<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF
SECURITIES PURSUANT TO SECTION 12(b) OR (g) OF
THE SECURITIES EXCHANGE ACT OF 1934
Corpus Christi Bancshares, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Texas 74-2351663
- ---------------------------------------- -------------------------
(State of incorporation or organization) (IRS Employer
Identification No.)
2402 Leopard, Corpus Christi, Texas 78469
- ---------------------------------------- -------------------------
(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
- ------------------------------- -----------------------------------
Rights to Purchase Common Stock American Stock Exchange
- ------------------------------- -----------------------------------
Securities to be registered pursuant to Section 12(g) of the Act:
None
- --------------------------------------------------------------------------------
(Title of Class)
Index to Exhibits Appears on Page 9
Page 1 of 9 pages
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ITEM 1. Description of Registrant's Securities to be Registered
On October 18, 1995, the Board of Directors of Corpus Christi
Bancshares, Inc. (the "Company") declared a dividend distribution of one right
(a "Right") for each outstanding share of Common Stock, par value $5.00 per
share (the "Common Shares"), of the Company. The distribution is payable on
November 3, 1995 (the "Record Date") to the stockholders of record as of the
close of business on the Record Date. Each Right entitles the registered
holder to purchase from the Company one Common Share at a price of $50.00 (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement, dated as of October 18, 1995 (the
"Rights Agreement"), between the Company and Chemical Mellon Shareholder
Services, L.L.C., as Rights Agent (the "Rights Agent").
Until the earliest to occur of the following dates (the earliest of
such dates being hereinafter called the "Distribution Date"):
(i) The close of business on the tenth calendar day (or
such later date as may be specified by the Board of Directors)
following the first date of public announcement by the Company
that a person (other than the Company or a subsidiary or
employee benefit or stock ownership plan of the Company),
together with its affiliates and associates, has acquired, or
obtained the right to acquire, beneficial ownership of 20% or
more of the outstanding Common Shares (any such person being
hereinafter called an "Acquiring Person"); provided that any
person who or which, at the time of the public announcement by
the Company of the declaration by its Board of Directors on
October 18, 1995 of the dividend distribution of the Rights,
together with all affiliates and associates of such person,
was the beneficial owner or had the right to acquire
beneficial ownership of 20% or more of the outstanding Common
Shares shall not be deemed to have become an Acquiring Person
unless and until (a) such person or any affiliate or associate
of such person shall become the beneficial owner or acquire
the right to obtain beneficial ownership of additional Common
Shares following such public announcement or (b) any other
person who is the beneficial owner or has the right to obtain
beneficial ownership of Common Shares shall thereafter become
an affiliate or associate of such person;
(ii) the close of business on the tenth calendar day (or such later
date as may be specified by the Board of Directors) following
the commencement of a tender offer or exchange offer by a
person (other than the Company or a subsidiary or employee
benefit or stock ownership plan of the Company), the
consummation of which would result in
Page 2 of 9 pages
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beneficial ownership by such person of 20% or more of the
outstanding Common Shares; and
(iii) the close of business on the tenth calendar day following the
first date of public announcement by the Company that (a) a
person, together with its affiliates and associates, has
acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the outstanding Common Shares (any
such person being hereinafter called an "Adverse Person," and
additionally, an "Acquiring Person"); provided that the
Company or a subsidiary or employee benefit or stock ownership
plan of the Company, certain institutional investors and any
person who or which is determined by the Board of Directors
not to be an Adverse Person as provided in the Rights
Agreement prior to the close of business on such tenth
calendar day will not be deemed to be an Adverse Person unless
and until such person is determined by the Board of Directors
to be an Adverse Person as provided in the Rights Agreement
and such person thereafter becomes the beneficial owner of
additional Common Shares; and provided further that any person
who or which, at the time of the public announcement by the
Company of the declaration by its Board of Directors on
October 18, 1995 of the dividend distribution of the Rights,
together with all affiliates and associates of such person,
was the beneficial owner or had the right to acquire
beneficial ownership of 20% or more of the outstanding Common
Shares shall not be deemed to have become an Adverse Person
unless and until (a) such person or any affiliate or associate
of such person shall become the beneficial owner or acquire
the right to obtain beneficial ownership of additional Common
Shares following such public announcement or (b) any other
person who is the beneficial owner or has the right to obtain
beneficial ownership of Common Shares shall thereafter become
an affiliate or associate of such person; and
(iv) the close of business on the tenth calendar day following the
first date of public announcement by the Company that any
other Flip-in Event or a Flip-over Event (as such terms are
hereinafter defined) has occurred;
the Rights will be evidenced, with respect to any of the
Common Share certificates outstanding as of the Record Date,
by such Common Share certificates.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption
Page 3 of 9 pages
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or expiration of the Rights), the surrender for transfer of any certificates
for Common Shares in respect of which Rights have been issued will also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificates. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights (the "Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
No Right is exercisable at any time prior to the Distribution Date.
The Rights will expire on October 18, 2005 (the "Final Expiration Date") unless
earlier redeemed or exchanged by the Company as described below. 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.
The Purchase Price payable, and the number of Common Shares or other
securities issuable, upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Common Shares, (ii) upon
the grant to holders of the Common Shares of certain rights or warrants to
subscribe for or purchase Common Shares at a price, or securities convertible
into Common Shares with a conversion price, less than the then current market
price of the Common Shares or (iii) upon the distribution to holders of the
Common Shares of evidences of indebtedness or cash (excluding regular periodic
cash dividends), assets, stock (excluding dividends payable in Common Shares)
or of subscription rights or warrants (other than those referred to above).
In the event (a "Flip-in Event") that (i) any person or group of
affiliated or associated persons becomes the beneficial owner of 20% or more of
the outstanding Common Shares (or if such person or group was the beneficial
owner of 20% or more of the outstanding Common Shares at the time of the public
announcement by the Company of the declaration by its Board of Directors of the
dividend distribution of the Rights, such person or group subsequently acquires
additional Common Shares or becomes affiliated or associated with any person or
group who or which beneficially owns Common Shares), (ii) the Company publicly
announces that any Person has become an Adverse Person, (iii) any Acquiring
Person merges into or combines with the Company and the Company is the
surviving corporation or any Acquiring Person effects certain other
transactions with the Company, as described in the Rights Agreement, or (iv)
during such time as there is an Acquiring Person, there shall be any
reclassification of securities or recapitalization or reorganization of the
Company which has the effect of increasing by; more than 1% the proportionate
share of the outstanding shares of any class of equity securities of the
Company or any of its subsidiaries beneficially owned by the Acquiring Person,
proper provision shall be made so that each
Page 4 of 9 pages
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holder of a Right, other than Rights that are or were owned beneficially by the
Acquiring Person (which, from and after the later of the Distribution Date and
the date of the earliest of any such events, will be void), will thereafter
have the right to receive, upon exercise thereof at the then current exercise
price of the Right, that number of Common Shares (or, under certain
circumstances, an economically equivalent security or securities of the
Company) having a market value of two times the exercise price of the Right.
To illustrate the operation of such an adjustment, at a purchase price
of $50, assuming the current market price (as determined pursuant to the
provisions of the Rights Agreement) per Common Share were $25, each Right not
owned beneficially by an Acquiring Person at or after the time of such an
occurrence would entitle its holder to purchase (after the Distribution Date)
from the Company four Common Shares (having a market value of $100 ) for $50.
In the event (a "Flip-over Event") that, following the first date of
public announcement that a person has become an Acquiring Person, (i) the
Company emerges with or into any person and the Company is not the surviving
corporation, (ii) any person merges with or into the Company and the Company is
the surviving corporation, but its Common Shares are changed or exchanged, or
(iii) 50% or more of the Company's assets or earning power, including without
limitation securities creating obligations of the Company, are sold, proper
provision shall be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock (or, under certain
circumstances, an economically equivalent security or securities) of such other
person which at the time of such transaction would have a market value of two
times the exercise price of the Right.
Following the occurrence of any Flip-in Event or Flip-over Event,
Rights (other than any Rights which have become void) may be exercised as
described above, upon payment of the exercise price or, at the option of the
holder thereof, without the payment of the exercise price that would otherwise
be payable. If a holder of Rights elects to exercise Rights without the
payment of the exercise price that would otherwise be payable, such holder will
be entitled to receive upon the exercise of such Rights securities having a
market value equal to the exercise price of the Rights. In addition, at any
time after the later of the Distribution Date and the first occurrence of a
Flip-in Event or Flip- over Event and prior to the acquisition by any person or
group of affiliated or associated persons of 50% or more of the outstanding
Common Shares, the Board of Directors of the Company may exchange the Rights
(other than any Rights which have become void), in whole or in part, at an
exchange ratio of one Common Share per Right (subject to adjustment).
Page 5 of 9 pages
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With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment in the Purchase
Price of at least 1%. The Company is not required to issue fractional Common
Shares or other securities issuable upon the exercise of Rights. In lieu of
issuing such securities, the Company may make a cash payment, as provided in
the Rights Agreement.
The Company may redeem the Rights in whole, but not in part, at a
price of $0.01 per Right (the "Redemption Price"), at any time prior to the
close of business on the later of (i) the Distribution Date and (ii) the first
date of public announcement that a person has become an Acquiring Person.
Immediately upon any 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 Rights Agreement may be amended by the Company without the
approval of any holders of Right Certificates including amendments which add
other events requiring adjustment to the purchase price payable and the number
of Common Shares or other securities issuable upon the exercise of the Rights
or which modify procedures relating to the redemption of the Rights, provided
that no amendment may be made which decreases the stated Redemption Price or
the period of time remaining until the Final Expiration Date or which modifies
a time period relating to when the Rights may be redeemed at such time as the
Rights are not then redeemable.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board of Directors, except pursuant to an offer
conditioned on a substantial number of Rights being acquired. The Rights
should not interfere with any other merger or other business combination
approved by the Board of Directors since (subject to the limitations described
above) the Rights may be redeemed by the Company at the Redemption Price prior
to the time that the Rights would otherwise become exercisable, or if later,
the time that a person or group has become an Acquiring Person.
The Rights Agreement, which includes the form of Right Certificate as
an exhibit thereto, and the forms of press release and letter to shareholders
announcing the declaration of the dividend distribution of the Rights are
attached hereto as exhibits and are incorporated herein by this reference. The
foregoing description of the Rights does not purport to be complete and is
qualified in its entirety by reference to such exhibits.
Page 6 of 9 pages
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ITEM 2. Exhibits.
<TABLE>
<S> <C>
4.1 Form of Right Certificate (Exhibit A to the Rights
Agreement filed as Exhibit 4.2 hereto).
4.2 Rights Agreement.
4.3 Summary of Rights to Purchase Common Shares (Exhibit B
to the Rights Agreement filed as Exhibit 2 hereto).
4.4 Resolutions authorizing adoption of Rights Agreement.
99.1 Form of press release dated October 19, 1995.
99.2 Form of letter to shareholders dated October 19, 1995.
</TABLE>
Page 7 of 9 pages
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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.
CORPUS CHRISTI BANCSHARES, INC.
By: /s/ R. JAY PHILLIPS
-----------------------------------
Name: R. Jay Phillips
Title: President and Chief
Executive Officer
Dated: February 15, 1996
---------------------
Page 8 of 9 pages
<PAGE> 9
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Exhibit Page
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<S> <C> <C>
4.1 Form of Right Certificate (Exhibit A to the Rights
Agreement filed as Exhibit 4.2).
4.2 Rights Agreement.
4.3 Summary of Rights to Purchase Common Shares (Exhibit B
to the Rights Agreement filed as Exhibit 2 hereto).
4.4 Resolutions authorizing adoption of Rights Agreement
99.1 Form of press released dated October 19, 1995.
99.2 Form of letter to shareholders dated October 19, 1995.
</TABLE>
Page 9 of 9 pages
<PAGE> 1
Exhibit 4.1
Exhibit A
FORM OF RIGHT CERTIFICATE
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER OCTOBER 18, 2005 OR EARLIER IF REDEEMED
OR EXCHANGED. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $0.01 PER RIGHT AND TO EXCHANGE ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
AN ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) MAY BECOME NULL AND VOID.
Right Certificate
CORPUS CHRISTI BANCSHARES, INC.
This certifies that ____________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of October 18, 1995 (the "Rights
Agreement"), by and between Corpus Christi Bancshares, Inc., a Texas
corporation (the "Company"), and Chemical Mellon Shareholder Services, L.L.C.,
a New Jersey limited liability 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. Dallas, Texas time, on October 18,
2005 at the principal office or offices of the Rights Agent designated for such
purpose, one fully paid nonassessable share of Common Stock, $5.00 par value
(the "Common Shares"), of the Company, at a purchase price of $50.00 per Common
Share (the "Exercise Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and related Certificate duly
executed. If this Right Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Right Certificate or
Right Certificates for the number of whole Rights not exercised. The number of
Rights evidenced by this Right Certificate (and the number of Common Shares
which may be purchased upon exercise thereof) set forth above, and the Exercise
Price set forth above, are the number and Exercise Price as of October 18,
1995, based on the Common Shares as constituted at such date.
