FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
JEFFERSONVILLE BANCORP
(Exact name of registrant as specified in its charter)
New York 22-2385448
(State of incorporation or organization) (I.R.S. Employer Identification No.)
Main Street 12748
Jeffersonville, New York
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Series A Preferred None
Stock Purchase Rights
Item 1. Description of Securities to be Registered:
In General
On July 9, 1996 (the "Declaration Date"), the Board of Directors
of Jeffersonville Bancorp, a New York corporation (the "Company"),
declared a dividend distribution of one purchase right (a "Right" or
collectively the "Rights") for each outstanding share of common
stock, $0.50 par value, of the Company (the "Common Stock") to
stockholders of record at the close of business on July 9, 1996 (the
"Record Date"). Each Right entitles the registered holder thereof to
purchase from the Company following the Distribution Date, as
defined below, one one-hundredth of a share, subject to adjustment,
of Series A Preferred Stock or, upon the occurrence of certain
events described below, Common Stock of the Company or common
stock of an entity that acquires the Company. The description and
terms of the Rights are set forth in the Stockholder Rights
Agreement (the "Rights Agreement"), dated July 9, 1996, between
the Company and First National Bank of Jeffersonville, a national
banking association, as the "Rights Agent."
Distribution Date; Series A Preferred Stock
Initially, the Rights will be attached to the Common Stock, and
no separate certificates representing the Rights ("Rights
Certificates") will be distributed. The Rights will separate from the
Common Stock and a "Distribution Date" will occur upon the earlier
of (i) 10 days following a public announcement that a "Person" (i.e.,
an individual, corporation, partnership, trust, or estate, etc.) or
group of affiliated or associated Persons (such Person or group being
hereafter referred to as an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 20% or more
of the outstanding shares of Common Stock (the "Stock Acquisition
Date"); or (ii) 10 days following the commencement of a tender offer
or exchange offer that, if successful, would result in an Acquiring
Person beneficially owning 30% or more of such outstanding shares
of Common Stock (unless such tender or exchange offer is predicated
upon the redemption of the Rights). The foregoing does not apply to
any employee stock ownership or other benefit plan or arrangement
of the Company or any of its subsidiaries. Until the Distribution
Date, (i) the Rights will be evidenced by the Common Stock
certificates and will be transferable with and only with such
Common Stock certificates; (ii) new Common Stock certificates
issued after the Record Date will contain a notation incorporating
the Rights Agreement by reference; and (iii) the surrender for
transfer of any certificates for Common Stock outstanding will also
constitute the transfer of the Rights associated with the Common
Stock represented by such certificate.
Following a Distribution Date, each Right will entitle the holder
thereof to purchase one one-hundredth of a share, subject to the
anti-dilution provisions described below, of Series A Preferred
Stock of the Company. Each share of Series A Preferred Stock is
entitled to (i) 100 votes on each matter submitted to the
shareholders of the Company for their vote; (ii) quarterly dividends;
and (iii) preference upon a liquidation, dissolution, or winding up of
the Company. The purchase price per one one-hundredth of a share of
Series A Preferred Stock (the "Purchase Price") is equal to the Board
of Directors' judgment as to the "long-term investment" value of one
share, subject to adjustment, of Common Stock at the end of the
10-year term of the Rights.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on July 9, 2006, unless
redeemed earlier by the Company as described below.
Rights Certificates; Transferability
As soon as is practical after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date, and
thereafter, the separate Rights Certificates alone will represent the
Rights. After the Distribution Date, the Rights may be transferred
independently from the Common Stock. Except as otherwise
determined by the Board of Directors and except for Common Stock
issued pursuant to the exercise of stock options granted prior to the
Distribution Date, only shares of Common Stock issued or
outstanding prior to the Distribution Date will be issued with Rights.
"Flip-In" Provision
In the event that, at any time following the Distribution Date,
(i) the Company is the surviving corporation in a merger with an
Acquiring Person and the Company's Common Stock is not converted
or exchanged; (ii) a Person becomes the beneficial owner of more
than 20% of the then outstanding shares of Common Stock (except
pursuant to an offer for all outstanding shares of Common Stock that
the Continuing Directors (as defined below) determine to be fair to
and otherwise in the best interest of the Company and it
stockholders); (iii) an Acquiring Person engages in one or more
"self-dealing" transactions as set forth in the Rights Agreement; or
(iv) during such time as there is an Acquiring Person, an event
occurs that results in such Acquiring Person's ownership interest
being increased by more than one percentage point (e.g., a reverse
stock split), each holder of a Right (if the Right has not theretofore
been exercised to purchase Series A Preferred Stock) will thereafter
have the right to receive, upon exercise thereof and in lieu of Series
A Preferred Stock, Common Stock (or, in certain circumstances,
cash, property, or other securities of the Company) having a value
equal to twice the Purchase Price of the Right. Notwithstanding any
of the foregoing, following the occurrence of any of the events set
forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person will be null and void.
For example, at a Purchase Price of $50 per Right, each Right not
owned by an Acquiring Person (or by certain related parties)
following an event set forth in the preceding paragraph would
entitle its holder to purchase $100 of then-current market value of
Common Stock (or other consideration, as noted above) for $50.
Assuming that the Common Stock had a per share value of $10 at
such time, the holder of each valid Right would be entitled to
purchase 10 shares of Common Stock for $50.
"Flip-Over" Provision
In the event that, at any time following the Stock Acquisition
Date, (i) the Company is acquired in a merger or other business
combination transaction in which the Company is not the surviving
corporation (other than a merger that follows an offer described in
Clause (ii) of the second preceding paragraph); or (ii) 50% or more of
the Company's assets or earning power is sold or transferred to any
Person other than a subsidiary of the Company, each holder of a
Right (except Rights that previously have been exercised to purchase
Series A Preferred Stock or have been voided as set forth above)
shall thereafter have the right to receive, upon exercise thereof and
in lieu of Series A Preferred Stock, common stock of the acquiring
Person having a value equal to twice the Purchase Price of the Right.
Anti-Dilution Provision
The Purchase Price payable, and the number of one one-
hundredths of a share of Series A Preferred Stock or other
securities or property issuable upon exercise of the Rights, are
subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination, or
reclassification of, the Common Stock; (ii) if holders of the Series A
Preferred Stock are granted certain rights or warrants to subscribe
for Series A Preferred Stock or securities convertible into Series A
Preferred Stock at less than the current market price of the Series
A Preferred Stock; or (iii) upon the distribution to holders of the
Series A Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription
rights or warrants (other than those referred to above).
With certain exceptions, no adjustments in the Purchase Price
will be required until cumulative adjustments amount to at least 1%
of the Purchase Price. No fractional shares of Series A Preferred
Stock (other than integral multiples of one one-hundredth of a share,
as may be adjusted from time to time as set forth in the
immediately preceding paragraph) will be issued upon exercise of a
Right, and in lieu thereof, payment in cash will be made for such
fractional shares based on the market price of the Series A
Preferred Stock on the last trading date prior to the date of exercise.
Redemption
At any time prior to July 9, 2006, or, if earlier, 10 days
following the Stock Acquisition Date, the Company may redeem the
Rights (to the extent not exercised) in whole, but not in part, at a
price of $0.01 per Right (payable in cash, Common Stock, or other
consideration deemed appropriate by the Board of Directors). Under
certain circumstances set forth in the Rights Agreement, the
decision to redeem shall require the concurrence of a majority of
the Continuing Directors. If no Continuing Directors remain in
office, the Rights may be redeemed only upon the approval of (i) a
majority of the holders of Common Stock; and (ii) the holders of at
least 80% of the Common Stock held other than by any Acquiring
Person. After the redemption period has expired, the Company's
right of redemption may be reinstated if an Acquiring Person
reduces its beneficial ownership to 10% or less of the outstanding
shares of Common Stock in a transaction or series of transactions
not involving the Company. Immediately upon the action of the Board
of Directors ordering redemption of the Rights with, where required,
the concurrence of a majority of the Continuing Directors, the Rights
will terminate and the only right of the holders of Rights will be to
receive the $0.01 redemption price.
Definition of Continuing Director
The term "Continuing Director" means any member of the Board
of Directors of the Company who was a member of the Board on the
Declaration Date, and any person who is subsequently elected to the
Board if such person is recommended or approved by a majority of
the then Continuing Directors, but shall not include an Acquiring
Person, an affiliate or associate of an Acquiring Person, or any
representative of the foregoing entities.
Limited Interests as a Rights Holder
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 notice of stockholder meetings, the right to
vote, or the right to receive dividends. While the distribution of the
Rights will not be taxable to stockholders or to the Company,
stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable for
Series A Preferred Stock, for Common Stock (or other consideration)
of the Company, or for common stock of the acquiring entity as set
forth above.
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement
may be amended by the Board of Directors of the Company prior to
the Distribution Date. After the Distribution Date, the provisions of
the Rights Agreement may be amended by the Board (in certain
circumstances, with the concurrence of a majority of the Continuing
Directors) in order to cure any ambiguity, to make changes that do
not adversely affect the interests of holders of Rights (excluding
the interests of any Acquiring Person), or to shorten or lengthen any
time period under the Rights Agreement, provided, however, that no
amendment to adjust the time period governing redemption may be
made at such time as the Rights are not redeemable.
A copy of the Rights Agreement between the Company and the
Rights Agent, specifying the terms of the Rights (which includes the
following Exhibits: (i) the Certificate of Designation with respect
to Series A Preferred Stock, specifying the terms of the Series A
Preferred Shares; (ii) the Form of Rights Certificate; and (iii) the
Summary of the Rights to Purchase Series A Preferred Stock) is
attached hereto as Exhibit 1 and incorporated herein by reference.
The foregoing description of the Rights and the terms of the Series
A Preferred Stock is qualified in its entirety by reference to the
Rights Agreement.
Exhibits:
1. Stockholder Rights Agreement dated July 9, 1996, between
the Company and the Rights Agent.
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.
Dated: July 9, 1996
JEFFERSONVILLE BANCORP
By ______________________________
Arthur E. Keesler,
President
STOCKHOLDER RIGHTS AGREEMENT
JULY 9, 1996
JEFFERSONVILLE BANCORP
and
THE FIRST NATIONAL BANK OF JEFFERSONVILLE
TABLE OF CONTENTS
Section Page
1. Certain Definitions 1
2. Appointment of Rights Agent 6
3. Issue of Rights Certificates 7
4. Form of Rights Certificates 8
5. Countersignature and Registration 9
6. Transfer, Split-Up, Combination, and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost, or
Stolen Rights Certificates 10
7. Exercise of Rights; Purchase Price; Expiration Date of Rights 11
8. Cancellation and Destruction of Rights Certificates 13
9. Reservation and Availability of Capital Stock 13
10. Preferred Stock and Record Date 15
11. Adjustment of Purchase Price, Number,
and Kind of Shares or Number of Rights 15
12. Certificate of Adjusted Purchase Price or Number of Shares 25
13. Consolidation, Merger, or Sale or Transfer of Assets or Earning Power 25
14. Fractional Rights and Fractional Shares 29
15. Rights of Action 30
16. Agreement of Rights Holders 30
17. Rights Certificate Holder Not Deemed a Stockholder 31
18. Concerning the Rights Agent 31
19. Merger, Consolidation, or Change of Name of Rights Agent 32
20. Duties of Rights Agent 32
21. Change of Rights Agent 34
22. Issuance of New Rights Certificates 35
23. Redemption and Termination 36
24. Exchange 37
25.Notice of Certain Events 39
26. Notices 40
27. Supplements and Amendments 41
28. Successors 42
29. Determinations and Action by the Board of Directors 42
30. Benefits of this Agreement 42
31. Severability 42
32. Governing Law 43
33. Counterparts 43
34. Descriptive Headings 43
Exhibit A -- Certificate of Designation, Preferences, and Rights
Exhibit B -- Form of Rights Certificate
Exhibit C -- Summary of the Rights
STOCKHOLDER RIGHTS AGREEMENT
This Stockholder Rights Agreement, dated as of July 9, 1996 (the
"Agreement"), is made and entered into by and between JEFFERSONVILLE
BANCORP, a New York corporation (the "Company"), and THE FIRST NATIONAL
BANK OF JEFFERSONVILLE, Jeffersonville, New York, a national banking
association (the "Rights Agent").
WITNESSETH:
WHEREAS, on July 9, 1996 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company (the "Board") authorized and
declared a dividend distribution of one right (individually a "Right"
and collectively the "Rights") for each share of common stock, $0.50
par value per share, of the Company (the "Common Stock") outstanding
at the close of business on July 9, 1996 (the "Record Date"), and
has authorized the issuance of one Right (as such number may hereinafter
be adjusted pursuant to the provisions of Section 11(p) below) for
each share of Common Stock of the Company issued between the Record
Date (whether originally issued or delivered from the Company's treasury)
and the Distribution Date (as defined in Section 1(q) below), each
such Right initially representing the right to purchase one one-hundredth
of a share of Preferred Stock (as defined in Section 1(y) below) and,
upon the occurrence of a Triggering Event (as defined in Section 1(qq)
below), to purchase Common Stock or other equity securities, upon
the terms and subject to the conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as defined in Paragraph
(x) below) who or which, together with all Affiliates and Associates
(as such terms are defined in Paragraph (d) below) of such Person,
is the Beneficial Owner (as defined in Paragraph (f) below) of 20%
or more of the shares of Common Stock then outstanding, but shall
not include the Company, any Subsidiary (as defined in Paragraph (nn)
below) of the Company, any employee benefit plan of the Company or
of any Subsidiary of the Company, or any Person organized, appointed,
or established by the Company for or pursuant to the terms of any
such plan, provided, however, that no Person shall be deemed to be
an Acquiring Person if such Person shall become the Beneficial Owner
of 20% or more of the Common Stock then outstanding solely because
of an action of the Company with respect to the Common Stock.
