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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
MURFREESBORO BANCORP, INC.
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(Exact name of registrant as specified in its charter)
TENNESSEE
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(State of Organization)
62-1694317
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(I.R.S. Employer Identification Number)
615 MEMORIAL BOULEVARD
MURFREESBORO, TENNESSEE 37129
(615) 890-1111
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(Address and Phone Number of Registrants' Principal Executive Offices)
If this Form relates to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A(c), check the following box. [ ]
If this Form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A(d), check the following box. [X]
Securities Act registration statement file number to which this form relates:
______________ (if applicable).
Securities to be registered pursuant to Section 12(b) of the Act:
NONE
Securities to be registered pursuant to Section 12(g) of the Act:
FLOATING RATE CONVERTIBLE SUBORDINATED DEBENTURES DUE AUGUST 31, 2011
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(Title of Class)
SHAREHOLDER RIGHTS
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(Title of Class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
DESCRIPTION OF CONVERTIBLE SUBORDINATED DEBENTURES
GENERAL
The Floating Rate Convertible Subordinated Debentures due August 31, 2011 (the
"Debentures") are direct, unsecured, subordinated obligations of Murfreesboro
Bancorp, Inc. (the "Corporation"). Debentures in aggregate principal amount of
$3,000,000 are outstanding and will mature on August 31, 2011. The Debentures
are convertible at the option of the holder into shares of Common Stock of the
Corporation, par value $5.00 per share (the "Shares"), at any time prior to
maturity, subject to adjustment under certain circumstances, based on a purchase
price of $12.50 per Share. At maturity, to the extent not previously exercised,
the Corporation will pay the principal amount of the Debentures with Shares
based on the fair market value of the Shares at that time. This obligation
exists even if on August 31, 2011, the fair market value of the Shares is below
$12.50 a share. Interest on the Debentures began to accrue on January 1, 2000,
at the rate of prime minus .5% per annum (as adjusted) and is payable annually
on December 15 of each year, commencing December 15, 2000, to holders of record
at the close of business on the last day of the preceding month. The Debentures
were issued in fully registered form and may be transferred or exchanged without
payment of any charge other than taxes or other governmental charges. The
Debentures are unsecured debt obligations of the Corporation, are not
obligations of a bank, and are not insured by the FDIC.
SUBORDINATION
The payment of the principal of, and interest on, the Debentures is subordinated
and junior in right of payment, to the extent and in the manner set forth in the
Debenture, to the prior payment in full of all senior indebtedness of the
Corporation. The term "senior indebtedness" is defined as the principal of,
premium (if any), and interest on indebtedness (other than the Debentures) of
the Corporation for money borrowed evidenced by bonds, notes, debentures, or
similar obligations, including any guaranty by it of any indebtedness for money
borrowed by others, whether currently outstanding or hereafter created, assumed,
or incurred, unless the instrument creating or evidencing such indebtedness
provides that such indebtedness is not senior in right of payment to the
Debentures. As of March 31, 2000, there is no senior indebtedness.
Senior indebtedness may be incurred from time to time in the future.
The Debenture prohibits any payment of principal of, or interest on, the
Debentures during the continuance of any default in respect of any senior
indebtedness, or any default beyond the period of grace, under any agreement
pursuant to which such senior indebtedness was issued, unless and until such
default on the senior indebtedness shall have been cured or waived.
Upon any distribution of assets of the Corporation in connection with any
dissolution, winding up, liquidation, reorganization, bankruptcy, or other
similar proceeding, the holders of all senior indebtedness will first be
entitled to receive payment in full of the principal thereof and premium (if
any) and interest due
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thereon before the holders of the Debentures are entitled to receive any payment
of the principal of, or interest on, the Debentures. By reason of such
subordination, in the event of insolvency, creditors of the Corporation who are
not holders of senior indebtedness or of the Debentures may recover less,
ratably, than holders of senior indebtedness but may recover more, ratably, than
the holders of the Debentures.
Because the Corporation is a corporation, the right of its creditors, including
the holders of the Debentures, to participate in the assets of any subsidiary
upon the latter's liquidation or reorganization would be subject to the prior
claims of such subsidiary's creditors (including depositors in the case of bank
subsidiaries) except to the extent that the Corporation may itself be a creditor
with recognized claims against the subsidiary. There is no restriction in the
Debentures against the incurring of indebtedness by the Corporation or by any
subsidiary of the Corporation.
DEFERRAL OF INTEREST
So long as no event of default under the Debentures has occurred and is
continuing, the Corporation has the right at any time or from time to time
during the term of the Debentures to defer payment of interest on the Debentures
for a period not exceeding two (2) years (the "Extension Period"), provided that
no Extension Period may extend beyond the stated maturity of the Debentures. At
the end of such Extension Period, the Corporation must pay all interest then
accrued and unpaid on the Debentures. During an Extension Period, interest will
continue to accrue and holders of Debentures will be required to accrue interest
income for United States federal income tax purposes.
During any such Extension Period, the Corporation may not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Corporation's capital stock or
(ii) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Corporation that rank
equal in all respects with or junior in interest to the Debentures (other than
(a) repurchases, redemptions or other acquisitions of shares of capital stock of
the Corporation in connection with any employment contract, benefit plan or
other similar arrangement with or for the benefit of one or more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or stockholder stock purchase plan or in connection with the issuance of capital
stock of the Corporation (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of any exchange or
conversion of any class or series of the Corporation's capital stock (or any
capital stock of a subsidiary of the Corporation) for any class or series of the
Corporation's capital stock or of any class or series of the Corporation's
indebtedness for any class or series of the Corporation's capital stock, (c) the
purchase of fractional interests in shares of the Corporation's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (d) any declaration of a dividend in
connection with any stockholder's rights plan, or the issuance of rights, stock
or other property under any stockholder's rights plan, or the redemption or
repurchase of rights pursuant thereto, or (e) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock issuable
upon exercise of such warrants, options or other rights is the same stock as
that on which the dividend is being paid or ranks equal with or junior to such
stock).
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Prior to the termination of any such Extension Period, the Corporation may
further defer the payment of interest on the Debentures, provided that no
Extension Period may exceed two (2) years or extend beyond the stated maturity
of the Debentures. Upon the termination of any such Extension Period and the
payment of all interest then accrued and unpaid, the Corporation may elect to
begin a new Extension Period subject to the above requirements. No interest
shall be due and payable during an Extension Period, except at the end thereof.
The Corporation must give the Debenture holders notice of its election to begin
such Extension Period at least one business day prior to the earlier of (i) the
date interest on the Debentures would have been payable except for the election
to begin such Extension Period or (ii) the date such interest is payable, but in
any event not less than one business day prior to such record date. There is no
limitation on the number of times that the Corporation may elect to begin an
Extension Period.
CONVERSION OF DEBENTURES
A Debenture may be surrendered by its holder to the Corporation at any time or
from time to time prior to maturity in full or partial conversion to Shares. In
the case of a partial satisfaction, a Debenture representing the unused
principal amount will be returned to the holder. The holder will then have the
right to convert such remaining principal amount to Shares at any time prior to
maturity. Any Debenture converted after any interest payment date and on or
prior to the next succeeding regular record date for the payment of interest
thereon will cease to accrue interest upon such conversion; interest theretofore
accrued but unpaid will be paid at the time of such conversion.
CHANGE OF CONTROL
The Corporation may prepay all or a portion of the Debentures at the discretion
of the Board of Directors by paying the principal amount in the form of Shares
based upon a purchase price of $12.50 per Share, as may be adjusted, any time
after, or simultaneously with, a "change in control" of the Corporation. "Change
of control" means that more than 50% of the outstanding Shares changes
beneficial ownership within a twelve-month period as determined by the Board of
Directors of the Corporation or its successor. If the Debentures are prepaid as
a result of a change of control, holders of Debentures will be sent notice of
such prepayment not less than 30 nor more than 90 days prior to the prepayment
of the Debentures.
SECONDARY OFFERING AND EXCHANGE DATE
The Debentures provide that at maturity the principal amount of the Debentures
will be paid with Shares. The Debentures provide that the Corporation will be
unconditionally obligated to sell the Shares issued at maturity in a secondary
offering on behalf of the holders of Debentures who elect to receive cash
proceeds from the sale of the Shares they receive instead of holding such Shares
for their own account. The secondary offering may be a private sale, but in the
event that the secondary offering is a public offering, the Corporation will
register the Shares to be sold by the former holders of Debentures in the
offering with the Securities and Exchange Commission in accordance with the
Securities Act of 1933. In such case, the Corporation will name such selling
security holders in any such registration statement, and the Corporation will
arrange for any such public offering to be effected through a best efforts
underwriting.
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The Corporation will give notice to the holders of Debentures not less than 90
days prior to maturity (the "Exchange Date") that Shares will be exchanged for
the Debentures. Such notice will also state that the holders may elect to (a)
receive and hold Shares for their own account or (b) receive such Shares and
have such Shares sold for their account in a secondary offering and receive the
proceeds therefrom. If a holder of Debentures elects to have the Shares be
exchanged for his Debentures sold in the secondary offering, he must return to
the exchange agent named in the notice a cash election form not less than 60
days prior to the maturity of the Debentures. If such form is not properly
completed and timely returned by the holder, such holder will be deemed to have
elected to receive and hold such Shares for his own account.
The Shares will be issued on the Exchange Date. The Exchange Date will be the
maturity date of the Debentures or such earlier date within 60 days of the
maturity date as the Corporation may designate by notice mailed to each holder
of the Debentures not less than three business days prior to the accelerated
Exchange Date. If the secondary offering is effected, the Exchange Date will be
the closing of such secondary offering.
Holders of Debentures who do not elect to participate in the secondary offering
will receive Shares having a fair market value equal to the principal amount of
Debentures held as of the date of the secondary offering by presenting
Debentures to the exchange agent appointed by the Corporation. The fair market
value will be the greater of the amount determined by the Board as defined below
or the sales price of the Shares in a public secondary offering. Since the fair
market value of Shares will be determined at the time of the secondary offering
but holders of Debentures will not be entitled to receive the Shares until the
Exchange Date, holders of Debentures electing to receive Shares will bear the
market risk with respect to the value of the Shares to be received from the date
of the secondary offering to the Exchange Date, a period which is anticipated to
be not less than five nor more than ten business days. There can be no assurance
that the fair market value of the Shares received by such holders of Debentures
on the Exchange Date will not be less than the principal amount of the
Debentures.
"Fair market value" of the Shares shall be determined reasonably in good faith
by the Board of Directors of the Corporation and described in a Board
resolution. The Board shall take into consideration the current market price, if
any, per Share based upon the average of the last sale prices of a Share for the
five consecutive trading days selected by the Corporation commencing not more
than 20 trading days before, and ending not later than, the earlier of the date
in question and the date before the "ex date," with respect to the issuance
requiring such computation. For purposes of this paragraph, the term "ex date,"
when used with respect to any issuance, means the first date on which the Shares
trade in a regular way on the principal market or exchange on which the Shares
are listed or admitted to trading without the right to receive such issuance. If
the Shares are not quoted by any third party recognized organization, the Board
shall take into consideration recent arms length transactions in Shares.
The Corporation unconditionally will be obligated to sell, or cause to be sold,
all Shares payable at maturity to electing holders of Debentures in the
secondary offering. The intended period for the secondary offering will be the
60-day period prior to maturity. If the Corporation is unable to sell Shares in
the secondary offering so that the proceeds thereof are sufficient to satisfy
the holders of Debentures' cash elections, the proceeds of such secondary
offering will be allocated pro rata to the extent practicable, and, in any
event,
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in such manner as may be required by applicable law. To the extent electing
holders of Debentures who should receive cash do not receive cash, they will
receive Shares. In such event, the Corporation will have no further obligation
to effect the secondary offering in respect of Shares received by such holders,
but will not be relieved of any liability it may have for monetary damages for
breach of its obligation to effect a secondary offering of sufficient amounts of
Shares.
INTEREST RATE ADJUSTMENT
The Corporation may, at its option, adjust the interest rate paid on the
Debentures upon a Determination of Non-Deductibility as defined below. (Such
rate may be reduced upon a Determination of Non-Deductibility, but such rate
shall be no less than an effective rate of 6.5% during the term of the
Debenture.) A "Determination of Non-Deductibility" means the occurrence of any
of the following:
(i) the issuance of a written notice of deficiency or other final
notice to the Corporation from, or any other action taken by, the
Internal Revenue Service of the United States which is not subject to
further review or rehearing except by the filing of a petition in the
Tax Court of the United States or by other judicial proceeding, with or
having the effect that interest paid on the Debentures is not fully
deductible from the gross income of the Corporation for federal income
tax purposes; or
(ii) the receipt by the Corporation of written advice from its counsel
(other than a regular employee of the Corporation) that there is a
substantial likelihood for any reason whatsoever (including, without
limitation, a change of law, issuance of temporary, proposed or final
Treasury Regulations, or issuance of an Internal Revenue Service
ruling) that the Internal Revenue Service will take the position that
interest paid on the Debentures is not fully deductible from the gross
income of the Corporation for federal income tax purposes.
