, in
accordance with Section 3 hereof, shall prior to the Distribution Date also be
the holders of the Common Stock) 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. Issuance of Rights Certificates.
(a) Distribution Date. Until the earlier of:
(i) Stock Acquisition Date - the close of business on the twentieth (20th)
business day after the Stock Acquisition Date (or, if the twentieth (20th)
business day after the Stock Acquisition Date occurs before the Record
Date, the close of business on the Record Date); or
<PAGE>
(ii) Commencement of a Tender Offer - the close of business on the twentieth
(20th) business day after the date that a tender or exchange offer 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) is first
published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act, if upon
consummation thereof, such Person would be the Beneficial Owner of 15%
or more of the shares of Common Stock then outstanding, in either
instance other than pursuant to a Qualifying Offer (the earlier of (i)
and (ii) being herein referred to as the "Distribution Date"),
(x) the Rights will be evidenced (subject to the provisions of
paragraphs (b) and (c)of this Section 3) by the certificates for the
Common Stock registered in the names of the holders thereof (which
certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and
(y) the Rights will be transferable only in connection with
the transfer of the underlying shares of Common Stock (including a
transfer to the Company).
Notwithstanding the foregoing, the Board may determine, at any time and from
time to time prior to the Distribution Date, such specified later date for the
Distribution Date following the occurrence of either of the foregoing events,
provided that if any deferral of a Distribution Date by the Board pursuant to
this sentence is authorized at any time on or after the earliest of (1) the time
that any Person becomes an Acquiring Person or (2) the first occurrence of
either of the circumstances described in clauses (i) and (ii) of Section 23(c)
hereof, such authorization shall be effective only if there is at least one
Continuing Director then in office and only if a majority of Continuing
Directors then in office concurs with such authorization. As soon as practicable
after the Distribution Date, the Rights Agent will send by first-class, insured,
postage-prepaid mail, to each record holder of the Common Stock 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 right certificates, substantially in the
form of Exhibit B hereto (the "Rights Certificates"), evidencing one Right for
each share of Common Stock so held, subject to adjustment as provided herein. In
the event that an adjustment in the number of Rights per share of Common Stock
has been made pursuant to Section 11(i) or Section 11(p) hereof, at the time of
distribution of the Rights Certificates, the Company shall not be required to
issue Rights Certificates evidencing fractional rights, but may, in lieu
thereof, make the necessary and appropriate rounding adjustments (in accordance
with Section 14(a) hereof) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any fractional
Rights. As of and after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates.
(b) Prior to Distribution Date. The Company shall deliver a copy of a Summary of
Rights, substantially in the form attached as Exhibit C hereto (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record holder of Common
Stock as of the Record Date. Until the earlier of the Distribution Date or the
Expiration Date, the Rights will be evidenced by certificates for the Common
Stock and the registered holders of the Common Stock shall also be the
registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date, the transfer of any certificates
representing shares of Common Stock in respect of which Rights have been issued
shall also constitute the transfer of the Rights associated with such shares of
Common Stock.
(c) Legend. Rights shall be issued in respect of all shares of Common Stock
which are issued (whether originally issued or from the Company's treasury)
after the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date, and to the extent provided in Section 22 hereof, in respect of
shares of Common Stock issued after the Distribution Date and prior to the
Expiration Date. Certificates representing such shares of Common Stock shall
also be deemed to be certificates for Rights, and shall, as promptly as
practicable following the Record Date, bear the following legend:
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in the Rights Agreement between Pacific Capital
Bancorp (the "Company") and the Rights Agent thereunder, dated as of
December 14, 1999, as the same may be amended, restated, renewed or
extended from time to time (the "Rights Agreement"), the terms of which
are hereby incorporated herein by reference and a copy of which is on file
at the principal offices of the Company. Under certain circumstances, as
set forth in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this certificate.
The Company will mail to the holder of this certificate a copy of the
Rights Agreement, as in effect on the date of mailing, without charge,
promptly after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued to, or
beneficially owned by, any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate thereof (as such terms are defined in
the Rights Agreement), whether currently held by or on behalf of such
Person or by any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing
legend, until the earlier of (i) the Distribution Date or (ii) the Expiration
Date, the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone and registered
holders of Common Stock shall also be the registered holders of the associated
Rights, and the transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificates.
Section 4. Form of Rights Certificates.
(a) General. 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 attached hereto as Exhibit B and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Section 11
and Section 22 hereof, the Rights Certificates, whenever distributed, shall be
dated as of the Record Date and on their face shall entitle the holders thereof
to purchase such number of one one-thousandths of a share of Preferred Stock as
shall be set forth therein at the price set forth therein (such exercise price
per one one-thousandth of a share, as adjusted from time to time hereunder, the
"Purchase Price"), but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Acquiring Person Legend. Any Rights Certificate issued:
(i) pursuant to Section 3(a), Section 11(i) or Section 22 hereof that
represents Rights beneficially owned by:
A. an Acquiring Person or any Associate or Affiliate of an Acquiring
Person;
B. a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person
becomes such; or
C. a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom
such Acquiring Person has any continuing agreement, arrangement
or understanding (whether or not in writing) regarding the
transferred Rights or (B) a transfer which the Board, in its sole
discretion, has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect avoidance
of the provisions of Section 7(e) hereof; or
(ii) pursuant to Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Rights Certificate referred to in
this sentence,
shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the circumstances specified
in Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration.
(a) Countersignature. 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, and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be countersigned by an authorized
signatory of the Rights Agent, either manually or by facsimile signature, and
shall not be valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Rights Certificates shall cease
to be such officer of the Company before countersignature by an authorized
signatory of the Rights Agent and issuance and delivery by the Company, such
Rights Certificates, nevertheless, may be countersigned by an authorized
signatory of the Rights Agent and issued and delivered by the Company with the
same force and effect as though the person who signed such Rights Certificates
had not ceased to be such officer of the Company; and any Rights Certificates
may be signed on behalf of the Company by any person who, at the actual date of
the execution of such Rights Certificate, shall be a proper officer of the
Company to sign such Rights Certificate, although at the date of the execution
of this Agreement any such person was not such an officer.
(b) Registration. 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 of Rights Certificates; Destroyed, Lost or Stolen
Rights Certificates.
(a) Transfer and Exchange. Subject to the provisions of Section 4(b), Section
7(e) and Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the Expiration
Date, any Rights Certificate or Certificates (other than Rights Certificates
representing Rights that may have been exchanged pursuant to Section 24 hereof)
may be transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to purchase a like
number of one one-thousandths of a share of Preferred Stock (or, following the
occurrence of a Triggering Event, Common Stock, other securities, cash or other
assets, as the case may be) as the Rights Certificate or Certificates
surrendered then entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up, combined or exchanged,
with the forms of assignment and certificate contained therein duly executed, at
the principal office or offices of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the Rights
Agent shall, subject to Section 4(b), Section 7(e), Section 14 and Section 24
hereof, 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 from the holder of a Rights Certificate of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Rights
Certificates.
