Exhibit 4(a)
RIGHTS AGREEMENT dated
January 20, 1992 between TRANS FINANCIAL
BANCORP, INC.
a Kentucky corporation (the "Company"),
and Manufacturers Hanover,
a New York State Chartered Bank and Trust Company
as Rights Agent (the "Rights Agent")
TABLE OF CONTENTS
Section 1. Certain Definitions
Section 2. Appointment of Rights Agent
Section 3. Distribution of Rights Certificates
Section 4. Form of Rights Certificates
Section 5. Execution, Countersignature and Registration
Section 6. Transfer, Split-Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost
or Stolen Rights Certificates
Section 7. Exercise of Rights; Expiration Date of Rights
Section 8. Cancellation and Destruction of Rights Certificates
Section 9. Reservation and Availability of Preferred
Stock
Section 10. Preferred Stock Record Date
Section 11. Adjustment of Number and Kind of Shares
and Rights
Section 12. Certificate of Adjustments
Section 13. Consolidation, Merger, Share Exchange or
Sale or Transfer of Major Part of Assets
Section 14. Additional Covenants
Section 15. Fractional Rights and Fractional Shares
Section 16. Rights of Action
Section 17. Transfer and Ownership of Rights and Rights
Certificates
Section 18. Rights Certificate Holder Not Deemed a Stockholder
Section 19. Concerning the Rights Agent
Section 20. Merger or Consolidation or Change of Rights
Agent
Section 21. Duties of Rights Agent
Section 22. Change of Rights Agent
Section 23. Issuance of New Rights Certificates
Section 24. Redemption and Termination
Section 25. Exchange of Rights
Section 26. Notice of Certain Events
Section 27. Notices
Section 28. Supplements and Amendments
Section 29. Determinations and Actions by the Board of
Directors
Section 30. Successors
Section 31. Benefits of this Rights Agreement; Determinations and
Actions by the Board of Directors, etc.
Section 32. Severability
Section 33. Governing Law
Section 34. Counterparts
Section 35. Descriptive Headings
EXHIBIT A Form of Certificate of Designation
EXHIBIT B Form of Rights Certificates
EXHIBIT C Form of Summary of Rights
RIGHTS AGREEMENT dated
January 20, 1992 between TRANS FINANCIAL
BANCORP, INC.
a Kentucky corporation (the "Company"),
and Manufacturers Hanover,
a New York State Chartered Bank and Trust Company
as Rights Agent (the "Rights Agent")
The Board of Directors of the Company has authorized and
declared a dividend of one Right (as hereinafter defined) for each share of
Common Stock (as hereinafter defined) outstanding as of January 30, 1992 (the
"Record Date"), and has authorized the issuance of one Right with respect to
each share of Common Stock that shall become outstanding between the Record Date
and, except as otherwise provided herein, the earliest of the Distribution Date,
the Redemption Date or the Expiration Date (as such terms are hereinafter
defined), each Right initially representing the right to purchase one one
hundredth of a share of Class B Preferred Stock, Series 1992 of the Company
("Preferred Stock"), having the powers, rights and preferences set forth in the
form of Certificate of Designation, attached hereto as Exhibit A.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Rights Agreement, the
following terms have the meanings indicated:
A. "Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
15% or more of the Common Shares of the Company then outstanding, but shall not
include any Subsidiary of the Company, any employee benefit plan of the Company
or of any of its Subsidiaries or any Person holding Common Shares for or
pursuant to the terms of any such employee benefit plan.
B. "Adverse Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be declared by a majority of
the Disinterested Directors to be an Adverse Person, upon a determination by
such Disinterested Directors that such Person, alone or together with its
Affiliates and Associates, has, at any time after the Record Date, become the
Beneficial Owner of an amount of Common Stock which the Disinterested Directors
determine to be substantial (which amount shall in no event be less than 10% of
the shares of Common Stock then outstanding) and a determination by such
Disinterested Directors, after reasonable inquiry and investigation, including
consultation with such persons as such Disinterested Directors shall deem
appropriate, that (a) such Beneficial Ownership by such Person is intended to
cause, is reasonably likely to cause or will cause the Company to repurchase the
Common Stock beneficially owned by such Person or to cause pressure on the
Company to take action or enter into a transaction or series of transactions
intended to provide such Person with short term financial gain under
circumstances where the best long term interests of the Company and its share
holders would not be served by taking such action or entering into such
transactions or series of transactions at that time or (b) such Beneficial
Ownership is causing or reasonably likely to cause a material adverse impact
(including, but not limited to, impairment of relationships with customers or
impairment of the Company's ability to maintain its competitive position or
effectuate a transaction that is in the best long term interests of the
Company's shareholders) on the business or prospects of the Company to the
detriment of the Company's shareholders, or (c) such beneficial ownership
otherwise is not in the best interests of the Company and its shareholders,
employees, customers and communities in which the Company or its Subsidiaries do
business. Notwithstanding any other Section of this Rights Agreement, a majority
of the Disinterested Directors shall have the power, pursuant to this Section,
to designate a Person as an Adverse Person until the Expiration Date and under
no circumstances shall a prior designation made under this subsection be binding
on any subsequent designation by such Disinterested Directors.
C. "Affiliate" and "Associate", when used with reference to any Person,
shall have the respective meanings ascribed to such terms in Rule 12b 2 of the
General Rules and Regulations under the Exchange Act, as in effect on January
20, 1992.
D. A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
[1] which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, other than
pursuant to a firm commitment under writing agreement with the Company
with respect to a bona fide public offering of securities, provided
however, that when such underwriter terminates the active distribution
of such securities and holds such securities for investment purposes,
such underwriter shall be deemed the beneficial owner of such
securities;
[2] which such Person or any of such Person's Affiliates or
Associates has [A] the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, rights (other than Rights issuable
under this Rights Agreement), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any of
such Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange thereunder; or [B] the right to
vote pursuant to any agreement, arrangement or understanding; provided.
however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, any security if the agreement, arrangement or
understanding to vote such security [1] arises solely from a revocable
proxy given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
rules and regulations under the Exchange Act and [2) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
[3] which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities pursuant to a firm commitment
underwriting agreement with the Company, provided however, that when
such underwriters or selling group members terminate the active
distribution of such securities and hold such securities for investment
purposes, such underwriters and selling group members shall be deemed
the beneficial owners of such securities), whether or not in writing,
for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in Section 1(D)(2)(B)) or disposing of any
securities of the Company.
E. "Book Value" when used with reference to Common Shares issued by any
Person shall mean the amount of equity of such Person applicable to each Common
Share, determined [i] in accordance with generally accepted accounting
principles (consistently applied) in effect on the date as of which such Book
Value is to be determined, [ii] using all the consolidated assets and all the
consolidated liabilities of such Person on the date as of which such Book Value
is to be determined, except that no value shall be included in such assets for
goodwill arising from consummation of a Business Combination and [iii] after
giving effect to [A] the exercise of all rights, options and warrants to
purchase such Common Shares, at an exercise or conversion price, per Common
Share, which is less than such Book Value before giving effect to such exercise
or conversion, [B] all dividends and other distributions on the capital stock of
such Person declared prior to the date as of which such Book Value is to be
determined and to be paid or made after such date and [C] any other agreement,
arrangement, understanding, transaction or other action prior to the date as of
which such Book Value is to be determined which would have the effect of
reducing such Book Value after such date.
F. "Business Combination" shall mean any transaction specified in the
following clauses [i], [ii] and [iii]:
[i] the Company shall consolidate with, or merge with and
into, any other Person;
[ii] any Person shall merge with and into the Company
or shall engage in a share exchange with shareholders of the Company and all or
part of the Common Shares of the Company shall be changed into or exchanged
for capital stock or other securities of the Company or of any other Person or
cash or any other property; or
[iii] the Company shall sell, lease, exchange or otherwise
transfer or dispose of one or more of its Subsidiaries shall sell,
lease, exchange or otherwise transfer or dispose of), in one or more
related transactions, the Major Part of the assets of the Company and
its Subsidiaries to any other Person or Persons;
G. "Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in the Borough of
Manhattan, The City of New York or in Bowling Green, Kentucky are authorized or
obligated by law or executive order to close.
H. "Close of Business" on any given date shall mean 5:00 p.m.
Eastern Standard Time, on such date provided, however, that if such date is
not a Business Day, "Close of Business" shall mean 5:00 p.m. Eastern
Standard Time, on the next succeeding Business Day.
I. "Common Shares" when used with reference to the Company prior to a
Business Combination shall mean the shares of Common Stock of the Company or any
other shares of capital stock of the Company into which the Common Stock shall
be reclassified or changed. "Common Shares" when used with reference to any
Person (other than the Company prior to a Business Combination) shall mean
shares of capital stock of such Person (if such Person is a corporation) of any
class or series, or units of equity interests in such Person (if such Person is
not a corporation) of any class or series, the terms of which do not limit (as a
fixed amount and not merely in proportional terms) the amount of dividends or
income payable or distributable on such class or series or the amount of assets
distributable on such class or series upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person and do not provide that
such class or series is subject to redemption at the option of such Person, or
any shares of capital stock or units of equity interests into which the
foregoing shall be reclassified or changed; provided, however, that if at any
time there shall be more than one such class or series of capital stock or
equity interests of such Person, "Common Shares" of such Person shall include
all such classes and series substantially in the proportion of the total number
of shares or other units of each such class or series outstanding at such time.
J. "Common Stock" shall mean the Common Stock, no par value per
share, of the Company.
K. "Company" shall mean Trans Financial Bancorp, Inc., a Kentucky
corporation; provided, however, that if there is a Business Combination,
"Company" shall mean each issuer of Common Shares for which Rights may be
exercised as sat forth in Section 13(a) of this Rights Agreement.
L. "Control" with respect to any Person shall mean the power to direct
the management and policies of such Person, directly or indirectly, by or
through stock ownership, agency or otherwise, or pursuant to or in connection
with an agreement, arrangement or understanding (written or oral) with one or
more other Persons by or through stock ownership, agency or otherwise; and the
terms "controlling" and "controlled" shall have meanings correlative to the
foregoing.
M. "Disinterested Director" shall mean [i] any member of the Board of
Directors of the Company who [a] is not an officer or employee of the Company or
any of its Subsidiaries, [b] beneficially owns less than 10% of the outstanding
Common Stock, [c) is not a nominee or representative of an Acquiring Person or
of any Affiliate or Associate of an Acquiring Person, [d] is not a nominee or
representative of an Adverse Person or of any Affiliate or Associate of an
Adverse Person and [e] was a member of the Board of Directors of the Company on
and prior to the Share Acquisition Date, or [ii] any person who becomes a member
of the Board of Directors of the Company after the Share Acquisition Date who
[a] is not an officer or employee of the Company or any of its Subsidiaries, [b]
beneficially owns less than 10% of the outstanding Common Stock, [c] is not a
nominee or representative of an Acquiring Person or of any Affiliate or
Associate of an Acquiring Person [d] is not a nominee or representative of an
Adverse Person or of any Affiliate or Associate of an Adverse Person and [e] was
recommended for election or elected by a majority of the Disinterested Directors
then on the Board of Directors of the Company.
N. "Distribution Date" shall mean the earlier of [i] the Close of
Business on the tenth Business Day after the Share Acquisition Date or [ii] the
Close of Business on the tenth Business Day after the date of the first public
disclosure by the Board of Directors of the Company of the commencement of, or
the intent to commence, a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or of any of its Subsidiaries or any Person holding Common Shares for or
pursuant to the terms of any such employee benefit plan) for 25% or more of the
outstanding Common Shares (including any such date which is after the date of
this Rights Agreement and prior to the issuance of the Rights).