A Determination of Non-Deductibility will be deemed to have occurred upon the
date of the occurrence of the earlier of the events set forth in clause (i) and
clause (ii) of this paragraph and will be evidenced by an opinion of counsel
(which counsel may not be a regular employee of the Corporation) furnished to
the Corporation. Whether the Corporation exercises its right to adjust the
interest rate after the occurrence of a Determination of Non-Deductibility will
depend upon the circumstances at that time, including the extent and
significance of the loss of tax benefits.
DEFAULTS AND WAIVER THEREOF
The happening of one or more of the following events will constitute an event of
default: (i) default for 30 days in the payment of interest on any Debentures,
and (ii) default in payment of the principal of or on any Debenture, except that
no default will occur if interest or principal is not paid due to the repayment
of senior indebtedness as described under "Subordination" caption. In addition,
certain events of bankruptcy, insolvency, or reorganization will constitute an
event of default, and if such an event of default shall occur and be continuing,
the holders of not less than two-thirds in aggregate principal amount of the
Debentures outstanding may accelerate the maturity of all outstanding
Debentures. The record holders of two-thirds in aggregate principal amount of
the Debentures outstanding may waive an event of default resulting in
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acceleration of the Debentures, but only if all defaults and events of default
have been remedied and all payments due (other than those due as a result of
acceleration) have been made. In such an event, interest shall be cumulative,
but no interest shall be paid on interest cumulated.
MODIFICATION OF THE DEBENTURE
With the consent of the holders of not less than two-thirds in aggregate
principal amount of the outstanding Debentures, modifications and alterations of
the Debentures may be made which affect the rights of the holders of the
Debentures, but no such modification or alteration may be made without the
consent of the holder of each Debenture so affected which would (i) change the
maturity of the principal thereof, or of any installment of interest thereon, or
reduce the principal amount thereof or the interest payable thereon; (ii) reduce
the above stated percentage in aggregate principal amount of outstanding
Debentures required to modify or alter the Debentures; or (iii) impair the right
to institute suit for the enforcement of any such payment.
NO FRACTIONAL SHARES
The holder of Debentures upon payment of principal in Shares will receive the
largest number of full Shares purchasable for the aggregate purchase price or
portion thereof which is consummated. No fraction of a share will be issued, and
in lieu thereof, the purchaser will receive a cash adjustment based upon the
purchase price per Share then applicable.
ANTI-DILUTION
The Debentures provide that the purchase price per Share and number of Shares
that holders of the Debentures are obligated to receive will be subject to
adjustment in certain events, including (i) the declaration or making of a
dividend or other distribution on common stock in shares of common stock; (ii)
the subdivision of shares of common stock into a greater number of shares; (iii)
the combination of shares of common stock into a smaller number of shares; (iv)
the issuance to all holders of common stock of rights or warrants entitling them
(for a period not exceeding 45 days) to subscribe for shares of common stock at
a price per share less than the current fair market value; and (v) the
distribution to all common stock holders of any of the following: shares of any
class other than common stock, evidences of indebtedness of the Corporation,
assets (other than the distributions referred to above and cash dividends), or
rights or warrants (other than those referred to above). No adjustment of the
purchase price per share will be made until cumulative adjustments amount to at
least 1% thereof.
STATUS OF HOLDER OF DEBENTURES
Prior to the receipt of Shares pursuant to the payment for Debentures at
maturity, the holder of a Debenture will not as such be a shareholder of the
Corporation or have any of the rights and privileges of a shareholder. Provided,
however, that holders of Debentures shall receive all communications that are
delivered to shareholders of the Corporation.
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CONSOLIDATION, MERGER, AND SALE OF ASSETS
The Corporation may, without the consent of holders of any of the Debentures,
consolidate with, merge into, or transfer its assets substantially as an
entirety to any corporation organized under the laws of any domestic
jurisdiction, provided (i) that the successor corporation assumes the
Corporation's obligations on the Debentures; (ii) that after giving effect
thereto, no default or event of default under the Debentures shall have occurred
and be continuing; (iii) that the resulting entity have a net worth including
goodwill equal to the net worth of the Corporation prior to the consolidation,
merger, or sale; and (iv) that certain other conditions are met. Any of these
conditions may be waived by the consent of two-thirds of the holders of the
Debentures.
DESCRIPTION OF SHAREHOLDER RIGHTS
GENERAL
On March 18, 1998, the Board of Directors of the Corporation authorized and
declared a dividend of one right ("Right") for each outstanding share of common
stock, par value $5.00 per share (the "Common Stock") to shareholders of record
at the close of business on March 18, 1998. The Rights were issued pursuant to a
Shareholder Protection Rights Agreement by and between the Corporation and Bank
of Murfreesboro, as Rights Agent, dated March 18, 1998 (the "Agreement").
DISTRIBUTION AND TRANSFER OF RIGHTS; RIGHTS CERTIFICATES
Prior to the Separation Time (defined below), (i) no Right may be exercised and
(ii) each Right will be evidenced by a certificate for the associated share of
Common Stock, and will be transferrable only together with such associated
share. After the Separation Time, the Company will mail certificates evidencing
the Rights (the "Rights Certificates") to shareholders, and the Rights will
become exercisable and transferable apart from the Common Stock.
SEPARATION TIME
Rights will separate from the Common Stock and become exercisable following the
earlier of the (i) the date of the Flip-in Trigger referred to below or (ii) the
tenth business day (or such later date as the Board by a two-thirds vote may
decide) after any person commenced a tender offer that would result in such
person holding a total of 20% or more of the Common Stock ("Separation Time").
EXERCISE OF RIGHTS
After the Separation Time, each Right will entitle the holder to purchase,
participating preferred stock, par value $5.00 per share, of the Corporation
("Participating Preferred Stock") which is designed to have economic and voting
terms similar to those of one share of Common Stock.
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"FLIP-IN" TRIGGER
Upon announcement that any person has acquired 20% or more of the outstanding
Common Stock, then 10 days thereafter (or such earlier or later day as the Board
by a two-thirds vote may decide):
(i) Rights owned by the person acquiring such stock (an "Acquiring
Person") or transferees thereof will automatically become void; and
(ii) each other Right will automatically become a right to buy, for an
exercise price equal to $25.00, as adjusted, ("Exercise Price") that
number of shares of Common Stock or Participating Preferred Stock
having a market value of twice the Exercise Price.
EXCHANGE OPTION
If any person acquires between 20% and 50% of the outstanding Common Stock, the
Board by a two-thirds vote may, in lieu of allowing Rights to be exercised,
require each outstanding Right to be exchanged for one share of Common Stock or
Participating Preferred Stock designed to have economic and voting terms similar
to those of one share of Common Stock.
"FLIP-OVER" TRIGGER
After an Acquiring Person has become such, the Company may not consolidate or
merge with, or sell 50% or more of its assets or earning power to, any person if
at the time of such merger or sale (or agreement to do any of the foregoing) the
Acquiring Person controls the Board of Directors and, in the case of a merger,
will receive different treatment than all other shareholders unless proper
provision is made so that each Right would thereafter become a right to buy, for
the Exercise Price, that number of shares of common stock of such other person
having a market value of twice the Exercise Price.
REDEMPTION
The Rights may be redeemed by the Board by a two-thirds vote at any time until a
"Flip-in" Trigger has occurred at a redemption price of $0.01 per Right.
POWER TO AMEND
The Corporation and the Rights Agent may from time to time amend the Agreement
without the approval of the holders of any Rights prior to the occurrence of a
"Flip-in" Trigger. Thereafter, the Corporation or the Rights Agent may amend the
Agreement in any respect not materially adverse to Rights holders generally.
EXPIRATION
The Rights will expire ten years from the date of their issuance.
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ITEM 2. EXHIBITS
The securities described herein are to be registered pursuant to Section 12(g)
of the Act. Accordingly, attached are the following exhibits, required in
accordance with to the Instructions as to Exhibits on Form 8-A. Exhibits
incorporated by reference are so indicated.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
1. Form of Floating Rate Convertible Subordinated Debenture of
Murfreesboro Bancorp, Inc. due August 31, 2011.
2. Shareholder Protection Rights Agreement by and between Murfreesboro
Bancorp, Inc. and Bank of Murfreesboro, as Rights Agent, dated March
18, 1998, including Form of Shareholder Rights Certificate, Assignment
and Election to Exercise (Exhibit A), Articles of Amendment to Charter
of Murfreesboro Bancorp, Inc. (Exhibit B) and Summary of Shareholder
Protection Rights Plan (Exhibit C).
</TABLE>
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
MURFREESBORO BANCORP, INC.
Date: April 28, 2000 By: /s/ WILLIAM E. ROWLAND
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William E. Rowland,
President
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EXHIBIT 1
Form of Floating Rate Convertible Subordinated Debenture
of Murfreesboro Bancorp, Inc. due August 31, 2011.
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$____________ Holder: _______________________ NO. ________________
FLOATING RATE CONVERTIBLE SUBORDINATED DEBENTURE
OF
MURFREESBORO BANCORP, INC.
DUE AUGUST 31, 2011
THIS DEBENTURE IS CONVERTIBLE AT THE OPTION OF THE HOLDER INTO SHARES
OF COMMON STOCK, PAR VALUE $5.00 PER SHARE (THE "SHARES"), OF THE CORPORATION AT
ANY TIME PRIOR TO MATURITY AT A CONVERSION PRICE OF $12.50 PER SHARE, SUBJECT TO
ADJUSTMENT UNDER CERTAIN CIRCUMSTANCES. AT MATURITY, THE CORPORATION WILL PAY
THE PRINCIPAL AMOUNT OF THE DEBENTURES WITH SHARES BASED UPON THE FAIR MARKET
VALUE OF THE SHARES AT THAT TIME. INTEREST ON THE DEBENTURES WILL BEGIN TO
ACCRUE ON JANUARY 1, 2000, AND IS PAYABLE ANNUALLY BY DECEMBER 15 OF EACH YEAR,
COMMENCING DECEMBER 15, 2000.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE TENNESSEE
DEPARTMENT OF COMMERCE AND INSURANCE. FOR A PERIOD OF NINE (9) MONTHS FROM THE
DATE OF THIS CERTIFICATE, ANY RESALE OF ANY OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE BY ANY PERSON MAY BE MADE ONLY TO PERSONS WHO ARE BONA FIDE
RESIDENTS OF THE STATE OF TENNESSEE. THIS DEBENTURE IS AN UNSECURED DEBT
OBLIGATION OF THE CORPORATION, IS NOT AN OBLIGATION OF A BANK, AND IS NOT
INSURED BY THE FDIC.
Murfreesboro Bancorp, Inc., a Tennessee corporation (hereinafter called
the "Corporation"), for value received, hereby promises to pay to the holder
listed above (the "Holder"), or registered assigns, the principal sum indicated
above on August 31, 2011, and to pay interest thereon from January 1, 2000, or
from the most recent interest payment date to which interest has been paid or
duly provided for, annually, by December 15 each year, beginning December 15,
2000, at the rate equal to .5% less than the Prime Rate of interest (such rate
may be reduced upon a Determination of Non-Deductibility, as defined on the
reverse side hereof, but such rate shall be no less than an effective rate of
6.5% during the term of the Debenture), until the principal hereof is paid or
duly provided for. The Corporation is allowed to defer interest payments for up
to two (2) years as long as all accumulated interest is paid at the end of the
deferment period.
The Prime Rate is defined to mean the Prime Rate of interest published
from time to time by The Wall Street Journal as such rate and shall be computed
on the daily outstanding principal balance of the indebtedness evidenced hereby.
In the event The Wall Street Journal publishes more than one Prime Rate of
interest, the Prime Rate is defined to mean the higher Prime Rate of interest
published from time to time by The Wall Street Journal as such rate. If at any
time or from time to time the Prime Rate increases or decreases, then the rate
of interest hereunder shall be correspondingly increased or decreased, effective
on the day such increase or decrease of the Prime Rate is published. In the
event that The Wall Street Journal, during the term hereof, shall abolish or
abandon the practice of publishing a Prime Rate, or should the same become
unascertainable, the Corporation shall designate a comparable reference rate
which shall be deemed to be the Prime Rate for purposes hereof. If for any
reason the accrual of interest on this loan at the Prime Rate is voided by a
court of competent jurisdiction or if for any reason such court finds that the
interest rate is different from the rate designated by the holder, then this
Debenture shall be deemed to have accrued interest from the date of execution at
the highest rate permitted by law.
The interest so payable, and punctually paid or duly provided for, on
any interest payment date will be paid to the Holder in whose name this
Debenture (or one or more predecessor debentures) is registered at the close of
business on the Regular Record Date for such interest, which shall be the last
day of the month (whether or not a business day) next preceding such interest
payment date. Payment of the principal of and interest on this Debenture will be
made at the office or agency of the Corporation maintained for that purpose in
the City of Murfreesboro, Tennessee, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the
Corporation, payment of interest may be made by check mailed to the address of
the Holder entitled thereto as such address shall appear in the Debenture
Register or by deposit into a deposit account held by such person at Bank of
Murfreesboro.
This Debenture is the obligation of the Corporation only, and no
recourse shall be had for the payment hereof or the interest thereon against any
shareholder, officer, or director of the Corporation, either directly or through
the Corporation by virtue of any statute for the enforcement of any assessment
or otherwise, all such liability of shareholders, directors, and officers as
such being released by the Holder hereof by the acceptance of this Debenture.
