SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A/A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
FIRST VIRGINIA BANKS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Virginia 54-0497561
(State of Incorporation (I.R.S. Employer
or Organization) Identification No.)
One First Virginia Plaza
6400 Arlington Boulevard
Falls Church, Virginia 22042-2336
(Address of Principal Executive Offices) (Zip Code)
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
Preferred Stock Purchase Rights New York Stock Exchange, Inc.
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)<PAGE>
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Introductory Statement
On August 27, 1997, the Registrant entered into
Amendment No. 1 to Rights Agreement (the "Amendment") with
Registrar and Transfer Company, successor to American Security
Bank, N.A. as Rights Agent, amending the Rights Agreement,
dated as of July 29, 1988 (the "Rights Agreement"), between the
Registrant and the Rights Agent. Pursuant to the Amendment,
the Registrant has restated the Rights Agreement as the Amended
and Restated Rights Agreement, filed as Exhibit 1 hereto, to
reflect the amendments contained therein. The Registrant
hereby amends Items 1 and 2 of the Registrant's Form 8-A dated
August 1, 1988 to read in their entirety as follows:
Item 1. Description of Securities to be Registered.
On July 27, 1988, the Board of Directors of First
Virginia Banks, Inc. (the "Company") declared a dividend dis-
tribution of one Right for each outstanding share of common
stock, $1.00 par value (the "Common Stock"), of the Company to
stockholders of record at the close of business on August 8,
1988 (the "Record Date"). Except as set forth below, each
Right, when exercisable, entitles the registered holder to pur-
chase from the Company one one-hundredth share of a new series
of preferred stock, designated as Series E Participating Pre-
ferred Stock, par value $10.00 per share (the "Preferred
Stock"), at a price of $450 (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set
forth in an Amended and Restated Rights Agreement (the "Amended
Rights Agreement") between the Company and Registrar and
Transfer Company, as Rights Agent.
Initially, the Rights will be attached to all Common
Stock certificates representing shares then outstanding, and no
separate Rights certificates will be distributed. Until the
earlier to occur of (i) the tenth day after a public
announcement that, without the prior consent of the Company, a
person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to
acquire, beneficial ownership of securities having 20% or more
of the voting power of all outstanding voting securities of the
Company or (ii) ten business days (or such later date as may be
determined by the Board of Directors prior to a person becoming
an Acquiring Person) following the commencement of (or a public
announcement of an intention to make) a tender offer or
exchange offer which would result in any person or group and
related persons becoming an Acquiring Person, without the prior
consent of the Company (the earlier of such dates being called
-2-<PAGE>
the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Stock certificates outstanding as
of the Record Date, by such Common Stock certificate together
with the Summary of Rights. The Amended Rights Agreement
provides that, until the Distribution Date, the Rights will be
transferred with, and only with, Common Stock certificates.
From as soon as practicable after the Record Date and until the
Distribution Date (or earlier redemption or expiration of the
Rights), new Common Stock certificates issued after the Record
Date upon transfer or new issuance of the Common Stock will
contain a notation incorporating the Amended Rights Agreement
by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for
transfer of any certificates for Common Stock outstanding as of
the Record Date (with or without this Summary of Rights
attached) will also constitute the transfer of the Rights
associated with the Common Stock represented by such certifi-
cate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Rights Certifi-
cates") will be mailed to holders of record of the Common Stock
as of the close of business on the Distribution Date, and the
separate Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire on the earliest of (i) August 8,
2008, (ii) consummation of a merger transaction with a person
or group who acquired Common Stock pursuant to a Permitted
Offer (as defined below), and is offering in the merger the
same price per share and form of consideration paid in the Per-
mitted Offer, or (iii) redemption by the Company as described
below.
The Purchase Price payable, and the number of shares
of Preferred Stock or other securities or property issuable,
upon exercise of the Rights are subject to adjustment from time
to time to prevent dilution (i) in the event of a stock divi-
dend on, or a subdivision, combination or reclassification of
the Preferred Stock, (ii) upon the grant to holders of the Pre-
ferred Stock of certain rights or warrants to subscribe for
Preferred Stock, certain convertible securities or securities
having the same or more favorable rights, privileges and pref-
erences as the Preferred Stock at less than the current market
price of the Preferred Stock or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends out of earn-
ings or retained earnings) or of subscription rights or war-
rants (other than those referred to above).
The number of outstanding Rights associated with each
share of Common Stock then outstanding, or issued or delivered
-3-<PAGE>
thereafter but prior to the Distribution Date, is also subject
to adjustment in the event of a stock split of the Common Stock
or a stock dividend on the Common Stock payable in shares of
Common Stock or subdivisions, consolidations or combinations of
the Common Stock occurring, in any such case, prior to the
Distribution Date.
In the event that a person becomes the beneficial
owner of securities having 20% or more of the voting power of
all then outstanding voting securities of the Company (unless
pursuant to a tender offer or exchange offer for all outstand-
ing shares of Common Stock at a price and on terms determined
by at least a majority of the members of the Board of Directors
who are not officers of the Company to be both adequate and
otherwise in the best interests of the Company and its stock-
holders (a "Permitted Offer")), proper provision shall be made
so that each holder of a Right (other than an Acquiring Person)
will for a 60-day period thereafter have the right to receive
upon exercise that number of one one-hundredths of a share of
Preferred Stock equal to the number of shares of Common Stock
having a market value (immediately prior to the triggering of
the Right) of two times the exercise price of the Right, to the
extent available, and then (after all authorized and unreserved
shares of Preferred Stock have been issued) an equal number of
an equivalent security (such as another equity security with at
least the same economic value as one one-hundredth of a share
of Preferred Stock) (such right being called the "Flip-In
Right"). In addition, the Company shall be entitled (but not
required) to deliver, upon exercise of the Flip-In Right, in
lieu of one one-hundredths of a share of Preferred Stock, an
equal number of shares of Common Stock, to the extent they are
available.
In the event that, after the first date of public
announcement by the Company or an Acquiring Person that an
Acquiring Person has become such, the Company is involved in a
merger or other business combination transaction in which the
Common Stock is exchanged or changed, or 50% or more of the
Company's assets or earning power are sold (in one transaction
or a series of transactions), proper provision shall be made so
that each holder of a Right (other than the Acquiring Person)
shall thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company (or,
in the event there is more than one acquiring company, the
acquiring company receiving the greatest portion of the assets
or earning power transferred) which at the time of such trans-
action would have a market value (immediately prior to the
triggering of the Right) of two times the exercise price of the
Right (such right being called the "Flip-Over Right"). For
-4-<PAGE>
example, at an exercise price of $450 per Right, each Right not
owned by an Acquiring Person following an event set forth in
this paragraph would entitle its holder to purchase common
stock of the acquiring company with a market value immediately
prior to the triggering of the Right of $900 (or, in the event
there is more than one acquiring company, the acquiring company
receiving the greatest portion of the assets or earning power
transferred) for $450.
At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person or
group of 50% or more of the outstanding shares of Common Stock,
the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will
have become void), in whole or in part, at an exchange ratio of
one share of Common Stock, or one one-hundredth of a share of
Preferred Stock (or of a share of a class or series of the
Company's preferred stock having equivalent rights, preferences
and privileges), per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction
occurring after July 29, 1988.
The holder of a Right will continue to have the
Flip-Over Right whether or not such holder exercises the
Flip-In Right. Upon the occurrence of any of the events giving
rise to the exercisability of the Flip-Over Right or the
Flip-In Right, any Rights that are or were at any time owned by
an Acquiring Person engaging in any of such transactions or
receiving the benefits thereof on or after the time the Acquir-
ing Person becomes such shall become void insofar as they
relate to the Flip-Over Right or the Flip-In Right.
With certain exceptions, no adjustments in the Pur-
chase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price.
No fractions of shares will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of
the Common Stock on the last trading date prior to the date of
exercise.
At any time prior to the earlier to occur of (i) a
person becoming an Acquiring Person or (ii) the expiration of
the Rights, the Company may redeem the Rights in whole, but not
in part, at a price of $.01 per Right (the "Redemption Price"),
which redemption shall be effective upon the action of the
Board of Directors. Additionally, the Company may thereafter
redeem the then outstanding Rights in whole, but not in part,
at the Redemption Price provided that such redemption is inci-
dental to a merger or other business combination transaction or
series of transactions involving the Company but not involving
-5-<PAGE>
an Acquiring Person or any person who was an Acquiring Person
or following an event giving rise to, and the expiration of the
exercise period for, the Flip-In Right if and for as long as an
Acquiring Person beneficially owns securities representing less
than 20% of the voting power of the Company's voting
securities. The redemption of Rights described in the
preceding sentence shall be effective only as of such time when
the Flip-In Right is not exercisable, and in any event, only
after 10 business days prior notice. Upon the effective date
of the redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
The Preferred Stock purchasable upon exercise of the
Rights will be nonredeemable. Each share of Preferred Stock
will have a preferential quarterly dividend in an amount equal
to 100 times the dividend declared on each share of Common
Stock, but in no event less than $1.00. In the event of liqui-
dation, the holders of Preferred Stock will receive a preferred
liquidation payment per 1/100 share thereof equal to the
greater of the issuance price thereof or the payment made per
each share of Common Stock.
Each share of Preferred Stock will have 1 vote,
voting together with the shares of Common Stock.
In the event of any merger, consolidation or other
transaction in which shares of Common Stock are exchanged, each
share of Preferred Stock will be entitled to receive 100 times
the amount and type of consideration received per share of Com-
mon Stock. The rights of the Preferred Stock as to dividends,
liquidation and voting, and in the event of mergers and con-
solidations, are protected by customary anti-dilution provi-
sions. Fractional shares of Preferred Stock will be issuable;
however, the Company may elect to distribute depositary
receipts in lieu of such fractional shares. In lieu of frac-
tional shares other than fractions that are multiples of one
one-hundredth of a share, an adjustment in cash will be made
based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive
dividends. While the distribution of the Rights will not be
taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income
should the Rights become exercisable or upon the occurrence of
certain events thereafter.
-6-<PAGE>
The terms of the Rights may be amended by the Board
of Directors of the Company without the consent of the holders
of the Rights, including an amendment to lower certain
thresholds described above to not less than the greater of (i)
the sum of .001% and the largest percentage of the outstanding
shares of Common Stock then known to the Company to be ben-
eficially owned by any person or group of affiliated or asso-
ciated persons and (ii) 10%, except that from and after such
time as any person or group of affiliated or associated persons
becomes an Acquiring Person no such amendment may adversely
affect the interests of the holders of the Rights.
As of August 31, 1997 there were 51,788,223 shares of
Common Stock outstanding (split adjusted). Each outstanding
share of Common Stock on such date had 4/9ths of a Right
attached thereto, as adjusted to reflect two 3-for-2 stock
splits with respect to the Common Stock since the Record Date.
As long as the Rights are attached to the shares of Common
Stock, the Company will issue 4/9ths of a Right, as adjusted,
with each new share of Common Stock so that all such shares
will have attached rights. 300,000 shares of Preferred Stock
have been reserved for issuance upon exercise of the Rights.
The Rights have certain anti-takeover effects. The
Rights will cause substantial dilution to a person or group
that attempts to acquire the Company (other than pursuant to a
Permitted Offer or with the Company's prior approval) without
conditioning the offer on the Rights being redeemed or substan-
tially all of the Rights being acquired. However, the Rights
should not interfere with any merger or other business combina-
tion approved by the Company with a person other than an
Acquiring Person because the Rights are redeemable under those
circumstances.
Attached hereto as Exhibit 1 and incorporated herein
by reference are a copy of the Amended Rights Agreement between
the Company and Registrar and Transfer Company, as Rights
Agent, specifying the terms of the Rights, and the exhibits
thereto, as follows: Exhibit A -- Certificate of Designation,
Preferences and Rights of Series E Participating Preferred
Stock; Exhibit B -- Form of Rights Certificate; and Exhibit C -
- Summary of Rights to Purchase Preferred Stock. The foregoing
description of the Rights is qualified by reference to the
Amended Rights Agreement.
Item 2. Exhibits.
1 Amended and Restated Rights Agreement, dated as
of July 29, 1988, as amended August 27, 1997,
between First Virginia Banks, Inc. and Registrar
-7-<PAGE>
and Transfer Company, as Rights Agent, which
includes, as Exhibit A thereto, Certificate of
Designation, Preferences and Rights of Series E
Participating Preferred Stock, as Exhibit B
thereto, Form of Rights Certificate and as
Exhibit C thereto, Summary of Rights to Purchase
Preferred Stock. Pursuant to the Amended and
Restated Rights Agreement, Rights Certificates
will not be mailed until after a Stock
Acquisition Date (as defined in the Amended and
Restated Rights Agreement) or ten days after a
person commences or announces its intention to
commence an offer if, upon consummation thereof,
such person would become an Acquiring Person (as
defined in the Amended and Rights Agreement).
-8-<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.
FIRST VIRGINIA BANKS, INC.