(b) Lost and Destroyed 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) Exercise. Except as otherwise provided in this Agreement (including, but not
limited to, the restrictions on exercisability set forth in Section 9(c),
Section 11(a)(iii) and Section 23(a) hereof) and subject to Section 7(e) hereof,
the registered holder of any Rights Certificate may exercise the Rights
evidenced thereby in whole or in part at any time after the Distribution Date
upon surrender of the Rights Certificate, with the form of election to purchase
and the certificate contained therein duly executed, to the Rights Agent at the
principal office or offices of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price with respect to the total
number of one one-thousandths of a share of Preferred Stock (or, following the
occurrence of a Triggering Event, Common Stock, other securities, cash or other
assets, as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the earliest of (i) 5:00 P.M., Santa Barbara,
California, time, on November 30, 2009 (such date, the "Final Expiration Date"),
(ii) the time at which all of the Rights are redeemed or exchanged as provided
in Section 23 or Section 24 hereof, respectively, or (iii) the time at which the
Rights expire pursuant to Section 13(d) hereof (the earliest of (i), (ii) and
(iii) being herein referred to as the "Expiration Date").
(b) Purchase Price. The Purchase Price for each one one-thousandth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be One
Hundred Twenty Dollars ($120.00), and shall be subject to adjustment from time
to time as provided in Section 11 and Section 13(a) hereof and shall be payable
in accordance with paragraph (c) below.
(c) Procedure. Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price (as such amount may be reduced pursuant to Section 11(a)(iii) hereof) per
one one-thousandth of a share of Preferred Stock (or Common Stock, other
securities, cash or other assets, as the case may be) to be purchased as set
forth below and an amount equal to any applicable transfer tax, the Rights Agent
shall, subject to Section 20(k) hereof, thereupon promptly:
(i) (A) requisition from any transfer agent of the shares of Preferred
Stock (or make available, if the Rights Agent is the transfer agent for
such shares) certificates for the total number of one one-thousandths
of a share of Preferred Stock to be purchased, and the Company hereby
irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the total
number of shares of Preferred Stock issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of one
one-thousandths of a share of Preferred Stock as are to be purchased
(in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent
with the depositary agent), and the Company will direct the depositary
agent to comply with such request;
(ii) requisition from the Company the amount of cash, if any, to be paid in
lieu of fractional shares in accordance with Section 14 hereof;
(iii) after receipt of such certificates or depositary receipts, cause the same
to be delivered to or, upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated
by such holder; and
(iv) after receipt thereof, deliver such cash, if any, to or upon the order of
the registered holder of such Rights Certificate.
The payment of the Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) shall be made in cash or by certified bank check or
bank draft payable to the order of the Company. In the event that the Company is
obligated to issue other securities (including Common Stock) of the Company, pay
cash and/or distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other securities, cash
and/or other property are available for distribution by the Rights Agent, if and
when appropriate. The Company reserves the right to require prior to the
occurrence of a Triggering Event that, upon any exercise of Rights, a number of
Rights be exercised so that only whole shares of Preferred Stock would be
issued.
(d) New Certificates. In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or upon the order of, the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder, subject to the provisions of Section 14
hereof. (e) Acquiring Person Exception. Notwithstanding anything in this
Agreement to the contrary, from and after the first occurrence of a Section
11(a)(ii) Event, any Rights beneficially owned by:
(i) an Acquiring Person or an Affiliate or Associate of an Acquiring Person;
(ii) a transferee of an Acquiring Person (or of any such Affiliate or
Associate) who becomes a transferee after the Acquiring Person becomes
such; or
(iii) a transferee of an Acquiring Person (or of any such Affiliate or
Associate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any
Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding (whether or not in writing) regarding the
transferred Rights or (B) a transfer which the Board has determined is
part of a plan, arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(e),
shall become null and void without any further action and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no liability to any holder
of Rights Certificates or any other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
(f) Limitation. Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder of a Rights Certificate upon the
occurrence of any purported assignment or exercise as set forth in this Section
7 unless such registered holder shall have (i) completed and signed the
certificate contained in the form of assignment or election to purchase set
forth on the reverse side of the Rights Certificate surrendered for such
assignment or exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in 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.
Section 9. Reservation and Availability of Capital Stock.
(a) Reservation. The Company will cause to be reserved and kept available out of
its authorized and unissued shares of Preferred Stock (and, following the
occurrence of a Triggering Event, out of its authorized and unissued shares of
Common Stock and/or other securities or out of its authorized and issued shares
held in its treasury), the number of shares of Preferred Stock (and, following
the occurrence of a Triggering Event, Common Stock and/or other securities, as
the case may be) that, as provided in this Agreement including Section
11(a)(iii) hereof, will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) Listing on Exchange. So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or other
securities, as the case may be) issuable and deliverable upon the exercise of
the Rights may be listed on any national securities exchange, the Company shall
use all reasonable efforts to cause, from and after such time as the Rights
become exercisable, all shares reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
(c) Registration Statement. The Company shall use its reasonable best efforts to
(i) file, as soon as practicable following the earlier of (A) the earliest date
after the first occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of the Rights has
been determined in accordance with Section 11(a)(iii) hereof, or (B) as soon as
is required by law following the Distribution Date, a registration statement on
an appropriate form under the Securities Act, with respect to the Common Stock
or other securities purchasable upon exercise of the Rights, (ii) cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the earlier of (x) the date as of which the Rights are no longer exercisable for
such securities, and (y) the date of the expiration of the Rights. The Company
will also take such action as may be appropriate under, or to ensure compliance
with, the securities or "blue sky" laws of the various states in connection with
the exercisability of the Rights. The Company may temporarily suspend, for a
period of time not to exceed ninety (90) days after the date set forth in clause
(i) of the first sentence of this Section 9(c), the exercisability of the Rights
in order to prepare and file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. In addition, if the Company shall determine that a
registration statement is required in other circumstances following the
Distribution Date, the Company similarly may temporarily suspend the
exercisability of the Rights until such time as a registration statement has
been declared effective. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained, or
the exercise thereof shall not be permitted under applicable law, or a
registration statement shall not have been declared effective.