A-1
<PAGE> 2
As provided in the Rights Agreement, the Exercise Price and
the number and kind of securities issuable upon the exercise of the Rights
evidenced by this Right Certificate are subject to adjustment upon the
happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
the Rights under the circumstances specified in the Rights Agreement. Copies
of the Rights Agreement are on file at the above-mentioned office of the Rights
Agent.
Pursuant to the Rights Agreement, from and after the later of
the Distribution Date and the date that any person or group of affiliated or
associated persons becomes as an Acquiring Person, (i) any Rights that are or
were acquired or beneficially owned by any Acquiring Person (or any Affiliate
or Associate of such Acquiring Person) shall be void and any holder of such
Rights shall thereafter have no right to exercise such Rights under any
provision of the Rights Agreement, (ii) no Right Certificate shall be issued
pursuant to the Rights Agreement that represents Rights beneficially owned by
an Acquiring Person or any Affiliate or Associate thereof, (iii) no Right
Certificate shall be issued at any time upon the transfer of any Rights to an
Acquiring Person or any Affiliate or Associate thereof or to any nominee of
such Acquiring Person or Affiliate or Associate thereof, and (iv) any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
or any Affiliate or Associate thereof shall be cancelled.
This Right Certificate, with or without other Right
Certificates, may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the holder to purchase a
like number of Common Shares (or other securities, as the case may be) as the
Right Certificate or Right Certificates surrendered shall have entitled such
holder (or former holder in the case of a transfer) to purchase, upon
presentation and surrender hereof at the principal office of the Rights Agent
designated for such purpose, with the Form of Assignment (if appropriate) and
the related Certificate duly executed.
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 $0.01 per Right. The Rights Agreement may be supplemented
and amended by the Company, as provided therein.
A-2
<PAGE> 3
The Company is not required to issue fractions of Common
Shares. In lieu of issuing such fractional Common Shares or other securities,
the Company may make a cash payment, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder
of the Common Shares or of any other securities of the Company which may at any
time be issuable upon the exercise of the Right or Rights represented hereby,
nor shall anything contained herein or in the Rights Agreement be construed to
confer upon the holder hereof, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Right Certificate shall have been exercised in
accordance with the provisions of the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ____________.
ATTEST: CORPUS CHRISTI BANCSHARES, INC.
By By
--------------------------- -------------------------------------
Secretary Title:
Countersigned:
CHEMICAL MELLON SHAREHOLDER SERVICES
By
---------------------------
Authorized Signature
A-3
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Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED, _____________________________________ hereby sells,
assigns and transfers unto _____________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ____________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated:
-------------------------
----------------------------------------
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being sold, assigned, transferred, split up, combined or exchanged by
or on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Right Certificate from any Person who is, was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person.
Dated:
-------------------------
----------------------------------------
Signature
A-4
<PAGE> 5
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To CORPUS CHRISTI BANCSHARES, INC.:
The undersigned hereby irrevocably elects to exercise
____________________ Rights represented by this Right Certificate to purchase
Common Shares or other securities issuable upon the exercise of such Rights and
requests that certificates for such securities be issued in the name of:
Please insert social security
or other identifying number:____________________________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:____________________________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated:
-------------------------
----------------------------------------
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined pursuant to the Rights Agreement);
A-5
<PAGE> 6
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Right Certificate from any Person who is, was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person.
Dated:
-------------------------
----------------------------------------
Signature
NOTICE
Signatures on the foregoing Form of Assignment and Form of Election to
Purchase and in the related Certificates must correspond to the name as written
upon the face of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
A-6
<PAGE> 1
Exhibit 4.2
================================================================================
CORPUS CHRISTI BANCSHARES, INC.
and
CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C.
RIGHTS AGREEMENT
Dated as of October 18, 1995
================================================================================
<PAGE> 2
Table of Contents
<TABLE>
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Page
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Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3. Issue of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights . . . . . . . . . . . . . . . . . . . . 14
Section 8. Cancellation and Destruction of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 9. Availability of Common Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 10. Common Shares Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 11. Adjustment of Exercise Price, Number and Kind of Securities or Number of Rights . . . . . . . . . . . 20
Section 12. Certificate of Adjusted Exercise Price or Number of Securities . . . . . . . . . . . . . . . . . . . 32
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power . . . . . . . . . . . . . . . . 33
Section 14. Fractional Rights and Fractional Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 16. Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 17. Right Certificate Holder Not Deemed a Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . . . . . . . . 40
</TABLE>
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<PAGE> 3
<TABLE>
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<S> <C> <C>
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 22. Issuance of New Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 25. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 27. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 28. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 29. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 30. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 32. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 33. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
</TABLE>
List of Exhibits
<TABLE>
<S> <C>
Exhibit A - Form of Right Certificate
Exhibit B - Summary of Rights to Purchase Common Shares
</TABLE>
-ii-
<PAGE> 4
RIGHTS AGREEMENT
This RIGHTS AGREEMENT, dated as of October 18, 1995 (this
"Agreement"), is made and entered into by and between Corpus Christi
Bancshares, Inc., a Texas corporation (the "Company"), and Chemical Mellon
Shareholder Services, L.L.C., a New Jersey limited liability company, as Rights
Agent (the "Rights Agent").
RECITALS
WHEREAS, on October 18, 1995, the Board of Directors of the
Company authorized and declared a dividend distribution of one common share
purchase right (a "Right") for each Common Share (as hereinafter defined) of
the Company outstanding as of the Close of Business (as hereinafter defined) on
November 3, 1995 (the "Record Date"), each Right initially representing the
right to purchase one Common Share (as hereinafter defined), upon the terms and
subject to the conditions herein set forth, and further authorized and directed
the issuance of one Right with respect to each Common Share that shall become
outstanding after the Record Date but prior to the earlier of the Distribution
Date (as hereinafter defined) and the Expiration Date (as hereinafter defined).
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or
which, together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 20% or more of the Common Shares
<PAGE> 5
then outstanding, but shall not include (i) the Company, any Subsidiary of the
Company, any employee benefit or stock ownership plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant
to the terms of any such plan, or (ii) any Person who would otherwise become an
Acquiring Person solely as a result of a reduction in the number of Common
Shares outstanding unless and until (A) such time as such Person or any
Affiliate or Associate of such Person shall thereafter become the Beneficial
Owner of any additional Common Shares, other than as a result of a stock
dividend, stock split or similar transaction effected by the Company in which
all holders of Common Shares are treated equally, or (B) any other Person who
is the Beneficial Owner of any Common Shares shall thereafter become an
Affiliate or Associate of such Person. 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 Common Shares
so that such Person would no longer be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this paragraph (a), then such Person
shall not be deemed an "Acquiring Person for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date of this Agreement.
2
<PAGE> 6
(c) A Person shall be deemed the "Beneficial Owner" of,
to "beneficially own" and to have "beneficial ownership" of, any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, beneficially
owns;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has (A) the
right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (other than customary
agreements with and among underwriters and selling group
members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise (in
each case, other than upon exercise or exchange of the
Rights); provided, however, that a Person shall not be deemed
the Beneficial Owner of, to beneficially own or to have
beneficial ownership of, securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person
or any of such Person's Affiliates or Associates until such
tendered securities are accepted for payment or exchange; or
(B) the right to vote, including pursuant to any agreement,
arrangement or understanding; provided, however, that a Person
shall not be deemed the Beneficial Owner of, to beneficially
own or to have beneficial
3
<PAGE> 7
ownership of, any security if such Person has the right to
vote such security pursuant to an agreement, arrangement or
understanding which (1) arises solely from a revocable proxy
given to such Person in response 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 on Schedule 13D under the Exchange
Act (or any comparable or successor report); or
(iii) of which any other Person is the Beneficial
Owner, if such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding
(other than customary agreements with and among underwriters
and selling group members with respect to a bona fide public
offering of securities) with such other Person (or any of such
other Person's Affiliates or Associates) with respect to
acquiring, holding, voting (except with respect to any right
to vote such security pursuant to an agreement, arrangement or
understanding which (A) arises solely from a revocable proxy
given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations of the Exchange Act and (B)
is not also then reportable on Schedule 13D under the Exchange
Act (or any comparable or successor report)) or disposing of
any securities of the Company.
4
<PAGE> 8
(d) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State of Texas
are authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00
p.m., Dallas, Texas time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 p.m., Dallas, Texas time, on the next
succeeding Business Day.
(f) "Common Shares" when used with reference to the
Company shall mean the shares of common stock, par value $5.00 per share, of
the Company. "Common Shares" when used with reference to any Person other than
the Company shall mean the capital stock or equity security with the greatest
aggregate voting power of such Person, or, if such other Person is a Subsidiary
of another Person, the Person or Persons which ultimately control such
first-mentioned Person.
(g) "Distribution Date" shall mean the earlier of: (i)
the Close of Business on the tenth calendar day after the Share Acquisition
Date, and (ii) the Close of Business on the tenth Business Day (or such later
date as may be specified by the Board of Directors of the Company prior to such
time as any Person becomes an Acquiring Person) after the date of the
commencement of a tender or exchange offer by any Person (other than the
Company or any Subsidiary of the Company or any employee benefit or stock
ownership plan of the Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such plan), if upon
the consummation thereof such Person would
5
<PAGE> 9
be the Beneficial Owner of 20% or more of the then outstanding Common Shares.
(h) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(i) "Exercise Price" shall mean initially $50.00 per one
Common Share and shall be subject to adjustment from time to time as provided
in this Agreement.
(j) "Expiration Date" shall mean the earliest of (i) the
Close of Business on the Final Expiration Date, (ii) the time at which the
Rights are redeemed as provided in Section 23, and (iii) the time at which all
exercisable Rights are exchanged as provided in Section 24.
(k) "Final Expiration Date" shall mean the tenth
anniversary of the Record Date.
(l) "Person" shall mean any individual, corporation,
partnership, association, trust or other entity, and shall include any
successor (by merger or otherwise) of such entity.
(m) "Redemption Price" shall mean $.01 per Right, subject
to adjustment by resolution of the Board of Directors of the Company to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof.
(n) "Right Certificates" shall mean certificates
evidencing the Rights, in substantially the form of the Form of Right
Certificate attached to this Agreement as Exhibit A.
(o) "Securities Act" shall mean the Securities Act of
1933, as amended.
6
<PAGE> 10
(p) "Share Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person (by press release,
filing made with the Securities and Exchange Commission or otherwise) that an
Acquiring Person has become such.
(q) "Subsidiary" when used with reference to any Person
shall mean any corporation or other entity of which a majority of the voting
power of the voting equity securities or equity interests is owned, directly or
indirectly, by such Person.
(r) "then outstanding" when used with reference to a
Person's beneficial ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to be the Beneficial Owner of hereunder.
(s) "Trading Day" shall mean any day on which the
principal national securities exchange or transaction reporting system on which
the Common Shares are listed or quoted is open for the transaction of business
or, if the Common Shares are not listed or quoted on any national securities
exchange or transaction reporting system, a Business Day.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3, shall also be, prior
to the Distribution Date, the holders of the Common Shares) 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
7
<PAGE> 11
necessary or desirable. Any actions which may be taken by the Rights Agent
pursuant to the terms of this Agreement may be taken by any such Co-Rights
Agent. To the extent that any Co-Rights Agent takes any action pursuant to
this Agreement, such Co-Rights Agent shall be entitled to all of the rights and
protections of, and subject to all of the applicable duties and obligations
imposed upon, the Rights Agent pursuant to the terms of this Agreement.
Section 3. Issue of Right Certificates. (a) Until the
Distribution Date, (i) the Rights shall be evidenced by the certificates
representing Common Shares, registered in the names of the record holders
thereof (which certificates shall also be deemed to be Right Certificates), and
(ii) the Rights, including the right to receive Rights Certificates, shall be
transferable only in connection with the transfer of the underlying Common
Shares.
(b) As promptly as practicable after the Record Date, the
Company shall send a copy of a Summary of Rights to Purchase Common Shares in
substantially the form attached to this Agreement as Exhibit B, by first-class,
postage prepaid mail, to each record holder of Common Shares as of the close of
business on the Record Date, at the address of such holder shown on the records
of the Company as of such date.