By /s/ Thomas P. Jennings
Thomas P. Jennings
Vice President, General Counsel
and Secretary
Date: September 29, 1997
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EXHIBIT INDEX
Exhibit Description Page
1 Amended and Restated Rights Agreement, dated
as of July 29, 1988, as amended August 27,
1997, between First Virginia Banks, Inc. and
Registrar and Transfer Company, as Rights
Agent, which includes, as Exhibit A thereto,
Certificate of Designation, Preferences and
Rights of Series E Participating Preferred
Stock, as Exhibit B thereto, Form of Rights
Certificate, and, as Exhibit C thereto,
Summary of Rights. Pursuant to the Amended
and Restated Rights Agreement, Rights
Certificates will not be mailed until after
a Stock Acquisition Date (as defined in the
Amended and Restated Rights Agreement) or 10
days after a person announces or commences
its intention to commence an offer if, upon
consummation thereof, such person would
become an Acquiring Person (as defined in
the Amended and Restated Rights Agreement).
-10-
EXECUTION COPY
FIRST VIRGINIA BANKS, INC.
and
REGISTRAR AND TRANSFER COMPANY
Rights Agent
________________
Amended and Restated Rights Agreement
Dated as of July 29, 1988, as amended
as of August 27, 1997
<PAGE>
Table of Contents
Section Page
1 Certain Definitions......................... 2
2 Appointment of Rights Agent................. 9
3 Issue of Rights Certificates................ 9
4 Form of Rights Certificates................. 12
5 Countersignature and Registration........... 14
6 Transfer, Split Up, Combination and
Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen
Rights Certificates....................... 15
7 Exercise of Rights; Purchase Price;
Expiration Date of Rights................. 17
8 Cancellation and Destruction of
Rights Certificates....................... 22
9 Reservation and Availability of
Preferred Stock........................... 22
10 Preferred Stock Record Date................. 25
11 Adjustment of Purchase Price,
Number and Kind of Shares or
Number of Rights.......................... 26
12 Certificate of Adjusted Purchase
Price or Number of Shares................. 44
13 Consolidation, Merger or Sale
or Transfer of Assets or
Earning Power............................. 44
14 Additional Covenants........................ 50
15 Fractional Rights and Fractional
Shares.................................... 51
16 Rights of Action............................ 54
17 Agreement of Rights Holders................. 55
(i)<PAGE>
Section Page
18 Rights Certificate Holder Not
Deemed a Stockholder...................... 56
19 Concerning the Rights Agent................. 57
20 Merger or Consolidation or Change of
Name of Rights Agent...................... 58
21 Duties of Rights Agent...................... 60
22 Change of Rights Agent...................... 65
23 Issuance of New Rights Certificates......... 67
24 Redemption and Termination.................. 67
24A Exchange.................................... 67
25 Notice of Certain Events.................... 70
26 Notices..................................... 72
27 Supplements and Amendments.................. 73
28 Determination and Actions by the
Board of Directors, etc................... 74
29 Successors.................................. 75
30 Benefits of this Agreement.................. 75
31 Severability................................ 75
32 Governing Law............................... 76
33 Counterparts................................ 76
34 Descriptive Headings........................ 76
Exhibit A -- Form of Certificate of Designation A-1
of Series A Participating
Preferred Stock
Exhibit B -- Form of Rights Certificate............... B-1
Exhibit C -- Form of Summary of Rights................ C-1
(ii)<PAGE>
AMENDED AND RESTATED RIGHTS AGREEMENT
This Amended and Restated Rights Agreement dated as of July
29, 1988, as amended as of August 27, 1997, between First
Virginia Banks, Inc., a Virginia corporation (the "Company"),
and Registrar and Transfer Company (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on July 27, 1988, the Board of Directors of
the Company authorized and declared a dividend distribution of
one Right (as hereinafter defined) for each share of Common
Stock, $1.00 par value per share, of the Company (the "Common
Stock") outstanding on August 8, 1988 (the "Record Date"), and
authorized the issuance of one Right (subject to adjustment as
provided herein) for each share of Common Stock of the Company
that shall become outstanding between the Record Date and the
earliest of the Distribution Date and the Expiration Date (as
such terms are hereinafter defined), each Right representing
the right to purchase one one-hundredth of a share of Series E
Participating Preferred Stock, par value $10.00 per share, of
the Company having the rights, powers and preferences set forth
in the form of Certificate of Designation attached hereto as
Exhibit A, upon the terms and subject to the conditions herein-
after set forth (the "Rights");<PAGE>
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the parties hereto
hereby agree as follows:
Section 1. Certain Definitions. For purposes of
this Agreement, the following terms have the meanings indi-
cated:
(a) "Acquiring Person" shall mean any Person (as
such term is hereinafter defined) who or which, together
with all Affiliates (as such term is hereinafter defined)
and Associates (as such term is hereinafter defined) of
such Person, without the prior approval of the Company,
shall be the Beneficial Owner (as such term is hereinafter
defined) of securities representing 20% or more of the
shares of Common Stock then outstanding or who was such a
Beneficial Owner at any time after the date hereof,
whether or not such Person continues to be the Beneficial
Owner of securities representing 20% or more of the out-
standing shares of Common Stock, provided, however, that
in no event shall a Person who or which, together with all
Affiliates and Associates of such Person, is the Benefi-
cial Owner of less than 20% of the Company's outstanding
shares of Common Stock become an Acquiring Person solely
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as a result of a reduction of the number of shares of out-
standing Common Stock, including repurchases of outstand-
ing Common Stock by the Company, which reduction increases
the percentage of outstanding shares of Common Stock
beneficially owed by such Person, and provided further
that Acquiring Person shall not mean (i) the Company, (ii)
any subsidiary of the Company (as such term is hereinafter
defined), (iii) any employee benefit plan of the Company
or any of its subsidiaries or (iv) any entity holding
securities of the Company organized, appointed or
established by the Company or any of its subsidiaries for
or pursuant to the terms of any such plan.
Notwithstanding the foregoing, if the Board of Directors
of the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person", as defined
pursuant to the foregoing provisions of this paragraph
(a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of
shares of Common Stock so that such Person would no longer
be an "Acquiring Person", as defined pursuant to the
foregoing provisions of this paragraph (a), then such
Person shall not be deemed to be an "Acquiring Person" for
any purposes under this Agreement.
-3-<PAGE>
(b) "Adjusted Number of Shares" shall have the mean-
ing ascribed thereto in Section 11(a)(iii) of this Agree-
ment.
(c) "Adjusted Purchase Price" shall have the meaning
ascribed thereto in Section 11(a)(iii) of this Agreement.
(d) "Affiliate" and "Associate" shall have the re-
spective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as
in effect on the date of this Agreement.
(e) A Person shall be deemed the "Beneficial Owner"
of, and shall be deemed to "beneficially own," any secu-
rities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly
or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right or obliga-
tion to acquire (whether such right or obligation is
exercisable or effective immediately or only after
-4-<PAGE>
the passage of time) pursuant to any agreement, ar-
rangement or understanding (whether or not in writ-
ing) or upon the exercise of conversion rights, ex-
change rights, rights (other than the Rights), war-
rants or options, or otherwise; provided, however,
that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," securities ten-
dered pursuant to a tender or exchange offer made by
such Person or any of such Person's Affiliates or
Associates until such tendered securities are ac-
cepted for payment or exchange; or (B) the right to
vote pursuant to any agreement, arrangement or under-
standing (whether or not in writing); provided, how-
ever, that a Person shall not be deemed the "Benefi-
cial Owner" of, or to "beneficially own," any secu-
rity under this clause (B) if the agreement, arrange-
ment or understanding to vote such security
(1) arises solely from a revocable proxy given in re-
sponse to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (2) is
not also then reportable by such person on Schedule
13D under the Exchange Act (or any comparable or suc-
cessor report); or
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(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 agree-
ment, arrangement or understanding (whether or not in
writing), or with which such Person or any of such
Person's Affiliates have otherwise formed a group,
for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in clause
(B) of subparagraph (ii) of this paragraph (e)) or
disposing of any securities of the company.
(f) "Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions
in the Commonwealth of Virginia are authorized or
obligated by law or executive order to close.
(g) "Close of business" on any given date shall mean
5:00 P.M., Eastern Time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00
P.M., Eastern Time, on the next succeeding Business Day.
(h) "Common Stock" shall mean the Common Stock,
$1.00 par value, of the Company, except that "Common
Stock" when used with reference to stock issued by any
Person other than the Company shall mean the capital stock
with the greatest voting power, or the equity securities
-6-<PAGE>
or other equity interest having power to control or direct
the management, of such Person or, if such Person is a
subsidiary of another Person, of the Person which ulti-
mately controls such first-mentioned Person and which has
issued and outstanding such capital stock, equity securi-
ties or equity interests.
(i) The term "current market price" per share of
Common Stock shall have the meaning ascribed thereto in
Section 11(d)(i) of this Agreement and the term "current
market price" per share (or one one-hundredth of a share)
of Preferred Stock shall have the meaning ascribed thereto
in Section 11(d)(ii) of this Agreement.
(j) "Distribution Date" shall have the meaning as-
cribed thereto in Section 3(a) of this Agreement.
(k) "Eastern Time" or "E.T." shall mean the
prevailing local time in Fairfax, Virginia.
(l) The term "equivalent security" shall have the
meaning ascribed thereto in Section 11(a)(iii) of this
Agreement.
(m) "Expiration Date" and "Final Expiration Date"
shall have the respective meanings ascribed to such terms
in Section 7(a) of this Agreement.
-7-<PAGE>
(n) The term the "number of Adjustment Shares" shall
have the meaning ascribed thereto in Section 11(a)(ii) of
this Agreement.
(o) "Permitted Offer" shall have the meaning as-
cribed thereto in Section 11(a)(ii) of this Agreement.
(p) "Person" shall mean any individual, firm, corpo-
ration, partnership, joint venture, association, trust or
other entity.
(q) "Preferred Stock" shall mean the Series E Par-
ticipating Preferred Stock, par value $10.00 per share, of
the Company.
(r) "Principal Party" shall have the meaning as-
cribed thereto in Section 13(b) of this Agreement.
(s) "Proration Factor" shall have the meaning as-
cribed thereto in Section 11(a)(iii) of this Agreement.
(t) "Purchase Price" shall have the meaning ascribed
thereto in Section 4(a) of this Agreement.
(u) "Redemption Price" shall have the meaning as-
cribed thereto in Section 24(a)(i) of this Agreement.
-8-<PAGE>
(v) "Stock Acquisition Date" shall mean the first
date of public announcement by the Company or an Acquiring
Person that an Acquiring Person has become such.
(w) A "subsidiary" of any Person shall mean any cor-
poration or other entity of which a majority of the voting
power of the voting equity securities or voting interests
is owned, directly or indirectly, by such Person, or which
is otherwise controlled by such Person.
(x) "Trading Day" shall have the meaning ascribed
thereto in Section 11(d)(i) of this Agreement.
(y) "Voting Power" shall mean the voting power of
all securities of the Company then outstanding and gener-
ally entitled to vote for the election of directors of the
Company.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Com-
pany 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. In the
event the Company appoints one or more Co-Rights Agents, the
-9-<PAGE>
respective duties of the Rights Agents and any Co-Rights Agents
shall be as the Company shall determine.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the tenth day after the
Stock Acquisition Date and (ii) the tenth Business Day (or such
later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring
Person) after the first date (including, without limitation,
any such date which is on or after the date of this Agreement
and prior to the issuance of the Rights) of the commencement
of, or first public disclosure of the intent to commence, by
any Person (other than the Company, any subsidiary of the
Company, any employee benefits plan of the Company or of any
subsidiary of the Company or any entity holding Common Stock
for or pursuant to any such plan), a tender or exchange offer
for securities of the Company if the consummation thereof would
result in such Person becoming the Beneficial Owner of 20% or
more of the Common Stock then outstanding (including any such
date which is after the date of this Agreement and prior to the
issuance of the Rights; the earlier of such dates being herein
referred to as the "Distribution Date"), (x) the Rights shall
be evidenced (subject to the provisions of paragraph (b) of
this Section 3) by the certificates for Common Stock registered
in the names of the holders of the Common Stock (which
-10-<PAGE>
certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and
(y) the Rights (and the right to receive certificates therefor)
shall be transferable only in connection with the transfer of
the underlying shares of Common Stock. As soon as practicable
after the Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign, and the Company
will send or cause to be sent (and the Rights Agent will, if
requested, send) by first-class, insured, postage-prepaid mail,
to each record holder of 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, a certificate for
Rights, in substantially the form of Exhibit B hereto (the
"Rights Certificates"), evidencing one Right for each share of
Common Stock so held. As of and after the Distribution Date,
the Rights shall be evidenced solely by such Right
Certificates.
