e424b5
The
information in this preliminary prospectus supplement and the
accompanying prospectus is not complete and may be changed. This
preliminary prospectus supplement and the accompanying
prospectus are part of an effective registration statement filed
with the Securities and Exchange Commission. This preliminary
prospectus supplement and the accompanying prospectus are not an
offer to sell these securities, and we are not soliciting offers
to buy these securities in any jurisdiction where the offer or
sale is not permitted.
|
Filed
Pursuant to
Rule 424(b)(5)
Registration
No. 333-159084
Subject
to Completion, Dated August 3, 2009
Preliminary Prospectus Supplement to Prospectus dated
May 20, 2009
Shares
Univest Corporation of
Pennsylvania
Common Stock
We are
offering shares
of our common stock, par value $5.00 per share. Our common stock
is listed on the NASDAQ Global Select Market under the symbol
UVSP. On July 31, 2009, the closing sale price
of Univest common stock was $25.87 per share.
The shares of common stock offered hereby are not savings
accounts, deposits or other obligations of a bank or depository
institution and are not insured by the Federal Deposit Insurance
Corporation or any other governmental agency.
Investing in our common stock involves risk. See
Risk Factors beginning on
page S-5
of this prospectus supplement to read about factors you should
consider before buying our common stock.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
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Per Share
|
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Total
|
|
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Public offering price
|
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$
|
|
|
|
$
|
50,000,000
|
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Underwriting discounts and commissions
|
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$
|
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|
|
$
|
|
|
Proceeds to Univest Corporation of Pennsylvania (before expenses)
|
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$
|
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$
|
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|
The underwriters may also purchase up to an
additional shares
of our common stock within 30 days of the date of this
prospectus supplement to cover over-allotments, if any.
The underwriters expect to deliver the common stock in
book-entry form only, through the facilities of The Depository
Trust Company, against payment on or about
August , 2009.
Keefe, Bruyette &
Woods
Prospectus Supplement dated August , 2009.
ABOUT
THIS PROSPECTUS SUPPLEMENT
This prospectus supplement and the accompanying prospectus are
part of a registration statement that we filed with the
Securities and Exchange Commission (the SEC)
utilizing a shelf registration process. Under this
shelf registration process, we may sell any combination of
securities from time to time in one or more offerings. Each time
we sell securities, we or parties acting on our behalf will
provide a prospectus supplement that will contain specific
information about the terms of that offering and the securities
being sold in that offering. You should read both this
prospectus supplement and the accompanying prospectus, together
with additional information described immediately below under
the heading Where You Can Find More Information.
Any statements in this prospectus supplement and in the
accompanying prospectus supplement concerning the provisions of
any document are intended to be summaries. In each instance,
reference is made to the copy of that document filed or
incorporated or deemed to be incorporated by reference as an
exhibit to the registration statement of which this prospectus
supplement is a part or otherwise filed with the SEC. Each
statement concerning the provisions of any document is qualified
in its entirety by reference to the document so filed.
Unless otherwise mentioned or unless the context requires
otherwise, all references in this prospectus to
Univest, we, us,
our or similar references mean Univest Corporation
of Pennsylvania and its subsidiaries.
You should rely only on the information contained in or
incorporated by reference in this prospectus supplement and the
accompanying prospectus. This prospectus supplement may be used
only for the purpose for which it has been prepared. No one is
authorized to give information other than that contained in this
prospectus supplement and the accompanying prospectus and in the
documents referred to or incorporated by reference in this
prospectus supplement and the accompanying prospectus and which
are made available to the public. We have not, and the
underwriters have not, authorized any other person to provide
you with different information. If anyone provides you with
different or inconsistent information, you should not rely on
it.
We are not, and the underwriters are not, making an offer to
sell these securities in any jurisdiction where the offer or
sale is not permitted. You should not assume that the
information appearing in this prospectus supplement or any
document incorporated by reference is accurate as of any date
other than the date of the applicable document. Our business,
financial condition, results of operations and prospects may
have changed since that date. Neither this prospectus supplement
nor the accompanying prospectus constitutes an offer, or an
invitation on our behalf or on behalf of the underwriters, to
subscribe for and purchase, any of the securities and may not be
used for or in connection with an offer or solicitation by
anyone, in any jurisdiction in which such an offer or
solicitation is not authorized or to any person to whom it is
unlawful to make such an offer or solicitation.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read and copy any
document we file at the SECs public reference room located
at 100 F Street, N.E., Room 1580,
Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330
for further information on the operation of the public reference
room. The SEC maintains an Internet site at www.sec.gov that
contains reports, proxy and information statements, and other
information regarding issuers like us that file electronically
with the SEC. We also maintain an Internet site that contains
information about us. The address of that site is
www.univest.net. Information contained in our Internet
site is not incorporated by reference into this prospectus
supplement, and you should not consider information contained in
our Internet site as part of this prospectus supplement.
INCORPORATION
OF DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference the
information contained in the documents we file with the SEC (SEC
File
No. 000-07617),
which means that we can disclose important information to you in
this prospectus supplement by referring you to those documents.
The information incorporated by reference is an important part
of this prospectus supplement, and information that we file
later with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed
below and any future filings (other than filings
S-ii
or portions of filings that, under applicable SEC rules, are
furnished instead of filed) we make with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934, as amended (the Exchange Act),
until this prospectus supplement is no longer deemed effective.
(1) Our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2008;
(2) Our Quarterly Reports on
Form 10-Q
for the quarters ended March 31, 2009 and June 30,
2009;
(3) Our Current Report on Form
8-K, filed
with the SEC on July 23, 2009; and
(4) The description of our common stock contained in our
registration statement filed pursuant to the Securities Act of
1933, on
Form S-14
filed with the SEC on March 1, 1973 including any amendment
or report filed for the purpose of updating such description.
We have also filed a registration statement on
Form S-3,
as amended (SEC File
No. 333-159084)
with the SEC relating to the securities offered by this
prospectus supplement and the accompanying prospectus. This
prospectus supplement is part of the registration statement. You
may obtain from the SEC a copy of the registration statement and
exhibits that we filed with the SEC. The registration statement
may contain additional information that may be important to you.
Any information contained in this prospectus supplement or in
any document incorporated or deemed to be incorporated by
reference in this prospectus supplement will be deemed to have
been modified or superseded to the extent that a statement
contained in any other document we subsequently file with the
SEC that also is incorporated or deemed to be incorporated by
reference in this prospectus supplement modifies or supersedes
the original statement. Any statement so modified or superseded
will not be deemed, except as so modified or superseded, to be a
part of this prospectus supplement.
We encourage you to read our periodic and current reports. We
think these reports provide additional information about our
company which prudent investors will find important. You may
request a copy of these filings, as well as any future filings
incorporated by reference, at no cost, by writing to us at the
following address or calling the telephone number below:
Univest
Corporation of Pennsylvania
Attention: Corporate Secretary
14 North Main Street
Souderton, PA 18964
(215) 721-2400
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement and accompanying prospectus,
including the documents incorporated into them by reference,
contain various statements that may constitute forward-looking
statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the Securities
Act), and Section 21E of the Securities Exchange Act
of 1934, as amended (the Exchange Act), and are
intended to be covered by the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Any statements
about our expectations, beliefs, plans, objectives, assumptions
or future events or performance are not historical facts and may
be forward-looking. These forward-looking statements often can
be, but are not always, identified by the use of words such as
assume, expect, intend,
plan, project, believe,
estimate, predict,
anticipate, may, might,
should, could, goal,
potential and similar expressions. We base these
forward-looking statements on our current expectations and
projections about future events, our assumptions regarding these
events and our knowledge of facts at the time the statements are
made. These statements include statements relating to our
projected growth, anticipated future financial performance, and
managements long-term performance goals, as well as
statement relating to the anticipated effects on results of
operations and financial condition.
These forward-looking statements are subject to various risks
and uncertainties that may be outside our control and our actual
results could differ materially from our projected results. In
addition, our past results of operations do not necessarily
indicate our future results. Please see our most recent Annual
Report on
Form 10-K
and our subsequent Quarterly Reports on
Form 10-Q
and the other information contained in this prospectus
supplement for
S-iii
a further discussion of these and other risks and uncertainties
applicable to our business. The forward-looking statements could
be affected by many factors, including but not limited to:
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a significant increase in competitive pressures among financial
institutions;
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changes in the interest rate environment that may reduce net
interest margins;
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changes in prepayment speeds, loan sale volumes, charge-offs and
loan loss provisions;
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general economic conditions;
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legislative or regulatory changes that may adversely affect the
businesses in which the Company is engaged;
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technological issues which may adversely affect the
Companys financial operations or customers;
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changes in the securities market; and
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|
risks and other factors set forth in this prospectus supplement,
the accompanying prospectus, and in the documents incorporated
by reference into this prospectus supplement.
|
Because of these and other uncertainties, our actual future
results, performance or achievements, or industry results, may
be materially different from the results indicated by these
forward-looking statements. In addition, our past results of
operations do not necessarily indicate our future results.
We are not able to predict all the factors that may affect
future results. You should not place undue reliance on any
forward-looking statement, which speaks only as of the date of
this prospectus supplement or the date of the document
incorporated by reference. Except as required by applicable laws
or regulations, we do not undertake any obligation to update or
revise any forward-looking statement, whether as a result of new
information, future events or otherwise.
S-iv
SUMMARY
This summary highlights selected information contained
elsewhere or incorporated by reference in this prospectus
supplement and may not contain all the information that you need
to consider in making your investment decision. You should
carefully read this entire prospectus supplement and the
accompanying prospectus, as well as the information to which we
refer you and the information incorporated by reference herein,
before deciding whether to invest in the common stock. You
should pay special attention to the Risk Factors
section of this prospectus supplement to determine whether an
investment in the common stock is appropriate for you.
The
Company
Univest Corporation of Pennsylvania (the Company) is
a Pennsylvania corporation headquartered in Souderton, PA. It
was established on June 12, 1876 as Union National Bank.
Through subsidiaries Univest National Bank and Trust Co.
(the Bank), Univest Realty Corporation, Univest
Delaware, Inc., and Univest Reinsurance Corporation, the Company
provides Financial Solutions For Life through an
integrated platform.
The Company and its subsidiaries serve the financial needs of
residents, businesses, and nonprofit organizations in Bucks,
Montgomery, Chester and Lehigh counties in Southeastern
Pennsylvania. At June 30, 2009, the Company had
approximately $2.1 billion total assets, $1.5 billion
in total loans, $1.6 billion in total deposits and
$208 million in total shareholders equity.
The Company aims to be the The Best Integrated Financial
Solutions Provider in the Market. To complement its
traditional core banking business, the Company offers a
wide-range of insurance and investment products and services to
assist both consumer and commercial customers with achieving
their financial goals.
The Bank is engaged in the general commercial banking business
and provides a full range of banking services and trust services
to its customers. It offers 32 financial service centers, 12
retirement financial services centers, and 38 ATM locations
throughout the region. The Bank is also the parent company of
Univest Insurance, Inc., an independent insurance agency,
Univest Investments, Inc., a full-service broker-dealer and
investment advisory firm, and Univest Capital, Inc., a small
ticket commercial finance business. Univest Insurance has two
offices in Pennsylvania and one in Maryland. Univest Investments
has two offices in Pennsylvania. Through its wholly-owned
subsidiaries, the Company provides a variety of financial
services to individuals, municipalities and businesses
throughout its markets of operation.
In recent years the Company has supplemented its organic growth
with a targeted acquisition strategy and expanded its scope of
services. Since 1999, the Company has completed nine financial
services company acquisitions, which include five insurance
brokers, two banks and two broker dealer investment advisory
firms.
Throughout its rich history spanning more than 133 years,
the Company has become one of the strongest locally based
financial institutions in Southeastern Pennsylvania. The Company
takes pride in being an organization that offers its customers
an expanding scope of services while maintaining traditional
beliefs and a determined commitment to its community.
The Companys common stock trades on the NASDAQ Global
Select Market under the ticker symbol UVSP. Our
principal executive offices are located at Univest Plaza, 14
North Main Street, Souderton, Pennsylvania 18964. Our mailing
address at this facility is Post Office Box 64197, Souderton,
Pennsylvania 18964 and our telephone number is
(215) 721-2400.
We maintain an Internet website at
http://www.univest.net.
We are not incorporating the information on our website into
this prospectus supplement, and neither the website nor the
information on our website is included or incorporated in, or a
part of, this prospectus supplement.
S-1
The
Offering
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Common stock offered by Univest Corp. of Pennsylvania |
|
shares |
|
Common stock outstanding prior to this offering |
|
13,049,502 shares |
|
Common stock outstanding after this offering(1) |
|
shares |
|
Use of proceeds |
|
The net proceeds from the sale of the common stock offered
hereby will be approximately $ (or
approximately $ if the
underwriters exercises their over-allotment option in full),
after deducting underwriting discounts and commissions and
expenses paid by us. |
|
|
|
We intend to use the net proceeds of this offering for general
corporate purposes, including supporting the capital needs of
the Bank, the financing of our operations, repayment of
short-term indebtedness, business acquisitions and capital
expenditures. |
|
NASDAQ Global Select Market symbol |
|
UVSP |
|
Risk factors |
|
Before investing, you should carefully consider all of the
information in this prospectus supplement. In particular, you
should evaluate the Risk Factors beginning on
page S-5
of this prospectus supplement, as well as the risk factors
included in our Annual Report on
Form 10-K
for the year ended December 31, 2008, incorporated by
reference herein before buying our common stock. |
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(1) |
|
The number of shares outstanding after the offering is based on
13,049,502 common shares outstanding as of July 31, 2009.
This number of shares does not include 408,482 shares of
common stock issuable upon exercise of all options outstanding
as of July 31, 2009 and the number of shares of common
stock issuable pursuant to the exercise of the
underwriters over-allotment option. |
S-2
SUMMARY
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following table sets forth summary historical consolidated
financial information as of and for the years ended
December 31, 2008, 2007, 2006, 2005 and 2004, and as of and
for the six months ended June 30, 2009 and 2008. The
summary historical financial information as of and for the six
months ended June 30, 2009 and 2008 is unaudited. This
unaudited financial information has been prepared on the same
basis as our audited financial statements and includes, in the
opinion of management, all adjustments necessary to fairly
present the data for such period. The results of operations for
the six months ended June 30, 2009 are not necessarily
indicative of the results of operations to be expected for the
full year or any future period. The following summary
consolidated financial data should be read in conjunction with
our consolidated financial statements and related notes and
Managements Discussion and Analysis of Financial
Condition and Results of Operations included in our Annual
Report on
Form 10-K
for the year ended December 31, 2008, our Quarterly Report
on
Form 10-Q
for the quarter ended June 30, 2009 filed with the SEC and
the other information included or incorporated by reference in
this prospectus supplement.