0. "Equivalent Shares" shall mean any class or series of capital stock
of the Company other than Common Shares which is entitled to participate in
dividends and other distributions, including distributions upon the liquidation,
dissolution or winding up of the Company, on a proportional basis with the
Common Shares. In calculating the number of any class or series of Equivalent
Shares for purposes of Section 11 of this Rights Agreement, the number of
shares, or fractions of a share, of such class or series of capital stock that
is entitled to the same dividend or distribution as one whole Common Share shall
be deemed to be on e share.
P. "Exchange Act" shall mean the Securities Exchange Act of 1934,
as in effect on the date in question, unless otherwise specifically provided
in this Rights Agreement.
Q. "Exercise Price" with respect to each whole Right shall mean $45,
and shall be payable in lawful money of the United States of America.
R. "Expiration Date" shall mean the Close of Business on January 20,
2002.
S. "Major Part" when used with reference to the assets of the Company
and its Subsidiaries as of any date shall mean assets which meet any of the
following: [i] having a fair market value aggregating 50% or more of the total
fair market value of all the assets of the Company and its Subsidiaries (taken
as a whole) as of the date in question; [ii] accounting for 50% or more of the
total value (net of depreciation and amortization) of all the assets of the
Company and its Subsidiaries (taken as a whole), as would be shown on a
consolidated or combined balance sheet of the Company and its Subsidiaries as of
the date in question, prepared in accordance with generally accepted accounting
principles (consistently applied) then in effect; or [iii] accounting for 50% or
more of the total amount of net income of the Company and its Subsidiaries
(taken as a whole), as would be shown on a consolidated or combined statement of
income of the Company and its Subsidiaries for the period of 12 months ending on
the last day of the month next preceding the date in question, prepared in
accordance with generally accepted accounting principles (consistently applied)
then in effect.
T. "Market Value" when used with reference to the Common Shares on any
date shall be deemed to be the average of the daily closing prices, per share,
for the 30 consecutive Trading Days immediately prior to the date in question;
provided, however, that in the event that the market value of such shares is to
be determined in whole or in part during a period following the announcement by
the issuer of such Common Shares of any dividend, distribution or other action
of the type described in Section 11(A), 11(B), 11(C) or 11(J) of this Rights
Agreement that would require an adjustment thereunder, then in each such case
the Market Value of such shares shall be appropriately adjusted to reflect the
effect of such action on the market price of such shares. The closing price, per
Common Share, for each Trading Day shall be the last sale price, regular way,
or, in case no such sale takes place on such Trading Day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to shares
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over the counter market, as reported by the National Association
of Security Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
comparable system then in use, or, if on any such Trading Day the applicable
shares are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
such shares and selected by a majority of the Disinterested Directors or, if
there are no Disinterested Directors, by the Board of Directors of the Company.
If on any such Trading Day no market maker is making a market in such shares,
the Market Value of such shares on such Trading Day shall mean the fair value of
such shares as determined in good faith by a majority of the Disinterested
Directors or, if there are no Disinterested Directors, by the Board of Directors
of the Company (whose determination, if described in a statement filed with the
Rights Agent, shall be binding on the Rights Agent, the holders of Rights and
all other Persons). For purposes of this Section 1(T), the term Common Shares
shall include Equivalent Shares.
U. "Person" shall include an individual, corporation, partnership,
joint venture, association, trust, unincorporated organization or other
entity.
V. "Preferred Stock" shall mean the Class B Preferred Stock, Series
1992 of the Company, having the powers, rights and preferences set forth in
the Certificate of Designation attached hereto as Exhibit A.
W. "Principal Party" shall mean the Surviving Person in a Business
Combination; provided. however, that if such Surviving Person is a direct or
indirect subsidiary of another Person, "Principal Party" shall mean the Person
who or which is the ultimate parent of such Surviving Person and who or which is
not itself a Subsidiary of another Person. In the event ultimate control of such
Surviving Person is shared by two or more Persons, "Principal Party" shall mean
that Person that is immediately controlled by such two or more Persons.
X. "Record Date" shall mean January 30, 1992.
Y. "Redemption Date" shall mean the Close of Business on the date
as of which the Rights are ordered to be redeemed by the Board of Directors of
the Company as provided in Section 24(A) of this Rights Agreement.
Z. "Redemption Price" shall mean the price required to be paid upon
the redemption of the Rights as provided in Section 24(A) of this Rights
Agreement.
AA. "Registered Common Shares" shall mean Common Shares which are
registered, as of the date of consummation of a Business Combination, and have
been continuously registered during the preceding 12 months under Section 12 of
the Exchange Act.
AB. "Right Certificate" shall mean a certificate distributed in
accordance with the provisions of this Rights Agreement evidencing a Right in
substantially the form attached as Exhibit B to this Rights Agreement.
AC. "Rights" shall mean the rights to purchase Preferred Stock as
provided in this Rights Agreement.
AD. "Securities Act" shall mean the Securities Act of 1933, as
in effect on the date in question, unless otherwise specifically provided
in this Rights Agreement.
AE. "Share Acquisition Date" shall mean [i] the first date of the
public disclosure by the Board of Directors of the Company or an Acquiring
Person that an Acquiring Person has become an Acquiring Person or [ii] the date
on which a majority of the Disinterested Directors determine that an Adverse
Person has become an Adverse Person.
AF. "Subsidiary" shall mean a Person, a majority of the total
outstanding Voting Power of which is beneficially owned, directly or indirectly,
by another Person or by one or more other Subsidiaries of such other Person or
by such other Person and one or more other Subsidiaries of such other Person.
AG. "Summary of Rights" shall mean the Summary of Rights to Purchase
Preferred Stock in substantially the form attached hereto as Exhibit C.
AH. "Surviving Person" shall mean [1] the Person which is the
continuing or surviving Person in a consolidation or merger or share exchange
specified in clause [i] or [ii] of Section 1(F) of this Rights Agreement or [2]
the Person to which the Major Part of the assets of the Company and its
Subsidiaries are sold, leased, exchanged or otherwise transferred or disposed of
as specified in clause [iii] of Section 1(F) of this Rights Agreement; provided.
however, that if the Major Part of the assets of the Company and its
Subsidiaries are sold, leased, exchanged or otherwise transferred or disposed of
in one or more related transactions specified in clause [iii] of Section 1(F) of
this Rights Agreement to more than one Person, the "Surviving Person" in such
case shall mean the Person that acquired assets of the Company and/or its
Subsidiaries with the greatest fair market value in such transaction or
transactions.
AI. "Trading Day" shall mean a day on which the principal national
securities exchange on which any Common Shares, Equivalent Shares or Rights, as
the case may be are listed or admitted to trading is open for the transaction of
business or, if the shares or Rights in question are not listed or admitted to
trading on any national securities exchange, a Business Day.
AJ. "Triggering Event" shall mean the occurrence of any of the
following events after the occurrence of the Distribution Date, pursuant to
Section 1(N)(ii) of the Rights Agreement:
(i) without the prior approval of at least two thirds of the
Disinterested Directors, any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or
of any of its Subsidiaries or any Person holding Common Shares for or
pursuant to the terms of any such employee benefit plan), alone or
together with all Affiliates and Associates of such Person, shall
become the Beneficial Owner of 15% or more of the Common Shares then
outstanding; or
(ii) a Person, together with all Affiliates and Associates of
such Person, is declared an Adverse Person pursuant to Section 1(B).
AK. "Voting Power" when used with reference to the capital stock of, or
units of equity interests in, any Person shall mean the power under ordinary
circumstances (and not merely upon the happening of a contingency) to vote in
the election of directors of such Person (if such Person is a corporation) or to
participate in the management and Control of such Person (if such Person is not
a corporation).
Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint one or more co-Rights Agents as it may
deem necessary or desirable (the term "Rights Agent" being used herein to refer,
collectively, to the Rights Agent together with any such co- Rights Agents). In
the event the Company appoints one or more co-Rights Agents, the respective
duties of the Rights Agent and any co-Rights Agents shall be as the Company
shall determine.
Section 3. Distribution of Right Certificates.
A. Until the Distribution Date, [i] the Rights will be evidenced by the
certificates for Common Shares of the Company registered in the names of the
holders thereof (which certificates for Common Shares shall also be deemed to be
Right Certificates until the Distribution Date) and not by separate Right
Certificates, and [ii] the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares. As soon as
practicable after the Distribution Date, the Rights Agent will send, by first
class, postage prepaid mail, to each record holder of Common Shares as of the
Distribution Date, at the address of such holder shown on the records of the
Company, a Right Certificate, evidencing one Right for each Common Share so
held. As of and after the Distribution Date, the Rights will be evidenced solely
by such Right Certificates.
B. Within a reasonable period after the Record Date, the Company will
send a copy of the Summary of Rights by first class, postage prepaid mail, to
each record holder of Common Shares as of the Close of Business on the Record
Date at the address of such holder shown on the records of the Company. With
respect to certificates for Common Shares outstanding as of the Record Date and
certificates for Common Shares referred to in Section 3(C)(1) of this Rights
Agreement, until the Distribution Date, the Rights associated with the Common
Shares represented by such certificates shall be evidenced by such certificates
for the Common Shares with or without a copy of the Summary of Rights attached
thereto and the registered holders of the Common Shares shall also be the
registered holders of the associated Rights. Until the earliest of the
Distribution Date, the Redemption Date or the Expiration Date, the surrender for
transfer of any of the certificates for the Common Shares outstanding on the
Record Date or any of the certificates for Common Shares referred to in Section
3(C)(1), even without a copy of the Summary of Rights attached thereto, shall
also constitute the transfer of the Rights associated with the Common Shares
represented by such certificate.
C. [1] Certificates for Common Shares that become out standing after
the Record Date, but prior to the earliest of the preparation of certificates of
Common Shares having affixed thereon the legend specified in Section 3(C)(2),
the Distribution Date, the Redemption Date or the Expiration Date, shall be
accompanied by the Summary of Rights when such certificates are issued to the
record holders thereof.
[2] Subject to Section 3(C)(1), certificates for Common
Shares that become outstanding after the Record Date but prior to the earliest
of the Distribution Date, the Redemption Date or the Expiration Date shall have
printed on, written on or otherwise affixed to them a legend substantially in
the following form:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement dated as of January
20, 1992 (the "Rights Agreement"), between Trans Financial Bancorp,
Inc. and Manufacturers Hanover as Rights Agent, the terms of which are
hereby incorporated herein by reference and a copy of which is on file
at the principal executive offices of Trans Financial Bancorp, Inc.
Under certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. Trans Financial Bancorp, Inc. will mail
to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. Under
certain circumstances, Rights beneficially owned by Acquiring Persons
or their Affiliates or Associates and Adverse Persons or their
Affiliates or Associates (as such terms are defined in the Rights
Agreement) are null and void and any holder of any such Rights
(including any subsequent holder) shall not have any right to exercise
such Rights; provided. however, that a holder of a Right which has
become null and void will have the right, at any time prior to the
Expiration Date, subject to the provisions of the Rights Agreement, to
require the Company to repurchase such Right at a purchase price equal
to $.01 per whole Right.
With respect to certificates bearing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
Section 4. Form of Right Certificates.
A. The Right Certificates (and the form of election to purchase and
form of assignment to be printed on the reverse side thereof) shall be in
substantially the form set forth as Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Board of Directors of the Company may deem appropriate
and as are not inconsistent with the provisions of this Rights Agreement, or as
may be required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Sections 11 and 23 hereof, the Right Certificates,
when first distributed, shall be dated as of the Distribution Date, and shall
entitle the holders thereof to purchase such number of shares of Preferred Stock
as shall be set forth therein for the Exercise Price.