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Adjustment Shares" shall have the meaning assigned thereto in
Section 11(a)(ii)(C) below.
(d) "Affiliate" and "Associate" shall have the respective meanings
assigned to such terms in Rule 12b-2 of the General Rules and Regulations
promulgated under the Exchange Act (as defined in Paragraph (s) below)
and in effect on the date of this Agreement.
(e) "Agreement" shall mean this Stockholder Rights Agreement as originally
executed or as it may, from time to time, be supplemented or amended
pursuant to the applicable provisions hereof.
(f) A Person shall be deemed the "Beneficial Owner" of, and shall
be deemed to "beneficially own," any securities
(i) that such Person, or any of such Person's Affiliates or Associates,
directly or indirectly has the right to acquire (whether such right
is exercisable immediately or only after the passage of time) pursuant
to any agreement, arrangement, or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights,
subscription rights, warrants, options, or otherwise, provided, however,
that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant to a tender or
exchange offer made by such Person, or any of such Person's Affiliates
or Associates, until such tendered securities are accepted for purchase
or exchange; (B) securities issuable upon exercise of Rights at any
time prior to the occurrence of a Triggering Event; or (C) securities
issuable upon exercise of Rights from and after the occurrence of
a Triggering Event where such Rights were acquired by such Person,
or any of such Person's Affiliates or Associates, prior to the Distribution
Date or pursuant to Section 3(a) or Section 22 below (the "Original
Rights") or pursuant to Section 11(i) below in connection with an
adjustment made with respect to any Original Rights;
(ii) that such Person, or any of such Person's Affiliates or Associates,
directly or indirectly has the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant to Rule 13d-3 of
the General Rules and Regulations promulgated under the Exchange Act),
including pursuant to any agreement, arrangement, or understanding
(whether or not in writing), provided, however, that a Person shall
not be deemed the "Beneficial Owner" of, or to "beneficially own,"
any security under this Subparagraph (ii) as a result of an agreement,
arrangement, or understanding to vote such security if such agreement,
arrangement, or understanding (A) arises solely from a revocable proxy
given in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable provisions of the General
Rules and Regulations promulgated under the Exchange Act; and (B)
is not also then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) that are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate of such Person) with which
such Person (or any of such Person's Affiliates or Associates) has
any agreement, arrangement, or understanding (whether or not in writing)
for the purpose of acquiring, holding, voting (except pursuant to
a revocable proxy as described in the proviso to Subparagraph (ii)
of this Paragraph (f)), or disposing of any voting securities of the
Company, provided, however, that nothing in this Paragraph (f) shall
cause a Person engaged in business as an underwriter of securities
to be the "Beneficial Owner" of, or to "beneficially own," any securities
acquired through such Person's participation in good faith in a firm
commitment underwriting until the expiration of 40 days after the
date of such acquisition.
Notwithstanding anything in this definition of Beneficial Ownership
to the contrary, no Person shall be deemed to be the "Beneficial Owner"
of, or to "beneficially own," any share of Common Stock of the Company
issued pursuant to an employee stock ownership plan or any other employee
benefit plan or employee compensation arrangement, so long as such
plan or arrangement is or has been approved by the Continuing Directors
(as defined in Paragraph (n) below).
(g) "Board" shall have the meaning assigned thereto in the preamble
to this Agreement.
(h) "Business Day" shall mean any day other than a Saturday, a Sunday,
or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(i) "Close of Business" on any given date shall mean 5:00 p.m., Jeffersonville,
New York, time on such date, provided, however, that if such date
is not a Business Day, it shall mean 5:00 p.m., Jeffersonville, New
York, time on the next succeeding Business Day.
(j) "Closing Price" shall have the respective meanings assigned thereto
in Section 11(d) and Section 14(a) below.
(k) "Common Stock" shall have the meaning assigned thereto in the
preamble to this Agreement, except that "Common Stock," when used
with reference to any Person other than the Company, shall mean the
capital stock of such Person with the greatest voting power, or the
equity securities or other equity interest having power to control
or direct the management, of such Person.
(l) "Common Stock Equivalents" shall have the meaning assigned thereto
in Section 11(a)(iii) below.
(m) "Company" shall mean Jeffersonville Bancorp, a New York corporation,
or any successor corporation thereto.
(n) "Continuing Director" shall mean (i) any member of the Board,
but only while such Person is a member of the Board, who is not an
Acquiring Person, an Affiliate or Associate of an Acquiring Person,
or a representative or nominee of an Acquiring Person or of any such
Affiliate or Associate, and was a member of the Board on the date
of this Agreement; or (ii) any Person who subsequently becomes a member
of the Board, but only while such Person is a member of the Board,
who is not an Acquiring Person, an Affiliate or Associate of an Acquiring
Person, or a representative or nominee of an Acquiring Person or of
any such Affiliate or Associate, if such Person's nomination for election
or election to the Board is recommended or approved by a majority
of the Continuing Directors. Any reference to a decision, determination,
action, consent, approval, or resolution of the Continuing Directors
shall mean, and in all such cases shall require, at least a majority
of such Continuing Directors.
(o) "Current Market Price" shall have the respective meanings assigned
thereto in Section 11(d) and Section 14(a) below.
(p) "Current Value" shall have the meaning assigned thereto in Section
11(a)(iii) below.
(q) "Distribution Date" shall have the meaning assigned thereto in
Section 3(a) below.
(r) "Equivalent Preferred Stock" shall have the meaning assigned
thereto in Section 11(b) below.
(s) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(t) "Expiration Date" shall have the meaning assigned thereto in
Section 7(a) below.
(u) "Final Expiration Date" shall have the meaning assigned thereto
in Section 7(a) below.
(v) "NASDAQ" shall mean the National Association of Securities Dealers,
Inc. Automated Quotation System.
(w) "Original Rights" shall have the meaning assigned thereto in
Paragraph (f)(i) above.
(x) "Person" shall mean any individual, association, corporation,
partnership, limited partnership, limited liability company, limited
liability partnership, joint venture, trust, estate, or other entity.
(y) "Preferred Stock" shall mean shares of Series A preferred stock,
no par value, of the Company and, to the extent that there are not
a sufficient number of shares of Preferred Stock authorized to permit
the full exercise of the Rights, any other series of preferred stock
of the Company designated for such purpose containing terms substantially
similar to the terms of the Preferred Stock.
(z) "Permitted Offer" shall mean a tender offer for all outstanding
Common Stock made in a manner prescribed by Section 14(d) of the Exchange
Act and the rules and regulations promulgated thereunder, provided,
however, that such tender occurs at a time when Continuing Directors
are in office and a majority of the Continuing Directors then in office
has determined that the offer is both adequate and otherwise in the
best interests of the Company and its stockholders (taking into account
all factors that such Continuing Directors deem relevant, including,
without limitation, prices that could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed to realize
maximum value).
(aa) "Principal Party" shall have the meaning assigned thereto in
Section 13(b) below.
(bb) "Purchase Price" shall have the respective meanings assigned
thereto in Section 7(b), Section 11(a)(ii)(C), and Section 13(a) below.
(cc) "Record Date" shall have the meaning assigned thereto in the
preamble to this Agreement.
(dd) "Redemption Price" shall have the meaning assigned thereto in
Section 23(a) below.
(ee) "Right" or "Rights" shall have the meaning assigned thereto
in the preamble to this Agreement.
(ff) "Rights Agent" shall mean The First National Bank of Jeffersonville,
Jeffersonville, New York, or any successor corporation to the Rights
Agent pursuant to Section 19 below.
(gg) "Rights Certificates" shall have the meaning assigned thereto
in Section 3(b) below.
(hh) "Rights Dividend Declaration Date" shall have the meaning assigned
thereto in the preamble of this Agreement.
(ii) "Section 11(a)(ii) Event" shall mean any event described in
Clauses (A), (B), or (C) of Section 11(a)(ii) below.
(jj) "Section 11(a)(ii) Trigger Date" shall have the meaning assigned
thereto in Section 11(a)(iii) below.
(kk) "Section 13 Event" shall mean any event described in Subparagraphs
(i), (ii), or (iii) of Section 13(a) below.
(ll) "Spread" shall have the meaning assigned thereto in Section
11(a)(iii) below.
(mm) "Stock Acquisition Date" shall mean the first date of a public
announcement (which, for the purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d)
of the Exchange Act) by the Company or a Person that such Person has
become an Acquiring Person.
(nn) "Subsidiary" shall mean, with reference to any Person, any corporation
of which an amount of voting securities sufficient to elect at least
a majority of the directors of such corporation is beneficially owned,
directly or indirectly, by such Person, or otherwise controlled by
such Person.
(oo) "Substitution Period" shall have the meaning assigned thereto
in Section 11(a)(iii) below.
(pp) "Trading Day" shall have the respective meanings assigned thereto
in Section 11(d)(i) below.
(qq) "Triggering Event" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
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 below, shall, prior
to the Distribution Date, also be the holders of the Common Stock)
in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may from time
to time appoint such co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the 10th calendar
day after the Stock Acquisition Date (or, if the 10th calendar day
after the Stock Acquisition Date occurs before the Record Date, the
Close of Business on the Record Date); or (ii) the Close of Business
on the 10th calendar day after the date that a tender or exchange
offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary
of the Company, or any Person or entity organized, appointed, or established
by the Company for or pursuant to the terms of any such plan) is first
published, sent, or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act (unless such
tender or exchange offer is predicated upon the redemption of the
Rights), if upon consummation thereof, such Person would be the Beneficial
Owner of 30% or more of the shares of Common Stock then outstanding
(the earlier of (i) and (ii) being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the provisions
of Paragraph (b) of this Section 3) by the certificates for the Common
Stock (which certificates for Common Stock shall be deemed also to
be certificates for Rights) and not by separate certificates; and
(y) the Rights will be transferable only in connection with the transfer
of the underlying shares of Common Stock (including a transfer to
the Company).
(b) As soon as is practical after the Rights Agent has been notified
by the Company that the Distribution Date has occurred, the Rights
Agent will send by first-class, insured, postage-prepaid mail to each
record holder of the Common Stock as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records
of the Company, one or more certificates representing Rights, in substantially
the form of Exhibit B hereto (the "Rights Certificates"), evidencing
one Right for each share of Common Stock so held, subject to adjustment
as provided herein. In the event that an adjustment in the number
of Rights per share of Common Stock has been made pursuant to Section
11(p) below, at the time of distribution of the Rights Certificates,
the Company shall make the necessary and appropriate rounding adjustments
(in accordance with Section 14(a) below) so that Rights Certificates
representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the Distribution
Date, the Rights will be evidenced solely by such Rights Certificates.
(c) As soon as is practical after the Record Date, the Company will
send a copy of a descriptive summary of Rights, in substantially the
form attached hereto as Exhibit C, by first- class, postage-prepaid
mail to each record holder of the Common Stock as of the Close of
Business on the Record Date, at the address of such holder shown on
the records of the Company.
(d) Rights shall be issued in respect of all shares of Common Stock
that are issued (whether originally issued or from the Company's treasury)
after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date. Certificates representing such shares
of Common Stock shall also be deemed to be certificates for Rights.
All certificates for Common Stock issued after the Record Date and
before the earlier of the Distribution Date or the Expiration Date
shall bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Stockholder Rights Agreement between
Jeffersonville Bancorp (the "Company") and The First National Bank
of Jeffersonville, Jeffersonville, New York (the "Rights Agent"),
dated as of July 9, 1996 (the "Rights Agreement"), the terms of which
are hereby incorporated herein by reference and a copy of which is
on file at the principal offices of the Company, Main Street, Jeffersonville,
New York 12748, and the Rights Agent, Main Street, Jeffersonville,
New York, 12748. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate. The Company
will mail to the holder of this certificate a copy of the Rights Agreement,
as in effect on the date of mailing, without charge promptly after
receipt of a written request therefor. Under certain circumstances
set forth in the Rights Agreement, Rights issued to, or held by, any
Person who is, was, or becomes an Acquiring Person or any Affiliate
or Associate thereof (as such terms are defined in the Rights Agreement),
whether currently held by or on behalf of such Person or by any subsequent
holder, may become null and void.
With respect to such certificates containing the foregoing legend,
until the earlier of (i) the Distribution Date or (ii) the Expiration
Date, the rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone and registered
holders of Common Stock shall also be registered holders of the associated
Rights, and the transfer of any such certificates shall also constitute
the transfer of the Rights associated with the Common Stock represented
by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase
and of assignment to be printed on the reverse thereof) shall each
be substantially in the form set forth in Exhibit B hereto and may
have such marks of identification or designation and such legends,
summaries, or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law
or with any rule or regulation made pursuant thereto, or with any
rule or regulation of any stock exchange on which the Rights may from
time to time be listed, or to conform to usage. Subject to the provisions
of Section 11, Section 22, and Paragraph (b) below, the Rights Certificates,
whenever distributed, shall be dated as of authentication thereof
and on their face shall entitle the holders thereof to purchase such
number of shares of Preferred Stock as shall be set forth therein
at the Purchase Price (as defined in Section 7(b) below) set forth
therein, but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof shall be subject
to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) above
or Section 22 below that represents Rights beneficially owned by (i)
an Acquiring Person or any Associate or Affiliate of an Acquiring
Person; (ii) a transferee of an Acquiring Person (or of any such Associate
of Affiliate) who becomes a transferee after the Acquiring Person
becomes such; or (iii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person's becoming such and receives
such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests
in such Acquiring Person or to any Person with whom such Acquiring
Person has any continuing agreement, arrangement, or understanding
regarding the transferred Rights; or (B) a transfer that the Board
has determined is part of a plan, arrangement, or understanding that
has as a primary purpose or effect the avoidance of Section 7(e) below,
and any Rights Certificate issued pursuant to Section 6 or Section
11 below upon transfer, exchange, replacement, or adjustment of any
other Rights Certificate referred to in this sentence, shall contain
(to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Affiliate
or Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement). Accordingly, this Rights Certificate and the
Rights represented hereby may become null and void in the circumstances
specified in Section 7(e) of such Rights Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its President, or any Vice President,
either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof, which shall be
attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Rights Certificates
shall be 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 signed any of the Rights Certificates shall cease
to be such officer of the Company before countersignature by the Rights
Agent and issued and delivered by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued
and delivered by the Company with the same force and effect as though
the person who signed such Rights Certificates had not ceased to be
such officer of the Company; and any Rights Certificates may be signed
on behalf of the Company by any person who, at the actual date of
the execution of such Rights Certificates, shall be a proper officer
of the Company to sign such Rights Certificates 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 shall cause to be kept, at its principal office or offices designated
as the appropriate place for surrender of Rights Certificates upon
exercise or transfer, books for registration and transfer of the Rights
Certificates issued pursuant to this Agreement. Such books shall
show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of
the Rights Certificates, and the date of each of the Rights Certificates.