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|
|
|
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For the Six Months
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|
|
|
|
|
|
Ended June 30,
|
|
|
For the Years Ended December 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
|
(In thousands, except per share data)
|
|
|
Income Statement Data(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
$
|
48,931
|
|
|
$
|
54,942
|
|
|
$
|
108,057
|
|
|
$
|
116,144
|
|
|
$
|
104,853
|
|
|
$
|
85,290
|
|
|
$
|
74,601
|
|
Interest expense
|
|
|
15,413
|
|
|
|
22,532
|
|
|
|
42,310
|
|
|
|
54,127
|
|
|
|
43,651
|
|
|
|
26,264
|
|
|
|
18,948
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
|
33,518
|
|
|
|
32,410
|
|
|
|
65,747
|
|
|
|
62,017
|
|
|
|
61,202
|
|
|
|
59,026
|
|
|
|
55,653
|
|
Provision for loan and lease losses
|
|
|
7,509
|
|
|
|
3,296
|
|
|
|
8,769
|
|
|
|
2,166
|
|
|
|
2,215
|
|
|
|
2,109
|
|
|
|
1,622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income after provision for loan and lease losses
|
|
|
26,009
|
|
|
|
29,114
|
|
|
|
56,978
|
|
|
|
59,851
|
|
|
|
58,987
|
|
|
|
56,917
|
|
|
|
54,031
|
|
Noninterest income
|
|
|
14,000
|
|
|
|
15,722
|
|
|
|
26,615
|
|
|
|
27,268
|
|
|
|
25,730
|
|
|
|
22,656
|
|
|
|
22,791
|
|
Noninterest expense
|
|
|
32,293
|
|
|
|
28,693
|
|
|
|
57,225
|
|
|
|
52,211
|
|
|
|
49,958
|
|
|
|
45,796
|
|
|
|
44,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income before income taxes
|
|
|
7,716
|
|
|
|
16,143
|
|
|
|
26,368
|
|
|
|
34,908
|
|
|
|
34,759
|
|
|
|
33,777
|
|
|
|
31,902
|
|
Provision for income taxes
|
|
|
1,211
|
|
|
|
3,548
|
|
|
|
5,778
|
|
|
|
9,351
|
|
|
|
9,382
|
|
|
|
8,910
|
|
|
|
8,311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
6,505
|
|
|
$
|
12,595
|
|
|
$
|
20,590
|
|
|
$
|
25,557
|
|
|
$
|
25,377
|
|
|
$
|
24,867
|
|
|
$
|
23,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Data(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, interest-earning deposits and federal funds sold
|
|
$
|
32,412
|
|
|
$
|
45,016
|
|
|
$
|
40,066
|
|
|
$
|
59,385
|
|
|
$
|
70,355
|
|
|
$
|
59,439
|
|
|
$
|
37,745
|
|
Investment securities
|
|
|
425,774
|
|
|
|
419,804
|
|
|
|
432,266
|
|
|
|
415,464
|
|
|
|
374,814
|
|
|
|
336,611
|
|
|
|
337,717
|
|
Net loans and leases(2)
|
|
|
1,446,062
|
|
|
|
1,384,556
|
|
|
|
1,436,774
|
|
|
|
1,342,356
|
|
|
|
1,339,180
|
|
|
|
1,236,056
|
|
|
|
1,161,081
|
|
Intangible assets
|
|
|
56,183
|
|
|
|
46,950
|
|
|
|
56,051
|
|
|
|
47,081
|
|
|
|
47,608
|
|
|
|
43,387
|
|
|
|
43,561
|
|
Assets
|
|
|
2,086,821
|
|
|
|
2,012,659
|
|
|
|
2,084,797
|
|
|
|
1,972,505
|
|
|
|
1,929,501
|
|
|
|
1,769,309
|
|
|
|
1,666,957
|
|
Deposits
|
|
|
1,565,076
|
|
|
|
1,504,007
|
|
|
|
1,527,328
|
|
|
|
1,532,602
|
|
|
|
1,488,545
|
|
|
|
1,366,715
|
|
|
|
1,270,884
|
|
Long-term obligations
|
|
|
81,815
|
|
|
|
123,479
|
|
|
|
120,006
|
|
|
|
114,453
|
|
|
|
107,405
|
|
|
|
88,449
|
|
|
|
90,418
|
|
Shareholders equity
|
|
|
208,358
|
|
|
|
203,138
|
|
|
|
203,207
|
|
|
|
198,726
|
|
|
|
185,385
|
|
|
|
173,080
|
|
|
|
160,393
|
|
Per Common Share(3):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares outstanding
|
|
|
13,000
|
|
|
|
12,595
|
|
|
|
12,873
|
|
|
|
12,885
|
|
|
|
12,960
|
|
|
|
12,867
|
|
|
|
12,841
|
|
Earnings per share basic
|
|
|
0.50
|
|
|
|
0.98
|
|
|
|
1.60
|
|
|
|
1.98
|
|
|
|
1.96
|
|
|
|
1.93
|
|
|
|
1.84
|
|
Earnings per share diluted
|
|
|
0.50
|
|
|
|
0.98
|
|
|
|
1.60
|
|
|
|
1.98
|
|
|
|
1.95
|
|
|
|
1.91
|
|
|
|
1.80
|
|
Cash dividends
|
|
|
0.400
|
|
|
|
0.400
|
|
|
|
0.800
|
|
|
|
0.800
|
|
|
|
0.780
|
|
|
|
0.717
|
|
|
|
0.667
|
|
Book value
|
|
|
15.78
|
|
|
|
15.80
|
|
|
|
15.71
|
|
|
|
15.49
|
|
|
|
14.25
|
|
|
|
13.37
|
|
|
|
12.47
|
|
Dividend payout ratio
|
|
|
80.00
|
%
|
|
|
40.81
|
%
|
|
|
50.00
|
%
|
|
|
40.40
|
%
|
|
|
40.00
|
%
|
|
|
37.54
|
%
|
|
|
37.06
|
%
|
Performance Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets(4)
|
|
|
0.63
|
%
|
|
|
1.25
|
%
|
|
|
1.02
|
%
|
|
|
1.32
|
%
|
|
|
1.38
|
%
|
|
|
1.46
|
%
|
|
|
1.44
|
%
|
Return on average common equity(4)
|
|
|
6.35
|
%
|
|
|
12.48
|
%
|
|
|
10.09
|
%
|
|
|
13.44
|
%
|
|
|
14.04
|
%
|
|
|
14.87
|
%
|
|
|
15.46
|
%
|
Average equity to average assets
|
|
|
9.98
|
%
|
|
|
10.02
|
%
|
|
|
10.08
|
%
|
|
|
9.84
|
%
|
|
|
9.81
|
%
|
|
|
9.83
|
%
|
|
|
9.33
|
%
|
Net interest margin(5)
|
|
|
3.82
|
%
|
|
|
3.71
|
%
|
|
|
3.75
|
%
|
|
|
3.71
|
%
|
|
|
3.86
|
%
|
|
|
4.04
|
%
|
|
|
3.97
|
%
|
Efficiency ratio(6)
|
|
|
64.78
|
%
|
|
|
56.08
|
%
|
|
|
58.78
|
%
|
|
|
55.86
|
%
|
|
|
54.76
|
%
|
|
|
53.46
|
%
|
|
|
54.47
|
%
|
S-3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
|
|
|
|
|
|
|
Ended June 30,
|
|
|
For the Years Ended December 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
|
(In thousands, except per share data)
|
|
|
Asset Quality Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses to period end loans(2)
|
|
|
1.29
|
%
|
|
|
0.98
|
%
|
|
|
0.90
|
%
|
|
|
0.97
|
%
|
|
|
0.98
|
%
|
|
|
1.07
|
%
|
|
|
1.12
|
%
|
Allowance for loan losses to period end nonperforming loans
|
|
|
172.30
|
%
|
|
|
131.58
|
%
|
|
|
200.15
|
%
|
|
|
148.79
|
%
|
|
|
144.33
|
%
|
|
|
345.03
|
%
|
|
|
118.90
|
%
|
Nonperforming assets to period end loans and OREO(7)
|
|
|
0.94
|
%
|
|
|
0.75
|
%
|
|
|
0.48
|
%
|
|
|
0.65
|
%
|
|
|
0.68
|
%
|
|
|
0.34
|
%
|
|
|
0.99
|
%
|
Nonperforming assets to period end total assets(7)
|
|
|
0.66
|
%
|
|
|
0.52
|
%
|
|
|
0.33
|
%
|
|
|
0.45
|
%
|
|
|
0.48
|
%
|
|
|
0.24
|
%
|
|
|
0.70
|
%
|
Net charge-offs to average assets(4)
|
|
|
0.12
|
%
|
|
|
0.19
|
%
|
|
|
0.62
|
%
|
|
|
0.17
|
%
|
|
|
0.17
|
%
|
|
|
0.15
|
%
|
|
|
0.12
|
%
|
Capital Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to assets
|
|
|
9.98
|
%
|
|
|
10.09
|
%
|
|
|
9.75
|
%
|
|
|
10.07
|
%
|
|
|
9.61
|
%
|
|
|
9.78
|
%
|
|
|
9.62
|
%
|
Tangible common equity to tangible assets(8)
|
|
|
7.49
|
%
|
|
|
7.95
|
%
|
|
|
7.25
|
%
|
|
|
7.88
|
%
|
|
|
7.32
|
%
|
|
|
7.51
|
%
|
|
|
7.20
|
%
|
Tier 1 leverage ratio
|
|
|
8.86
|
%
|
|
|
9.00
|
%
|
|
|
8.94
|
%
|
|
|
9.11
|
%
|
|
|
8.76
|
%
|
|
|
8.88
|
%
|
|
|
8.44
|
%
|
Tier 1 risk-based capital ratio
|
|
|
10.65
|
%
|
|
|
11.24
|
%
|
|
|
10.65
|
%
|
|
|
11.35
|
%
|
|
|
10.67
|
%
|
|
|
11.01
|
%
|
|
|
10.64
|
%
|
Total risk-based capital ratio
|
|
|
11.89
|
%
|
|
|
12.29
|
%
|
|
|
11.60
|
%
|
|
|
12.46
|
%
|
|
|
11.90
|
%
|
|
|
12.48
|
%
|
|
|
12.36
|
%
|
Other Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of banking offices
|
|
|
32
|
|
|
|
33
|
|
|
|
33
|
|
|
|
33
|
|
|
|
34
|
|
|
|
34
|
|
|
|
36
|
|
Number of employees (full-time equivalent basis)
|
|
|
534
|
|
|
|
504
|
|
|
|
538
|
|
|
|
480
|
|
|
|
499
|
|
|
|
484
|
|
|
|
467
|
|
|
|
|
(1)
|
|
Certain amounts have been
reclassified to conform to the current-year presentation.
|
|
(2)
|
|
Net of unearned income and excludes
loans held for sale.
|
|
(3)
|
|
Per share data has been restated to
give effect to a
three-for-two
stock split in the form of a dividend declared on March 23,
2005 which was distributed on April 29, 2005.
|
|
(4)
|
|
Six-month results have been
annualized to allow for comparability to the preceding five year
results.
|
|
(5)
|
|
Calculated on a tax-equivalent
basis using the Companys applicable federal tax rate of
35%.
|
|
(6)
|
|
The efficiency ratio is equal to
total operating expenses divided by net interest income before
loan loss provision plus non-interest income adjusted for tax
equivalent income.
|
|
(7)
|
|
Nonperforming assets includes
impaired loans and leases (inclusive of all nonaccrual and/or
restructured loans and leases), loans and leases 90 days or
more past due but still accruing, and other real estate owned.
|
|
(8)
|
|
Tangible common equity to tangible
assets is calculated by reducing both common shareholders
equity and total assets by intangible assets.
|
S-4
RISK
FACTORS
Our business, financial condition and results of operations
are subject to various risks, including those discussed below,
and those set forth in Item 1A, Risk Factors of
our Annual Report on
Form 10-K
for the year ended December 31, 2008 and our Quarterly
Report on
Form 10-Q
for the quarter ended June 30, 2009, which are incorporated
herein by reference, which may affect the value of our common
stock. The risks discussed in this prospectus supplement and
incorporated herein by reference are those that we believe are
the most significant risks, although additional risks not
presently known to us or that we currently deem less significant
may also adversely affect our business, financial condition and
results of operations, perhaps materially. Before making a
decision to invest in our common stock, you should carefully
consider the risks and uncertainties described below and the
risks incorporated by reference in this prospectus supplement,
together with all of the other information included or
incorporated by reference in this prospectus supplement.
Risks
Relating to Recent Economic Conditions and Governmental Response
Efforts
The
Companys earnings are impacted by general business and
economic conditions.
The Companys operations and profitability are impacted by
general business and economic conditions; these conditions
include long-term and short-term interest rates, inflation,
money supply, political issues, legislative and regulatory
changes, fluctuations in both debt and equity capital markets,
broad trends in industry and finance, and the strength of the
U.S. economy and the local economies in which we operate,
all of which are beyond our control.
Our results of operations are affected by conditions in the
capital markets and the economy generally. The capital and
credit markets have experienced extreme volatility and
disruption for more than twelve months. The volatility and
disruption in these markets have produced downward pressure on
stock prices of, and credit availability to, certain companies
without regard to those companies underlying financial
strength. This has resulted in significant write-downs of asset
values by financial institutions, including government-sponsored
entities and major commercial and investment banks. The
U.S. and global economies are in steep decline. Monetary
and fiscal policies are loosening around the world to varying
degrees most aggressively in the United
States but they are battling against an extreme
credit crunch, and will take time to become effective. These
factors, combined with declining business and consumer
confidence, dramatic declines in the housing market during the
past year, with falling home prices and increasing foreclosures,
and rising unemployment have precipitated an economic slowdown
and induced fears of a prolonged recession.
We
cannot predict the effect of recent legislative and regulatory
initiatives.
The U.S. federal, state and foreign governments have taken
or are considering extraordinary actions in an attempt to deal
with the worldwide financial crisis and the severe decline in
the global economy. To the extent adopted, many of these actions
have been in effect for only a limited time, and have produced
limited or no relief to the capital, credit and real estate
markets. There is no assurance that these actions or other
actions under consideration will ultimately be successful.
In the United States, the federal government has adopted the
Emergency Economic Stabilization Act of 2008 (enacted on
October 3, 2008) (EESA) and the American
Recovery and Reinvestment Act of 2009 (enacted on
February 17, 2009) (ARRA). With authority
granted under these laws, the Treasury has proposed a financial
stability plan that is intended to:
|
|
|
|
|
provide for the government to invest additional capital into
banks and otherwise facilitate bank capital formation;
|
|
|
|
increase the limits on federal deposit insurance; and
|
|
|
|
provide for various forms of economic stimulus, including to
assist homeowners restructure and lower mortgage payments on
qualifying loans.
|
In many cases, full implementation of the laws will require the
adoption of regulations and program parameters. Other laws,
regulations, and programs at the federal, state and even local
levels are under consideration that address the economic climate
and/or the
financial services industry. The full effect of these
initiatives cannot be
S-5
predicted. Compliance with such initiatives may increase our
costs and limit our ability to pursue business opportunities.
Although we did not participate in the U.S. Treasurys
Capital Purchase Program, future participation in specific
programs may subject us to additional restrictions. In addition,
we are required to pay significantly higher Federal Deposit
Insurance Corporation (FDIC) premiums because market
developments have significantly depleted the insurance fund of
the FDIC and reduced the ratio of reserves to insured deposits.
There can be no assurance that these initiatives will improve
economic conditions generally or the financial markets or
financial services industry in particular. The failure of EESA,
ARRA and the financial stability plan to stabilize the financial
markets could materially adversely affect our ability to access
the capital and credit markets, our business, financial
condition, results of operations and the market price for our
common stock.
Regulatory
initiatives by the government could increase our costs of doing
business and adversely affect our results of operations and
financial condition.
Recent government responses to the condition of the global
financial markets and the banking industry has, among other
things, increased our costs significantly and may further
increase our costs for items such as federal deposit insurance
and increased capital requirements. The FDIC insures deposits at
FDIC-insured financial institutions, including our Bank. The
FDIC charges the insured financial institutions premiums to
maintain the Deposit Insurance Fund at a certain level. Current
economic conditions have increased bank failures and
expectations for further failures, in which case the FDIC would
pay all deposits of a failed bank up to the insured amount from
the Deposit Insurance Fund. In December 2008, the FDIC adopted a
rule that would increase premiums paid by insured institutions
and make other changes to the assessment system. Increases in
deposit insurance premiums could adversely affect our net
income. We may also become subject to additional federal
legislation and regulation that could force us to change a
number of our historical practices, limit the fees we may charge
or restrict our ability to attract and maintain our executive
officers.
We
borrow from the Federal Home Loan Bank and the Federal Reserve,
and there can be no assurance these programs will continue in
their current manner.
We at times utilize the Federal Home Loan Bank
(FHLB) of Pittsburgh for overnight borrowings and
term advances; we also borrow from the Federal Reserve and from
correspondent banks under our federal funds lines of credit. The
amount loaned to us is generally dependent on the value of the
collateral pledged. These lenders could reduce the percentages
loaned against various collateral categories, could eliminate
certain types of collateral and could otherwise modify or even
terminate their loan programs, particularly to the extent they
are required to do so because of capital adequacy or other
balance sheet concerns. Any change or termination of our
borrowings from the FHLB, the Federal Reserve or correspondent
banks would have an adverse affect on our liquidity and
profitability.
Our
results of operations may be adversely affected by
other-than-temporary
impairment charges relating to our investment
portfolio.
We may be required to record future impairment charges on our
investment securities, including our investment in the FHLB of
Pittsburgh, if they suffer declines in value that we consider
other-than-temporary.
Numerous factors, including the lack of liquidity for re-sales
of certain investment securities, the absence of reliable
pricing information for investment securities, adverse changes
in the business climate, adverse regulatory actions or
unanticipated changes in the competitive environment, could have
a negative effect on our investment portfolio in future periods.
If an impairment charge is significant enough, it could affect
the ability of our Bank to pay dividends to us, which could have
a material adverse effect on our liquidity and our ability to
pay dividends to shareholders. Significant impairment charges
could also negatively impact our regulatory capital ratios and
result in our Bank not being classified as
well-capitalized for regulatory purposes.
We may
need to raise additional capital in the future and such capital
may not be available when needed or at all.
We may need to raise additional capital in the future to provide
us with sufficient capital resources and liquidity to meet our
commitments and business needs. Our ability to raise additional
capital, if needed, will depend on,
S-6
among other things, conditions in the capital markets at that
time, which are outside of our control, and our financial
performance. The ongoing liquidity crisis and the loss of
confidence in financial institutions may increase our cost of
funding and limit our access to some of our customary sources of
capital, including, but not limited to, inter-bank borrowings,
repurchase agreements and borrowings from the discount window of
the Federal Reserve.
We cannot assure you that such capital will be available to us
on acceptable terms or at all. Any occurrence that may limit our
access to the capital markets, such as a decline in the
confidence of debt purchasers, depositors of our subsidiary bank
or counterparties participating in the capital markets may
adversely affect our capital costs and our ability to raise
capital and, in turn, our liquidity. An inability to raise
additional capital on acceptable terms when needed could have a
material adverse effect on our business, financial condition and
results of operations.
Risks
Related to Our Market and Business
The
Companys profitability is affected by economic conditions
in the Commonwealth of Pennsylvania.
Unlike larger national or regional banks that operate in large
geographies, the Company provides banking and financial services
to customers primarily in Bucks, Montgomery, Chester and Lehigh
Counties in Pennsylvania. Because of our geographic
concentration, continuation of the economic downturn in our
region could make it more difficult to attract deposits and
could cause higher rates of loss and delinquency on our loans
than if the loans were more geographically diversified. Adverse
economic conditions in the region, including, without
limitation, declining real estate values, could cause our levels
of non-performing assets and loan losses to increase. If the
economic downturn continues or a prolonged economic recession
occurs in the economy as a whole, borrowers will be less likely
to repay their loans as scheduled. A continued economic downturn
could, therefore, result in losses that materially and adversely
affect our financial condition and results of operations.
The
Company operates in a highly competitive industry and market
area.
We face substantial competition in all phases of our operations
from a variety of different competitors. Our competitors,
including commercial banks, community banks, savings and loan
associations, mutual savings banks, credit unions, consumer
finance companies, insurance companies, securities dealers,
brokers, mortgage bankers, investment advisors, money market
mutual funds and other financial institutions, compete with
lending and deposit-gathering services offered by us. Increased
competition in our markets may result in reduced loans and
deposits.
Many of these competing institutions have much greater financial
and marketing resources than we have. Due to their size, many
competitors can achieve larger economies of scale and may offer
a broader range of products and services than we can. If we are
unable to offer competitive products and services, our business
may be negatively affected.