(d) Due Authorization. The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all one one-thousandths of a
share of Preferred Stock (and, following the occurrence of a Triggering Event,
Common Stock and/or other securities, as the case may be) delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) Transfer Taxes. 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 and of any certificates for a number of one one thousandths of a
share of Preferred Stock (or Common Stock and/or other securities, as the case
may be) 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 a number of one one- thousandths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) in a name other than
that of the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for a number of
one one- thousandths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have been paid (any
such tax being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
Section 10. Stockholder Rights. Each person in whose name any certificate for a
number of one one-thousandths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record of
such fractional shares of Preferred Stock (or Common Stock and/or other
securities, as the case may be) represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided that if the date of such surrender
and payment is a date upon which the Preferred Stock (or Common Stock and/or
other securities, as the case may be) transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock (or Common Stock and/or
other securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate, as such, shall not be entitled to any rights of a stockholder of
the Company with respect to 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 and Kind of Shares or Rights.
The Purchase Price, the number and kind of shares, or fractions thereof,
purchasable upon exercise of each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a) Adjustment.
(i) Adjustment of Preferred Stock. In the event the Company shall at any
time after the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B) subdivide or
split the outstanding Preferred Stock, (C) combine or consolidate the
outstanding Preferred Stock into a smaller number of shares, or (D)
issue any shares of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section
11(a) and Section 7(e) hereof, the Purchase Price in effect at the time
of the record date for such dividend or of the effective date of such
subdivision, split, combination, consolidation or reclassification, and
the number and kind of shares of Preferred Stock (or other capital
stock, as the case may be,) issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares
of Preferred Stock or capital stock, as the case may be, which, if such
Right had been exercised immediately prior to such date (whether or not
such Right was then exercisable) and at a time when the transfer books
for the Preferred Stock (or other capital stock, as the case may be) of
the Company were open, such holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
split, combination, consolidation or reclassification. If an event
occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Acquiring Person Event. Unless the event causing such Person to become
an Acquiring Person is described in clause (x) or clause (y), below, in
the event any Person shall, at any time after the Rights Dividend
Declaration Date, become an Acquiring Person, then, promptly following
the occurrence of such event, proper provision shall be made so that
each holder of a Right (except as provided below and in Section 7(e)
hereof) shall thereafter have the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the terms
of this Agreement, in lieu of a number of one one-thousandths of a
share of Preferred Stock, such number of shares of Common Stock of the
Company as shall equal the result obtained by
(a) multiplying the then current Purchase Price by the then
number of one one-thousandths of a share of Preferred Stock for
which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event (whether or not such Right
was then issued or exercisable), and
(b) dividing that product (which, following such first
occurrence, shall thereafter be referred to as the "Purchase Price"
for each Right and for all purposes of this Agreement) by 50% of the
Current Market Price (determined pursuant to Section 11(d) hereof)
per share of Common Stock on the date of such first occurrence (such
number of shares, the "Adjustment Shares").
The provisions of this Section 11(a)(ii) shall not apply if the event
causing such Person to become an Acquiring Person is either:
(x) a transaction set forth in Section 13(a) hereof, or
(y) an acquisition of shares of Common Stock pursuant to a
tender offer or an exchange offer for all outstanding shares of
Common Stock at a price and on terms determined by at least a
majority of the members of the Board who are not officers of the
Company or any of its Subsidiaries and who are Continuing Directors,
after receiving advice from one or more investment banking firms, to
be (1) at a price which is fair to the Company's stockholders and
not inadequate (taking into account all factors which such members
of the Board deem relevant, including, without limitation, prices
which could reasonably be achieved if the Company or its assets were
sold on an orderly basis designed to realize maximum value) and (2)
otherwise in the best interests of the Company and its stockholders
(a "Qualifying Offer"),
(iii) Insufficient Shares. In the event that the number of shares of Common
Stock which are authorized by the Company's Articles of Incorporation, but
which are not outstanding or reserved for issuance for purposes other than
upon exercise of the Rights, is not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii) of
this Section 11(a), the Company, acting by resolution of the Board, shall:
A. determine the value of the Adjustment Shares issuable upon the exercise
of a Right (the "Current Value"); and
B. with respect to each Right (subject to Section 7(e) hereof), make
adequate provision to substitute for the Adjustment Shares, upon
the exercise of such Right and payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Common Stock or other equity securities of the Company
(including, without limitation, shares or units of shares of
preferred stock, such as the Preferred Stock, which the Board has
deemed to have essentially the same value or economic rights as
shares of Common Stock (such shares of preferred stock being
referred to as "Common Stock Equivalents")), (4) debt securities
of the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value,
where such aggregate value has been determined by the Board based
upon the advice of a nationally recognized investment banking
firm selected by the Board; provided that if the Company shall
not have made adequate provision to deliver pursuant to this
clause (B) cash, securities or other property described in
clauses (1) through (6) above within thirty (30) days following
the later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) hereof expires (the later of (x) and
(y) being referred to herein as the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment
of the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares and/or cash
have an aggregate value equal to the Spread.
For purposes of the preceding sentence, the term "Spread" shall mean the excess
of (i) the Current Value over (ii) the Purchase Price. If the Board determines
in good faith that it is likely that sufficient additional shares of Common
Stock could be authorized for issuance upon exercise in full of the Rights, the
thirty (30) day period set forth above may be extended to the extent necessary,
but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in
order that the Company may seek stockholder approval for the authorization of
such additional shares (such thirty (30) day period, as it may be extended, is
herein called the "Substitution Period"). To the extent that action is to be
taken pursuant to the first and/or third sentences of this Section 11(a)(iii),
the Company (1) shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights, and (2) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek such stockholder approval for such authorization of additional
shares and/or to decide the appropriate form of distribution to be made pursuant
to such first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of each Adjustment Share shall be the
Current Market Price (as defined in Section 11(d) hereof) per share of the
Common Stock on the Section 11(a)(ii) Trigger Date, and the per share or per
unit value of any Common Stock Equivalent shall be deemed to equal the Current
Market Price per share of the Common Stock on such date. Notwithstanding the
foregoing provisions of this subparagraph (iii), in the event that, pursuant to
this subparagraph (iii), upon the exercise of the Rights the Company shall be
required to deliver value in any form other than shares of Common Stock, such
value shall be delivered only to the extent and at the time that, if required,
the approval by appropriate financial regulatory authorities with supervisory
jurisdiction over the Company or its financial institution Subsidiaries of such
delivery of such value shall have been obtained. (b) Issuance of Options on
Preferred Stock. In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within forty-five (45) calendar
days after such record date) Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred Stock ("Equivalent
Preferred Stock")) or securities convertible into Preferred Stock or Equivalent
Preferred Stock at a price per share of Preferred Stock or per share of
Equivalent Preferred Stock (or having a conversion price per share, if a
security convertible into Preferred Stock or Equivalent Preferred Stock) less
than the Current Market Price (as determined pursuant to Section 11(d) hereof)
per share of Preferred Stock on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of shares of Preferred Stock which the
aggregate subscription or offering price of the total number of shares of
Preferred Stock and/or Equivalent Preferred Stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price, and the denominator of
which shall be the number of shares of Preferred Stock outstanding on such
record date, plus the number of additional shares of Preferred Stock and/or
Equivalent Preferred Stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). In
case such subscription price may be paid by delivery of consideration, part or
all of which may be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights. Shares of Preferred Stock owned by
or held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights 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.