(c) Certificates evidencing Common Shares which become
outstanding after the Record but prior to the earlier of the Distribution Date
and the Expiration Date shall have stamped on, impressed on, printed on,
written on or otherwise affixed to them the following legend or such similar
legend as the Company may deem appropriate and as is not inconsistent with the
provisions of this
8
<PAGE> 12
Agreement, or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
stock exchange or transaction reporting system on which the Common Shares may
from time to time be listed or quoted, or to conform to usage:
This Certificate also evidences and entitles the holder hereof
to certain rights as set forth in a Rights Agreement between
Corpus Christi Bancshares, Inc. (the "Company") and Chemical
Mellon Shareholder Services, dated as of October 18, 1995 (the
"Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on
file at the principal executive offices of the Company. Under
certain circumstances, as set forth in the Rights Agreement,
such Rights may be redeemed, may expire, may be amended or may
be evidenced by separate certificates and no longer be
evidenced by this Certificate. The Company will mail to the
holder of this Certificate a copy of the Rights Agreement
without charge promptly after receipt of a written request
therefor. Under certain circumstances as set forth in the
Rights Agreement, Rights issued to an Acquiring Person or any
Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement) may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares evidenced by
such certificates shall be evidenced by such certificates alone, and the
transfer of any such certificate shall also constitute the transfer of the
Rights associated with the Common Shares evidenced by such certificates. In
the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any
9
<PAGE> 13
Rights associated with the Common Shares which are no longer outstanding.
(d) As promptly as practicable after the Distribution
Date, the Company shall prepare and execute, the Rights Agent shall countersign
and the Company shall send or cause to be sent (and the Rights Agent shall, if
requested, send), by first-class, insured, postage prepaid mail, to each record
holder of Common Shares as of the Close of Business on the Distribution Date,
at the address of such holder shown on the records of the Company, a Right
Certificate, evidencing one Right for each Common Share so held, subject to
adjustment. As of and after the Distribution Date, the Rights shall be
evidenced solely by such Right Certificates.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase and assignment to be
printed on the reverse thereof) shall be substantially in the form set forth as
Exhibit A hereto with such changes, marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or transaction reporting system on which the Rights may from time to
time be listed or quoted, or to conform to usage. Subject to the provisions of
Section 22, the Right Certificates, whenever issued, on their face shall
entitle the holders thereof to purchase such number of Common Shares as shall
be set forth therein at the Exercise Price set forth therein,
10
<PAGE> 14
but the Exercise Price, the number and kind of securities issuable upon
exercise of each Right and the number of Rights outstanding shall be subject to
adjustment as provided herein.
Section 5. Countersignature and Registration. (a) The
Right Certificates shall be executed on behalf of the Company by its Chairman
of the Board, President or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Right 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 Right Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by the Company with
the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent
shall keep or cause to be kept, at one of its offices designated
11
<PAGE> 15
for such purpose, books for registration and transfer of the Right Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights evidenced on
its face by each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Section 14, at any time after the Close of
Business on the Distribution Date and prior to the Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to this Agreement) may be transferred,
split up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of
Common Shares (or other securities or property, as the case may be) as the
Right Certificate or Right Certificates surrendered then entitled such holder
(or former holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any such Right
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent designated for such purpose. Thereupon or as promptly as
practicable thereafter, subject to the provisions of Section 14, the Rights
Agent shall countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may
12
<PAGE> 16
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates. 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 any purported transfer of a Right
Certificate as set forth in this Section 6 unless the registered holder of such
Right Certificate shall have (i) completed and signed the certificate following
the form of assignment set forth on the reverse side of the Right Certificate
surrendered for such transfer, and (ii) provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall have reasonably requested.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company shall execute and deliver a new Right
Certificate of like tenor to the Rights Agent and the Rights Agent shall
countersign and deliver such new Right Certificate to the registered holder in
lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
13
<PAGE> 17
Section 7. Exercise of Rights; Exercise Price;
Expiration Date of Rights. (a) The registered holder of any Right Certificate
may exercise the Rights evidenced thereby (except as otherwise provided herein)
in whole or in part at any time after the Distribution Date and prior to the
Expiration Date, upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at the office or offices of the Rights Agent designated for such purpose,
together with payment of the aggregate Exercise Price for the total number of
Common Shares (or other securities or property, as the case may be) as to which
such surrendered Rights are exercised.
(b) Upon receipt of a Right Certificate representing
exercisable Rights with the form of election to purchase duly executed,
accompanied by payment of the Exercise Price for the shares to be purchased and
an amount equal to any applicable transfer tax required to be paid by the
holder of such Right Certificate in accordance with Section 9 by certified
check, cashier's check or money order payable to the order of the Company, the
Rights Agent shall promptly thereupon (i) requisition from any transfer agent
of the Common Shares (or make available, if the Rights Agent is the transfer
agent therefor) certificates representing the number of Common Shares to be
purchased (and the Company hereby irrevocably authorizes and directs its
transfer agent to comply with all such requests), or, if the Company shall have
elected to deposit Common Shares issuable upon exercise of the Rights hereunder
with a depositary agent, requisition from the
14
<PAGE> 18
depositary agent depositary receipts representing such number of Common Shares
as are to be purchased (and the Company hereby irrevocably authorizes and
directs such depositary agent to comply with all such requests), (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of the issuance of fractional shares in accordance with the provisions of
Section 14, (iii) after receipt of such certificates (or depositary receipts,
as the case may be), cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names
as may be designated by such holder, and (iv) when appropriate, after receipt,
deliver such cash to or upon the order of the registered holder of such Right
Certificate.
(c) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14.
(d) 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 any purported exercise of a Right
Certificate as set forth in this Section 7 unless the registered holder of such
Right Certificate shall have (i) completed and signed the certificate following
the form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise, and (ii) provided such
15
<PAGE> 19
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall have
reasonably requested.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Right Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Availability of Common Shares. The Company
covenants and agrees that:
(a) It shall take all such action as may be necessary to
ensure that all Common Shares delivered upon exercise of Rights, at the time of
delivery of the certificates for such securities, shall be (subject to payment
of the Exercise Price) duly and validly authorized and issued, fully paid and
nonassessable securities.
16
<PAGE> 20
(b) It shall pay when due and payable any and all federal
and state transfer taxes and charges that may be payable in respect of the
issuance or delivery of the Right Certificates and of any certificates
representing securities issued upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax or charge which may be
payable in respect of any transfer or delivery of Right Certificates to a
person other than, or the issuance or delivery of certificates or depositary
receipts representing securities issued upon the exercise of Rights in a name
other than that of, the registered holder of the Right Certificate evidencing
Rights surrendered for exercise, or to issue or deliver any certificates or
depositary receipts representing securities issued upon the exercise of any
Rights until any such tax or charge shall have been paid (any such tax or
charge being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's reasonable
satisfaction that no such tax is due.
(c) It shall use its best efforts (i) to file on an
appropriate form, as soon as required by law after the Distribution Date, a
registration statement under the Securities Act with respect to the securities
issuable upon exercise of the Rights, (ii) to cause such registration statement
to become effective as soon as practicable after such filing, and (iii) to
cause such registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Act) until the earlier of (A) the date as
of which the Rights are no longer exercisable for such securities and (B) the
Expiration Date. The Company shall
17
<PAGE> 21
also take such action as may be appropriate under, or to ensure compliance
with, the securities or "blue sky" laws of the various states in connection
with the exercisability of the Rights. The Company, upon a determination in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent, may temporarily
suspend, for a period of time after the date set forth in clause (i) of the
first sentence of this Section 9(d), the exercisability of the Rights in order
to prepare and file such registration statement and to permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is
no longer in effect. In addition, if the Company shall determine, upon a
determination in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent,
that a registration statement should be filed under the Securities Act or any
state securities laws following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights in each relevant
jurisdiction until such time as a registration statement has been declared
effective and, upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is
no longer in effect.
Section 10. Common Shares Record Date. Each Person in
whose name any certificate representing Common Shares is issued
18
<PAGE> 22
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Common Shares represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Exercise Price
(and all applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Common Shares
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such securities on, and such certificate shall be
dated, the next succeeding Business Day on which the Common Shares transfer
books of the Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any rights
of a stockholder of the Company with respect to securities for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Exercise Price, Number and Kind
of Securities or Number of Rights. The Exercise Price, the number and kind of
securities or other property issuable upon exercise of each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event that the Company shall at any
time after the date of this Agreement (A) declare a dividend on the
19
<PAGE> 23
Common Shares payable in Common Shares, (B) subdivide the outstanding Common
Shares, (C) combine the outstanding Common Shares into a smaller number of
Common Shares, or (D) issue any shares of its capital stock in a
reclassification of the Common Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in this
Section 11(a), the Exercise 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 upon exercise of a Right, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive upon payment of the Exercise Price then in effect the aggregate number
and kind of shares of capital stock which, if such Right had been exercised
immediately prior to such date and at a time when the Common Shares transfer
books of the Company were open, the holder of such Right would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. If an event occurs which would require an
adjustment under both this 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).
20
<PAGE> 24
(ii) Subject to the provisions of Section 24, in
the event that any Person shall become an Acquiring Person, each holder of a
Right, except as provided below, shall thereafter have a right to receive, upon
exercise thereof in accordance with the terms of this Agreement at an exercise
price per Right equal to the then-current Exercise Price multiplied by the
number of Common Shares for which a Right is then exercisable, in accordance
with this Agreement and in lieu of Common Shares, such number of Common Shares
as shall equal the result obtained by (A) multiplying the then-current Exercise
Price by the number of Common Shares for which a Right is then exercisable, and
dividing that product by (B) 50% of the current per share market price of the
Common Shares (determined pursuant to Section 11(d)) on the date of the
occurrence such event. Notwithstanding anything in this Agreement to the
contrary, from and after the occurrence of such event (1) any Rights that are
or were acquired or beneficially owned by any Acquiring Person (or any
Affiliate or Associate of such Acquiring Person) shall be void and any holder
of such Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement, (2) no Right Certificate shall be issued pursuant
to Section 3 that represents Rights beneficially owned by an Acquiring Person
whose Rights would be void pursuant to the foregoing clause (1) or any
Affiliate or Associate thereof, (3) no Right Certificate shall be issued at any
time upon the transfer of any Rights to an Acquiring Person whose Rights would
be void pursuant to the foregoing clause (1) or any Affiliate or Associate
thereof or to any nominee of such Acquiring Person,
21
<PAGE> 25
Affiliate or Associate, and (4) any Right Certificate delivered to the Rights
Agent for transfer to an Acquiring Person whose Rights would be void pursuant
to the foregoing clause (1) or any Affiliate or Associate thereof shall be
cancelled.
(iii) In the event there shall not be sufficient
Common Shares authorized but unissued or issued but not outstanding to permit
the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Company shall take all such action as may be necessary
to authorize additional Common Shares for issuance upon exercise of the Rights.
In the event the Company shall, after good faith effort, be unable to take all
such action as may be necessary to authorize such additional Common Shares, the
Company shall substitute, for each Common Share that would otherwise be
issuable upon exercise of a Right, a number of Common Shares or fraction
thereof such that the current per share market price (as defined in Section
11(d)) of Common Shares multiplied by such number or fraction is equal to the
current per share market price of one Common Share as of the date of issuance
of such Common Shares or fraction thereof.
(b) In the event that the Company shall fix a record
date for the issuance of rights, options or warrants to all holders of Common
Shares entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Common Shares (or securities having
the same or more favorable rights, privileges and preferences as the Common
Shares ("equivalent common shares")) or securities convertible into Common
Shares or equivalent common shares at a price per Common Share or
22
<PAGE> 26
equivalent common share (or having a conversion price per share, if a security
convertible into Common Shares or equivalent common shares) less than the
then-current per share market price of the Common Shares (determined pursuant
to Section 11(d)) on such record date, the Exercise Price to be in effect after
such record date shall be determined by multiplying the Exercise Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of Common Shares outstanding on such record date plus
the number of Common Shares which the aggregate offering price of the total
number of Common Shares and/or equivalent common shares so to be offered
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such current per share market price and the
denominator of which shall be the number of Common Shares outstanding on such
record date plus the number of additional Common Shares and/or equivalent
common shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible); provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent.
Common Shares owned by or held for the account of
23
<PAGE> 27
the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed; and in the event that such rights, options or warrants are not
so issued, the Exercise Price shall be adjusted to be the Exercise Price which
would then be in effect if such record date had not been fixed.
(c) In the event that the Company shall fix a record
date for the making of a distribution to all holders of Common Shares
(including any such distribution made in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness, cash (other than a regular periodic cash dividend),
assets, stock (other than a dividend payable in Common Shares) or subscription
rights, options or warrants (excluding those referred to in Section 11(b)), the
Exercise Price to be in effect after such record date shall be determined by
multiplying the Exercise Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the current per share market
price of the Common Shares (as determined pursuant to Section 11(d)) on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the evidences of
indebtedness, cash, assets or stock so to be distributed or of such
subscription rights, options or warrants applicable to one Common Share, and
the denominator of which shall be such current per share market price of the
Common Shares; provided, however, that in no event shall the consideration to
be
24
<PAGE> 28
paid upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one Right.