Some of the financial services organizations with which we
compete are not subject to the same degree of regulation as is
imposed on bank holding companies and federally insured
financial institutions. As a result, these non-bank competitors
have certain advantages over us in accessing funding and in
providing various services. The banking business in our primary
market areas is very competitive, and the level of competition
facing us may increase further, which may limit our asset growth
and financial results.
The
Companys controls and procedures may fail or be
circumvented.
Our management diligently reviews and updates the Companys
internal controls over financial reporting, disclosure controls
and procedures, and corporate governance policies and
procedures. Any failure or undetected circumvention of these
controls could have a material adverse impact on our financial
condition and results of operations.
Potential
acquisitions may disrupt the Companys business and dilute
shareholder value.
We regularly evaluate opportunities to acquire and invest in
banks and in other complementary businesses. As a result, we may
engage in negotiations or discussions that, if they were to
result in a transaction, could have a material effect on our
operating results and financial condition, including short and
long-term liquidity.
S-7
Our acquisition activities could be material to us. For example,
we could issue additional shares of common stock in a purchase
transaction, which could dilute current shareholders
ownership interest. These activities could require us to use a
substantial amount of cash, other liquid assets,
and/or incur
debt. In addition, if goodwill recorded in connection with our
prior or potential future acquisitions were determined to be
impaired, then we would be required to recognize a charge
against our earnings, which could materially and adversely
affect our results of operations during the period in which the
impairment was recognized. Any potential charges for impairment
related to goodwill would not impact cash flow, tangible capital
or liquidity.
Our acquisition activities could involve a number of additional
risks, including the risks of:
|
|
|
|
|
incurring time and expense associated with identifying and
evaluating potential acquisitions and negotiating potential
transactions, resulting in managements attention being
diverted from the operation of our existing business;
|
|
|
|
using inaccurate estimates and judgments to evaluate credit,
operations, management, and market risks with respect to the
target institution or assets;
|
|
|
|
the time and expense required to integrate the operations and
personnel of the combined businesses;
|
|
|
|
creating an adverse short-term effect on our results of
operations; and
|
|
|
|
losing key employees and customers as a result of an acquisition
that is poorly received.
|
We cannot assure you that we will be successful in overcoming
these risks or any other problems encountered in connection with
potential acquisitions. Our inability to overcome these risks
could have an adverse effect on our ability to achieve our
business strategy and maintain our market value.
The
Company may not be able to attract and retain skilled
people.
We are dependent on the ability and experience of a number of
key management personnel who have substantial experience with
our operations, the financial services industry, and the markets
in which we offer products and services. The loss of one or more
senior executives or key managers may have an adverse effect on
our operations. The Company does not currently have employment
agreements or non-competition agreements with any of our
executive officers. Also, as we continue to grow operations, our
success depends on our ability to continue to attract, manage,
and retain other qualified middle management personnel.
If we
lost a significant portion of our low-cost deposits, it would
negatively impact our liquidity and profitability.
Our profitability depends in part on our success in attracting
and retaining a stable base of low-cost deposits. As of
June 30, 2009, 14.2% of our deposit base was comprised of
noninterest bearing deposits, of which 11.0% consisted of
business deposits, which are primarily operating accounts for
businesses, and 3.2% consisted of consumer deposits. While we
generally do not believe these core deposits are sensitive to
interest rate fluctuations, the competition for these deposits
in our markets is strong and customers are increasingly seeking
investments that are safe, including the purchase of
U.S. Treasury securities and other government-guaranteed
obligations, as well as the establishment of accounts at the
largest, most-well capitalized banks. If we were to lose a
significant portion of our low-cost deposits, it would
negatively impact our liquidity and profitability.
The
Companys information systems may experience an
interruption or breach in security.
While the Company has policies and procedures designed to
prevent or limit the effect of any failure, interruption, or
breach in our security systems, there can be no assurance that
any such failures will not occur and, if they do occur, that
they will be adequately addressed. As a result, the occurrence
of any such failures, interruptions, or breaches in security
could expose the Company to reputation risk, civil litigation,
regulatory scrutiny and possible financial liability that could
have a material adverse effect on our financial condition.
S-8
The
Company continually encounters technological
change.
Our future success depends, in part, on our ability to
effectively embrace technology efficiencies to better serve
customers and reduce costs. Failure to keep pace with
technological change could potentially have an adverse effect on
our business operations and financial condition.
The
Company is subject to claims and litigation.
Customer claims and other legal actions, whether founded or
unfounded, could result in financial or reputation damage and
have a material adverse effect on our financial condition and
results of operations if such claims are not resolved in a
manner favorable to the Company.
External
events could impact the Company.
Natural disasters, acts of war or terrorism and other adverse
external events could have a significant impact on the
Companys ability to conduct business. Our management has
established disaster recovery policies and procedures that are
expected to mitigate events related to natural or man-made
disasters; however, the impact of an overall economic decline
resulting from such a disaster could have a material adverse
effect on the Companys financial condition.
The
Company depends on the accuracy and completeness of information
about customers and counterparties.
In deciding whether to extend credit or enter into other
transactions with customers and counterparties, we may rely on
information furnished to us by or on behalf of customers and
counterparties, including financial statements and other
financial information. We also may rely on representations of
customers and counterparties as to the accuracy and completeness
of that information and, with respect to financial statements,
on reports of independent auditors. For example, in deciding
whether to extend credit to clients, we may assume that a
customers audited financial statements conform to GAAP and
present fairly, in all material respects, the financial
condition, results of operations and cash flows of the customer.
Our earnings are significantly affected by our ability to
properly originate, underwrite and service loans. Our financial
condition and results of operations could be negatively impacted
to the extent we incorrectly assess the creditworthiness of our
borrowers, fail to detect or respond to deterioration in asset
quality in a timely manner, or rely on financial statements that
do not comply with GAAP or are materially misleading.
Risks
Related to the Banking Industry
The
Company is subject to interest rate risk.
Our profitability is dependent to a large extent on our net
interest income. Like most financial institutions, we are
affected by changes in general interest rate levels and by other
economic factors beyond our control. Although we believe we have
implemented strategies to reduce the potential effects of
changes in interest rates on our results of operations, any
substantial and prolonged change in market interest rates could
adversely affect our operating results.
Net interest income may decline in a particular period if:
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In a declining interest rate environment, more interest-earning
assets than interest-bearing liabilities re-price or
mature, or
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In a rising interest rate environment, more interest-bearing
liabilities than interest-earning assets re-price or mature.
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Our net interest income may decline based on our exposure to a
difference in short-term and long-term interest rates. If the
difference between the interest rates shrinks or disappear, the
difference between rates paid on deposits and received on loans
could narrow significantly resulting in a decrease in net
interest income. In addition to these factors, if market
interest rates rise rapidly, interest rate adjustment caps may
limit increases in the interest rates on adjustable rate loans,
thus reducing our net interest income. Also, certain adjustable
rate loans re-price based on
S-9
lagging interest rate indices. This lagging effect may also
negatively impact our net interest income when general interest
rates continue to rise periodically.
The
Company is subject to lending risk.
Risks associated with lending activities include, among other
things, the impact of changes in interest rates and economic
conditions, which may adversely impact the ability of borrowers
to repay outstanding loans, and impact the value of the
associated collateral. Various laws and regulations also affect
our lending activities and failure to comply with such
applicable laws and regulations could subject the Company to
enforcement actions and civil monetary penalties.
As of June 30, 2009, approximately 77.6% of our loan and
lease portfolio consisted of commercial, industrial,
construction, and commercial real estate loans and leases; these
are generally perceived as having more risk of default than
residential real estate and consumer loans. These types of loans
involve larger loan balances to a single borrower or groups of
related borrowers. Commercial real estate loans may be affected
to a greater extent than residential loans by adverse conditions
in real estate markets or the economy because commercial real
estate borrowers ability to repay their loans depends on
successful development of their properties, as well as the
factors affecting residential real estate borrowers. An increase
in non-performing loans and leases could result in a net loss of
earnings from these loans and leases, an increase in the
provision for possible loan and lease losses, and an increase in
loan and lease charge-offs. The risk of loan and lease losses
will increase if the economy worsens.
Risk of loss on a construction loan depends largely upon whether
our initial estimate of the propertys value at completion
of construction equals or exceeds the cost of the property
construction (including interest) and the availability of
permanent take-out financing. During the construction phase, a
number of factors can result in delays and cost overruns. If
estimates of value are inaccurate or if actual construction
costs exceed estimates, the value of the property securing the
loan may be insufficient to ensure full repayment when completed
through a permanent loan or by seizure of collateral.
Commercial business loans are typically based on the
borrowers ability to repay the loans from the cash flow of
their businesses. These loans may involve greater risk because
the availability of funds to repay each loan depends
substantially on the success of the business itself. In
addition, the collateral securing the loans often depreciates
over time, is difficult to appraise and liquidate and fluctuates
in value based on the success of the business.
Commercial real estate, commercial business, and construction
loans are more susceptible to a risk of loss during a downturn
in the business cycle. Our underwriting, review, and monitoring
cannot eliminate all of the risks related to these loans.
The
Companys allowance for possible loan and lease losses may
be insufficient and an increase in the allowance would reduce
earnings.
We maintain an allowance for loan losses. The allowance is
established through a provision for loan losses based on our
managements evaluation of the risks inherent in our loan
portfolio and the general economy. The allowance is based upon a
number of factors, including the size of the loan portfolio,
asset classifications, economic trends, industry experience and
trends, industry and geographic concentrations, estimated
collateral values, managements assessment of the credit
risk inherent in the portfolio, historical loan loss experience
and loan underwriting policies. In addition, we evaluate all
loans identified as problem loans and augment the allowance
based upon our estimation of the potential loss associated with
those problem loans. Additions to our allowance for loan losses
decrease our net income.
If the evaluation we perform in connection with establishing
loan loss reserves is wrong, our allowance for loan losses may
not be sufficient to cover our losses, which would have an
adverse effect on our operating results. Due to the volatile
economy, we cannot assure you that we will not experience an
increase in delinquencies and losses as these loans continue to
mature.
The federal regulators, in reviewing our loan portfolio as part
of a regulatory examination, may from time to time require us to
increase our allowance for loan losses, thereby negatively
affecting our financial condition and
S-10
earnings at that time. Moreover, additions to the allowance may
be necessary based on changes in economic and real estate market
conditions, new information regarding existing loans,
identification of additional problem loans and other factors,
both within and outside of our control.
The loan provision for the six months ended June 30, 2009
was $7.5 million as opposed to $3.3 million for the
same period of 2008. The increase in the provision for loan
losses was due to the deterioration of underlying collateral and
economic factors. This resulted in the migration of loans to a
higher risk category and increased specific reserves on impaired
loans to $2.1 million at June 30, 2009 from $36,000 at
December 31, 2008. Additionally, nonaccrual loans and
restructured loans increased to $9.1 million at
June 30, 2009 from $7.4 million at June 30, 2008.
There can be no assurance that conditions will improve in the
near term or that we will maintain our current provisions for
loan losses.
Changes
in economic conditions and the composition of our loan portfolio
could lead to higher loan charge-offs or an increase in our
provision for loan losses and may reduce our net
income.
Changes in national and regional economic conditions could
impact our loan portfolios. For example, an increase in
unemployment, a decrease in real estate values or increases in
interest rates, as well as other factors, could weaken the
economies of the communities we serve. Weakness in the market
areas we serve could depress our earnings and consequently our
financial condition because customers may not demand our
products or services; borrowers may not be able to repay their
loans; the value of the collateral securing our loans to
borrowers may decline and the quality of our loan portfolio may
decline. Any of the latter three scenarios could require us to
charge off a higher percentage of our loans
and/or
increase our provision for loan losses, which would reduce our
net income and could require us to raise capital.
The
Company is subject to environmental liability risk associated
with lending activities.
In the course of our business, we may foreclose and take title
to real estate and could be subject to environmental liabilities
with respect to these properties. The Company may be held liable
to a governmental entity or to third parties for property
damage, personal injury, investigation and
clean-up
costs incurred by these parties in connection with environmental
contamination, or may be required to investigate or clean up
hazardous or toxic substances, or chemical releases at a
property. Our policies and procedures require environmental
factors to be considered during the loan application process. An
environmental review is performed before initiating any
commercial foreclosure action; however, these reviews may not be
sufficient to detect all potential environmental hazards.
Possible remediation costs and liabilities could have a material
adverse effect on our financial condition.
The
Company is subject to extensive government regulation and
supervision.
We are subject to Federal Reserve Board regulation. Our Bank is
subject to extensive regulation, supervision, and examination by
our primary federal regulator, the Office of the Comptroller of
the Currency, and by the FDIC, the regulating authority that
insures customer deposits. Also, as a member of the FHLB, our
Bank must comply with applicable regulations of the Federal
Housing Finance Board and the FHLB. Regulation by these agencies
is intended primarily for the protection of our depositors and
the deposit insurance fund and not for the benefit of our
shareholders. Our Banks activities are also regulated
under consumer protection laws applicable to our lending,
deposit, and other activities. A large claim against our Bank
under these laws could have a material adverse effect on our
results of operations.
Proposals for further regulation of the financial services
industry are continually being introduced in the Congress of the
United States of America and the General Assembly of the
Commonwealth of Pennsylvania. We can provide no assurance
regarding the manner in which any new laws and regulations will
affect us.
Consumers
may decide not to use banks to complete their financial
transactions.
The process of eliminating banks as intermediaries, known as
disintermediation, could result in the loss of fee
income as well as the loss of customer deposits and the related
income generated from those deposits. The loss of these revenue
streams could have an adverse effect on our financial condition
and results of operation.
S-11
Risks
Related to Our Common Stock and this Offering
An
investment in the Companys common stock is not an insured
deposit.
The Companys common stock is not a bank deposit, is not
insured by the FDIC or any other deposit insurance fund, and is
subject to investment risk, including the loss of some or all of
your investment. Our common stock is subject to the same market
forces that affect the price of common stock in any company.
The
Company has broad discretion in applying the net proceeds from
this offering.
The Company intends to use the net proceeds from this offering
for general corporate purposes, which may include the funding of
additional contributions to the capital of the Bank. We will
have significant flexibility in applying the net proceeds of
this offering. Our failure to apply these funds effectively
could adversely affect our business by reducing its return on
equity and inhibiting our abilities to expand
and/or raise
additional capital in the future.
The
Companys stock price can be volatile.
The Companys stock price can fluctuate in response to a
variety of factors, some of which are not under our control.
These factors include:
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our past and future dividend practice;
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our financial condition, performance, creditworthiness and
prospects;
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quarterly variations in our operating results or the quality of
our assets;
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operating results that vary from the expectations of management,
securities analysts and investors;
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changes in expectations as to our future financial performance;
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the operating and securities price performance of other
companies that investors believe are comparable to us;
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future sales of our equity or equity-related securities;
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the credit, mortgage and housing markets, the markets for
securities relating to mortgages or housing, and developments
with respect to financial institutions generally; and
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changes in global financial markets and global economies and
general market conditions, such as interest or foreign exchange
rates, stock, commodity or real estate valuations or volatility
and other geopolitical, regulatory or judicial events.
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These factors could cause the Companys stock price to
decrease regardless of our operating results.
The Companys common stock is listed for trading on the
NASDAQ Global Select Market under the symbol UVSP;
the trading volume has historically been less than that of
larger financial services companies. Stock price volatility may
make it more difficult for you to resell your common stock when
you want and at prices you find attractive.
A public trading market having the desired characteristics of
depth, liquidity and orderliness depends on the presence in the
marketplace of willing buyers and sellers of our common stock at
any given time. This presence depends on the individual
decisions of investors and general economic and market
conditions over which we have no control. Given the relatively
low trading volume of our common stock, significant sales of our
common stock in the public market, or the perception that those
sales may occur, could cause the trading price of our common
stock to decline or to be lower than it otherwise might be in
the absence of those sales or perceptions.
S-12
Anti-takeover
provisions could negatively impact our
shareholders.
Certain provisions in the Companys Articles of
Incorporation and Bylaws, as well as federal banking laws,
regulatory approval requirements, and Pennsylvania law could
make it more difficult for a third party to acquire the Company,
even if doing so would be perceived to be beneficial to the
Companys shareholders.
There
may be future sales or other dilution of the Companys
equity, which may adversely affect the market price of our
common stock.
The Company is generally not restricted from issuing additional
common stock, including any securities that are convertible into
or exchangeable for, or that represent the right to receive,
common stock. The issuance of any additional shares of common
stock or preferred stock or securities convertible into,
exchangeable for or that represent the right to receive common
stock or the exercise of such securities could be substantially
dilutive to shareholders of our common stock. Holders of our
shares of common stock have no preemptive rights that entitle
holders to purchase their pro rata share of any offering of
shares of any class or series. The market price of our common
stock could decline as a result of this offering or because of
sales of shares of our common stock made after this offering or
the perception that such sales could occur. Because our decision
to issue securities in any future offering will depend on market
conditions and other factors beyond our control, we cannot
predict or estimate the amount, timing or nature of our future
offerings. Thus, our shareholders bear the risk of our future
offerings reducing the market price of our common stock and
diluting their stock holdings in us. In addition, giving effect
to the issuance of common stock in this offering, the receipt of
the expected net proceeds and the use of those proceeds, we
expect that this offering will have a dilutive effect on our
expected earnings per share.
The
Company relies on dividends from our subsidiaries for most of
our revenue.
The Company is a financial holding company and our operations
are conducted by our subsidiaries from which we receive
dividends. The ability of our subsidiaries to pay dividends is
subject to legal and regulatory limitations, profitability,
financial condition, capital expenditures and other cash flow
requirements. The ability of our Bank to pay cash dividends to
the Company is limited by its obligation to maintain sufficient
capital and by other restrictions on its cash dividends that are
applicable to national banks and banks that are regulated by the
Office of the Comptroller of the Currency . If our Bank is not
permitted to pay cash dividends to the Company, it is unlikely
that we would be able to pay cash dividends on our common stock.
