FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
FIRST MID-ILLINOIS BANCSHARES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 37-1103704
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(State of incorporation or organization) (I.R.S. Employer
Identification No.)
1515 Charleston Avenue, P.O. Box 499, Mattoon, Illinois 61938
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None Not Applicable
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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(g) of the Act:
Common Stock Purchase Rights
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(Title of class)
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(Title of class)
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
On September 21, 1999, the Board of Directors (the "Board") of
First Mid-Illinois Bancshares, Inc. (the "Corporation") declared a
dividend distribution of one right (each a "New Right") for each
outstanding share of the common stock, par value $4.00 per share, of
the Corporation ("Common Stock") to stockholders of record at the
close of business on October 12, 1999 (the "Record Date"). Each Right
will entitle the registered holder to purchase from the Corporation
one share of Common Stock at an exercise price of $125.00, subject to
adjustment (as adjusted from time to time, the "Purchase Price"). The
description and terms of the Rights are set forth in a Rights
Agreement, dated as of September 21, 1999 (the "Rights Agreement"),
between the Corporation and Harris Trust and Savings Bank, as Rights
Agent.
Initially following the Record Date, the Rights will be attached
to all certificates representing shares of Common Stock then
outstanding, and no separate Rights Certificates will be distributed.
Unless previously redeemed by the Board in accordance with the Rights
Agreement, the Rights will separate from the Common Stock and a
"Distribution Date" will occur upon the earlier of (i) 20 days
following the Stock Acquisition Date (as defined below) or (ii) 20
days (or such later date as the Board shall determine, provided that
no deferral of such date may be made by the Board at any time during
the Special Period (as defined below)) after the date a tender or
exchange offer that would result in a person or group beneficially
owning 15% or more of the outstanding shares of Common Stock is first
published, sent or given to the Corporation's stockholders. The
"Special Period" is defined as the 180-day period following the
effectiveness of any election of directors, occurring after a public
announcement (and prior to the withdrawal or abandonment of such
announcement) by a third party of an intent or proposal to engage
(without the current and continuing concurrence of the Board) in a
transaction involving an acquisition of or business combination with
the Corporation or otherwise to become an Acquiring Person (as defined
below), which election results in a majority of the Board being
comprised of persons who were not nominated by the Board in office
immediately prior to such election.
The "Stock Acquisition Date" is defined as the earlier of (x) the
first date of public announcement by the Corporation that any person
or group (other than certain exempt persons or groups) has acquired,
or obtained the right to acquire, beneficial ownership of 15% or more
of the shares of Common Stock then outstanding or (y) the date that
any person enters into an agreement with the Corporation or any of its
subsidiaries providing for an Acquisition Transaction (as defined
below) (any person described in clause (x) or clause (y) above is
referred to as an "Acquiring Person"). None of Margaret Lumpkin Keon,
Mary Lumpkin and Richard Anthony Lumpkin or any of their respective
descendants or certain related trusts or other entities (or a group
comprised solely of such persons) will be deemed to be an Acquiring
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Person as long as all such persons beneficially own less than 40.1% of
the outstanding shares of Common Stock. An "Acquisition Transaction"
is defined as (a) a merger, consolidation or similar transaction as a
result of which stockholders of the Corporation will own less than 60%
of the outstanding shares of Common Stock or the common stock of a
publicly traded entity which controls the Corporation or into which
the Corporation has been merged or otherwise combined (based solely on
the shares of Common Stock received by such stockholders, in their
capacity as stockholders of the Corporation, pursuant to such
transactions), (b) a purchase of all or a substantial portion of the
assets of the Corporation and its subsidiaries, or (c) a purchase or
other acquisition of securities representing 15% or more of the shares
of Common Stock then outstanding.
Following the Record Date and until the Distribution Date, (i)
the Rights will be evidenced by the Common Stock certificates and will
be transferred only with such Common Stock certificates, (ii) new
Common Stock certificates issued after the Record Date will contain a
notation incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificate for Common Stock outstanding
will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
The Rights will not be exercisable until the Distribution Date
and will expire at the close of business on September 21, 2009, unless
earlier redeemed by the Corporation as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock
as of the close of business on the Distribution Date and, thereafter,
the separate Rights Certificates alone will represent the Rights.