As soon as practicable following the Record Date, the
Company shall send a copy of a Summary of Rights, in substan-
tially the form attached hereto as Exhibit C (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record
holder of the Common Stock as of the close of business on the
Record Date, at the address of such holder shown on the records
of the Company. With respect to certificates for the Common
Stock outstanding as of the Record Date, until the Distribution
-11-<PAGE>
Date (or earlier redemption, expiration or termination of the
Rights), the Rights shall be evidenced by such certificates for
the Common Stock together with the Summary of Rights and the
registered holders of the Common Stock shall also be the regis-
tered holders of the associated Rights. Until the Distribution
Date (or earlier redemption, expiration or termination of the
Rights), the surrender for transfer of any of the certificates
for the Common Stock outstanding on the Record Date, with or
without a copy of the Summary of Rights attached thereto, shall
also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
(b) Certificates for Common Stock (including, with-
out limitation, certificates issued upon transfer or exchange
of Common Stock) issued after the Record Date, but prior to the
earlier of the Distribution Date or the Expiration Date (as
such term is hereinafter defined), shall be deemed also to be
certificates for Rights, and shall have impressed, printed,
stamped, written or otherwise affixed onto them the following
legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in an Amended
and Restated Rights Agreement between First Virginia
Banks, Inc. and Registrar and Transfer Company (the
"Rights Agent") dated as of July 29, 1988, as amended as
of August 27, 1997 (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 First
Virginia Banks, Inc. Under certain circumstances, as set
-12-<PAGE>
forth in the Rights Agreement, such Rights may be re-
deemed, may expire, or may be evidenced by separate cer-
tificates and will no longer be evidenced by this certifi-
cate. First Virginia Banks, Inc. will mail to the holder
of this certificate a copy of the Rights Agreement without
charge within five days after receipt of a written request
thereof. Under certain circumstances, Rights issued to
Acquiring Persons (as defined in the Rights Agreement) or
certain related persons and any subsequent holder of such
Rights may become null and void with respect to certain
rights set forth in Section 11(a)(ii) and Section 13(a) of
the Rights Agreement.
With respect to such certificates containing the foregoing leg-
end, until the Distribution Date, the Rights associated with
the Common Stock represented by such certificates shall be evi-
denced by such certificates alone, and the surrender for trans-
fer of any such certificates shall also constitute the transfer
of the Rights associated with the Common Stock represented by
such certificate.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of elec-
tion to purchase shares and of assignment to be printed on the
reverse thereof) shall each be substantially in the form set
forth in Exhibit B hereto and may have such marks of indemnifi-
cation or designation and such legends, summaries or endorse-
ments 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
-13-<PAGE>
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 23 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 one one-hundredths of a share
of Preferred Stock as shall be set forth therein at the price
per one one-hundredth of a share set forth therein (the "Pur-
chase Price"), but the number of such shares and the Purchase
Price shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Sec-
tion 3(a) hereof that represents Rights beneficially owned by
an Acquiring Person or any Associate or Affiliate thereof and
any Rights Certificate issued at any time upon the transfer of
any Rights to such an Acquiring Person or any Associate or Af-
filiate thereof or to any nominee of such Acquiring Person,
Associate or Affiliate, and any Rights Certificate issued pur-
suant to Section 6 or Section 11 upon transfer, exchange, re-
placement or adjustment of any other Rights Certificate re-
ferred to in this sentence, shall contain the following legend:
The Rights represented by this Rights Certificate
were issued to a Person who was an Acquiring Person or an
Affiliate or an Associate of an Acquiring Person. This
Rights Certificate and the Rights represented hereby may
become void to the extent provided by, and under certain
circumstances as specified in, Section 7(e) of the Rights
Agreement.
-14-<PAGE>
The provisions of Section 7(e) of this Rights Agreement shall
be operative whether or not the foregoing legend is contained
on any such Rights Certificate.
Section 5. Countersignature and Registration. The
Rights Certificates shall be executed on behalf of the Company
by its Chairman of the Board, any Vice Chairman of the Board,
any President or any Vice President, either manually or by fac-
simile signature, and shall have affixed thereto the Company's
seal or a facsimile thereof which shall be attested by the Sec-
retary or an Assistant Secretary of the Company, either manu-
ally or by facsimile signature. The Rights Certificates shall
be manually countersigned by the Rights Agent and shall not be
valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company be-
fore countersignature by the Rights Agent and issuance and de-
livery by the Company, such Rights Certificates, nevertheless,
may be countersigned by the Rights Agent, and issued and deliv-
ered 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
-15-<PAGE>
Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at one of its offices in
Cranford, New Jersey, books for registration and transfer of
the Rights Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of the
Rights Certificates, the number of Rights evidenced on its face
by each of the Rights Certificates and the date of each of the
Rights Certificates.
Section 6. Transfer, Split Up, Combination and Ex-
change of Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates. Subject to the provisions of Sec-
tion 15 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 may
be transferred, split up, combined or exchanged for another
Rights Certificate or Rights Certificates, entitling the regis-
tered holder to purchase a like number of shares of Preferred
Stock as the Rights Certificate or Rights Certificates surren-
dered when entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any
Rights Certificate shall make such request in writing delivered
to the Rights Agent, and shall surrender the Rights Certificate
-16-<PAGE>
or Rights Certificates to be transferred, split up, combined or
exchanged at the principal office of the Rights Agent. There-
upon the Rights Agent shall countersign and deliver to the Per-
son entitled thereto a Rights Certificate or Rights Certifi-
cates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or govern-
mental charge that may be imposed in connection with any trans-
fer, split up, combination or exchange of Rights Certificates.
Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft
destruction or mutilation of a Rights Certificate, and, in case
of loss, theft or destruction, of indemnity or security reason-
ably 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 shall 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, de-
stroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expi-
ration Date of Rights.
(a) The registered holder of any Rights Certificate
may exercise the Rights evidenced thereby (except as otherwise
-17-<PAGE>
provided herein) in whole or in part at any time after the Dis-
tribution Date upon presentation of the Rights Certificate,
with the appropriate form of election to purchase on the re-
verse side thereof duly executed, to the Rights Agent at the
principal corporate trust office of the Rights Agent, together
with payment of the Purchase Price for each one one-hundredth
of a share of Preferred Stock (or such other number of shares
or other securities) as to which the Rights are exercised, at
or prior to the earliest of (i) the close of business on August
8, 2008 (the "Final Expiration Date"), or (ii) the time at
which the Rights are redeemed as provided in Section 24 hereof
or (iii) the consummation of a transaction contemplated by Sec-
tion 13(d) hereof (such earliest time being herein referred to
as the "Expiration Date"). Notwithstanding any other provision
of this Agreement, any Person who prior to the Distribution
Date becomes a record holder of shares of Common Stock may ex-
ercise all of the rights of a registered holder of a Rights
Certificate with respect to the Rights associated with such
shares of Common Stock in accordance with and subject to the
provisions of this Agreement, including the provisions of Sec-
tion 7(e) hereof, as of the date such Person becomes a record
holder of shares of Common Stock.
(b) The Purchase Price for each one one-hundredth
share of Preferred Stock (as adjusted pursuant hereto) pursuant
to the exercise of a Right shall initially be $450, shall be
-18-<PAGE>
subject to adjustment from time to time as provided in Section
11 or 13 hereof and shall be payable in lawful money of the
United States of America in accordance with paragraph (c)
below.
(c) Upon receipt of a Rights Certificate represent-
ing exercisable Rights, with the appropriate form of election
to purchase duly executed, accompanied by payment of the Pur-
chase Price for the shares (or other securities or property) to
be purchased and an amount equal to any applicable transfer tax
(as determined by the Rights Agent) by certified check or bank
draft payable to the order of the Company, the Rights Agent
shall, subject to Section 21(k), 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) certificates for the number of shares of Preferred Stock
to be purchased, and the Company hereby irrevocably authorizes
its transfer agent to comply with all such request, or (B) if
the Company, in its sole discretion, shall have elected to de-
posit the shares of Preferred Stock issuable upon exercise of
the Rights hereunder into a depository, requisition from the
depositary agent depositary receipts representing such number
of one one-hundredths of a share of Preferred Stock as are to
be purchased (in which case certificates for the shares of Pre-
ferred Stock represented by such receipts shall be deposited by
the transfer agent with the depositary agent) and the Company
-19-<PAGE>
shall direct the depositary agent to comply with such request,
(ii) when appropriate, requisition from the Company the amount
of cash, if any, to be paid in lieu of issuance of fractional
shares in accordance with Section 15, (iii) promptly after re-
ceipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or
names as may be designated by such holder and (iv) when appro-
priate, after receipt promptly deliver such cash to or upon the
order of the registered holder of such Rights Certificate. In
the event that the Board of Directors of the Company authorizes
the Company to issue other securities of the Company pursuant
to Section 11(a), the Company shall make all arrangements nec-
essary so that such other securities are available for distri-
bution by the Rights Agent, if and when appropriate. In addi-
tion, in the case of an exercise of the Rights by a holder pur-
suant to Section 11(a)(ii), the Rights Agent shall return such
Rights Certificate to the registered holder thereof after im-
printing, stamping or otherwise indicating thereon that the
rights represented by such Rights Certificate no longer include
the rights provided by Section 11(a)(ii) of the Rights Agree-
ment and if less than all the Rights represented by such Rights
Certificate were so exercised, the Rights Agent shall indicate
on the Rights Certificate the number of Rights represented
-20-<PAGE>
thereby which continue to include the rights provided by Sec-
tion 11(a)(ii).
(d) In case the registered holder of any Rights Cer-
tificate shall exercise (except pursuant to Section 11(a)(ii))
less than all the Rights evidenced thereby, a new Rights Cer-
tificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered
to the registered holder of such Rights Certificate or to his
duly authorized assigns, subject to the provisions of Section
15 hereof.
(e) Notwithstanding anything in this Agreement to
the contrary, if there occurs the transaction set forth in Sec-
tion 11(a)(ii) or Section 13(a) then any Rights that are or
were on or after the earlier of the Distribution Date or the
Stock Acquisition Date beneficially owned by an Acquiring Per-
son or any Associate or Affiliate shall become void with re-
spect to the rights provided under Section 11(a)(ii) and Sec-
tion 13(a) and any holder of such Rights shall thereafter have
no right to exercise such Rights under the provisions of Sec-
tion 11(a)(ii) and Section 13(a).
(f) Notwithstanding anything in this Agreement to
the contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set
-21-<PAGE>
forth in this Section 7 unless the certificate contained in the
appropriate form of election to purchase set forth on the re-
verse side of the Rights Certificate surrendered for such exer-
cise shall have been properly completed and duly executed by
the registered holder thereof and the Company shall have been
provided with 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 pur-
pose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or any of its agents, be
delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be can-
celled by it, and no Rights Certificates shall be issued in
lieu thereof except as expressly permitted by any of the provi-
sions of this Rights 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 Cer-
tificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all
cancelled Rights Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Rights
Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
-22-<PAGE>
Section 9. Reservation and Availability of Preferred
Stock.
(a) The Company covenants and agrees that it shall
cause to be reserved and kept available out of its authorized
and unissued shares of Preferred Stock, or any authorized and
issued shares of Preferred Stock held in its treasury, the num-
ber of shares of Preferred Stock that will be sufficient to
permit the exercise, to the extent provided in Section
11(a)(i), and in accordance with the terms of Section 7, of
this Agreement, of all outstanding Rights.
(b) So long as the shares of Preferred Stock (or
other securities) issuable upon the exercise of the Rights may
be listed on any national securities exchange, the Company
shall use its best efforts to cause, from and after such time
as the Rights become exercisable, all shares (or other securi-
ties) reserved for such issuance to be listed on such exchange
upon official notice of issuance upon such exercise.
(c) The Company covenants and agrees that it shall
take all such action as may be necessary to ensure that all
shares of Preferred Stock and/or other securities delivered
upon exercise of Rights shall, at the time of delivery of the
certificates for such shares or other securities (subject to
payment of the Purchase Price), be duly and validly authorized
-23-<PAGE>
and issued and fully paid and nonassessable shares or securi-
ties.
(d) The Company further covenants and agrees that it
shall pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of
the issuance or delivery of the Rights Certificates or of any
certificates for shares of Preferred Stock and/or other securi-
ties upon the exercise of Rights. The Company shall not, how-
ever, 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 in respect of the issuance or deliv-
ery of the shares of Preferred Stock and/or other securities 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 shares or Preferred
Stock, and/or other securities 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.
(e) The Company shall use its best efforts to (i)
file, as soon as practicable following the Distribution Date, a
registration statement under the Securities Act of 1933, as
-24-<PAGE>
amended (the "Securities Act"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as
soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Securities Act and
the rules and regulations thereunder) until the date of the
expiration of the rights provided by Section 11(a)(ii). The
Company will also take such action as may be appropriate under
the blue sky laws of the various states.