Section 6. Transfer, Split-up, Combination, and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost, or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b) above and Section
7(e), Section 9(f), and Section 14 below, at any time after the Close
of Business on the Distribution Date, and at or prior to the Close
of Business on the Expiration Date, any Rights Certificate(s) may
be transferred, split up, combined, or exchanged for another Rights
Certificate(s) entitling the registered holder to purchase a like
number of shares of Preferred Stock (or, following a Triggering Event,
Common Stock, other securities, cash, or other assets, as the case
may be) as the Rights Certificate(s) surrendered then entitled such
holder (or former holder in the case of a transfer) to purchase.
Any registered holder desiring to transfer, split up, combine, or
exchange any Rights Certificate(s) shall make such request in writing
delivered to the Rights Agent, and shall surrender the Rights Certificate(s)
to be transferred, split up, combined, or exchanged at the principal
office or offices of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take
any action whatsoever with respect to the transfer of any such surrendered
Rights Certificate(s) until the registered holder shall have completed
and signed the certificate contained in the form of assignment on
the reverse side of such Rights Certificate(s) and shall have provided
such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request. Thereupon the Rights Agent shall,
subject to Section 4(b) above and Section 7(e), Section 9(f), and
Section 14 below, countersign and deliver to the Person entitled thereto
a Rights Certificate(s), as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer,
split up, combination, or exchange of Rights Certificates.
(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 Rights Certificate, and, in case of loss, theft, or
destruction, of indemnity or security reasonably satisfactory to them,
and reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent
and cancellation of the Rights Certificate if mutilated, the Company
will execute and deliver a new Rights Certificate of like tenor to
the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed,
or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e) and Section 9(f) below, the registered
holder of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein including, without limitation,
the restrictions on exercisability set forth in Section 9(c), Section
11(a)(iii), and Section 23(a) below) in whole or in part at any time
after the Distribution Date upon surrender of the Rights Certificate,
with the form of election to purchase and the certificate on the reverse
side thereof duly executed, to the Rights Agent at the principal office
or offices of the Rights Agent designated for such purpose, together
with payment of the aggregate Purchase Price (as defined in Paragraph
(b) below) with respect to the total number of shares of Preferred
Stock (or Common Stock, other securities, cash, or other assets, as
the case may be) as to which such surrendered Rights are then exercisable,
at or prior to the earlier of (i) the Close of Business on July 9,
2006 (the "Final Expiration Date"); or (ii) the time at which the
Rights are redeemed as provided in Section 23 below (the earlier of
(i) and (ii) being herein referred to as the "Expiration Date").
(b) The "Purchase Price" for each one one-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially
be $50.51, and shall be subject to adjustment from time to time as
provided in Sections 11 and 13(a) below and shall be payable in accordance
with Paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment, with respect to each Right
so exercised, of the Purchase Price per one one-hundredth of a share
of Preferred Stock (or Common Stock, other securities, cash, or other
assets, as the case may be) to be purchased as set forth below and
an amount equal to any applicable transfer tax, the Rights Agent shall,
subject to Section 20(k) below, thereupon promptly (i) (A) requisition
from any transfer agent of the shares of Preferred Stock (or make
available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of shares of Preferred Stock to
be purchased and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests; or (B) if the Company shall
have elected to deposit the total number of shares of Preferred Stock
issuable upon exercise of the Rights hereunder with a depository agent,
requisition from the depository agent depositary receipts representing
such number of shares of Preferred Stock as are to be purchased (in
which case certifies for the shares of Preferred Stock represented
by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary agent
to comply with such request; (ii) requisition from the Company the
amount of cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 below; (iii) after receipt of such certificates
or depositary receipts, cause the same to be delivered to or upon
the order of the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder; and (iv)
after receipt thereof, deliver such cash, if any, to or upon the order
of the registered holder of such Rights Certificate. The payment
of the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) below) shall be made in cash or by certified bank check
or bank draft payable to the order of the Company. In the event that
the Company is obligated to issue other securities (including Common
Stock) of the Company, pay cash, and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make all arrangements
necessary so that such other securities, cash, and/or other property
are available for distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or to the order
of, the registered holder of such Rights Certificate, registered in
such name or names as may be designated by such holder, subject to
the provisions of Section 14 below.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event,
any Rights beneficially owned by (i) an Acquiring Person or an Associate
or Affiliate of an Acquiring Person; (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such (a "Part Transferee"); or
(iii) a transferee of an Acquiring Person (or of any such Associate
or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person's becoming such and receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any continuing
agreement, arrangement, or understanding regarding the transferred
Rights; or (B) a transfer that the Continuing Directors have determined
is part of a plan, arrangement, or understanding that has as a primary
purpose or effect the avoidance of this Section 7(e) (a "Prior Transferee"),
or (iv) any subsequent transferee receiving transferred Rights from
a Part Transferee or a Prior Transferee, either directly or through
one or more intermediate transferees, shall become null and void without
any further action, and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision
of this Agreement or otherwise. The Company shall use all reasonable
effort to insure that the provisions of this Section 7(e), Section
9(f) below, and Section 4(b) above are complied with, but shall have
no liability to any holder of Rights Certificates or other Person
as a result of the Company's failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates, or transferees
hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder of Rights Certificates
upon the occurrence of any purported exercise of Rights as set forth
in this Section 7 unless such registered holder shall have (i) completed
and signed the certificate contained in the form of election to purchase
set forth on the reverse side of the Rights Certificate surrendered
for such exercise; and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise, transfer,
split-up, combination, or exchange shall, if surrendered to the Company
or any of its agents, be delivered to the Rights Agent for cancellation
or in canceled form, or, if surrendered to the Rights Agent, shall
be canceled by it, and no Rights Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of
this Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Rights Certificate purchased or acquired by
the Company. The Rights Agent shall deliver all canceled Rights Certificates
to the Company or shall, at the written request of the Company, destroy
such canceled Rights Certificates, and in such case shall deliver
a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Preferred
Stock (and, following the occurrence of a Section 11(a)(ii) Event,
out of its authorized and unissued shares of Common Stock and/or other
securities, or out of its authorized and issued shares held in its
treasury), the number of shares of Preferred Stock (and, following
the occurrence of a Section 11(a)(ii) Event, Common Stock and/or other
securities) that, as provided in this Agreement including Section
11(a)(iii) below, will be sufficient to permit the exercise in full
of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Section 11(a)(ii) Event, Common Stock and/or other
securities) issuable and deliverable upon the exercise of the Rights
may be listed on any national securities exchange, the Company shall
use its best efforts to cause, from and after such time as the Rights
become exercisable, all shares reserved for such issuance to be listed
on such exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon
as is practical following the earliest date after the first occurrence
of a Section 11(a)(ii) Event on which the consideration to be delivered
by the Company upon exercise of the Rights has been determined in
accordance with Section 11(a)(iii) below, a registration statement
under the Act with respect to the securities purchasable upon exercise
of the Rights on an appropriate form; (ii) cause such registration
statement to become effective as soon as practical after such filing;
and (iii) cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Act) until
the earlier of (A) the date as of which the Rights are no longer exercisable
for such securities; or (B) the date of the expiration of the Rights.
The Company shall also take such action as may be appropriate under,
or to ensure compliance with, the securities or "blue sky" laws and
regulations of the various states in connection with the exercisability
of the Rights. The Company may temporarily suspend, (x) for a period
of time not to exceed 90 days after the date set forth in Subparagraph
(i) of this Section 9(c) in any case in which Paragraph (f) below
is not applicable, the exercisability of the Rights in order to prepare
and file such registration statement and permit it to become effective;
or (y) some portion or all of the Rights for a period of 180 days
in the case in which Paragraph (f) below is applicable. Upon any
such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the suspension is
no longer in effect. In addition, if the Company shall determine
that a registration statement is required following the Distribution
Date, the Company may temporarily suspend the exercisability of the
Rights until such time as a registration statement has been declared
effective. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction
if the requisite qualification in such jurisdiction shall not have
been obtained, the exercise thereof shall not be permitted under applicable
law, or a registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Preferred
Stock (and, following the occurrence of a Section 11(a) (ii) Event,
Common Stock and/or other securities) delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such shares
(subject to payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will 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
Rights Certificates and of any certificates for a number of shares
of Preferred Stock (or Common Stock and/or other securities, as the
case may be) upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax that may be payable in
respect of any transfer or delivery of Rights Certificates to a Person
other than, or the issuance or delivery of a number of shares of Preferred
Stock (or Common Stock and/or other securities, as the case may be)
in respect of a name other than that of, the registered holder of
the Rights Certificates evidencing Rights surrendered for exercise
or to issue or deliver any certificates for a number of shares of
Preferred Stock (or Common Stock and/or other securities, as the case
may be) in a name other than that of the registered holder upon the
exercise of any Rights until such tax shall have been paid (any such
tax being payable by the holder of such Rights Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
(f) The Company may suspend, for a period not to exceed 180 days
after the date set forth in Paragraph (c)(i) above, the exercise of
some portion or all of the Rights with respect to any Person(s) for
Preferred Stock, or following the occurrence of a Triggering Event,
Common Stock, if the issuance of such shares of Preferred Stock or
Common Stock to such Person(s) would result in (i) a "change of control,"
within the meaning of the Change in Bank Control Act of 1978, 12 U.S.C.
Section 1817(j), with respect to the Company or any Subsidiary of the Company
that is a national bank or a bank insured by the Federal Deposit Insurance
Corporation; or (ii) such Person(s)' becoming a "bank holding company"
within the meaning of the Bank Holding Company Act of 1956, 12 U.S.C.
Section 1842(c). Any such Person(s) with respect to whom the exercise of
Rights has been suspended may apply for approval from the applicable
bank regulatory agency for the Company or the affected Subsidiary.
The Company will issue the Preferred Stock or Common Stock to such
Person(s) only after the Company has received written verification
that the applicable regulatory agency has approved such Person(s)'
acquisition of the Preferred Stock or Common Stock. If the Company
shall have not received such verification within the 180-day period
set forth in the first sentence of this Paragraph (f), then all Rights
held by such Person(s) with respect to whom the exercise thereof has
been suspended shall become null and void as of the Close of Business
on the day on which such 180-day period ends.
Section 10. Preferred Stock Record Date. Each person in whose name
any certificates for a number of shares of Preferred Stock (or Common
Stock and/or other securities, as the case may be) is issued upon
the exercise of Rights shall for all purposes be deemed to have become
the holder of record of such shares of Preferred Stock (or Common
Stock and/or other securities, as the case may be) represented thereby
on, and such certificates shall be dated the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment
of the Purchase Price (and all applicable transfer taxes) was made,
provided, however, that if the date of such surrender and payment
is a date upon which the Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are
closed, such Person shall be deemed to have become the record holder
of such shares on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Stock (or Common Stock and/or
other securities, as the case may be) transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Rights Certificate shall not be entitled to any rights
as a stockholder of the Company with respect to shares for which the
Rights may be exercisable, including, without limitation, the right
to vote, to receive dividends or other distributions, or to exercise
any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number, and Kind of Shares
or Number of Rights. The Purchase Price, the number and kind of
shares covered by each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this Section
11.
(a) (i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Stock payable
in shares of Preferred Stock; (B) subdivide the outstanding Preferred
Stock; (C) combine the outstanding Preferred Stock into a smaller
number of shares; or (D) issue any shares of its capital stock in
a reclassification of the Preferred Stock (including any such reclassification
in connection with a consolidation or merger in which the Company
is the continuing or surviving corporation), except as otherwise provided
in this Section 11(a) and Section 7(e) and Section 9(f) above, the
Purchase Price in effect at the time of the record date for such dividend
or of the effective date of such subdivision, combination, or reclassification,
and the number of one one-hundredths of a share of Preferred Stock,
or the number of shares of capital stock, as the case may be, issuable
on such date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive,
upon payment of the Purchase Price then if effect, the aggregate number
and kind of shares of Preferred Stock or capital stock, as the case
may be, that, if such Right had been exercised immediately prior to
such date and at a time when the Preferred Stock transfer books of
the Company were open, he would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision,
combination, or reclassification. If an event occurs that would require
an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
below, 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) below.