Except as otherwise determined by the Board, only shares of Common
Stock issued prior to the Distribution Date will be issued with
Rights.
In the event (a "Flip-in Event") that any person, at any time
after the date of the Rights Agreement, becomes an Acquiring Person,
each holder of a Right thereafter will have the right to receive, upon
exercise thereof, Common Stock (or, in certain circumstances, cash,
property or other securities of the Corporation) having a value equal
to two times the Purchase Price. Notwithstanding any of the foregoing,
following the occurrence of a Flip-in Event, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by an Acquiring Person, any of its associates or
affiliates, and certain of its transferees, will be null and void.
Moreover, the Rights will not be exercisable following the first
occurrence of a Flip-in Event until such time as the Rights are no
longer redeemable by the Corporation as described below.
In the event that, at any time following the Stock Acquisition
Date, (i) the Corporation is acquired in a merger or other business
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combination transaction, or (ii) 50% or more of the Corporation's
assets or earning power is sold or transferred (each, a "Flip-over
Event"), each holder of a Right (except Rights which previously have
been voided as described above) shall thereafter have the right to
receive, upon exercise thereof, common stock or other securities of
the acquiring company having a value equal to two times the Purchase
Price.
The Purchase Price payable, and the number of shares of Common
Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time in accordance with
customary anti-dilution provisions.
With certain exceptions, no adjustment to the Purchase Price will
be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional shares will be issued.
At any time after the Rights become exercisable for Common Stock,
the Board may exchange the unexercised Rights (other than Rights owned
by any Acquiring Person which have become void), in whole or in part,
at an exchange ratio of one share of Common Stock per Right (subject
to adjustment). Notwithstanding the foregoing, no such exchange of the
Rights may be authorized by the Board during the Special Period or at
any time when the Rights are not redeemable.
The Board is empowered to redeem the Rights in whole, but not in
part, at a price of $0.01 per Right (the "Redemption Price") at any
time before the earlier of (i) the close of business on the 20th day
following the Stock Acquisition Date or (ii) the final expiration date
of the Rights. Immediately upon the action of the Board ordering
redemption of the Rights, the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption Price.
Notwithstanding the foregoing, in the event that after a public
announcement (and prior to the withdrawal or abandonment of such
announcement) by a third party of an intent or proposal to engage
(without the current and continuing concurrence of the Board) in a
transaction involving an acquisition of or business combination with
the Corporation or otherwise to become an Acquiring Person, there is
an election of directors (whether at one or more stockholder meetings
and/or pursuant to written stockholder consents) resulting in a
majority of the Board being comprised of persons who were not
nominated by the Board in office immediately prior to such election,
then following such election and for a period of 180 days (the
"Special Period"), the Rights, if otherwise then redeemable, will only
be redeemable by the Board either (1) if they have followed certain
prescribed procedures or (2) in any other case, provided that, if in
any such other case their decision regarding redemption and any
acquisition or business combination is challenged as a breach of
fiduciary duty of care or loyalty, the directors can establish the
entire fairness of such decision without the benefit of any business
judgement rule or other presumption. The procedures required under
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clause (1) include: (a) the retention of an independent financial
advisor, and the receipt by the Board of (i) the views of such advisor
regarding whether redemption of the Rights will serve the best
interests of the Corporation and its stockholders, or (ii) such
advisor's statement that it is unable to express such a view, setting
forth the reason therefor; and (b) with respect to any pending
acquisition or business combination proposal, (i) the implementation
by the Board, with the advice of its independent financial advisor, of
a process and procedures which the Board and such advisor conclude
would be most likely to result in the best value reasonably available
to stockholders, (ii) receipt of a fairness opinion from such advisor,
and the Board determining, and such advisor confirming, that it has no
reason to believe that a superior transaction is reasonably available,
and (iii) execution of a definitive transaction agreement.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Corporation, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to stockholders or to
the Corporation, stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become exercis-
able for Common Stock (or other consideration) or for common stock of
an acquiring company as set forth above.