Section 10. Preferred Stock Record Date. Each per-
son in whose name any certificate for shares of Preferred Stock
(or other securities) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of
record of the shares of Preferred Stock (or other securities)
represented thereby on, and such certificate shall be dated,
the date upon which the Rights Certificate evidencing such
Rights was duly presented and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, how-
ever, that if the date of such presentation and payment is a
date upon which the Preferred Stock (or other securities)
transfer books of the Company are closed, such person shall be
deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business
Day on which the Preferred Stock (or other securities) transfer
-25-<PAGE>
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 shareholder
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 ex-
ercise any preemptive rights, and shall not be entitled to re-
ceive any notice of any proceedings of the Company, except as
provided herein.
Section 11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights. The Purchase Price, the
number of shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as pro-
vided in this Section 11.
(a) (i) In the event the Company shall at any
time after the date of this Agreement (A) declare a
dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine 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
-26-<PAGE>
continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and in
Section 7(e), the Purchase Price in effect at the
time of the record date for such dividend or of the
effective date of such subdivision, combination or
reclassification, and the number and kind of shares
of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of
capital stock and other securities which, if such
Right had been exercised immediately prior to such
date and at a time when the Preferred Stock transfer
books of the Company were open, he would have owned
upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would
require an adjustment under both Section 11(a)(i) and
Section 11(a)(ii), 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).
-27-<PAGE>
(ii) In the event that any Person (other than
the Company, any subsidiary of the Company, any em-
ployee benefit plan of the Company or any of its sub-
sidiaries or any entity holding securities of the
Company organized, appointed or established by the
Company or any of its subsidiaries for or pursuant to
the terms of any such plan), alone or together with
its Affiliates and Associates, shall become an Ac-
quiring Person (except pursuant to a tender or ex-
change 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 of Directors
who are not officers of the Company to be both ad-
equate and otherwise in the best interests of the
Company and its shareholders (other than the Person
or an Affiliate or Associate thereof on whose behalf
the offer is being made) (a "Permitted Offer")), then
proper provision shall be made so that each holder of
a Right, except as provided in Section 7(e) hereof,
shall, for a period of 60 days after the later of the
occurrence of any such event and the effective date
of an appropriate registration statement pursuant to
Section 9, have a right to receive, upon exercise
thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such
-28-<PAGE>
number of one one-hundredths of a share of Preferred
Stock of the Company as shall equal the result ob-
tained by (x) multiplying the then current Purchase
Price by the then number of one one-hundredths of a
share of Preferred Stock for which a Right is then
exercisable under Section 11(a)(i) of this Agreement
(y) dividing that product by 50% of the current mar-
ket price per one share of Common Stock (determined
pursuant to Section 11(d)) on the date of the occur-
rence of the event set forth in this subparagraph
(ii) (such number of shares being referred to as the
"number of Adjustment Shares"); provided, however,
that if the transaction that would otherwise give
rise to the foregoing adjustment is also subject to
the provisions of Section 13 hereof, then only the
provisions of Section 13 hereof shall apply and no
adjustment shall be made pursuant to this Section
11(a)(ii).
(iii) Notwithstanding the foregoing
subparagraph (ii), the Board of Directors may, by
resolution duly adopted, provide that, effective on
the date specified in such resolution, the Company
shall be entitled (but not required) to deliver upon
exercise of any Right at the then current Purchase
Price in accordance with the foregoing subparagraph
-29-<PAGE>
(ii) and the terms of this Agreement, in lieu of a
number of one one-hundredths of a share of Preferred
Stock, a number of shares, or units of shares, of (x)
Common Stock (up to the maximum number of shares of
Common Stock which may permissibly be issued using
the allocation procedure specified in the second
sentence of Section 11(k)) and (y) preferred stock
(or other equity securities) of the Company,
including, but not limited to Preferred Stock, equal
in the aggregate to the number of Adjustment Shares
where the Board of Directors of the Company shall
have deemed such shares or units, other than the
shares of Preferred Stock, to have at least the same
economic value and, to the extent permitted by the
Company's Articles of Incorporation, at least the
same voting rights as the Preferred Stock (an
"equivalent security") (one share of Common Stock
shall be deemed to be an equivalent security);
provided, however, that if the Board of Directors
elects, pursuant to this subparagraph (iii), to de-
liver upon exercise of any Right, securities other
than Preferred Stock, then the Board of Directors
shall do so in a manner that it deems, in its
absolute discretion, not to discriminate among
shareholders; provided, further, if there are
-30-<PAGE>
unavailable sufficient shares (or fractions of
shares) of Preferred Stock, Common Stock, and/or
other equivalent securities, as the case may be, then
the Company shall take all such action as may be
necessary to authorize additional shares of Preferred
Stock, Common Stock, or other equivalent securities,
as the case may be, for issuance upon exercise of the
Rights, including the calling of a meeting of share-
holders; and provided, further, that if the Company
is unable to cause sufficient shares of Preferred
Stock, Common Stock, or other equivalent securities,
as the case may be, to be available for issuance upon
exercise in full of the Rights, then each Right shall
thereafter represent the right to receive the Ad-
justed Number of Shares upon exercise at the Adjusted
Purchase Price (as such terms are hereinafter de-
fined). As used herein, the term Adjusted Number of
Shares shall be equal to that number of shares (or
fractions of shares) of Preferred Stock, Common Stock
(and/or shares or units of equivalent securities)
equal to the product of (x) the number of Adjustment
Shares and (y) a fraction, the numerator of which is
the number of shares of Preferred Stock, Common Stock
(and/or shares or units of equivalent securities), as
the case may be, available for issuance upon exercise
-31-<PAGE>
of the Rights and the denominator of which is the
aggregate number of Adjustment Shares otherwise issu-
able upon exercise in full of all Rights (assuming
there were sufficient shares of Preferred Stock, Com-
mon Stock, and/or shares or units of equivalent secu-
rities, as the case may be, available) (such fraction
being referred to as the "Proration Factor"). The
Adjusted Purchase Price shall mean the product of the
Purchase Price and the Proration Factor. The Board
of Directors may, but shall not be required to, es-
tablish procedures to allocate the right to receive
Preferred Stock, Common Stock and/or equivalent secu-
rities, as the case may be, upon exercise of the
Rights among holders of Rights.
(b) If the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Pre-
ferred Stock entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or pur-
chase Preferred Stock (or shares having the same or more favor-
able rights, privileges and preferences as the 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)
-32-<PAGE>
less than the current market price (as defined in Section
11(d)) 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 immedi-
ately prior to such record date by a fraction, the numerator of
which shall be the number of shares of Preferred Stock out-
standing on such record date, plus the number of shares of Pre-
ferred Stock which the aggregate offering price of the total
number of shares of Preferred Stock and/or equivalent preferred
stock 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 out-
standing 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 con-
vertible securities so to be offered are initially convert-
ible). In case such subscription price may be paid in a con-
sideration part or all of which shall be in a form other than
cash, the value of such consideration shall be determined rea-
sonably and with good faith to the holders of Rights by the
Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall
be binding on the Rights Agent. Shares of Preferred Stock
owned by or held for the account of the Company shall not be
-33-<PAGE>
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 war-
rants are not so issued, the Purchase Price shall be adjusted
to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) If the Company shall fix a record date for the
making of a distribution to all holders of Preferred Stock (in-
cluding any such distribution made in connection with a con-
solidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a
regular quarterly 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)), the Purchase
Price to be in effect after such record date shall be deter-
mined 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 defined in Section 11(d))
per share of Preferred Stock on such record date, less the fair
market value (as determined reasonably and with good faith to
the holders of Rights by the Board of Directors of the Company,
whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent)
-34-<PAGE>
of the portion of the cash, assets or evidences of indebtedness
so to be distributed or of such subscription rights or warrants
distributable in respect of one share of Preferred Stock and
the denominator of which shall be the current market price per
share of the 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 again be adjusted to be the Purchase Price which would be
in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereun-
der, other than in Section 11(a)(iii), 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 30 consecutive Trading Days (as such term
is hereinafter defined) immediately prior to such date; pro-
vided, however, that in the event that the current per share
market price 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 or (B) any subdivision, combination
or reclassification of such Common Stock, and prior to the ex-
piration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivi-
sion, combination or reclassification, then, and in each such
-35-<PAGE>
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 clos-
ing bid and asked prices, regular way, in either case as re-
ported in the principal consolidated transaction reporting sys-
tem 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 with respect to securities listed on the prin-
cipal national securities exchange on which the shares of Com-
mon Stock are listed or admitted to trading or, if the shares
of Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the National Asso-
ciation of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such
date the shares of Common Stock are not quoted by any such or-
ganization, 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 of Directors of the Company.
If on any such date no market maker is making a market in the
Common Stock, the fair value of such shares on such date as
-36-<PAGE>
determined reasonably and with good faith by the Board of
Directors of the Company shall be used and shall be binding on
the Rights Agent. 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 Com-
mon Stock are not listed or admitted to trading on any national
securities exchange, a Business Day. If the Common Stock is
not publicly held or not so listed or traded, "current market
price" per share shall mean the fair value per share determined
reasonably and with good faith to the holders of Rights by the
Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall
be binding on the Rights Agent.
(ii) For the purpose of any computation hereunder,
the "current market price" per share (or one one-hundredth of a
share) of Preferred Stock shall be determined in the same man-
ner as set forth above for the Common Stock in clause (i) of
this Section 11(d) (other than the last sentence thereof). If
the current market price per share (or one one-hundredth of a
share) of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly held
or listed or traded 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
-37-<PAGE>
equal to 100 (as such number may be appropriately adjusted for
such events as stock splits, stock dividends and re-
capitalizations 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 and the "current
market price" per one one-hundredth of a share of Preferred
Stock shall be equal to the current market price per share of
the Common Stock (as appropriately adjusted). If neither the
Common Stock nor the Preferred Stock is publicly held or so
listed or traded, "current market price" per share shall mean
the fair value per share as determined in good faith by the
Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall
be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at
least 1% in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(a) are not re-
quired to be made shall be carried forward and taken into ac-
count 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-hundred-thousandth of a share of Preferred Stock,
as the case may be. Notwithstanding the first sentence of this
-38-<PAGE>
Section 11(e), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three years from the
date of the transaction which mandates such adjustment or (ii)
the Expiration Date.
(f) If as a result of any provision of Section
11(a), the holder of any Right thereafter exercised shall be-
come entitled to receive any shares of capital stock of the
Company other than Preferred Stock, thereafter the number of
such other shares so receivable upon exercise of any Right
shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provi-
sions with respect to the shares contained in Section 11(a)
through (c), inclusive, and the provisions of Sections 7, 9,
10, 13 and 15 hereof with respect to the Preferred Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company sub-
sequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase
Price, the number of shares of Preferred Stock purchasable from
time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of
-39-<PAGE>
the Purchase Price as a result of the calculations made in Sec-
tion 11(b) and (c), each Right outstanding immediately prior to
the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number
of one one-hundredths of a share of Preferred Stock (calculated
to the nearest one-hundred-thousandth) obtained by (i) multi-
plying (x) the number of one one-hundredths of a share of Pre-
ferred Stock covered by a Right immediately prior to this ad-
justment by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of
Rights, in substitution for any adjustment in the number of
shares of Preferred Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of one
one-hundredths of a share of Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the
nearest ten-thousandth) obtained by dividing the Purchase Price
in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of
-40-<PAGE>
the Purchase Price. The Company shall make a public announce-
ment of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time,
the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued,
shall be at least 10 days later than the date of the public
announcement. If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Sec-
tion 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Rights Certifi-
cates on such record date Rights Certificates evidencing, sub-
ject to Section 15 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 Com-
pany, 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, ex-
ecuted 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
-41-<PAGE>
record of Rights Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of shares of Preferred Stock issu-
able upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of shares which were
expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par
value, if any, of the shares of Preferred Stock, Common Stock
or other securities issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opin-
ion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares
of Preferred Stock, Common Stock or other securities at such
adjusted Purchase Price. If upon any exercise of the Rights, a
holder is to receive a combination of Preferred Stock, Common
Stock, and/or other equivalent securities, a portion the con-
sideration paid upon such exercise, equal to at least the then
par value of each security so received, shall be allocated as
the payment for each security of the Company so received.
-42-<PAGE>
(l) In any case in which this Section 11 shall re-
quire that an adjustment in the Purchase Price be made effec-
tive as of a record date for a specified event, the Company may
elect to defer until the occurrence of such event the issuing
to the holder of any Right exercised after such record date the
shares of Preferred Stock and other capital stock or securities
of the Company, if any, issuable upon such exercise over and
above the shares 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 ad-
justment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evi-
dencing such holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(m) Anything to the contrary in this Section 11 not-
withstanding, the Company shall be entitled to make such reduc-
tions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent
that it in its sole discretion shall determine to be advisable
in order that any consolidation or subdivision of the Preferred
Stock, issuance wholly for cash of any shares of Preferred
Stock at less than the current market price, 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, stock dividends or issuance of rights, options
-43-<PAGE>
or warrants referred to hereinabove in this Section 11, hereaf-
ter made by the Company to holders of its Preferred Stock shall
not be taxable to such shareholders.