(ii) In the event that
(A) any Acquiring Person, or any Associate or Affiliate of any
Acquiring Person, at any time after the date of this Agreement, directly
or indirectly, (1) shall merge into the Company or otherwise combine
with the Company and the Company shall be the continuing or surviving
corporation of such merger or combination and the Common Stock of
the Company shall remain outstanding and unchanged; (2) shall, in
one transaction or a series of transactions, transfer any assets to
the Company or to any of its Subsidiaries in exchange (in whole or
in part) for shares of Common Stock, for shares of other equity securities
of the Company, or for securities exercisable for or convertible into
shares of equity securities of the Company (Common Stock or otherwise)
or otherwise obtain from the Company, with or without consideration,
any additional shares of such equity securities or securities exercisable
for or convertible into shares of such equity securities (other than
pursuant to a pro rata distribution to all holders of Common Stock);
(3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer,
or otherwise acquire or dispose of, in one transaction or a series
of transactions, to, from, or with (as the case may be) the Company
or any of its Subsidiaries, assets on terms and conditions less favorable
to the Company than the Company would be able to obtain in arm's-length
negotiation with an unaffiliated third party, other than pursuant
to a transaction set forth in Section 13(a) below; (4) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer, or otherwise
acquire or dispose of, in one transaction or a series of transactions,
to, from, or with (as the case may be) the Company or any of its Subsidiaries
(other than incidental to the lines of business, if any, engaged in
as of the date hereof between the Company and such Acquiring Person
or Associate or Affiliate) assets having an aggregate fair market
value of more than $1,000,000, other than pursuant to a transaction
set forth in Section 13(a) below; (5) shall receive any compensation
from the Company or any of its Subsidiaries other than compensation
for full-time employment as a regular employee at rates in accordance
with the Company's (or its Subsidiaries') past practices; or (6) shall
receive the benefit, directly or indirectly (except proportionately
as a stockholder and except if resulting from a requirement of law
or governmental regulation), of any loans, advances, guarantees, pledges,
or other financial assistance or any tax credits or other financial
assistance or any tax credits or other financial assistance or any
tax credits or other tax advantage provided by the Company or any
of its Subsidiaries;
(B) any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary
of the Company, or any Person or entity organized, appointed, or established
by the Company for or pursuant to the terms of any such plan), alone
or together with its Affiliates or Associates, shall, at any time
after the Rights Dividend Declaration Date, become an Acquiring Person
unless the event causing the Person to become an Acquiring Person
is a transaction set forth in Section 13(a) below, or is an acquisition
of shares of Common Stock pursuant to a tender offer or an exchange
offer for all outstanding shares of Common Stock at a price and on
terms determined by the Continuing Directors, after receiving advice
from one or more nationally recognized investment banking firms, to
be (1) at a price that is fair to stockholders (taking into account
all factors that such members of the Board deem relevant including,
without limitation, prices that could reasonably be achieved of the
Company or its assets were sold on an orderly basis designed to realize
maximum value); and (2) otherwise in the best interests of the Company
and its stockholders; or
(C) during such time as there is an Acquiring Person, there shall
be any reclassification of securities (including any reverse stock
split), recapitalization of the Company, merger or consolidation of
the Company with any of its Subsidiaries, or any other transaction
or series of transactions involving the Company or any of its Subsidiaries,
other than a transaction or transactions to which the provisions of
Section 13(a) below apply (whether or not with or into or otherwise
involving an Acquiring Person) that has the effect, directly or indirectly,
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 that is directly or indirectly beneficially owned
by any Acquiring Person or any Associate or Affiliate of any Acquiring
Person, then, promptly following five days after the date of the occurrence
of an event described in Section 11(a)(ii) (B) above and promptly
following the occurrence of any event described in Section 11(a)(ii)
(A) or (C) above, each holder of a Right (except as provided below
and in Section 7(e) and Section 9(f) above) shall thereafter have
the right to receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, in lieu of shares
of Preferred Stock, such number of validly authorized and issued,
fully paid and non-assessable shares of Common Stock of the Company,
not subject to any liens, encumbrances, rights of first refusal, or
other adverse claims, as shall be obtained by (x) multiplying the
then current Purchase Price by the then number of one one-hundredths
of a share of Preferred Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event (which
product shall thereafter be the "Purchase Price" per Right with respect
to the Common Stock); and (y) dividing the product obtained in Clause
(x) above by 50% of the Current Market Price (as determined pursuant
to Paragraph (d) below) per share of Common Stock on the date of such
first occurrence (such number of shares of Common Stock for which
a Rights is exercisable following such first occurrence shall hereinafter
be referred to as the "Adjustment Shares").
(iii) In the event that the number of shares of Common Stock that
are authorized by the Company's certificate of incorporation but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing Subparagraph (ii)
of this Section 11(a), the Company shall (A) determine the excess
of (1) the value of the Adjustment Shares issuable upon the exercise
of a Right (the "Current Value") over (2) the Purchase Price (such
excess being hereinafter referred to as the "Spread"); and (B) with
respect to each Right, make adequate provision to substitute for the
Adjustment Shares, upon payment of the applicable Purchase Price,
(1) cash, (2) a reduction in the Purchase Price, (3) Common Stock
or other equity securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock that the Continuing
Directors have deemed to have the same value as shares of Common Stock
(such shares of preferred stock being hereinafter referred to as "Common
Stock Equivalents")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having an aggregate
value equal to the Current Value, where such aggregate value has been
determined by the Continuing Directors based upon the advice of a
nationally recognized investment banking firm selected by the Board
with the concurrence of the Continuing Directors, provided, however,
that if the Company shall not have made adequate provision to deliver
such consideration pursuant to Clause (B) above within 30 days following
the later of (x) the first occurrence of a Section 11 (a) (ii) Event;
or (y) the date on which the Company's right of redemption pursuant
to Section 23(a) below expires (the later of (x) and (y) being hereinafter
referred to as the "Section 11 (a) (ii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of
a Right and without requiring payment of the Purchase Price, shares
of Common Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the
Spread. If the Continuing Directors shall determine in good faith
that it is likely that sufficient additional shares of Common Stock
could be authorized for issuance upon exercise in full of the Rights,
the 30-day period set forth above may be extended to the extent necessary,
but not more than 90 days after the Section 11 (a)(ii) Trigger Date,
in order that the Company may seek stockholder approval for the authorization
of such additional shares (such period, as it may be extended, the
"Substitution Period"). To the extent that the Company determines
that some action need be taken pursuant to the first and/or second
sentences of this Section 11(a)(iii), the Company (x) shall provide,
subject to Section 7(e) and Section 9(f) above, that such action shall
apply uniformly to all outstanding Rights; and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional shares and/or
to decide the appropriate form of distribution to be made pursuant
to such first sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension
is no longer in effect. For purposes of this Section 11(a)(iii),
the value of the Common Stock shall be the Current Market Price (as
determined pursuant to Paragraph (d) below) per share of the Common
Stock on the Section 11(a)(ii) Trigger Date and the value of any Common
Stock Equivalent shall be deemed to have the same value as the Common
Stock on such date.
(iv) The right to buy Common Stock of the Company pursuant to Section
11(a)(ii) above shall not arise as a result of any Person becoming
an Acquiring Person through an acquisition of Common Stock pursuant
to a Permitted Offer.
(b) If the Company shall fix a record date for the issuance of rights,
options, or warrants to all holders of Preferred Stock entitling them
to subscribe for or purchase for a period expiring within 45 calendar
days after such record date Preferred Stock (or shares having the
same rights, privileges, and preferences as the shares of Preferred
Stock) ("Equivalent Preferred Stock") or securities convertible into
Preferred Stock or Equivalent Preferred Stock at a price per share
of Preferred Stock or per share of Equivalent Preferred Stock (or
having a conversion price per share, if a security convertible into
Preferred Stock or Equivalent Preferred Stock) less than the Current
Market Price (as determined in Section 11(d) below), the Purchase
Price to be in effect after such date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares
of preferred Stock outstanding on such record date, plus the number
of shares of Preferred Stock, Equivalent Preferred Stock, and/or Preferred
Stock or Equivalent Preferred Stock (that would result from the complete
conversion of the convertible securities) to be offered, and the denominator
of which shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of shares of Preferred Stock,
Equivalent Preferred Stock, and/or Preferred Stock or Equivalent Preferred
Stock (that would result from the complete conversion of the convertible
securities) that theoretically could be purchased, irrespective of
whether such shares would actually be available for purchase, upon
the payment of the Current Market Price (rather than the subscription,
exercise, or conversion price). In case such subscription, exercise,
or conversion price may be paid by delivery of consideration part
or all of which may be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Continuing
Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and
the holders of the Rights. Shares of Preferred Stock owned by or
held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed, and in the
event that such rights or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price that would then be
in effect of such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution
to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company
is the continuing corporation) of evidences of indebtedness, cash
(other than a regular quarterly cash dividend out of the earnings
or retained earnings of the Company), assets (including any stock
dividend other than a dividend of shares of Preferred Stock), or subscription
rights or warrants (excluding those referred to in paragraph (b) above),
the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the Current Market Price (as determined pursuant to Paragraph (d)
below) per share of Preferred Stock on such record date, less the
fair market value (as determine in good faith by the Continuing Directors,
whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the cash, assets, or evidences of
indebtedness so to be distributed or of such subscription rights or
warrants applicable to a share of Preferred Stock, and the denominator
of which shall be such Current Market Price per share of Preferred
Stock. In case the Company shall fix a record date for a distribution
to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company
is the continuing corporation) of additional shares of Preferred Stock,
the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the number of shares of Preferred Stock outstanding on such record
date and the denominator of which shall be the total number of shares
of Preferred Stock that will be outstanding following the distribution.
Such adjustments shall be made successively whenever such a record
date is fixed, and in the event that such distribution is not so made,
the Purchase Price shall be adjusted to be the Purchase Price that
would have been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) above, the "Current
Market Price" per shares of Common Stock on any date shall be deemed
to be the average of the daily Closing Prices (as such term is hereinafter
defined) per share of such Common Stock for the 30 consecutive Trading
Days (as such term is hereinafter defined) immediately prior to such
date, and for purposes of computations made pursuant to Section 11(a)(iii)
above, the "Current Market Price" per share of Common Stock on any
date shall be deemed to be the average of the daily Closing Prices
per share of such Common Stock for the 10 consecutive Trading Days
immediately following such date, provided, however, that in the event
that the Current Market Price per share of the Common Stock is determined
during a period following the announcement by the issuer of such Common
Stock of (A) a dividend or distribution on such Common Stock payable
in shares of such Common Stock or securities convertible into shares
of such Common Stock (other than the Rights); or (B) any subdivision,
combination, or reclassification of such Common Stock, and prior to
the expiration of the requisite 30 Trading Day or 10 Trading Day period,
as set forth above, 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 Market
Price" shall be properly adjusted to take into account ex-dividend
trading so as to include the value of the dividend. The "Closing
Price" for each day shall be the last sale price, regular way; or,
in case no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange;
or, if the shares of Common Stock are not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on
the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading; or, if the shares
of Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price; or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use; or,
if on any such date the shares of Common Stock are not quoted by any
such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the
Common Stock selected by the Board; or, if on any such date no market
maker is making a market in the Common Stock, the fair value of such
shares on such date as determined in good faith by Continuing Directors.
The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are listed
or admitted to trading is open for the transaction of business; or,
if the shares of Common Stock are not listed or admitted to trading
on any national securities exchange, a Business Day. If the Common
Stock is not publicly held or not so listed or traded, "Current Market
Price" per share shall mean the fair value per shares as determined
in good faith by the Continuing Directors, whose determination shall
be described in a statement filed with the Rights Agent and shall
be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "Current
Market Price" per share of Preferred Stock shall be determined in
the same manner as set forth above for the Common Stock in Subparagraph
(i) of this Section 11(d) (other than the last sentence thereof).
If the Current Market Price per share of Preferred Stock cannot be
determined in the manner provided above, or if the Preferred Stock
is not publicly held or listed or traded in a manner described in
Subparagraph (i) of this Section 11(d), the "Current Market Price"
per share of Preferred Stock shall be conclusively deemed to be an
amount equal to 100 (as such number may be appropriately adjusted
for such events as stock splits, stock dividends, and recapitalization
with respect to the Common Stock occurring after the date of this
Agreement) multiplied by the Current Market Price per share of the
Common Stock. If neither the Common Stock nor the Preferred Stock
is publicly held or so listed or traded, "Current Market Price" per
share of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Continuing Directors, whose determination
shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price,
provided, however, that any adjustments which by reason of this Paragraph
(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest
one one-hundredth of a share of Common Stock or other share or one
ten- thousandth of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Paragraph (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 that mandates
such adjustment; or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii)
above or Section 13(a) below, the holder of any Rights thereafter
exercised shall become entitled to receive any shares of capital stock
other than Preferred Stock, then the number of such other shares so
receivable upon exercise of any Rights and the Purchase Price thereof
shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions of Sections
7, 9, 10, 11, 13, and 14 of this Agreement with respect to the Preferred
Stock, which shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of
one one-hundredths of a share of Preferred Stock purchasable from
time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Paragraph (i) below, upon each adjustment of the Purchase Price
as a result of the calculations made in Paragraphs (b) and (c) above,
each Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at such adjusted
Purchase Price, that number of one one-hundredths of a share of Preferred
Stock (calculated to the nearest one ten-thousandth) obtained by (i)
multiplying (A) the number of one one-hundredths of a share of Preferred
Stock covered by a Right immediately prior to such adjustment; by
(B) the Purchase Price in effect immediately prior to such adjustment
of the Purchase Price; and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of adjustment of
the Purchase Price to adjust the number of Rights. In lieu of, but
not in addition to, the adjustment in the number of one one-hundredths
of a share of Preferred Stock made in Paragraph (h) above, the Company
may adjust the number of Rights held by each record holder thereof.
Each of the Rights outstanding after the adjustment of the number
of Rights shall thereafter be exercisable for the number of one one-hundredths
of a share of Preferred Stock for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record immediately prior
to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one ten-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to the
adjustment of the Purchase Price by the Purchase Price in effect immediately
after the adjustment of the Purchase Price. The Company shall make
a public announcement of its intention to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Rights Certificates have been issued, shall be at least
10 days later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the number
of Rights pursuant to this Paragraph (i), the Company shall, as promptly
as practical, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject
to Section 14 below, the additional Rights to which such holders shall
be entitled as a result of such adjustment; or, at the option of the
Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof,
if required by the Company, new Rights Certificates evidencing all
the Rights to which such holders shall be entitled after such adjustment.