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 Exercise
Price shall again be adjusted to be the Exercise Price which would then be in
effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the
"current per share market price" of any security on any date shall be deemed to
be the average of the daily closing prices per share of such security for the
30 consecutive Trading Days immediately prior to such date; provided, however,
that in the event that the current per share market price of such security is
determined during a period following the announcement by the issuer of such
security of (i) a dividend or distribution on such security payable in shares
of such security or securities convertible into such shares or (ii) any
subdivision, combination or reclassification of such security, and prior to the
expiration of 30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to take into account ex-dividend trading
or otherwise to reflect the current per share market price per Common Share
equivalent. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in
the principal
25
<PAGE> 29
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if such security is 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 principal national securities exchange on which such
security is listed or admitted to trading or, if such security is not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in
use, or, if on any such date such security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in such security selected by the
Board of Directors of the Company. If the Common Shares are not publicly
traded, the "current per share market price" of the Common Shares shall be
conclusively deemed to be the current per share market price of the Common
Shares. If neither the Common Shares nor the Common Shares are publicly
traded, or, with respect to any other security which is not publicly traded,
the "current per share market price" shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent.
(e) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
such price; provided, however, that any
26
<PAGE> 30
adjustments which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or to
the nearest one one-millionth of a Common Share or one ten-thousandth of a
Common Share or other security, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three years from the date of the
transaction which requires such adjustment and (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a), the holder of any Right thereafter exercised shall become
entitled to receive any securities of the Company other than Common Shares,
thereafter the number of such other securities 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 provisions with respect to the
Common Shares contained in Section 11(a) through (m), and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Common Shares shall apply on
like terms to any such other securities.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Exercise Price hereunder shall
evidence the right to purchase, at the adjusted Exercise Price, the number of
Common Shares issuable from time to time hereunder upon exercise of the Rights,
all subject to further adjustment as provided herein.
27
<PAGE> 31
(h) Unless the Company shall have exercised its election
as provided in Section 11(i), upon each adjustment of the Exercise Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Exercise Price, that number of
Common Shares (calculated to the nearest one millionth of a Common Share)
obtained by (i) multiplying (A) the number of Common Shares issuable upon
exercise of a Right immediately prior to this adjustment by (B) the Exercise
Price in effect immediately prior to such adjustment of the Exercise Price and
(ii) dividing the product so obtained by the Exercise Price in effect
immediately after such adjustment of the Exercise Price.
(i) The Company may elect, on or after the date of any
adjustment of the Exercise Price, to adjust the number of Rights in
substitution for any adjustment in the number of Common Shares issuable upon
the exercise of a Right. Each of the Rights outstanding after such adjustment
of the number of Rights shall be exercisable for the number of Common Shares
for which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Exercise Price in effect immediately prior to
adjustment of the Exercise Price by the Exercise Price in effect immediately
after adjustment of the Exercise Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record
28
<PAGE> 32
date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Exercise
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 calendar days later than the date of the
public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing,
subject to the provisions of Section 14, 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 Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Exercise
Price) and shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Exercise Price or the number or kind of securities issuable upon the exercise
of the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Exercise Price and
29
<PAGE> 33
the number and kind of securities which were expressed in the initial Right
Certificate issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Exercise Price below the then par value, if any, of the
Common Shares or below the then par value, if any, of any other securities of
the Company issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Common Shares or such other securities, as the case may be, at
such adjusted Exercise Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Exercise Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such record
date the number of Common Shares or other securities of the Company, if any,
issuable upon such exercise over and above the number of Common Shares or other
securities of the Company, if any, issuable upon such exercise on the basis of
the Exercise Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional Common
Shares or other securities upon the occurrence of the event requiring such
adjustment.
(m) Notwithstanding anything in this Agreement to the
contrary, the Company shall be entitled to make such reductions in the Exercise
Price, in addition to those adjustments expressly
30
<PAGE> 34
required by this Section 11, as and to the extent that in its good faith
judgment the Board of Directors of the Company shall determine to be advisable
in order that any (i) consolidation or subdivision of the Common Shares, (ii)
issuance wholly for cash of Common Shares at less than the current per share
market price therefor, (iii) issuance wholly for cash of Common Shares or
securities which by their terms are convertible into or exchangeable for Common
Shares, (iv) stock dividends on Common Shares, or (v) issuance of rights,
options or warrants referred to in this Section 11, hereafter made by the
Company to holders of Common Shares shall not be taxable to such holders.
(n) In the event that the Company shall at any time after
the date of this Agreement and prior to the Distribution Date (i) declare or
pay any dividend on the outstanding Common Shares payable in Common Shares or
(ii) effect a subdivision, combination or consolidation of the Common Shares
(by reclassification or otherwise than by payment of dividends in Common
Shares) into a greater or lesser number of Common Shares, then, in each such
case, the number of Rights associated with each Common Share then outstanding,
or issued or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated
with each Common Share following any such event shall equal the result obtained
by multiplying the number of Rights associated with each Common Share
immediately prior to such event by a fraction the numerator of which shall be
the total number of Common Shares outstanding immediately prior to the
occurrence of the event and the
31
<PAGE> 35
denominator of which shall be the total number of Common Shares outstanding
immediately following the occurrence of such event. The adjustments provided
for in this Section 11(n) shall be made successively whenever such a dividend
is declared or paid or such a subdivision, combination or consolidation is
effected.
Section 12. Certificate of Adjusted Exercise Price or
Number of Securities. Whenever an adjustment is made as provided in Section 11
or Section 13, the Company shall promptly (a) prepare a certificate setting
forth such adjustment and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for the
Common Shares and the Common Shares, a copy of such certificate, and (c) if
such adjustment is made after the Distribution Date, mail a brief summary of
such adjustment to each holder of a Right Certificate in accordance with
Section 26.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. (a) In the event that, at any time after a Person
has become an Acquiring Person, directly or indirectly (i) the Company shall
consolidate with, or merge with or into, any other Person and the Company shall
not be the continuing or surviving corporation of such consolidation or merger;
(ii) any Person shall consolidate with the Company, or merge with or into the
Company and the Company shall be the continuing or surviving corporation of
such merger or consolidation and, in connection with such merger or
consolidation, all or part of the Common Shares shall be changed into or
exchanged for stock or other securities of any other Person or cash or any
other property; or (iii) the
32
<PAGE> 36
Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one or more transactions, assets or
earning power (including, without limitation, securities creating any
obligation on the part of the Company and/or any of its Subsidiaries)
representing in the aggregate more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any Person or Persons,
then, and in each such case, proper provision shall be made so that (A) each
holder of a Right (except as otherwise provided herein) shall thereafter have
the right to receive, upon the exercise thereof at an exercise price per Right
equal to the product of the then-current Exercise Price multiplied by the
number of Common Shares for which a Right is then exercisable, and in lieu of
Common Shares, such number of Common Shares of such other Person (including the
Company as successor thereto or as the surviving corporation) as shall equal
the result obtained by (1) multiplying the then-current Exercise Price by the
number of Common Shares for which a Right is then exercisable, and dividing
that product by (2) 50% of the current per share market price of the Common
Shares of such other Person (determined pursuant to Section 11(d)) on the date
of consummation of such consolidation, merger, sale or transfer; (B) the issuer
of such Common Shares shall thereafter be liable for, and shall assume, by
virtue of the consummation of such consolidation, merger, sale or transfer, all
the obligations and duties of the Company pursuant to this Agreement; (C) the
term "Company" shall thereafter be deemed to refer to such issuer; and (D) such
issuer shall take such steps (including, without
33
<PAGE> 37
limitation, the reservation of a sufficient number of Common Shares to permit
the exercise of all outstanding Rights) in connection with such consummation as
may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be possible, in relation to the Common
Shares thereafter deliverable upon the exercise of the Rights.
(b) The Company shall not consummate any such
consolidation, merger, sale or transfer, unless prior thereto the Company and
the other Person or Persons parties thereto shall have executed and delivered
to the Rights Agent a supplemental agreement providing for the terms set forth
in paragraph (a) of this Section 13. The Company shall not enter into any
transaction of the kind referred to in this Section 13 if at the time of such
transaction there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or substantially diminish the
benefits intended to be afforded by the Rights. The provisions of this Section
13 shall similarly apply to successive mergers or consolidations or sales or
other transfers.
Section 14. Fractional Rights and Fractional Securities.
(a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, the Company shall pay as promptly as practicable to the
registered holders of the Right Certificates with regard to which such
fractional Rights otherwise would be issuable, an amount in cash equal to the
same fraction of
34
<PAGE> 38
the current market value of a whole Right. For the purposes of this Section
14(a), the current market value of a whole Right shall be the closing price of
the Rights for the Trading Day immediately prior to the date on which such
fractional Rights otherwise would have been issuable. The closing price for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights 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 principal national securities exchange on which the Rights are
listed or admitted to trading or, if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors
of the Company. If on any such date no such market maker is making a market in
the Rights the fair value of the Rights on such date as determined in good
faith by the Board of Directors of the Company shall be used.
35
<PAGE> 39
(b) The Company shall not be required to issue fractions
of Common Shares upon exercise of the Rights or to distribute certificates
which evidence fractional Common Shares. In lieu of fractional Common Shares,
the Company shall pay to the registered holders of Right 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 Common Share. For the
purposes of this Section 14(b), the current market value of a Common Share
shall be the closing price of a Common Share (as determined pursuant to the
second sentence of Section 11(d)) for the Trading Day immediately prior to the
date of such exercise.
Section 15. Rights of Action. All rights of action in
respect of this Agreement, excepting the rights of action given to the Rights
Agent under Section 18, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered holders
of the Common Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the holder of any Common Shares), may in such
holder's own behalf and for such holder's own benefit enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's right to exercise the
Rights evidenced by such Right Certificate or Common Share certificate in the
manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of
36
<PAGE> 40
Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and shall be
entitled to specific performance of the obligations under, and injunctive
relief against actual or threatened violations of the obligations of any Person
subject to, this Agreement.
Section 16. Agreement of Rights Holders. Every holder of
a Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) Prior to the Distribution Date, the Rights shall be
transferable only in connection with the transfer of the Common Shares;
(b) After the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights Agent if surrendered
at the principal office of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer;
(c) The Company and the Rights Agent may deem and treat
the person in whose name the Right Certificate (or, prior to the Distribution
Date, the associated Common Share certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificate or the associated
Common Share certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary; and
37
<PAGE> 41
(d) Such holder expressly waives any right to receive any
fractional Rights and any fractional securities upon exercise or exchange of a
Right, except as otherwise provided in Section 14.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the Common
Shares or any other securities of the Company which may at any time be issuable
upon the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of Directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions of this Agreement or exchanged pursuant to the
provisions of Section 24.
Section 18. Concerning the Rights Agent. (a) The Company
agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent,
its reasonable expenses and counsel fees and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights
38
<PAGE> 42
Agent for, and to hold it harmless against, any loss, liability, suit, action,
proceeding or expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability arising therefrom, directly or indirectly.
(b) The Rights Agent shall be protected and shall incur
no liability for or in respect of any action taken, suffered or omitted by it
in connection with its administration of this Agreement in reliance upon any
Right Certificate or certificate evidencing Common Shares or other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons, or otherwise upon the advice of counsel as set forth in
Section 20.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. (a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any
39
<PAGE> 43
further act on the part of any of the parties hereto; provided, that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the
40
<PAGE> 44
Company and the holders of Right Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman of
the Board, the President or any Vice President of the Company and delivered to
the Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for
its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or in
the Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
41
<PAGE> 45
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution and delivery hereof by the Rights
Agent) or in respect of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this Agreement
or in any Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including any of the Rights becoming void
pursuant to Section 11(a)(ii)) or any adjustment in the terms of the Rights
provided for in Sections 11, 13 or 24 or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after actual notice that any such
adjustment is required); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any
Common Shares or other securities to be issued pursuant to this Agreement or
any Right Certificate or as to whether any shares of stock or other securities
shall, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it shall perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the
42
<PAGE> 46
Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from any one of the Chairman of the Board, the President or any Vice President
of the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any other
legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
43
<PAGE> 47
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 calendar days' notice in writing mailed to the Company
and to each transfer agent of the Common Shares and the Common Shares and, if
the Distribution Date shall have occurred, to the registered holders of the
Right Certificates, by registered or certified mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 calendar days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares and the Common Shares and,
if the Distribution Date shall have occurred, to the registered holders of the
Right Certificates, by registered or certified mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Company shall fail to
make such appointment within a period of 30 calendar 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
Right Certificate (who shall, with such notice, submit his Right Certificate
for inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of the State of Texas
(or of any other state of the United States so long
44
<PAGE> 48
as such corporation is authorized to do business as a banking institution in
the State of Texas, which is authorized under such laws to exercise corporate
trust powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares and the
Common Shares and, if the Distribution Date shall have occurred, shall mail a
notice thereof to the registered holders of the Right Certificates. Failure to
give any notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or
45
<PAGE> 49
change in the Exercise Price per share and the number or kind or class of
securities or property issuable upon exercise of the Rights made in accordance
with the provisions of this Agreement.