Issuance of Other Property. In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash (other than a regular
periodic cash dividend out of the earnings or retained earnings of the Company),
assets (other than a dividend payable in Preferred Stock, but including any
dividend payable in stock other than Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the Current Market Price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock on
such record date, less the fair market value (as determined in good faith by the
Board, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Preferred Stock, and
the denominator of which shall be such Current Market Price (as determined
pursuant to Section 11(d) hereof) per share of Preferred Stock. Such adjustments
shall be made successively whenever such a record date is fixed, and in the
event that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect if such record
date had not been fixed.
(c) Current Market Value.
(i) For Common Stock. For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii) hereof, the
"Current Market Price" per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such
Common Stock for the thirty (30) consecutive Trading Days (as such term
is hereinafter defined) immediately prior to such date. For purposes
of computations made pursuant to Section 11(a)(iii) hereof, the
"Current Market Price" per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such
Common Stock for the ten (10) consecutive Trading Days immediately
following such date; provided that in the event that the Current Market
Price per share of the Common Stock is determined during a period
following the announcement by the issuer of such Common Stock of (A) a
dividend or distribution on such Common Stock payable in shares of such
Common Stock or securities convertible into shares of such Common Stock
(other than the Rights), or (B) any subdivision, combination,
consolidation, reverse stock split or reclassification of such Common
Stock, and the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination, consolidation,
reverse stock split or reclassification shall not have occurred prior
to the commencement of the requisite thirty (30) Trading Day or ten
(10) Trading Day period, as set forth above, then, and in each such
case, the Current Market Price shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall be
the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the shares of
Common Stock are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction
reporting system or as quoted by the Nasdaq National Market with
respect to securities listed or admitted to trading on another national
securities exchange or quoted by the Nasdaq National Market,
respectively, or if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange or quoted by
the Nasdaq National Market, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the
over-the-counter market, as reported by The Nasdaq Stock Market or such
other quotation system then in use, or, if on any such date the shares
of Common Stock are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market
maker making a market in the Common Stock selected by the Board. If on
any such date the Common Stock is not publicly held and is not so
listed, admitted to trading or quoted, and no market maker is making a
market in the Common Stock, "Current Market Price" per share of Common
Stock shall mean the fair value of such shares on such date as
determined in good faith by the Board, which determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. The term "Trading Day" shall mean a day
on which the principal national securities exchange on which the shares
of Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, a
Business Day.
(ii) For Preferred Stock. per share of Preferred Stock shall be determined
in the same manner as set forth above for the Common Stock in clause
(i) of this Section 11(d) (other than the next to last sentence
thereof). If the Current Market Price per share of Preferred Stock
cannot be determined in the manner provided above or if the Preferred
Stock is not publicly held or listed or admitted to trading or quoted
in a manner described in clause (i) of this Section 11(d), the Current
Market Price per share of Preferred Stock shall be conclusively deemed
to be an amount equal to 1,000 (as such number may be appropriately
adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock occurring after the
date of this Agreement) multiplied by the Current Market Price per
share of the Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or admitted to trading or
quoted, the Current Market Price per share of the Preferred Stock shall
mean the fair value per share as determined in good faith by the Board,
whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. For all
purposes of this Agreement, the Current Market Price of one
one-thousandth of a share of Preferred Stock shall be equal to the
Current Market Price of one share of Preferred Stock divided by 1,000.
(d) Limitation on Adjustment. Anything herein to the contrary notwithstanding,
no adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease in the Purchase Price of at least one
percent (1%); provided 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 ten-thousandth of a share of
Common Stock or other share or one-millionth of a share of Preferred Stock, as
the case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three (3) years from the date of the transaction which mandates such
adjustment, or (ii) the Expiration Date.
(e) Further Adjustment. If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof (or the number of Rights)
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Preferred
Stock contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and
(m) hereof, and the provisions of Sections 7, 9, 10, 13 and 14 hereof with
respect to the Preferred Stock shall apply on like terms to any such other
shares.
(f) Subsequent Issuance of Rights. 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-thousandths of a share of Preferred Stock purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(g) Calculation of Preferred Stock. Unless the Company shall have exercised its
election as provided in Section 11(i) hereof, upon each adjustment of the
Purchase Price as a result of the calculations made in Sections 11(b) and (c)
hereof, each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-thousandths of a share of Preferred Stock
(calculated to the nearest one-millionth) obtained by (i) multiplying (x) the
number of one one-thousandths 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.
(h) Alternative Adjustment of Rights. The Company may elect on or after the date
of any adjustment of the Purchase Price to adjust the number of Rights, in lieu
of any adjustment in the number of one one-thousandths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights outstanding
after the adjustment in the number of Rights shall be exercisable for the number
of one one-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one-ten-thousandth of a Right) obtained by
dividing the Purchase Price in effect 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
ten (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 may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(i) Rights Certificates. Irrespective of any adjustment or change in the
Purchase Price or the number of one one-thousandths of a share of Preferred
Stock issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase Price per
one one-thousandth of a share and the number of one one-thousandths of a share
which were expressed in the initial Rights Certificates issued hereunder.
(j) Corporate Authorization. Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated value, if any, of
the number of one one-thousandths of a share of Preferred Stock issuable upon
exercise of the Rights, the Company shall use all reasonable efforts to take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue, fully paid and nonassessable,
such number of one one-thousandths of a share of Preferred Stock at such
adjusted Purchase Price.
(k) Deferral of Issuance. 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 number of one one-thousandths of a share of Preferred Stock and
other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of one one-thousandths of a share of
Preferred Stock 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 that the Company shall deliver to such holder a due
bill or other appropriate instrument evidencing such holder's right to receive
such additional shares (fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.
(l) Non-Taxable Adjustments. Notwithstanding anything in this Section 11 to the
contrary, the Company shall be entitled to make such adjustments in the Purchase
Price, in addition to those adjustments expressly required by this Section 11,
as and to the extent that in its good faith judgment the Board shall determine
to be advisable in order that any (i) consolidation or subdivision of the
Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred Stock
at less than the Current Market Price, (iii) issuance wholly for cash of shares
of Preferred Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock dividends or (v) issuance
of rights, options or warrants referred to in this Section 11, hereafter made by
the Company to holders of its Preferred Stock shall not be taxable to such
stockholders.