B. Notwithstanding any other provisions of this Rights Agreement, [i]
any Right Certificate distributed pursuant to Section 3(A) hereof that
represents Rights known by the Company to be beneficially owned by an Acquiring
Person or any Affiliate or Associate of an Acquiring Person or by an Adverse
Person or any Affiliate or Associate of an Adverse Person, [ii] any Right
Certificate issued at any time upon the transfer of any Right to an Acquiring
Person or Adverse Person or Person known by the Company to be an Affiliate or an
Associate of an Acquiring Person or Adverse Person, or to any Person known by
the Company to be a nominee of such Acquiring Person, Adverse Person, Affiliate
or Associate, and [iii] any Right Certificate issued pursuant to Section 6,
Section 11 or Section 23 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence, shall
contain (in addition to the legend specified in Section 3(C)(2)) a legend
substantially in the following form:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was an Acquiring Person or an
Adverse Person, or an Affiliate or an Associate of an Acquiring Person
or an Adverse Person. Accordingly, this Right Certificate and the
Rights represented hereby may become null and void in the circumstances
specified in Section 7(E) of the Rights Agreement; provided, however,
that a holder of a Right which has become null and void will have the
right, at any time prior to the Expiration Date, subject to the
provisions of the Rights Agreement, to require the Company to
repurchase such Right at a purchase price equal to $.01 per whole
Right.
Notwithstanding the foregoing, the failure to include on any Right Certificate
the foregoing legend shall not impair the applicability to the Rights
represented by such Right Certificate of the provisions set forth in the first
paragraph of Section 7(E) of this Rights Agreement.
Section 5. Execution. Countersignature and Registration.
A. The Right Certificates shall be executed on behalf of the Company by
the President or any Vice President of the Company, either manually or by
facsimile signature, and have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary of the Company, either manually
or by facsimile signature. The Right Certificates shall be countersigned, either
manually or by facsimile signature, by the Rights Agent and shall not be valid
or obligatory for any purpose unless so countersigned. In case any officer of
the Company who shall have signed any of the Rights Certificates shall cease to
be such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate although at the date of
the execution of this Rights Agreement such person was not such an officer of
the Company.
B. Following the Distribution Date, the Rights Agent will keep or cause
to be kept records of the registration and transfer of the Right Certificates
issued hereunder. Such records shall show such information as may be specified
by the Company, including, without limitation, the names and addresses of the
respective holders of the Right Certificates, the number of Rights evidenced by
each of the Right Certificates, the certificate number of each of the Rights
Certificates and the date of each of the Right Certificates.
Section 6. Transfer. Split Up. Combination and Exchange of Right Certificates:
Mutilated. Destroyed. Lost or Stolen Right Certificates.
A. Subject to the provisions of Section 15 hereof, at any time after
the Distribution Date, and at or prior to the Expiration Date, any Right
Certificate or Right Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates entitling the
registered holder to purchase a like number of shares of Preferred Stock as the
Right Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate shall make such request in writing delivered to
the Rights Agent and shall surrender the Right Certificate or Right Certificates
to be transferred, split up, combined or exchanged at the shareholder services
office of the Rights Agent. Thereupon the Rights Agent shall countersign and
deliver to the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates.
B. Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to the Company, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make a new Right
Certificate of like tenor and deliver such new Right Certificate to the Rights
Agent for delivery to the registered owner in lieu of the Right Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights: Expiration Date of Rights.
A. Each Right shall vest in the registered holder thereof the right to
purchase, for the Exercise Price, at any time after the Distribution Date and at
or prior to the earlier of the Expiration Date or the Redemption Date, one one
hundredth of a share of Preferred Stock, subject to adjustment from time to time
as provided in Sections 11 and 13 of this Rights Agreement.
B. The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the office of the Rights Agent specified
in the Rights Certificates, together with payment of the Exercise Price for the
Preferred Stock as to which the Rights are exercised, at or prior to the
Expiration Date.
C. Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
the Exercise Price for the Preferred Stock to be purchased together with an
amount equal to any applicable transfer tax, in lawful money of the United
States of America, by bank check, certified check or money order payable to the
order of the Company or the Rights Agent, the Rights Agent shall thereupon
promptly [i) requisition from any transfer agent of the Common Shares (or make
available, if the Rights Agent is the transfer agent) certificates for the
number of shares of Preferred Stock to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests, [ii]
when appropriate, requisition from the Company the amount of cash to be paid in
lieu of issuance of fractional shares in accordance with Section 15 hereof,
[iii] promptly after receipt of such certificates, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and [iv] when appropriate, after receipt promptly deliver such cash,
securities or other assets to or upon the order of the registered holder of such
Right Certificate.
D. In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equal in number to the Rights remaining unexercised shall be
issued by the Rights Agent and delivered to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 15 hereof.
E. Notwithstanding anything in this Rights Agreement to the contrary,
any Rights that are or were, at any time on or after the earlier of the
Distribution Date or the Share Acquisition Date, beneficially owned by an
Acquiring Person or an Adverse Person, or any Affiliate or Associate of an
Acquiring Person or an Adverse Person shall become null and void at any time on
or after the earlier of [i] the Share Acquisition Date or [ii] the occurrence of
a Triggering Event and any holder of any such Right (including any holder who
acquired such Right subsequent to [A] the Share Acquisition Date or [B] a
Triggering Event) shall not have any right to exercise any such Right under this
Rights Agreement on or after the earlier of [x] the Share Acquisition Date or
[y] the occurrence of a Triggering Event.
Any holder of a Right that has become null and void as specified in
this Section 7(E) shall have the right, subject to the provisions of this
paragraph, to require the Company to repurchase all, but not less than all, the
Rights held by such holder at a purchase price per whole Right equal to the
Redemption Price per whole Right specified in Section 24 hereof. If any legal or
contractual restrictions prevent the Company from paying the full amount payable
in accordance with this paragraph, the Company shall pay to holders of the
Rights as to which such payments are being made all amounts which are not then
restricted on a pro rata basis. The Company shall continue to make payments on a
pro rata basis as such payments become permissible under such legal or
contractual restrictions until such payments have been paid in full. Subject to
the foregoing, payment of the purchase price for Rights to be repurchased by the
Company pursuant to this paragraph shall be made within 15 days of receipt by
the Rights Agent, at its address specified in the Right Certificates, of a Right
Certificate or Right Certificates representing such Rights together with a
notice by the registered holder thereof that it is exercising its right to have
such Rights repurchased by the Company pursuant to this Section 7(E). No right
to require the repurchase of Rights pursuant to this Section 7(E) may be
exercised after the Expiration Date.
F. Notwithstanding anything in this Rights Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to the registered holder of a Right Certificate upon the
occurrence of any purported exercise of any Rights represented by such Right
Certificate as set forth in this Section 7 unless such registered holder shall
have [i] completed and signed the certificate contained in the form of election
to purchase set forth on the reverse side of the Right Certificate surrendered
for such exercise, and [ii] provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company or the Rights Agent shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any Right Certificate purchased or acquired by the Company.
The Rights Agent shall deliver all canceled Right Certificates to the Company,
or shall, at the written request of the Company, destroy such canceled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Preferred Stock.
A. The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized unissued Preferred Stock or any
authorized and issued Preferred Stock held in its treasury, free from preemptive
rights or any right of first refusal, a number of shares of Preferred Stock
sufficient to permit the exercise in full of all outstanding Rights at the date
of this Rights Agreement.
B. The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Stock delivered upon exercise
of Rights shall, at the time of delivery of the certificates for such Preferred
Stock (subject to payment of the Exercise Price), be duly and validly authorized
and issued and fully paid and nonassessable shares.
C. If and so long as the Preferred Stock issuable upon the exercise of
Rights are listed for quotation on any national automated quotation system or
are listed on any national securities exchange, the Company covenants and agrees
to use its best efforts to cause, from and after such time as the Rights become
exercisable, all Shares reserved for such issuance to be listed for quotation on
such quotation system or to be listed on such exchange upon official notice of
issuance upon such exercise.
D. The Company further covenants and agrees that it will pay when due
and payable any and all Federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of Right Certificates or of
Preferred Stock upon the exercise of the Rights. The Company shall not, however,
be required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a Person other than, or in respect
of the issuance or delivery of certificates for Common Shares in a name other
than that of, the registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to transfer or deliver any Right Certificate, or
issue or deliver any certificates for Preferred Stock upon the exercise of any
Rights, until any such tax shall have been paid (any such tax being payable by
the holder of such Right Certificate at the time of surrender) or until it has
been established to the satisfaction of the Company that no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for Preferred Stock is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Stock represented thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Exercise Price (and any applicable transfer taxes) was made;
provided. however, that if the date of such surrender and payment is a date upon
which the Preferred Stock transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock transfer books of the Company are open.
Section 11. Adjustment of Number and Kind of Shares and Rights. The number and
kind of shares covered by each Right and the number of Rights associated with
each Common Share are subject to adjustment from time to time as provided in
this Section 11.
A. If the Company at any time after the date of this Rights Agreement
[i] subdivides (by a stock split or otherwise) or splits the outstanding
Preferred Stock into a larger number of Preferred Stock, [ii] combines (by a
reverse stock split or otherwise) the outstanding Preferred Stock into a smaller
number of Preferred Stock or [iiil issues any shares of its capital stock in a
reclassification or change of the outstanding Preferred Stock (including any
such reclassification or change in connection with a merger in which the Company
is the surviving corporation), then in each such event, the number and kind of
shares of capital stock issuable upon the exercise of the Rights shall be
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive, for the Exercise Price, the aggregate number and kind of
shares of capital stock which such holder would have received if such holder had
exercised such Right prior to such time.
B. If the Company, at any time after the date of this Rights
Agreement, shall fix a record date for the issuance of rights, options or
warrants to all holders of Common Shares or of any class or series of Equivalent
Shares entitling such holder (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Common Shares or Equivalent
Shares (or securities convertible into Common Shares or Equivalent Shares) at a
price per share (or having a conversion price per share, if a security
convertible into Common Shares or Equivalent Shares) less than the Market Value
of such Common Shares or Equivalent Shares on such record date, each Right
outstanding immediately prior to such record date shall thereafter evidence the
right to purchase, for the Exercise Price, that number of shares of Preferred
Stock obtained by multiplying the number of Preferred Stock covered by a Right
immediately prior to the record date by a fraction, the numerator of which shall
be the number of Common Shares and Equivalent Shares (if any) outstanding on
such record date plus the number of additional Common Shares or Equivalent
Shares, as the case may be, to be offered for subscription or purchase (or into
which convertible securities so to be offered are initially convertible) and the
denominator of which shall be the total number of Common Shares and Equivalent
Shares (if any) outstanding on such record date plus the number of Common Shares
or Equivalent Shares, as the case may be, which the aggregate offering price of
the total number of Common Shares or Equivalent Shares, as the case may be, so
to be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such Market Value. If such
subscription or purchase price may be paid in a consideration, part or all of
which shall be in a form other than cash, the value of such consideration shall
be as determined in good faith by a majority of the Disinterested Directors or,
if there are no Disinterested Directors, by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent. Common Shares and Equivalent Shares owned by or held for the
account of the Company or any Subsidiary of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and if such rights,
options or warrants are not so issued, each Right shall be adjusted to evidence
the right to receive that number of Preferred Stock which such Right would have
entitled the holder to receive, for the Exercise Price, if such record date had
not been fixed. Notwithstanding the foregoing, this Section 11(B) shall not be
deemed to apply to the Company's stock purchase plan or dividend reinvestment
plan, as now existing or hereafter amended.