(n) Anything in this Agreement to the contrary not-
withstanding, in the event that the Company shall at any time
after the date of this Agreement 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 Common Stock, (iii) combine the outstanding Common
Stock into a smaller number of shares, or (iv) issue any shares
of its capital stock in a reclassification of the outstanding
Common Stock, the number of Rights associated with each share
of Common Stock then outstanding, or issued or delivered there-
after but prior to the Distribution Date, shall be proportion-
ately adjusted so that the number of Rights thereafter associ-
ated 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 im-
mediately prior to the occurrence of the event and the denomi-
nator of which shall be the total number of shares of Common
Stock outstanding immediately following the occurrence of such
event.
-44-<PAGE>
(o) The exercise of Rights under Section 11(a)(ii)
shall only result in the loss of rights under Section 11(a)(ii)
to the extent so exercised and shall not otherwise affect the
rights represented by the Rights under this Rights Agreement,
including the rights represented by Section 13.
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares. Whenever an adjustment is made as pro-
vided in Sections 11 and 13 hereof, the Company shall (a)
promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjust-
ment, (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) mail a brief summary thereof
to each holder of a Rights Certificate in accordance with Sec-
tion 26 hereof. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein
contained.
Section 13. Consolidation, Merger or Sale or Trans-
fer of Assets or Earning Power.
(a) In the event that, following the Stock Acquisi-
tion Date, directly or indirectly, (x) the Company shall con-
solidate with, or merge with and into, any other Person, (y)
any Person shall consolidate with the Company, or merge with
-45-<PAGE>
and into the Company shall be the continuing or surviving cor-
poration of such merger (other than, in the case of either
transaction described in (x) or (y), a merger or consolidation
which would result in all of the Voting Power represented by
the securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstand-
ing or by being converted into securities of the surviving en-
tity) all of the Voting Power represented by the securities of
the Company or such surviving entity outstanding immediately
after such merger or consolidation and the holders of such se-
curities not having changed as a result of such merger or con-
solidation), or (z) the Company shall sell, mortgage or other-
wise transfer (or one or more of its subsidiaries shall sell,
mortgage or otherwise transfer), in one or more 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, then, and in each such case,
proper provision shall be made so that (i) following the Dis-
tribution date, each holder of a Right, shall have the right to
receive, upon the exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, such num-
ber of shares of freely tradeable Common Stock of the Principal
Party (as hereinafter defined), free and clear of liens, rights
of call or first refusal, encumbrances or other adverse claims,
and shall be equal to the result obtained by (x) multiplying
-46-<PAGE>
the then current Purchase Price by the number of one one-
hundredths of a share of Preferred Stock for which a Right is
then exercisable (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii) hereof) and (y)
dividing that product by 50% of the current market price per
share of the Common Stock of such Principal Party (determined
pursuant to Section 11(d) hereof) on the date of consummation
of such consolidation, merger, sale or transfer; (ii) such
Principal Party shall thereafter be liable for, and shall as-
sume, by virtue of such consolidation, merger, sale or trans-
fer, 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
to such Principal Party; and (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 ac-
cordance with Section 9 hereof) in connection with such con-
summation 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.
-47-<PAGE>
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x)
or (y) of the first sentence of this Section 13, the
Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in
such merger or consolidation, and if no securities are so
issued, the Person that is the other party to the merger
or consolidation (including, if applicable, the Company,
if it is the surviving corporation); and
(ii) in the case of any transaction described in (z)
of the first sentence in this Section 13, the Person that
is the party receiving the greatest portion of the assets
or earning power transferred pursuant to such transaction
or transactions;
provided, however, that in any such case, (1) if the Common
Stock of such Person is not at such time and has not been con-
tinuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, and such Person is a direct or
indirect subsidiary or Affiliate of another Person, "Principal
Party" shall refer to such other Person; (2) in case such Per-
son is a subsidiary, directly or indirectly, or Affiliate 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
-48-<PAGE>
having the greatest aggregate market value; and (3) in case
such Person is owned, directly or indirectly, by a joint ven-
ture formed by two or more Persons that are not owned, directly
or indirectly, by the same Person, the rules set forth in (1)
and (2) above shall apply to each of the chains of ownership
having an interest in such joint venture as if such party were
a "Subsidiary" of both or all of such joint venturers and the
Principal Parties in each such chain shall bear the obligations
set forth in this Section 13 in the same ratio as their direct
or indirect interests in such Person bear to the total of such
interests.
(c) The Company shall not consummate any such con-
solidation, merger, sale or transfer unless the Principal Party
shall have a sufficient number of authorized shares of its Com-
mon Stock that 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 each
Principal Party and each other Person who may become a Princi-
pal Party as a result of such consolidation, merger, sale or
transfer shall have executed and delivered to the Rights Agent
a supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any consolida-
tion, merger, sale or transfer of assets mentioned in paragraph
-49-<PAGE>
(a) of this Section 13, the Principal Party at its own expense
shall:
(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, will use its best efforts to cause such
registration statement to become effective as soon as
practicable after such filing and will use its best
efforts to cause such registration statement to remain
effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration
Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the
Rights under the blue sky laws of such jurisdictions 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 material respects with
the requirements for registration on Form 10 under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to suc-
cessive mergers or consolidations or sales or other transfers.
-50-<PAGE>
The rights under this Section 13 shall be in addition to the
rights to exercise Rights and adjustments under Section
11(a)(ii) and shall survive any exercise thereunder.
(d) Notwithstanding anything in this Agreement to
the contrary, Section 13 shall not be applicable to a transac-
tion described in subparagraphs (x) and (y) of Section 13(a) if
(i) such transaction is consummated with a Person or Persons
who acquired shares of Common Stock pursuant to a Permitted
Offer (or a wholly owned subsidiary of any such Person or Per-
sons), (ii) the price per share of Common Stock offered in such
transaction is not less than the price per Common Share paid to
all holders of Common Stock whose shares were purchased pursu-
ant to such Permitted Offer and (iii) the form of consideration
being offered to the remaining holders of Common Stock pursuant
to such transaction is the same as the form of consideration
paid pursuant to such Permitted Offer. Upon consummation of
any such transaction contemplated by this subsection (d), all
Rights hereunder shall expire.
Section 14. Additional Covenants.
(a) After the Stock Acquisition Date, the Company
covenants and agrees that it shall not (i) consolidate with,
(ii) merge with or into, or (iii) sell or transfer to, in one
or more transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its
-51-<PAGE>
subsidiaries taken as a whole, any other Person if at the time
of or after consolidation, merger or sale there are any charter
or by-law provisions or any rights, warrants or other instru-
ments outstanding or any other action taken which would dimin-
ish or otherwise eliminate the benefits intended to be afforded
by the Rights. The Company shall not consummate any such con-
solidation, merger or sale unless prior thereto the Company and
such other Person shall have executed and delivered to the
Rights Agent a supplemental agreement evidencing compliance
with this subsection.
(b) The Company covenants and agrees that, after the
Stock Acquisition Date, it will not, except as permitted by
Section 24 hereof, take any action the purpose or effect of
which is to diminish or otherwise eliminate the benefits in-
tended to be afforded by the Rights.
Section 15. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue frac-
tions of Rights, except prior to the Distribution Date as pro-
vided in Section 11(n), or to distribute Rights Certificates
which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Right.
-52-<PAGE>
For the purposes of this Section 15(a), the current market
value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last sale
price, the last quoted price or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in
the Rights selected by the Board of Directors of the Company.
If on any such date no such market maker is making a market in
the Rights the fair value of the Rights on such date as deter-
mined reasonably and with good faith to the holders of Rights
by the Board of Directors of the Company shall be used and
shall be binding on the Rights Agent.
(b) The Company shall not be required to issue frac-
tions of shares of Preferred Stock (other than fractions which
are integral multiples of one one-hundredth of a share of Pre-
ferred Stock) upon exercise of the Rights or to distribute cer-
tificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-
hundredth of a share of Preferred Stock). Fractions of shares
of Preferred Stock in integral multiples of one one-hundredth
-53-<PAGE>
of a share of Preferred Stock may, at the election of the Com-
pany, be evidenced by depositary receipts, pursuant to an ap-
propriate agreement between the Company and a depositary se-
lected by it, provided that such agreement shall provide that
the holders of such depositary receipts shall have all the
rights, privileges and preferences to which they are entitled
as beneficial owners of the shares of Preferred Stock repre-
sented by such depositary receipts. In lieu of fractional
shares of Preferred Stock that are not integral multiples of
one one-hundredth of a share of Preferred Stock, the Company
may pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in
cash equal to the same fraction of the current market value of
one one-hundredth of a share of Preferred Stock. For purposes
of this Section 15(b), the current market value of one one-
hundredth of a share of Preferred Stock shall be one one-
hundredth of the closing price of a share of Preferred Stock
(as determined pursuant to Section 11(d)(ii) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of one of the transac-
tions or events specified in Section 11 giving rise to the
right to receive Common Stock or other equivalent securities
upon the exercise of a Right, the Company shall not be required
to issue fractions of shares or units of such Common Stock or
other equivalent securities upon exercise of the Rights or to
-54-<PAGE>
distribute certificates which evidence fractional shares of
such Common Stock or other equivalent securities. In lieu of
fractional shares or units of such Common Stock or other equiv-
alent securities, 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 a share or unit of such Common
Stock or other equivalent securities. For purposes of this
Section 15(c), the current market value shall be determined in
the manner set forth in Section 11(d) hereof for the Trading
Day immediately prior to the date of such exercise and, if such
equivalent security is not traded, each such equivalent secu-
rity shall have the value of one one-hundredth of a share of
Preferred Stock.
(d) Except as otherwise expressly provided herein,
the holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any frac-
tional shares upon exercise of a Right.
Section 16. Rights of Action. All rights of action
in respect of this Agreement are vested in the respective reg-
istered 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
-55-<PAGE>
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 his own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such
Rights Certificate in the manner provided in such Rights Cer-
tificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is spe-
cifically 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 obliga-
tions hereunder and injunctive relief against actual or threat-
ened violations of the obligations hereunder of any Person sub-
ject to this Agreement. Holders of Rights shall be entitled to
recover the reasonable costs and expenses, including attorneys'
fees, incurred by them in any action to enforce the provisions
of this Agreement.
Section 17. 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:
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(a) prior to the Distribution Date, the Rights will
be transferable only in connection with the transfer of
Common Stock;
(b) after the Distribution Date, the Rights Certifi-
cates are transferable only on the registry books of the
Rights Agent if surrendered at the principal corporate
trust office of the Rights Agent, duly endorsed or accom-
panied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and
treat the person in whose name a Rights Certificate (or,
prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstand-
ing any notations of ownership or writing on the Rights
Certificates 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 shall be affected by any notice to the
contrary.
Section 18. 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 shares of Preferred Stock, Common
Stock or any other securities of the Company which may at any
-57-<PAGE>
time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Rights
Certificate by construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a shareholder
of the Company or any right to vote for the election of direc-
tors or upon any matter submitted to shareholders at any meet-
ing thereof, or to give or withhold consent to any corporate
action, or to receive notice or meetings or other actions af-
fecting shareholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions
thereof.
Section 19. Concerning the Rights Agent. The Com-
pany agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder as agreed, and, from
time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disburse-
ments incurred in the administration and execution of this
Agreement and the exercise and performance of its duties here-
under. 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 mis-
conduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance
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and administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising
therefrom, directly or indirectly.
The Rights Agent shall be protected and shall incur
no liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this
Agreement in reliance upon any Rights Certificate or certifi-
cate for Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, en-
dorsement, affidavit, letter, notice, direction, consent, cer-
tificate, statement, or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
Section 20. Merger or Consolidation or Change of
Name of Rights Agent. 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 suc-
cessor Rights Agent shall be a party, or any corporation suc-
ceeding to the corporate trust business of the Rights Agent or
any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution of fil-
ing of any paper or any further act on the part of any of the
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parties hereto, provided that such corporation would be eligi-
ble for appointment as a successor Rights Agent under the pro-
visions of Section 22 hereof. In case at the time such succes-
sor Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been coun-
tersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent
and deliver such Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have
been countersigned, any successor Rights Agent may countersign
such Rights Certificates either in the name of the predecessor
or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates shall have the full force pro-
vided in the Rights Certificates in this Agreement.
In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certifi-
cates 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.
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Section 21. Duties of Rights Agent. The Rights
Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of
which the Company and the holders of Rights Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
selected by it (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 accor-
dance with such opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without lim-
itation, the identity of any Acquiring Person) 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 pre-
scribed) may be deemed to be conclusively proved and es-
tablished by a certificate signed by the Chairman of the
Board, any Vice Chairman of the Board, any President, any
Vice President, the Treasurer, any Assistant Treasurer,
the Secretary or any Assistant Secretary of the Company
and delivered to the Rights Agent; and such certificate
-61-<PAGE>
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 cer-
tificate.