(m) Limitation on Reorganizations. The Company covenants and agrees that it
shall not, at any time after the Distribution Date, (i) consolidate with any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), (ii) merge with or into any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to
sell or transfer), in one transaction, or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if (x) at the
time of or immediately after such consolidation, merger, sale or transfer there
are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger, sale or
transfer, the stockholders of the Person who constitutes, or would constitute,
the "Principal Party" for purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates
and Associates.
(n) No Impairment. The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 27 hereof, take
(or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
(o) Adjustment of Common Stock. Notwithstanding anything in this Agreement to
the contrary, in the event that the Company shall at any time after the Rights
Dividend Declaration Date and prior to the Distribution Date (i) declare a
dividend on the outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii) combine
or consolidate the outstanding shares of Common Stock into a smaller number of
shares, the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date (or issued or delivered on or after the Distribution Date pursuant to
Section 22), shall be proportionately adjusted so that the number of Rights
thereafter associated with each share of Common Stock following any such event
shall equal the result obtained by multiplying the number of Rights associated
with each share of Common Stock immediately prior to such event by a fraction
the numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the denominator
of which shall be the total number of shares of Common Stock outstanding
immediately following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever
an adjustment is made as provided in Section 11 and Section 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Preferred Stock
and the Common Stock, a copy of such certificate, and (c) if a Distribution Date
has occurred, mail or cause the Rights Agent to mail a brief summary thereof to
each holder of a Rights Certificate in accordance with Section 26 hereof. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment therein contained and shall not be deemed to have knowledge of
any such adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) Section 13 Event. In the event that, on or after the Stock Acquisition
Date, directly or indirectly,
(x) the Company shall consolidate with, or merge with and into, any
other Person or Persons (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), and the Company
shall not be the continuing or surviving corporation of such consolidation
or merger,
(y) any Person or Persons (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof) shall consolidate
with, or merge with or into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or merger and,
in connection with such consolidation or merger, all or part of the
outstanding shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or Persons or cash or any
other property, or
(z) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one transaction or
a series of related transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole and calculated on the basis of the Company's most recent
regularly prepared financial statements) to any Person or Persons (other
than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof),
then, and in each such case (except as may be contemplated by Section 13(d)
hereof), proper provision shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e)
hereof, shall, from and after the later of (A) the date of the first
occurrence of any such Section 13 Event or (B) the date of the expiration
of the period within which the Rights may be redeemed pursuant to Section
23 hereof (as the same may be amended), have the right to receive, upon
the exercise thereof at the then current Purchase Price in accordance with
the terms of this Agreement, such number of validly authorized and issued,
fully paid, nonassessable and freely tradable shares of Common Stock of
the Principal Party (as such term is hereinafter defined), not subject to
any liens, encumbrances, rights of first refusal or other adverse claims,
as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of one one-thousandths of a share of
Preferred Stock for which a Right is exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event
has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such one one-thousandths of a share for which a
Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price in effect immediately prior
to such first occurrence), and (2) dividing that product (which, following
the first occurrence of a Section 13 Event, shall be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement) by
50% of the Current Market Price (determined pursuant to Section 11(d)(i)
hereof) per share of the Common Stock of such Principal Party on the date
of consummation of such Section 13 Event;
(ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties
of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the
first occurrence of a Section 13 Event;
(iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction as may
be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of the Rights; and
(v) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
(b) Principal Party. A "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or (y) of the
first sentence of Section 13(a), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are
converted, changed or exchanged in such merger or consolidation, or if
no securities are so issued, the Person that is the other party to such
merger or consolidation, or if the other party to the merger does not
survive the merger, the Person that does survive the merger (including
the Company, if it survives); and
(ii) in the case of any transaction described in clause (z) of the first
sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions;
provided that in any such case, (1) if the Common Stock of such Person is
not at such time and has not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the Common Stock of which is
and has been so registered, "Principal Party" shall refer to such other Person;
and (2) if the Common Stock of such Person is not and has not been so registered
and such Person is a Subsidiary, directly or indirectly, of more than one
Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value.
(c) Supplemental Agreement. The Company shall not consummate any such Section 13
Event unless the Principal Party shall have a sufficient number of authorized
shares of its Common Stock which have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with this Section 13
and unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement confirming
that the requirements of Section 13(a) and Section 13(b) hereof shall promptly
be performed in accordance with their terms and further providing that, as soon
as practicable after the date of any such Section 13 Event, the Principal Party
will (i) prepare and file a registration statement under the Securities Act,
with respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, and will use its best efforts to cause
such registration statement to (A) become effective as soon as practicable
after such filing and (B) remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the Expiration Date;
and
(ii) take all such other action as may be necessary to enable the Principal
Party to issue the securities purchasable upon exercise of the Rights,
including but not limited to the registration or qualification of such
securities under all requisite securities laws of jurisdictions of the
various states and the listing of such securities on such exchanges and
trading markets as may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical financial statements for the
Principal Party and each of its Affiliates which comply in all respects
with the requirements for registration on Form 10 (or any successor form)
under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a).
(d) Exempt Transaction. Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction described in
subparagraph (x) or (y) of Section 13(a) if (i) such transaction is consummated
with a Person or Persons, or a wholly owned subsidiary of any such Person or
Persons, who acquired shares of Common Stock pursuant to a Qualifying Offer (as
such term is defined in Section 11(a)(ii) hereof), (ii) the price per share of
Common Stock offered in such transaction is not less than the price per share of
Common Stock paid to all holders of shares of Common Stock whose shares were
purchased pursuant to such Qualifying Offer and (iii) the form of consideration
being offered to the remaining holders of shares of Common Stock pursuant to
such transaction is the same as the form of consideration paid pursuant to such
Qualifying Offer. Upon consummation of any such transaction contemplated by this
Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) No Fractional Rights. The Company shall not be required to issue fractions
of Rights, except prior to the Distribution Date as provided in Section 11(i)
and Section 11(p) hereof, or to distribute Rights Certificates which evidence
fractional Rights. In lieu of any such fractional Rights, the fractional Rights
otherwise issuable shall be rounded to the nearest whole number of Rights with
one-half of a Right being rounded to the next highest whole Right. Any
determination under this Section 14(a) with respect to factional Rights shall be
done on an aggregate basis taking into account all Rights held by such holder
(i.e., such holder shall have no more than one fractional Right).