Section 23. Redemption. (a) Prior to the Expiration
Date, the Board of Directors of the Company may, at its option, redeem all but
not less than all of the then-outstanding Rights at the Redemption Price at any
time prior to such time as any Person becomes an Acquiring Person. The
redemption of the Rights by the Board of Directors of the Company may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.
(b) Immediately upon the effectiveness of the action of
the Board of Directors of the Company ordering the redemption of the Rights,
and without any further action and without any notice, the right to exercise
the Rights shall terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price. Promptly after the action of
its Board of Directors ordering the redemption of the Rights, the Company shall
publicly announce such action, and, within 10 calendar days thereafter, the
Company shall give notice of such redemption to the holders of the
then-outstanding Rights by mailing such notice to all such holders at their
last addresses as they appear on the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for
the Common Shares; provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of the redemption of the
Rights. Any notice which is mailed in the manner herein
46
<PAGE> 50
provided shall be deemed given, whether or not the holder receives the notice.
The notice of redemption mailed to the holders of Rights shall state the method
by which the payment of the Redemption Price shall be made. Neither the
Company nor any of its Affiliates or Associates may redeem, acquire or purchase
for value any Rights at any time in any manner other than that specifically set
forth in this Section 23 or in Section 24 or in connection with the purchase of
Common Shares prior to the Distribution Date.
Section 24. Exchange. (a) The Board of Directors of the
Company may, at its option, at any time after such time as any Person becomes
an Acquiring Person, exchange all or part of the then-outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii)) for Common Shares at an
exchange ratio of one Common Share per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the
Company or any such Subsidiary, or any entity holding Common Shares for or
pursuant to the terms of any such plan), who or which, together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50%
or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights
47
<PAGE> 51
pursuant to paragraph (a) of this Section 24, and, without any further action
and without any notice, the right to exercise such Rights shall terminate and
the only right with respect to such Rights thereafter of the holder of such
Rights shall be to receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. Promptly
after the action of the Board of Directors of the Company ordering the exchange
of any Rights pursuant to paragraph (a) of this Section 24, the Company shall
publicly announce such action, and, within 10 calendar days thereafter shall
give notice of any such exchange to all of the holders of such Rights at their
last addresses as they appear on the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for
the Common Shares; provided, however, that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. The notice of exchange mailed to the
holders of the Rights shall state the method by which the exchange of the
Common Shares for Rights shall be effected and, in the event of any partial
exchange, the number of Rights which shall be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 11(a)(ii)) held by
each holder of Rights.
(c) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized but unissued
48
<PAGE> 52
to permit any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be necessary to
authorize additional Common Shares for issuance upon exercise of the Rights.
In the event the Company shall, after good faith effort, be unable to take all
such action as may be necessary to authorize such additional Common Shares, the
Company shall substitute, for each Common Share that would otherwise be
issuable upon exercise of a Right, a number of Common Shares or fraction
thereof such that the current per share market price (as defined in Section
11(d)) of one Common Share multiplied by such number or fraction is equal to
the current per share market price of one Common Share as of the date of
issuance of such Common Shares or fraction thereof.
(d) The Company shall not be required to issue fractions
of Common Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional Common Shares otherwise would be issuable, an amount in cash equal
to the same fraction of the current market value of a whole Common Share. For
the purposes of this paragraph (d), the current market value of a whole Common
Share shall be the closing price of a Common Share (as determined pursuant to
the second sentence of Section 11(d) for the Trading Day immediately prior to
the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. (a) In case, at
any time after the Distribution Date, the Company shall propose
49
<PAGE> 53
(i) to pay any dividend payable in stock of any class to the holders of the
Common Shares or to make any other distribution to the holders of the Common
Shares (other than a regular periodic cash dividend), (ii) to offer to the
holders of the Common Shares rights, options or warrants to subscribe for or to
purchase any additional Common Shares or shares of stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of
its Common Shares (other than a reclassification involving only the subdivision
of outstanding Common Shares, (iv) to effect any consolidation or merger into
or with, or to effect any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of assets or earning power (including, without limitation,
securities creating any obligation on the part of the Company and/or any of its
Subsidiaries) representing more than 50% of the assets and earning power of the
Company and its Subsidiaries, taken as a whole, to any other Person or Persons,
(v) to effect the liquidation, dissolution or winding up of the Company, or
(vi) to declare or pay any dividend on the Common Shares payable in Common
Shares or to effect a subdivision, combination or reclassification of the
Common Shares then, in each such case, the Company shall give to each holder of
a Right Certificate, in accordance with Section 26, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, distribution or offering of rights, options or warrants, or the date
on which such reclassification, consolidation, merger, sale, transfer,
50
<PAGE> 54
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Shares and/or Common Shares,
if any such date is to be fixed, and such notice shall be so given, in the case
of any action covered by the foregoing clauses (i) or (ii), at least 10
calendar days prior to the record date for determining holders of the Common
Shares for purposes of such action, and, in the case of any such other action,
at least 10 calendar days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the Common Shares
and/or Common Shares whichever shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii)
shall occur, then the Company shall as soon as practicable thereafter give to
the Rights Agent and each holder of a Right Certificate, or, if prior to the
Distribution Date, each holder of Common Shares, in accordance with Section 26,
a notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights.
Section 26. Notices. (a) Notices or demands authorized
by this Agreement to be given or made by the Rights Agent or by the holder of
any Right 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:
Chemical Mellon Shareholder Services
2323 Bryan Street, Suite 2300
Dallas, Texas 75201
Attention: Ms. Mona Vorhees
51
<PAGE> 55
(b) Subject to the provisions of Section 21, any notice
or demand authorized by this Agreement to be given or made by the Company or by
the holder of any Right 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:
Corpus Christi Bancshares, Inc.
2402 Leopard Street
Corpus Christi, Texas 78469
Attention: Mr. R. Jay Phillips
(c) Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the holder of any Right
Certificate (or, if prior the Distribution Date, to the holder of any Common
Shares) 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.
Section 27. Supplements and Amendments. Prior to the
Distribution Date and subject to the last sentence of this Section 27, if the
Company so directs, the Company and the Rights Agent shall supplement or amend
any provision of this Agreement without the approval of any holders of Rights.
From and after the Distribution Date and subject to the last sentence of this
Section 27, if the Company so directs, the Company and the Rights Agent shall
supplement or amend this Agreement without the approval of any holders of
Rights in order (a) to cure any ambiguity, (b) to correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provisions herein, (c) to shorten or lengthen any time period hereunder,
or (d) to supplement
52
<PAGE> 56
or amend the provisions hereunder in any manner which the Company may deem
desirable, including, without limitation, the addition of other events
requiring adjustment to the Rights under Sections 11, 13 or 24 or procedures
relating to the redemption of the Rights, which supplement or amendment shall
not, in the good faith determination of the Board of Directors of the Company,
adversely affect the interests of the holders of Right Certificates (other than
an Acquiring Person or an Affiliate or Associate of an Acquiring Person). Upon
the delivery of a certificate from an officer of the Company which states that
the proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment;
provided, however, that the failure or refusal of the Rights Agent to execute
such supplement or amendment shall not affect the validity of any supplement or
amendment adopted by the Company, any of which shall be effective in accordance
with the terms thereof. Notwithstanding anything in this Agreement to the
contrary, no supplement or amendment shall be made which decreases the stated
Redemption Price or the period of time remaining until the Final Expiration
Date or which modifies a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable.
Section 28. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
53
<PAGE> 57
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Shares) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for
the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (or prior to the Distribution
Date, the Common Shares).
Section 30. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
internal substantive laws of the State of Texas and for all purposes shall be
governed by and construed in accordance with the internal substantive laws of
such State applicable to contracts to be made and performed entirely within
such State.
Section 32. Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings
of the several Sections of this Agreement are inserted for
54
<PAGE> 58
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
Attest: CORPUS CHRISTI BANCSHARES, INC.
By By
---------------------------- -------------------------------------
Title: Title:
Attest: CHEMICAL MELLON
SHAREHOLDER SERVICES
By By
----------------------------- -------------------------------------
Title: Title:
55
<PAGE> 1
Exhibit 4.3
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
The Board of Directors of Corpus Christi Bancshares, Inc. (the
"Company") has declared a dividend distribution of one right (a "Right") for
each outstanding share of Common Stock, par value $5.00 per share (the "Common
Shares"), of the Company. The distribution is payable on November 3, 1995 (the
"Record Date") to the stockholders of record as of the close of business on the
Record Date. Each Right entitles the registered holder to purchase from the
Company one share of Common Stock, $5.00 par value (the "Common Shares"), of
the Company at a price of $50.00 per Common Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth
in a Rights Agreement, dated as of October 18, 1995 (the "Rights Agreement"),
between the Company and Chemical Mellon Shareholder Services, L.L.C., as Rights
Agent (the "Rights Agent").
Until the earliest to occur of (i) the close of business on
the tenth calendar day after the first date of public announcement that a
person or group of affiliated or associated persons has acquired, or obtained
the right to acquire, beneficial ownership of 20% or more of the outstanding
Common Shares (an "Acquiring Person") and (ii) the close of business on the
tenth business day (or such later date as may be specified by the Board of
Directors of the Company prior to such time as any person or group of
affiliated or associated persons becomes an Acquiring Person) after the date of
the commencement of a tender offer or exchange offer by a person or group of
affiliated or associated persons, the consummation of which would result in
beneficial ownership by such person or group of 20% or more of the outstanding
Common Shares (the earlier of such dates being hereinafter called the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Common Share certificates outstanding as of the Record Date, by such Common
Share certificates.
The Rights Agreement provides that, until the Distribution
Date, the Rights will be transferred with and only with the Common Shares.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), Common Share certificates issued upon issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares in respect of
which Rights have been issued will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificates. As soon as
B-1
<PAGE> 2
practicable following the Distribution Date, separate certificates evidencing
the Rights (the "Right Certificates") will be mailed to holders of record of
the Common Shares as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
No Right is exercisable at any time prior to the Distribution
Date. The Rights will expire on October 18, 2005 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed or exchanged by the Company as described below. 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.
The Purchase Price payable, and the number of Common Shares or
other securities issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Shares, (ii) upon the grant to holders of the Common Shares of certain rights
or warrants to subscribe for or purchase Common Shares at a price, or
securities convertible into Common Shares with a conversion price, less than
the then current market price of the Common Shares, or (iii) upon the
distribution to holders of the Common Shares of evidences of indebtedness or
cash (excluding regular periodic cash dividends), assets, stock (excluding
dividends payable in Common Shares) or of subscription rights or warrants
(other than those referred to above).
The number of outstanding Rights and the number of Common
Shares issuable upon exercise of each Right are also subject to adjustment in
the event of a stock dividend on the Common Shares payable in Common Shares or
subdivision, combination or reclassification of the Common Shares occurring, in
any such case, prior to the Distribution Date. Common Shares issuable upon
exercise of the Rights will not be redeemable.
In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, proper provision shall be made
so that each holder of a Right, other than Rights that are or were owned
beneficially by the Acquiring Person (which, from and after the later of the
Distribution Date and the date of the earliest of any such events, will be
void), will thereafter have the right to receive, upon exercise thereof at the
then current exercise price of the Right, that number of Common Shares (or,
under certain circumstances, an economically equivalent security or securities
of the Company) having a market value of two times the exercise price of the
Right.
To illustrate the operation of such an adjustment, at a
Purchase Price of $50.00, assuming the current market price (as determined
pursuant to the provisions of the Rights Agreement) per Common Share were
$25.00, each Right not owned beneficially
B-2
<PAGE> 3
by an Acquiring Person at or after the time of such an occurrence would entitle
its holder to purchase (after the Distribution Date) from the Company four
Common Shares (having a market value of $100.00) for $50.00.
In the event that, at any time after a person or group of
affiliated or associated persons has become an Acquiring Person, (i) the
Company merges with or into any person and the Company is not the surviving
corporation, (ii) any person merges with or into the Company and the Company is
the surviving corporation, but its Common Shares are changed or exchanged, or
(iii) 50% or more of the Company's assets or earning power, including without
limitation securities creating obligations of the Company, are sold, proper
provision shall be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock (or, under certain
circumstances, an economically equivalent security or securities) of such other
person which at the time of such transaction would have a market value of two
times the exercise price of the Right.