(c) The Rights Agent shall be liable hereunder only
for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals con-
tained in this Agreement or in the Rights Certificates
(except as to the fact that it has countersigned the
Rights Certificates) or be required to verify the same,
but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any respon-
sibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execu-
tion 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 respon-
sible 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 adjust-
ment required under the provisions of Section 11 or 13
hereof or responsible for the manner, method or amount of
-62-<PAGE>
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 actual notice of any such adjustment);
nor shall it be responsible for any determination by the
Board of Directors of the Company of the current market
value of the Rights or Preferred Stock or Common Stock
pursuant to the provisions of Section 15 hereof; nor shall
it by any act hereunder be deemed to make any representa-
tion or warranty as to the authorization or reservation of
any shares of Preferred Stock or other securities to be
issued pursuant to this Agreement or any Rights Certifi-
cate or as to whether any shares of Preferred Stock or
other securities will, when so issued, be validly autho-
rized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, exe-
cute, 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.
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(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the per-
formance of its duties hereunder and certificates deliv-
ered pursuant to any provision hereof from the Chairman of
the Board, any Vice Chairman of the Board, any President,
any Vice President, the Secretary, any Assistant Secre-
tary, the Treasurer or any Assistant Treasurer of the Com-
pany, and is authorized 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 instruc-
tions of any such officer.
(h) The Rights Agent and any shareholder, director,
officer or employee or other Affiliate of the Rights Agent
may buy, sell or deal in any of the Rights or other secu-
rities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any
-64-<PAGE>
duty hereunder either itself or by or through its attor-
neys or agents, and the Rights Agent shall not be answer-
able or accountable for any act, omission, default, ne-
glect or misconduct of any such attorneys or agents or for
any loss to the Company or to the holders of the Rights
resulting from any such act, omission, default, neglect or
misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of
its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that re-
payment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate sur-
rendered 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
of transfer without first consulting with the Company.
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Section 22. Change of Rights Agent. The Rights
Agent or any successor Rights Agent may resign and be dis-
charged from its duties under this Agreement upon 30 days' no-
tice in writing mailed to the Company and to each transfer
agent of the Common Stock and Preferred Stock by registered or
certified mail, and to holders of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or
any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Stock and
Preferred Stock by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise be-
come incapable of acting, the Company shall appoint a successor
to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who
shall, with such notice, submit his Rights Certificate for in-
spection by the Company), then the registered holder of any
Rights Certificate may apply to any court of competent juris-
diction for the appointment of a new Rights Agent. Any succes-
sor Rights Agent, whether appointed by the Company or by such a
court, shall be (a) a corporation organized and doing business
-66-<PAGE>
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 su-
pervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a com-
bined capital and surplus of at least $50,000,000 or (b) an
affiliate of a corporation described in clause (a) of this sen-
tence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibili-
ties as if it has been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property
at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such ap-
pointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of
the Common Stock and Preferred Stock, and mail a notice thereof
in writing to the registered holders of the Rights Certifi-
cates. Failure to give any notice provided for in this Section
22, however, or any defect therein, shall not affect the legal-
ity or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the
case may be.
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Section 23. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option,
issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any ad-
justment or change in the Purchase Price per share and the num-
ber or kind or class of shares or other securities or property
purchasable under the Rights Certificates made in accordance
with the provisions of this Agreement.
Section 24. Redemption and Termination.
(a) (i) The Board of Directors of the Company may,
at its option, at any time prior to the earlier of (x) the time
that any person becomes an Acquiring Person or (y) 5:00 P.M.,
E.T., on the Final Expiration Date, redeem all but not less
than all of the then outstanding Rights at a redemption price
of $.01 per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after
the date hereof (such redemption price being hereinafter re-
ferred to as the "Redemption Price").
(ii) In addition, the Board of Directors of the Com-
pany may redeem all but not less than all of the then outstand-
ing Rights at the Redemption Price following the occurrence of
a Stock Acquisition Date but prior to any event described in
Section 13(a) either (x) in connection with any event specified
-68-<PAGE>
in Section 13(a) in which all holders of Common Stock are
treated alike and not involving (other than as a holder of Com-
mon Stock being treated like all other such holders) an Acquir-
ing Person or an Affiliate or Associate of an Acquiring Person
or any other Person in which such Acquiring Person, Affiliate
or such Associate has any interest, or any other Person acting
directly or indirectly on behalf of or in association with any
such Acquiring Person, Affiliate or Associate, or (y) following
the occurrence of an event set forth in, and the expiration of
any period during which the holder of Rights may exercise the
rights under, Section 11(a)(ii) if and for as long as the Ac-
quiring Person is not thereafter the Beneficial Owner of secu-
rities representing 20% or more of the outstanding shares of
the Voting Power, and at the time of redemption there are no
other persons who are Acquiring Persons.
(b) In the case of a redemption permitted under Sec-
tion 24(a)(i), immediately upon the action of the Board of Di-
rectors of the Company ordering the redemption of the Rights,
evidence of which shall have been filed with the Rights Agent
and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Re-
demption Price. In the case of a redemption permitted only
under Section 24(a)(ii), evidence of which shall have been
filed with the Rights Agent, the right to exercise the Rights
-69-<PAGE>
will terminate and represent only the right to receive the Re-
demption Price only after ten Business Days following the giv-
ing of notice of such redemption to the holders of such Rights
if no event set forth in Section 11(a)(ii) shall have occurred,
and, if such event shall have occurred, upon the later of ten
Business Days following the giving of such notice or the expi-
ration of any period during which the rights under Section
11(a)(ii) may be exercised. Within ten days after the action
of the Board of Directors ordering any such redemption of the
Rights, the Company shall give notice of such redemption to the
Rights Agent and the holders of the then outstanding Rights by
mailing such notice to the Rights Agent and to all such holders
at their last addresses as they appear upon the registry books
of the Rights Agent or, prior to the Distribution Date, on the
registry books of the Transfer Agent for the Common Stock. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which
the payment of the Redemption Price will be made.
(c) In the case of a redemption permitted under Sec-
tion 24(a)(i) or (ii), the Company may, at its option, dis-
charge all of its obligations with respect to the Rights by (i)
issuing a press release announcing the manner of redemption of
the Rights and (ii) mailing payment of the Redemption Price to
the registered holders of the Rights at their last addresses as
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they appear on the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the Transfer
Agent of the Common Stock, and upon such action, all outstand-
ing Rights Certificates shall be null and void without any fur-
ther action by the Company.
Section 24A. Exchange.
(a) The Board of Directors of the Company may, at
its option, at any time after any Person becomes an Acquiring
Person, exchange all or part of the then outstanding and ex-
ercisable 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"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the Company,
any subsidiary of the Company, any employee benefit plan of the
Company or any such subsidiary, or any entity holding Common
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.
-71-<PAGE>
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to paragraph (a) of this Section 24A 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,
however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the
exchange of the Common 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.
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(c) In the event that there shall not be sufficient
Common Stock issued but not outstanding (i.e., treasury shares)
or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24A, the Company
shall take all such action as may be necessary to authorize
additional Common Stock for issuance upon exchange of the
Rights. In the event the Company shall, after good faith
effort, be unable to take all such action as may be necessary
to authorize such additional Common Stock, the Company shall
substitute, for each share of Common Stock that would otherwise
be issuable upon exchange of a Right, a number of shares of
Preferred Stock or fraction thereof such that the current per
share market price of one share of Preferred Stock multiplied
by such number or fraction is equal to the current per share
market price of one share of Common Stock as of the date of
issuance of such shares of Preferred Stock or fraction thereof.
(d) The Company shall not be required to issue
fractional shares of Common Stock or to distribute certificates
which evidence fractional shares of Common Stock. In lieu of
such fractional shares of Common Stock, the Company shall pay
to the registered holders of the Right Certificates with regard
to which such fractional shares of Common Stock would otherwise
be issuable an amount in cash equal to the same fraction of the
current market value of a whole shares of Common Stock. For
the purposes of this paragraph (d), the current market value of
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a whole share of Common Stock shall be the closing price of
shares of a 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 24A.
Section 25. Notice of Certain Events. In case the
Company shall propose (a) 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 quarterly cash dividend out of earnings or re-
tained earnings of the Company) or (b) 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 (c) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision
of outstanding shares of Preferred Stock), or (d) to effect any
consolidation or merger into or with, or to effect any sale or
other transfer (or to permit one or more of its subsidiaries to
effect any sale or other transfer), in one or more transac-
tions, of more than 50% of the assets or earning power of the
Company and its subsidiaries (taken as a whole) to, any other
Person, or (e) to effect the liquidation, dissolution or wind-
ing up of the Company, then, in each such case, the Company
-74-<PAGE>
shall give to each holder of a Rights Certificate, in accor-
dance with Section 26 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date
on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of
the shares of Preferred Stock, if any such date is to be fixed,
and such notice shall be so given in the case of any action
covered by clause (a) or (b) above at least 20 days prior to
the record date for determining holders of the shares of Pre-
ferred Stock for purposes of such action, and in the case of
any such other action, at least 20 days prior to the date of
the taking of such proposed action or the date of participation
therein by the holders of the shares of Preferred Stock which-
ever shall be the earlier.
In case any of the events set forth in Section
11(a)(ii) of this Agreement shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give
to each holder of a Rights Certificate, in accordance with Sec-
tion 26 hereof, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) hereof.
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Section 26. Notices. Notices or demands authorized
by this Agreement to be given or made by the Rights Agent or by
the holder of any Rights Certificate to or on the Company shall
be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
First Virginia Banks, Inc.
6400 Arlington Boulevard
Falls Church, Virginia 22046-2399
Attention: Secretary
Subject to the provisions of Section 22, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the holder of any Rights Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first-
class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Registrar and Transfer Company
10 Commerce Drive
Cranford, N.J. 07016
Attention: Corporate Trust Department
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 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.
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Section 27. Supplements and Amendments. The Company
may from time to time supplement or amend this Agreement
without the approval of any holders of Right Certificates in
order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any
other provisions with respect to the Rights which the Company
may deem necessary or desirable, any such supplement or amend-
ment to be evidenced by a writing signed by the Company and the
Rights Agent; provided, however, that from and after such time
as any Person becomes an Acquiring Person, this Agreement shall
not be amended in any manner which would adversely affect the
interests of the holders of Rights. Without limiting the
foregoing, the Company may at any time prior to such time as
any Person becomes an Acquiring Person amend this Agreement to
lower the thresholds set forth in Sections 1(a) and 3(a) to not
less than the greater of (i) the sum of .001% and the largest
percentage of the outstanding Common Stock then known by the
Company to be beneficially owned by any Person (other than the
Company, any subsidiary of the Company, any employee benefit
plan of the Company or any subsidiary of the Company, or any
entity holding Common Stock for or pursuant to the terms of any
such plan) and (ii) 10%.
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Section 28. Determination 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 or any other securities of which any Person is the Ben-
eficial Owner, shall be made in accordance with the last sen-
tence of Rule 13d-3(d)(1)(i) of the General Rules and Regula-
tions under the Exchange Act as in effect on the date of this
Agreement. The Board of Directors of the Company shall have
the exclusive power and authority to administer this Agreement
and to exercise all rights and powers specifically granted to
the Board, or the Company, or as may be necessary or advisable
in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions
of this Agreement, and (ii) make all determinations deemed nec-
essary or advisable for the administration of this Agreement
(including a determination to redeem or not redeem the Rights
or to amend the 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 in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent,
the holders of the Rights Certificates and all other parties,
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and (y) not subject the Board to any liability to the holders
of the Rights Certificates.
Section 29. Successors. All the covenants and pro-
visions 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 30. Benefits of this Agreement. Nothing in
this Agreement shall be construed to give to any person or cor-
poration other than the Company, the Rights Agent and the reg-
istered holders of the Rights Certificates (and, prior to the
Distribution Date, 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 Certifi-
cates (and, prior to the Distribution Date, 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, cove-
nants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated.
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Section 32. Governing Law. This Agreement, each
Right and each Rights Certificate issued hereunder shall be
deemed to be a contract made under the laws of the Commonwealth
of Virginia and for all purposes shall be governed by and con-
strued in accordance with the laws of such Commonwealth appli-
cable to contracts to be 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 coun-
terparts 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 head-
ings of the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
-80-<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and their respective corpo-
rate seals to be hereunto affixed and attested, all as of the
day and year first above written.
Attest: FIRST VIRGINIA BANKS, INC.
[Seal]
/s/ Thomas P. Jennings By /s/ Barry J. Fitzpatrick
Name: Thomas P. Jennings Name: Barry J. Fitzpatrick
Title: Senior Vice President, Title: Chairman, President
General Counsel and and Chief Executive
Secretary Officer
Attest: REGISTRAR AND TRANSFER COMPANY
[Seal]
/s/ By /s/
Name: Name:
Title: Title:
-81-<PAGE>
Exhibit A
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES E PARTICIPATING PREFERRED STOCK
of
FIRST VIRGINIA BANKS, INC.