IN WITNESS WHEREOF, the Corporation has caused this Debenture to be
duly executed.
Dated: MURFREESBORO BANCORP, INC.
---------------------
By:
------------------------------------
President
The provisions of this Debenture are continued on the reverse side
hereof, and such continued provisions shall for all purposes have the same
effect as if set forth at this place.
1. GENERAL. This Debenture is one of a duly authorized issue of
Debentures of the Corporation designated as its Floating Rate Convertible
Subordinated Debentures Due August 31, 2011 (herein called the "Debentures").
The indebtedness evidenced by the Debentures is subordinated and subject in
right of payment to the prior payment in full of all Senior Indebtedness of the
Corporation. This and other terms used herein are defined in the Offering
Circular dated July 20, 1999, and hereinafter referred to as the "Offer." The
Debentures will be issued in fully registered form and may be transferred or
exchanged without payment of any charge other than taxes or other governmental
charges.
2. SUBORDINATION. The payment of the principal of, and interest on, the
Debentures is subordinated and junior in right of payment to the prior payment
in full of all senior indebtedness of the Corporation. The term "senior
indebtedness" is defined as the principal of, premium (if any), and interest on
indebtedness (other than the Debentures) of the Corporation for money borrowed
evidenced by bonds, notes, debentures, or similar obligations, including any
guaranty by it of any indebtedness for money borrowed by others, whether
currently outstanding or hereafter created, assumed, or incurred, unless the
instrument creating or evidencing such indebtedness provides that such
indebtedness is not senior in right of payment to the Debentures. Senior
indebtedness may be incurred from time to time in the future.
There will be no payment of principal of, or interest on, the
Debentures during the continuance of any default in respect of any senior
indebtedness, or any default beyond the period of grace, under any agreement
pursuant to which such senior indebtedness was issued, unless and until such
default on the senior indebtedness shall have been cured or waived.
Upon any distribution of assets of the Corporation in connection with
any dissolution, winding up, liquidation, reorganization, bankruptcy, or other
similar proceeding, the holders of all senior indebtedness will first be
entitled to receive payment in full of the principal thereof and premium (if
any) and interest due thereon before the holders of the Debentures are entitled
to receive any payment of the principal of, or interest on, the Debentures. By
reason of such subordination, in the event of insolvency, creditors of the
Corporation who are not holders of senior indebtedness or of the Debentures may
recover less, ratably, than holders of senior indebtedness but may recover more,
ratably, than the holders of the Debentures.
Because the Corporation is a corporation, the right of its creditors,
including the holders of the Debentures, to participate in the assets of any
subsidiary upon the latter's liquidation or reorganization would be subject to
the prior claims of such subsidiary's creditors (including depositors in the
case of bank subsidiaries) except to the extent that the Corporation may itself
be a creditor with recognized claims against the subsidiary. There is no
restriction against the incurring of indebtedness by the Corporation or by any
subsidiary of the Corporation.
3. DEFERRAL OF INTEREST. So long as no event of default hereunder has
occurred and is continuing, the Corporation has the right at any time or from
time to time during the term of the Debentures to defer payment of interest on
the Debentures for a period not exceeding two (2) years (the "Extension
Period"), provided that no Extension Period may extend beyond the stated
maturity of the Debentures. At the end of such Extension Period, the Corporation
must pay all interest then accrued and unpaid on the Debentures. During an
Extension Period, interest will continue to accrue and holders of Debentures
will be required to accrue interest income for United States federal income tax
purposes.
During any such Extension Period, the Corporation may not (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire, or make
a liquidation payment with respect to, any of the Corporation's capital stock or
(ii) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Corporation that rank
equal in all respects with or junior in interest to the Debentures (other than
(a) repurchases, redemptions or other acquisitions of shares of capital stock of
the Corporation in connection with any employment contract, benefit plan or
other similar arrangement with or for the benefit of one or more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or stockholder stock purchase plan or in connection with the issuance of capital
stock of the Corporation (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of any exchange or
conversion of any class or series of the Corporation's capital stock (or any
capital stock of a subsidiary of the Corporation) for any class or series of the
Corporation's capital stock or of any class or series of the Corporation's
indebtedness for any class or series of the Corporation's capital stock, (c) the
purchase of fractional interests in shares of the Corporation's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (d) any declaration of a dividend in
connection with any stockholder's rights plan, or the issuance of rights, stock
or other property under any stockholder's rights plan, or the redemption or
repurchase of rights pursuant thereto, or (e) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock issuable
upon exercise of such warrants, options or other rights is the same stock as
that on which the dividend is being paid or ranks equal with or junior to such
stock).
<PAGE> 3
Prior to the termination of any such Extension Period, the Corporation
may further defer the payment of interest on the Debentures, provided that no
Extension Period may exceed two (2) years or extend beyond the stated maturity
of the Debentures. Upon the termination of any such Extension Period and the
payment of all interest then accrued and unpaid, the Corporation may elect to
begin a new Extension Period subject to the above requirements. No interest
shall be due and payable during an Extension Period, except at the end thereof.
The Corporation must give the Debenture holders notice of its election to begin
such Extension Period at least one business day prior to the earlier of (i) the
date interest on the Debentures would have been payable except for the election
to begin such Extension Period or (ii) the date such interest is payable, but in
any event not less than one business day prior to such record date. There is no
limitation on the number of times that the Corporation may elect to begin an
Extension Period.
4. CHANGE OF CONTROL. The Corporation may prepay all or a portion of
the Debentures at the discretion of the Board of Directors by paying the
principal amount in the form of Shares based upon a purchase price of $12.50 per
Share, as may be adjusted, any time after, or simultaneously with, a "change in
control" of the Corporation. "Change of control" means that more than 50% of the
outstanding Shares changes beneficial ownership within a twelve-month period as
determined by the Board of Directors of the Corporation or its successor. If the
Debentures are prepaid as a result of a change of control, holders of Debentures
will be sent notice of such prepayment not less than 30 nor more than 90 days
prior to the prepayment of the Debentures.
5. SECONDARY OFFERING AND EXCHANGE DATE. At maturity, the principal
amount of the Debentures will be paid with Shares. The Corporation will be
unconditionally obligated to sell the Shares issued at maturity in a secondary
offering on behalf of the holders of Debentures who elect to receive cash
proceeds from the sale of the Shares they receive instead of holding such Shares
for their own account. The secondary offering may be a private sale, but in the
event that the secondary offering is a public offering, the Corporation will
register the Shares to be sold by the former holders of Debentures in the
offering with the Securities and Exchange Commission in accordance with the
Securities Act of 1933. In such case, the Corporation will name such selling
security holders in any such registration statement, and the Corporation will
arrange for any such public offering to be effected through a best efforts
underwriting.
The Corporation will give notice to the holders of Debentures not less
than 90 days prior to maturity (the "Exchange Date") that Shares will be
exchanged for the Debentures. Such notice will also state that the holders may
elect to (a) receive and hold for their own account Shares on the Exchange Date
or (b) receive such Shares and have such Shares sold for their account in a
secondary offering and receive the proceeds therefrom. If a holder of Debentures
elects to have the Shares be exchanged for his Debentures sold in the secondary
offering, he must return to the Exchange Agent named in the notice a cash
election form not less than 60 days prior to the maturity of the Debentures. If
such form is not properly completed and timely returned by the holder, such
holder will be deemed to have elected to receive and hold such Shares for his
own account.
The Shares will be issued on the Exchange Date. The Exchange Date will
be the maturity date of the Debentures or such earlier date within 60 days of
the maturity date as the Corporation may designate by notice mailed to each
holder of the Debentures not less than three business days prior to the
accelerated Exchange Date. If the secondary offering is effected, the Exchange
Date will be the closing of such secondary offering.
Holders of Debentures who do not elect to participate in the secondary
offering will receive Shares having a fair market value equal to the principal
amount of Debentures held as of the date of the secondary offering by presenting
Debentures to the Exchange Agent appointed by the Corporation. The fair market
value will be the greater of the amount determined by the Board as defined below
or the sales price of the Shares in a public secondary offering. Since the fair
market value of Shares will be determined at the time of the secondary offering
but holders of Debentures will not be entitled to receive the Shares until the
Exchange Date, holders of Debentures electing to receive Shares will bear the
market risk with respect to the value of the Shares to be received from the date
of the secondary offering to the Exchange Date, a period which is anticipated to
be not less than five nor more than ten business days. There can be no assurance
that the fair market value of the Shares received by such holders of Debentures
on the Exchange Date will not be less than the principal amount of the
Debentures. If a secondary offering is not effected, all holders of Debentures
will receive Shares and not cash (except for fractional Shares) on the Exchange
Date.
"Fair market value" of the Shares shall be determined reasonably in
good faith by the Board of Directors of the Corporation and described in a Board
resolution. The Board shall take into consideration the current market price, if
any, per Share based upon the average of the last sale prices of a Share for the
five consecutive trading days selected by the Corporation commencing not more
than 20 trading days before, and ending not later than, the earlier of the date
in question and the date before the "ex date," with respect to the issuance
requiring such computation. For purposes of this paragraph, the term "ex date,"
when used with respect to any issuance, means the first date on which the Shares
trade in a regular way on the principal market or exchange on which the Shares
are listed or admitted to trading without the right to receive such issuance. If
the Shares are not quoted by any third party recognized organization, the Board
shall take into consideration recent arms length transactions in Shares.
The Corporation unconditionally will be obligated to sell, or cause to
be sold, all Shares payable at maturity to electing holders of Debentures in the
secondary offering. The intended period for the secondary offering will be the
60-day period prior to maturity. If the Corporation is unable to sell Shares in
the secondary offering so that the proceeds thereof are sufficient to satisfy
the holders of Debentures' cash elections, the proceeds of such secondary
offering will be allocated pro rata to the extent practicable, and, in any
event, in such manner as may be required by applicable law. To the extent
electing holders of Debentures who should receive cash do not receive cash, they
will receive Shares. In such event, the Corporation will have no further
obligation to effect the secondary offering in respect of Shares received by
such holders, but will not be relieved of any liability it may have for monetary
damages for breach of its obligation to effect a secondary offering of
sufficient amounts of Shares.
6. INTEREST RATE ADJUSTMENT. The Corporation may, at its option, adjust
the interest rate paid on the Debentures upon a Determination of
Non-Deductibility as defined below. (Such rate shall be no less than an
effective rate of 6.5% during the term of the Debenture.) A "Determination of
Non-Deductibility" means the occurrence of any of the following:
(i) the issuance of a written notice of deficiency or other
final notice to the Corporation from, or any other action taken by, the
Internal Revenue Service of the United States which is not subject to
further review or rehearing except by the filing of a petition in the
Tax Court of the United States or by other judicial proceeding, with or
having the effect that interest paid on the Debentures is not fully
deductible from the gross income of the Corporation for federal income
tax purposes; or
(ii) the receipt by the Corporation of written advice from its
counsel (other than a regular employee of the Corporation) that there
is a substantial likelihood for any reason whatsoever (including,
without limitation, a change of law, issuance of temporary, proposed or
final Treasury Regulations, or issuance of an Internal Revenue Service
ruling) that the Internal Revenue Service will take the position that
interest paid on the Debentures is not fully deductible from the gross
income of the Corporation for federal income tax purposes.
A Determination of Non-Deductibility will be deemed to have occurred upon the
date of the occurrence of the earlier of the events set forth in clause (i) and
clause (ii) of this paragraph and will be evidenced by an opinion of counsel
(which counsel may not be a regular employee of the Corporation) furnished to
the Corporation. Whether the Corporation exercises its right to adjust the
interest rate after the occurrence of a Determination of Non-Deductibility will
depend upon the circumstances at that time, including the extent and
significance of the loss of tax benefits.
7. DEFAULTS AND WAIVER THEREOF. The happening of one or more of the
following events will constitute an Event of Default: (i) default for 30 days in
the payment of interest on any Debentures, and (ii) default in payment of the
principal of or on any Debenture, except that no default will occur if interest
or principal is not paid due to the repayment of senior indebtedness as
described above. In addition, the following events will constitute an Event of
Default:
(1) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Corporation a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment, or composition of or in
respect of the Corporation under the Federal Bankruptcy Act or any
other applicable federal or state law, or appointing a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official)
of the Corporation or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days; or
(2) the institution by the Corporation of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by the Corporation
to the institution of bankruptcy or insolvency proceedings against it,
or the filing by the Corporation of a petition or answer or consent
seeking reorganization or relief in respect of it or its property under
the Federal Bankruptcy Act or any other applicable federal or state
law, or the consent by the Corporation to the filing of any such
petition or to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Corporation or
of any substantial part of its property, or the making by the
Corporation of a general assignment for the benefit of creditors, or
the admission by the Corporation in writing of its inability to pay its
debts generally as they become due, or the taking of corporate action
by the Corporation in furtherance of any such action.