S-13
USE OF
PROCEEDS
We expect to receive net proceeds from the sale of common stock
offered hereby of approximately
$ million (or approximately
$ million if the underwriters
exercise their over-allotment option in full), after deducting
underwriting discounts and commissions and estimated expenses
payable by us. We intend to use the net proceeds of this
offering for general corporate purposes, which may include
supporting the growth and related regulatory needs of the Bank,
the financing of our operations, repayment of short-term
indebtedness, business acquisitions and capital expenditures.
Pending any specific application, we may initially invest funds
in short-term marketable securities or apply them to the
reduction of short-term indebtedness.
S-14
CAPITALIZATION
The following table shows our consolidated capitalization
(unaudited) as of June 30, 2009 on a historical basis to
reflect the sale
of shares
of our common stock offered by us in this offering. You should
read the following tables in conjunction with
Managements Discussion and Analysis of Financial
Condition and Results of Operations and the consolidated
financial statements and the notes thereto incorporated by
reference into this prospectus supplement from our Annual Report
on
Form 10-K
for the fiscal year ended December 31, 2008 and our
Quarterly Report on
Form 10-Q
for the period ended June 30, 2009, as well as financial
information in the other documents incorporated by reference
into this prospectus supplement.
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At June 30, 2009
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Actual
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As Adjusted
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(Dollars in thousands)
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Long-term debt:
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Long-term debt
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$
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55,196
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Subordinated notes
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6,000
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Trust preferred securities
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20,619
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Total long-term debt
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81,815
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Shareholders equity:
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Common stock, $5.00 par value; authorized
48,000,000 shares:
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13,023,704 shares issued and outstanding; as
adjusted shares
issued and outstanding
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74,370
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Additional paid in capital
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21,382
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Retained earnings
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152,950
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Accumulated other comprehensive loss, net of tax benefit
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(5,556
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Treasury stock at cost; 1,850,200 shares
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(34,788
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Total shareholders equity
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208,358
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Total capitalization(1)
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$
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290,173
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$
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Capital ratios:
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Tier 1 leverage ratio
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8.86
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%
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Tier 1 risk-based capital ratio
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10.65
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%
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Total risk-based capital ratio
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11.89
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%
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Tangible equity to tangible assets (period end)
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7.49
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%
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Tangible common equity to tangible assets (period end)
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7.49
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%
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(1) |
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Total capitalization is the sum of total long-term debt plus
total shareholders equity. |
S-15
PRICE
RANGE OF COMMON STOCK
Our common stock is listed on the NASDAQ Global Select Market
under the symbol USVP. As of July 31, 2009, the
last reported sale price of our common stock on NASDAQ was
$25.87. As of July 31, 2009, there were approximately
3,862 shareholders of record.
The following table presents the high and low closing sales
price per share of our common stock during certain periods, as
reported on the NASDAQ Global Select Market in each quarter.
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High
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Low
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Year Ended December 31, 2007:
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First Quarter
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$
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31.24
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$
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22.32
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Second Quarter
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25.74
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21.94
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Third Quarter
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25.95
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18.00
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Fourth Quarter
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25.45
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18.84
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Year Ended December 31, 2008:
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First Quarter
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$
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27.00
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$
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19.09
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Second Quarter
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29.89
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19.85
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Third Quarter
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38.99
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19.70
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Fourth Quarter
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36.10
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25.01
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Year Ending December 31, 2009:
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First Quarter
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$
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33.34
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$
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16.91
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Second Quarter
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21.88
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18.28
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Third Quarter (through July 31, 2009)
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26.41
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19.46
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S-16
DIVIDEND
POLICY
Holders of our common stock are entitled to receive dividends
that the board of directors may declare from time to time. We
may only pay dividends out of funds that are legally available
for that purpose. Because consolidated net income consists
largely of the net income of our bank subsidiary, dividend
payments to shareholders are dependent upon our receipt of
dividends from our bank subsidiary. The payment of dividends on
our common stock and by our bank is subject to certain
restrictions imposed by federal and state banking laws,
regulations and authorities. The approval of the Office of the
Comptroller of the Currency is required for a national bank to
pay dividends if the total of all dividends declared in any
calendar year exceeds the banks net profits for that year,
combined with its retained net profits for the preceding two
calendar years. As of December 31, 2008, under this
formula, the Bank can declare dividends in 2009 without approval
of the Office of the Comptroller of the Currency of
approximately $17.3 million, plus an additional amount
equal to the Banks net profits for 2009 up to the date of
any such dividend declaration.
Our dividend declaration is discretionary and will depend on our
earnings and financial condition, regulatory limitations, tax
considerations and other factors. While the board of directors
expects to continue to declare dividends quarterly, there can be
no assurance that we will continue to pay dividends at these
levels or at all.
The following table shows the history of per share cash
dividends declared and paid on our common stock for the first
and second quarters of 2009 and for each of 2008 and 2007.
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Cash Dividends
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Per Share
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2007
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First Quarter
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$
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0.20
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Second Quarter
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0.20
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Third Quarter
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0.20
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Fourth Quarter
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0.20
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2008
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First Quarter
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$
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0.20
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Second Quarter
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0.20
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Third Quarter
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0.20
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Fourth Quarter
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0.20
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2009
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First Quarter
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$
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0.20
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Second Quarter
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0.20
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DESCRIPTION
OF CAPITAL STOCK
This section describes the general terms of our common and
preferred stock. A copy of our amended and restated articles of
incorporation has been incorporated by reference from our
filings with the SEC as an exhibit to the registration
statement. Our capital stock and the rights of the holders of
our capital stock are subject to the applicable provisions of
Pennsylvania law, our amended and restated articles of
incorporation, and our amended bylaws.
Our amended and restated articles of incorporation authorize the
issuance of forty-eight million (48,000,000) shares of common
stock with a par value of $5.00 (Five Dollars) per share and ten
million (10,000,000) shares of preferred stock with a par value
of $5.00 (Five Dollars) per share. As of July 31, 2009,
there were 13,049,502 shares of common stock issued and
outstanding and no shares of preferred stock issued or
outstanding. We have no options, warrants or other rights
authorized, issued or outstanding other than options and rights
granted under our various stock compensation and dividend
reinvestment plans.
S-17
Common
Stock
Dividends
The holders of our common stock share ratably in dividends when,
as and if declared by our board of directors from legally
available funds. Our ability to pay cash dividends depends upon
our receipt of cash dividends d from our direct and indirect
subsidiaries, which are our primary source of revenue and cash
flow. We are a legal entity separate and distinct from our
subsidiaries. Accordingly, the right of Univest, and
consequently the right of creditors and shareholders of Univest,
to participate in any distribution of the assets or earnings of
any subsidiary is necessarily subject to the prior claims of
creditors of that subsidiary, except to the extent that claims
of Univest in its capacity as a creditor may be recognized.
Voting
Rights
Until we issue any preferred stock with voting rights, the
holders of shares of common stock have exclusive voting rights.
Each holder of shares of common stock has one vote for each
share held. Shareholders cannot cumulate votes in the election
of directors.
Univest common stock currently trades on the NASDAQ Global
Select Market of the NASDAQ Stock Market LLC. Under the NASDAQ
Stock Markets rules, shareholder approval is required for
the issuance of shares of our common stock or securities
convertible into or exercisable for our common stock, if the
issuance of such securities:
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is in connection with the acquisition of a company, where the
securities to be issued will have 20% or more of the voting
power outstanding before such issuance;
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is in connection with the acquisition of a company in which a
director, officer or substantial shareholder has a 5% or greater
interest, and the issuance of the securities could result in an
increase in our outstanding common stock or voting power of 5%
or more;
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is in connection with a transaction, other than a public
offering, at a price less than the greater of book or market
value in which the shares issued will equal 20% or more of the
shares of our common stock, or have 20% or more of the voting
power, outstanding before issuance; or
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would result in a change in control.
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Under the NASDAQ Stock Markets rules, shareholder approval
is also required to establish a stock option or purchase plan in
which stock may be acquired by officers and directors other than
a broadly-based plan in which other Univest securities holders
or employees may participate.
Pre-Emptive
Rights, Redemption
Holders of our common stock do not have pre-emptive rights to
acquire any additional shares of Univest common stock. Our
common stock is not subject to redemption.
Liquidation
Rights
In the event of our liquidation, dissolution or
winding-up,
whether voluntary of involuntary, holders of Univest common
stock will share ratably in any of our assets or funds that are
available for distribution to our shareholders after
satisfaction, or adequate provision is made for satisfaction, of
our liabilities, and after payment of any liquidation
preferences of any outstanding shares of Univest preferred stock.
Preferred
Stock
Our board of directors is authorized to issue shares of Univest
preferred stock without shareholder approval. Our amended and
restated articles of incorporation authorize our board of
directors to determine the rights, qualifications, limitations
and restrictions of each series of Univest preferred stock at
the time of issuance, including without limitation, rights as to
dividends, voting and convertibility into shares of Univest
common stock. Shares of preferred stock may have dividend,
redemption, voting, and liquidation rights that take priority
over our common stock, and may be convertible into common stock.
S-18
If our board of directors decides to issue any preferred stock,
it may discourage or make more difficult a merger, tender offer,
business combination or proxy contest, assumption of control by
a holder of a large block of our securities or the removal of
incumbent management, even if these events were favorable to the
interests of shareholders. Our amended and restated articles of
incorporation authorize our board of directors, without
shareholder approval, to issue preferred stock with voting and
conversion rights and dividend and liquidation preferences which
may adversely affect the holders of common stock.
The following description of our preferred stock, and any
description of our preferred stock in a prospectus supplement
and/or free
writing prospectus is subject to, and qualified in its entirety
by reference to, the Pennsylvania Business Corporation Law, and
the actual terms and provisions contained in our articles of
incorporation and bylaws, each as amended from time to time.
Anti-Takeover
Charter and Pennsylvania Law Provisions
Our articles of incorporation and bylaws, each as amended,
contain certain provisions which may have the effect of
deterring or discouraging an attempt to take control of Univest.
These provisions:
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empower our board of directors, without shareholder approval, to
issue shares of preferred stock the terms of which, including
voting power, are set by our board;
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divide our board of directors into three classes serving
staggered three-year terms;
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restrict the ability of shareholders to remove directors;
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require that shares with at least 75% of total voting power
approve a merger or other similar transaction with a person or
entity holding stock with more than 5% of Univests total
voting power, if the transaction is not approved, in advance, by
our board of directors;
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do not permit shareholders to take action by written consent in
lieu of a meeting;
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require that shares with at least 75% of total voting power or a
majority of our board of directors approve the repeal or
amendment of certain provisions of our articles of incorporation
and bylaws;
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eliminate cumulative voting in the election of directors;
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require advance notice of nominations for the election of
directors and the presentation of shareholder proposals at
meetings of shareholders; and
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require a director nominee to have served as an
alternative directors, who, as described in our
bylaws, had previously been elected to attend board meetings as
an observer.
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The Pennsylvania Business Corporation Law also contains certain
provisions applicable to us that may have the effect of
deterring or discouraging an attempt to take control of Univest.
These provisions, among other things:
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require that, following any acquisition by any person or group
of 20% or more of a public corporations voting power, the
remaining shareholders have the right to demand payment for
their shares, in cash, from such person or group in an amount
equal to the fair value of the shares, including an
increment representing a proportion of any value payable for
control of the corporation;
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prohibit for five years, subject to certain exceptions, a
business combination (which includes a merger or
consolidation of the corporation or a sale, lease or exchange of
assets) with a person or group beneficially owning 20% or more
of a public corporations voting power;
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prevent a person or group acquiring different levels of voting
power (20%,
331/3%
and 50%) from voting any shares over the applicable threshold,
unless both our disinterested shareholders and all
voting shares approve such voting rights;
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require any person or group that publicly announces that it may
acquire control of a corporation, or that acquires or publicly
discloses an intent to acquire 20% or more of the voting power
of a corporation, to disgorge to the corporation any profits
that it receives from sales made within the following
18 months of the corporations equity securities
purchased over the prior 24 or subsequent 18 months;
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expand the factors and groups (including shareholders) which a
corporations board of directors can consider in
determining whether an action is in the best interests of the
corporation;
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provide that a corporations board of directors need not
consider the interests of any particular group as dominant or
controlling;
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provide that a corporations directors, in order to satisfy
the presumption that they have acted in the best interests of
the corporation, need not satisfy any greater obligation or
higher burden of proof with respect to actions relating to an
acquisition or potential acquisition of control;
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provide that actions relating to acquisitions of control that
are approved by a majority of disinterested
directors are presumed to satisfy the directors
standard of conduct, unless it is proven by clear and convincing
evidence that the directors did not assent to such action in
good faith after reasonable investigation; and
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provide that the fiduciary duty of a corporations
directors is solely to the corporation and may be enforced by
the corporation or by a shareholder in a derivative action, but
not by a shareholder directly.
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The Pennsylvania Business Corporation Law also explicitly
provides that the fiduciary duty of directors does not require
them to:
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redeem any rights under, or to modify or render inapplicable,
any shareholder rights plan;
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render inapplicable, or make determinations under, provisions of
the Pennsylvania Business Corporation Law relating to control
transactions, business combinations, control-share acquisitions
or disgorgement by certain controlling shareholders following
attempts to acquire control; or
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act as the board of directors, a committee of the board or an
individual director, solely because of the effect such action
might have on an acquisition or potential acquisition of control
of the corporation or the consideration that might be offered or
paid to shareholders in such an acquisition.
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S-20
UNDERWRITING
We are offering the shares of our common stock described in this
prospectus supplement through Keefe, Bruyette & Woods,
Inc., as sole representative of the several underwriters
(collectively, the Underwriters). We have entered
into an underwriting agreement with the Underwriters, dated
August , 2009 (the Underwriting
Agreement). Subject to the terms and conditions of the
Underwriting Agreement, each of the Underwriters has agreed,
severally and not jointly, to purchase the number of shares of
common stock, $5.00 par value per share, listed next to its
name in the following table:
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Underwriter of Shares
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Number
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Keefe, Bruyette & Woods, Inc.
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Total
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Our common stock is offered subject to a number of conditions,
including receipt and acceptance of the common stock by the
Underwriters.
In connection with this offering, certain of the Underwriters or
securities dealers may distribute prospectuses electronically.
Director
and Officer Participation
Our management, directors, principal shareholders, or their
affiliates may acquire shares in this offering. Any purchases by
management, directors, principal shareholders, or their
affiliates must be made on the same terms and conditions as
purchases by nonaffiliated investors and with a view toward
investment, not resale.
Over-allotment
Option
We have granted the Underwriters an option to
buy
additional shares of our common stock. The Underwriters may
exercise this option solely for the purpose of covering
over-allotments, if any, made in connection with this offering.
The Underwriters have thirty (30) days from the date of
this prospectus supplement to exercise this option.
Commissions
and Discounts
Shares of common stock sold by the Underwriters to the public
will initially be offered at the offering price set forth on the
cover of this prospectus. Any shares of common stock sold by the
Underwriters to securities dealers may be sold at a discount of
up to $ per share from the public
offering price. Any of these securities dealers may resell any
shares of common stock purchased from the Underwriters to other
brokers or dealers at a discount of up to
$ per share from the public
offering price. If all the shares of common stock are not sold
at the public offering price, the representative may change the
offering price and the other selling terms. Sales of shares of
common stock made outside of the United States may be made by
affiliates of the Underwriters.
The following table shows the per share and total underwriting
discounts and commissions we will pay to the Underwriters,
assuming both no exercise and full exercise of the
Underwriters option to purchase an
additional shares
of common stock:
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No Exercise
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Full Exercise
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Per Share Total
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$
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$
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Total
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$
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$
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S-21
We estimate that the total expenses of this offering payable by
us, not including the underwriting discounts and commissions but
including our reimbursement of certain expenses of the
Underwriters, will be approximately
$ .
No Sales
of Similar Securities
We and our executive officers and directors have entered into
lock-up
agreements with the Underwriters. Under these agreements, we and
each of these persons may not, without the prior written
approval of Keefe, Bruyette & Woods, subject to
limited exceptions, offer, sell, contract to sell or otherwise
dispose of or hedge our common stock or securities convertible
into or exercisable or exchangeable for our common stock. These
restrictions will be in effect for a period of ninety
(90) days after the date of the Underwriting Agreement.
These lockup provisions will apply to our common stock and to
securities convertible into or exchangeable or exercisable for
or repayable with our common stock. It will also apply to shares
of our common stock owned now or acquired later by the person
executing the agreement or for which the person executing the
agreement later acquires the power of disposition. In the event
that either (x) during the period that begins on the date
that is 15 calendar days plus 3 business days before the last
day of the
90-day
period referred to above, we issue an earnings release or
material news or a material event relating to our company occurs
or (y) prior to the expiration of the
90-day
restricted period, we announce that we will release earnings
results or become aware that material news or a material event
will occur during the
16-day
period beginning on the last day of the
90-day
restricted period, the restrictions described above shall
continue to apply until the expiration of the date that is 15
calendar days plus 3 business days after the date on which the
earnings release is issued or the material news or event related
to our company occurs.
Indemnification
and Contribution
We have agreed to indemnify the Underwriters and their
affiliates and controlling persons against certain liabilities.
If we are unable to provide this indemnification, we will
contribute to the payments the Underwriters, their affiliates
and their controlling persons may be required to make in respect
of those liabilities.
NASDAQ
Global Select Market Quotation
Our common stock is quoted on NASDAQ under the symbol
UVSP.
Price
Stabilization, Short Positions and Passive Market
Making
In connection with this offering, the Underwriters may engage in
activities that stabilize, maintain or otherwise affect the
price of our common stock, including:
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stabilizing transactions;
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short sales;
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purchases to cover positions created by short sales;
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imposition of penalty bids;
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syndicate covering transactions; and
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passive market making.