At any time after the first date of public announcement that
an Acquiring Person has become such and prior to the acquisition by any person
or group of affiliated or associated persons of 50% or more of the outstanding
Common Shares, the Board of Directors of the Company may exchange the Rights
(other than any Rights which have become void), in whole or in part, at an
exchange ratio of one Common Share per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment in the
Purchase Price of at least 1%. The Company is not required to issue fractional
Common Shares or other securities issuable upon the exercise of Rights. In
lieu of issuing such securities, the Company may make a cash payment, as
provided in the Rights Agreement.
The Company may redeem the Rights in whole, but not in part,
at a price of $0.01 per Right (the "Redemption Price"), at any time prior to
such time as a person or group of affiliated or associated persons becomes an
Acquiring Person. Immediately upon any 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 Rights Agreement may be amended by the Company without the
approval of any holders of Right Certificates, including amendments which add
other events requiring adjustment to the purchase price payable and the number
of Common Shares or other securities issuable upon the exercise of the Rights
or which modify procedures relating to the redemption of the Rights, provided
that no amendment may be made which decreases the stated
B-3
<PAGE> 4
Redemption Price or the period of time remaining until the Final Expiration
Date or which modifies a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights is as of October 18, 1995,
does not purport to be complete and is qualified in its entirety by reference
to the Rights Agreement, which is incorporated herein by this reference.
B-4
<PAGE> 1
Exhibit 4.4
MINUTES OF THE MEETING OF
THE BOARD OF DIRECTORS
OF CORPUS CHRISTI BANCSHARES, INC.
HELD
OCTOBER 18, 1995
A meeting of the Board of Directors of Corpus Christi Bancshares, Inc., of
Corpus Christi, Texas (the "Corporation") was held on October 18, 1995, at 3:00
p.m. with the following Directors and Advisory Directors (*) present:
Marvin L. Berry Jack Powers
John C. Brooke John J. Sloan, M.D.*
J.B. Clark Roscoe M. Smith
Joe R. DeLeon, Jr. Jon C. Spradley*
Roy M. Grassedonio L. L. Woodman, Jr.
Stephen R. Karp John T. Wright, Jr.
R. Jay Phillips John T. Wright, III
Also in attendance were Jace C. Hoffman, Secretary of the Corporation; Jimmy M.
Knioum, Treasurer of the Corporation; Philip E. Brickley, Assistant Secretary
of the Corporation; Darla R. Perez, Assistant Secretary of the Corporation;
Richard K. Kneipper of the law firm of Jones, Day, Reavis & Pogue, Dallas,
Texas, special legal counsel to the Corporation; and Fred Baker and Fred
Schwartz of the FinSer Corporation, San Antonio, Texas, financial advisors to
the Corporation.
There being a quorum of the Board, the meeting was called to order by the
Chairman of the Board, John T. Wright, Ill, and declared open for business as
required by the Bylaws of the Corporation.
The minutes of the following meetings were presented for approval:
1. Board of Directors meeting held on September 20, 1995.
2. Executive Committee meeting held on September 6, 1995.
There being no additions or corrections to the minutes presented, Mr. Wright,
Jr. moved that the minutes of the above listed meeting be approved as written
with ratification of the various committee actions. The motion was seconded by
Mr. Smith and unanimously approved.
<PAGE> 2
CORPUS CHRISTI BANCSHARES, INC.
Board of Directors Minutes
October 18, 1995
Page 2
Mr. Phillips then circulated to the Board copies of five financial schedules
that were provided by Don Latin, President of D. Latin and Company, Inc., for
the purposes of presenting his quarterly analysis of the Corporation's stock
performance as compared to other financial institutions. Mr. Phillips reviewed
with the Board each of the schedules. In addition, Mr. Latin made the
following comments, among others, via telephone conference: Schedule 1 - Corpus
Christi Bancshares, Inc. and Subsidiaries Consolidated Statements of Income
(1993, 1994); Schedule 2 - the projections are not available at this time;
Schedule 3 - the Corporation is at a lower price/earnings ratio (11.1x) than
the other comparables, and dividend yields ranged from 1.8% to 3.9%, with the
Corporation at 1.9%; Schedule 4 -return on average equity - the Corporation is
third, which is impacted by tax liabilities; equity to total assets - the
Corporation is second; loan to deposits the Corporation is fourth with
indications pointing to increasing loan volume, thus improving the spread; and
Schedule 5 -four bank transactions as detailed (Tanglewood Bancshares, Tomball
National Bancshares, Quest Star Bank and La Porte State Bank). Mr. Latin noted
that the transactions were at or near a price/earnings ratio of nine or better.
A copy of Mr. Latin's schedules is attached and made a permanent portion of
these minutes.
Mr. Phillips introduced Mr. Kneipper. Mr. Kneipper made a detailed
presentation to the Board regarding additional shareholder protections that
could be obtained by the adoption by the Corporation of a shareholder rights
plan. A copy of Mr. Kneipper's presentation had previously been sent on
October 5, 1995 to each of the Directors for their review. Mr. Kneipper's
presentation supplemented and expanded upon his presentation on rights plans at
the last board meeting on September 20, 1995. Mr. Kneipper's presentation, a
copy of which is attached and made a permanent portion of these minutes,
included the following: Mr. Kneipper discussed the definition of a "shareholder
rights plan". The term "shareholder rights plan" (which is sometimes called a
"poison pill") is used generically to describe a right that is intended to have
no effect on the issuing corporation or its shareholders unless triggered by an
attempt to take control of the issuing corporation on inadequate terms or by
coercive means. The rights are redeemable by the directors at a nominal price
prior to the occurrence of specified triggering events. This redemption right
provides flexibility to the board of directors to respond to the particular
facts of any given situation. Most shareholder rights plans have the following
in common: (1) the plans are designed to reduce a corporation's vulnerability
to identified types of potentially coercive takeover practices or takeover bids
that are inadequate or otherwise inconsistent with interests of the corporation
or its shareholders; (2) the plans are designed to encourage potential
acquirers to negotiate with a corporation's board of directors and to enhance
the bargaining position of the board of directors in any such negotiations; (3)
the plans are designed to provide a means by which a corporation may, under
appropriate circumstances, be able to keep a hostile bidder at bay
<PAGE> 3
CORPUS CHRISTI BANCSHARES, INC.
Board of Directors Minutes
October 18, 1995
Page 3
while pursuing, developing and implementing a course of continued independence
or to provide superior value to shareholders; and (4) upon being triggered, the
rights issued under a rights plan become nonredeemable and entitle the holders
thereof (other than the bidder) to purchase common stock of the target
corporation or equity securities of the acquirer at a substantial discount.
Mr. Kneipper then discussed the following limitations of shareholder rights
plans: (1) they are not an absolute deterrent - shareholder rights plans are
not intended to, and do not, deter a fully priced and financed cash offer for
all of a corporation's stock that is consistent with the best interests of the
corporation and its shareholders; (2) they are often opposed by activist
shareholders-shareholder rights plans have been criticized on various grounds,
including as being indicative of an entrenchment motive, and may increase the
risk of a proxy contest; and (3) they need to be re-evaluated as circumstances
change - if a bid were received, the board would have to determine whether it
constituted a danger to corporate policy and effectiveness and, if so, whether
not redeeming the rights, or modifying them in some way, would be a reasonable
response to the perceived threat.
Mr. Kneipper then discussed the types and development of rights plans,
including the basic flip-in/flip-over plan. He explained that in the
flip-in/flip-over plan the issuing company distributes rights to shareholders
as a dividend on its common stock. Unless triggered, rights are not
exercisable and trade with the shares of common stock. If a bidder crosses a
specified ownership threshold, the rights entitle holders (other than the
bidder) to buy shares of the company at a reduced price ("flip-in") or, if the
bidder crosses a specified ownership threshold and the company is merged or its
assets are sold, the rights entitle holders to buy shares of the surviving or
purchasing company at a reduced price ("flip-over"). Because the rights are
redeemable by the issuing company at a nominal price prior to becoming
exercisable, they are intended to deter a bidder from crossing the specified
ownership threshold without first negotiating an acceptable transaction with
the company's board of directors that includes a redemption or modification of
the rights. Mr. Kneipper also discussed the other types of rights plans,
current trends in rights plans, the operation of a rights plan, including the
exercise price, triggering event thresholds, desirability of "adverse person"
provision, redemption, amendment, and exchange; and corporate authority to
adopt a rights plan, including Texas corporate law, compliance with the
Corporation's Amended Articles of Incorporation, compliance with federal
securities laws, compliance with AMEX requirements, compliance with state
securities laws, and compliance with applicable bank regulations. Mr. Kneipper
also responded to numerous questions from the Directors.
<PAGE> 4
CORPUS CHRISTI BANCSHARES, INC.
Board of Directors Minutes
October 18, 1995
Page 4
Mr. Phillips then introduced Mr. Baker and Mr. Schwartz. On behalf of FinSer
Corporation ("FinSer"), Messrs. Baker and Schwartz delivered to each of the
Directors a copy of FinSer's Twelve Year Plan as of June 30, 1995 for the
Corporation and FinSer's report dated October 18, 1995 entitled "Shareholder
Rights Plan/Exercise Price Analysis," copies of which are attached and made a
permanent portion of these minutes. Messrs. Baker and Schwartz presented,
analyzed and discussed with the Directors the detailed financial information
set forth in their report and in slides that excerpted portions of such
information, including comparisons to book value multiples, price-to-earnings
multiples for Texas bank stocks and regional bank stocks. On the basis of
their report and discussion, Messrs. Baker and Schwartz recommended to the
Board that $50.00 per share of Common Stock would be an appropriate exercise
price for a rights plan adopted by the Corporation. Messrs. Baker and Schwartz
then responded to numerous questions from the Directors, after which they and
Mr. Kneipper excused themselves from the meeting.
After a thorough discussion on the advantages and disadvantages of a rights
plan, and the Corporation's vulnerability to coercive takeover practices or
takeover bids that are inadequate or otherwise inconsistent with the interests
of the Corporation and its shareholders. Mr. Phillips then presented the
following resolutions to the Board of Directors in connection with the adoption
by the Corporation of a rights plan:
Authorization of Rights Agreement and Rights to Purchase Common Shares
RESOLVED: that the issuance by the Corporation of rights to purchase
shares of Common Stock, par value $5.00 per share ("Common Shares"),
of the Corporation, as presented and discussed at this meeting, be,
and it hereby is, determined to be in the best interests of the
Corporation and its shareholders and a reasonable response to the
threat of inadequate or coercive takeover bids or practices to which
the Board of Directors of the Corporation perceives the Corporation to
be vulnerable.
RESOLVED: that the form of Rights Agreement which has been presented
to this meeting (the "Rights Agreement") with such additions,
delegations or modifications from such form as have been approved at
this meeting be, and it hereby is, approved and ordered placed in the
minute book for the Corporation.
RESOLVED: that the President and Chief Executive Officer, the
Treasurer and the Secretary of the Corporation (collectively, the
"Proper Officers"), be, and each of them hereby is, authorized, in the
name and on behalf of the Corporation, to execute the Rights Agreement
with such additions, deletions or modifications to or from the
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CORPUS CHRISTI BANCSHARES, INC.
Board of Directors Minutes
October 18, 1995
Page 5
form thereof presented to this meeting as have been approved at this
meeting, and with such other additions, deletions or modifications to
or from such form as the Proper Officer or Proper Officers executing
the same shall approve at the recommendation of, or after consulting
with, the Corporation's legal and financial advisors, and to deliver
the same to the Rights Agent thereunder, such execution and delivery
conclusively to evidence the due authorization and approval thereof by
the Corporation.
RESOLVED: that the Corporation be, and it hereby is, authorized and
directed to issue to the holder of each Common Share outstanding on
the Record Date (as hereinafter defined) and thereafter as set forth
in the Rights Agreement one right (a "Right") initially representing
the right to purchase one Common Share, which Right shall be issued
pursuant to, and governed by, the terms of the Rights Agreement.
RESOLVED: that the Proper Officers of the Corporation be, and each of
them hereby is, authorized and directed to take any and all such
action as they or any of them may deem necessary, appropriate or
desirable to make the Rights Agreement and the Rights binding and
legal obligations of the Corporation in accordance with their terms,
and to comply with each and all of the obligations imposed upon the
Corporation by the provisions of the Rights Agreement and the Rights
which may at any time be outstanding thereunder.
Dividend and Issuance of Rights
RESOLVED: that the Board of Directors hereby declares that a dividend
of one Right for each Common Share be paid at the close of business on
November 3, 1995 (the "Record Date") to the holders of record of the
Common Shares issued and outstanding at the close of business on such
date.
RESOLVED: that each Common Share (other than a Common Share issued
upon exercise of any Right) issued or delivered by the Corporation
(whether originally issued or delivered from the Corporation's
treasury) after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date (as each of those terms is
defined in the Rights Agreement) shall be entitled to and accompanied
by one Right and the certificate evidencing such Common Share bear a
legend to such effect.