C. If the Company shall fix a record date for the making of a
distribution to all holders of the Common Shares or of any class or series of
Equivalent Shares (including any such distribution made in connection with
a share exchange or a consolidation or merger in which the Company is the
continuing or surviving corporation) of cash other than a regular periodic
cash dividend at a rate not in excess of 150% of the rate of the last regular
cash dividend theretofore paid on the Common Shares, evidences of
indebtedness, assets, securities (other than Common Shares) or
subscription rights, options or warrants (excluding those referred to in
Section 11(B)), each Right outstanding immediately prior to such record date
shall thereafter evidence the right to purchase, for the Exercise Price,
that number of Preferred Stock obtained by multiplying the number of Preferred
Stock covered by a Right immediately prior to the record date by a fraction,
the numerator of which shall be the Market Value of such Common Shares or
Equivalent Shares on such record date and the denominator of which shall be
the Market Value of such Common Shares or Equivalent Shares on such record
date, less the fair market value (as determined in good faith by a
majority of the Disinterested Directors, or if there are no Disinterested
Directors, by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent) of the
subscription rights, options or warrants applicable to one Common Shares or
Equivalent Share, as the case may be. Such adjustments shall be made
successively whenever such a record date is fixed; and if such distribution
is not so made, each Right shall be adjusted to evidence the right to receive
that number of Preferred Stock which such Right would have entitled the holder
to receive, for the Exercise Price, if such record date had not been fixed.
D. [1] At any time on or after the earlier of [i] the Share
Acquisition Date or [ii] the occurrence of a Triggering Event, proper provision
shall be made so that each holder of a Right, except as provided in Section 7(E)
and below, shall thereafter have the right to receive, upon exercise thereof for
the Exercise Price in accordance with terms of this Rights Agreement, such
number of one one hundredth of shares of Preferred Stock as shall equal the
result obtained by multiplying the Exercise Price by a fraction, the numerator
of which shall be the number of one one hundredths of a share of Preferred Stock
for which a Right is then exercisable and the denominator of which shall be 50%
of the Market Value of the Common Shares on the earlier of [i] the Share
Acquisition Date or [ii] the occurrence of a Triggering Event.
[2] If an event occurs which would require an
adjustment under both Section 11(D)(1) and Section
11(A), 11(B), 11(C) or 11(J), the adjustment provided
for in Section 11(A), 11(B), 11(C) or 11(J) shall be
in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(D)(1).
E. All calculations under this Section 11 shall be made to the
nearest one thousandth of a share.
F. If as a result of an adjustment made pursuant to Section 11(A)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Preferred Stock contained in subsections (A), (B), (C) or (D) of this Section 11
and the provision of Sections 7, 9, 10 and 13 hereof with respect to the
Preferred Stock shall apply on like terms to any such other shares.
G. All Rights originally issued by the Company subsequent to any
adjustment made to the number of Preferred Stock or other securities relating to
a Right shall evidence the right to purchase, for the Exercise Price, the
adjusted number of shares or other securities purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
H. Irrespective of any adjustment or change in the number of Preferred
Stock or the number or kind of other securities issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the terms which were expressed in the initial Right
Certificates issued hereunder.
Z. In any case in which this Section 11 shall require that an
adjustment be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event issuing to the
holder of any Right exercised after such record date the Preferred Stock and/or
other securities of the Company, if any, issuable upon such exercise over and
above the Preferred Stock issuable before giving effect to such adjustment;
provided, however, that the Company shall deliver to such holder a due ββββ or
other appropriate instrument evidencing such holder's right to receive such
additional securities upon the occurrence of the event requiring such
adjustment.
J. If the Company at any time after the date of this Rights Agreement
and prior to the Distribution Date [x] declares a dividend, or makes a
distribution, on its outstanding Common Shares payable in Common Shares, [y]
subdivides (by a stock split or otherwise) or splits the outstanding Common
Shares into a larger number of Common Shares or [z] combines (by a reverse stock
split or otherwise) the outstanding Common Shares into a smaller number of
Common Shares then, in each such event, the number of Rights associated with
each Common Share of the Company at the time of the record date for such
dividend or distribution or the effective date of such subdivision or
combination, shall be adjusted so that the number of Rights thereafter
associated with each such Common Share shall equal the result obtained by
multiplying the number of Rights associated with each such Common Share
immediately prior to such record date or effective date by a fraction, the
numerator of which shall be the total number of such Common Shares outstanding
immediately prior to such record date or effective date and the denominator of
which shall be the total number of such Common Shares outstanding immediately
following such record date or effective date. If the Company at anytime after
the date hereof and prior to the Distribution Date issues any shares of its
capital stock in a reclassification or change of the outstanding Common Shares
(including any such reclassification or change in connection with a merger in
which the Company is the surviving corporation), the number of Rights associated
with each share of capital stock issued in such reclassification or change shall
be appropriately adjusted to reflect such reclassification or change.
Section 12. Certificate of Adjustment. Whenever an adjustment is made as
provided in Section 11 or Section 13 hereof, the Company shall [a) promptly
prepare a certificate setting forth such adjustment and a brief statement of the
facts accounting for such adjustment, [b] promptly file with the Rights Agent
and with each transfer agent for the Common Shares or Preferred Stock a copy of
such certificate and [c] mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 26 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained.
Section 13. Consolidation. Merger. Share Exchange or Sale or Transfer of
Major Part of Assets. (a) If, following the Distribution Date, directly or
indirectly, any Business Combination shall be consummated, then, in each such
case, unless at least two thirds of the Disinterested Directors shall have
approved such Business Combination at a time when neither the Principal Party to
such Business Combination nor any of its Affiliates or Associates were an
Acquiring Person or an Adverse Person, proper provision shall be made so that
each holder of a Right, except as provided in Section 7(E) hereof, shall
thereafter have the right to receive, upon the exercise thereof for the Exercise
Price in accordance with the terms of this Rights Agreement, the securities
specified below:
A. If the Principal Party in such Business Combination has Registered
Common Shares outstanding, each Right shall thereafter represent the right to
receive, upon the exercise thereof for the Exercise Price in accordance with the
terms of this Rights Agreement, such number of Registered Common Shares of such
Principal Party, free and clear of liens, encumbrances or other adverse claims,
as shall be equal to the result obtained by multiplying the Exercise Price by a
fraction, the numerator of which shall be the number of one one hundredths of a
share of Preferred Stock for which a Right was exercisable immediately prior to
consummation of such Business Combination and the denominator of which shall be
50% of the Market Value of each Registered Common Share of such Principal Party
on the date of such Business Combination;
B. If the Principal Party in such Business Combination does not have
Registered Common Shares outstanding, each Right shall thereafter represent the
right to receive, upon the exercise thereof for the Exercise Price in accordance
with the terms of this Rights Agreement, at the election of the holder of such
Right at the time of the exercise thereof, either:
[1] such number of Common Shares of the Surviving Person in such
Business Combination as shall be equal to the result obtained by
multiplying the Exercise Price by a fraction, the numerator of which
shall be the number of one one hundredths of a share of Preferred Stock
for which a Right was exercisable immediately prior to the consummation
of such Business Combination and the denominator of which shall be 50%
of the Book Value of each Common Share of such Surviving Person
immediately after giving effect to such Business Combination;
[2] such number of Common Shares of the Principal Party in such
Business Combination (if the Principal Party is not also the Surviving
Person in such Business Combination) as shall be equal to the result
obtained by multiplying the Exercise Price by a fraction, the numerator
of which shall be the number of one one hundredths of a share of
Preferred Stock for which a Right was exercisable immediately prior to
the consummation of such Business Combination and the denominator of
which shall be 50% of the Book Value of each Common Share of the
Principal Party immediately after giving effect to such Business
Combination; or
[3] if the Principal Party in such Business Combination is an
Affiliate of one or more Persons which has Registered Common Shares
outstanding, such number of Registered Common Shares of whichever of
such Affiliates of the Principal Party has Registered Common Shares
with the greatest aggregate Market Value on the date of consummation of
such Business Combination as shall be equal to the result obtained by
multiplying the Exercise Price by a fraction, the numerator of which
shall be the number of one one hundredths of a share of Preferred Stock
for which a Right was exercisable immediately prior to the consummation
of such Business Combination and the denominator of which shall be 50%
of the Market Value of each Registered Common Share of such Affiliate
on the date of such Business Combination.
All Common Shares of any Person for which any Right may be exercised after
consummation of a Business Combination as provided in this Section 13(a) shall,
when issued upon exercise thereof in accordance with this Rights Agreement, be
validly issued, fully paid and non-assessable and free of preemptive rights,
rights of first refusal or any other restrictions or limitations on the transfer
or ownership thereof.
(b) After consummation of any Business Combination [i] each issuer of
Common Shares for which Rights may be exercised as set forth in Section 13(a)
shall be liable for, and shall assume, by virtue of such Business Combination,
all the obligations and duties of the Company pursuant to this Rights Agreement,
[ii] the term "Company" shall thereafter be deemed to refer to each such issuer,
[iii] each such issuer shall take such steps in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
Common Shares thereafter deliverable upon the exercise of the Rights and [iv]
the number of Common shares of each such issuer thereafter receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Sections 11 and 13 hereof and the
provisions of Sections 7, 9, 10, 11 and 13 hereof with respect to the Preferred
Stock shall apply on like terms to such Common Shares.
(c) The Company shall not consummate any Business Combination unless
each issuer for which Rights may be exercised, as set forth in Section 13(a),
shall have sufficient authorized Common Shares that have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior thereto the Company and each such issuer
shall have:
[i] executed and delivered to the Rights Agent a supplemental
agreement providing for the obligation of such issuer to issue Common
Shares upon the exercise of Rights in accordance with the terms set
forth in Section 13(a) and 13(b) and further providing that, as soon as
practicable after the date of such Business Combination, such issuer,
at its own expense, will:
[a] prepare and file a registration statement under
the Securities Act, with respect to the Rights and the
securities purchasable upon exercise of the Rights
on an appropriate form, use its best efforts to cause
such registration statement to become effective
as soon as practicable after such filing and use its best
efforts to cause such registration statement to remain
effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the
Expiration Date;
[b] use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the
Rights under the blue sky laws of such jurisdictions as may
be necessary or appropriate; and
[c] use its best efforts to list the Rights and the
securities purchasable upon exercise of the Rights
on a national securities exchange;
[ii] furnished to the Rights Agent an opinion of independent
counsel stating that such supplemental agreement is a valid, binding
and enforceable agreement of such issuer; and
[iii] filed with the Rights Agent a certificate of a
nationally recognized firm of independent accountants setting forth the
number of Common Shares of such issuer which may be purchased upon the
exercise of each Right after the consummation of such Business
Combination.
(d) If a Business Combination shall be consummated at anytime after [i]
the Share Acquisition Date or [ii] the occurrence of a Triggering Event, the
Rights that have not been exercised prior to such time shall thereafter be
exercisable in the manner set forth in Section 13(a).
Section 14. Additional Covenants.
(a) Notwithstanding any other provision of this Rights
Agreement, no adjustment in the number of Preferred Stock or
other securities for which a Right is exercisable or the
number of Rights outstanding or associated with each Common
Share or any similar or other adjustment shall be made or be
effective if such adjustment would have the effect of reducing
or limiting the benefits the holders of the Rights would have
had absent such adjustment, including, without limitation, the
benefits under Section 11(D) and Section 13 hereof, unless the
terms of this Rights Agreement are amended so as to preserve
such benefits.
(b) The Company covenants and agrees that it shall not effect
any Business Combination if at the time of, or immediately
after such Business Combination, there are any rights,
options, warrants or other instruments outstanding which would
diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.