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Stabilizing transactions consist of bids or purchases made for
the purpose of preventing or retarding a decline in the market
price of our common stock while this offering is in progress.
These transactions may also include making short sales of our
common stock, which involve the sale by the Underwriters of a
greater number of shares of common stock than they are required
to purchase in this offering. Short sales may be covered
short sales, which are short positions in an amount not
greater than the Underwriters over-allotment option
referred to above, or may be naked short sales,
which are short positions in excess of that amount.
The Underwriters may close out any covered short position either
by exercising its over-allotment option, in whole or in part, or
by purchasing shares in the open market. In making this
determination, the Underwriters will consider, among other
things, the price of shares available for purchase in the open
market compared to the price at
S-22
which they may purchase shares through the over-allotment
option. The Underwriters must close out any naked short position
by purchasing shares in the open market. A naked short position
is more likely to be created if the Underwriters are concerned
that there may be downward pressure on the price of the common
stock in the open market that could adversely affect investors
who purchased in this offering.
As a result of these activities, the price of our common stock
may be higher than the price that otherwise might exist in the
open market. If these activities are commenced, they may be
discontinued by the Underwriters at any time. The Underwriters
may carry out these transactions on NASDAQ, in the
over-the-counter
market or otherwise.
In addition, in connection with this offering the Underwriters
may engage in passive market making transactions in our common
stock on NASDAQ prior to the pricing and completion of this
offering. Passive market making consists of displaying bids on
NASDAQ no higher than the bid prices of independent market
makers and making purchases at prices no higher than these
independent bids and effected in response to order flow. Net
purchases by a passive market maker on each day are generally
limited to a specified percentage of the passive market
makers average daily trading volume in the common stock
during a specified period and must be discontinued when such
limit is reached. Passive market making may cause the price of
our common stock to be higher than the price that otherwise
would exist in the open market in the absence of these
transactions. If passive market making is commenced, it may be
discontinued at any time.
Electronic
Distribution
In connection with the offering, certain of the Underwriters or
securities dealers may distribute prospectuses by electronic
means, such as by making the prospectus supplement in electronic
format available on their websites or by
e-mail.
Other than the prospectus supplement in electronic format, the
information on such websites will not form part of this
prospectus supplement.
Other
Relationships
The Underwriters and their affiliates have engaged in, and may
in the future engage in, investment banking, financial advisory
services and other commercial dealing in the ordinary course of
business with us. They have received, and may in the future
receive, customary fees and commission for these transactions.
Selling
Restrictions
European
Economic Area
In relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive (each, a
Relevant Member State), each Underwriter has
represented and agreed that with effect from and including the
date on which the Prospectus Directive is implemented in that
Relevant Member State (the Relevant Implementation
Date) it has not made and will not make an offer of shares
to the public in that Relevant Member State prior to the
publication of a prospectus in relation to the shares which has
been approved by the competent authority in that Relevant Member
State or, where appropriate, approved in another Relevant Member
State and notified to the competent authority in that Relevant
Member State, all in accordance with the Prospectus Directive,
except that it may, with effect from and including the Relevant
Implementation Date, make an offer of shares to the public in
that Relevant Member State at any time:
(a) to legal entities which are authorized or regulated to
operate in the financial markets or, if not so authorized or
regulated, whose corporate purpose is solely to invest in
securities;
(b) to any legal entity which has two or more of
(1) an average of at least 250 employees during the
last financial year; (2) a total balance sheet of more than
43,000,000 and (3) an annual net turnover of more
than 50,000,000, as shown in its last annual or
consolidated accounts;
(c) to fewer than 100 natural or legal persons (other than
qualified investors as defined in the Prospectus Directive)
subject to obtaining the prior consent of the representative for
any such offer; or
(d) in any other circumstances which do not require the
publication by the Issuer of a prospectus pursuant to
Article 3 of the Prospectus Directive.
S-23
For the purposes of this provision, the expression an
offer of shares to the public in relation to any
shares in any Relevant Member State means the communication in
any form and by any means of sufficient information on the terms
of the offer and the shares to be offered so as to enable an
investor to decide to purchase or subscribe for the shares, as
the same may be varied in that Relevant Member State by any
measure implementing the Prospectus Directive in that Relevant
Member State, and the expression Prospectus Directive means
Directive 2003/71/EC and includes any relevant implementing
measure in each Relevant Member State.
United
Kingdom
Each Underwriter has represented and agreed that:
(a) it has only communicated or caused to be communicated
and will only communicate or cause to be communicated an
invitation or inducement to engage in investment activity
(within the meaning of Section 21 of the Financial Services
and Markets Act 2000, as amended (the FSMA))
received by it in connection with the issue or sale of the
shares in circumstances in which Section 21(1) of the FSMA
does not apply to the Issuer; and
(b) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in
relation to the shares in, from or otherwise involving the
United Kingdom.
CERTAIN
UNITED STATES TAX CONSEQUENCES TO
NON-U.S.
HOLDERS OF COMMON STOCK
This section summarizes certain United States federal income and
estate tax consequences of the ownership and disposition of our
common stock by a
non-U.S. holder.
You are a
non-U.S. holder
if you are, for United States federal income tax purposes:
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a nonresident alien individual,
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a foreign corporation or other foreign entity taxable as a
foreign corporation under U.S. federal income tax
law, or
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an estate or trust that in either case is not subject to United
States federal income tax on a net income basis on income or
gain from common stock.
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This section does not consider the specific facts and
circumstances that may be relevant to a particular
non-U.S. holder
and does not address the treatment of a
non-U.S. holder
under the laws of any state, local or foreign taxing
jurisdiction. This section is based on the tax laws of the
United States, including the Internal Revenue Code of 1986, as
amended, existing and proposed regulations, and administrative
and judicial interpretations, all as currently in effect. These
laws are subject to change, possibly on a retroactive basis.
If an entity is treated as a partnership for U.S. federal
income tax purposes holds our common stock, the
United States federal income tax treatment of a partner
will generally depend on the status of the partner and the tax
treatment and activities of the partnership. A partner in a
partnership holding our common stock should consult its tax
advisor with regard to the United States federal income tax
treatment of an investment in our common stock.
You should consult a tax advisor regarding the United States
federal tax consequences of acquiring, holding and disposing of
our common stock in your particular circumstances, as well as
any tax consequences that may arise under the laws of any state,
local or foreign taxing jurisdiction.
Distributions
If distributions are paid on the shares of our common stock,
these distributions generally will constitute dividends for
U.S. federal income tax purposes to the extent paid from
our current or accumulated earnings and profits, as determined
under U.S. federal income tax principles, and then will
constitute a return of capital that is applied against your tax
basis in our common stock to the extent these distributions
exceed those earnings and profits. Distributions in excess of
our current and accumulated earnings and profits and your tax
basis in our common stock (determined on a share by share basis)
will be treated as a gain from the sale or exchange of our
S-24
common stock, the treatment of which is discussed below. Except
as described below, if you are a
non-U.S. holder
of our common stock, dividends paid to you are subject to
withholding of United States federal income tax at a 30% rate or
at a lower rate if you are eligible for the benefits of an
income tax treaty that provides for a lower rate. The
U.S. federal withholding tax generally is imposed on the
gross amount of a distribution, regardless of whether we have
sufficient earnings and profits to cause the distribution to be
a dividend for U.S. federal income tax purposes. However,
we may elect to withhold on less than the gross amount of the
distribution if we determine that the distribution is not paid
out of our current or accumulated earnings and profits, based on
our reasonable estimates.
Non-U.S. holders
should consult their tax advisors regarding their entitlement to
benefits under a relevant tax treaty. Even if you are eligible
for a lower treaty rate, we and other payors will generally be
required to withhold at a 30% rate (rather than the lower treaty
rate) on dividend payments to you, unless you have furnished to
us or another payor:
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a valid Internal Revenue Service
Form W-8BEN
or an acceptable substitute form upon which you certify, under
penalties of perjury, your status as (or, in the case of a
United States alien holder that is a partnership or an estate or
trust, such forms certifying the status of each partner in the
partnership or beneficiary of the estate or trust as) a
non-United
States person and your entitlement to the lower treaty rate with
respect to such payments, or
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in the case of payments made outside the United States to an
offshore account (generally, an account maintained by you at an
office or branch of a bank or other financial institution at any
location outside the United States), other documentary evidence
establishing your entitlement to the lower treaty rate in
accordance with U.S. Treasury regulations.
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If you are eligible for a reduced rate of United States
withholding tax under a tax treaty, you may obtain a refund of
any amounts withheld in excess of that rate by filing a refund
claim with the United States Internal Revenue Service.
If dividends paid to you are effectively connected
with your conduct of a trade or business within the
United States, and, if required by a tax treaty, the
dividends are attributable to a permanent establishment that you
maintain in the United States, we and other payors generally are
not required to withhold tax from the dividends, provided that
you have furnished to us or another payor a valid Internal
Revenue Service
Form W-8ECI
or an acceptable substitute form upon which you represent, under
penalties of perjury, that:
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you are a
non-United
States person, and
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the dividends are effectively connected with your conduct of a
trade or business within the United States and are includible in
your gross income.
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Effectively connected dividends are taxed at rates
applicable to United States citizens, resident aliens and
domestic United States corporations.
If you are a corporate
non-U.S. holder,
effectively connected dividends that you receive
may, under certain circumstances, be subject to an additional
branch profits tax at a 30% rate or at a lower rate
if you are eligible for the benefits of an income tax treaty
that provides for a lower rate.
Gain on
Disposition of Common Stock
If you are a
non-U.S. holder,
you generally will not be subject to United States federal
income tax on gain that you recognize on a disposition of our
common stock unless:
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the gain is effectively connected with your conduct
of a trade or business in the United States, and the gain is
attributable to a permanent establishment that you maintain in
the United States, if that is required by an applicable income
tax treaty as a condition for subjecting you to United States
taxation on a net income basis,
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you are an individual, you hold our common stock as a capital
asset, you are present in the United States for 183 or more days
in the taxable year of the sale and certain other conditions
exist, or
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we are or have been a United States real property holding
corporation for federal income tax purposes and, if our common
stock is treated as regularly traded on an established
securities market, only if you held,
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directly or indirectly, at any time during the five-year period
ending on the date of disposition, more than 5% of our common
stock and you are not eligible for any treaty exemption. A
United States Real Property Holding Corporation is generally
defined as a corporation, the fair market value of whose real
property interests equals or exceeds 50% of the fair market
value of its U.S. real property interests, its interests in
real property located outside the United States and any other of
its assets used or held for use in a trade or business. We have
not been and do not anticipate becoming, a United States Real
Property Holding Corporation for United States federal income
tax purposes.
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If you are a corporate
non-U.S. holder,
effectively connected gains that you recognize may
also, under certain circumstances, be subject to an additional
branch profits tax at a 30% rate or at a lower rate
if you are eligible for the benefits of an income tax treaty
that provides for a lower rate.
Federal
Estate Taxes
Common stock held by a
non-U.S. holder
at the time of death will be included in the holders gross
estate for United States federal estate tax purposes and may be
subject to U.S. federal estate tax, unless an applicable
estate tax treaty provides otherwise.
Backup
Withholding and Information Reporting
If you are a
non-U.S. holder,
you are generally exempt from backup withholding and information
reporting requirements with respect to:
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dividend payments, and
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the payment of the proceeds from the sale of common stock
effected at a United States office of a broker, as long as the
income associated with such payments is otherwise exempt from
United States federal income tax, and:
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the payor or broker does not have actual knowledge or reason to
know that you are a United States person and you have furnished
to the payor or broker:
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a valid Internal Revenue Service
Form W-8BEN
or an acceptable substitute form upon which you certify, under
penalties of perjury, that you are (or, in the case of a
non-U.S. holder
that is a partnership or an estate or trust, such forms
certifying that each partner in the partnership or beneficiary
of the estate or trust is) a
non-United
States person, or
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other documentation upon which it may rely to treat the payments
as made to a
non-United
States person in accordance with U.S. Treasury
regulations, or
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you otherwise establish an exemption.
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Payment of the proceeds from the sale of common stock effected
at a foreign office of a broker generally will not be subject to
information reporting or backup withholding. However, a sale of
common stock that is effected at a foreign office of a broker
will be subject to information reporting and backup withholding
if:
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the proceeds are transferred to an account maintained by you in
the United States,
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the payment of proceeds or the confirmation of the sale is
mailed to you at a United States address, or
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the sale has some other specified connection with the United
States as provided in U.S. Treasury regulations,
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unless the broker does not have actual knowledge or reason to
know that you are a United States person and the documentation
requirements described above are met or you otherwise establish
an exemption.
In addition, a sale of our common stock will be subject to
information reporting if it is effected at a foreign office of a
broker that is:
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a United States person,
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a controlled foreign corporation for United States tax purposes,
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S-26
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a foreign person 50% or more of whose gross income is
effectively connected with the conduct of a United States
trade or business for a specified three-year period, or
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a foreign partnership, if at any time during its tax year:
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one or more of its partners are U.S. persons,
as defined in U.S. Treasury regulations, who in the
aggregate hold more than 50% of the income or capital interest
in the partnership, or
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such foreign partnership is engaged in the conduct of a United
States trade or business,
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unless the broker does not have actual knowledge or reason to
know that you are a United States person and the documentation
requirements described above are met or you otherwise establish
an exemption. Backup withholding will apply if the sale is
subject to information reporting and the broker has actual
knowledge that you are a United States person.
Amounts withheld under the backup withholding rules do not
constitute a separate U.S. federal income tax. Rather, any
amounts withheld under the backup withholding rules will be
refunded or allowed as a credit against the holders
U.S. federal income tax liability, if any, provided the
required information and appropriate claim for refund is filed
with the Internal Revenue Service.
Non-U.S. holders
should consult their own tax advisors regarding the application
of the information reporting and backup withholding rules to
them.
LEGAL
MATTERS
The validity of the common stock will be passed upon for us by
Shumaker Williams, P.C., York, Pennsylvania. Certain legal
matters in connection with the offering will be passed upon for
the representative of the Underwriters by Alston &
Bird LLP, Atlanta, Georgia.
EXPERTS
The consolidated financial statements of Univest Corporation of
Pennsylvania (the Company) as of December 31,
2008 and 2007, and for each of the years in the three-year
period ended December 31, 2008, and managements
assessment of the effectiveness of internal control over
financial reporting as of December 31, 2008 have been
incorporated by reference herein in reliance upon the reports of
KPMG LLP, independent registered public accounting firm,
incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
The audit report covering the December 31, 2008
consolidated financial statements refers to the Companys
adoption of Statement of Financial Accounting Standards
No. 123R, Share-Based Payment, effective
January 1, 2006, and Statement of Financial Accounting
Standards No. 158, Employers Accounting for
Defined Benefit Pension and Other Postretirement Plans,
effective December 31, 2006.
S-27
Prospectus
UNIVEST CORPORATION OF
PENNSYLVANIA
$75,000,000
COMMON STOCK
PREFERRED STOCK
DEBT SECURITIES
DEPOSITARY SHARES
SECURITIES WARRANTS
STOCK PURCHASE
CONTRACTS
STOCK PURCHASE UNITS
We may offer from time to time common stock, preferred stock,
debt securities, depositary shares, securities warrants, stock
purchase contracts, or stock purchase units with a total public
offering price not to exceed $75,000,000. This prospectus
provides a general description of these securities. Specific
terms of these securities will be provided in supplements to
and/or free
writing prospectuses accompanying this prospectus; these
supplements
and/or free
writing prospectuses will be filed with the Securities and
Exchange Commission. You should read this prospectus and any
supplement
and/or free
writing prospectus accompanying this prospectus carefully before
you invest.
Our common stock is listed on the NASDAQ Global Select Market
under the symbol UVSP. On May 14, 2009, the
closing sale price of Univest common stock was $19.59 per share.
Investment in any securities offered by this prospectus
involves risk. See Risk Factors on page 2 of
this prospectus and the risk factors disclosed in our periodic
reports filed from time to time with the Securities and Exchange
Commission and in the applicable prospectus supplement or free
writing prospectus accompanying this prospectus.
The securities offered hereby are not savings accounts,
deposits or other obligations of a bank or depository
institution and are not insured by the Federal Deposit Insurance
Corporation or any other governmental agency. Investment in
these securities involves investment risk, including the
possible loss of principal.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
The date of this prospectus is May 20, 2009.
TABLE OF
CONTENTS
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i
ABOUT
THIS PROSPECTUS
This prospectus is part of a registration statement that we
filed with the Securities and Exchange Commission (the
SEC) utilizing a shelf registration
process. Under this shelf registration process, we may sell any
combination of securities from time to time in one or more
offerings. This prospectus provides you with a general
description of the securities we may offer. Each time we sell
securities, we or parties acting on our behalf will provide a
prospectus supplement
and/or free
writing prospectus that will contain specific information about
the terms of that offering and the securities being sold in that
offering. The applicable prospectus supplement or free writing
prospectus may also add, update or change information contained
in this prospectus. You should read both this prospectus and any
prospectus supplement and any free writing prospectus prepared
by us or on our behalf, together with additional information
described immediately below under the heading Where You
Can Find More Information.
Any statements in this prospectus, in any accompanying
prospectus supplement or in any free writing prospectus
concerning the provisions of any document are intended to be
summaries. In each instance, reference is made to the copy of
that document filed or incorporated or deemed to be incorporated
by reference as an exhibit to the registration statement of
which this prospectus is a part or otherwise filed with the SEC.
Each statement concerning the provisions of any document is
qualified in its entirety by reference to the document so filed.
You should rely only on the information contained in or
incorporated by reference in this prospectus and in any
accompanying prospectus supplement or any free writing
prospectus filed by us with the Securities and Exchange
Commission and any information about the terms of securities
offered conveyed to you by us, our underwriters or our agents.