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CORPUS CHRISTI BANCSHARES, INC.
Board of Directors Minutes
October 18, 1995
Page 6
RESOLVED: that the issuance upon exercise of the Rights of a number
of additional Common Shares equal to the total of (i) the number of
Common Shares issued and outstanding at the close of business on the
Record Date, (ii) the number of Common Shares issued (other than a
Common Share issued upon the exercise of any Right) after the close of
business on the Record but prior to the earlier of the Distribution
Date and the Expiration Date, and (iii) upon the occurrence of an
event which, in accordance with the Rights Agreement, shall increase
the number of Common Shares which may be purchased upon exercise the
number of Common Shares which may be purchased upon exercise of the
Rights, the number of additional Common Shares which may become so
issuable, be, and it hereby is, authorized, and such Common Shares
hereby are reserved until such time as they are issued pursuant to the
exercise of the Rights or until the Expiration Date; provided,
however, that in no event shall such number of such Common Shares,
together with all other Common Shares issued and outstanding or held
in treasury, exceed the total number of authorized Common Shares.
RESOLVED: that when the Corporation (i) receives for each Common
Share as provided in the Rights Agreement the consideration for which
such Common Share is to be issued pursuant to the Rights Agreement and
(ii) issues a Common Share as provided in the Rights Agreement, such
Common Share shall be fully paid and nonassessable and the issuance of
such Common Share shall not be subject to any preemptive or similar
rights.
Right Certificates
RESOLVED: that the certificates evidencing the Rights (the "Right
Certificates") shall be substantially in the form attached as Exhibit
A to the Rights Agreement, with such additions, deletions or
modifications to or from such form as the Proper Officer or Proper
Officers of the Corporation executing the Rights Agreement or any
Right Certificate shall deem necessary, appropriate or desirable, as
conclusively evidenced by his or their execution thereof, and shall be
issued and delivered as provided in the Rights Agreement.
RESOLVED: that the Proper Officers of the Corporation be, and each of
them hereby is, authorized, in the name and on behalf of the
Corporation and under its corporate seal attested by the Secretary or
any Assistant Secretary, to execute and deliver Right Certificates as
provided in the Rights Agreement in fully registered form.
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CORPUS CHRISTI BANCSHARES, INC.
Board of Directors Minutes
October 18, 1995
Page 7
RESOLVED: that the signatures of the Proper Officers of the
Corporation so authorized to execute the Right Certificates may be the
facsimile signatures of the present or any future such authorized
Proper Officers and may be imprinted or otherwise reproduced thereon,
the Corporation for such purpose hereby adopting each such facsimile
signature as binding upon it, notwithstanding the fact that at the
time the Right Certificate shall be countersigned, delivered or
disposed of the Proper Officer so executing shall have ceased to be a
Proper Officer, the Secretary or an Assistant Secretary, as the case
may be.
RESOLVED: that a facsimile of the corporate seal of the Corporation
shall be imprinted on the Right Certificates, which facsimile is
hereby acknowledged to be the corporate seal of the Corporation for
the purpose of sealing the Right Certificates.
RESOLVED: that after the Distribution Date, the Proper Officers of
the Corporation be, and each of them hereby is, authorized to deliver
to the Rights Agent (appointed as described below) under the Rights
Agreement the Right Certificates in such denominations as may be
determined by the Proper Officers delivering the Right Certificates
(such determination to be conclusively evidenced by the delivery of
the Right Certificates), and to request the Rights Agent to
countersign the Right Certificates and to deliver the same pursuant to
the Rights Agreement.
Rights Agent
RESOLVED: that the Proper Officers of the Corporation be, and each of
them hereby is, authorized to appoint as Rights Agent under the Rights
Agreement Chemical Mellon Shareholder Services, L.L.C. or any other
bank selected by any of them in their or his discretion (the "Rights
Agent") and, after the Distribution Date, upon presentation to it of
Right Certificates for the purpose of exercise in accordance with the
Rights Agreement, such Rights Agent so appointed is hereby authorized
to act as Transfer Agent and Registrar for the Rights and the Common
Shares issued upon the exercise thereof.
RESOLVED: that for the purpose of the original issue of the right
Certificates, the Rights Agent be, and it hereby is, authorized and
directed:
(a) to countersign when signed manually or by facsimile
by the proper officers of the Corporation and bearing the
manual or facsimile seal of the Corporation, original
certificates for up to the aggregate number of the Rights to
be issued; and
<PAGE> 8
CORPUS CHRISTI BANCSHARES, INC.
Board of Directors Minutes
October 18, 1995
Page 8
(b) to record and register the, Right Certificates when
so countersigned in the books for registration and transfer
thereof, showing the names and addresses of the respective
holders of the Right Certificates, the number of Rights
evidenced on the face of each of the Right Certificates and
the date of each of the Right Certificates, as provided in the
Rights Agreement; and
(c) upon request of the Corporation, to send Right
Certificates when so countersigned, recorded and registered to
the respective holders of Common Shares, at the addresses of
the holders shown on the records of the Corporation.
RESOLVED: that if the Rights Agent requires a prescribed form of
resolution or resolutions with respect to the matters set forth in the
preceding resolutions or with respect to any of the other duties of
the Rights Agent provided for in the Rights Agreement, such resolution
or resolutions shall be deemed to have been, and hereby are, adopted,
and the Secretary or an Assistant Secretary of the Corporation hereby
is authorized to certify the adoption of all such resolutions as
though such resolutions were now adopted, all such resolutions to be
inserted in the minute book for the Corporation and to be
appropriately marked by one of such officers.
Securities Act Registration
RESOLVED: that if any of the Proper Officers of the Corporation deem
it necessary, appropriate or desirable, such Proper Officers, and any
of them, hereby are authorized for and on behalf of the Corporation
(a) to prepare, execute and file with the Securities and Exchange
Commission (the "Commission") a registration statement or registration
statements under the Securities Act of 1933, as amended (the
"Securities Act"), for the registration of the Common Shares or other
securities issuable upon the exercise of Rights, or any or all
thereof; (b) to execute and file with the Commission such amendments
and supplements to any such registration statement as the Proper
Officer or Proper Officers so acting deem necessary, appropriate or
desirable to conform to the requirements of the Securities Act; and
(c) to take all such further actions and to execute all such
additional documents as the Proper Officer or Proper Officers so
acting may deem necessary, appropriate or desirable to cause any such
registration statement to become and remain effective.
RESOLVED: that the Secretary of the Corporation be, and he hereby is,
authorized to act on behalf of the Corporation as its agent for
service, with all powers and
<PAGE> 9
CORPUS CHRISTI BANCSHARES, INC.
Board of Directors Minutes
October 18, 1995
Page 9
functions specified in the General Rules and Regulations of the
Commission under the Securities Act.
RESOLVED: that the Proper Officers of the Corporation be, and each of
them hereby is, authorized, in the name and on behalf of the
Corporation, to take all such actions and to execute all such
documents as they or any of them may deem necessary, appropriate or
desirable in connection with the issuance of the Rights, Common Shares
or other securities issuable upon the exercise of Rights, or any or
all thereof, in order to comply with the Securities Act.
Blue Sky Action
RESOLVED: that the Proper Officers of the Corporation be, and each of
them hereby is, authorized, in the name and on behalf of the
Corporation, to take all such actions and to execute all such
documents as they or any of them may deem necessary, appropriate or
desirable, including the execution, acknowledgment, verification,
delivery, filing and publishing of consents to, and appointments of
statutory agents for, service of process, applications, reports,
resolutions, prospectuses and other documents in order to comply with
the applicable securities laws of all states of the United States or
other jurisdictions in order to permit the issuance of the Rights,
Common Shares or other securities issuable upon the exercise of
Rights, or any or all thereof, in such jurisdictions, and to maintain
such registrations or qualifications.
RESOLVED: that the Proper Officers of the Corporation be, and each of
them hereby is, authorized and directed, in the name and on behalf of
the Corporation, to take all such actions and to execute all such
documents as they or any of them may deem necessary, appropriate or
desirable in order to register the Corporation as a dealer or broker
in any state or states wherein such registration is necessary,
appropriate or desirable in connection with the issuance of the
Rights, Common Shares or other securities issuable upon the exercise
of Rights, or any or all thereof, and in connection therewith to
execute, acknowledge, verify, deliver, file and publish all such
applications, reports, resolutions and other papers and instruments as
may be required under such securities laws, and to take all further
actions and to execute all further documents as they or any of them
may deem necessary, appropriate or desirable in order to maintain any
such registration.
RESOLVED: that the Proper Officers of the Corporation be, and each of
them hereby is, authorized to execute and file, in the name and on
behalf of the
<PAGE> 10
CORPUS CHRISTI BANCSHARES, INC.
Board of Directors Minutes
October 18, 1995
Page 10
Corporation, in such states of the United States or such other
jurisdictions wherein consents to service of process may be required
under the securities laws thereof in connection with such registration
or qualification of the Rights, Common Shares or other securities
issuable upon the exercise of Rights, or any or all thereof, or in
connection with the registration of the Corporation as a dealer or
broker, an irrevocable written consent on the part of the Corporation
to be sued in such states in suits arising out of the violation of any
provisions of such securities and to appoint an appropriate state
official as agent of the Corporation for the purpose of receiving and
accepting process of such suits.
RESOLVED: that if a prescribed form of resolution or resolutions is
required in any such jurisdiction in which any such application or
statement is filed, such resolution or resolutions shall be deemed to
have been, and hereby are, adopted, and the Secretary and any
Assistant Secretary of the Corporation be, and each of them hereby is,
authorized to certify the adoption of all such resolutions as though
such resolutions were now adopted, all such resolutions to be inserted
into the minute book for the Corporation and to be appropriately
marked by one of such officers.
Filing with Stock Exchanges and Exchange Act Registration
RESOLVED: that the Proper Officers of the Corporation be, and each of
them hereby is, authorized, in the name and on behalf of the
Corporation, to execute and file such application or applications
(including exhibits) and amendments and supplements thereto and to
take such other action as the Proper Officer or Proper Officers so
acting may deem necessary, appropriate or desirable with respect to
the Rights, common Shares or other relevant securities issuable upon
the exercise of Rights, or any or all thereof, on the American Stock
Exchange ("AMEX") and on any other stock exchanges (and/or to effect
the inclusion thereof on any securities quotation system) deemed
necessary, appropriate or desirable by such Proper Officer or Proper
Officers, and to appear before the AMEX and any such other stock
exchanges, to execute such papers and agreements and deliver or cause
to be delivered such other documents (including certified copies of
all resolutions adopted hereby) as may be necessary to conform with
the requirements of the AMEX and any such other stock exchanges.
RESOLVED: that the form of Indemnity Agreement, if any, required by
the AMEX, indemnifying the AMEX and others against loss resulting from
reliance on the facsimile signatures of the Proper Officers of the
Corporation on the Right Certificates or the certificates representing
the Common Shares or other securities
<PAGE> 11
CORPUS CHRISTI BANCSHARES, INC.
Board of Directors Minutes
October 18, 1995
Page 11
issuable upon the exercise of Rights be, and it hereby is, approved,
and that the Proper Officers of the Corporation be, and each of them
hereby is, authorized, in the name and on behalf of the Corporation,
to execute and deliver such Indemnity Agreement.
RESOLVED: that, if the AMEX or any stock exchange upon which the
Rights, Common Shares or other securities issuable upon the exercise
of Rights, as the case may be, are to be listed requires a prescribed
form of resolution or resolutions to effect such listing, such
resolution or resolutions shall be deemed to have been, and hereby
are, adopted, and the Secretary and any Assistant Secretary of the
Corporation be, and each of them hereby is, authorized to certify the
adoption of all such resolutions as though such resolutions were now
adopted, all such resolutions to be inserted into the minute book for
the Corporation and to be appropriately marked by one of such
officers.
RESOLVED: that the Proper Officers of the Corporation be, and each of
them hereby is, authorized to file with the Commission all appropriate
applications or registration statements (and any amendments or
supplements thereto) to effect the registration of the Rights, Common
Shares or other securities issuable upon the exercise of Rights, or
any or all thereof, under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and to appear before the Commission and
to take all such further actions and to execute all such additional
documents as they or any of them may deem necessary, appropriate or
desirable in connection therewith.
Power of Attorney
RESOLVED: that the Proper Officers of the Corporation be, and each of
them hereby is, authorized, in the name and on behalf of the
Corporation, to execute a power or powers of attorney appointing
Richard K. Kneipper and Cynthia J. Dollar and any of them, with full
power of substitution and resubstitution, as attorneys or attorney of
the Corporation, to sign and file a registration statement or
registration statements relating to the registration of the Rights,
Common Shares or other securities issuable upon the exercise of
Rights, or any or all thereof, under the Securities Act and to sign
and file a registration statement relating to the registration of the
Rights, Common Shares or other securities issuable upon the exercise
of rights, or any or all thereof, under the Exchange Act, and any and
all amendments and exhibits to each such registration statement, and
any and all applications or other documents to be filed with the
Commission pertaining thereto, with full power and authority to do and
perform any and all acts and things whatsoever required and
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CORPUS CHRISTI BANCSHARES, INC.