The Rights Agreement may be amended by the Board (a) prior to the
Distribution Date, in any manner and (b) after the Distribution Date,
in order to (i) cure any ambiguity, (ii) correct or supplement
provisions which may be defective or inconsistent, (iii) make changes
which do not adversely affect the interests of holders of Rights
(other than those held by an Acquiring Person or certain related
persons) or (iv) shorten or lengthen any time period under the Rights
Agreement (including the time period governing redemption), provided
that no supplement or amendment to the Rights Agreement may be made
during the Special Period or at any time when the Rights are
nonredeemable other than supplements or amendments of the type
contemplated by clause (i) or (ii) above.
The Rights may have certain anti-takeover effects. The Rights
will cause a substantial dilution to a person or group that attempts
to acquire the Corporation unless the acquisition is conditioned on a
substantial number of Rights being acquired. The Rights should not
interfere with any merger or other business combination properly
approved by the Board.
The Rights Agreement is filed herewith as Exhibit 4.1 and is
incorporated herein by reference. The foregoing summary description of
the Rights does not purport to be complete and is qualified in its
entirety by reference to the full text of the Rights Agreement.
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ITEM 2. EXHIBITS
The following exhibits are filed as a part of this
Registration Statement.
Exhibit No. Description
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4.1 Rights Agreement, dated as of September 21, 1999,
between First Mid-Illinois Bancshares, Inc. and Harris
Trust and Savings Bank, as Rights Agent
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned hereunto duly
authorized.
FIRST MID-ILLINOIS BANCSHARES, INC.
By: /s/ William S. Rowland
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Name: William S. Rowland
Title: President
Dated: September 22, 1999
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EXHIBIT INDEX
Exhibit No. Description
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4.1 Rights Agreement, dated as of September 21, 1999,
between First Mid-Illinois Bancshares, Inc. and
Harris Trust and Savings Bank, as Rights Agent
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<PAGE>
Exhibit 4.l
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FIRST MID-ILLINOIS BANCSHARES, INC.
and
HARRIS TRUST AND SAVINGS BANK,
as Rights Agent
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Rights Agreement
Dated as of September 21, 1999
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TABLE OF CONTENTS
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Page
Section 1. Certain Definitions. . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent. . . . . . . . . . 6
Section 3. Issuance of Rights Certificates. . . . . . . . 6
Section 4. Form of Rights Certificates. . . . . . . . . . 8
Section 5. Countersignature and Registration. . . . . . . 9
Section 6. Transfer, Split-Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates. . . . . . . 9
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights. . . . . . . . . . . . . . . . . 10
Section 8. Cancellation and Destruction of Rights
Certificates. . . . . . . . . . . . . . . . . .11
Section 9. Reservation and Availability of Capital Stock. 12
Section 10. Common Stock Record Date. . . . . . . . . . . . 13
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. . . . . . . . . . . 13
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. . . . . . . . . . . . . . . . . . . 20
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. . . . . . . . . . . . 20
Section 14. Fractional Rights and Fractional Shares. . . . 22
Section 15. Rights of Action. . . . . . . . . . . . . . . . 23
Section 16. Agreement of Rights Holders. . . . . . . . . . 23
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. . . . . . . . . . . . . . . . . . 24
Section 18. Concerning the Rights Agent. . . . . . . . . . 24
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. . . . . . . . . . . . . . . . . 25
Section 20. Duties of Rights Agent. . . . . . . . . . . . . 25
Section 21. Change of Rights Agent. . . . . . . . . . . . 27
Section 22. Issuance of New Rights Certificates. . . . . . 28
Section 23. Redemption and Termination. . . . . . . . . . . 28
Section 24. Exchange. . . . . . . . . . . . . . . . . . . . 30
Section 25. Notice of Certain Events. . . . . . . . . . . . 30
Section 26. Notices. . . . . . . . . . . . . . . . . . . . 31
Section 27. Supplements and Amendments. . . . . . . . . . . 32
Section 28. Successors. . . . . . . . . . . . . . . . . . . 32
Section 29. Determinations and Actions by the Board of
Directors, etc. . . . . . . . . . . . . . . . 32
Section 30. Benefits of this Agreement. . . . . . . . . . . 33
Section 31. Severability. . . . . . . . . . . . . . . . . . 33
Section 32. Governing Law. . . . . . . . . . . . . . . . . 33
Section 33. Counterparts. . . . . . . . . . . . . . . . . . 33
Section 34. Descriptive Headings. . . . . . . . . . . . . . 33
EXHIBITS
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Exhibit A - Form of Rights Certificates
Exhibit B - Form of Summary of Rights
RIGHTS AGREEMENT
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RIGHTS AGREEMENT, dated as of September 21, 1999 (the
"Agreement"), between First Mid-Illinois Bancshares, Inc., a Delaware
corporation (the "Company"), and Harris Trust and Savings Bank, an
Illinois banking corporation (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on September 21, 1999 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company (the
"Board") authorized and declared a dividend distribution of one Right
(as hereinafter defined) for each share of common stock, par value
$4.00 per share (the "Common Stock"), of the Company outstanding at
the close of business on October 12, 1999 (the "Record Date"), and
authorized the issuance of one Right (as such number may hereafter be
adjusted pursuant to the provisions of Section 11(i) or Section 11(p)
hereof) for each share of Common Stock issued between the Record Date
(whether originally issued or delivered from the Company's treasury)
and the Distribution Date (as hereinafter defined), each Right
initially representing the right to purchase one share of Common
Stock, upon the terms and subject to the conditions hereinafter set
forth (the "Rights").