Pursuant to Section 13.1-639 of the
Virginia Stock Corporation Act
We, and , President,
and Senior Vice President and Secretary, respectively, of First
Virginia Banks, Inc., a corporation organized and existing
under the Virginia Stock Corporation Act, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the
Board of Directors by the Articles of Incorporation of the said
Corporation, the said Board of Directors on July 27, 1988,
adopted the following resolution creating a series of 300,000
shares of Preferred Stock, par value $10.00 per share, desig-
nated as Series E Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in
the Board of Directors of this Company in accordance with the
provisions of its Articles of Incorporation, a series of
Preferred Stock, par value $10.00 per share, of the Company be
and it hereby is created, and that the designation and amount
thereof and the powers, preferences and relative, participat-
ing, optional and other special rights of the shares of such
series, and the qualifications, limitations or restrictions
thereof are as follows:
Section 1. Designation and Amount. The shares of
such series shall be designated as "Series E Participating
Preferred Stock", and the number of shares constituting such
series shall be 300,000. Such number of shares may be in-
creased or decreased by resolution of the Board of Directors;
provided, that no decrease shall reduce the number of shares of
Series E Participating Preferred Stock to a number less than
that of the shares then outstanding plus the number of shares
issuable upon exercise of outstanding rights, options or war-
rants or upon conversion of outstanding securities issued by
the Corporation.
Section 2. Dividends and Distributions.
(A) The holders of shares of Series E Participating
Preferred Stock in preference to the holders of shares of
A-1<PAGE>
Common Stock, par value $1.00 per share (the "Common Stock"),
of the Corporation and any other junior stock, shall be en-
titled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quar-
terly dividends payable in cash on the first day of January,
April, July and October in each year (each such date being re-
ferred to herein as a "Quarterly Dividend Payment Date"), com-
mencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Series E
Participating Preferred Stock in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $1.00, or (b)
subject to the provision for adjustment hereinafter set forth,
100 times the aggregate per share amount of all cash dividends,
and 100 times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of
the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock, since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series E Par-
ticipating Preferred Stock. In the event the Corporation shall
at any time after August 8, 1988 (the "Rights Declaration
Date") (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to
which holders of shares of Series E Participating Preferred
Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by mul-
tiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior
to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series E Participating Preferred Stock as
provided in paragraph (A) above immediately after it declares a
dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Divi-
dend Payment Date, a dividend of $1.00 per share on the Series
E Participating Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumula-
tive on outstanding shares of Series E Participating Preferred
A-2<PAGE>
Stock from the Quarterly Dividend Payment Date next preceding
the date of issue of such shares of Series E Participating Pre-
ferred Stock unless the date of issue of such shares is prior
to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the
date of issue is, a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of
shares of Series E Participating Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend
Payment Date in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear in-
terest. Dividends paid on the shares of Series E Participating
Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall
be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix
a record date for the determination of holders of shares of
Series E Participating Preferred Stock entitled to receive pay-
ment of a dividend or distribution declared thereon, which rec-
ord date shall be no more than 30 days prior to the date fixed
for the payment thereof.
Section 3. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends
or distributions payable on the Series E Participating
Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series E
Participating Preferred Stock outstanding shall have been paid
in full, the Corporation shall not
(i) declare or pay dividends on, make any
other distributions on, or redeem or purchase or
otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the
Series E Participating Preferred Stock;
(ii) declare or pay dividends on or make
any other distributions on any shares of stock rank-
ing on a parity (either as to dividends or upon liq-
uidation, dissolution or winding up) with the Series
E Participating Preferred Stock except dividends paid
ratably on the Series E Participating Preferred Stock
and all such parity stock on which dividends are pay-
able or in arrears in proportion to the total amounts
A-3<PAGE>
to which the holders of all such shares are then en-
titled;
(iii) redeem or purchase or otherwise
acquire for consideration shares of any stock ranking
on a parity (either as to dividends or upon liquida-
tion, dissolution or winding up) with the Series E
Participating Preferred Stock provided that the Cor-
poration may at any time redeem, purchase or other-
wise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon dis-
solution, liquidation or winding up) to the Series E
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for
consideration any shares of Series E Participating
Preferred Stock or any shares of stock ranking on a
parity with the Series E Participating Preferred
Stock except in accordance with a purchase offer made
in writing or by publication (as determined by the
Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after con-
sideration of the respective annual dividend rates
and other relative rights and preferences of the re-
spective series and classes, shall determine in good
faith will result in fair and equitable treatment
among the respective series or classes.
(B) The Corporation shall not permit any subsidiary
of the Corporation to purchase or otherwise acquire for consid-
eration any shares of stock of the Corporation unless the
Corporation could, under paragraph (A) of this Section 3, pur-
chase or otherwise acquire such shares at such time and in such
manner.
Section 4. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Corporation, no distribution shall be made
to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series E Participating Preferred Stock unless, prior
thereto, the holders of shares of Series E Participating Pre-
ferred Stock shall have received per 1/100 share thereof, the
greater of the issuance price thereof or the payment made per
share of Common Stock, plus an amount equal to accrued and un-
paid dividends and distributions thereon, whether or not de-
clared, to the date of such payment (the "Series E Liquidation
Preference"). Following the payment of the full amount of the
Series E Liquidation Preference, no additional distributions
A-4<PAGE>
shall be made to the holders of shares of Series E Participat-
ing Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share
(the "Common Adjustment") equal to the quotient obtained by
dividing (i) the Series E Liquidation Preference by (ii) 100
(as appropriately adjusted as set forth in subparagraph C below
to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such
number in clause (ii), the "Adjustment Number"). Following the
payment of the full amount of the Series E Liquidation Prefer-
ence and the Common Adjustment in respect of all outstanding
shares of Series E Participating Preferred Stock and Common
Stock, respectively, holders of Series E Participating Pre-
ferred Stock and holders of shares of Common Stock shall re-
ceive their ratable and proportionate share of the remaining
assets to be distributed in the ratio of the Adjustment Number
to 1 with respect to such Preferred Stock and Common Stock, on
a per share basis, respectively.
(B) In the event there are not sufficient assets
available to permit payment in full of the Series E Liquidation
Preference and the liquidation preferences of all other series
of Preferred Stock, if any, which rank on a parity with the
Series E Participating Preferred Stock then such remaining as-
sets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation prefer-
ences. In the event there are not sufficient assets available
to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of
Common Stock.
(C) In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such
case the Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment Number
by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 5. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combi-
nation or other transaction in which the shares of Common Stock
are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case the
shares of Series E Participating Preferred Stock shall at the
same time be similarly exchanged or changed in an amount per
A-5<PAGE>
share (subject to the provision for adjustment hereinafter set
forth) equal to 100 times the aggregate amount of stock, secu-
rities, cash and/or any other property (payable in kind), as
the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare
any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine
the outstanding Common Stock into a smaller number of shares,
then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of
Series E Participating Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that are outstanding immediately prior
to such event.
Section 6. Redemption. The shares of Series E
Participating Preferred Stock shall not be redeemable.
Section 7. Ranking. The Series E Participating Pre-
ferred Stock shall rank on a parity with all other series of
the Corporation's Preferred Stock as to the payment of divi-
dends and the distribution of assets.
Section 8. Amendment. The Articles of Incorporation
of the Corporation shall not be further amended in any manner
which would materially alter or change the powers, preferences
or special rights of the Series E Participating Preferred Stock
so as to affect them adversely without the affirmative vote of
the holders of a majority or more of the outstanding shares of
Series E Participating Preferred Stock voting separately as a
class.
Section 9. Fractional Shares. Series E Participat-
ing Preferred Stock may be issued in fractions of a share which
shall entitle the holder, in proportion to such holder's frac-
tional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all
other rights of holders of Series E Participating Preferred
Stock.
RESOLVED FURTHER, that the proper officers of the
Corporation be, and each of them hereby is, authorized to ex-
ecute a Certificate of Designation with respect to the Series E
Participating Preferred Stock pursuant to Section 13.1-639 of
the Virginia Stock Corporation Act and to take all appropriate
A-6<PAGE>
action to cause such Certificate to become effective, includ-
ing, but not limited to, the filing and recording of such Cer-
tificate with and/or by the State Corporation Commission of the
Commonwealth of Virginia.
IN WITNESS WHEREOF, we have executed and subscribed
this Certificate and do affirm the foregoing as true under the
penalties of perjury this day of , 1988.
/s/
President
Attest:
/s/
Secretary
A-7<PAGE>
Exhibit B
[Form of Rights Certificate]
Certificate No. R Rights
NOT EXERCISABLE AFTER AUGUST 8, 2008 OR EARLIER
IF NOTICE OF REDEMPTION IS GIVEN. THE RIGHTS
ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. [THE RIGHTS
REPRESENTED BY THIS CERTIFICATE WERE ISSUED TO A
PERSON WHO WAS AN ACQUIRING PERSON OR AN ASSOCI-
ATE OR AFFILIATE OF AN ACQUIRING PERSON. THIS
RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME VOID TO THE EXTENT PROVIDED IN
AND UNDER THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF THE RIGHTS AGREEMENT.]*
Rights Certificate
FIRST VIRGINIA BANKS, INC.
This certifies that , or reg-
istered assigns, is the registered owner of the number of
Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the
Amended and Restated Rights Agreement dated as of July 29, 1988, as
amended as of August 27, 1997 (the "Rights Agreement"), between
First Virginia Banks, Inc., a Virginia corporation (the "Company"),
and [Registrar and Transfer Company] (the "Rights Agent"), to
purchase from the Company at any time after
the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M. (Eastern Daylight Time) on
August 8, 2008 at the designated office of the Rights Agent in
_____________________
* The portion of the legend in brackets shall be inserted
only if applicable.
B-1<PAGE>
[Cranford, New Jersey], one one-hundredth of a fully paid, non-
assessable share of Series E Participating Preferred Stock (the
"Preferred Stock") of the Company, at a purchase price of $450
per one one-hundredth of a share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the
appropriate Form of Election to Purchase duly executed. The
number of Rights evidenced by this Rights Certificate (and the
number of shares which may be purchased upon exercise thereof)
set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of August 8, 1988 and as amended
August 27, 1997, based on the Preferred Stock as constituted
at such date.
As provided in the Rights Agreement, the Purchase
Price and the number of shares of Preferred Stock or other
securities which may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to mod-
ification and adjustment upon the happening of certain events.
This Rights Certificate is subject to all of the
terms, provisions and conditions of the Rights Agreement, which
terms, provisions and conditions are hereby incorporated herein
by reference and made a part hereof and to which Rights Agree-
ment reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immuni-
ties hereunder of the Rights Agent, the Company and the holders
of the Rights Certificates. Copies of the Rights Agreement are
B-2<PAGE>
on file at the principal office of the Company and are also
available upon written request to the Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office of the
Rights Agent, may be exercised for another Rights Certificate
or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of
shares of Preferred Stock as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have en-
titled such holder to purchase. If this Rights Certificate
shall be exercised (other than pursuant to Section 11(a)(ii) of
the Rights Agreement) in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or
Rights Certificates for the number of whole Rights not exer-
cised. If this Rights Certificate shall be exercised in whole
or in part pursuant to Section 11(a)(ii) of the Rights Agree-
ment, the holder shall be entitled to receive this Rights Cer-
tificate duly marked to indicate that such exercise has oc-
curred as set forth in the Rights Agreement.
Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Certificate may be redeemed by the
Company at its option at a redemption price of $.01 per Right.
Subject to the provisions of the Rights Agreement, the Company,
at its option, may elect to mail payment of the redemption
B-3<PAGE>
price to the registered holder of the Right at the time of re-
demption, in which event this certificate may become void with-
out any further action by the Company.
No fractional shares of Preferred Stock will be
issued upon the exercise of any Right or Rights evidenced
hereby (other than fractions which are integral multiples of
one one-hundredth of a share of Preferred Stock, which may, at
the election of the Company, be evidenced by depositary re-
ceipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall
be entitled to vote or receive dividends or be deemed for any
purpose the holder of shares of Preferred Stock or of any other
securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions af-
fecting shareholders (except as provided in the Rights Agree-
ment), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Rights
B-4<PAGE>
Certificate shall have been exercised as provided in the Rights
Agreement.
This Rights Certificate shall not be valid or obliga-
tory for any purpose until it shall have been countersigned by
the Rights Agent.
WITNESS the facsimile signature of the proper
officers of the Company and its corporate seal. Dated as of
.
ATTEST: FIRST VIRGINIA BANKS, INC.
By
Name: Name:
Title: Title:
Countersigned:
Authorized Signature
B-5<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
hereby sell, assigns and transfers unto
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the within
Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: , 19
Signature
Signature Guaranteed:
B-6<PAGE>
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate
[ ] are [ ] are not being sold, assigned and transferred by
or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such
terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of
the undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate
or Associate of an Acquiring Person.
Dated: , 19
Signature
NOTICE
The signature to the foregoing Assignment must cor-
respond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlarge-
ment or any change whatsoever.
B-7<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate pursuant to
Section 11(a)(ii) of the Rights Agreement.)