If such an Event of Default shall occur and be continuing, the holders of not
less than two-thirds in aggregate principal amount of the Debentures outstanding
may accelerate the maturity of all outstanding Debentures. The record holders of
two-thirds in aggregate principal amount of the Debentures outstanding may waive
an Event of Default resulting in acceleration of the Debentures, but only if all
Defaults and Events of Default have been remedied and all payments due (other
than those due as a result of acceleration) have been made. In such an event,
interest shall be cumulative, but no interest shall be paid on interest
cumulated.
No Holder of any Debenture shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Debenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
the Holders of two-thirds (2/3rds) in principal amount of the outstanding
Debentures shall have previously given written notice to the Corporation of a
continuing Event of Default, specifying such default and stating that such
notice is a "Notice of Default" hereunder; it being understood and intended that
no one or more Holders of Debentures shall have any right in any manner whatever
by virtue of, or by availing of, any provision of this Debenture to affect,
disturb or prejudice the rights of any other Holders of Debentures, or to obtain
or to seek to obtain priority or preference over any other Holders or to enforce
any right under this Debenture, except in the manner herein provided and for the
equal and ratable benefit of all the Holders of Debentures.
8. MODIFICATION OF THE DEBENTURE. With the consent of the holders of
not less than two-thirds in aggregate principal amount of the outstanding
Debentures, modifications and alterations of the Debentures may be made which
affect the rights of the holders of the Debentures, but no such modification or
alteration may be made without the consent of the holder of each Debenture so
affected which would (i) change the maturity of the principal thereof, or of any
installment of interest thereon, or reduce the principal amount thereof or the
interest payable thereon; (ii) reduce the above stated percentage in aggregate
principal amount of outstanding Debentures required to modify or alter the
Debentures; or (iii) impair the right to institute suit for the enforcement of
any such payment.
9. NO FRACTIONAL SHARES. The holder of Debentures upon payment of
principal in Shares will receive the largest number of full Shares purchasable
for the aggregate purchase price or portion thereof which is consummated. No
fraction of a Share will be issued, and in lieu thereof, the purchaser will
receive a cash adjustment based upon the purchase price per Share then
applicable. Thus, if a Debenture with a face amount of $440.00 were paid or
converted at a purchase price of $12.50 per Share, the holder would receive the
following: 35 Shares and a cash payment of $2.50 in lieu of a fractional share.
10. ANTI-DILUTION. The purchase price per Share and number of Shares
that holders of the Debentures are obligated to receive will be subject to
adjustment in certain events, including (i) the declaration or making of a
dividend or other distribution on Common Stock in shares of Common Stock; (ii)
the subdivision of shares of Common Stock into a greater number of shares; (iii)
the combination of shares of Common Stock into a smaller number of shares; (iv)
the issuance to all holders of Common Stock of rights or warrants entitling them
(for a period not exceeding 45 days) to subscribe for shares of Common Stock at
a price per share less than the current fair market value; and (v) the
distribution to all Common Stock holders of any of the following: shares of any
class other than Common Stock, evidences of indebtedness of the Corporation,
assets (other than the distributions referred to above and cash dividends), or
rights or warrants (other than those referred to above). No adjustment of the
purchase price per share will be made until cumulative adjustments amount to at
least 1% thereof.
11. STATUS OF HOLDER OF DEBENTURES. Prior to the receipt of Shares
pursuant to the payment for Debentures at maturity, the holder of a Debenture
will not as such be a Shareholder of the Corporation or have any of the rights
and privileges of a Shareholder. Holders of Debentures shall receive all
communications that are delivered to Shareholders of the Corporation.
12. CONSOLIDATION, MERGER, AND SALE OF ASSETS. The Corporation may,
without the consent of holders of any of the Debentures, consolidate with, merge
into, or transfer its assets substantially as an entirety to any corporation
organized under the laws of any domestic jurisdiction, provided (i) that the
successor corporation assumes the Corporation's obligations on the Debentures;
(ii) that after giving effect thereto, no Default or Event of Default under the
Debentures shall have occurred and be continuing; (iii) that the resulting
entity have a net worth including goodwill equal to the net worth of the
Corporation prior to the consolidation, merger, or sale; and (iv) that certain
other conditions are met. Any of these conditions may be waived by the consent
of two-thirds of the holders of the Debentures.
13. SURRENDER OF DEBENTURES. A Debenture may be surrendered by its
holder to the Corporation at any time or from time to time prior to maturity in
full or partial conversion to Shares. In the case of a partial satisfaction, a
Debenture representing the unused principal amount will be returned to the
holder. The holder will then have the right to convert such remaining principal
amount to Shares at any time prior to maturity. Any Debenture surrendered after
any interest payment date and on or prior to the next succeeding regular record
date for the payment of interest thereon will cease to accrue interest upon such
surrender; interest theretofore accrued but unpaid will be paid at the time of
such surrender.
14. CONSTRUCTION. This Debenture shall be construed in accordance with
and governed by the laws of the State of Tennessee.
<PAGE> 1
EXHIBIT 2
Shareholder Protection Rights Agreement
by and between
Murfreesboro Bancorp, Inc. and Bank of Murfreesboro, as Rights Agent,
dated March 18, 1998.
<PAGE> 2
- --------------------------------------------------------------------------------
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
March 18, 1998
between
Murfreesboro Bancorp, Inc.
and
Bank of Murfreesboro,
as Rights Agent
- --------------------------------------------------------------------------------
<PAGE> 3
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C> <C>
ARTICLE I
CERTAIN DEFINITIONS...............................................................................................1
1.1 Certain Definitions.............................................................................1
ARTICLE II
THE RIGHTS...............................................................................................6
2.1 Summary of Rights...............................................................................6
2.2 Legend on Common Stock Certificates.............................................................6
2.3 Exercise of Rights: Separation of Rights. ......................................................6
2.4 Adjustments to Exercise Price; Number of Rights.................................................8
2.5 Date on Which Exercise is Effective.............................................................9
2.6 Execution, Authentication, Delivery and Dating of Rights Certificates..........................9
2.7 Registration. Registration of Transfer and Exchange. ..........................................10
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates......................................10
2.9 Persons Deemed Owners..........................................................................11
2.10 Delivery and Cancellation of Certificates......................................................11
2.11 Agreement of Rights Holders....................................................................12
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS.......................................................................12
3.1 Flip-in........................................................................................12
3.2 Flip-over......................................................................................14
ARTICLE IV
THE RIGHTS AGENT .......................................................................................15
4.1 General........................................................................................15
4.2 Merger or Consolidation or Change of Name of Rights Agent......................................15
4.3 Duties of Rights Agent.........................................................................16
4.4 Change of Rights Agent.........................................................................17
ARTICLE V
MISCELLANEOUS...........................................................................................18
5.1 Redemption.....................................................................................18
5.2 Expiration.....................................................................................18
5.3 Issuance of New Rights Certificates............................................................19
5.4 Supplements and Amendments.....................................................................19
5.5 Fractional Shares..............................................................................19
5.6 Rights of Action...............................................................................20
5.7 Holder of Rights Not Deemed a Shareholder......................................................20
5.8 Notice of Proposed Actions.....................................................................20
5.9 Notices........................................................................................20
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C> <C>
5.10 Suspension of Exercisability...................................................................21
5.11 Costs of Enforcement...........................................................................21
5.12 Successors.....................................................................................21
5.13 Benefits of this Agreement.....................................................................21
5.14 Determination and Actions by the Board of Directors, etc.......................................22
5.15 Certain Events.................................................................................22
5.16 Descriptive Headings...........................................................................22
5.17 Governing Law..................................................................................22
5.18 Counterparts...................................................................................22
5.19 Severability...................................................................................22
</TABLE>
ii
<PAGE> 5
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
SHAREHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time to time,
this "Agreement"), dated as of March 18, 1998, between Murfreesboro Bancorp,
Inc., a Tennessee corporation (the "Company), and Bank of Murfreesboro, a
Tennessee corporation, as Rights Agent (the "Rights Agent", which term shall
include any successor Rights Agent hereunder).
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has (a) authorized and
declared a dividend of one right ("Right") in respect of each share of Common
Stock (as hereinafter defined) held of record as of the close of business on
March 18, 1998 (the "Record Time") and (b) authorized the issuance of one Right
in respect of each share of Common Stock issued after the Record Time and prior
to the Separation Time (as hereinafter defined) and, to the extent provided in
Section 5.3, each share of Common Stock issued after the Separation Time;
WHEREAS, subject to the terms hereof, each Right entitles the holder
thereof, after the Separation Time, to purchase securities of the Company (or,
in certain cases, of certain other entities) pursuant to the terms and subject
to the conditions set forth herein; and
WHEREAS, the Company desires to appoint the Rights Agent to act on
behalf of the Company, and the Rights Agent is willing so to act, in connection
with the issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein;
NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE 15.
CERTAIN DEFINITIONS
(i) Certain Definitions. For purposes of this Agreement, the following
terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial Owner of
20% or more of the outstanding shares of Common Stock; provided, however, that
the term "Acquiring Person" shall not include (i) any Person who shall become
the Beneficial Owner of 20% or more of the outstanding shares of Common Stock
solely as a result of an acquisition by the Company of shares of Common Stock,
until such time thereafter as such Person shall become the Beneficial Owner
(other than by means of a stock dividend or stock split) of any additional
shares of Common Stock, or (ii) any Person who is the Beneficial Owner of 20% or
more of the outstanding shares of Common Stock but who acquired Beneficial
Ownership of shares of Common Stock without any plan or intention to seek or
affect control of the Company, if such Person promptly enters into an
irrevocable commitment promptly to divest, and thereafter promptly divests
(without exercising or retaining any power, including voting, with respect to
such shares), sufficient shares of Common
<PAGE> 6
Stock (or securities convertible into, exchangeable into or exercisable for
Common Stock) so that such Person ceases to be the Beneficial Owner of 20% or
more of the outstanding shares of Common Stock. In addition, the Company, any
wholly-owned Subsidiary of the Company and any employee stock ownership or other
employee benefit plan of the Company or a wholly-owned Subsidiary of the Company
shall not be an Acquiring Person.
"Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 under the Securities Exchange Act of 1934, as such
Rule is in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership" of, and to "Beneficially Own", any securities as to which
such Person or any of such Person's Affiliates or Associates is or may be deemed
to be the beneficial owner of pursuant to Rule 13d-3 and 13d-5 under the
Securities Exchange Act, as such Rules are in effect on the date of this
Agreement as well as any securities as to which such Person or any of such
Person's Affiliates or Associates has the right to become Beneficial Owner
(whether such right is exercisable immediately or only after the passage of time
or the occurrence of conditions) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial Owner", or to have
"Beneficial Ownership" of, or to "Beneficially Own", any security (i) solely
because such security has been tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or Associates until such
tendered security is accepted for payment or exchange or (ii) solely because
such Person or any of such Person's Affiliates or Associates has or shares the
power to vote or direct the voting of such security pursuant to a revocable
proxy given in response to a public proxy or consent solicitation made to more
than ten holders of shares of a class of stock of the Company registered under
Section 12 of the Securities Exchange Act of 1934 and pursuant to, and in
accordance with, the applicable rules and regulations under the Securities
Exchange Act of 1934, except if such power (or the arrangements relating
thereto) is then reportable under Item 6 of Schedule 13D under the Securities
Exchange Act of 1934 (or any similar provision of a comparable or successor
report). For purposes of this Agreement, in determining the percentage of the
outstanding shares of Common Stock with respect to which a Person is the
Beneficial Owner, all shares as to which such Person is deemed the Beneficial
Owner shall be deemed outstanding.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in Murfreesboro, Tennessee, are generally
authorized or obligated by law or executive order to close.
"Close of business" on any given date shall mean 5:00 p.m.
Murfreesboro, Tennessee, time on such date (or, if such date is not a Business
Day, 5:00 p.m. Murfreesboro, Tennessee, time on the next succeeding Business
Day) at which the Murfreesboro, Tennessee, office of the Company is open to the
public.
"Common Stock" shall mean the shares of Common Stock, par value $5.00
per share, of the Company.
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"Exchange Time" shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 3.1(c) hereof.
"Exercise Price" shall mean, as of any date, the which a holder may
purchase the securities issuable upon exercise of one whole Right. Until
adjustment thereof in accordance with the terms hereof, the Exercise Price shall
equal $25.00.
"Expiration Time" shall mean the earliest of (i) the Exchange Time,
(ii) the Redemption Time, or (iii) the close of business on the tenth-year
anniversary of the Record Time.
"Flip-in Date" shall mean the tenth business day after any Stock
Acquisition Date which is not the result of a Flip-over Transaction or Event or
such earlier or later date as the Board of Directors of the Company may from
time to time fix by resolution adopted by a two-thirds vote prior to the Flip-in
Date that would otherwise have occurred.
"Flip-over Entity," for purposes of Section 3.2, shall mean (i) in the
case of a Flip-over Transaction or Event described in clause-(i) of the
definition thereof, the Person issuing any securities into which shares of
Common Stock are being converted or exchanged and, if no such securities are
being issued, the other party to such Flip-over Transaction or Event and (ii) in
the case of a Flip-over Transaction or Event referred to in clause (ii) of the
definition thereof, the Person receiving the greatest portion of the assets or
earning power being transferred in such Flip-over Transaction or Event, provided
in all cases if such Person is a subsidiary of a corporation, the parent
corporation shall be the Flip-Over Entity.