Rights Certificates so to be distributed shall be issued, executed,
and countersigned in the manner provided for in Section 5(a) above
and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-hundredths of a shares of Preferred Stock
issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase
Price per one one-hundredth of a share of Preferred Stock that were
expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then stated value, if any, of the number
of shares of Preferred Stock issuable upon exercise of the Rights,
the Company shall take any corporate action that may, in the opinion
of its counsel, be necessary in order that the Company may validly
and legally issue such number of fully paid and nonassessable shares
of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence
of such event the issuance to the holder of any Right exercised after
such record date the number of shares of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon
such exercise over and above the number of shares of preferred Stock
and other capital stock or securities of the Company, if any, issuable
upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment, provided, however, that the Company shall deliver
to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares (fractional
or otherwise) or securities upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled, but is not required, to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that in their good
faith judgment the Board shall determine to be advisable in order
that any (i) consolidation or subdivision of the Preferred Stock;
(ii) issuance wholly for cash of any shares of Preferred Stock at
less than the Current Market Price; (iii) issuance wholly for cash
of shares of Preferred Stock or securities that by their terms are
convertible into or exchangeable for shares of Preferred Stock; (iv)
stock dividends; or (v) issuance of rights, options, or warrants referred
to in this Section 11, hereafter made by the Company to holders of
its Preferred Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it will not, at any time
after the Distribution Date, (i) consolidate with or merge with or
into any other Person (other than a subsidiary of the Company in a
transaction that complies with Section 11(o) herein); or (ii) sell
or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and all
of its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if
(A) at the time of or immediately after such consolidation, merger,
or sale there would be any rights, warrants, or other instruments
or securities outstanding or agreements in effect that would substantially
diminish or otherwise eliminate the benefits intended to be afforded
by the Rights; or (B) prior to, simultaneously with, or immediately
after such consolidation, merger, or sale, the stockholders of the
Person who constitute, or would constitute, the "Principal Party"
for purposes of Section 13(a) below would otherwise receive a distribution
of Rights previously owned by such Person or any of its Affiliates
and Associates
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23, Section 24,
or Section 27 below, take (or permit any Subsidiary to take) any action,
if at the time such action is taken, it is reasonably foreseeable
that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding,
in the event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare a
dividend on the outstanding shares of Common Stock payable in shares
of Common Stock; (ii) subdivide the outstanding shares of Common Stock;
or (iii) combine the outstanding shares of Common Stock into a smaller
number of shares, the number of Rights associated with each share
of Common Stock then outstanding, or issued or delivered thereafter
but prior to the Distribution Date, shall be proportionately adjusted
so that the number of Rights thereafter associated with each share
of Common Stock following any such event shall equal the result obtained
by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction, the numerator
of which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator
of which shall be the total number of shares of Common Stock outstanding
immediately following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 above or
Section 13 below, the Company shall (a) promptly prepare a certificate
setting forth such adjustment and a brief statement of the facts
accounting for such adjustment; (b) promptly file with the Rights
Agent, and with each transfer agent for the Preferred Stock and the
Common Stock, a copy of such certificate; and (c) mail a brief summary
thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing shares
of Common Stock) in accordance with Section 25 below. The Rights
Agent shall be fully protected in relying on any such certificate
and on any adjustment therein contained.
Section 13. Consolidation, Merger, or Sale or Transfer of Assets
or Earning Power.
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, (i) the Company shall consolidate with,
or merge with or into, any other Person (other than a Subsidiary of
the Company in a transaction that complies with Section 11(o) hereof),
and the Company shall not be the continuing or surviving corporation
of such consolidation or merger; (ii) any Person (other than a Subsidiary
of the Company in a transaction that complies with Section 11(o) hereof)
shall consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such consolidation
or merger and, in connection with such consolidation or merger, all
or part of the outstanding shares of Common Stock shall be changed
into or exchanged for stock or other securities of any other Person
or cash or any other property; or (iii) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one transaction or a series of transactions,
assets or earning power aggregating more than 50% of the assets or
earning power of the Company and all of its Subsidiaries (taken as
a whole) to any Person or Persons (other than the Company or any Subsidiary
of the Company in one or more transactions each of which complies
with Section 11(o) hereof), then, and in each such case (except as
may be contemplated by Paragraph (d) below), proper provision shall
be made so that (A) each holder of a Right, except as provided in
Section 7(e) and Section 9(f) above, shall thereafter have the right
to receive, upon the exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, in lieu of shares
of Preferred Stock, such number of validly authorized and issued,
fully paid, non-assessable, and freely tradeable shares of Common
Stock of the Principal Party (as such term is hereinafter defined),
not subject to any liens, encumbrances, rights of first refusal, or
other adverse claims, as shall be obtained by (1) multiplying the
Purchase Price by the number of one one-hundredths of a share of Preferred
Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event
has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such one one-hundredths of a share for which
a Right was exercisable immediately prior to the first occurrence
of a Section 11(a)(ii) Event by the Purchase Price in effect immediately
prior to such first occurrence); and (2) dividing that product (which,
following the first occurrence of a Section 13 Event, shall be referred
to as the "Purchase Price" per Right with respect to the Common Stock
of the Principal Party) by 50% of the Current Market Price (determined
pursuant to Section 11(d) above) per share of the Common Stock of
such Principal Party on the date of consummation of such Section 13
Event; (B) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the obligations
and duties of the Company pursuant to this Agreement; (C) the term
"Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section 11 above
shall apply only to such Principal Party following the first occurrence
of a Section 13 Event; (D) such Principal party shall take such steps
(including, but not limited to, the reservation of a sufficient number
of shares of its Common Stock) in connection with the consummation
of any such transaction as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may
be, in relating to its shares of Common Stock thereafter deliverable
upon the exercise of the Rights; and (E) the provisions of Section
11(a)(ii) above shall be of no effect following the first occurrence
of any Section 13 Event
(b) "Principal Party" shall mean either of the following:
(i) in the case of any transaction described in Subparagraph (i)
or (ii) of Section 13(a) above, the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted
in such merger or consolidation, and if no securities are so issued,
the Person that is the other party to such merger or consolidation;
and
(ii) in the case of any transaction described in Subparagraph (iii)
of Section 13(a) above, the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant
to such transaction or transactions; provided, however, that in any
such case, (A) if the Common Stock of such Person is not at such time
and has not been continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act, and such Person is a direct
or indirect Subsidiary of another Person the Common Stock of which
is and has been so registered, "Principal Party" shall refer to such
other Person; and (B) in case such Person is a Subsidiary, directly
or indirectly, of more than one Person, the Common Stocks of two or
more of which are and have been so registered, "Principal Party" shall
refer to whichever of such Persons is the issuer of the Common Stock
having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger,
sale, statutory share exchange, or transfer unless the Principal Party
shall have a sufficient number of authorized shares of its Common
Stock that have not been issued or reserved for issuance to permit
the exercise in full of the Rights in accordance with this Section
13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in Paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as is practical after
the date of any consolidation, merger, or sale of assets mentioned
in Paragraph (a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise
of the Rights on an appropriate form, and will use its best efforts
to cause such registration statement to (A) become effective as soon
as is practical after such filing; and (B) remain effective (with
a prospectus at all times meeting the requirements of the Act) until
the Expiration Date; and
(ii) use its best efforts to qualify or register the Rights and
the securities purchasable upon exercise of the Rights under any blue
sky laws of such jurisdictions as may be necessary or appropriate;
and
(iii) deliver to holders of the Rights historical financial statements
for the Principal Party and each of its Affiliates that comply in
all respects with the requirements for registration on Form 10 under
the Exchange Act; and
(iv) use its best efforts if the Common Stock of the Principal
Party shall become listed on a national securities exchange to list
(or continue the listing of) the Rights and the securities purchasable
upon exercise of the Rights on such securities exchange and, if the
Common Stock of the Principal Party shall not be listed on a national
securities exchange to cause the Rights and the securities purchasable
upon exercise of the Rights to be reported by NASDAQ or such other
system then in use; and
(v) obtain waivers of any rights of first refusal or preemptive
rights in respect of the shares of Common Stock of the Principal Party
subject to purchase upon exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to successive
mergers, consolidations, statutory share exchanges, sales, or other
transfers. In the event that a Section 13 Event shall occur at any
time after the occurrence of a Section 11(a) (ii) Event, the Rights
that have not theretofore been exercised shall thereafter become exercisable
in the manner described in Section 13(a) above.
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in Subparagraphs
(i) and (ii) of Section 13(a) if (i) such transaction is consummated
with a Person or Persons who acquired shares of Common Stock pursuant
to a Permitted Offer or a cash tender offer for all outstanding shares
of Common Stock that complies with the provisions of Section 11(a)(ii)
(B) above (or a wholly-owned subsidiary of any such Person or Persons);
(ii) the price per share of Common Stock offered in such transaction
is not less than the price per share of Common Stock paid to all holders
of shares of Common Stock whose shares were purchased pursuant to
such Permitted Offer or such cash tender offer; and (iii) the form
of consideration being offered to the remaining holders of shares
of Common Stock pursuant to such transaction is the same as the form
of consideration paid pursuant to such Permitted Offer or such cash
tender offer. Upon consummation of any such transaction contemplated
by this Section 13(d), all Rights hereunder shall expire.
(e) If, for any reason, the Rights cannot be exercised for Common
Stock of such Principal Party as provided in Section 13(a), then each
holder of Rights shall have the right to exchange its Rights for cash
from such Principal Party in an amount equal to the number of shares
of Common Stock that it would otherwise be entitled to purchase times
50% of the current per share market price, as determined pursuant
to Section 11(d) hereof, of such Common Stock of such Principal Party.
If, for any reason, the foregoing formulation cannot be applied to
determine the cash amount into which the Rights are exchangeable,
then the Board of Directors, based upon the advice of one or more
nationally recognized investment banking firms, and based upon the
total value of the Company, shall determine such amount reasonably
and with good faith to the holders of Rights. Any such determination
shall be final and binding on the Rights Agent.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(p)
above, or to distribute Rights Certificates that evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to
the registered holders of the Rights Certificates with regard to which
such fractional Rights would otherwise be issuable an amount in cash
equal to the same fraction of the Current Market Value of a whole
Right. For purposes of this Section 14(a), the "Current Market Value"
of a whole Right shall be the Closing Price of the Rights for the
Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. For purposes of this Section
14, the "Closing Price" of the Rights 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; or, of 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 Continuing Directors.
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock upon exercise of the Rights (other than the integral
multiples of one one-hundredth of a share) or to distribute certificates
that evidence fractional shares of Preferred Stock (other than integral
multiples of one one-hundredth of a share). In lieu of fractional
shares of Preferred Stock, the Company may pay to the registered holders
of Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the Current
Market Value of one share of Preferred Stock. For purposes of this
Section 14(b), the "Current Market Value" of one share of Preferred
Stock shall be the Closing Price of a share of Preferred Stock (as
determined pursuant to Section 11(d) (ii) above) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of shares of Common Stock
upon exercise of the Rights or to distribute certificates that evidence
fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the Current Market
Value of one share of Common Stock. For purposes of this Section
14(c), the "Current Market Value" of one share of Common Stock shall
be the Closing Price of one share of Common Stock (as determined pursuant
to Section 11(d) (i) above) for the Trading Day immediately prior
to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by this Section
14.
Section 15. Rights of Action. All rights of action in respect of
this Agreement are vested in the respective registered holders of
the Rights Certificates (and, in prior to the Distribution Date, the
registered holders of the Common Stock), and any registered holder
of any Rights Certificate (or, prior to the Distribution Date, of
the Common Stock), without the consent of the Rights Agent or of the
holder of any other Rights Certificate (or, prior to the Distribution
Date, of the capital stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action,
or proceeding against the Company to enforce, or may otherwise act
in respect of, his right to exercise the Rights in the manner provided
in this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief against
actual or threatened violations of the obligations hereunder of any
Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right
by accepting the same consents and agrees with the Company and the
Rights Agent and with every other holder of a Right to all of the
following:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the
principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer,
and with the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) above, the Company
and the Rights Agent may deem and treat the Person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Rights Certificates or the associated
Common Stock certificate made by anyone other than the Company or
the Rights Agent) for all purposes whatsoever, and neither the Company
nor the Rights Agent, subject to the last sentence of Section 7(e)
above, shall be required to be affected by any notice to the contrary;
and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability
to any holder of a Right or other Person as a result of its inability
to perform any of its obligations under this Agreement by reason of
any preliminary or permanent injunction or other order, decree, or
ruling issued by a court of competent jurisdiction or by a governmental,
regulatory, or administrative agency or commission, or any statute,
rule, regulation, or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining performance
of such obligation, provided, however, the Company must use its best
efforts to have any such order, decree, or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends, or be deemed for any purpose the holder of
the number of shares of Preferred Stock or any other securities of
the Company that may at any time be issuable on the exercise of the
Rights represented thereby, nor shall anything contained herein or
in any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a 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 below), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such
Rights Certificate shall have been exercised in accordance with the
provisions of this Agreement.
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 disbursements and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of
its duties hereunder. The Company also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss, liability, or
expenses incurred without negligence, bad faith, or willful misconduct
on the part of the Rights Agent for anything done or omitted by the
Rights Agent in connection with the acceptance and administration
of this Agreement, including the costs and expenses of defending against
any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered, or omitted by it
in connection with its administration of this Agreement in reliance
upon any Rights Certificate or certificate for Common Stock or for
other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed
by it to be genuine and to be signed, executed, and, where necessary,
verified or acknowledged, by the proper Person or Persons.