(b) No Fractional Shares of Preferred Stock. The Company shall not be required
to issue fractions of shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock, which
may, at the option of the Company, be evidenced by depositary receipts) upon
exercise of the Rights or to distribute certificates which evidence fractional
shares of Preferred Stock (other than fractions which are integral multiples of
one one-thousandth of a share of Preferred Stock). In lieu of fractional shares
of Preferred Stock that are not integral multiples of one one-thousandth of a
share of Preferred Stock, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of one
one-thousandth of a share of Preferred Stock. For purposes of this Section
14(b), the current market value of one one-thousandth of a share of Preferred
Stock shall be one one-thousandth of the closing price of a share of Preferred
Stock, or if unavailable, the appropriate alternative price (in each case, as
determined pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) No Fractional Shares of Common Stock. Following the occurrence of a
Triggering Event, the Company shall not be required to issue fractions of shares
of Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one (1) share
of Common Stock. For purposes of this Section 14(c), the current market value of
one share of Common Stock shall be the closing price of one share of Common
Stock, or if unavailable, the appropriate alternative price (in each case, as
determined pursuant to Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.
(d) Waiver by Holders. The holder of a Right by the acceptance of that Right
expressly waives such holder's right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this Section
14.
Section 15. Rights of Action. All rights of action in respect of this Agreement,
other than rights of action vested in the Rights Agent pursuant to Section 18
hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in such holder's own behalf and
for such holder's own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in respect
of, such holder's right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by accepting
the same consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of shares of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and
certificates contained therein duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Rights Certificate or
the associated Common Stock certificate made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be required to be affected
by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of
any preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission,
or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation; provided
that the Company must use its reasonable best efforts to have any
such order, decree or ruling lifted or otherwise overturned as
soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder, as
such, of any Rights Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of the number of one one-thousandths of a
share of Preferred Stock or any other securities of the Company which may at any
time be issuable upon the exercise of the Rights represented thereby, nor shall
anything contained in this Agreement or in any Rights Certificate be construed
to confer upon the holder of any Rights Certificate, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in Section
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.
(a) Compensation. 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, reimbursement for its reasonable expenses and
counsel fees and disbursements and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
(b) Limitation of Liability. The Rights Agent shall be protected and shall incur
no liability for or in respect of any action taken, suffered or omitted by it in
good faith in connection with its administration of this Agreement in reliance
upon any Rights Certificate or certificate for Common Stock or for other
securities of the Company, or any instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document reasonably believed by it to
be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Merger or Consolidation. Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust, stock transfer or other shareholder services
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
but only if such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. If at the time such
successor Rights Agent shall succeed to the agency created by this Agreement any
of the Rights Certificates shall have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of a predecessor
Rights Agent and deliver such Rights Certificates so countersigned; and 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 or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
(b) Change of Name. If at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes to perform all
of the duties and obligations imposed on the Rights Agent by this Agreement upon
the following terms and conditions. By it's execution of this Agreement, the
Company agrees to be bound by all of such terms and conditions. By their
acceptance of the Rights Certificate, each of the holders of Rights Certificates
agrees to be bound by all of such terms and conditions.
(a) Consultation with Counsel. The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Reliance on Company. Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of Current Market Price) be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
the Chairman of the Board, any Vice Chairman, the President, any Executive or
Senior 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) Negligence. The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct. (d) Reliance. The Rights Agent
shall not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Rights Certificates, nor shall it
be required to verify the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) Reliance on Agreement. 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 adjustment required
under the provisions of Section 11, Section 13 or Section 24 hereof or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Rights Certificates
after receipt of a certificate describing any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or Preferred Stock to
be issued pursuant to this Agreement or any Rights Certificate or as to whether
any shares of Common Stock or Preferred Stock will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) Company Covenant. The Company 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) Company Instructions. 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, any Vice Chairman, the President, any Executive or
Senior 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.
(h) Dealing in Rights. The Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company, or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing in this Agreement shall preclude the
Rights Agent from acting in any other capacity for the Company or for any other
legal entity.
(i) Attorneys and Agents. 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 reasonable care was exercised in
the selection and continued employment of any such attorney or agent.
(j) No Financial Liability. No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder (other than internal
costs incurred by the Rights Agent in providing services to the Company in the
ordinary course of its business as Rights Agent) or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) Restriction on Action. If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first consulting
with the Company.
Section 21. Change of Rights Agent.
(a) Resignation. The Rights Agent or any successor Rights Agent may resign and
be discharged from its duties under this Agreement upon thirty (30) days'
written notice mailed to the Company, and to each transfer agent of the Common
Stock and Preferred Stock, by registered or certified mail, and, if such
resignation occurs after the Distribution Date, to the registered holders of the
Rights Certificates by first-class mail.
(b) Removal. The Company may remove the Rights Agent or any successor Rights
Agent upon thirty (30) days' written notice mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified mail, and, if such
removal occurs after the Distribution Date, to the holders of the Rights
Certificates by first-class mail.
(c) Appointment of Successor Rights Agent. 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 thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent.
(d) Successor Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (i) a legal business entity organized and
doing business under the laws of the United States or of any state of the United
States, in good standing, which is authorized under such laws to exercise
corporate trust powers and is subject to supervision or examination by a federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $100,000,000 or (ii) an Affiliate of
a legal business entity described in clause (i) of this sentence.
(e) Authority of Successor Rights Agent. After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and shall execute
and deliver any further assurance, conveyance, act or deed necessary for that
purpose. Not later than the effective date of any such appointment, the Company
shall file written notice thereof with the predecessor Rights Agent and each
transfer agent of the Common Stock and the Preferred Stock, and, if such
appointment occurs after the Distribution Date, mail a written notice thereof to
the registered holders of the Rights Certificates. (f) No Delay. Failure to give
any notice provided for in this Section 21, or any defect in any such notice,
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, any Rights Certificate or 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 the Board 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. In addition, in
connection with the issuance or sale of shares of Common Stock following the
Distribution Date and prior to the redemption or expiration of the Rights, the
Company shall:
(a) with respect to shares of Common Stock so issued or sold pursuant to
the exercise of stock options or under any employee plan or
arrangement, granted or awarded as of the Distribution Date, or upon
the exercise, conversion or exchange of securities hereafter issued
by the Company; and
(b) may, in any other case, if deemed necessary or appropriate by the
Board, issue Rights Certificates representing the appropriate
number of Rights in connection with such issuance or sale;
provided that (i) no such Rights Certificate shall be issued if,
and to the extent that, the Company shall be advised by counsel
that such issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to whom
such Rights Certificate would be issued, and (ii) no such Rights
Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.
Section 23. Redemption and Termination.
(a) Redemption Period. The Board may, at its option, at any time prior to
the earlier of:
(i) the close of business on the twentieth (20th) day following the Stock
Acquisition Date (or, if the Stock Acquisition Date shall have occurred
prior to the Record Date, the close of business on the twentieth (20th)
day following the Record Date), or
(ii) the Final Expiration Date,
direct the Company to, and if directed, the Company shall redeem all, but not
less than all, of the then outstanding Rights at a redemption price of $.01 per
Right, as such amount may be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price").