"Flip-over Stock" shall mean the capital stock (or similar equity
interest) with the greatest voting power in respect of the election of directors
(or other persons similarly responsible for direction of the business and
affairs) of the Flip-Over Entity.
"Flip-over Transaction or Event" shall mean a transaction or series of
transactions after the time when an Acquiring Person has become such in which,
directly or indirectly, (i) the Company shall consolidate or merge or
participate in a share exchange with any other Person if, at the time of the
consolidation, merger or share exchange or at the time the Company enters into
any agreement with respect to any such consolidation, merger or share exchange,
the Acquiring Person controls the Board of Directors of the Company and any term
of or arrangement concerning the treatment of shares of capital stock in such
consolidation, merger or share exchange relating to the Acquiring Person is not
identical to the terms and arrangements relating to other holders of the Common
Stock or (ii) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer) assets (A) aggregating more
than 50% of the assets (measured by either book value or fair market value) or
(B) generating more than 50% of the operating income or cash flow, of the
Company and its Subsidiaries (taken as a whole) to any Person (other than the
Company or one or more of its wholly owned Subsidiaries) or to two or more such
Persons which are Affiliates or Associates or otherwise acting in concert, if,
at the time of the entry by the Company (or any such Subsidiary) into an
agreement with respect to such sale or transfer of assets, the Acquiring Person
controls the Board of Directors of the Company.
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"Market Price" per share of any securities on any date shall mean the
average of the daily closing prices per share of such securities (determined as
described below) on each of the 20 consecutive Trading Days through and
including the Trading Day immediately preceding such date; provided, however,
that if an event of a type analogous to any of the events described in Section
2.4 hereof shall have caused the closing prices used to determine the Market
Price on any Trading Days during such period of 20 Trading Days not to be fully
comparable with the closing price on such date, each such closing price so used
shall be appropriately adjusted in order to make it fully comparable with the
closing price on such date. The closing price per share of any securities on any
date shall be the last reported sale price, regular way, or, in case no such
sale takes place or is quoted on such date, the average of the closing bid and
asked prices, regular way, for each share of such securities, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
securities are listed or admitted to trading or, if the securities are not
listed or admitted to trading on any national securities exchange, as reported
by the National Association of Securities Dealers, Inc. Automated Quotation
System or such other system then in use, or, if on any such date the securities
are not listed or admitted to trading on any national securities exchange or
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 securities
selected by the Board of Directors of the Company; provided, however, that if on
any such date the securities are not listed or admitted to trading on a national
securities exchange or traded in the over-the-counter market, the closing price
per share of such securities on such date shall mean the fair value per share of
securities on such date as determined by a two-thirds vote in good faith by the
Board of Directors of the Company, after consultation with a recognized
investment banking firm, and set forth in a certificate delivered to the Rights
Agent.
"Person" shall mean any individual, firm, partnership, association,
group (as such term is used in Rule 13d-5 under the Securities Exchange Act of
1934, as such Rule is in effect on the date of this Agreement), corporation or
other entity.
"Preferred Stock" shall mean the series of Participating Preferred
Stock, par value $5.00 per share, of the Company created by a Certificate of
Amendment and Terms in substantially the form set forth in Exhibit B hereto
appropriately completed. Such Certificate of Amendment may be filed after an
event has occurred which may lead to the issuance of the Preferred Stock.
"Redemption Price" shall mean an amount equal to one cent, $0.01.
"Redemption Time" shall mean the time at which the right to exercise
the Rights shall terminate pursuant to Section 5.1 hereof.
"Separation Time" shall mean the close of business on the earlier of
(i) the tenth business day (or such later date as the Board of Directors of the
Company may from time to time fix by resolution adopted by a two-thirds vote
prior to the Separation Time that would otherwise have occurred) after the date
on which any Person commences a tender or exchange offer which, if consummated,
would result in such Person's becoming an Acquiring Person and (ii) the Flip-in
Date; provided, that if the foregoing results in the Separation Time being prior
to the Record Time, the Separation Time shall be the Record Time and provided
further, that if any tender or exchange offer referred to in clause (i) of this
paragraph is canceled, terminated or otherwise withdrawn prior to
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<PAGE> 9
the Separation Time without the purchase of any shares of Common Stock pursuant
thereto, such offer shall be deemed, for purposes of this paragraph, never to
have been made.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company (by any means) that an Acquiring Person has become
such.
"Subsidiary" of any specified Person shall mean any corporation or
other entity of which a majority of the voting power of the equity securities or
a majority of the equity interest is Beneficially Owned, directly or indirectly,
by such Person.
"Trading Day", when used with respect to any securities, shall mean a
day on which the Tennessee Stock Exchange, Inc. is open for the transaction of
business or, if such securities are not listed or admitted to trading on the
Tennessee Stock Exchange, Inc., a day on which the principal national securities
exchange on which such securities are listed or admitted to trading is open for
the transaction of business or, if such securities are not listed or admitted to
trading on any national securities exchange, a Business Day.
ARTICLE 16.
THE RIGHTS
(i) Summary of Rights. As soon as practicable after the Record Time,
the Company will mail a letter (or include information in its proxy materials)
summarizing the terms of the Rights to each holder of record of Common Stock as
of the Record Time, at such holder's address as shown by the records of the
Company.
(ii) Legend on Common Stock Certificates. Certificates for the Common
Stock issued after the Record Time but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented thereby and shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
Until the Separation Time (as defined in the Rights Agreement referred
to below), this certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement, dated as
of March 18, 1998 (as such may be amended from time to time, the
"Rights Agreement"), between Murfreesboro Bancorp, Inc. (the"Company")
and Bank of Murfreesboro, 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 the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may be
redeemed, may be exchanged for shares of Common Stock or other
securities or assets of the Company or a Subsidiary of the Company, may
expire, may become void (if they are "Beneficially Owned" by an
"Acquiring Person" or an Affiliate or Associate thereof, as such terms
are defined in the Rights Agreement, or by any transferee of any of the
foregoing) or may be evidenced by separate certificates and may no
longer be evidenced by this certificate. The Company will mail or
arrange for the mailing of a copy of the Rights Agreement to the holder
of this certificate without charge within five days after the receipt
of a written request therefor. Certificates representing shares of
Common
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Stock that are issued and outstanding at the Record Time shall evidence
one Right for each share of Common Stock evidenced thereby
notwithstanding the absence of the foregoing legend.
(iii) Exercise of Rights: Separation of Rights.
(1) Subject to Sections 3.1, 5.1 and 5.10 and subject to adjustment as
herein set forth, each Right will entitle the holder thereof, after the
Separation Time and prior to the Expiration Time; to purchase, for the Exercise
Price, one one-hundredth of a share of Preferred Stock.
(2) Until the Separation Time, (i) no Right may be exercised and (ii)
each Right will be evidenced by the certificate for the associated share of
Common Stock (together, in the case of certificates issued prior to the Record
Time, with the letter mailed to the record holder thereof pursuant to Section
2.1) and will be transferable only together with, and will be transferred by a
transfer (whether with or without such letter) of, such associated share.
(3) Subject to the terms hereof, after the Separation Time and prior to
the Expiration Time, the Rights (i) may be exercised and (ii) may be transferred
independent of shares of Common Stock. Promptly following the Separation Time,
the Rights Agent will mail to each holder of record of Common Stock as of the
Separation Time (other than any Person whose Rights have become void pursuant to
Section 3.1(b)), at such holder's address as shown by the records of the Company
(the Company hereby agreeing to furnish copies of such records to the Rights
Agent for this purpose), (x) a certificate (a "Rights Certificate") in
substantially the form of Exhibit A hereto appropriately completed, representing
the number of Rights held by such holder at the Separation Time and having such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any national securities exchange or quotation system
on which the Rights may from time to time be listed or traded, or to conform to
usage, and (y) a disclosure statement describing the Rights.
(4) Subject to the terms hereof, Rights may be exercised on any
Business Day after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent the Rights Certificate evidencing such Rights
with an Election to Exercise (an "Election to Exercise") substantially in the
form attached to the Rights Certificate duly completed, accompanied by payment
in cash, or by certified or official bank check or money order payable to the
order of the Company, of a sum equal to the Exercise Price multiplied by the
number of Rights being exercised and a sum sufficient to cover any transfer tax
or charge which may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or delivery of
certificates for shares or depositary receipts (or both) in a name other than
that of the holder of the Rights being exercised.
(5) Upon receipt of a Rights Certificate, with an Election to Exercise
accompanied by payment as set forth in Section 2.3(d), and subject to the terms
hereof, the Rights Agent will thereupon promptly (i) (A) requisition from a
transfer agent stock certificates evidencing such number of shares or other
securities to be purchased (the Company hereby irrevocably authorizing
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<PAGE> 11
its transfer agents to comply with all such requisitions) and (B) if the Company
elects pursuant to Section 5.5 not to issue certificates representing fractional
shares, requisition from the depositary selected by the Company depositary
receipts representing the fractional shares to be purchased or requisition from
the Company the amount of cash to be paid in lieu of fractional shares in
accordance with Section 5.5 and (ii) after receipt of such certificates,
depositary receipts and/or cash, deliver the same to or upon the order of the
registered holder of such Rights Certificate, registered (in the case of
certificates or depositary receipts) in such name or names as may be designated
by such holder.
(6) In case the holder of any Rights shall exercise less than all the
Rights evidenced by such holder's Rights Certificate, a new Rights Certificate
evidencing the Rights remaining unexercised will be issued by the Rights Agent
to such holder or to such holder's duly authorized assigns.
(7) The Company covenants and agrees that it will (i) take all such
action as may be necessary to ensure that all shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Exercise Price), be duly and validly authorized,
executed, issued and delivered and fully paid and nonassessable; (ii) take all
such action as may be necessary to comply with any applicable requirements of
the Securities Act of 1933 or the Securities Exchange Act of 1934, and the rules
and regulations thereunder, and any other applicable law, rule or regulation, in
connection with the issuance of any shares upon exercise of Rights; and (iii)
pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the original issuance or delivery of
the Rights Certificates or of any shares issued upon the exercise of Rights,
provided that the Company shall not be required to pay any transfer tax or
charge which may be payable in respect of any transfer involved in the transfer
of delivery of Rights Certificates or the issuance or delivery of certificates
for shares in a name other than that of the holder of the Rights being
transferred or exercised.
(iv) Adjustments to Exercise Price; Number of Rights.
(1) In the even the Company shall at any time after the Record Time and
prior to the Separation Time (i) declare or pay a dividend on Common Stock
payable in Common Stock, (ii) subdivide the outstanding Common Stock or (iii)
combine the outstanding Common Stock into a smaller number of shares of Common
Stock, (x) the Exercise Price in effect after such adjustment will be equal to
the Exercise Price in effect immediately prior to such adjustment divided by the
number of shares of Common Stock (the "Expansion Factor") that a holder of one
share of Common Stock immediately prior to such dividend, subdivision or
combination would hold thereafter as a result thereof and (y) each Right held
prior to such adjustment will become that number of Rights equal to the
Expansion Factor, and the adjusted number of Rights will be deemed to be
distributed among the shares of Common Stock with respect to which the original
Rights were associated (if they remain outstanding) and the shares issued in
respect of such dividend, subdivision or combination, so that each such share of
Common Stock will have exactly one Right associated with it. Each adjustment
made pursuant to this paragraph shall be made as of the payment or effective
date for the applicable dividend, subdivision or combination.
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<PAGE> 12
In the event the Company shall at any time after the Record Time and
prior to the Separation Time issue any shares of Common Stock otherwise than in
a transaction referred to in the preceding paragraph, each such share of Common
Stock so issued shall automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing such share. To the
extent provided in Section 5.3, Rights shall be issued by the Company in respect
of shares of Common Stock that are issued or sold by the Company after the
Separation Time.
(2) In the event the Company shall at any time after the Record Time
and prior to the Separation Time issue or distribute any securities or assets in
respect of, in lieu of or in exchange for Common Stock (other than pursuant to a
regular periodic cash dividend or a dividend paid solely in Common Stock)
whether by dividend, in a reclassification or recapitalization (including any
such transaction involving a merger, consolidation or share exchange), or
otherwise, the Company shall make such adjustments, if any, in the Exercise
Price, number of Rights and/or securities or other property purchasable upon
exercise of Rights as the Board of Directors of the Company, in its sole
discretion by a two-thirds vote, may deem to be appropriate under the
circumstances in order to adequately protect the interests of the holders of
Rights generally, and the Company and the Rights Agent shall amend this
Agreement as necessary to provide for such adjustments.
(3) Each adjustment to the Exercise Price made pursuant to this Section
2.4 shall be calculated to the nearest cent. Whenever an adjustment to the
Exercise Price is made pursuant to this Section 2.4, the Company shall (i)
promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (ii) promptly file with
the Rights Agent and with each transfer agent for the Common Stock a copy of
such certificate and (iii) mail a brief summary thereof to each holder of
Rights.
(4) Irrespective of any adjustment or change in the securities
purchasable upon exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the securities so purchasable which
were expressed in the initial Rights Certificates issued hereunder.