Section 19. Merger, 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 further act on the part of any of the parties
hereto, provided, however, that such corporation must be eligible
for appointment as a successor Rights Agent under the provisions of
Section 21 below. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the
Rights Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of
a predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
or in the name of the successor Rights Agent; and in all such cases,
such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall not
have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and
in all such cases, such Rights Certificates will have the full force
provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following
terms and conditions, all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (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 (including, without limitation, the identity of any Acquiring
Person and the determination of "Current Market Price") be proved
or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of
the Board, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary, or any Assistant Secretary of the Company
and delivered to the Rights Agent. 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 Rights Certificates or be required to verify the same (except
as to its countersignature on such Rights Certificates), but all such
statements and recitals are and shall be deemed to have been made
by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach
by the Company of any covenant or condition contained in this Agreement
or in any Rights Certificate; nor shall it be responsible for any
adjustment required under the provisions of Section 11 or Section
13 above or be responsible for the manner, method, or amount of any
such adjustment or the ascertainment of the existence of facts that
would require any such adjustment (except with respect to the exercise
of Rights evidenced by Rights Certificates after actual notice of
any such adjustment); nor shall it by any act hereunder be deemed
to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock or Preferred Stock to be
issued pursuant to this Agreement or any Rights Certificate or as
to whether any shares of Common Stock or Preferred Stock will, when
so issued, be validly authorized and issued, fully paid, and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge,
and deliver or cause to be performed, executed, acknowledged, and
delivered all such further and other acts, instruments, and assurances
as may reasonably be required by the Rights Agent for the carrying
out or performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder
from the Chairman of the Board, the President, any Vice President,
the Secretary, any Assistant Secretary, the Treasurer, or any Assistant
Treasurer of the Company, and to apply to such officers for advice
or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in good
faith in accordance with instructions of any such officer.
(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 the 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 that reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk
or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificates surrendered to the
Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative
response to Clause 1 and/or 2 of such Rights Certificate, the Rights
Agent shall not take any further action with respect to such requested
exercise of transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and
to each transfer agent of the Common Stock and Preferred Stock by
registered or certified mail and to the holders of the Rights Certificates
by first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon 30 days' notice in writing mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Stock and Preferred Stock by registered
or certified mail and to the holders of the Rights Certificates by
first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Rights Certificate (who shall, with such notice, submit
his Rights Certificate for inspection by the Company), then any registered
holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation in good standing organized and doing business
under the laws of the United States or of any state that 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 $ 100,000,000 or (b) an Affiliate of a corporation
described in clause (a) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights,
duties, and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and shall 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 Stock and the Preferred
Stock, and mail a notice thereof in writing to the registered holders
of the Rights Certificates. Failure to give any notice provided for
in this Section 21, however, or any defect therein, shall not affect
the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case
may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Rights Certificates evidencing
Rights in such form as may be approved by the Board to reflect any
adjustment or change in the Purchase Price and the number or kind
or class of shares or other securities or property purchasable under
the Rights Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or sale
of shares of Common Stock following the Distribution Date and prior
to the redemption or expiration of the Rights, the Company (a) shall,
with respect to shares of Common Stock so issued or sold pursuant
to the exercise of stock options or under any employee plan or arrangement,
or upon the exercise, conversion, or exchange of securities hereinafter
issued by the Company; and (b) may, in any other case, if deemed necessary
or appropriate by the Board, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance
or sale, provided, however, that (i) no such Rights Certificate shall
be issued if, and to the extent that, the Company shall be advised
by counsel that such issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued; and (ii) no such Rights Certificate
shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board may, at its option, at any time prior to the earlier
of (i) the Close of Business on the 10th calendar day following the
Stock Acquisition Date or such later date as may be determined by
action of a majority of Continuing Directors then in office and publicly
announced by the Company, (or, if the Stock Acquisition Date shall
have occurred prior to the Record Date, the Close of Business on the
10th calendar day following the Record Date or such later date as
may be determined by action of a majority of Continuing Directors
then in office and publicly announced by the Company); or (ii) the
Final Expiration Date, redeem all but not less than all the then outstanding
Rights at redemption price of $0.01 per Right in cash, or by delivery
of or exchange for shares of Common Stock (including fractional shares)
or other consideration (including, but not limited to, depository
units representing shares of Common Stock or fractions thereof) deemed
in good faith to have a fair market value equal to $0.01 per Right
by the Board, as such amount may be appropriately adjusted to reflect
any stock split, stock dividend, or similar transaction occurring
after the date of this Agreement (such redemption price being hereinafter
referred to as the "Redemption Price"), provided, however, if the
Board authorizes redemption of the Rights and (x) such authorization
occurs on or after the time a Person becomes an Acquiring Person;
or (y) such authorization occurs on or after the date of a change
(resulting from a proxy or consent solicitation) in a majority of
the directors in office at the commencement of such solicitation if
any Person who is a participant in such solicitation has stated (or,
if upon the commencement of such solicitation, a majority of the Board
has determined in good faith) that such Person (or any of its Affiliates
or Associates) intends to take, or may consider taking, any action
that would result in such Person becoming an Acquiring Person or that
would cause the occurrence of a Triggering Event, then there must
be at least one Continuing Director then in office and such authorization
shall require the concurrence of a majority of the then-remaining
Continuing Directors, provided further, however, that if, following
the occurrence of a Stock Acquisition Date and following the expiration
of the right of redemption hereunder but prior to any Triggering Event,
(1) a Person who is an Acquiring Person shall have transferred or
otherwise disposed of a number of shares of Common Stock in one transaction
or series of transactions, not directly or indirectly involving the
Company or any of its Subsidiaries, that did not result in the occurrence
of a Triggering Event such that such Person is thereafter a Beneficial
Owner of 10% or less of the outstanding shares of Common Stock; and
(2) there is no other Person or Persons, immediately following the
occurrence of the event described in Clause (1), who are Acquiring
Person(s), then the right of redemption shall be reinstated and thereafter
be subject to the provisions of this Section 23. Notwithstanding
anything contained in this Agreement to the contrary, the Rights shall
not be exercisable after the first occurrence of a Section 11(a) (ii)
Event until such time as the Company's right of redemption hereunder
has expired. The Company may, at its option, pay the Redemption Price
in cash, shares of Common Stock (based on the Current Market Price
of the Common Stock, as defined in Section 11(d) above, at the time
of redemption), or any other form of consideration deemed appropriate
by the Board.
(b) Immediately upon the action of the Board ordering the redemption
of the Rights, evidence of which shall have been filed with the Rights
Agent, and without any further action and without any notice, the
right to exercise the Rights will terminate, and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price
for each Right so held. Promptly after the action of the Board ordering
the redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at each holder's
last address as it appears upon the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the Transfer
Agent for the Common Stock. Any notice that is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made.
(c) Notwithstanding the foregoing, if no Continuing Directors are
then in office, any action requiring concurrence of the Continuing
Directors shall nevertheless be, and be deemed to be, duly approved
if such action is approved (at a meeting of stockholders duly called
and held upon at least 30 days' prior written notice to the stockholders)
by the affirmative votes of a majority of the outstanding Common Stock
of the Company, including, if at such time there is an Acquiring Person,
the affirmative votes of the holders of at least 80% of all outstanding
Common Stock of the Company held as of the record date for such meeting
by persons other than such Acquiring Person.
Section 24. Exchange.
(a) Subject to applicable laws, rules, and regulations, and subject
to subsection (c) below, the Company may, at its option, by majority
vote of the Board and a majority vote of the Continuing Directors,
at any time after the occurrence of a Section 11(a) (ii) Event, exchange
all or part of the then outstanding and exercisable Rights (which
shall not include Rights that have become void pursuant to the provisions
of Section 7(e) hereof) for Common Stock at an exchange ratio of one
(1) share of Common Stock per Right, appropriately adjusted to reflect
any stock split, stock dividend, or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter referred
to as the "Ratio of Exchange"). Notwithstanding the foregoing, the
Board shall not be empowered to effect such exchange at any time after
any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company, or any such Subsidiary,
or any entity holding Common Stock for or pursuant to the terms of
any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Common
Stock then outstanding.
(b) Immediately upon the action of the Board of Directors ordering
the exchange of any Rights pursuant to subsection (a) of this Section
24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter
of a holder of such rights shall be to receive that number of shares
of Common Stock equal to the number of such Rights held by such holder
multiplied by the Ratio of Exchange. The Company shall give public
notice of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity
of such exchange. The Company shall mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which
is mailed in the manner herein provided shall be deemed given, whether
or not the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the Common Stock for
Rights will be effected and, in the event of any partial exchange,
the number of Rights that will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of Common
Stock issued but not outstanding, or authorized but unissued, to permit
any exchange of Rights as contemplated in accordance with Section
24(a), the Company shall either take such action as may be necessary
to authorize additional Common Stock for issuance upon exchange of
the Rights or alternatively, at the option of a majority of the Board,
with respect to each Right (i) pay cash in an amount equal to the
Current Value (as hereinafter defined), in lieu of issuing Common
Stock in exchange therefor, or (ii) issue debt or equity securities
or a combination thereof, having a value equal to the Current Value
(as defined below), in lieu of issuing Common Stock in exchange for
each such Right, where the value of such securities shall be determined
by a nationally recognized investment banking firm selected by the
Board by majority vote of the Board, or (iii) deliver any combination
of cash, property, Common Stock and/or other securities having a value
equal to the Current Value in exchange for each Right. For purposes
of this Section 24(c) only, the Current Value shall mean the product
of the current per share market price of Common Stock (determined
pursuant to Section 11(d) on the date of the occurrence of the event
described above in subparagraph (a)) multiplied by the number of shares
of Common Stock for which the Right otherwise would be exchangeable
if there were sufficient shares available. To the extent that the
Company determines that some action need be taken pursuant to clauses
(i), (ii), or (iii) of this Section 24(c), the Board may temporarily
suspend the exercisability of the Rights for a period of up to sixty
(60) days following the date on which the event described in Section
24(a) shall have occurred, in order to seek any authorization of additional
shares of Common Stock and/or to decide the appropriate form of distribution
to be made pursuant to the above provision and to determine the value
thereof. In the event of any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights
has been temporarily suspended.
(d) The Company shall not be required to issue fractions of shares
of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of such fractional shares of Common
Stock, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional shares of Common
Stock would otherwise be issuable, an amount in cash equal to the
same fraction of the current per share market value of a whole share
of Common Stock (as determined pursuant to the second sentence of
Section 11(d) hereof).
(e) The Company may, at its option, by majority vote of the Board,
at any time before any Person has become an Acquiring Person, exchange
all or part of the then outstanding Rights for rights of substantially
equivalent value, as determined reasonably and with good faith by
the Board, based upon the advice of one or more nationally recognized
investment banking firms.
(f) Immediately upon the action of the Board ordering the exchange
of any Rights pursuant to subsection (e) of this Section 24 and without
any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of
such Rights shall be to receive that number of rights in exchange
therefor as has been determined by the Board in accordance with subsection
(e) above. The Company shall give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company
shall mail a notice of any such exchange to all of the holders of
such Rights at their last addresses as they appear upon the registry
books of the transfer agent for the Common Stock of the Company.
Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each
such notice of exchange will state the method by which the exchange
of the Rights will be effected.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the Distribution
Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the
holders of Preferred Stock (other than a regular quarterly cash dividend
out of earnings or retained earnings of the Company); (ii) to offer
to the holders of Preferred Stock rights or warrants to subscribe
for or to purchase any additional shares of Preferred Stock or shares
of stock of any class or any other securities, rights, or options;
(iii) to effect any reclassification of the Preferred Stock (other
than a reclassification involving only the subdivision of outstanding
shares of Preferred Stock); (iv) to effect any consolidation or merger
into or with any other Person (other than a Subsidiary of the Company
in a transaction that complies with Section 11(o) above), or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries
to effect any sale or other transfer), in one transaction or a series
of transactions, of more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any other Person
or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o)
above); or (v) to effect the liquidation, dissolution, or winding
up of the Company, then, in each such case, the Company shall give
to each holder of a Rights Certificate, to the extent feasible and
in accordance with Section 26 below, a notice of such proposed action,
which shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Preferred Stock, if any such
date is to be fixed, and such notice shall be so given in the case
of any action covered by Subparagraph (i) or (ii) above at least 20
days prior to the record date for determining holders of the shares
of Preferred Stock for purposes of such action, and in the case of
any such other action, at least 20 days prior to the date of the taking
of such proposed action or the date of participation therein by the
holders of the shares of Preferred Stock whichever shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii) or
Section 13(a) above shall occur, then, in any such case, (i) the Company
shall as soon as practical thereafter give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section
25 below, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under
Section 11(a) (ii) or Section 13(a) above; and (ii) all references
in the preceding paragraph to Preferred Stock shall be deemed thereafter
to refer to Common Stock and/or, if appropriate, other securities.
Section 26. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made
if sent by first-class mail, postage pre-paid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
Jeffersonville Bancorp
Main Street
Jeffersonville, New York 12748
Attention: Dwayne K. Rhodes
Subject to the provisions of Section 21 above, any notice or demand
authorized by this Agreement to be given or made by the Company or
by the holder of any Rights Certificate to or on the Rights Agent
shall be sufficiently given or made if sent by first-class mail, postage
pre-paid, addressed (until another address is filed in writing with
the Company) as follows:
The First National Bank of Jeffersonville
Main Street
Jeffersonville, New York 12748
Attention: Corporate Trust Department
Notices or demand authorized by this Agreement to be given or made
by the Company or the Rights Agent to the holder of any Rights Certificate
(or, if prior to the Distribution Date, to the holder of certificates
representing shares of Common Stock) shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books
of the Company.
Section 27. Supplements and Amendments. Prior to the Distribution
Date the Company and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement without the approval
of any holders of certificates representing shares of Common Stock.