(c) Without limiting the generality of Section 13, if the
nature of the organization of any Person shall preclude or
limit the acquisition of Common Shares of such Person upon
exercise of the Rights as required by Section 13(a) hereof as
a result of a Business Combination, it shall be a condition to
such Business Combination that such Person shall take such
steps (including, but not limited to, a reorganization) as may
be necessary to assure that the benefits intended to be
derived under Section 13 hereof upon the exercise of the
Rights are assured to the holders thereof.
Section 15. Fractional Rights and Fractional Shares.
A. The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, the Company may pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 15(A), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to Rights listed or admitted to trading on a national securities exchange or, if
the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over the counter market, as reported by NASDAQ
or such other comparable system then in use or, if on any such date the Rights
are not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
Rights selected by a majority of the Disinterested Directors or, if there are no
Disinterested Directors, by the Board of Directors of the Company. If on any
such date no such market maker is making a market in the Rights, the fair value
of the Rights on such date as determined in good faith by a majority of the
Disinterested Directors or, if there are no Disinterested Directors, by the
Board of Directors of the Company, shall be used.
B. The Company shall not be required to issue fractional shares of
Preferred Stock upon exercise of the Rights or distribute certificates which
evidence less than one whole share of Preferred Stock. In lieu of fractional
Preferred Stock, the Company may elect to pay to the registered holders of Right
Certificates, at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one share of
Preferred Stock. For purposes of this Section 15(B), the current market value of
a share of Preferred Stock (or Common Share) shall be the closing price of one
share of Preferred Stock (or Common Share) (as determined pursuant to the method
of computing Market Value contained in the second sentence of Section 1(T) of
this Rights Agreement) for the Trading Day immediately prior to the date of such
exercise.
C. The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional
securities upon exercise of a Right.
Section 16. Rights of Action.
A. All rights of action in respect of this Rights Agreement are vested
in the respective registered holders of the Right Certificates (and, prior to
the Distribution Date, the registered holders of the Common Shares); and, except
as otherwise provided by the last sentence of this Section 16(A), any registered
holder of any Right Certificate (or, prior to the Distribution Date, of the
Common Shares), without the consent of the Rights Agent or of the holder of any
other Right Certificate (or, prior to the Distribution Date, of the Common
Shares), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Rights Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Rights Agreement and shall be entitled to specific performance of
the obligations of any Person under, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to, this Rights
Agreement. Notwithstanding the foregoing, the right of a registered holder of a
Right Certificate representing Rights that have become null and void pursuant to
Section 7(E) of this Rights Agreement to maintain a suit in respect of this
Rights Agreement or such Rights shall be limited to enforcement of such holder's
right to require the Company to repurchase such Rights pursuant to Section 7(E).
B. Any holder of Rights who prevails in an action to enforce the
provisions of this Rights Agreement shall be entitled to recover the reasonable
costs and expenses, including attorneys' fees, incurred in such action.
Section 17. Transfer and Ownership of Rights and Right Certificates.
A. Prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares.
B. After the Distribution Date, the Right Certificates will be
transferable only on the records of the Rights Agent when surrendered at the
shareholder services office of the Rights Agent, duly endorsed or accompanied by
a proper instrument of transfer.
C. The Company and the Rights Agent may deem and treat the Person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated certificate for
Common Shares made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 18. Right Certificate Holder Not Deemed a Stockholder. No holder, as
such, of any Right Certificate shall be entitled to vote or receive dividends or
be deemed, for any purpose, the holder of the Common Shares, Preferred Stock or
of any other securities which may at any time be issuable on the exercise of the
Rights represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Company, including, without
limitation any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 26 hereof), or to receive
dividends or other distributions or subscription rights, or otherwise, until the
Right or Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 19. Concerning the Rights Agent.
A. The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and from time to time, on
demand of the Rights Agent, its expenses and counsel fees and other
disbursements incurred in the administration and execution of this Rights
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Rights Agreement, including the costs and expenses of defending against any
claim of liability arising therefrom, directly or indirectly.
B. The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection with
its administration of this Rights Agreement in reliance upon any Right
Certificate or certificate for the Common Shares or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper Person or Persons.
Section 20. Merger or Consolidation or Change of Rights Agent.
A. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation or share exchange to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or corporate trust business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Rights Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 22 hereof. In case at the time such successor Rights
Agent succeeds to the agency created by this Rights Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned and in case at that time any of
the Right Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Rights Agreement.
B. In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Rights Agreement.
Section 21. Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Rights Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
A. The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel (if approved by the
Company) shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in accordance
with such opinion.
B. Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person or
Adverse Person) be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the President, a Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Rights Agreement in reliance
upon such certificate.
C. The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
D. The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Rights Agreement or in the
Right Certificates (except as to its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
E. The Rights Agent shall not be under any responsibility in respect of
the validity of this Rights Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or 13 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice of any such adjustment); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any Preferred Stock or other
securities for which a Right is exercisable to be issued pursuant to this Rights
Agreement or any Right Certificate or as to whether any Preferred Stock or other
securities for which a Right is exercisable will, when so issued, be validly
authorized, issued, fully paid and non-assessable.
F. The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Rights Agreement.
G. The Rights Agent is hereby authorized and directed to accept written
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, a Vice President, the Treasurer
or the Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
H. The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Rights Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
I. The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct provided reasonable care was exercised in the selection
and continued employment thereof.
Section 22. Change of Rights Agent: Co-Rights Agent.
A. The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Rights Agreement upon 30 days' notice in
writing mailed to the Company and to each transfer agent of the Common Shares by
registered or certified mail, and to the holders of the Right Certificates by
first class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case maybe, and to each transfer agent of the
Common Shares by registered or certified mail, and to the holders of the Right
Certificates by first class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
{who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of the Commonwealth of Kentucky (or of any other state of the United
States so long as such corporation is authorized to conduct a stock transfer or
corporate trust business in the Commonwealth of Kentucky) in good standing,
having a principal office in the Commonwealth of Kentucky which is authorized
under such laws to exercise stock transfer or corporate trust powers and is
subject to supervision or examination by Federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 22, however, or any defect therein shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
B. Notwithstanding anything to the contrary in this Rights Agreement,
it is agreed that the Company may appoint certain individuals in the Company as
co-Rights Agents hereunder. If such appointments are made, any reference herein
to the office of the Rights Agent shall be deemed to include the office of the
stock transfer department of the Company.
Section 23. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Rights Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by the Board of Directors of the Company to reflect
any adjustment or change made in accordance with the provisions of this Rights
Agreement. In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the Expiration Date,
the Company [a] shall, with respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities, notes
or debentures issued by the Company, and [b] may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided. however, that [i] no such Right Certificate
shall be issued if, and to the extent that the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Right Certificate
would be issued, and [ii] no such Right Certificate shall be issued if, and to
the extent that, appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.
Section 24. Redemption and Termination.
A. The Board of Directors of the Company may, at its option, at any
time prior to the earliest of [i] the Close of Business on the tenth Business
Day following the Share Acquisition Date, [ii] the occurrence of a Triggering
Event or [iii] the Expiration Date, order the redemption of all, but not less
than all, the then outstanding Rights at a Redemption Price of $.01 per whole
Right; provided, however, that immediately upon the date that an Acquiring
Person becomes an Acquiring Person or an Adverse Person becomes an Adverse
Person, and thereafter until the earliest of [i] the Close of Business on the
tenth Business Day following the Share Acquisition Date, [ii] the occurrence of
a Triggering Event or [iii] the Expiration Date, the Rights may be redeemed only
if a majority of the Disinterested Directors then in office determine that such
redemption is, in their judgment, in the best interest of the Company and its
shareholders.
B. Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights, and without any further action and
without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price. Within ten Business Days after the action of the Board of Directors of
the Company ordering the redemption of the Rights, the Company shall give notice
of such redemption to the holders of the then outstanding Rights by mailing such
notice to all such holders at their last addresses as they appear upon the
records of the Rights Agent or, prior to the Distribution Date, on the records
of the transfer agent for the Common Shares. Each such notice of redemption will
state the method by which the payment of the Redemption Price will be made. The
notice, if mailed in the manner herein provided, shall be conclusively presumed
to have been duly given, whether or not the holder of Rights receives such
notice. In any case, failure to give such notice by mail, or any defect in the
notice, to any particular holder of Rights shall not affect the sufficiency of
the notice to other holders of Rights. Neither the Company nor any of its
Affiliates or Associates may redeem the Rights at any time, in any manner, other
than that specifically set forth in this Section 24.
Section 25. Exchange of Right.
A. The Board of Directors of the Company may, at its option, at any
time after a Person becomes an Acquiring Person or an Adverse Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become null and void pursuant to the provisions of
Section 7(E)) for shares of Preferred Stock at an exchange ratio of one one
hundredth share of Preferred Stock per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors of the Company
shall not be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any of its Subsidiaries or any Person holding Common
Shares for or pursuant to the terms of any such employee benefit plan), alone or
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding.
B. Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to Section 25(A) and without any
further action and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights shall be to
receive that number of shares of Preferred Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the Preferred Stock for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become null and void pursuant to the provisions of Section
7(E)) held by each holder of Rights.
C. In the event that there shall not be sufficient shares of Preferred
Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 25, the
Company shall take all such action as may be necessary to authorize additional
shares of Preferred Stock for issuance upon exchange of the Rights. In the event
the Company shall, after good faith effort, be unable to take all such action as
may be necessary to authorize such additional Preferred Stock, the Company shall
substitute, for each share or fractional share of Preferred Stock that would
otherwise be issuable upon exchange of a Right, a number of Common Shares or
Equivalent Shares or fraction thereof having an aggregate Market Value equal to
the Market Value of the Preferred Stock otherwise issuable upon exchange of the
Right.
D. The Company is not required to issue fractions of shares of
Preferred Stock or to distribute certificates which evidence fractional shares
of Preferred Stock. In lieu of fractional shares of Preferred Stock, there shall
be paid to the registered holders of the Right Certificates with regard to which
such fractional shares of Preferred Stock would otherwise be issuable, an amount
in cash equal to the same fraction of the Market Value of a whole share of
Preferred Stock. For the purpose of this subsection (D), the Market Value of a
whole share of Preferred Stock shall be the closing price per share of Preferred
Stock (as determined pursuant to the second sentence of Section 1(T)) for the
Trading Day immediately prior to the date of exchange pursuant to this Section
25.
Section 26. Notice of Certain Events.
A. In case the Company shall propose [i] to take any action of the type
described in Section 11(A), 11(B), 11(C) or 11(J) hereof that would require an
adjustment thereunder, [ii] to effect any Business Combination or [iii] to
effect the liquidation, dissolution or winding up of the Company, then, in such
case, the Company shall give to each holder of a Rights Certificate, in
accordance with Section 27 hereof, a notice of such proposed action, which shall
specify any record date for the purposes of determining any participation
therein by the holders of the Common Shares and/or Preferred Stock, or the date
on which such action is to take place and the date of any participation therein
by the holders of the Common Shares and/or Preferred Stock, if any such date is
to be fixed, and such notice shall be so given at least twenty days prior to any
such record date, the taking of such action or the date of participation therein
by the holders of the Common Shares and/or Preferred Stock, whichever shall be
the earliest.
B. In the event that the Share Acquisition Date or a Triggering Event
shall occur, then, in any either case, the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in accordance with
Section 27 hereof, a notice of such occurrence, which shall specify the cause
and the consequences of reaching the tenth Business Day following the Share
Acquisition Date or the Triggering Event to holders of Rights under Section
11(D) hereof.
Section 27. Notices. Notices or demands authorized by this Agreement to be given
or made by the Rights Agent or by the holder of any Right Certificate to or on
the Company shall be sufficiently given or made if sent by first class mail,
postage prepaid, addressed (until another address is filed in writing with the
Rights Agent) as follows:
Trans Financial Bancorp, Inc.