(v) Date on Which Exercise is Effective. Each person in whose name any
certificate for shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares represented
thereby on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Exercise Price for such Rights (and any applicable taxes and other governmental
charges payable by the exercising holder hereunder) was made; provided, however,
that if the date of such surrender and payment is a date upon which the 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 stock transfer books of the
Company are open.
(vi) Execution, Authentication, Delivery and Dating of Rights
Certificates. (1) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or one of its Vice Presidents,
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Rights Certificates may be manual or facsimile.
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<PAGE> 13
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the countersignature and delivery of such Rights
Certificates.
Promptly after the Company learns of the Separation Time, the Company
will notify the Rights Agent of such Separation Time and will deliver Rights
Certificates executed by the Company to the Rights Agent for countersignature,
and, subject to Section 3.1(b), the Rights Agent shall manually countersign and
deliver such Rights Certificates to the holders of the Rights pursuant to
Section 2.3(c) hereof. No Rights Certificate shall be valid for any purpose
unless manually countersigned by the Rights Agent.
(2) Each Rights Certificate shall be dated the date of countersignature
thereof.
(vii) Registration. Registration of Transfer and Exchange. (1) After
the Separation Time, the Company will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company will provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed "Rights Registrar" for the purpose of maintaining the
Rights Register for the Company and registering Rights and transfers of Rights
after the Separation Time as herein provided. In the event that the Rights Agent
shall cease to be the Rights Registrar, the Rights Agent will have the right to
examine the Rights Register at all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights Certificate,
and subject to the provisions of Section 2.7(c) and (d), the Company will
execute, and the Rights Agent will countersign and deliver, in the name of the
holder or the designated transferee or transferees, as required pursuant to the
holder's instructions, one or more new Rights Certificates evidencing the same
aggregate number of Rights as did the Rights Certificate so surrendered.
(2) Except as otherwise provided in Section 3.1(b), all Rights issued
upon any registration of transfer or exchange of Rights Certificates shall be
the valid obligations of the Company, and such Rights shall be entitled to the
same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(3) Every Rights Certificate surrendered for registration of transfer
or exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company or the Rights Agent, as the case
may be, duly executed by the holder thereof or such holder's attorney duly
authorized in writing. As a condition to the issuance of any new Rights
Certificate under this Section 2.7, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto.
(4) The Company shall not be required to register the transfer or
exchange of any Rights after such Rights have become void under Section 3.1(b),
been exchanged under Section 3.1(c) or been redeemed or terminated under Section
5.1;
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(viii) Mutilated, Destroyed, Lost and Stolen Rights Certificates. (1)
If any mutilated Rights Certificate is surrendered to the Rights Agent prior to
the Expiration Time, then, subject to Sections 3.1(b) and 5.1, the Company shall
execute and the Rights Agent shall countersign and deliver in exchange therefor
a new Rights Certificate evidencing the same number of Rights as did the Rights
Certificate so surrendered.
(2) If there shall be delivered to the Company and the Rights Agent
prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Sections 3.1(b) and 5.1 and in the absence of
notice to the Company or the Rights Agent that such Rights Certificate has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Rights Agent shall countersign and deliver, in lieu of any such
destroyed, lost or stolen Rights Certificate, a new Rights Certificate
evidencing the same number of Rights as did the Rights Certificate so destroyed,
lost or stolen.
(3) As a condition to the issuance of any new Rights Certificate under
this Section 2.8, the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Rights
Agent) connected therewith.
(4) Every new Rights Certificate issued pursuant to this Section 2.8 in
lieu of any destroyed, lost or stolen Rights Certificate shall evidence an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Rights Certificate shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other Rights duly issued hereunder.
(ix) Persons Deemed Owners. Prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated Common Stock
certificate) for registration of transfer, the Company, the Rights Agent and any
agent of the Company or the Rights Agent may deem and treat the person in whose
name such Rights Certificate (or, prior to the Separation Time, such Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, including the payment of the
Redemption Price and neither the Company nor the Rights Agent shall be affected
by any notice to the contrary. As used in this Agreement, unless the context
otherwise requires, the term "holder" of any Rights shall mean the registered
holder of such Rights (or, prior to the Separation Time, the associated shares
of Common Stock).
(x) Delivery and Cancellation of Certificates. All Rights Certificates
surrendered upon exercise or for registration of transfer or exchange shall, if
surrendered to any person other than the Rights Agent, be delivered to the
Rights Agent and, in any case, shall be promptly canceled by the Rights Agent.
The Company may at any time deliver to the Rights Agent for cancellation any
Rights Certificates previously countersigned and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all Rights Certificates
so delivered shall be promptly canceled by the Rights Agent. No Rights
Certificates shall be countersigned in lieu of or in exchange for any Rights
Certificates canceled as provided in this Section 2.10, except as expressly
permitted by this Agreement. The Rights Agent shall destroy all canceled Rights
Certificates and deliver a certificate of destruction to the Company.
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<PAGE> 15
(xi) Agreement of Rights Holders. Every holder of Rights by accepting
the same consents and agrees with the Company and the Rights Agent and with
every other holder of Rights that:
(1) prior to the Separation Time, each Right will be transferable only
together with, and will be transferred by a transfer of, the associated share of
Common Stock;
(2) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(3) prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Common Stock certificate) for registration of
transfer, the Company, the Rights Agent and any agent of the Company or the
Rights Agent may deem and treat the person in whose name the Rights Certificate
(or, prior to the Separation Time, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary;
(4) Rights beneficially owned by certain Persons will, under the
circumstances set forth in Section 3.1(b), become void; and
(5) this Agreement may be supplemented or amended from time to time
pursuant to Section 2.4(b) or 5.4 hereof.
ARTICLE 17.
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
(i) Flip-in. (1) In the event that prior to the Expiration Time a
Flip-in Date shall occur, the Company shall take such action as shall be
necessary to ensure and provide that, except as provided in this Section 3.1,
each Right shall constitute the right to purchase from the Company, upon
exercise thereof in accordance with the terms hereof (but subject to Section
5.10), that number of shares of Common Stock having an aggregate Market Price on
the Stock Acquisition Date equal to twice the Exercise Price for an amount in
cash equal to the Exercise Price (such right to be appropriately adjusted in
order to protect the interests of the holders of Rights generally in the event
that on or after such Stock Acquisition Date an event of a type analogous to any
of the events described in Section 2.4(a) or (b) shall have occurred with
respect to the Common Stock).
(2) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an Acquiring Person
or an Affiliate or Associate thereof or by any transferee, direct or indirect,
of any of the foregoing shall become void and any holder of such Rights
(including transferees) shall thereafter have no right to exercise or transfer
such Rights under any provision of this Agreement. If any Rights Certificate is
presented for assignment or exercise and the Person presenting the same will not
complete the certification set forth at the end of the form of assignment or
notice of election to exercise and provide such additional evidence of the
identity of the Beneficial Owner and its Affiliates and Associates (or former
Beneficial Owners
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<PAGE> 16
and their Affiliates and Associates) as the Company shall reasonably request,
then the Company shall be entitled conclusively to deem the Beneficial Owner
thereof to be an Acquiring Person or an Affiliate or Associate thereof or a
transferee of any of the foregoing and accordingly will deem the Rights
evidenced thereby to be void and not transferable or exercisable.
(3) The Board of Directors of the Company may, at its option, at any
time after a Flip-in Date and prior to the time that an Acquiring Person becomes
the Beneficial Owner of more than 50% of the outstanding shares of Common Stock,
elect by a two-thirds vote to exchange all (but not less than all) the then
outstanding Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 3.1(b)) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right, appropriately adjusted in
order to protect the interests of holders of Rights generally in the event that
after the Separation Time an event of a type analogous to any of the events
described in Section 2.4(a) or (b) shall have occurred with respect to the
Common Stock (such exchange ratio, as adjusted from time to time, being
hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the Company
electing to exchange the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right (other
than Rights that have become void pursuant to Section 3.1(b)) will thereafter
represent only the right to receive a number of shares of Common Stock equal to
the Exchange Ratio. Promptly after the action of the Board of Directors electing
to exchange the Rights, the Company shall give notice thereof (specifying the
steps to be taken to receive shares of Common Stock in exchange for Rights) to
the Rights Agent and the holders of the Rights (other than Rights that have
become void pursuant to Section 3.1(b)) outstanding immediately prior thereto by
mailing such notice in accordance with Section 5.9.
Each Person in whose name any certificate for shares is issued upon the
exchange of Rights pursuant to this Section 3.1(c) or Section 3.1(d) shall for
all purposes be deemed to have become the holder of record of the shares
represented thereby on, and such certificate shall be dated, the date upon which
the Rights Certificate evidencing such Rights was duly surrendered and payment
of any applicable taxes and other governmental charges payable by the holder was
made; provided, however, that if the date of such surrender and payment is a
date upon which the 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 stock
transfer books of the Company are open.
(4) Whenever the Company shall become obligated under Section 3.1(a) or
(c) to issue shares of Common Stock upon exercise of or in exchange for Rights,
the Company, at its option, may substitute therefor shares of Preferred Stock,
at a ratio of one one-hundredth of a share of Preferred Stock for each share of
Common Stock so issuable.
(5) In the event that there shall not be sufficient treasury shares or
authorized but unissued shares of Common Stock or Preferred Stock of the Company
to permit the exercise or exchange in full of the Rights in accordance with
Section 3.1(a) or (c), the Company shall either (i) call a meeting of
stockholders seeking approval to cause sufficient additional shares to be
authorized (provided that if such approval is not obtained the Company will take
the action specified in clause
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<PAGE> 17
(ii) of this sentence) or (ii) take such action as shall be necessary to ensure
and provide, to the extent permitted by applicable law and any agreements or
instruments in effect on the Stock Acquisition Date to which it is a party, that
each Right shall thereafter constitute the right to receive, (x) at the
Company's option, either (A) in return for the Exercise Price, debt or equity
securities or other assets (or a combination thereof) having a fair value equal
to twice the Exercise Price, or (B) without payment of consideration (except as
otherwise required by applicable law), debt or equity securities or other assets
(or a combination thereof) having a fair value equal to the Exercise Price, or
(y) if the Board of Directors of the Company elects to exchange the Rights in
accordance with Section 3.1(c), debt or equity securities or other assets (or a
combination thereof) having a fair value equal to the product of the Market
Price of a share of Common Stock on the Flip-in Date times the Exchange Ratio in
effect on the Flip-in Date, where in any case set forth in (x) or (y) above the
fair value of such debt or equity securities or other assets shall be as
determined by a two-thirds vote in good faith by the Board of Directors of the
Company, after consultation with a nationally recognized investment banking
firm.
(ii) Flip-over. (1) Prior to the Expiration Time, the Company shall not
enter into any agreement with an Acquiring Person (or any of its Affiliates or
Associates) with respect to, consummate or permit to occur any Flip-over
Transaction or Event unless and until it shall have entered into a supplemental
agreement with the Flip-over Entity, for the benefit of the holders of the
Rights, providing that, upon consummation or occurrence of the Flip-over
Transaction or Event (i) each Right shall thereafter constitute the right to
purchase from the Flip-over Entity, upon exercise thereof in accordance with the
terms hereof, that number of shares of Flip-over Stock of the Flip-over Entity
having an aggregate Market Price on the date of consummation or occurrence of
such Flip-over Transaction or Event equal to twice the Exercise Price for an
amount in cash equal to the Exercise Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights generally in
the event that after such date of consummation or occurrence an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Flip-over Stock) and (ii) the Flip-over Entity
shall thereafter be liable for, and shall assume, by virtue of such Flip-over
Transaction or Event and such supplemental agreement, all the obligations and
duties of the Company pursuant to this Agreement. The provisions of this Section
3.2 shall apply to successive Flip-over Transactions or Events.
(2) Prior to the Expiration Time, unless the Rights will be redeemed
pursuant to Section 5.1 hereof in connection therewith, the Company shall not
enter into any agreement with respect to, consummate or permit to occur any
Flip-over Transaction or Event if at the time thereof there are any rights,
warrants or securities outstanding or any other arrangements, agreements or
instruments that would eliminate or otherwise diminish in any material respect
the benefits intended to be afforded by this Rights Agreement to the holders of
Rights upon consummation of such transaction.
ARTICLE 18.
THE RIGHTS AGENT
(i) General. (1) 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 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
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<PAGE> 18
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted to be done by the Rights Agent in connection
with the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability.
(2) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any certificate for
securities purchasable upon exercise of Rights, Rights Certificate, certificate
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.
(ii) Merger or Consolidation or Change of Name of Rights Agent. (1) Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent is a party, or any corporation succeeding to the shareholder services
business of the Rights Agent or any successor Rights Agent, will be the
successor to the Rights Agent under this Agreement without, the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 4.4 hereof. In case at the time
such successor Rights Agent succeeds to the agency created by this Agreement any
of the Rights Certificates have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates have not been countersigned, any successor
Rights Agent may countersign such Rights 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 Rights Certificates will have the full force provided in the
Rights Certificates and in this Agreement.