Notwithstanding anything in this Agreement to the contrary, the Rights shall not
be exercisable after the first occurrence of a Section 11(a)(ii) Event until
such time as the Company's right of redemption hereunder has expired. The
Company may, at its option, pay the Redemption Price in cash, shares of Common
Stock (based on the Current Market Price, as defined in Section 11(d)(i) hereof,
of the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board.
(b) Redemption Procedure. Immediately upon the action of the Board directing the
Company to redeem the Rights, evidence of which shall have been filed with the
Rights Agent, and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right so
held. Promptly after the action of the Board directing the Company to redeem the
Rights, the Company shall give written notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice to
each such holder at such holder's last address as it appears upon the registry
books of the Rights Agent, or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made.
(c) Redemption After Change of Board. Notwithstanding the provisions of Section
23(a) hereof, if, within 270 days of a public announcement by a third party of
an intent or proposal to engage (without the current and continuing concurrence
of the Board) in a transaction involving an acquisition of or business
combination with the Company or otherwise to become an Acquiring Person, there
is an election of Directors (whether at one or more stockholder meetings and/or
pursuant to written stockholder consent) resulting in a majority of the Board
being comprised of persons who were not nominated by the Board in office
immediately prior to such election, then following the effectiveness of such
election for a period of 180 days (the "Special Period") the Rights, if
otherwise then redeemable absent the provisions of this paragraph (c), shall be
redeemable upon either of the following conditions being satisfied, but not
otherwise:
(i) by a vote of a majority of the Directors then in office, provided that
A. before such vote, the Board shall have implemented the Value
Enhancement Procedures (as defined below) and
B. promptly after such vote, the Company publicly announces such vote and
(1) the manner in which the Value Enhancement Procedures were implemented,
(2) any material financial, business, personal or other benefit or
relationship (an "Interest") which each Director and each
Affiliate of such Director (identifying each Director and
Affiliate separately in relation to each such Interest) has
in connection with any suggested, proposed or pending
transaction with or involving the Company (a
"Transaction"), or with any other party or Affiliate of any
other party to a Transaction, where such Transaction would
or might, or is intended to, be permitted or facilitated by
redemption of the Rights (an "Affected Transaction"), other
than treatment as a stockholder on a pro rata basis with
other stockholders or pursuant to compensation arrangements
as a director or employee of the Company or a subsidiary
which have been previously disclosed by the Company,
(3) the individual vote of each Director on the motion to redeem
the Rights, and
(4) the statement of any Director who voted for or against the
motion to redeem the Rights and desires to have a statement
included in such announcement, or
(ii) if clause (i) is not applicable, by a vote of a majority of the Directors
then in office, provided that
A. if there is a challenge to the Directors' action approving
redemption and/or any related Affected Transaction as a breach of
the fiduciary duty of care or loyalty, the Directors, solely for
purposes of determining the effectiveness of such redemption
pursuant to this clause (ii), are able to establish the entire
fairness of such redemption and, if applicable, such related
Affected Transaction, and
B. the Company shall have publicly announced the vote of the Board
approving such redemption and, if applicable, such related Affected
Transaction, which announcement shall set forth the information
prescribed by clauses (A) (II) (b), (c) and (d) above.
(d) Value Enhancement Procedure. "Value Enhancement Procedures" shall mean:
(i) the selection by the Board of an independent financial advisor (the
"Independent Advisor") from among financial advisors which have
national standing, have established expertise in advising on mergers,
acquisitions and related matters and have no Interest relating to an
Affected Transaction, and have not during the preceding year provided
services to, been engaged by or been a financing source for any other
party to an Affected Transaction or any Affiliate of any such party or
of any Director (other than the Company and its subsidiaries);
(ii) whether or not there is a then-pending Affected Transaction, the receipt
by the Board from its Independent Advisor of (a) such advisor's view
(expressed in such form and subject to such qualifications and limitations
as the Independent Advisor deems appropriate) regarding whether redemption
of the Rights will serve the best interests of the Company and its
stockholders or (b) such advisor's statement that it is unable to express
such a view, setting forth the reasons therefor;
(iii) if there is a then-pending Affected Transaction,
A. the establishment and implementation by the Board, with the advice
of its Independent Advisor, of a process and procedures which the
Board and such advisor conclude would be most likely to result in
the best value reasonably available to stockholders (regardless of
whether such Affected Transaction involves a "sale of control" or
"break-up" of the Company for California law purposes),
B. the Board (I) receiving the opinion of its Independent Advisor, in
customary form and content for transactions of the type involved,
that the Affected Transaction is fair to the Company's stockholders
from a financial point of view and (II) determining, and the
Independent Advisor confirming, that it has no reason to believe
that a superior transaction is reasonably available for the benefit
of the Company's stockholders, and
C. the execution of a definitive transaction agreement and other
definitive documentation necessary to effect the Affected
Transaction.
(e) Exclusive Procedure. 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 and other
than in connection with the purchase or repurchase by any of them of Common
Stock prior to the Distribution Date.
Section 24. Exchange.
(a) Right to Exchange. At any time after the first occurrence of a Section
11(a)(ii) Event, the Board may, at its option, 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 7(e) hereof) for Common Stock
at an exchange ratio of one share of Common Stock 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"); provided that if the Board authorizes such exchange
of the Rights at any time on or after the earlier of (i) the earliest time that
any Person becomes an Acquiring Person or (ii) the first occurrence of either of
the circumstances described in clauses (i) and (ii) of Section 23(c) hereof,
there must be at least one Continuing Director then in office and such
authorization shall require the approval of a majority of the Continuing
Directors then in office. Notwithstanding the foregoing, the Board 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 Stock 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 Stock then
outstanding.
(b) Exchange Procedure. Immediately upon the action of the Board ordering the
exchange of any Rights pursuant to Section 24(a) above, 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 shares of Common Stock 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 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 Rights. 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 Stock for
Rights will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void pursuant
to the provisions of Section 7(e) hereof) held by each holder of Rights.
(c) Substitute Preferred Stock. In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Stock (or Equivalent Preferred
Stock, as such term is defined in Section 11(b) hereof) for Common Stock
exchangeable for Rights, at the initial rate of one one-thousandth of a share of
Preferred Stock (or Equivalent Preferred Stock) for each share of Common Stock,
as appropriately adjusted to reflect stock splits, stock dividends and other
similar transactions after the date hereof.
(d) Insufficient Shares. In the event that the number of shares of Common Stock
which are authorized by the Company's Articles of Incorporation but which are
not outstanding or reserved for issuance for purposes other then upon exercise
of the Rights is not sufficient to permit any exchange of Rights as contemplated
in accordance with this Section 24, the Board shall take all such action as may
be necessary to authorize additional shares of Common Stock for issuance upon
exchange of the Rights.