βββ ββββ ββββ ββββββ
βββββββ βββββ, ββββββββ βββββ Attn: Chief Financial Officer
Subject to the provisions of Section 22 hereof, any notice or demand authorized
by this Rights Agreement to be given or made by the Company or by the holder of
any Right Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
Manufacturers Hanover
βββ β. ββββ ββββββ, ββββ βββββ
βββ ββββ, βββ ββββ βββββ
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to any holder of a Right Certificate shall be
sufficiently given or made if sent by first class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the record
books of the Rights Agent or, prior to the Distribution Date, on the record
books of the transfer agent for the Common Shares.
Section 28. Supplements and Amendments. At any time prior to the Distribution
Date and subject to the last sentence of this Section 28, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Rights Agreement without the approval of any holder of the Rights
(including, without limitation, the time when the Distribution Date shall
occur). From and after the Distribution Date and subject to applicable law, the
Company and the Rights Agent shall, if the Company so directs, amend this Rights
Agreement without the approval of any holders of Right Certificates [i] to cure
any ambiguity or to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provision of this Rights
Agreement or [ii] to make any other provisions in regard to matters or questions
arising here under which the Company may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Right Certificates
(other than an Acquiring Person or an Adverse Person or an Affiliate or
Associate of an Acquiring Person or Adverse Person). Without limiting the
generality of the foregoing, the Company may at any time prior to such time as
any Person becomes an Acquiring Person amend this Agreement to lower the
thresholds set forth in Sections 1(A) and 1(AJ) from 15%, to not less than the
greater of [i] the largest percentage of the outstanding Common Shares then
known by the Company to be beneficially owned by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or of any of its Subsidiaries or any Person holding Common Shares for or
pursuant to the terms of any such employee benefit plan) plus .01% or [ii] 10%.
Upon the delivery of a certificate from an appropriate officer of the Company
which states that a proposed supplement or amendment to this Rights Agreement is
in compliance with the provisions of this Section 28, the Rights Agent shall
execute such supplement or amendment. Notwithstanding anything contained in this
Rights Agreement to the contrary, [1] at any time that there shall be an
Acquiring Person or Adverse Person, this Rights Agreement may be supplemented or
amended only if a majority of the Disinterested Directors then in office
determine that such supplement or amendment is in their judgment in the best
interest of the Company and [2] no supplement or amendment to this Rights
Agreement shall be made which reduces the Redemption Price, or provides for an
earlier Expiration Date.
Section 29. Determinations and Actions by the Board of Directors. The Board of
Directors of the Company (and/or, as provided for in this Rights Agreement, the
Disinterested Directors) shall have the exclusive power and authority to
administer this Rights Agreement and to exercise all rights and powers
specifically granted to the Board of Directors or the Company (and/or, as
provided for in this Rights Agreement, the Disinterested Directors) or as may be
necessary or advisable in the administration of this Rights Agreement,
including, without limitation, the right and power to interpret this Rights
Agreement and to make conclusively all determinations deemed necessary or
advisable for the administration of this Rights Agreement. All such acts,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) that are done or
made by the Board of Directors and/or the Disinterested Directors, in good faith
shall (x) be final, conclusive and binding on the Company, the Rights Agent and
the holders of the Rights and all other parties and (y) not subject the Board of
Directors or the Disinterested Directors to any liability to the holders of the
Rights or any other party.
Section 30. Successors. All the covenants and provisions in this Rights
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns here under.
Section 31. Benefits of This Rights Agreement: Determinations and Actions by
the Board of Directors. etc.
A. Nothing in this Rights Agreement shall be construed to give to any
person or corporation other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares) any legal or equitable right, remedy or claim under
this Rights Agreement; but this Rights Agreement shall be the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares).
B. Any action which this Rights Agreement specifies is to be taken by
the Disinterested Directors shall be a sufficient act of the Company if approved
by the requisite number of the Disinterested Directors specified in this Rights
Agreement without any further act of the Board of Directors of the Company. Any
action which this Rights Agreement does not specify is to be taken by the
Disinterested Directors and which otherwise would require approval of the Board
of Directors of the Company, shall be a sufficient act of the Company if
approved by a majority of the directors of the Company present at a meeting of
the Board of Directors of the Company at which a quorum is present and, if there
are Disinterested Directors, by a majority of the Disinterested Directors.
Section 32. Severability. If any term, provision, covenant or restriction of
this Rights Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Rights Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 33. Governing Law. This Rights Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
Commonwealth of Kentucky and, except as to the duties of the Rights Agent and as
hereinafter otherwise provided, for all purposes shall be governed by and
construed in accordance with the laws of such Commonwealth applicable to
contracts to be made and performed entirely within such Common wealth. The
duties of the Rights Agent shall be governed by and construed in accordance with
the laws of the State of New York.
Section 34. Counterparts. This Rights Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 35. Descriptive Headings. Descriptive headings of the several Sections
of this Rights Agreement are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions of this Rights
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
TRANS FINANCIAL BANCORP, INC.
By:
/s/ βββββββ β. ββββββ
βββββββ β. ββββββ, President
MANUFACTURERS HANOVER as Rights Agent
By:/s/Manufacturers Hanover, Rights Agent
EXHIBIT A
FORM OF CERTIFICATE OF DESIGNATION OF CLASS B PREFERRED STOCK, SERIES
1992 OF TRANS FINANCIAL BANCORP, INC.
I, βββββ β. βββββββββ, Secretary of Trans Financial
Bancorp, Inc. (the "Corporation"), a corporation organized and existing
under the Kentucky Business Corporation Act, in accordance with the
provisions of KRS 271.B.6 020 thereof, do hereby certify:
That pursuant to the authority conferred upon the Board of
Directors by the Articles of Incorporation of the Corporation, the Board of
Directors on January 20, 1992, adopted the following resolution creating a
series of Preferred Stock designated as Class B Preferred Stock, Series 1992:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of the Corporation and in accordance with the
provisions of its Articles of Incorporation, a Series of Preferred Stock of the
Corporation be and hereby is, created, and that the designation and amount
thereof and the relative rights and preferences of the shares of such series,
are as follows:
1. Designation and Amount. There is hereby created a series of
Preferred Stock, such series being designated as "Class B Preferred Stock,
Series 1992" (the "Series 1992 Preferred Stock"), and the number of shares
initially constituting such series shall be 350,000. The number of shares
constituting such series may, unless prohibited by the Articles of Incorporation
or by applicable law of the Commonwealth of Kentucky, be increased or decreased
by subsequent amendment of this resolution by the Board of Directors; provided,
that no decrease shall reduce the number of shares of Series 1992 Preferred
Stock to a number less than the number of 'shares then outstanding plus the
number of shares issuable upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
corporation convertible into Series 1992 Preferred Stock.
2. Dividends and Distributions.
A. The holders of Series 1992 Preferred Stock shall be
entitled to receive as a dividend per share per annum, when, as and if declared
by the Board of Directors out of the funds legally available for the purpose, an
amount (rounded to the nearest cent) equal to the greater of (1) $6.00 or (2)
the sum of the Formula Amounts with respect to each quarterly payment of
dividends on the Series 1992 Preferred Stock. The Formula Amount for any such
quarterly payment shall be the Formula Number then in effect times the aggregate
per whole share amount of (x) dividends payable in cash and (y) a cash amount
equal to the fair market value of all dividends or other distributions payable
in assets, securities or other forms of non-cash consideration (other than
dividends or distributions solely in Common Stock, no par value of the
Corporation ("Common Shares") or any distribution of stock into which the Common
Shares may be reclassified or exchanged as contemplated by subparagraph B of
this Section 2), declared on the Common Shares since the immediately preceding
date of a quarterly payment of dividends on the Series 1992 Preferred Stock (a
"Quarterly Dividend Payment Date") or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share of Series 1992
Preferred Stock. As used herein, the "Formula Number" shall be 100; provided.
however, that if at any time after January 20, 1992, the Company shall (i)
declare a dividend, or make a distribution, on its outstanding Common Shares
payable in Common Shares, (ii) subdivide (by a stock split or otherwise) or
split the outstanding Common Shares into a larger number of Common Shares, or
(iii) combine (by a reverse stock split or otherwise) the outstanding Common
Shares into a smaller number of Common Shares, then in each such event the
Formula Number shall be adjusted to a number determined by multiplying the
Formula Number in effect immediately prior to such event by a fraction, the
numerator of which is the number of Common Shares that are outstanding
immediately after such event and the denominator of which is the number of
shares that are outstanding immediately prior to such event (and rounding the
result to the nearest whole number); and provided further that if at any time
after January 20, 1992, the Company shall issue any shares of its capital stock
in a reclassification or change of the outstanding Common Shares (including any
such reclassification or change in connection with a merger in which the Company
is the surviving corporation), then in such event the Formula Number shall be
appropriately adjusted to reflect such reclassification or change.
B. The Corporation shall declare a dividend or distribution on
the Series 1992 Preferred Stock as provided in subparagraph A of this Section 2
simultaneously with its declaration of a dividend or distribution on the Common
Shares (other than a dividend payable in Common Shares or a subdivision of the
outstanding Common Shares); provided, that in the event no dividend or
distribution (other than a dividend payable in Common Shares or a subdivision of
the outstanding Common Shares) shall have been declared on the Common Shares
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.50 per share on the
Series 1992 Preferred Stock shall nevertheless be payable, out of the funds
legally available for such purpose, on such subsequent Quarterly Dividend
Payment Date.
C. Dividends shall begin to accrue and be cumulative
on outstanding Series 1992 Preferred Stock from the Quarterly Dividend
Payment Date immediately preceding the date of issue of such Series 1992
Preferred Stock, unless the date of issue of such shares is prior to
the record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of Series 1992
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend .Payment Date, in either of which events such dividend shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends payable on the
Series 1992 Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro
rata on a share by share basis among all such shares outstanding at that time.
The Board of Directors may fix a record date for the determination of holders of
Series 1992 Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be the same as the record
date for the corresponding dividend or distribution on the Common Shares.
3. Voting Rights. The holders of Series 1992 Preferred Stock shall
have the following voting rights:
A. Subject to the provision for adjustment hereinafter set
forth, each whole share of Series 1992 Preferred Stock shall entitle the holder
thereof to the number of votes equal to the Formula Number then in effect for
each share of Series 1992 Preferred Stock held of record on all matters
submitted to a vote of the shareholders of the Corporation.
B. Except as otherwise provided in any other Certificate of
Designation creating a series of Preferred Stock, by law or as otherwise
provided herein, the holders of Series 1992 Preferred Stock and the holders of
Common Shares and any other capital shares of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of the shareholders of the Corporation.
C. Except as otherwise provided by law or as otherwise
provided herein, the holders of the Series 1992 Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the
extent that they are entitled to vote with holders of Common Shares and any
other capital stock of the Corporation having general voting rights as set forth
herein) for taking any corporate actions.
4. Certain Restrictions.
A. Whenever quarterly dividends or other dividends or
distributions payable on the Series 1992 Preferred Stock as provided in the
Section 2 hereof are in arrears, thereafter until all accrued and unpaid
dividends and distributions, whether or not declared, on Series 1992 Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
[1] declare or pay dividends, or make any other
distribution on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series 1992 Preferred Stock;
[2] declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series 1992 Preferred Stock, except
dividends paid ratably on the Series 1992 Preferred Stock and
all such parity stock on which dividends are payable or in
arrears in proportion to the total amount to which the holders
of all such shares are then entitled;
[3] redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series 1992 Preferred Stock, provided that the
corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares
of stock of the corporation ranking junior (both as to
dividends and upon liquidation, dissolution or winding up) to
the Series 1992 Preferred Stock; or
B. The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the corporation unless the corporation could, under subparagraph A of
this section 4, purchase or otherwise acquire such shares at such time and in
such a manner.
5. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (a)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series 1992 Preferred Stock
unless, prior thereto, the holders of Series 1992 Preferred Stock shall have
received the greater of (1) $12 per share or (2) an aggregate amount per share
equal to the Formula Number then in effect times the aggregate amount to be
distributed per share to holders of Common Shares or (b) to the holders of
shares of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series 1992 Preferred Stock, except
distributions made ratably on the Series 1992 Preferred Stock and all other such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon liquidation, dissolution or winding up declared, on
Series 1992 Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
[1] declare or pay dividends, or make any other
distribution on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
1992 Preferred Stock;
[2] declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series 1992 Preferred Stock, except dividends paid ratably on the
Series 1992 Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amount
to which the holders of all such shares are then entitled;
[3] redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
1992 Preferred Stock, provided that the corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of stock of the corporation ranking junior (both
as to dividends and upon liquidation, dissolution or winding up) to the
Series 1992 Preferred Stock; or
6. Consolidation. Merger. Exchange. etc. In case the corporation
shall enter into any consolidation, merger, combination, statutory share
exchange or other transaction in which the Common Shares are exchanged for or
changed into other stock or securities, money and/or any other property, then in
any such case the Series 1992 Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share equal to the Formula
Number then in effect times the aggregate amount of stock, securities, cash or
any other property (payable in kind), as the case may be, into which or for
which each Common Share is exchanged or changed.
7. No Redemption. Except as otherwise provided in Section 6, the
Series 1992 Preferred Stock shall not be redeemable.
8. Rank. The Series 1992 Preferred Stock shall rank junior in terms of
dividends and liquidation, dissolution and winding up rights to any Class A
Preferred Stock and to all other series of the corporation's Preferred Stock
hereinafter issued unless the terms of such series shall provide otherwise.
9. Fractional Shares. The corporation shall not be required to issue
fractional shares of the Series 1992 Preferred Stock and in lieu of fractional
shares, the corporation shall pay an amount in cash equal to the same fraction
of the current market value of one share of Preferred Stock.
IN WITNESS WHEREOF, I have executed this Certificate of
Designation, this the 20th day of January, 1992.
--------------------------------------------------------------------------------
βββββ β. βββββββββ, Secretary
EXHIBIT B
Form of Right Certificate
Certificate No.___ ___________ Rights
NOT EXERCISABLE AFTER JANUARY 20, 2002, OR EARLIER IF REDEEMED. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01
PER WHOLE RIGHT, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. [THE
RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS AN ACQUIRING PERSON OR AN ADVERSE PERSON, OR
AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON OR ADVERSE PERSON.
ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(E)
OF THE RIGHTS AGREEMENT; PROVIDED, HOWEVER, THAT A HOLDER OF A RIGHT
WHICH HAS BECOME NULL AND VOID WILL HAVE THE RIGHT, AT ANY TIME PRIOR
TO THE EXPIRATION DATE, SUBJECT TO THE PROVISIONS OF THE RIGHTS
AGREEMENT, TO REQUIRE THE COMPANY TO REPURCHASE SUCH RIGHT AT A
PURCHASE PRICE EQUAL TO $.01 PER WHOLE RIGHT.]i
RIGHT CERTIFICATE
TRANS FINANCIAL BANCORP, INC.
This certifies that ________________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of January 20, 1992 (the "Rights
--------------------------------------------
' The portion of the legend in brackets shall be inserted only if
Right Certificate was held or transferred by an Acquiring Person or Adverse
Person.
Agreement"), between Trans Financial Bancorp, Inc., a Kentucky corporation (the
"Company") and Manufacturers Hanover, βββ β. ββββ ββββββ, ββββ βββββ, βββ ββββ,
βββ ββββ βββββ, a state chartered bank and trust company, as Rights Agent (the
"Rights Agent"), unless the Rights evidenced hereby shall have been previously
redeemed, to purchase from the Company at any time after the Distribution Date
(as defined in the Rights Agreement) and prior to 5:00 p.m., Eastern Standard
Time on January 20, 2002 (the "Expiration Date"), at the principal corporate
trust office of the Rights Agent, or its successors as Rights Agent, in [City,
State], one one hundredth of a fully paid, non-assessable share of preferred
stock, without par value, of the Company (the "Preferred Stock"), upon
presentation and surrender of this Right Certificate with the Form of election
to Purchase duly executed. The exercise price with respect to each whole Right
shall be $45 (the "Exercise Price").
The number and kind of shares of which may be purchased upon
exercise of each Right evidenced by this Right Certificate, as set forth above,
are the number and kind of shares as of January 20, 1992. As provided in the
Rights Agreement, the number and kind of shares which may be purchased upon the
exercise of each Right evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
If the Rights evidenced by this Right Certificate are or were
at any time on or after the earlier of the Distribution Date or the Share
Acquisition Date (as such terms are defined in the Rights Agreement)
beneficially owned by an Acquiring Person or an Adverse Person, or an Affiliate
or Associate of an Acquiring Person or Adverse Person (as such terms are defined
in the Rights Agreement), such Rights shall become null and void at any time on
or after the earlier of [i] the Share Acquisition Date or [ii] the occurrence of
a Triggering Event (as defined in the Rights Agreement) and the holder of any
such Right (including any holder who acquired such Right after [i] the Share
Acquisition Date or [ii] the occurrence of a Triggering Event) shall not have
any right to exercise any such Right on or after [i] the Share Acquisition Date
or [ii] the occurrence of a Triggering Event; provided, however, that such
holder will have the right at any time prior to the Expiration Date, subject to
the provisions of the Rights Agreement, to require the Company to repurchase any
such Right at a purchase price equal to $.01 per whole Right.
This Right Certificate is subject to all the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and reference
to the Rights Agreement is hereby made for a full description of rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the above mentioned office of the Rights
Agent and are also available from the Company upon written request.
This Right Certificate, with or without other Right
Certificates, upon surrender at the above mentioned office of the Rights Agent,
may be exchanged for another Right Certificate or Right Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number and kind of shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate may be redeemed by the Company at its option
at a redemption price of $.01 per whole Right at any time prior to the earliest
of [i] the Close of Business on the tenth Business Day following the Share
Acquisition Date, [ii1 an occurrence of a Triggering Event or [iii] the
Expiration Date.
The Company is not required to issue fractional shares of
Preferred Stock upon the exercise of any Rights evidenced hereby. In lieu of
issuing fractional shares, the Company will make a cash payment as provided in
the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed or confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company, including without limitation, any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or, to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or other distributions or subscription rights, or otherwise, until the
Right or Rights evidenced by this Right Certificate shall have been exercised as
provided in accordance with the provisions of the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been counter signed by the Rights Agent.
WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal. Dated as of
[Distribution Date].
TRANS FINANCIAL BANCORP, INC.
By
[Name]
[Title]
Attest:
-----------------------------------------------------
[Name]
[Title]
Countersigned:
[NAME OF RIGHTS AGENT],
By
-----------------------------------------------------
Authorized Signature
[On Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Rights
represented by this Right Certificate.)
FOR VALUE RECEIVED _______________________________, hereby sells,
assigns and transfers unto (Please print name and address of transferee) this
Right Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint Attorney, to transfer the within Right
Certificate on the books of the within named Company, with full power of
substitution.
Dated
______________________, 19___ ___________________________
Signature
Signature Guaranteed:
Certificate
Signature Guarantee
The undersigned hereby certifies by checking the appropriate
boxes that:
1. this Right Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Adverse Person, or an Affiliate or Associate of any such Acquiring Person or
Adverse Person (as such terms are defined in to the Rights Agreement);
2. after due inquiry and to the best knowledge of the under signed,
it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is or was an Acquiring Person or
an Adverse Person, or an Affiliate or Associate of an Acquiring
Person or Adverse Person.
Dated
______________________, 19___ ___________________________
Signature Guaranteed:
NOTICE
The signature on the foregoing Form of Assignment and
Certificate must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
[On Reverse Side of Right Certificate]
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires to exercise the
Rights
represented by this Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise
___________________ Rights represented by this Right Certificate to purchase the
Preferred Stock (or other shares or any cash, debt securities or other property)
issuable or payable upon the exercise of such Rights and requests that
certificates for such shares (or documents of ownership for such other property)
be issued in the name of:
Please insert social security
or other identifying number: __________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number: __________________________
(Please print name and address)
Date _______________________, 19___
------------------ ------------------------------
__________________ Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
1. this Right Certificate [ ] is [ ] is not being exercised by or on
behalf of a Person who is or was an Acquiring Person or an Adverse Person, or an
Affiliate or Associate of any such Acquiring Person or Adverse Person (as such
terms are defined in to the Rights Agreement);
2. after due inquiry and to the best knowledge of the undersigned, it [
] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is or was an Acquiring Person or an Adverse Person, or any
Affiliate or Associate of an Acquiring Person or Adverse Person.
Dated _________________, 19____ ____________________________________
__________________ Signature
Signature Guaranteed:
NOTICE
The signature on the foregoing Form of Election to Purchase
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK OF
TRANS FINANCIAL BANCORP, INC.
On January 20, 1992, the Board of Directors of Trans Financial
Bancorp, Inc. (the "Company") declared a dividend of one Right for each
outstanding share of Common Stock, no par value per share, of the Company (the
"Common Shares"). The distribution is payable on February 6, 1992, to the
holders of record of Common Shares on January 30, 1992. Each Right, when and if
it becomes exercisable as described below, will entitle the registered holder to
purchase from the Company one one hundredth of a share of Class B Preferred
Stock, Series 1992 of the Company ("Preferred Stock"), subject to adjustment,
having the rights and preferences set forth in the form of Certificate of
Designation attached to the Rights Agreement dated as of January 20, 1992 (the
"Rights Agreement") between the Company and Manufacturers Hanover as Rights
Agent (the "Rights Agent").
Until the Distribution Date, the Rights will be evidenced by
the certificates for Common Shares registered in the names of the holders
thereof (which certificates for Common Shares shall also be deemed to be Right
Certificates, as defined below) and not by separate Right Certificates.
Therefore, until the Distribution Date, the Rights will be transferred with and
only with the Common Shares.
The "Distribution Date" is defined as the earlier of [i] the
tenth business day after the first date of the public disclosure by the Board of
Directors of the Company or an Acquiring Person (as hereafter defined) that a
person or group (including any affiliate or associate of such person or group)
acquired, or obtained the right to acquire, beneficial ownership of 15% or more
of the outstanding Common Shares (such person or group being called an
"Acquiring Person") or [ii] the tenth business day after the Disinterested
Directors of the Company (as defined in the Rights Agreement) determine that a
shareholder's beneficial ownership, such beneficial ownership being not less
than 10% of the Common Shares of the Company, has a detrimental effect on the
Company or its Shareholders (such person or group being called an "Adverse
Person") (such dates provided in [i] or [ii] above being called the "Share
Acquisition Date") or [iii] the tenth business day after the first public
disclosure by the Board of Directors of the Company of the commencement of, or
intent to commence, a tender or exchange offer for 25% or more of the
outstanding Common Shares.
As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Shares as of the close of business on
the Distribution Date, and such separate Right Certificates alone will
thereafter evidence the Rights.
The Rights are not exercisable until the Distribution Date and
will expire on January 20, 2002 (the "Expiration Date"), unless earlier redeemed
by the Company as described below.