(2) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
(iii) Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(1) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel will be full and
complete authorization and protection
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<PAGE> 19
to the Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(2) Whenever in the performance of its duties under this Agreement the
Rights Agent deems it necessary or desirable that any fact or matter be proved
or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by a person believed by the Rights Agent to be the
Chairman of the Board, the President or any Vice President and by the Treasurer
or any Assistant Treasurer or the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate will be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.
(3) The Rights Agent will be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(4) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for securities purchasable upon exercise of Rights or the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and will be deemed to have been
made by the Company only.
(5) The Rights Agent will not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due authorization, execution and delivery hereof by the Rights Agent) or in
respect of the validity or execution of any certificate for securities
purchasable upon exercise of Rights or Rights Certificate (except its
countersignature thereof); nor will it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 3.1(b) hereof) or any adjustment required under the provisions of
Section 2.4, 3.1 or 3.2 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 after
receipt of the certificate contemplated by Section 2.4 describing any such
adjustment); nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
securities purchasable upon exercise of Rights or any Rights or as to whether
any securities purchasable upon exercise of Rights will, when issued, be duly
and validly authorized, executed, issued and delivered and fully paid and
nonassessable.
(6) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(7) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person believed by the Rights Agent to
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<PAGE> 20
be the Chairman of the Board, the President or any Vice President or the
Secretary or any Assistant Secretary or the Treasurer or any Assistant Treasurer
of the Company, and to apply to such persons for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered by it in good faith in accordance with instructions of any such person.
(8) The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in Common Stock, Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(9) 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 will 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.
(iv) Change of Rights Agent. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 90 days' notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the Company
and to each transfer agent of Common Stock by registered or certified mail, and
to the holders of the Rights in accordance with Section 5.9. The Company may
remove the Rights Agent upon 30 days' notice in writing, mailed to the Rights
Agent and to each transfer agent of the Common Stock by registered or certified
mail, and to the holders of the Rights in accordance with Section 5.9. If the
Rights Agent should resign or be removed or otherwise become incapable of
acting, the Company will appoint a successor to the Rights Agent. If the Company
fails to make such appointment within a period of 30 days after 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 any Rights (which
holder shall, with such notice, submit such holder's Rights Certificate for
inspection by the Company), then the holder of any Rights may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of the State of Tennessee, in good standing, having its principal
office in the State of Tennessee, which is authorized under such laws to
exercise the powers of the Rights Agent contemplated by this Agreement 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
will 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 will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the holders of the
Rights. Failure to give any notice provided for in this Section 4.4, however, or
any defect therein,
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<PAGE> 21
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.
ARTICLE 19.
MISCELLANEOUS
(i) Redemption (1) The Board of Directors of the Company may, at its
option, at any time prior to the close of business on the Flip-in Date, elect by
a two-thirds vote to redeem all (but not less than all) the then outstanding
Rights at the Redemption Price and the Company, at its option, may pay the
Redemption Price either in cash or shares of Common Stock or other securities of
the Company deemed by the Board of Directors by a two-thirds vote, in the
exercise of its sole discretion, to be at least equivalent in value to the
Redemption Price.
(2) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights (or, if the resolution of the Board of
Directors electing to redeem the Rights states that the redemption will not be
effective until the occurrence of a specified future time or event, upon the
occurrence of such future time or event), without any further action and without
any notice, the right to exercise the Rights will terminate and each Right will
thereafter represent only the right to receive the Redemption Price in cash or
securities, as determined by the Board of Directors. Promptly after the Rights
are redeemed, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice in
accordance with Section 5.9.
(ii) Expiration. The Rights and this Agreement shall expire at the
Expiration Time, and no Person shall have any rights pursuant to this Agreement
or any Right after the Expiration Time, except, if the Rights are exchanged or
redeemed, as provided in Section 3.1(c), 3.1(d), 3.1(e), 3.2 or 5.1 hereof.
(iii) Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by a two-thirds vote by its Board of Directors to reflect any
adjustment or change in the number or kind or class of shares of stock
purchasable upon exercise of Rights made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or sale of shares
of Common Stock by the Company following the Separation Time and prior to the
Redemption Time or Expiration Time pursuant to the terms of securities
convertible or redeemable into shares of Common Stock or to options, including
the Option, in each case issued or granted prior to, and outstanding at, the
Separation Time, the Company shall issue holders of such shares of Common Stock,
Rights Certificates representing the appropriate number of Rights in connection
with the issuance or sale of such shares of Common Stock; provided, however, in
each case, (i) no such Rights Certificate shall be issued, if, and to the extent
that, the Company shall be advised by counsel that such issuance would crate a
significant risk of material adverse tax consequences to the Company or to the
Person to whom such Rights Certificates would be issued (ii) no such Rights
Certificates shall be issued if, and to the extent that, appropriate adjustment
shall have otherwise been made in lieu of the issuance thereof, and (iii) the
Company shall have no obligation to distribute Rights Certificates to any
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<PAGE> 22
Acquiring Person or Affiliate or Associate of an Acquiring Person or any
transferee of any of the foregoing.
(iv) Supplements and Amendments. The Company and the Rights Agent may
from time to time supplement or amend this Agreement without the approval of any
holders of Rights (i) prior to the close of the business of the Flip-in Date, in
any response and (ii) after the close of business on the Flip-in Date, to make
any changes that the Company may deem necessary or desirable and which shall not
materially adversely affect the interests of the holders of Rights generally or
in order to cure any ambiguity or to correct or supplement any provision
contained herein which may be inconsistent with any other provisions herein or
otherwise defective. The Rights Agent will duly execute and deliver any
supplement or amendment hereto requested by the Company which satisfies the
terms of the preceding sentence.
(v) Fractional Shares. If the Company elects not to issue certificates
representing fractional shares upon exercise or redemption of Rights, the
Company shall, in lieu thereof, in the sole discretion by a two-thirds vote of
the Board of Directors, either (a) evidence such fractional shares by depositary
receipts issued pursuant to an appropriate agreement between the Company and a
depositary selected by it, providing that each holder of a depositary receipt
shall have all of the rights, privileges and preferences to which such holder
would be entitled as a beneficial owner of such fractional share, or (b) sell
such shares on behalf of the holders of Right and pay to the registered holder
of such Rights the appropriate fraction of price per share received upon such
sale.
(vi) Rights of Action. Subject to the terms of this Agreement
(including Section 3.1(b)), rights of action in respect of this Agreement, other
than rights of action vested solely in the Rights Agent, are vested in the
respective holders of the Rights; and any holder of any Rights, without the
consent of the Rights Agent or of the holder of any other Rights, may, on such
holder's own behalf and for such holder's own benefit and the benefit of other
holders of Rights, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, such
holder's right to exercise such holder's Rights in the manner provided in such
holder's Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Agreement.
(vii) Holder of Rights Not Deemed a Shareholder. No holder, as such, of
any Rights shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of shares or any other securities which may at any time be
issuable on the exercise of such Rights, nor shall anything contained herein or
in any Rights Certificate be construed to confer upon the holder of any Rights,
as such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except as
provided in Section 5.8 hereof), or to receive dividends or subscription rights,
or otherwise, until such Rights shall have been exercised or exchanged in
accordance with the provisions hereof.
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<PAGE> 23
(viii) Notice of Proposed Actions. In case the Company shall propose
after the Separation Time and prior to the Expiration Time (i) to effect or
permit (in cases where the Company's permission is required) occurrence of any
Flip-in Date or Flip-over Transaction or Event or (ii) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right, in accordance with Section 5.9
hereof, a notice of such proposed action, which shall specify the Flip-in Date
or the date on which such Flip-over Transaction or Event, liquidation,
dissolution, or winding up is to take place, and such notice shall be so given
at least 20 Business Days prior to the date of the taking of such proposed
action.
(ix) Notices. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to or on the Company shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Murfreesboro Bancorp, Inc.
615 Memorial Boulevard
Murfreesboro, Tennessee 37133-7000
Attention: Secretary
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
Bank of Murfreesboro
615 Memorial Boulevard
Murfreesboro, Tennessee 37133-7000
Attention: Secretary
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, on
the registry books of the transfer agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice.
(x) Suspension of Exercisability. To the extent that the Company
determines in good faith that some action will or need be taken pursuant to
Section 3.1(a), (b), (d) or (e) or to comply with federal or state securities
laws, the Company may suspend the exercisability of the Rights for a period of
up to ninety (90) days following the date of the occurrence of the Separation
Time or the Flip-in Date in order to take such action or comply with such laws.
In the event of any such suspension, the Company shall issue as promptly as
practicable a public announcement stating that the exercisability or
exchangeability of the Rights has been temporarily suspended. Notice thereof
pursuant to Section 5.9 shall not be required.
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<PAGE> 24
Failure to give a notice pursuant to the provisions of this Agreement
shall not affect the validity of any action taken hereunder.
(xi) Costs of Enforcement. The Company agrees that if the Company or
any other Person the securities of which are purchasable upon exercise of Rights
fails to fulfill any of its obligations pursuant to this Agreement, then the
Company or such Person will reimburse the holder of any Rights for the costs and
expenses (including legal fees) incurred by such holder in actions to enforce
such holder's rights pursuant to any Rights or this Agreement.
(xii) Successors. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
(xiii) Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
holders of the Rights any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of the Rights.
(xiv) Determination and Actions by the Board of Directors, etc. The
Board of Directors of the Company shall have the exclusive power and authority
by a two-thirds vote to administer this Agreement and to exercise all rights and
powers specifically granted to the Board or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement. All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board of Directors of the Company to any liability to the holders of
the Rights.
(xv) Descriptive Headings. Descriptive headings appear herein for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
(xvi) Governing Law. THIS AGREEMENT AND EACH RIGHT ISSUED HEREUNDER
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF TENNESSEE
AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO BE MADE AND PERFORMED ENTIRELY
WITHIN SUCH STATE.
(xvii) Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
(xviii) Severability. If any term or provision hereof or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be ineffective
as to such jurisdiction to the extent of such invalidity or
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<PAGE> 25
unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions hereof or the application of such term or provision to
circumstances other than those as to which it is held invalid or unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
MURFREESBORO BANCORP, INC.
By
-----------------------------------------
Name: William E. Rowland
Title: President
BANK OF MURFREESBORO
By
-----------------------------------------
Name: Olin Williams
Title: Chairman of the Board
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EXHIBIT A
[Form of Rights Certificate]
Certificate No. W- _____________ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT THE
OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS OR AFFILIATES OR
ASSOCIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
OR TRANSFEREES OF ANY OF THE FOREGOING WILL BE VOID.
Rights Certificate
Murfreesboro Bancorp, Inc.
This certifies that ___________________________, or registered assigns,
is the registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof each of which entitles the registered
holder thereof, subject to the terms, provisions and conditions of the
Shareholder Protection Rights Agreement, dated as of March 18, 1998 (as amended
from time to time, the "Rights Agreement"), between Murfreesboro Bancorp, Inc.,
a Tennessee corporation (the "Company"), and Bank of Murfreesboro, a Tennessee
corporation, as Rights Agent (the "Rights Agent", which term shall include any
successor Rights-Agent under the Rights Agreement), to purchase from the Company
at any time after the Separation Time (as such term is defined in the Rights
Agreement) and prior to the close of business on March 18, 2003, one
one-hundredth of a fully paid share of Participating Preferred Stock, par value
$5.00 per share (the "Preferred Stock"), of the Company (subject to adjustment
as provided in the Rights Agreement) at the Exercise Price referred to below,
upon presentation and surrender of this Rights Certificate with the Form of
Election to Exercise duly executed at the principal office of the Rights Agent
in Albany. The Exercise Price shall initially be $25.00 per Right and shall be
subject to adjustment in certain events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase
securities of an entity other than the Company or securities or assets of the
Company other than Preferred Stock, all as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent,
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<PAGE> 27
the Company and the holders of the Rights Certificates. Copies of the Rights
Agreement are on file at the principal office of the Company and are available
without cost upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor evidencing an aggregate number of Rights equal to the aggregate number of
Rights evidenced by the Rights Certificate or Rights Certificates surrendered.
If this Rights Certificate shall be exercised in part, the registered holder
shall be entitled to receive, upon surrender hereof, another Rights Certificate
or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, each Right evidenced
by this Certificate may be (a) redeemed by the Company under certain
circumstances, at its option, at a redemption price of $0.01 per Right or (b)
exchanged by the Company under certain circumstances, at its option, for one
share of Common Stock or one one-hundredth of a share of Preferred Stock per
Right (or, in certain cases, other securities or assets of the Company), subject
in each case to adjustment in certain events as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of any
securities which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer upon
the holder hereof, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Rights evidenced by
this Rights Certificate shall have been exercised or exchanged as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company.
Date: __________________
ATTEST:
By
- -------------------------------- ----------------------------------
Secretary
Countersigned:
Bank of Murfreesboro
By
------------------------------
Authorized Signature
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<PAGE> 28
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer this Rights
Certificate.)
FOR VALUE RECEIVED ___________________________________ hereby sells,
assigns and transfers unto _______________________________ (Please print name
and address of transferee) this Rights Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and
appoint ________________ Attorney, to transfer the within Rights Certificate on
the books of the within-named Company, with full power of substitution.