From and after the Distribution Date the Company and the Rights
Agent shall, if the Company so directs, supplement or amend this Agreement
without the approval of any holders of Rights Certificates in order
(a) to cure any ambiguity; (b) to correct or supplement any provision
contained herein that may be defective or inconsistent with any other
provisions herein; (c) to shorten or lengthen any time period hereunder
(which lengthening or shortening, following the occurrence of an event
set forth in Subparagraphs (i) and (ii) of the first proviso to Section
23(a) above, shall be effective only if there are Continuing Directors
and shall require the concurrence of a majority of such Continuing
Directors); or (d) to change or supplement the provisions hereunder
in any manner that the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or Associate
of an Acquiring Person), provided, however, that this Agreement may
not be supplemented or amended to lengthen, pursuant to Subparagraph
(c) of this sentence, (i) a time period relating to when the Rights
may be redeemed at such time as the Rights are not then redeemable;
or (ii) any other time period unless such lengthening is for the purpose
of protecting, enhancing, or clarifying the rights of, and/or the
benefits to, the holders of Rights. Upon the delivery of a certificate
from an appropriate officer of the Company that 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.
Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders
of Common Stock.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors
and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors.
For all purposes of this Agreement, any recalculation of the number
of shares of Common Stock outstanding at any particular time, including
for purposes of determining the particular percentage of such outstanding
shares of Common Stock of which any Person is the Beneficial Owner,
shall be made in accordance with the last sentence of Rule 13-3(d)
(l) (i), or any successor provision thereof, of the General Rules
and Regulations under the Exchange Act. The Board (with, where specifically
provided for herein, the concurrence of the Continuing Directors)
shall have the exclusive power and authority to administer this Agreement
and to exercise all rights and powers specifically granted to the
Board (with, where specifically provided for herein, the concurrence
of the Continuing Directors) or to the Company, or as may be necessary
or advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of
this Agreement; and (ii) make all determinations deemed necessary
or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend this
Agreement). All such actions, calculations, interpretations, and
determinations (including, for purposes of Subparagraph (y) below,
all omissions with respect to the foregoing) that are done or made
by the Board (with, where specifically provided for herein, the concurrence
of the Continuing Directors) in good faith, shall (x) be final, conclusive
and binding on the Company, the Rights Agent, the holders of the Rights,
and all other parties; and (y) not subject the Board or the Continuing
Directors to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the
Rights Agent, and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, registered holders of the Common
Stock) any legal or equitable right, remedy, or claim under this Agreement;
but this Agreement shall be for the sole and exclusive benefit of
the Company, the Rights Agent, and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered holders
of the Common Stock).
Section 31. Severability. If any term, provision, covenant, or restriction
of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, or unenforceable, the remainder
of the terms, provisions, covenants, and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected,
impaired, or invalidated, provided, however, that notwithstanding
anything in this Agreement to the contrary, if any such term, provision,
covenant, or restriction is held by such court or authority to be
invalid, void, or unenforceable and the Board determines in its good
faith judgment that severing the invalid language from this Agreement
would adversely affect the purpose or effect the purpose of this Agreement,
the right of redemption set forth in Section 23 above shall be reinstated
and shall not expire until the Close of Business on the 10th day following
the date of such determination by the Board.
Section 32. Governing Law. This Agreement, each Right, and each
Rights Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of New York and for all purposes
shall be governed by and construed in accordance with the laws of
such state applicable to contracts made and to be performed entirely
within such state, except that the rights and obligations of the Rights
Agent shall be governed by the laws of the United States or, if the
Rights Agent is not a national bank, the State of New York.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall be for
all purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and their respective corporate seals to be hereunder
affixed and attested, all as of the day and year first above written.
Attest: JEFFERSONVILLE BANCORP
By:____________________________ By:____________________________
_________________, Secretary Arthur E. Keesler, President
[CORPORATE SEAL]
Attest: THE FIRST NATIONAL BANK
OF JEFFERSONVILLE
By:____________________________ By:____________________________
___________________, Cashier Raymond L. Walter, President
[CORPORATE SEAL]
CERTIFICATE OF DESIGNATION, PREFERENCES, AND RIGHTS
OF SERIES A PREFERRED STOCK
of
JEFFERSONVILLE BANCORP
Pursuant to Section 502 of the Business Corporation Law
of the State of New York
We, Arthur E. Keesler, President, and John. K. Gempler,
Secretary, of Jeffersonville Bancorp (the "Corporation"), a
corporation organized and existing under the Business Corporation
Law of the State of New York, in accordance with the provisions of
Section 104 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Corporation, the
Board of Directors on July 9, 1996, adopted the following resolution
creating a series of 50,000 shares of preferred stock designated as
Series A Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of
its Certificate of Incorporation, a series of preferred stock of the
Corporation shall be and is hereby created, and that the designation
and amount thereof and the voting powers, preferences, and relative,
participating, optional, and other special rights of the shares of
such series, and the qualifications, limitations, or restrictions
thereof are as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Preferred Stock" and the number of
shares constituting such series shall be 50,000.
Section 2. Dividends and Distributions.
(a) Subject to the prior and superior rights of the holders of any
shares of preferred stock that are senior with respect to dividends,
the holders of shares of Series A Preferred Stock shall be entitled
to receive, when, as, and if declared by the Board of Directors, out of
funds legally available for that purpose, semi-annual dividends
payable in cash on June 30 and December 31 in each year (each such
date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A
Preferred Stock.
(b) The Corporation shall declare a dividend or distribution on
the Series A Preferred Stock as provided in Paragraph (a) above
immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common
Stock), provided, however, that in the event no dividend or
distribution shall have been declared on the Common Stock during
the period between any Semi-Annual Dividend Payment Date and the
next subsequent Semi-Annual Dividend Payment Date, a dividend of
$2.575 per share on the Series A Preferred Stock shall nevertheless
be payable on such subsequent Semi-Annual Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Semi-
Annual Dividend Payment Date next following the date of issue of
such shares of Series A Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Semi-Annual
Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the
date of issue is a Semi-Annual Dividend Payment Date or is a date
after the record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive a semi-annual and
before such Semi-Annual Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from
such Semi-Annual Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of
Series A Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall
be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall
at any time after the date of adoption of this Resolution creating the
Series A Preferred Stock (the "Effective Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock; (ii)
subdivide the outstanding Common Stock; or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in
each such case the number of votes per share to which holders of
shares of Series A Preferred Stock were entitled immediately prior
to such event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Except as otherwise provided herein or by law, the holders
of shares of Series A Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.
(c) If at the time of any annual meeting of stockholders of the
Corporation for the election of directors a default in preference
dividends on any class or series of preferred stock of the
Corporation shall exist, or if at the time of any special meeting of
the holders of the outstanding shares of any one or more series or
classes of preferred stock of the Corporation upon which like voting
rights have been or may be conferred (by reason of dividends payable
on the shares of such other series being in arrears) at which meeting
such holders shall have the right to elect one or more directors of
the Corporation, then the number of directors constituting the Board
of Directors of the Corporation shall be increased by two, and the
holders of record of the outstanding shares of Series A Preferred
Stock shall have the right at any such meeting, voting separately as
a class, to elect by a majority vote on a non-cumulative basis two
new directors of the Corporation to fill such newly created
directorships to serve until the next annual meeting of stockholders
or until their successors are elected and qualified. Such right shall
continue until there are no dividends in arrears upon any class or
series of preferred stock. Each director elected by the holders of
shares of Series A Preferred Stock (herein called a "Series A
Preferred Director") shall continue to serve as such director for the
full term for which he shall have been elected, notwithstanding that
prior to the end of such term a default in preference dividends shall
cease to exist. Any Series A Preferred Director may be removed by,
and shall not be removed except by, the vote of the holders of record
of a majority of the outstanding shares of Series A Preferred Stock,
voting separately as a class, at a meeting of the stockholders, or at
a meeting of only the holders of shares of Series A Preferred Stock
called for that purpose. So long as a default in any preference
dividends on any class or series of preferred stock shall exist, (i)
any vacancy in the office of a Series A Preferred Director may be
filled (except as provided in the following Subparagraph (ii) below)
by a person selected by the remaining Series A Preferred Director by
filing an instrument in writing signed by such remaining Series A
Preferred Director with the Corporation; and (ii) in the case of the
removal of any Series A Preferred Director, the vacancy may be
filled by the vote of the holders of record of a majority of the
outstanding shares of the Series A Preferred Stock, voting
separately as a class, at the same meeting at which such removal
shall be voted. Each director appointed as aforesaid by the
remaining Series A Preferred Directors shall be deemed, for all
purposes hereof, to be a Series A Preferred Director. Whenever the
term of office of the Series A Preferred Directors shall end and a
default in preference dividends shall no longer exist, the number of
directors constituting the Board of Directors of the Corporation
shall be reduced by two. For the purposes hereof, a "default in
preference dividends" on the preferred stock shall be deemed to
exist whenever the amount of accrued dividends upon any class or
series of the preferred stock shall be equivalent to three full semi-
annual dividends or more, and having so occurred, such default shall
be deemed to exist thereafter until, but only until, all accrued
dividends on all such shares of preferred stock of each and every
class and series then outstanding shall have been paid to the end of
the last preceding semi-annual dividend period.
(d) Except as set forth herein, holders of Series A Preferred
Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for taking any
corporate action.
Section 4. Certain Restrictions.
(a) Whenever semi-annual or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are
in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A
Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem, purchase, or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution, or winding up) to the
Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution, or winding up)
with the Series A Preferred Stock, except dividends paid ratably
on the Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
(iii) redeem, purchase, or otherwise acquire for
consideration shares of any stock ranking on a parity (either as
to dividends or upon liquidation, dissolution, or winding up) with
the Series A Preferred Stock, provided that the Corporation may
at any time redeem, purchase, or otherwise acquire shares of
any such parity stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation, or winding up) to the Series A Preferred
Stock;
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock
ranking on a parity with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or
classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could,
under Paragraph (a) of this Section 4, purchase or otherwise acquire
such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of preferred stock and may
be reissued as part of a new series of preferred stock to be created
by resolution or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution, or Winding Up.
(a) Upon any liquidation (voluntary or otherwise), dissolution,
or winding up of the Corporation, no distribution shall be made to
the holders of shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution, or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of
Series A Preferred Stock shall have received $50.51 per share, plus
an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment (the
"Series A Liquidation Preference"). Following the payment of the
full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A
Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i)
the Series A Liquidation Preference by (ii) 100 (as appropriately
adjusted as set forth in Paragraph (c) below to reflect such events
as stock splits, stock dividends, and recapitalizations with respect
to the Common Stock (such number in Subparagraph (ii) being
referred to as the "Adjustment Number")). Following the payment of
the full amount of the Series A Liquidation Preference and the
Common Adjustment in respect of all outstanding shares of Series A
Preferred Stock and Common Stock, respectively, holders of Series A
Preferred Stock and holders of shares of Common Stock shall receive
their ratable and proportionate share of the remaining assets to be
distributed in the ratio of the Adjustment Number to the number one
with respect to such Series A Preferred Stock and Common Stock, on
a per share basis, respectively.
(b) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of
preferred stock, if any, that rank on a parity with the Series A
Preferred Stock, then such remaining assets shall be distributed
ratably to the holders of such parity shares in proportion to their
respective liquidation preferences. In the event that there are not
sufficient assets available to permit payment in full of the Common
Adjustment, then such remaining assets shall be distributed ratably
to the holders of Common Stock.
(c) In the event the Corporation shall at any time after the
Effective Date (i) declare any dividend on Common Stock payable in
shares of Common Stock; (ii) subdivide the outstanding Common
Stock; or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the Adjustment Number in
effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction, the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 7. Consolidation, Merger, etc. In the event that the
Corporation shall enter into any consolidation, merger, combination,
or other transaction in which the shares of Common Stock are
exchanged for or converted into other stock or securities, cash,
and/or any other property, then in any such case the shares of Series
A Preferred Stock shall at the same time be similarly exchanged or
converted in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the aggregate
amount of stock, securities, cash, and/or any other property, as the
case may be, into which or for which each share of Common Stock is
exchanged or converted. In the event that the Corporation shall at
any time after the Effective Date (a) declare any dividend on
Common Stock payable in shares of Common Stock; (b) subdivide the
outstanding Common Stock; or (c) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the
amount set forth in the preceding sentence with respect to the
exchange or conversion of shares of Series A Preferred Stock shall
be adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 8. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable.
Section 9. Ranking. The Series A Preferred Stock shall rank
junior to all other series of the Corporation's preferred stock as to
the payment of dividends and the distribution of assets, unless the
terms of any such series shall provide otherwise.
Section 10. Amendment. The Certificate of Incorporation of the
Corporation shall not be further amended in any manner that would
materially alter or change the powers, preferences, or special rights
of the Series A Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of a majority or more of
the outstanding shares of Series A Preferred Stock, voting
separately as a class.
Section 11. Fractional Shares. Series A Preferred Stock may be
issued in fractions of a share, but only in integral multiples of one
one-hundredth of a share, as may be adjusted from time to time
pursuant to Section 3(a), which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions, and to have
the benefit of all other rights of holders of Series A Preferred
Stock.
IN WITNESS WHEREOF, the Corporation has caused its corporate
seal to be hereunto affixed and this certificate to be signed by its
Chairman of the Board, and the same to be attested by its Secretary,
this 9th day of July, 1996.