We have not authorized anyone to provide you with any
information that is different or to make any different or
additional representations. We are not making any offer to sell
these or any securities in any jurisdiction where the offer or
sale is not permitted. You should not assume that the
information contained or incorporated by reference in this
prospectus, in any accompanying prospectus supplement or in any
free writing prospectus prepared by us or on our behalf is
accurate as of any date other than the date on the front of each
such document.
Unless otherwise mentioned or unless the context requires
otherwise, all references in this prospectus to
Univest, we, us,
our or similar references mean Univest Corporation
of Pennsylvania and its subsidiaries.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy any
document we file at the SECs public reference room located
at 100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at
1-800-SEC-0330
for further information on the operation of the public reference
room. The SEC maintains an Internet site at www.sec.gov that
contains reports, proxy and information statements, and other
information regarding issuers like us that file electronically
with the SEC. We also maintain an Internet site that contains
information about us. The address of that site is
www.univest.net. Information contained in our Internet site is
not incorporated by reference into this prospectus, and you
should not consider information contained in our Internet site
as part of this prospectus.
The SEC allows us to incorporate by reference the
information contained in the documents we file (SEC File
No. 000-07617)
with the SEC, which means that we can disclose important
information to you by referring you to those documents. The
information incorporated by reference is an important part of
this prospectus, and information that we file later with the SEC
will automatically update and supersede this information. We
incorporate by reference the documents listed below and any
future filings (other than filings or portions of filings that
under applicable SEC rules are furnished instead of filed) we
make with the SEC under Sections 13(a), 13(c), 14, or 15(d)
of the Securities Exchange Act of 1934, as amended (the
Exchange Act), until this prospectus is no longer
deemed effective.
(1) Our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2008;
(2) Our Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2009; and
(3) The description of our common stock contained in our
registration statement filed pursuant to Section 12 of the
Securities Exchange Act of 1934, including any amendment or
report filed for the purpose of updating such description.
1
Any information contained in this prospectus or in any document
incorporated or deemed to be incorporated by reference in this
prospectus will be deemed to have been modified or superseded to
the extent that a statement contained in any other document we
subsequently file with the SEC that also is incorporated or
deemed to be incorporated by reference in this prospectus or in
an applicable prospectus supplement or free writing prospectus
modifies or supersedes the original statement. Any statement so
modified or superseded will not be deemed, except as so modified
or superseded, to be a part of this prospectus.
We encourage you to read our periodic and current reports. We
think these reports provide additional information about our
company which prudent investors will find important. You may
request a copy of these filings as well as any future filings
incorporated by reference, at no cost, by writing to us at the
following address:
Univest
Corporation of Pennsylvania
Attention: Corporate Secretary
14 North Main Street
Souderton, PA 18964
(215) 721-2400
THE
COMPANY
Univest Corporation of Pennsylvania, (the Company),
is a Pennsylvania corporation organized in 1973 and registered
as a bank holding company pursuant to the Bank Holding Company
Act of 1956. The Company elected to become a Financial Holding
Company in 2000 as provided under Title I of the
Gramm-Leach-Bliley Act. It owns all of the capital stock of
Univest National Bank and Trust Company (the
Bank), Univest Realty Corporation, Univest Delaware,
Inc., and Univest Reinsurance Corporation. The consolidated
financial statements include the accounts of the Corporation and
its wholly owned subsidiaries.
The Bank is engaged in the general commercial banking business
and provides a full range of banking services and trust services
to its customers. Univest Capital, Inc., formerly Vanguard
Leasing, Inc., a wholly owned subsidiary of the Bank, is located
in Pennsylvania and provides lease financing. Delview, Inc., a
wholly owned subsidiary of the Bank, is a passive investment
holding company located in Delaware. Delview, Inc. provides
various financial services including financial planning,
investment management, insurance products and brokerage services
to individuals and businesses through its subsidiaries Univest
Investments, Inc. and Univest Insurance, Inc.
Univest Realty Corporation was established to obtain, hold and
operate properties for the holding company and its subsidiaries.
Univest Delaware, Inc. is a passive investment holding company
located in Delaware.
Univest Reinsurance Corporation, as a reinsurer, offers life and
disability insurance to individuals in connection with credit
extended to them by the Bank. Univest Investments, Inc., Univest
Insurance, Inc., Univest Capital, Inc. and Univest Reinsurance
Corporation were formed to enhance the traditional banking and
trust services provided by the Bank.
RISK
FACTORS
Investing in any securities that we may offer by this prospectus
involves risk. You should carefully consider the risk factors
that are incorporated into this prospectus by reference to our
most recent Annual Report on
Form 10-K
and our subsequent Quarterly Reports on
Form 10-Q
and the other information contained in this prospectus, as
updated by our subsequent filings under the Exchange Act and the
risk factors and other information contained in the applicable
prospectus supplement or free writing prospectus accompanying
this prospectus before acquiring any of our securities.
SPECIAL
NOTE ON FORWARD-LOOKING STATEMENTS
This prospectus, including the documents incorporated into it by
reference, contain various forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Any statements about our expectations, beliefs, plans,
objectives, assumptions or future events or performance are not
historical facts and may be forward-looking. These
forward-looking statements often can be, but are not always,
identified by the use of words such as assume,
expect, intend, plan,
project, believe, estimate,
predict, anticipate, may,
2
might, should, could,
goal, potential and similar expressions.
We base these forward-looking statements on our current
expectations and projections about future events, our
assumptions regarding these events and our knowledge of facts at
the time the statements are made. These forward-looking
statements are subject to various risks and uncertainties that
may be outside our control and our actual results could differ
materially from our projected results. Please see our most
recent Annual Report on
Form 10-K
and our subsequent Quarterly Reports on
Form 10-Q
and the other information contained in this prospectus for a
further discussion of these and other risks and uncertainties
applicable to our business. We are not able to predict all the
factors that may affect future results. Forward-looking
statements speak only as of the date of this prospectus or the
date of the document incorporated by reference. Except as
required by applicable laws or regulations, we do not undertake
any obligation to update or revise any forward-looking
statement, whether as a result of new information, future events
or otherwise.
RATIO OF
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK
The following table sets forth our historical ratio of earnings
to fixed charges and ratio of earnings to combined fixed charges
and preferred stock dividends for the periods indicated:
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Three Months Ended
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March 31,
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Year Ended December 31,
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2009
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2008
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2008
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2007
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2006
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2005
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2004
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Ratio of Earnings to Fixed Charges(1):
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Excluding interest on deposits
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3.81
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5.66
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4.28
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4.75
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5.09
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6.49
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7.36
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Including interest on deposits
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1.60
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1.73
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1.62
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1.64
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1.80
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2.29
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2.67
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Ratio of Earnings To Combined Fixed Charges and Preferred
Stock Dividends(2):
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Excluding interest on deposits
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3.81
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5.66
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4.28
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4.75
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5.09
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6.49
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7.36
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Including interest on deposits
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1.60
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1.73
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1.62
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1.64
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1.80
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2.29
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2.67X
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(1) |
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The ratio of earnings to fixed charges is calculated as follows: |
(Income
before income taxes and effects of discontinued operations, net
of tax)+(fixed
charges(4))
(fixed charges(4))
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The ratio of earnings to fixed charges and preferred stock
dividends is calculated as follows: |
(Income
before income taxes and effects of discontinued operations, net
of tax)+(fixed charges(4))
[(fixed charges(4)) + (pretax earnings required to cover
preferred stock dividends(3))
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Pretax earnings required to cover preferred stock dividends are
calculated as follows: |
Preferred
stock dividends
1 (our effective income tax rate of 35%)
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(4) |
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Fixed charges consists of: |
+ Interest on short-term borrowings
+ Interest on long-term debt
+ Portion of net rental expense deemed representative of
interest(5)
= Fixed charges, excluding interest on deposits
+ Interest on deposits
= Fixed Charges, including interest on deposits
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The portion of net rental expense deemed representative of
interest is calculated using the future cash outflows over the
individual leases and a corresponding treasury yield on the date
of origination or renewal. |
3
USE OF
PROCEEDS
Except as we may otherwise set forth in any accompanying
prospectus supplement, we expect to use the net proceeds we
receive from sales of securities offered by this prospectus for
general corporate purposes, which may include the financing of
our operations, repayment of short-term indebtedness, business
acquisitions and capital expenditures. Pending any specific
application, we may initially invest funds in short-term
marketable securities or apply them to the reduction of
short-term indebtedness.
If required, we will include a more detailed description of the
use of proceeds from any specific offering of securities in the
prospectus supplement relating to that offering.
DESCRIPTION
OF CAPITAL STOCK
This section describes the general terms of our common and
preferred stock. A prospectus supplement
and/or free
writing prospectus may provide information that is different
from this prospectus. If the information in the prospectus
supplement
and/or free
writing prospectus with respect to our capital stock being
offered differs from this prospectus, you should rely on the
information in the prospectus supplement
and/or free
writing prospectus. A copy of our amended articles of
incorporation has been incorporated by reference from our
filings with the SEC as an exhibit to the registration
statement. Our capital stock and the rights of the holders of
our capital stock are subject to the applicable provisions of
Pennsylvania law, our amended articles of incorporation, and our
amended bylaws.
The authorized capital stock of Univest consists of forty-eight
million (48,000,000) shares of common stock with a par value of
$5.00 and ten million (10,000,000) shares of preferred stock
with a par value of $5.00. As of May 14, 2009, there were
13,026,870 shares of common stock issued and outstanding
and no shares of preferred stock issued or outstanding. We have
no options, warrants or other rights authorized, issued or
outstanding other than options and rights granted under our
various stock compensation and dividend reinvestment plans.
Common
Stock
Dividends
The holders of our common stock share ratably in dividends when,
as and if declared by our board of directors from legally
available funds. Declaration and payment of cash dividends
depends upon cash dividend payments to it by our direct and
indirect subsidiaries, which are our primary source of revenue
and cash flow. We are a legal entity separate and distinct from
our subsidiaries. Accordingly, the right of Univest, and
consequently the right of creditors and shareholders of Univest,
to participate in any distribution of the assets or earnings of
any subsidiary is necessarily subject to the prior claims of
creditors of that subsidiary, except to the extent that claims
of Univest in its capacity as a creditor may be recognized.
Voting
Rights
Until we issue any preferred stock with voting rights, the
holders of shares of common stock have exclusive voting rights.
Each holder of shares of common stock has one vote for each
share held. Shareholders cannot cumulate votes in the election
of directors.
Univest common stock currently trades on the NASDAQ Global
Select Market of the NASDAQ Stock Market LLC. Under the NASDAQ
Stock Markets rules, shareholder approval is required for
the issuance of shares of our common stock or securities
convertible into or exercisable for our common stock, if the
issuance of such securities:
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is in connection with the acquisition of a company, is not in
connection with a public offering for cash, and the securities
to be issued will have 20% or more of the voting power
outstanding before such issuance;
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is in connection with the acquisition of a company in which a
director, officer or substantial shareholder has a 5% or greater
interest, and the issuance of the securities could result in an
increase in our outstanding common stock or voting power of 5%
or more;
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is in connection with a transaction, other than a public
offering, at a price less than the greater of book or market
value in which the shares issued will equal 20% or more of the
shares of our common stock, or have 20% or more of the voting
power, outstanding before issuance; or
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would result in a change in control.
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Under the NASDAQ Stock Markets rules, shareholder approval
is also required to establish a stock option or purchase plan in
which stock may be acquired by officers and directors other than
a broadly-based plan in which other Univest securities holders
or employees may participate.
Pre-Emptive
Rights, Redemption
Holders of our common stock do not have pre-emptive rights to
acquire any additional shares of Univest common stock. Our
common stock is not subject to redemption.
Liquidation
Rights
In the event of our liquidation, dissolution or
winding-up,
whether voluntary of involuntary, holders of Univest common
stock will share ratably in any of its assets or funds that are
available for distribution to its shareholders after
satisfaction, or adequate provision is made for satisfaction, of
its liabilities, and after payment of any liquidation
preferences of any outstanding shares of Univest preferred stock.
Preferred
Stock
Our board of directors is authorized to issue shares of Univest
preferred stock without shareholder approval. Our board of
directors will determine the rights, qualifications, limitations
and restrictions of each series of Univest preferred stock at
the time of issuance, including without limitation, rights as to
dividends, voting and convertibility into shares of Univest
common stock. Shares of preferred stock may have dividend,
redemption, voting, and liquidation rights that take priority
over the common stock, and may be convertible into common stock.
If our board of directors decides to issue any preferred stock,
it may discourage or make more difficult a merger, tender offer,
business combination or proxy contest, assumption of control by
a holder of a large block of our securities or the removal of
incumbent management, even if these events were favorable to the
interests of stockholders. Our board of directors, without
stockholder approval, may issue preferred stock with voting and
conversion rights and dividend and liquidation preferences which
may adversely affect the holders of common stock.
The following description of our preferred stock, and any
description of our preferred stock in a prospectus supplement
and/or free
writing prospectus is subject to, and qualified in its entirety
by reference to, the Pennsylvania Business Corporation Law, and
the actual terms and provisions contained in our articles of
incorporation and bylaws, each as amended from time to time.
Terms
Unless provided in a supplement to this prospectus
and/or free
writing prospectus, the shares of our preferred stock to be
issued will have no preemptive rights. Any prospectus supplement
and/or free
writing prospectus offering our preferred stock will furnish the
following information with respect to the preferred stock
offered:
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number of shares of preferred stock to be issued and the
offering price of the preferred stock;
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the title and stated value of the preferred stock;
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dividend rights;
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dividend rates, periods, or payment dates, or methods of
calculation of dividends applicable to the preferred stock;
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the date from which distributions on the preferred stock shall
accumulate, if applicable;
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right to convert the preferred stock into a different type of
security;
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voting rights attributable to the preferred stock;
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rights and preferences upon our liquidation or winding up of our
affairs;
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terms of redemption;
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the procedures for any auction and remarketing, if any, for the
preferred stock;
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the provisions for a sinking fund, if any, for the preferred
stock;
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any listing of the preferred stock on any securities exchange;
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the terms and conditions, if applicable, upon which the
preferred stock will be convertible into our common stock,
including the conversion price (or the manner of its
calculation);
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a discussion of federal income tax considerations applicable to
the preferred stock;
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the relative ranking and preferences of the preferred stock as
to distribution rights (including whether any liquidation
preference as to the preferred stock will be treated as a
liability for purposes of determining the availability of assets
for distributions to holders of stock ranking junior to the
shares of preferred stock as to distribution rights);
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any limitations on issuance of any series of preferred stock
ranking senior to or on a parity with the series of preferred
stock being offered as to distribution rights and rights upon
the liquidation, dissolution or winding up of our
affairs; and
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any other specific terms, preferences, rights, limitations or
restrictions of the preferred stock.
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Rank
Unless otherwise indicated in the applicable supplement to this
prospectus
and/or free
writing prospectus, shares of our preferred stock will rank,
with respect to payment of distributions and rights upon our
liquidation, dissolution or winding up, and allocation of our
earnings and losses:
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senior to all classes or series of our common stock, and to all
of our equity securities ranking junior to the preferred stock;
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on a parity with all equity securities issued by us, the terms
of which specifically provide that these equity securities rank
on a parity with the preferred stock; and
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junior to all equity securities issued by us, the terms of which
specifically provide that these equity securities rank senior to
the preferred stock.
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Distributions
Subject to any preferential rights of any outstanding stock or
series of stock, our preferred stockholders are entitled to
receive distributions, when and as authorized by our board of
directors, out of legally available funds, and share pro rata
based on the number of preferred shares, common stock and other
parity equity securities outstanding.
Voting
Rights
Unless otherwise indicated in the applicable supplement to this
prospectus
and/or free
writing prospectus, holders of our preferred stock will not have
any voting rights.
Liquidation
Preference
Upon the voluntary or involuntary liquidation, dissolution or
winding up of our affairs, then, before any distribution or
payment shall be made to the holders of any common stock or any
other class or series of stock ranking junior to the preferred
stock in our distribution of assets upon any liquidation,
dissolution or winding up, the holders of each series of our
preferred stock are entitled to receive, after payment or
provision for payment of our debts and other liabilities, out of
our assets legally available for distribution to stockholders,
liquidating
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distributions in the amount of the liquidation preference per
share (set forth in the applicable supplement to this
prospectus), plus an amount, if applicable, equal to all
distributions accrued and unpaid thereon (which shall not
include any accumulation in respect of unpaid distributions for
prior distribution periods if the preferred stock does not have
a cumulative distribution). After payment of the full amount of
the liquidating distributions to which they are entitled, the
holders of preferred stock will have no right or claim to any of
our remaining assets. In the event that, upon our voluntary or
involuntary liquidation, dissolution or winding up, the legally
available assets are insufficient to pay the amount of the
liquidating distributions on all of our outstanding preferred
stock and the corresponding amounts payable on all of our stock
of other classes or series of equity security ranking on a
parity with the preferred stock in the distribution of assets
upon liquidation, dissolution or winding up, then the holders of
our preferred stock and all other such classes or series of
equity security shall share ratably in the distribution of
assets in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled.
If the liquidating distributions are made in full to all holders
of preferred stock, our remaining assets shall be distributed
among the holders of any other classes or series of equity
security ranking junior to the preferred stock upon our
liquidation, dissolution or winding up, according to their
respective rights and preferences and in each case according to
their respective number of shares of stock.
Conversion
Rights
The terms and conditions, if any, upon which shares of any
series of preferred stock are convertible into other securities
will be set forth in the applicable supplement to this
prospectus
and/or free
writing prospectus. These terms will include the amount and type
of security into which the shares of preferred stock are
convertible, the conversion price (or manner of calculation
thereof), the conversion period, provisions as to whether
conversion will be at the option of the holders of the preferred
stock or us, the events requiring an adjustment of the
conversion price and provisions affecting conversion in the
event of the redemption of that preferred stock.