Dated: __________________, 19____
Signature Guaranteed:
----------------------------------
Signature (Signature must
correspond to name as
written upon the face of
this Rights Certificate in
every particular, without
alteration or enlargement
or any change whatsoever)
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
- -------------------------------------------------------------------------------
(To be completed if true)
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<PAGE> 29
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).
--------------------------------------------
Signature
- --------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in
connection with a purported assignment, the Company will deem the Beneficial
Owner of the Rights evidenced by the enclosed Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) or a transferee of any of the foregoing and accordingly will deem the
Rights evidenced by such Rights Certificate to be void and not transferable or
exercisable.
25
<PAGE> 30
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
TO: Murfreesboro Bancorp, Inc.
The undersigned hereby irrevocably elects to exercise ________________
whole Rights represented by the attached Rights Certificate to purchase the
shares of Participating Preferred Stock issuable upon the exercise of such
Rights and requests that certificates for such shares be issued in the name of:
__________________________________
Address:
__________________________________
__________________________________
Social Security or Other Taxpayer
Identification Number:____________
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
__________________________________
Address:
__________________________________
__________________________________
Social Security or Other Taxpayer
Identification Number:____________
Signature Guaranteed:
--------------------------
Signature (Signature must
correspond to name as
written upon the face of
the attached Rights
Certificate in every
particular, without
alteration or enlargement
or any change whatsoever)
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<PAGE> 31
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
- --------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of
Rights and shares of Common Stock, that the Rights evidenced by the attached
Rights Certificate are not, and, to the knowledge of the undersigned, have never
been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
--------------------------------------------
Signature
- --------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in
connection with a purported exercise, the Company will deem the Beneficial Owner
of the Rights evidenced by the attached Rights Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
or a transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
27
<PAGE> 32
EXHIBIT B
ARTICLES OF AMENDMENT
OF
CHARTER
OF
MURFREESBORO BANCORP, INC.
Under Section 48-20-106 of the Tennessee Business Corporation Act, the
undersigned Corporation hereby adopts the following Articles of Amendment to its
charter:
1. The name of the corporation is Murfreesboro Bancorp, Inc.
2. The charter is amended, pursuant to authority vested by the
charter of the Corporation in the Board of Directors, by the addition to Article
2 of the charter of the following provision:
A statement of the designation, number of shares, relative
rights, preferences, and limitations of the first series of Preferred
Stock established by the Board of Directors pursuant to the authority
vested in it by Paragraph 2 is as follows:
(a) The distinctive serial designation of this series
shall be "Participating Preferred Stock" (hereinafter called
"this Series"). Each share of this Series shall be identical
in all respects with the other shares of this Series except as
to the dates from and after which dividends thereon shall be
cumulative.
(b) The number of shares in this Series shall
initially be 50,000, which number may from time to time be
increased or decreased (but not below the number then
outstanding) by the Board of Directors. Shares of this Series
purchased by the Corporation shall be canceled and shall
revert to authorized but unissued shares of Preferred Stock
undesignated as to series. Shares of this Series may be issued
in fractional shares, which fractional shares shall entitle
the holder, in proportion to such holder's fractional share,
to all rights of a holder of a whole share of this Series.
(c) The holders of full or fractional shares of this
Series shall be entitled to receive, when and as declared by
the Board of Directors, but only out of funds legally
available therefor, dividends, (A) on each date that dividends
or other distributions (other than dividends or distributions
payable in Common Stock of the Corporation) are payable on or
in respect of Common Stock comprising part of the Reference
Package (as defined below), in an amount per whole share of
this Series equal to the aggregate amount of dividends or
other distributions (other than
28
<PAGE> 33
dividends or distributions payable in Common Stock of the
Corporation) that would be payable on such date to a holder of
the Reference Package and (B) on the last day of March, June,
September and December in each year, in an amount per whole
share of this Series equal to the excess (if any) of $6.25(1)
over the aggregate dividends paid per whole share of this
Series during the three month period ending on such last day.
Each such dividend shall be paid to the holders of record of
shares of this Series on the date, not exceeding fifty days
preceding such dividend or distribution payment date, fixed
for the purpose by the Board of Directors in advance of
payment of each particular dividend or distribution. Dividends
on each full and each fractional share of this Series shall be
cumulative from the date such full or fractional share is
originally issued; provided that any such full or fractional
share originally issued after a dividend record date and on or
prior to the dividend payment date to which such record date
relates shall not be entitled to receive the dividend payable
on such dividend payment date or any amount in respect of the
period from such original issuance to such dividend payment
date.
The term "Reference Package" shall initially mean 100
shares of Common Stock, par value $5.00 per share ("Common
Stock"), of the Corporation. In the event the Corporation
shall at any time after the close of business on
__________________, 19_____(2) (A) declare or pay a dividend
on any Common Stock payable in Common Stock, (B) subdivide any
Common Stock or (C) combine any Common Stock into a smaller
number of shares, then and in each such case the Reference
Package after such event shall be the Common Stock that a
holder of the Reference Package immediately prior to such
event would hold thereafter as a result thereof.
Holders of shares of this Series shall not be
entitled to any dividends, whether payable in cash, property
or stock, in excess of full cumulative dividends, as herein
provided on this Series.
So long as any shares of this Series are outstanding, no
dividend (other than a dividend in Common Stock or in any
other stock ranking junior to this Series as to dividends and
upon liquidation) shall be declared or paid or set aside for
payment or
- --------
(1)As may be adjusted to always be an amount equal to
1/4 of 1% of the Exercise Price divided by the number of
shares of Preferred Stock purchasable upon exercise of one
Right (i.e., a guaranteed 1% annualized dividend). Where a
Right is exercisable for one one-hundredth of a share, this
simplifies to one-fourth the Exercise Price. See definitions
in the Shareholder Protection Rights Agreement ("Rights
Agreement") dated March 18, 1998.
(2)For a certificate of designation relating to
shares to be issued pursuant to Section 2.3 of the Rights
Agreement, insert the Separation Time. For a certificate of
designation relating to shares to be issued pursuant to
Section 3.1(d) of the Rights Agreement, insert the Flip-in
Date.
29
<PAGE> 34
other distribution declared or made upon the Common Stock or
upon any other stock ranking junior to this Series as to
dividends or upon liquidation, nor shall any Common Stock nor
any other stock of the Corporation ranking junior to or on a
parity with this Series as to dividends or upon liquidation be
redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for
a sinking fund for the redemption of any shares of any such
stock) by the Corporation (except by conversion into or
exchange for stock of the Corporation ranking junior to this
Series as to dividends and upon liquidation), unless, in each
case, the full cumulative dividends (including the dividend to
be due upon payment of such dividend, distribution,
redemption, purchase or other acquisition) on all outstanding
shares of this Series shall have been, or shall
contemporaneously be, paid.
(d) In the event of any merger, consolidation,
reclassification or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such
case the shares of this Series shall at the same time be
similarly exchanged or changed in an amount per whole share
equal to the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may
be, that a holder of the Reference Package would be entitled
to receive as a result of such transaction.
(e) In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether
voluntary or involuntary, the holders of full and fractional
shares of this Series shall be entitled, before any
distribution or payment is made on any date to the holders of
the Common Stock or any other stock of the Corporation ranking
junior t.o this Series upon liquidation, to be paid in full an
amount per whole share of this Series equal to the greater of
(A) $____________(3) or (B) the aggregate amount distributed
or to be distributed prior to such date in connection with
such liquidation, dissolution or winding up to a holder of the
Reference Package (such greater amount being hereinafter
referred to as the "Liquidation Preference"), together with
accrued dividends to such distribution or payment date,
whether or not earned or declared. If such payment shall have
been made in full to all holders of shares of this Series, the
holders of shares of this Series as such shall have no right
or claim to any of the remaining assets of the Corporation.
In the event the assets of the Corporation available
for distribution to the holders of shares of this Series upon
any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, shall be insufficient to pay
in full all amounts to which such holders are entitled
pursuant to the first paragraph of this
- --------
(3)Insert an amount equal to 100 times the Exercise
Price in effect as of the Separation Time. [Note: this
footnote should remain in the final version of Exhibit B to
the Rights Agreement. The blank above would actually be
completed (and this footnote would be deleted) when a
certificate of designation is filed after the Separation
Time.]
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<PAGE> 35
Section (e), no such distribution shall be made on account of
any shares of any other class or series of Preferred Stock
ranking on a parity with the shares of this Series upon such
liquidation, dissolution or winding up unless proportionate
distributive amounts shall be paid on account of the shares of
this Series, ratably in proportion to the full distributable
amounts for which holders of all such parity shares are
respectively entitled upon such liquidation, dissolution or
winding up.
Upon the liquidation, dissolution or winding up of
the Corporation, the holders of shares of this Series then
outstanding shall be entitled to be paid out of assets of the
Corporation available for distribution to its stockholders all
amounts to which such holders are entitled pursuant to the
first paragraph of this Section (e) before any payment shall
be made to the holders of Common Stock or any other stock of
the Corporation ranking junior upon liquidation to this
Series.
For the purposes of this Section (e), the
consolidation or merger of, or binding share exchange by, the
Corporation with any other corporation shall not be deemed to
constitute a liquidation, dissolution or winding up of the
Corporation.
(f) The shares of this Series shall not be
redeemable.
(g) In addition to any other vote or consent of
stockholders required by law or by the charter, as amended, of
the Corporation, each whole share of this Series shall, on any
matter, vote as a class with any other capital stock
comprising part of the Reference Package and voting on such
matter and shall have the number of votes thereon that a
holder of the Reference Package would have.
3. The Corporation is a for-profit corporation.
4. The foregoing amendment of the certificate of incorporation was
authorized by the Board of Directors of the corporation at a meeting duly called
and held on March 18, 1998.
Date: ______________ MURFREESBORO BANCORP, INC.
By:
------------------------------
William E. Rowland, President
31
<PAGE> 36
EXHIBIT C
SUMMARY OF SHAREHOLDER PROTECTION RIGHTS PLAN
At a meeting on March 18, 1998, the Murfreesboro Bancorp, Inc. Board of
Directors adopted a Shareholder Protection Rights Plan which is similar to plans
adopted by many other bank holding companies. The purpose of the plan is to
enhance the ability of the Board of Directors to deal with acquisition proposals
in the best interests of shareholders.
What follows is a summary of the major terms of the Shareholder
Protection Rights Plan. A copy of the entire Plan may be obtained free of charge
by contacting William E. Rowland, Bank of Murfreesboro, 615 Memorial Boulevard,
Murfreesboro, Tennessee 37133, (615-890-1111).
Distribution and Transfer of Rights; Rights Certificates: The Board has
declared a dividend of one Right for each share of Common Stock outstanding on
March 18, 1998. Prior to the Separation Time referred to below, the Rights will
be evidenced by and trade with the Common Stock and will not be exercisable.
After the Separation Time, the Company will mail Rights Certificates to
shareholders, and the Rights will become transferable apart from the Common
Stock.
Separation Time: Rights will separate from the Common Stock and become
exercisable following the earlier of the (i) the date of the Flip-in Trigger
referred to below or (ii) the tenth business day (or such later date as the
Board by a two-thirds vote may decide) after any person commenced a tender offer
that would result in such person holding a total of 20% or more of the Common
Stock.
Exercise of Rights: After the Separation Time, each Right will entitle
the holder to purchase, Participating Preferred Stock designed to have economic
and voting terms similar to those of one share of Common Stock.
"Flip-in" Trigger: Upon announcement that any person has acquired 20%
or more of the outstanding Common Stock, then 10 days thereafter (or such
earlier or later day as the Board by a two-thirds vote may decide):
(i) Rights owned by the person acquiring such stock (an "Acquiring
Person") or transferees thereof will automatically become void; and
(ii) each other Right will automatically become a right to buy, for the
Exercise Price, that a number of shares of Common Stock or Participating
Preferred Stock having a market value of twice the Exercise Price.
Exchange Option: If any person acquires between 20% and 50% of the
outstanding Common Stock, the Board by a two-thirds vote may, in lieu of
allowing Rights to be exercised, require each outstanding Right to be exchanged
for one share of Common Stock or Participating Preferred Stock designed to have
economic and voting terms similar to those of one share of Common Stock.
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<PAGE> 37
"Flip-over" Trigger: After an Acquiring Person has become such, the
Company may not consolidate or merge with, or sell 50% or more of its assets or
earning power to, any person (a "Flip- over Transaction or Event") if at the
time of such merger or sale (or agreement to do any of the foregoing) the
Acquiring Person controls the Board of Directors and, in the case of a merger,
will receive different treatment than all other shareholders unless proper
provision is made so that each right would thereafter become a right to buy, for
the Exercise Price, that number of shares of common stock of such other person
having a market value of twice the Exercise Price.
Redemption: The Rights may be redeemed by the Board by a two-thirds
vote at any time until a "Flip-in" Trigger has occurred at a Redemption Price of
$0.01 per Right.
Power to Amend: The Board by a two-thirds vote may amend the Plan in
any respect until a "Flip-in" Trigger has occurred. Thereafter, the Board by a
two-thirds vote may amend the Plan in any respect not materially adverse to
Rights holders generally.
Expiration: The Rights will expire ten years from the date of their
issuance.
33