To FIRST VIRGINIA BANKS, INC.:
The undersigned hereby irrevocably elects to exercise
Rights represented by this Rights Certificate to
purchase the shares of Common Stock (or such other securities
of the Company) issuable upon the exercise of the Rights and
requests that certificates for such shares be issued in the
name of:
(Please insert social security or other identifying number)
(Please print name and address)
The Rights Certificate indicating the balance, if
any, of such Rights which may still be exercised pursuant to
Section 11(a)(ii) of the Rights Agreement shall be returned to
the undersigned unless such person requests that the Rights
Certificate be registered in the name of and delivered to:
B-8<PAGE>
Please insert social security or other identifying number
(complete only if Rights Certificate is to be registered in a
name other than the undersigned)
(Please print name and address)
Dated: , 19
Signature
Signature Guaranteed:
B-9<PAGE>
Certificate
The undersigned hereby certifies by checking the ap-
propriate boxes that:
(1) the Rights evidenced by this Rights Certificate
[ ] are [ ] are not being exercised by or on behalf of a Per-
son who is or was an Acquiring Person or an Affiliate or As-
sociate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) this Rights Certificate [ ] is [ ] is not be-
ing sold, assigned and transferred by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate
of any such Acquiring Person (as such terms are defined pursu-
ant to the Rights Agreement);
(3) after due inquiry and to the best knowledge of
the undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate
or Associate of an Acquiring Person.
Dated: , 19
Signature
NOTICE
The signature to the foregoing Election to Purchase
must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
B-10<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate other than pursuant to
Section 11(a)(ii) of the Rights Agreement.)
To FIRST VIRGINIA BANKS, INC.:
The undersigned hereby irrevocably elects to exercise
Rights represented by this Rights Certificate to
purchase the shares of Preferred Stock (or such other securi-
ties of the Company or any other Person) issuable upon the ex-
ercise of the Rights and requests that certificates for such
shares be issued in the name of:
(Please insert social security or other identifying number)
(Please print name and address)
The Rights Certificate indicating the balance, if
any, of such Rights which may still be exercised pursuant to
Section 11(a)(ii) of the Rights Agreement shall be returned to
the undersigned unless such person requests that the Rights
Certificate be registered in the name of and delivered to
Please insert social security or other identifying number
(complete only if Rights Certificate is to be registered in a
name other than the undersigned)
B-11<PAGE>
(Please print name and address)
Dated: , 19
Signature
Signature Guaranteed:
B-12<PAGE>
Certificate
The undersigned hereby certifies by checking the ap-
propriate boxes that:
(1) the Rights evidenced by this Rights Certificate
[ ] are [ ] are not being sold, assigned and transferred by
or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such
terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of
the undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate
or Associate of an Acquiring Person.
Dated: , 19
Signature
NOTICE
The signature to the foregoing Election to Purchase
must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
B-13<PAGE>
Exhibit C
SUMMARY OF RIGHTS
On July 27, 1988, the Board of Directors of First
Virginia Banks, Inc. (the "Company") declared a dividend dis-
tribution of one Right for each outstanding share of common
stock, $1.00 par value (the "Common Stock"), of the Company to
stockholders of record at the close of business on August 8,
1988 (the "Record Date"). Except as set forth below, each
Right, when exercisable, entitles the registered holder to pur-
chase from the Company one one-hundredth share of a new series
of preferred stock, designated as Series E Participating Pre-
ferred Stock, par value $10.00 per share (the "Preferred
Stock"), at a price of $450 (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set
forth in an Amended and Restated Rights Agreement (the "Amended
Rights Agreement") between the Company and Registrar and
Transfer Company, as Rights Agent.
Initially, the Rights will be attached to all Common
Stock certificates representing shares then outstanding, and no
separate Rights certificates will be distributed. Until the
earlier to occur of (i) the tenth day after a public
announcement that, without the prior consent of the Company, a
person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to
acquire, beneficial ownership of securities having 20% or more
of the voting power of all outstanding voting securities of the
Company or (ii) ten business days (or such later date as may be
determined by the Board of Directors prior to a person becoming
an Acquiring Person) following the commencement of (or a public
announcement of an intention to make) a tender offer or
exchange offer which would result in any person or group and
related persons becoming an Acquiring Person, without the prior
consent of the Company (the earlier of such dates being called
the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Stock certificates outstanding as
of the Record Date, by such Common Stock certificate together
with the Summary of Rights. The Amended Rights Agreement
provides that, until the Distribution Date, the Rights will be
transferred with, and only with, Common Stock certificates.
From as soon as practicable after the Record Date and until the
Distribution Date (or earlier redemption or expiration of the
Rights), new Common Stock certificates issued after the Record
Date upon transfer or new issuance of the Common Stock will
contain a notation incorporating the Amended Rights Agreement
by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for
transfer of any certificates for Common Stock outstanding as of
the Record Date (with or without this Summary of Rights
C-1<PAGE>
attached) will also constitute the transfer of the Rights
associated with the Common Stock represented by such certifi-
cate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Rights Certifi-
cates") will be mailed to holders of record of the Common Stock
as of the close of business on the Distribution Date, and the
separate Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire on the earliest of (i) August 8,
2008, (ii) consummation of a merger transaction with a person
or group who acquired Common Stock pursuant to a Permitted
Offer (as defined below), and is offering in the merger the
same price per share and form of consideration paid in the Per-
mitted Offer, or (iii) redemption by the Company as described
below.
The Purchase Price payable, and the number of shares
of Preferred Stock or other securities or property issuable,
upon exercise of the Rights are subject to adjustment from time
to time to prevent dilution (i) in the event of a stock divi-
dend on, or a subdivision, combination or reclassification of
the Preferred Stock, (ii) upon the grant to holders of the Pre-
ferred Stock of certain rights or warrants to subscribe for
Preferred Stock, certain convertible securities or securities
having the same or more favorable rights, privileges and pref-
erences as the Preferred Stock at less than the current market
price of the Preferred Stock or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends out of earn-
ings or retained earnings) or of subscription rights or war-
rants (other than those referred to above).
The number of outstanding Rights associated with each
share of Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, is also subject
to adjustment in the event of a stock split of the Common Stock
or a stock dividend on the Common Stock payable in shares of
Common Stock or subdivisions, consolidations or combinations of
the Common Stock occurring, in any such case, prior to the
Distribution Date.
In the event that a person becomes the beneficial
owner of securities having 20% or more of the voting power of
all then outstanding voting securities of the Company (unless
pursuant to a tender offer or exchange offer for all outstand-
ing shares of Common Stock at a price and on terms determined
by at least a majority of the members of the Board of Directors
who are not officers of the Company to be both adequate and
C-2<PAGE>
otherwise in the best interests of the Company and its stock-
holders (a "Permitted Offer")), proper provision shall be made
so that each holder of a Right (other than an Acquiring Person)
will for a 60-day period thereafter have the right to receive
upon exercise that number of one one-hundredths of a share of
Preferred Stock equal to the number of shares of Common Stock
having a market value (immediately prior to the triggering of
the Right) of two times the exercise price of the Right, to the
extent available, and then (after all authorized and unreserved
shares of Preferred Stock have been issued) an equal number of
an equivalent security (such as another equity security with at
least the same economic value as one one-hundredth of a share
of Preferred Stock) (such right being called the "Flip-In
Right"). In addition, the Company shall be entitled (but not
required) to deliver, upon exercise of the Flip-In Right, in
lieu of one one-hundredths of a share of Preferred Stock, an
equal number of shares of Common Stock, to the extent they are
available.
In the event that, after the first date of public
announcement by the Company or an Acquiring Person that an
Acquiring Person has become such, the Company is involved in a
merger or other business combination transaction in which the
Common Stock is exchanged or changed, or 50% or more of the
Company's assets or earning power are sold (in one transaction
or a series of transactions), proper provision shall be made so
that each holder of a Right (other than the Acquiring Person)
shall thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company (or,
in the event there is more than one acquiring company, the
acquiring company receiving the greatest portion of the assets
or earning power transferred) which at the time of such trans-
action would have a market value (immediately prior to the
triggering of the Right) of two times the exercise price of the
Right (such right being called the "Flip-Over Right"). For
example, at an exercise price of $450 per Right, each Right not
owned by an Acquiring Person following an event set forth in
this paragraph would entitle its holder to purchase common
stock of the acquiring company with a market value immediately
prior to the triggering of the Right of $900 (or, in the event
there is more than one acquiring company, the acquiring company
receiving the greatest portion of the assets or earning power
transferred) for $450.
At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person or
group of 50% or more of the outstanding shares of Common Stock,
the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will
C-3<PAGE>
have become void), in whole or in part, at an exchange ratio of
one share of Common Stock, or one one-hundredth of a share of
Preferred Stock (or of a share of a class or series of the
Company's preferred stock having equivalent rights, preferences
and privileges), per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction
occurring after July 29, 1988.
The holder of a Right will continue to have the
Flip-Over Right whether or not such holder exercises the
Flip-In Right. Upon the occurrence of any of the events giving
rise to the exercisability of the Flip-Over Right or the
Flip-In Right, any Rights that are or were at any time owned by
an Acquiring Person engaging in any of such transactions or
receiving the benefits thereof on or after the time the Acquir-
ing Person becomes such shall become void insofar as they
relate to the Flip-Over Right or the Flip-In Right.
With certain exceptions, no adjustments in the Pur-
chase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price.
No fractions of shares will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of
the Common Stock on the last trading date prior to the date of
exercise.
At any time prior to the earlier to occur of (i) a
person becoming an Acquiring Person or (ii) the expiration of
the Rights, the Company may redeem the Rights in whole, but not
in part, at a price of $.01 per Right (the "Redemption Price"),
which redemption shall be effective upon the action of the
Board of Directors. Additionally, the Company may thereafter
redeem the then outstanding Rights in whole, but not in part,
at the Redemption Price provided that such redemption is inci-
dental to a merger or other business combination transaction or
series of transactions involving the Company but not involving
an Acquiring Person or any person who was an Acquiring Person
or following an event giving rise to, and the expiration of the
exercise period for, the Flip-In Right if and for as long as an
Acquiring Person beneficially owns securities representing less
than 20% of the voting power of the Company's voting
securities. The redemption of Rights described in the
preceding sentence shall be effective only as of such time when
the Flip-In Right is not exercisable, and in any event, only
after 10 business days prior notice. Upon the effective date
of the redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
C-4<PAGE>
The Preferred Stock purchasable upon exercise of the
Rights will be nonredeemable. Each share of Preferred Stock
will have a preferential quarterly dividend in an amount equal
to 100 times the dividend declared on each share of Common
Stock, but in no event less than $1.00. In the event of liqui-
dation, the holders of Preferred Stock will receive a preferred
liquidation payment per 1/100 share thereof equal to the
greater of the issuance price thereof or the payment made per
each share of Common Stock.
Each share of Preferred Stock will have 1 vote,
voting together with the shares of Common Stock.
In the event of any merger, consolidation or other
transaction in which shares of Common Stock are exchanged, each
share of Preferred Stock will be entitled to receive 100 times
the amount and type of consideration received per share of Com-
mon Stock. The rights of the Preferred Stock as to dividends,
liquidation and voting, and in the event of mergers and con-
solidations, are protected by customary anti-dilution provi-
sions. Fractional shares of Preferred Stock will be issuable;
however, the Company may elect to distribute depositary
receipts in lieu of such fractional shares. In lieu of frac-
tional shares other than fractions that are multiples of one
one-hundredth of a share, an adjustment in cash will be made
based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive
dividends. While the distribution of the Rights will not be
taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income
should the Rights become exercisable or upon the occurrence of
certain events thereafter.
The terms of the Rights may be amended by the Board
of Directors of the Company without the consent of the holders
of the Rights, including an amendment to lower certain
thresholds described above to not less than the greater of (i)
the sum of .001% and the largest percentage of the outstanding
shares of Common Stock then known to the Company to be ben-
eficially owned by any person or group of affiliated or asso-
ciated persons and (ii) 10%, except that from and after such
time as any person or group of affiliated or associated persons
becomes an Acquiring Person no such amendment may adversely
affect the interests of the holders of the Rights.
C-5<PAGE>
As of there were shares of
Common Stock outstanding (split adjusted). Each outstanding
share of Common Stock on such date had 4/9ths of a Right
attached thereto, as adjusted to reflect two 3-for-2 stock
splits with respect to the Common Stock since the Record Date.
As long as the Rights are attached to the shares of Common
Stock, the Company will issue 4/9ths of a Right, as adjusted,
with each new share of Common Stock so that all such shares
will have attached rights. 300,000 shares of Preferred Stock
have been reserved for issuance upon exercise of the Rights.
The Rights have certain anti-takeover effects. The
Rights will cause substantial dilution to a person or group
that attempts to acquire the Company (other than pursuant to a
Permitted Offer or with the Company's prior approval) without
conditioning the offer on the Rights being redeemed or substan-
tially all of the Rights being acquired. However, the Rights
should not interfere with any merger or other business combina-
tion approved by the Company with a person other than an
Acquiring Person because the Rights are redeemable under those
circumstances.
C-6