Redemption
If so provided in the applicable supplement to this prospectus
and/or free
writing prospectus, our preferred stock will be subject to
mandatory redemption or redemption at our option, in whole or in
part, in each case upon the terms, at the times and at the
redemption prices set forth in such supplement to this
prospectus
and/or free
writing prospectus.
Anti-Takeover
Charter and Pennsylvania Law Provisions
Our articles of incorporation and bylaws, each as amended,
contain certain provisions which may have the effect of
deterring or discouraging an attempt to take control of Univest.
These provisions:
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empower our board of directors, without shareholder approval, to
issue shares of preferred stock the terms of which, including
voting power, are set by our board;
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divide our board of directors into three classes serving
staggered three-year terms;
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restrict the ability of shareholders to remove directors;
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require that shares with at least 75% of total voting power
approve a merger or other similar transaction with a person or
entity holding stock with more than 5% of Univests total
voting power, if the transaction is not approved, in advance, by
our board of directors;
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do not permit shareholders actions without a meeting;
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require that shares with at least 75% of total voting power
approve the repeal or amendment of certain provisions of our
articles of incorporation;
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eliminate cumulative voting in the election of
directors; and
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require advance notice of nominations for the election of
directors and the presentation of shareholder proposals at
meetings of shareholders.
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7
The Pennsylvania Business Corporation Law also contains certain
provisions applicable to us that may have the effect of
deterring or discouraging an attempt to take control of Univest.
These provisions, among other things:
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require that, following any acquisition by any person or group
of 20% of a public corporations voting power, the
remaining shareholders have the right to receive payment for
their shares, in cash, from such person or group in an amount
equal to the fair value of the shares, including an
increment representing a proportion of any value payable for
control of the corporation;
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prohibit for five years, subject to certain exceptions, a
business combination (which includes a merger or
consolidation of the corporation or a sale, lease or exchange of
assets) with a person or group beneficially owning 20% or more
of a public corporations voting power;
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prevent a person or group acquiring different levels of voting
power (20%, 33% and 50%) from voting any shares over the
applicable threshold, unless disinterested
shareholders approve such voting rights;
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require any person or group that publicly announces that it may
acquire control of a corporation, or that acquires or publicly
discloses an intent to acquire 20% or more of the voting power
of a corporation, to disgorge to the corporation any profits
that it receives from sales of the corporations equity
securities purchased over the prior 18 months;
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expand the factors and groups (including shareholders) which a
corporations board of directors can consider in
determining whether an action is in the best interests of the
corporation;
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provide that a corporations board of directors need not
consider the interests of any particular group as dominant or
controlling;
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provide that a corporations directors, in order to satisfy
the presumption that they have acted in the best interests of
the corporation, need not satisfy any greater obligation or
higher burden of proof with respect to actions relating to an
acquisition or potential acquisition of control;
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provide that actions relating to acquisitions of control that
are approved by a majority of disinterested
directors are presumed to satisfy the directors
standard, unless it is proven by clear and convincing evidence
that the directors did not assent to such action in good faith
after reasonable investigation; and
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provide that the fiduciary duty of a corporations
directors is solely to the corporation and may be enforced by
the corporation or by a shareholder in a derivative action, but
not by a shareholder directly.
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The Pennsylvania Business Corporation Law also explicitly
provides that the fiduciary duty of directors does not require
them to:
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redeem any rights under, or to modify or render inapplicable,
any shareholder rights plan;
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render inapplicable, or make determinations under, provisions of
the Pennsylvania Business Corporation Law relating to control
transactions, business combinations, control-share acquisitions
or disgorgement by certain controlling shareholders following
attempts to acquire control; or
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act as the board of directors, a committee of the board or an
individual director, solely because of the effect such action
might have on an acquisition or potential acquisition of control
of the corporation or the consideration that might be offered or
paid to shareholders in such an acquisition.
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DESCRIPTION
OF DEBT SECURITIES
We may issue debt securities under an indenture between us and a
U.S. banking institution, as the indenture trustee. Each
indenture will be subject to, and governed by, the
Trust Indenture Act of 1939, as amended, and we may
supplement the indenture from time to time after we
execute it.
This prospectus summarizes the material provisions of the
indenture and the debt securities that we may issue under an
indenture. This summary may not describe all of the provisions
of the indenture or of any of the debt securities that might be
important to you. For additional information, you should
carefully read the forms of
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indenture that are incorporated by reference as an exhibit to
the registration statement of which this prospectus forms a part.
When we offer to sell a particular series of debt securities, we
will describe the specific terms of those debt securities in a
supplement to this prospectus
and/or free
writing prospectus. We will also indicate in the supplement
and/or free
writing prospectus whether the general terms in this prospectus
apply to a particular series of debt securities. Accordingly,
for a description of the terms of a particular issue of debt
securities, you should carefully read both this prospectus and
the applicable supplement
and/or free
writing prospectus.
Terms
The prospectus supplement
and/or free
writing prospectus will describe the debt securities and the
price or prices at which we will offer the debt securities. The
description will include:
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the title and form of the debt securities;
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any limit on the aggregate principal amount of the debt
securities or the series of which they are a part;
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the person to whom any interest on a debt security of the series
will be paid;
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the date or dates on which we must repay the principal;
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the rate or rates at which the debt securities will bear
interest;
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the date or dates from which interest will accrue, and the dates
on which we must pay interest;
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the place or places where we must pay the principal and any
premium or interest on the debt securities;
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the terms and conditions on which we may redeem any debt
security, if at all;
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any obligation to redeem or purchase any debt securities, and
the terms and conditions on which we must do so;
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the denominations in which we may issue the debt securities;
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the manner in which we will determine the amount of principal of
or any premium or interest on the debt securities;
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the currency in which we will pay the principal of and any
premium or interest on the debt securities;
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the principal amount of the debt securities that we will pay
upon declaration of acceleration of their maturity;
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the amount that will be deemed to be the principal amount for
any purpose, including the principal amount that will be due and
payable upon any maturity or that will be deemed to be
outstanding as of any date;
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if applicable, that the debt securities are defeasible and the
terms of such defeasance;
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if applicable, the terms of any right to convert debt securities
into, or exchange debt securities for, shares of our debt
securities, preferred stock or common stock or other securities
or property;
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whether we will issue the debt securities in the form of one or
more global securities and, if so, the respective depositaries
for the global securities and the terms of the global securities;
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the subordination provisions that will apply to any subordinated
debt securities;
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any addition to or change in the events of default applicable to
the debt securities and any change in the right of the trustee
or the holders to declare the principal amount of any of the
debt securities due and payable;
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any addition to or change in the covenants in the
indentures; and
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any other terms of the debt securities not inconsistent with the
applicable indentures.
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We may sell the debt securities at a substantial discount below
their stated principal amount. We will describe
U.S. federal income tax considerations, if any, applicable
to debt securities sold at an original issue discount in the
prospectus supplement. An original issue discount
security is any debt security sold for less than its face
value,
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and which provides that the holder cannot receive the full face
value if maturity is accelerated. The prospectus supplement
relating to any original issue discount securities will describe
the particular provisions relating to acceleration of the
maturity upon the occurrence of an event of default. In
addition, we will describe U.S. federal income tax or other
considerations applicable to any debt securities that are
denominated in a currency or unit other than U.S. dollars
in the prospectus supplement.
Conversion
and Exchange Rights
The prospectus supplement
and/or free
writing prospectus will describe, if applicable, the terms on
which you may convert debt securities into or exchange them for
debt securities, preferred stock and common stock or other
securities or property. The conversion or exchange may be
mandatory or may be at your option. The prospectus supplement
and/or free
writing prospectus will describe how the amount of debt
securities, number of shares of preferred stock and common stock
or other securities or property to be received upon conversion
or exchange would be calculated.
Subordination
of Subordinated Debt Securities
The indebtedness underlying any subordinated debt securities
will be payable only if all payments due under our senior
indebtedness, as defined in the applicable indenture and any
indenture supplement, including any outstanding senior debt
securities, have been made. If we distribute our assets to
creditors upon any dissolution,
winding-up,
liquidation or reorganization or in bankruptcy, insolvency,
receivership or similar proceedings, we must first pay all
amounts due or to become due on all senior indebtedness before
we pay the principal of, or any premium or interest on, the
subordinated debt securities. In the event the subordinated debt
securities are accelerated because of an event of default, we
may not make any payment on the subordinated debt securities
until we have paid all senior indebtedness or the acceleration
is rescinded. If the payment of subordinated debt securities
accelerates because of an event of default, we must promptly
notify holders of senior indebtedness of the acceleration.
If we experience a bankruptcy, dissolution or reorganization,
holders of senior indebtedness may receive more, ratably, and
holders of subordinated debt securities may receive less,
ratably, than our other creditors. The indenture for
subordinated debt securities may not limit our ability to incur
additional senior indebtedness.
Form,
Exchange, and Transfer
We will issue debt securities only in fully registered form,
without coupons, and only in denominations of $1,000 and
integral multiples thereof, unless the prospectus supplement
and/or free
writing prospectus provides otherwise. The holder of a debt
security may elect, subject to the terms of the indentures and
the limitations applicable to global securities, to exchange
them for other debt securities of the same series of any
authorized denomination and of similar terms and aggregate
principal amount.
Holders of debt securities may present them for exchange as
provided above or for registration of transfer, duly endorsed or
with the form of transfer duly executed, at the office of the
transfer agent we designate for that purpose. We will not impose
a service charge for any registration of transfer or exchange of
debt securities, but we may require a payment sufficient to
cover any tax or other governmental charge payable in connection
with the transfer or exchange. We will name the transfer agent
in the prospectus supplement. We may designate additional
transfer agents or rescind the designation of any transfer agent
or approve a change in the office through which any transfer
agent acts, but we must maintain a transfer agent in each place
where we will make payment on debt securities.
If we redeem the debt securities, we will not be required to
issue, register the transfer of or exchange any debt security
during a specified period prior to mailing a notice of
redemption. We are not required to register the transfer of or
exchange of any debt security selected for redemption, except
the unredeemed portion of the debt security being redeemed.
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Global
Securities
The debt securities may be represented, in whole or in part, by
one or more global securities that will have an aggregate
principal amount equal to that of all debt securities of that
series. Each global security will be registered in the name of a
depositary identified in the prospectus supplement. We will
deposit the global security with the depositary or a custodian,
and the global security will bear a legend regarding the
restrictions on exchanges and registration of transfer.
No global security may be exchanged in whole or in part for debt
securities registered, and no transfer of a global security in
whole or in part may be registered, in the name of any person
other than the depositary or any nominee or successor of the
depositary unless:
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the depositary is unwilling or unable to continue as
depositary; or
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the depositary is no longer in good standing under the Exchange
Act or other applicable statute or regulation.
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The depositary will determine how all securities issued in
exchange for a global security will be registered.
As long as the depositary or its nominee is the registered
holder of a global security, we will consider the depositary or
the nominee to be the sole owner and holder of the global
security and the underlying debt securities. Except as stated
above, owners of beneficial interests in a global security will
not be entitled to have the global security or any debt security
registered in their names, will not receive physical delivery of
certificated debt securities and will not be considered to be
the owners or holders of the global security or underlying debt
securities. We will make all payments of principal, premium and
interest on a global security to the depositary or its nominee.
The laws of some jurisdictions require that some purchasers of
securities take physical delivery of such securities in
definitive form. These laws may prevent you from transferring
your beneficial interests in a global security.
Only institutions that have accounts with the depositary or its
nominee and persons that hold beneficial interests through the
depositary or its nominee may own beneficial interests in a
global security. The depositary will credit, on its book-entry
registration and transfer system, the respective principal
amounts of debt securities represented by the global security to
the accounts of its participants. Ownership of beneficial
interests in a global security will be shown only on, and the
transfer of those ownership interests will be effected only
through, records maintained by the depositary or any such
participant.
The policies and procedures of the depositary may govern
payments, transfers, exchanges and others matters relating to
beneficial interests in a global security. We and the trustee
will assume no responsibility or liability for any aspect of the
depositarys or any participants records relating to,
or for payments made on account of, beneficial interests in a
global security.
Payment
and Paying Agents
We will pay principal and any premium or interest on a debt
security to the person in whose name the debt security is
registered at the close of business on the regular record date
for such interest.
We will pay principal and any premium or interest on the debt
securities at the office of our designated paying agent. Unless
the prospectus supplement
and/or free
writing prospectus indicates otherwise, the corporate trust
office of the trustee will be the paying agent for the debt
securities.
Any other paying agents we designate for the debt securities of
a particular series will be named in the prospectus supplement
and/or free
writing prospectus. We may designate additional paying agents,
rescind the designation of any paying agent or approve a change
in the office through which any paying agent acts, but we must
maintain a paying agent in each place of payment for the debt
securities.
The paying agent will return to us all money we pay to it for
the payment of the principal, premium or interest on any debt
security that remains unclaimed for a specified period.
Thereafter, the holder may look only to us for payment, as an
unsecured general creditor.
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Consolidation,
Merger, and Sale of Assets
Under the terms of the indentures, so long as any securities
remain outstanding, we may not consolidate or enter into a share
exchange with or merge into any other person, in a transaction
in which we are not the surviving corporation, or sell, convey,
transfer or lease our properties and assets substantially as an
entirety to any person, unless:
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the successor assumes our obligations under the debt securities
and the indentures; and
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we meet the other conditions described in the indentures.
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Events of
Default
Each of the following will constitute an event of default under
each indenture:
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failure to pay the principal of or any premium on any debt
security when due;
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failure to pay any interest on any debt security when due, for
more than a specified number of days past the due date;
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failure to deposit any sinking fund payment when due;
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failure to perform any covenant or agreement in the indenture
that continues for a specified number of days after written
notice has been given by the trustee or the holders of a
specified percentage in aggregate principal amount of the debt
securities of that series;
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events of bankruptcy, insolvency or reorganization; and
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any other event of default specified in the prospectus
supplement.
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If an event of default occurs and continues, both the trustee
and holders of a specified percentage in aggregate principal
amount of the outstanding securities of that series may declare
the principal amount of the debt securities of that series to be
immediately due and payable. The holders of a majority in
aggregate principal amount of the outstanding securities of that
series may rescind and annul the acceleration if all events of
default, other than the nonpayment of accelerated principal,
have been cured or waived.
Except for its duties in case of an event of default, the
trustee will not be obligated to exercise any of its rights or
powers at the request or direction of any of the holders, unless
the holders have offered the trustee reasonable indemnity. If
they provide this indemnification and subject to conditions
specified in the applicable indenture, the holders of a majority
in aggregate principal amount of the outstanding securities of
any series may direct the time, method and place of conducting
any proceeding for any remedy available to the trustee or
exercising any trust or power conferred on the trustee with
respect to the debt securities of that series.
No holder of a debt security of any series may institute any
proceeding with respect to the indentures, or for the
appointment of a receiver or a trustee, or for any other remedy,
unless:
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the holder has previously given the trustee written notice of a
continuing event of default;
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the holders of a specified percentage in aggregate principal
amount of the outstanding securities of that series have made a
written request upon the trustee, and have offered reasonable
indemnity to the trustee, to institute the proceeding;
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the trustee has failed to institute the proceeding for a
specified period of time after its receipt of the
notification; and
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the trustee has not received a direction inconsistent with the
request within a specified number of days from the holders of a
specified percentage in aggregate principal amount of the
outstanding securities of that series.
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Modification
and Waiver
We and the trustee may change an indenture without the consent
of any holders with respect to specific matters, including:
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to fix any ambiguity, defect or inconsistency in the
indenture; and
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to change anything that does not materially adversely affect the
interests of any holder of debt securities of any series.
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In addition, under the indentures, the rights of holders of a
series of notes may be changed by us and the trustee with the
written consent of the holders of at least a majority in
aggregate principal amount of the outstanding debt securities of
each series that is affected. However, we and the trustee may
only make the following changes with the consent of the holder
of any outstanding debt securities affected:
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extending the fixed maturity of the series of notes;
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reducing the principal amount, reducing the rate of or extending
the time of payment of interest, or any premium payable upon the
redemption, of any debt securities; or
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reducing the percentage of debt securities the holders of which
are required to consent to any amendment.
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The holders of a majority in principal amount of the outstanding
debt securities of any series may waive any past default under
the indenture with respect to debt securities of that series,
except a default in the payment of principal, premium or
interest on any debt security of that series or in respect of a
covenant or provision of the indenture that cannot be amended
without each holders consent.
Except in limited circumstances, we may set any day as a record
date for the purpose of determining the holders of outstanding
debt securities of any series entitled to give or take any
direction, notice, consent, waiver or other action under the
indentures. In limited circumstances, the trustee may set a
record date. To be effective, the action must be taken by
holders of the requisite principal amount of such debt
securities within a specified period following the record date.
Defeasance
To the extent stated in the prospectus supplement
and/or free
writing prospectus, we may elect to apply the provisions in the
indentures relating to defeasance and discharge of indebtedness,
or to defeasance of restrictive covenants, to the debt
securities of any series. The indentures provide that, upon
satisfaction of the requirements described below, we may
terminate all of our obligations under the debt securities of
any series and the applicable indenture, known as legal
defeasance, other than our obligation:
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to maintain a registrar and paying agents and hold monies for
payment in trust;
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to register the transfer or exchange of the notes; and
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to replace mutilated, destroyed, lost or stolen notes.
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In addition, we may terminate our obligation to comply with any
restrictive covenants under the debt securities of any series or
the applicable indenture, known as covenant defeasance.
We may exercise our legal defeasance option even if we have
previously exercised our covenant defeasance option. If we
exercise either defeasance option, payment of the notes may not
be accelerated because of the occurrence of events of default.