Board of Directors Minutes
October 18, 1995
Page 12
necessary to be done in the premises, and which powers of attorney
shall ratify, confirm and approve the acts of said attorneys and any
of them and any such substitutes related thereto.
General
RESOLVED: that any actions taken by the Proper Officers of the
Corporation prior to the adoption of the foregoing resolutions that
are within the authority conferred thereby be, and each of them hereby
is, ratified, confirmed and approved as the act and deed of the
Corporation.
RESOLVED: that the Proper Officers of the Corporation be, and each of
them hereby is, authorized and empowered to execute and deliver any
and all other documents, papers or instruments and to do or cause to
be done any and all such acts and things as they or any of them may
deem necessary, appropriate or desirable in order to enable the
Corporation fully and promptly to carry out the purposes and intent of
the foregoing resolutions.
Upon a motion by Mr. Karp that was seconded by Mr. Brooke, the Board of
Directors unanimously approved all of the foregoing resolutions.
There being no further business, a motion was made by Mr. Woodman, Jr., which
was seconded by Mr. Wright, Jr., that the meeting be adjourned. This motion
was unanimously approved.
OCTOBER 18, 1995
----------------------------------------
Darla R. Perez
Assistant Secretary
----------------------------------------
John T. Wright, III
Chairman of the Board
<PAGE> 1
Exhibit 99.1
CORPUS CHRISTI BANCSHARES, INC.
PRESS RELEASE
Corpus Christi Bancshares, Inc.
Date: October 19, 1995 Contact: R. Jay Phillips
For Release: Immediate Tel No: (512) 887-3000
Page 1
CORPUS CHRISTI BANCSHARES, INC. REPORTS THIRD QUARTER 1995 RESULTS
Corpus Christi, Texas - (October 19, 1995) - Corpus Christi Bancshares, Inc.
(AMEX-CTZ) today announced net income for the third quarter ended September 30,
1995 of $430,399 ($.25 per share compared with $507,977 ($.30 per share) for
the same quarter last year.
Net income for the nine month period ended September 30, 1995 was $1,295,766
($.77 per share), up $68,836, compared with $1,226,930 ($.73 per share) for the
same period last year.
"The decrease in third quarter earnings was primarily attributable to higher
income tax expenses resulting from the utilization of tax net operating loss
carryforwards in 1994, which were not available to the Company in 1995. The
increase in earnings for the nine months ended September 30, 1995 was largely
attributable to the Company reducing its allowance for loan losses through
"negative" provisions totaling $400,000 for the nine month period ended
September 30, 1995 and to an increase in the Company's net interest income.
The "negative" provisions were made as the result of reduced loan charged-offs
and increased recoveries during the first nine months of 1995 on loans
previously charged-off, which resulted in an allowance for loan losses that
exceeded the level determined adequate by the Company," said R. Jay Phillips,
President and Chief Executive Office of the Company.
"While net interest income and noninterest income increased during the third
quarter and nine months ended September 30, 1995 as compared to the same
periods of 1994, noninterest expenses were higher than last year. The increase
in noninterest expenses during the quarter and nine months ended September 30,
1995 is largely attributable to staffing and occupancy expenses related to the
opening of the South and Five Points Banking Centers during the fourth quarter
of 1994, and the remodeling of the Village Banking Center in 1994", said Mr.
Phillips. "We are confident that these increased expenses are necessary to
achieve the long-term strategy of growing the Company's franchise and
shareholder value."
At September 30, 1995, the Company's average return on assets and return on
equity ratios were 1.0% and 11.25%, respectively. Assets totaled $181.8
million at September 30, 1995 compared with $171.5 million at December 31,
1994. Net loans at September 30, 1995 totaled $100.0 million compared with
$92.1 million at December 31, 1994. Net loans at September 30, 1994 totaled
$87.5 million. Deposits at September 30, 1995 totaled $158.7 million compared
with $157.7 million at December 31, 1994. Deposits at September 30, 1994
totaled $148.2 million.
<PAGE> 2
Corpus Christi Bancshares, Inc.
Date: October 19, 1995
For Release: Immediate
Page 2
Corpus Christi Bancshares, Inc. is a bank holding company that owns Citizens
State Bank of Corpus Christi, Texas, a bank with $181.6 million in assets that
operates four branches in Corpus Christi, Texas. On July 5, 1995, the Company
announced that Citizens State Bank had entered into a definitive agreement to
acquire The First National Bank of Taft, Texas. The First National Bank had
total assets of approximately $40 million at December 31, 1994, and is
approximately 20 miles from Corpus Christi, Texas. The purchase price for the
proposed acquisition will be approximately $8.1 million, subject to certain
adjustments. On October 10, 1995 the proposed acquisition was approved by the
shareholders of the First National Bank and by the Federal Deposit Insurance
Corporation, and on October 17, 1995 it was approved by the Texas Department of
Banking. The definitive agreement is subject to certain other conditions,
which the Company hopes will be satisfied in order to close this acquisition on
or about October 31, 1995.
It was also announced that the Company's board had adopted a shareholder rights
plan that provides for rights to be issued to shareholders of record on
November 3, 1995. Mr. Phillips stated "This action has been taken after long
and careful consideration in connection with implementing the Company's
strategic plan. The adoption of a shareholder rights plan has become common
practice in major American companies and financial institutions and a
well-accepted approach to ensuring that all shareholders receive a fair price
and are treated equally in the event of a takeover."
Under the plan, the rights will initially trade together with the Company's
common stock and will not be exercisable. In the absence of further board
action, the rights will become exercisable and allow the holder to acquire the
Company's common stock at a discounted price if a person or group acquires 20
percent or more of the Company's common stock. Rights held by persons who
exceed the applicable threshold will be void. Under certain circumstances, the
rights will entitle the holder to buy shares in an acquiring entity at a
discounted price.
The plan also includes an exchange option. In general, after the rights become
exercisable, the Board of Directors may, at its option, effect an exchange of
part or all of the rights --other than rights that have become void -- for
shares of the Company's common stock. Under the option, the Company would
issue one share of common stock for each right, subject to adjustment in
certain circumstances.
The Company's Board of Directors may, at its option, redeem all rights for
$0.01 per right, generally at any time prior to the rights becoming
exercisable. The rights will expire October 18, 2005, unless earlier redeemed
by the Board of Directors.
The issuance of the rights will not affect reported earnings per share and will
not change the way in which the Company's common stock is currently traded.
<PAGE> 3
Corpus Christi Bancshares, Inc.
Date: October 19, 1995
For Release: Immediate
Page 3
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
Unaudited Unaudited Unaudited Unaudited
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Total interest income $ 3,115,383 $ 2,606,783 $ 9,016,604 $ 7,449,843
Total interest expense 1,186,030 869,726 3,415,360 2,352,593
------------- ------------- ------------ ------------
Net interest income 1,929,353 1,737,057 5,601,244 5,097,250
Provision for possible
loan losses --- --- (400,000) ---
------------- ------------- ------------ ------------
Income after provision for 1,929,353 1,737,057 6,001,244 5,097,250
loan losses
Net gains on sale of securities
available for sale --- --- --- 165,081
Total noninterest income 768,229 726,859 2,259,829 2,022,701
Total noninterest expense 2,038,859 1,980,196 6,282,307 5,864,359
------------- ------------- ------------ ------------
Income before income taxes 658,723 483,720 1,978,766 1,420,673
Income taxes 228,324 (24,257) 683,000 193,743
------------- ------------- ------------ ------------
Net income $ 430,399 $ 507,977 $ 1,295,766 $ 1,226,930
============= ============= ============ ============
Weighted average of common
stock and common stock
equivalents outstanding 1,695,118 1,680,398 1,685,271 1,679,138
============= ============= ============ ============
Net income per share of
common stock and
common stock equivalents $ .25 $ .30 $ .77 $ .73
============= ============= ============ ============
Total assets $181,774,545 $162,308,083
============ ============
Loans, net $ 99,981,333 $ 87,495,605
============ ============
Deposits $158,663,317 $148,199,570
============ ============
Shareholders' equity $ 15,350,854 $ 13,522,629
============ ============
</TABLE>
<PAGE> 1
Exhibit 99.2
October 23, 1995
Dear Shareholder:
We were pleased to announce third quarter 1995 earning results for Corpus
Christi Bancshares, Inc. as set forth in our enclosed press release on October
19, 1995. As shown on the schedule included with this letter, net income for
the third quarter was $430,399 as compared with $507,977 for the same quarter,
1994. Net income for the nine month period ended September 30, 1995 was
$1,295,766 ($.77 per share), up $68,836 compared with $1,226,930 ($.73 per
share) for the same period last year.
As you will note, third quarter results before taxes increased some 36.2%.
While operating earnings increased during the quarter, the increase was not
sufficient to overcome the effect of the Company's having exhausted its tax
loss carryforward during 1994. However, the before tax operating results are
indicative of the Company's realization of its announced strategic plan.
The Company's branch expansion during the fourth quarter of 1994 provided
better delivery of service which continues to enable your Company to build its
franchise, thus enhancing shareholder value. Further, on July 5, 1995, we
announced that we had entered into a definitive agreement to purchase the First
National Bank of Taft, Texas. We are pleased to tell you that acquisition has
now been approved by the First National Bank's shareholders and all regulators.
Management presently believes that the acquisition should be completed on or
about November 1, 1995. The acquisition will further help to improve the
efficiency of your Company and is an integral facet of the Company's strategic
plan.
On October 18, 1995 the Company's Board adopted a shareholder rights plan that
provides for rights to be issued to shareholders of record on November 3, 1995.
This action was taken after long and careful consideration in connection with
implementing the Company's strategic plan. The adoption of a shareholder
rights plan has become common practice for public companies including financial
institutions, and a well-accepted approach to ensuring that all shareholders
receive a fair price and are treated equally in the event of a takeover. More
than 1,600 public companies (including 60% of the "Fortune 500") have adopted
shareholder rights plans. The principal purpose of the shareholder rights plan
is to preserve the Company's long-term value by deterring potential hostile
bidders from attempting to use unfair tactics to seize control of the Company
without treating all shareholders equally and without paying the full value of
their shares. While the Board continues to believe that the best way to
maximize shareholder's value is to continue to pursue its strategic plan to
build franchise value and allow time for the results of its strategic plan
implementation to be recognized in the market value of the Company's stock, the
Board is not opposed to a sale of the Company. In the event the Company were
to receive an unsolicited acquisition proposal, the Board would fulfill its
fiduciary duties to the Company's shareholders by
<PAGE> 2
Shareholders
October 23, 1995
Page 2
reviewing and responding appropriately to such proposal, which would include a
decision to agree to a sale of the Company if that were in the best interests
of shareholders. The shareholder rights plan should encourage any potential
bidder to make a fully priced offer for all of the Company's stock and should
facilitate the Board's ability to act in the best interests of all
shareholders.
Under the plan, the rights will initially trade together with the Company's
common stock and will not be exercisable. The rights will become exercisable
and allow the holder to acquire the Company's common stock at a discounted
price if a person or group acting in concert acquired 20 percent or more of the
Company's common stock. Rights held by persons who exceed the applicable
threshold will be void. Under certain circumstances, the rights will entitle
the holder to buy shares in an acquiring entity at a discounted price. Thus,
the purpose of a rights plan is to encourage potential bidders to negotiate
with your Board of Directors for a fair transaction that is in the best
interests of all shareholders, in which case the Board could redeem the rights
to allow the transaction to occur. The plan also includes an exchange option.
In general, after the rights become exercisable, the Board of Directors may, at
its option, effect an exchange of part or all of the rights - other than rights
that have become void - for shares of the Company's common stock. Under the
exchange option, the Company would issue one share of common stock for each
right, subject to adjustment in certain circumstances.
The Company Board of Directors may, at its option, redeem all rights for $0.01
per right, generally at any time prior to the rights becoming exercisable,
which gives the Board the flexibility to eliminate the rights whenever it
believes that would be in the best interests of all shareholders. The rights
will expire on October 18, 2005, unless earlier redeemed by the Board of
Directors.
The issuance of the rights will not affect reported earnings per share and will
not change the way in which the Company's common stock is currently traded
unless and until the 20 percent threshold is crossed by a person or a group
acting in concert.
We appreciate the continued loyalty and support of our shareholders. Working
together, we believe that the future shareholder value of Corpus Christi
Bancshares, Inc. will continue to grow as we serve the needs of our market.
Sincerely yours,
John T. Wright, III R. Jay Phillips
Chairman of the Board President and
Chief Executive Officer