The number of shares of Preferred Stock issuable upon
exercise of the Rights is subject to adjustment from time to time in the
event of [i] a subdivision, combination or reclassification of the Preferred
Stock, [ii] the issuance of certain rights, options or warrants to holders of
Common Shares or Equivalent Shares (as defined in the Rights Agreement) to
subscribe for or purchase Common Shares or Equivalent Shares at a price per
share less than the market value of such Common Shares or Equivalent Shares, or
[iii] the distribution to holders of Common Shares or Equivalent Shares, of
cash (excluding regular periodic cash dividends at a rate not in excess of
150% of the rate of the last regular cash dividend theretofore paid) or
evidence of indebtedness, assets or securities or subscription rights,
options or warrants (other than those referred to above). The number of Rights
associated with each Common Share is subject to adjustment in the event of the
declaration of a stock dividend payable in Common Shares or a subdivision,
combination or reclassification of, the Common Shares.
The Company shall not issue fractional shares, and in lieu of
fractional shares, the Company shall make a cash payment based on the market
price of such shares on the trading date immediately prior to the date of
exercise.
The number and kind of stock issuable upon exercise of the
Rights is also subject to adjustment. Such an adjustment will occur upon the
occurrence of any of the following events: (a) if the Company is acquired in a
merger or other business combination or 50% or more of its assets or assets
representing more than 50% of its earning power are sold, leased, exchanged or
otherwise transferred (in one or more transactions), to a publicly traded
corporation, and such transaction is not approved by two thirds of the
Disinterested Directors of the Company, the Rights will entitle each holder of a
Right to purchase, for the Exercise Price, that number of common shares of such
corporation which at the time of the transaction would have a market value of
twice the Exercise Price; and (b) if the Company is acquired in a merger or
other business combination or 50% or more of the assets or assets representing
more than 50% of the earning power of the Company are sold, leased, exchanged or
otherwise transferred (in one or more related transactions) to an entity that is
not a publicly traded corporation, the Rights will entitle each holder of a
Right to purchase, for the Exercise Price, at such holder's option, [i] that
number of common shares of such entity (or, at the holder's option, of the
surviving corporation in such acquisition) which would have a book value of
twice the Exercise Price or [ii] if such entity has an affiliate which has
publicly traded common shares, that number of common shares of such affiliate
which would have a market value of twice the Exercise Price.
A "Triggering Event" is defined as the occurrence of any
of the following events after the Distribution Date: [i] without the
approval of at least two thirds of the Disinterested Directors, a person or
group, alone or together with all affiliates and associates of such
person, shall become the beneficial owner of 15% or more of the Common Shares
then outstanding; or [ii] a person is declared an Adverse Person. At any time
on or after the earlier of [i] the Share Acquisition Date or
[ii] the occurrence of a Triggering Event, the Rights will entitle each holder
of a Right to purchase, for the Exercise Price, that number of Preferred Stock
which at the time of the transaction would have a market value of twice the
Exercise Price.
Any rights that are or were, at any time on or after the
earlier of the Distribution Date or the Share Acquisition Date, beneficially
owned by an Acquiring Person or Adverse Person (or any affiliate or associate of
such Person) will become null and void at any time on or after the earlier of
[i] the Share Acquisition Date or [ii] the occurrence of a Triggering Event, and
any holder of any such Right (including any holder who acquired such Right
subsequent to [A] the Share Acquisition Date or [BJ a Triggering Event) will be
unable to exercise any such Right on or after the earlier of [x] the Share
Acquisition Date or [y] the occurrence of a Triggering Event, provided, however,
that such holder of a Right that has become null and void will have the right,
at any time prior to the Expiration Date, subject to the provisions of the
Rights Agreement, to require the Company to repurchase such Right at a purchase
price equal to $.01 per whole Right.
At any time prior to the earliest of [i] the close of
business on the tenth business day following the Share Acquisition Date,
[ii] the occurrence of a Triggering Event, or [iii] the
Expiration date, the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per whole Right (the "Redemption
Price"); however, immediately upon the date that an Acquiring Person becomes an
Acquiring Person or an Adverse Person becomes an Adverse Person, and thereafter
until the earliest of [i] the close of business on the tenth business day
following the Share Acquisition Date, [ii] the occurrence of a Triggering Event,
or [iii] the Expiration Date, the Rights may be redeemed only if a majority of
the Disinterested Directors then in office determine that such redemption is, in
their judgment, in the best interests of the Company and its stockholders.
Upon the action of the Board of Directors of the Company
electing to redeem the Rights, the Company shall make an announcement thereof,
and upon such election, the right to exercise the Rights will immediately
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
At any time after any person or group becomes an Acquiring
Person or Adverse Person and prior to the acquisition by such person or group of
50% or more of the outstanding Common Shares, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by such person or
group, which will have become null and void), in whole or in part, at an
exchange ratio of one one hundredth of a share of Preferred Stock per Right
(subject to adjustment).
The Board of Directors and the Company shall not have any
liability to any person as a result of the redemption or exchange of the Rights
pursuant to the provisions of the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company including without limitation the
right to vote or to receive dividends.
At any time prior to the Distribution Date the Company may,
without the approval of any holder of the Rights, supplement, amend or extend
any provision of the Rights Agreement (including the date on which the
Distribution Date shall occur) except that no supplement, amendment or extension
shall be made which reduces the Redemption Price or provides for an earlier
Expiration Date. Prior to the time any person or group becomes an Acquiring
Person, the Board of Directors of the Company may amend the Rights Agreement to
lower the thresholds for an Acquiring Person and the Triggering Event from the
15% to not less than the greater of [i] the sum of .01% and the largest
percentage of the outstanding Common Shares then known to the Company to be
beneficially owned by any person or group, and [ii] 10%. However, at any time
when there shall be an Acquiring Person or Adverse Person, the Rights Agreement
may be supplemented or amended only if a majority of the Disinterested Directors
then in office determine that such supplement or amendment is in the best
interest of the Company and its stockholders.
A copy of the Rights Agreement will be filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8 A. A copy of the Rights Agreement is available free of charge from the
Company upon written request. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by reference.
PRESS RELEASE
Adoption of Shareholder Rights Plan
Bowling Green, Kentucky -- Trans Financial Bancorp, Inc.
announced today that its Board of Directors approved a Shareholders Rights Plan
in which a preferred stock purchase right will be distributed as a dividend
on each share of the company's common stock outstanding as of January 30, 1992.
"The Rights Plan is intended to discourage coercive takeover
tactics that may not be in the best interests of the company and its
stockholders," said βββββββ β. ββββββ, President of Trans Financial Bancorp,
Inc. "It also is intended to increase the likelihood that all stockholders will
receive a fair price that reflects the full value of the company in the event of
a takeover. Although the Rights Plan does not prevent a takeover event, it will
strongly encourage potential acquirers to negotiate with the board prior to
attempting a takeover and should give the board increased leverage in
negotiating the terms of any business combination that may occur."
ββββββ stated that the company is not aware of any present
takeover attempt at this time. Initially, the rights are not
exercisable and are not detachable from the common stock, and
they do not
give any immediate value to stockholders. The rights can be exercised and will
trade separately from the common stock ten days after any person or group
acquires 15% or more of the company's outstanding common stock, or the
disinterested directors designate a person or group with greater than 10%
ownership as being adverse to the company, or a person or group announces a
tender offer for 25% or more of the company's outstanding common stock.
After the rights become exercisable, they could become
valuable. If 15% or more of the company's outstanding common stock is acquired
by an outside party, or the disinterested directors designate a person or group
with greater than 10% ownership as being adverse to the company, holders of the
rights can purchase preferred stock of Trans Financial Bancorp, Inc. at 50% of
its then market price. If the company is a party to a merger or other business
combination, holders of the rights can purchase stock of the acquiring company
at 50% of its then market price.
The rights will expire on January 20, 2002, unless earlier
redeemed by the company. The distribution of rights will be
made on each share of common stock outstanding on January 30,
1992, and
on each addition al share of common stock sold by Trans Financial Bancorp, Inc.
after the date and prior to the date on which the rights trade separately as
described above. Until the right is exercised, the holder will receive no
additional voting stock. The rights distribution will not dilute the
stockholder's ownership of the company.
January 20, 1992
Dear Stockholder:
Your Board of Directors has adopted a Shareholders Rights Plan
(the "Rights Plan"). Under the Rights Plan, Rights to purchase one one hundredth
of a share of Series 1992 Preferred Stock of Trans Financial Bancorp, Inc. (the
"Company") will be distributed as a dividend at the rate of one Right for each
share of the Company's Common Stock. A summary of the terms of the Rights Plan
is included with this letter.
Initially, the Rights are not exercisable and are not
detachable from the Company's Common Stock, and they do not give any immediate
value to stockholders. No certificates representing the Rights will be issued at
this time.
Instead, the Rights will be evidenced by the Common Stock certificate.
The Rights will become exercisable 10 business days after (1)
any person or group acquires 15% or more of the Company's outstanding Common
Stock, (2) the Disinterested Directors designate a person or group with greater
than 10% ownership as being adverse to the Company or (3) any person or group
announces a tender offer for 25% or more of the Company's outstanding Common
Stock. Thereafter, the Rights will trade separately from the Company's Common
Stock, and separate certificates representing the Rights will be issued.
After the Rights become exercisable, they could become
valuable. If any person or group acquires 15% or more of the Common Stock or the
Disinterested Directors designate a person or group with greater than 10%
ownership as having an adverse impact on the Company, the holders of Rights can
purchase preferred stock of Trans Financial Bancorp, Inc. at 50% of its then
market price. If the Company is a party to a merger or other business
combination, holders of Rights can purchase stock of the acquiring company at
50% of its market value price. The Rights will expire on January 20, 2002 unless
exercised or redeemed by the Company.
The Rights Plan contains provisions that are intended to
protect stockholders from abusive takeover tactics that may be used by an
acquirer which the Board believes are not in the best interest of the
stockholders. Examples of abusive takeover tactics include a gradual
accumulation of shares in the open market or a partial or two tier tender offer
that does not treat all stockholders equally or other acquisition attempts which
may unfairly pressure stockholders by coercing them to relinquish their
investment, thereby depriving them of the full value of their shares. The Rights
Plan increases the Board's ability to represent effectively the interests of the
stockholders in the event of an unfair acquisition proposal. While the Board is
not aware of any specific effort to acquire control of the Company, it believes
these Rights represent a sound and reasonable means of safeguarding your
interests as stockholders.
The Rights are not intended to prevent a takeover of the
Company and will not do so. However, they should discourage any effort to
acquire the Company in a manner or on terms not approved by the Board. The
Rights are designed to deal with serious problems of a potential acquirer using
coercive tactics to deprive the Company's Board and the stockholders of any real
opportunity to determine the future of the Company and to realize the full value
of the stockholders' investment in the Company.
The distribution of Rights will not in any way alter the
financial strength of the Company or interfere with its business plans. The
distribution will not change the way in which you currently trade the Company's
shares and will not be dilutive or affect purported earnings per shares. While
the distribution of rights will not be taxable either to you or to the Company,
stockholders may, depending on their individual circumstances, recognize taxable
income should the rights become exercisable. As explained in further detail in
the summary of the Rights, the Rights will become exercisable if and only if a
problem arises for which the Rights were created.
A large number of companies, including many financial
institutions, have issued Rights similar to those adopted by the Board. The
Board is aware that some investors feel that Rights of the sort we are issuing
deter legitimate acquisition proposals. The Board carefully considered that
position and concluded that it does not justify denying stockholders the
protection which the Rights afford against abusive takeover tactics. In
declaring the Rights dividend the Board has expressed its confidence in the
future of Trans Financial Bancorp, Inc., and its determination that stockholders
be given every opportunity to participate fully in that future.
Sincerely,