To exercise either defeasance option as to debt securities of
any series, we must irrevocably deposit in trust with the
trustee money
and/or
obligations backed by the full faith and credit of the United
States that will provide money in an amount sufficient in the
written opinion of a nationally recognized firm of independent
public accountants to pay the principal of, premium, if any, and
each installment of interest on the debt securities. We may only
establish this trust if, among other things:
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no event of default shall have occurred or be continuing;
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in the case of legal defeasance, we have delivered to the
trustee an opinion of counsel to the effect that we have
received from, or there has been published by, the Internal
Revenue Service a ruling or there has been a change in law,
which in the opinion of our counsel, provides that holders of
the debt securities will not recognize gain or loss for federal
income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same
amount, in the same manner and at the same times as would have
been the case if such deposit, defeasance and discharge had not
occurred;
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in the case of covenant defeasance, we have delivered to the
trustee an opinion of counsel to the effect that the holders of
the debt securities will not recognize gain or loss for federal
income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same
amount, in the same manner and at the same times as would have
been the case if such deposit, defeasance and discharge had not
occurred; and
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we satisfy other customary conditions precedent described in the
applicable indenture.
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Notices
We will mail notices to holders of debt securities as indicated
in the prospectus supplement
and/or free
writing prospectus.
Title
We may treat the person in whose name a debt security is
registered as the absolute owner, whether or not such debt
security may be overdue, for the purpose of making payment and
for all other purposes.
Governing
Law
The indentures and the debt securities will be governed by and
construed in accordance with the laws of the State of New York.
DESCRIPTION
OF DEPOSITARY SHARES
We may, at our option, elect to offer fractional shares or some
multiple of shares of preferred stock, rather than individual
shares of preferred stock. If we choose to do so, we will issue
depositary receipts for depositary shares, each of which will
represent a fraction or a multiple of a share of a particular
series of preferred stock as described below.
The applicable prospectus supplement
and/or free
writing prospectus will describe the specific terms of any
issuance of depositary shares. You should read the particular
terms of any depositary shares we offer in any prospectus
supplement
and/or free
writing prospectus, together with the more detailed form of
deposit agreement, including the form of depositary receipt
relating to the depositary shares, which will be filed as an
exhibit to a document incorporated by reference in the
registration statement of which this prospectus forms a part.
The prospectus supplement
and/or free
writing prospectus also will state whether any of the terms
summarized below do not apply to the depositary shares being
offered.
General
The shares of any series of preferred stock represented by
depositary shares will be deposited under a deposit agreement
among us, a bank or trust company we select, with its principal
executive office in the United States and a combined capital and
surplus of at least $50,000,000, as depositary, which we refer
to as the preferred stock depositary, and the holders from time
to time of depositary receipts issued under the agreement.
Subject to the terms of the deposit agreement, each holder of a
depositary share will be entitled, in proportion to the fraction
or multiple of a share of preferred stock represented by that
depositary share, to all the rights and preferences of the
preferred stock represented by that depositary share, including
dividend, voting and liquidation rights.
The depositary shares will be evidenced by depositary receipts
issued under the deposit agreement. Depositary receipts will be
distributed to those persons purchasing the fractional or
multiple shares of the related series of
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preferred stock. Immediately following the issuance of shares of
a series of preferred stock, we will deposit those shares with
the preferred stock depositary, which will then issue and
deliver the depositary receipts to the purchasers.
Depositary receipts will only be issued evidencing whole
depositary shares. A depositary receipt may evidence any number
of whole depositary shares.
Dividends
and Other Distributions
The preferred stock depositary will distribute all cash
dividends or other cash distributions received on the related
series of preferred stock to the record holders of depositary
receipts relating to those series in proportion to the number of
the depositary shares evidenced by depositary receipts those
holders own.
If we make a distribution other than in cash, the preferred
stock depositary will distribute the property it receives to the
record holders of depositary receipts in proportion to the
number of depositary shares evidenced by depositary receipts
those holders own, unless the preferred stock depositary
determines that the distribution cannot be made proportionately
among those holders or that it is not feasible to make the
distribution. In that event, the preferred stock depositary may,
with our approval, sell the property and distribute the net
proceeds to the holders in proportion to the number of
depositary shares evidenced by depositary receipts they own.
The amount distributed to holders of depositary shares will be
reduced by any amounts required to be withheld by us or the
preferred stock depositary on account of taxes or other
governmental charges.
Conversion
and Exchange
If any series of preferred stock underlying the depositary
shares is subject to conversion or exchange, the applicable
prospectus supplement
and/or free
writing prospectus will describe the rights or obligations of
each record holder of depositary receipts to convert or exchange
the depositary shares.
Voting
Upon receiving notice of any meeting at which the holders of any
series of the preferred stock are entitled to vote, the
preferred stock depositary will mail the information contained
in the notice of the meeting to the record holders of the
depositary receipts relating to that series of preferred stock.
Each record holder of the depositary receipts on the record
date, which will be the same date as the record date for the
related series of preferred stock, may instruct the preferred
stock depositary how to exercise his or her voting rights. The
preferred stock depositary will endeavor, insofar as
practicable, to vote or cause to be voted the maximum number of
whole shares of the preferred stock represented by those
depositary shares in accordance with those instructions received
sufficiently in advance of the meeting, and we will agree to
take all reasonable action that may be deemed necessary by the
preferred stock depositary in order to enable the preferred
stock depositary to do so. The preferred stock depositary will
abstain from voting shares of the preferred stock for which it
does not receive specific instructions from the holder of the
depositary shares representing them.
Redemption
of Depositary Shares
Depositary shares will be redeemed from any proceeds received by
the preferred stock depositary resulting from the redemption, in
whole or in part, of the series of the preferred stock
represented by those depositary shares. The redemption price per
depositary share will equal the applicable fraction or multiple
of the redemption price per share payable with respect to
the series of the preferred stock. If we redeem shares of a
series of preferred stock held by the preferred stock
depositary, the preferred stock depositary will redeem as of the
same redemption date the number of depositary shares
representing the shares of preferred stock that we redeem. If
less than all the depositary shares will be redeemed, the
depositary shares to be redeemed will be selected by lot or
substantially equivalent method determined by the preferred
stock depositary.
After the date fixed for redemption, the depositary shares
called for redemption will no longer be deemed to be
outstanding, and all rights of the holders of the depositary
shares will cease, except the right to receive the monies
payable and any other property to which the holders were
entitled upon the redemption upon surrender to the
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preferred stock depositary of the depositary receipts evidencing
the depositary shares. Any funds deposited by us with the
preferred stock depositary for any depositary shares that the
holders fail to redeem will be returned to us after a period of
two years from the date the funds are deposited.
Amendment
and Termination of the Deposit Agreement
We may amend the form of depositary receipt evidencing the
depositary shares and any provision of the deposit agreement at
any time and from time to time by agreement with the preferred
stock depositary. However, any amendment that materially and
adversely alters the rights of the holders of depositary
receipts will not be effective unless it has been approved by
the holders of at least a majority of the depositary shares then
outstanding. The deposit agreement will automatically terminate
after there has been a final distribution on the related series
of preferred stock in connection with our liquidation,
dissolution or winding up and that distribution has been made to
the holders of depositary shares or all of the depositary shares
have been redeemed.
Charges
of Preferred Stock Depositary
We will pay all transfer and other taxes and governmental
charges arising solely from the existence of the depositary
arrangements. We will pay all charges of the preferred stock
depositary in connection with the initial deposit of the related
series of preferred stock, the initial issuance of the
depositary shares, all withdrawals of shares of the related
series of preferred stock by holders of depositary shares and
the registration of transfers of title to any depositary shares.
However, holders of depositary shares will pay other transfer
and other taxes and governmental charges and the other charges
expressly provided in the deposit agreement to be for their
accounts.
Corporate
Trust Office of Preferred Stock Depositary
The preferred stock depositarys corporate trust office
will be set forth in the applicable prospectus supplement
and/or free
writing prospectus relating to a series of depositary shares.
The preferred stock depositary will act as transfer agent and
registrar for depositary receipts, and, if shares of a series of
preferred stock are redeemable, the preferred stock depositary
will act as redemption agent for the corresponding depositary
receipts.
Resignation
and Removal of Preferred Stock Depositary
The preferred stock depositary may resign at any time by
delivering to us written notice of its election to do so, and we
may at any time remove the preferred stock depositary. Any
resignation or removal will take effect upon the appointment of
a successor preferred stock depositary. A successor must be
appointed by us within 60 days after delivery of the notice
of resignation or removal and must be a bank or trust company
having its principal office in the United States and a combined
capital and surplus of at least $50,000,000.
Reports
to Holders
We will deliver all required reports and communications to
holders of the preferred stock to the preferred stock
depositary, and it will forward those reports and communications
to the holders of depositary shares. Upon request, the preferred
stock depositary will provide for inspection to the holders of
depositary shares the transfer books of the depositary and the
list of holders of receipts; provided that any requesting holder
certifies to the preferred stock depositary that such inspection
is for a proper purpose reasonably related to such persons
interest as an owner of depositary shares evidenced by the
receipts.
DESCRIPTION
OF SECURITIES WARRANTS
We may issue securities warrants from time to time in one or
more series for the purchase of our common stock, debt
securities or preferred stock or any combination of those
securities. Securities warrants may be issued independently or
together with any shares of common stock, debt securities or
shares of preferred stock offered by any prospectus supplement
and/or free
writing prospectus and may be attached to or separate from these
shares of common stock, debt securities or shares of preferred
stock. Each series of securities warrants will be issued under a
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separate warrant agreement to be entered into between us and a
warrant agent or any other bank or trust company specified in
the related prospectus supplement
and/or free
writing prospectus relating to the particular issue of
securities warrants. The warrant agent will act solely as our
agent in connection with the securities warrants and will not
assume any obligation or relationship of agency or trust for or
with any holders of securities warrants or beneficial owners of
securities warrants. The specific terms of a series of
securities warrants will be described in the applicable
prospectus supplement
and/or free
writing prospectus relating to that series of securities
warrants along with any general provisions applicable to that
series of warrants. The following description of the warrants,
and any description of the securities warrants in a prospectus
supplement
and/or free
writing prospectus, is a summary. This summary description is
subject to, and qualified in its entirety by reference to, the
underlying warrant agreement, which we will file or incorporate
by reference as an exhibit to the registration statement of
which this prospectus forms a part at or prior to the time of
the sale of the securities warrants.
Terms
If securities warrants are offered by us, the prospectus
supplement
and/or free
writing prospectus will describe the terms of the securities
warrants, including the following if applicable to the
particular offering:
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the title of the warrants;
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the total number of warrants;
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the price or prices at which the warrants will be issued and
sold;
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the currency, currencies, including composite currencies or
currency units, in which the price of the warrants may be
payable;
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the number of shares of common stock purchasable upon exercise
of the securities warrants to purchase common stock and the
price at which such shares of common stock may be purchased upon
exercise;
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the designation, aggregate principal amount, currency,
currencies or currency units and terms of the debt securities
purchasable upon exercise of the warrants and the price at which
the debt securities may be purchased upon such exercise;
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the designation and terms of the debt securities or preferred
stock with which the securities warrants are issued and the
number of securities warrants issued with each debt security or
share of preferred stock;
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the date on and after which the securities warrants and the
related common stock, debt securities or preferred stock will be
separately transferable;
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if applicable, the date on which the right to exercise the
securities warrants shall commence and the date on which this
right shall expire;
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whether the securities warrants will be issued in registered or
bearer form;
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if applicable, the minimum or maximum amount of the warrants
which may be exercised at any one time;
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a discussion of federal income tax, accounting and other special
considerations, procedures and limitations relating to the
securities warrants; and
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any other terms of the securities warrants including terms,
procedures and limitations relating to the exchange and exercise
of the warrants.
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Securities warrants may be exchanged for new securities warrants
of different denominations, may (if in registered form) be
presented for registration of transfer, and may be exercised at
the corporate trust office of the warrant agent or any other
office indicated in the prospectus supplement. Before the
exercise of their securities warrants, holders of securities
warrants will not have any of the rights of holders of shares of
common stock, the debt securities or shares of preferred stock
purchasable upon exercise, including the right to receive
payments of principal of, any premium on, or any interest on,
the debt securities purchasable upon such exercise or to enforce
the covenants in the indenture or to receive payments of
dividends, if any, on the common stock or preferred stock
purchasable upon such exercise or to exercise any applicable
right to vote.
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Exercise
of Securities Warrants
Each securities warrant will entitle the holder to purchase a
principal amount of debt securities or a number of shares of
common stock or preferred stock at an exercise price as shall in
each case be set forth in, or calculable from, the prospectus
supplement relating to those securities warrant. Securities
warrants may be exercised at the times set forth in the
prospectus supplement relating to such securities warrants.
After the close of business on the expiration date (or any later
date to which the expiration date may be extended by us),
unexercised securities warrants will become void. Subject to any
restrictions and additional requirements that may be set forth
in the prospectus supplement
and/or free
writing prospectus relating thereto, securities warrants may be
exercised by delivery to the warrant agent of the certificate
evidencing the securities warrants properly completed and duly
executed and of payment as provided in the prospectus supplement
and/or free
writing prospectus of the amount required to purchase the debt
securities or shares of common stock or preferred stock
purchasable upon such exercise. The exercise price will be the
price applicable on the date of payment in full, as set forth in
the prospectus supplement
and/or free
writing prospectus relating to the securities warrants. Upon
receipt of the payment and the certificate representing the
securities warrants to be exercised properly completed and duly
executed at the corporate trust office of the warrant agent or
any other office indicated in the prospectus supplement
and/or free
writing prospectus, we will, as soon as practicable, issue and
deliver the debt securities or shares of common stock or
preferred stock purchasable upon such exercise. If fewer than
all of the securities warrants represented by that certificate
are exercised, a new certificate will be issued for the
remaining amount of securities warrants.
DESCRIPTION
OF STOCK PURCHASE CONTRACTS AND UNITS
We may issue stock purchase contracts representing contracts
obligating holders to purchase from us, and us to sell to the
holders, a specified number of shares of our common stock or
preferred stock (or a range of numbers of shares pursuant to a
predetermined formula) at a future date or dates. The price per
share of common or preferred stock and the number of shares of
common or preferred stock may be fixed at the time the stock
purchase contracts are issued or may be determined by reference
to a specific formula set forth in the stock purchase contracts.
The stock purchase contracts may be issued separately or as a
part of units, often known as stock purchase units, consisting
of a stock purchase contract and either:
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our debt securities;
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our preferred stock; or
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debt obligations of third parties, including U.S. Treasury
securities.
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These securities or third party debt obligations would secure
the holders obligations to purchase the common or
preferred stock under the stock purchase contracts.
The stock purchase contracts may require us to make periodic
payments to the holders of the stock purchase units or vice
versa, and such payments may be unsecured or pre-funded on some
basis. The stock purchase contracts may require holders to
secure their obligations in a specified manner, and in specified
circumstances we may deliver newly issued, prepaid stock
purchase contracts, often known as prepaid securities, upon
release to a holder of any collateral securing the holders
obligations under the original stock purchase contract.
The applicable prospectus supplement
and/or free
writing prospectus will describe the terms of any stock purchase
contracts or stock purchase units, and, if applicable, prepaid
securities. The description in the applicable prospectus
supplement
and/or free
writing prospectus will be a summary and reference will be made
to the stock purchase contracts, any collateral and depositary
arrangements relating to the stock purchase contracts or stock
purchase units; and, if applicable the prepaid securities.
Material U.S. federal income tax considerations applicable
to the stock purchase contracts and the stock purchase units
will also be discussed in the applicable prospectus supplement.
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PLAN OF
DISTRIBUTION
We may sell the offered securities through agents, through
underwriters or dealers, directly to one or more purchasers or
through a combination of any of these methods of sale. We will
identify the specific plan of distribution, including any
underwriters, dealers, agents or direct purchasers and their
compensation in a prospectus supplement.
EXPERTS
The consolidated financial statements of Univest Corporation of
Pennsylvania (the Company) as of December 31,
2008 and 2007, and for each of the years in the three-year
period ended December 31, 2008, and managements
assessment of the effectiveness of internal control over
financial reporting as of December 31, 2008 have been
incorporated by reference herein in reliance upon the reports of
KPMG LLP, independent registered public accounting firm,
incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
The audit report covering the December 31, 2008 financial
statements refers to the Companys adoption of Statement of
Financial Accounting Standards No. 123R, Share-Based
Payment, effective January 1, 2006, and Statement of
Financial Accounting Standards No. 158,
Employers Accounting for Defined Benefit Pension and
Other Postretirement Plans, effective December 31,
2006.
LEGAL
MATTERS
Unless otherwise indicated in the applicable prospectus
supplement, certain legal matters will be passed upon for us by
Shumaker Williams, P.C., Harrisburg, Pennsylvania. If legal
matters in connection with offerings made pursuant to this
prospectus are passed upon by counsel for underwriters, dealers
or agents, if any, such counsel will be named in the prospectus
supplement relating to such offering.
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No dealer, salesperson or other person is authorized to give
any information or to represent anything not contained in this
prospectus supplement and the accompanying prospectus. You must
not rely on any unauthorized information or representations.
This prospectus supplement and the accompanying prospectus are
an offer to sell only the shares of common stock offered hereby,
but only under circumstances and in jurisdictions where it is
lawful to do so. The information contained in this prospectus
supplement and the accompanying prospectus is current only as of
its date.
TABLE OF
CONTENTS
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Prospectus Supplement
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S-ii
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S-ii
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S-ii
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S-iii
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S-1
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S-5
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S-14
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S-15
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S-16
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S-17
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S-17
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S-21
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S-24
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S-27
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S-27
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Prospectus
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1
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1
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2
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2
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2
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3
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4
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4
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8
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14
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16
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18
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19
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19
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19
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Shares
Common Stock
PROSPECTUS SUPPLEMENT
Keefe, Bruyette &
Woods