(e) No Fractional Shares. The Company shall not be required to issue fractions
of shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares of Common
Stock, there shall be paid to the registered holders of the Rights Certificates
with regard to which such fractional shares of Common Stock would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock. For the purposes of this Section (e),
the current market value of a whole share of Common Stock shall be the closing
price of a share of Common Stock (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) Notice. In case the Company shall propose, at any time after the
Distribution Date:
(i) to pay any dividend payable in stock of any class to the holders of
Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular periodic cash dividend out of
earnings or retained earnings of the Company), or
(ii) to offer to the holders of Preferred Stock rights or warrants to subscribe
for or to purchase any additional shares of Preferred Stock or shares of
stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision or split of outstanding
shares of Preferred Stock), or
(iv) to effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), or to effect any sale or other transfer (or
to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one transaction or a series of related transactions, of
50% or more of the assets or earning power of the Company and/or its
Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), or
(v) to effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible, a notice of such proposed action. The
notice shall specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
shares of Preferred Stock, if any such date is to be fixed. In the case of any
action covered by clause (i) or (ii) above, such notice shall be given at least
twenty (20) days prior to the record date for determining holders of the shares
of Preferred Stock for purposes of such action. In the case of any such other
action, such notice shall be given at least twenty (20) days prior to the date
of the taking of such proposed action or the date of participation therein by
the holders of the shares of Preferred Stock, whichever shall be the earlier.
(b) Notice of Section 11(a)(ii) Event. In case any Section 11(a)(ii) Event shall
occur, then in any such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the extent feasible,
a notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii) hereof,
and (ii) all references in the preceding paragraph to Preferred Stock shall be
deemed thereafter to refer to Common Stock and/or, if appropriate, other
securities.
Section 26. Notices.
(a) Notice to the Company. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent by the Company) as follows:
Pacific Capital Bancorp
200 East Carrillo, Suite 300
P.O. Box 1119
Santa Barbara, California 93102
Attention: Corporate Secretary
(b) Notice to Rights Agent. Subject to the provisions of Section 21, any notice
or demand authorized by this Agreement to be given or made by the Company or by
the holder of any Rights Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing by the Rights Agent with
the Company) as follows:
Norwest Shareholder Services
Norwest Bank Minnesota, N.A.
161 N. Concord Exchange
South St. Paul, Minnesota 55075-1139
Attn : Account Manager
(c) Notice to Rights Holder. Notices or demands authorized by this Agreement to
be given or made by the Company or the Rights Agent to the holder of any Rights
Certificate (or, if prior to the Distribution Date, to the holder of any
certificate representing shares of Common Stock) shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry books of the Company.
(d) Delivery. Any notice given by the Company or the Rights Agent shall be
deemed delivered as of the date on which it is deposited with the U.S. Postal
Service if mailed in accordance with the provisions of this Section 26. Any
notice given by the holder of any Rights shall be deemed delivered five (5) days
after the date on which it is deposited with the U.S. Postal Service if mailed
in accordance with the provisions of this Section 26; provided that any notice
of exercise of any Rights shall be deemed delivered as of the date determined
under Section 7 hereof.
Section 27. Supplements and Amendments.
(a) Right to Amend. Prior to the Distribution Date, and subject to the next to
last sentence of this Section 27(a) and the provisions of Sections 27(b) and
27(c) hereof, the Company and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement (including, without
limitation, any extension of the period in which the Rights may be redeemed, any
increase in the Purchase Price and any extension of the Final Maturity Date)
without the approval of any holders of certificates representing shares of
Common Stock. From and after the Distribution Date, and subject to the next to
last sentence of this Section 27(a) and the provisions of Sections 27(b) and
27(c) hereof, the Company and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any holders of Rights
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period hereunder,
or (iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person); provided, that this
Agreement may not be supplemented or amended to lengthen, pursuant to clause
(iii) of this sentence, (A) a time period relating to when the Rights may be
redeemed, or to modify the ability (or inability) of the Board (with, where
required, the concurrence of a majority of the Continuing Directors) to redeem
the Rights, in either case at such time as the Rights are not then redeemable,
or (B) any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to, the
holders of Rights (other than an Acquiring Person or any Affiliate or Associate
of an Acquiring Person). Notwithstanding anything contained in this Agreement to
the contrary, no supplement or amendment shall be made which changes the
Redemption Price or the number of one one-thousandths of a share of Preferred
Stock for which a Right is exercisable. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Common Stock.
(b) Restriction. Notwithstanding anything contained in this Agreement to the
contrary, for a period of one hundred and eighty (180) days following the first
occurrence of either of the circumstances described in clause (i) and clause
(ii) of Section 23(c) hereof, no supplement or amendment shall be made to this
Agreement under any circumstances.
(c) Continuing Director. Notwithstanding anything contained in this Agreement to
the contrary, at any time following the expiration of the 180-day period under
Section 27(b) above, this Agreement may be amended or supplemented only if there
is at least one Continuing Director then in office and only if a majority of the
Continuing Directors then in office concurs with such amendment or supplement.
(d) Execution. Upon the delivery of a certificate from an appropriate officer of
the Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment.
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. Determinations and Actions by the Board of Directors, etc. For all
purposes of this Agreement, any calculation of the number of shares of Common
Stock outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding shares of Common Stock of which
any Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act. The Board (with, where specifically provided for herein, the
concurrence of the Continuing Directors) shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board (with, where specifically provided for herein,
the concurrence of the Continuing Directors) or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (a) interpret the provisions of this
Agreement, and (b) make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend this Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
(with, where specifically provided for herein, the concurrence of the Continuing
Directors) in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties, and
(y) not subject the Board, any of the directors on the Board or the Continuing
Directors to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).
Section 31. Severability If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; provided that,
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board determines in its good faith
judgment that severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right of redemption set
forth in Section 23 hereof shall be reinstated and shall not expire until the
close of business on the fifteenth (15th) day following the date of such
determination by the Board. Without limiting the foregoing, if any provision of
this Agreement requiring that a determination be made by, or with the
concurrence of, less than the entire Board is held by any court of competent
jurisdiction or other authority to be invalid, void or unenforceable, such
determination shall then be made by the Board in accordance with applicable law
and the Company's Articles of Incorporation and By-laws.
Section 32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of California and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the
<PAGE>
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Stockholders Rights
Agreement to be duly executed and attested as of the day and year first above
written.
PACIFIC CAPITAL BANCORP
By:____________________________________
David W. Spainhour, President
Attest:
- ------------------------------
Jay D. Smith, Corporate Secretary
NORWEST BANK MINNESOTA, N.A.
By:____________________________________
Nancy J. Rosengren, Vice President
Attest:
- ------------------------------
___________, Assistant Secretary