____________________________
Arthur E. Keesler, President
[Corporate Seal]
Attest:
___________________________
John K. Gempler, Secretary
SUMMARY OF THE RIGHTS
In General
On July 9, 1996 (the "Declaration Date"), the Board of Directors
of Jeffersonville Bancorp, a New York corporation (the "Company"),
declared a dividend distribution of one purchase right (a "Right" or
collectively the "Rights") for each outstanding share of common
stock, $0.50 par value, of the Company (the "Common Stock") to
stockholders of record at the close of business on July 9, 1996 (the
"Record Date"). Each Right entitles the registered holder thereof to
purchase from the Company following the Distribution Date, as
defined below, one one-hundredth of a share, subject to adjustment,
of Series A Preferred Stock or, upon the occurrence of certain
events described below, Common Stock of the Company or common
stock of an entity that acquires the Company. The description and
terms of the Rights are set forth in the Stockholder Rights
Agreement (the "Rights Agreement"), dated July 9, 1996, between
the Company and First National Bank of Jeffersonville, a national
banking association, as the "Rights Agent."
Distribution Date; Series A Preferred Stock
Initially, the Rights will be attached to the Common Stock, and
no separate certificates representing the Rights ("Rights
Certificates") will be distributed. The Rights will separate from the
Common Stock and a "Distribution Date" will occur upon the earlier
of (i) 10 days following a public announcement that a "Person" (i.e.,
an individual, corporation, partnership, trust, or estate, etc.) or
group of affiliated or associated Persons (such Person or group being
hereafter referred to as an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 20% or more
of the outstanding shares of Common Stock (the "Stock Acquisition
Date"); or (ii) 10 days following the commencement of a tender offer
or exchange offer that, if successful, would result in an Acquiring
Person beneficially owning 30% or more of such outstanding shares
of Common Stock (unless such tender or exchange offer is predicated
upon the redemption of the Rights). The foregoing does not apply to
any employee stock ownership or other benefit plan or arrangement
of the Company or any of its subsidiaries. Until the Distribution
Date, (i) the Rights will be evidenced by the Common Stock
certificates and will be transferable with and only with such
Common Stock certificates; (ii) new Common Stock certificates
issued after the Record Date will contain a notation incorporating
the Rights Agreement by reference; and (iii) the surrender for
transfer of any certificates for Common Stock outstanding will also
constitute the transfer of the Rights associated with the Common
Stock represented by such certificate.
Following a Distribution Date, each Right will entitle the holder
thereof to purchase one one-hundredth of a share, subject to the
anti-dilution provisions described below, of Series A Preferred
Stock of the Company. Each share of Series A Preferred Stock is
entitled to (i) 100 votes on each matter submitted to the
shareholders of the Company for their vote; (ii) semi-annual
dividends; and (iii) preference upon a liquidation, dissolution, or
winding up of the Company. The purchase price per one one-
hundredth of a share of Series A Preferred Stock (the "Purchase
Price") is equal to the Board of Directors' judgment as to the "long-
term investment" value of one share, subject to adjustment, of
Common Stock at the end of the 10-year term of the Rights.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on July 9, 2006, unless
redeemed earlier by the Company as described below.
Rights Certificates; Transferability
As soon as is practical after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date, and
thereafter, the separate Rights Certificates alone will represent the
Rights. After the Distribution Date, the Rights may be transferred
independently from the Common Stock. Except as otherwise
determined by the Board of Directors and except for Common Stock
issued pursuant to the exercise of stock options granted prior to the
Distribution Date, only shares of Common Stock issued or
outstanding prior to the Distribution Date will be issued with
Rights.
"Flip-In" Provision
In the event that, at any time following the Distribution Date, (i)
the Company is the surviving corporation in a merger with an
Acquiring Person and the Company's Common Stock is not converted
or exchanged; (ii) a Person becomes the beneficial owner of more
than 20% of the then outstanding shares of Common Stock (except
pursuant to an offer for all outstanding shares of Common Stock that
the Continuing Directors (as defined below) determine to be fair to
and otherwise in the best interest of the Company and it
stockholders); (iii) an Acquiring Person engages in one or more
"self-dealing" transactions as set forth in the Rights Agreement; or
(iv) during such time as there is an Acquiring Person, an event
occurs that results in such Acquiring Person's ownership interest
being increased by more than one percentage point (e.g., a reverse
stock split), each holder of a Right (if the Right has not theretofore
been exercised to purchase Series A Preferred Stock) will thereafter
have the right to receive, upon exercise thereof and in lieu of Series
A Preferred Stock, Common Stock (or, in certain circumstances,
cash, property, or other securities of the Company) having a value
equal to twice the Purchase Price of the Right. Notwithstanding any
of the foregoing, following the occurrence of any of the events set
forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person will be null and void.
For example, at a Purchase Price of $50.51 per Right, each Right
not owned by an Acquiring Person (or by certain related parties)
following an event set forth in the preceding paragraph would
entitle its holder to purchase $103.00 of then-current market value
of Common Stock (or other consideration, as noted above) for $50.51.
Assuming that the Common Stock had a per share value of $10.30 at
such time, the holder of each valid Right would be entitled to
purchase 10 shares of Common Stock for $50.51.
"Flip-Over" Provision
In the event that, at any time following the Stock Acquisition
Date, (i) the Company is acquired in a merger or other business
combination transaction in which the Company is not the surviving
corporation (other than a merger that follows an offer described in
Clause (ii) of the second preceding paragraph); or (ii) 50% or more of
the Company's assets or earning power is sold or transferred to any
Person other than a subsidiary of the Company, each holder of a
Right (except Rights that previously have been exercised to purchase
Series A Preferred Stock or have been voided as set forth above)
shall thereafter have the right to receive, upon exercise thereof and
in lieu of Series A Preferred Stock, common stock of the acquiring
Person having a value equal to twice the Purchase Price of the Right.
Anti-Dilution Provision
The Purchase Price payable, and the number of one one-
hundredths of a share of Series A Preferred Stock or other
securities or property issuable upon exercise of the Rights, are
subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination, or
reclassification of, the Common Stock; (ii) if holders of the Series A
Preferred Stock are granted certain rights or warrants to subscribe
for Series A Preferred Stock or securities convertible into Series A
Preferred Stock at less than the current market price of the Series
A Preferred Stock; or (iii) upon the distribution to holders of the
Series A Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription
rights or warrants (other than those referred to above).
With certain exceptions, no adjustments in the Purchase Price
will be required until cumulative adjustments amount to at least 1%
of the Purchase Price. No fractional shares of Series A Preferred
Stock (other than integral multiples of one one-hundredth of a share,
as may be adjusted from time to time as set forth in the
immediately preceding paragraph) will be issued upon exercise of a
Right, and in lieu thereof, payment in cash will be made for such
fractional shares based on the market price of the Series A
Preferred Stock on the last trading date prior to the date of
exercise.
Redemption
At any time prior to July 9, 2006, or, if earlier, 10 days
following the Stock Acquisition Date, the Company may redeem the
Rights (to the extent not exercised) in whole, but not in part, at a
price of $0.01 per Right (payable in cash, Common Stock, or other
consideration deemed appropriate by the Board of Directors). Under
certain circumstances set forth in the Rights Agreement, the
decision to redeem shall require the concurrence of a majority of
the Continuing Directors. If no Continuing Directors remain in
office, the Rights may be redeemed only upon the approval of (i) a
majority of the holders of Common Stock; and (ii) the holders of at
least 80% of the Common Stock held other than by any Acquiring
Person. After the redemption period has expired, the Company's
right of redemption may be reinstated if an Acquiring Person
reduces its beneficial ownership to 10% or less of the outstanding
shares of Common Stock in a transaction or series of transactions
not involving the Company. Immediately upon the action of the Board
of Directors ordering redemption of the Rights with, where required,
the concurrence of a majority of the Continuing Directors, the Rights
will terminate and the only right of the holders of Rights will be to
receive the $0.01 redemption price.
Definition of Continuing Director
The term "Continuing Director" means any member of the Board
of Directors of the Company who was a member of the Board on the
Declaration Date, and any person who is subsequently elected to the
Board if such person is recommended or approved by a majority of
the then Continuing Directors, but shall not include an Acquiring
Person, an affiliate or associate of an Acquiring Person, or any
representative of the foregoing entities.
Limited Interests as a Rights Holder
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 notice of stockholder meetings, the right to
vote, or the right to receive dividends. While the distribution of the
Rights will not be taxable to stockholders or to the Company,
stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable for
Series A Preferred Stock, for Common Stock (or other consideration)
of the Company, or for common stock of the acquiring entity as set
forth above.
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement
may be amended by the Board of Directors of the Company prior to
the Distribution Date. After the Distribution Date, the provisions of
the Rights Agreement may be amended by the Board (in certain
circumstances, with the concurrence of a majority of the Continuing
Directors) in order to cure any ambiguity, to make changes that do
not adversely affect the interests of holders of Rights (excluding
the interests of any Acquiring Person), or to shorten or lengthen any
time period under the Rights Agreement, provided, however, that no
amendment to adjust the time period governing redemption may be
made at such time as the Rights are not 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 dated August 30, 1996. A copy of the Rights
Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.
The Company is [insert brief business description from press
releases].
[Form of Obverse Side of Rights Certificate]
Certificate No. R- ____ Rights
NOT EXERCISABLE AFTER JULY 9, 2006, OR EARLIER IF REDEEMED BY
THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $0.01 PER RIGHT ON THE TERMS SET
FORTH IN THE STOCKHOLDER RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING
PERSON (AS SUCH TERM IS DEFINED IN THE STOCKHOLDER RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO
WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THE STOCKHOLDER RIGHTS AGREEMENT). ACCORDINGLY, THIS
RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.]
Rights Certificate
JEFFERSONVILLE BANCORP
This certifies that __________________________________________ , or
registered assigns, is the registered owner of the number of Rights
set forth above, each of which entities the owner thereof, subject to
the terms, provisions, and conditions of the Stockholder Rights
Agreement, dated July 9, 1996 (the "Rights Agreement"), between
Jeffersonville Bancorp, a New York corporation (the "Company"), and
First National Bank of Jeffersonville, a national banking association
(the "Rights Agent"), to purchase, per Right, from the Company at
any time prior to 5:00 p.m. (Jeffersonville, New York, time) on July
9, 2006 (provided the Rights have not been redeemed earlier by the
Company), at the office or offices of the Rights Agent designated for
such purpose, or its successors as Rights Agent, one one-hundredth
of a fully paid, non-assessable share of Series A Preferred Stock
(the "Preferred Stock") of the Company, at a purchase price of
$50.51 per one one-hundredth of a share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the Form
of Election to Purchase and related Certificate duly executed. The
number of one one-hundredths of a share of Series A Preferred Stock
and the Purchase Price thereof are subject to adjustment from time
to time as provided in the Rights Agreement. The number of Rights
evidenced by this Rights Certificate (and the number of shares that
may be purchased upon exercise thereof) set forth above and the
Purchase Price per share set forth above, are the number and
Purchase Price as of July 9, 1996, based on the Preferred Stock as
constituted at such date. All capitalized terms used but not
otherwise defined herein shall have the respective meanings
assigned to such terms in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Rights Certificate are beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate of any such Acquiring
Person; (ii) a transferee of any such Acquiring Person, Associate, or
Affiliate; or (iii) under certain circumstances specified in the
Rights Agreement, a transferee of a Person who, after such transfer,
becomes an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, such Rights shall become null and void, and no
holder hereof shall have any right with respect to such Rights from
and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of shares of Preferred Stock or other securities
that may be purchased upon the exercise of the Rights evidenced by
this Rights Certificate are subject to modification and adjustment
upon the happening of certain events, including Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions, and conditions of the Rights Agreement, which terms,
provisions, and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties, and immunities hereunder
of the Rights Agent, the Company, and the holders of the Rights
Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the
Rights Agreement are on file at the principal office of the Rights
Agent, Main Street, Jeffersonville, New York 12748, and are also
available upon written request to the Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of the
Rights Agent designated for such purpose, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor
evidencing Rights entitling the holder to purchase a like aggregate
number of one one-hundredths of a share of Preferred Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates.
[Form of Reverse Side of Rights Certificate]
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires
to exercise the Rights represented by this Rights Certificate.)
To: JEFFERSONVILLE BANCORP
The undersigned hereby irrevocably elects to exercise _____________
Rights represented by this Rights Certificate to purchase the shares
of Preferred Stock issuable upon the exercise of such number of
Rights (or such other securities of the Company or of any other
Person that may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name of
and delivered to:
Please insert social security or other identifying number
_______________________________________________________________________
(Please print name and address)
_______________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of
such Rights shall be registered in the name of and delivered to:
Please insert social security or other identifying number
_______________________________________________________________________
(Please print name and address)
________________________________________________________________________
________________________________________________________________________
Dated: ___________________ , ______
_____________________________
Signature
CERTIFICATION
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights 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 Acquiring
Person;
(2) after due inquiry and to the best knowledge of the
undersigned, I [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was, or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: ________________ , _______
_________________________
Signature
Signature Guaranteed:_____________________
NOTICE
The signature to the foregoing Election to Purchase and
Certification must correspond to the name as written upon the face
of this Rights Certificate in every particular, without alteration,
enlargement, or any change whatsoever.
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer the Rights represented by this Rights Certificate.)
FOR VALUE RECEIVED,
________________________________________________
hereby sells, assigns, and transfers unto
_______________________________________
_______________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________
the Rights represented by this Rights Certificate, together with all
right, title, and interest therein, and does hereby irrevocably
constitute and appoint the Rights Agent as Attorney to transfer the
within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _________________ , _______
________________________
Signature
Signature Guaranteed: _________________________
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of
such Rights shall be registered in the name of and delivered to:
Please insert social security or other identifying number
________________________________________________________________________
(Please print name and address)
________________________________________________________________________
________________________________________________________________________
Dated: ______________________ , ________
_____________________________
Signature
CERTIFICATION
The undersigned hereby certifies by checking the appropriate
boxes that
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned, or transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring
Person;
(2) after due inquiry and to the best knowledge of the
undersigned, I [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was, or subsequently
became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: _________________ , ______
__________________________
Signature
Signature Guaranteed:_________________________
NOTICE
The signature to the foregoing Assignment and Certification
must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration, enlargement, or
any change whatsoever.