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean (x) any Person who
or which, together with all Affiliates and Associates of such Person,
shall be the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding, but shall not include (i) the Company; (ii)
any Subsidiary of the Company; (iii) any employee benefit plan of the
Company, or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to
the terms of any such plan; (iv) any Person who becomes the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding
(or, in the case of a Person described in subclauses (A) through (H)
of the following clause (vi), 40.1% or more of the shares of Common
Stock then outstanding) as a result of a reduction in the number of
shares of Common Stock outstanding due to the repurchase of shares of
Common Stock by the Company other than during the Special Period (as
defined in Section 23(c) hereof) or at a time when the rights are not
redeemable, unless and until such Person, after becoming aware that
such Person has become the Beneficial Owner of 15% or more of the then
outstanding shares of Common Stock (or, in the case of a Person
described in subclauses (A) through (H) of the following clause (vi),
40.1% or more of the then outstanding shares of Common Stock),
acquires beneficial ownership of additional shares of Common Stock
constituting one percent (1%) or more of the shares of Common Stock
then outstanding; (v) any such Person who has reported or is required
to report such ownership (but less than 20%) on Schedule 13G under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and
in effect on the date of this Agreement (or any comparable or
successor report) or on Schedule 13D under the Exchange Act (or any
comparable or successor report) which Schedule 13D does not state any
intention to or reserve the right to control or influence the
management or policies of the Company or engage in any of the actions
specified in Item 4 of such schedule (other than the disposition of
the Common Stock) and, within ten Business Days of being requested by
the Company to advise it regarding the same, certifies to the Company
that such Person acquired shares of Common Stock in excess of 14.9%
inadvertently or without knowledge of the terms of the Rights and who
or which, together with all Affiliates and Associates, thereafter does
not acquire additional shares of Common Stock while the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding;
PROVIDED, HOWEVER, that if the Person requested to so certify fails to
do so within ten Business Days, then such Person shall become an
Acquiring Person immediately after such ten-Business-Day period; or
(vi) any of the Persons described in the following subclauses (A)
through (H) (or any group comprised solely of such Persons) who or
which would be an Acquiring Person but for this proviso if but only if
all securities of the Company beneficially owned by all such Persons
in the aggregate shall constitute less than 40.1% of the then
outstanding shares of Common Stock: (A) Margaret Lumpkin Keon, any
descendant of Margaret Lumpkin Keon (including descendants by adoption
and their descendants), or any spouse, former spouse or surviving
spouse of Margaret Lumpkin Keon or any such descendants; (B) Mary
Lumpkin Sparks, any descendant of Mary Lumpkin Sparks (including
descendants by adoption and their descendants), or any spouse, former
spouse or surviving spouse of Mary Lumpkin Sparks or any such
descendants; (C) Richard Anthony Lumpkin, any descendant of Richard
Anthony Lumpkin (including descendants by adoption and their
descendants), or any spouse, former spouse or surviving spouse of
Richard Anthony Lumpkin or any such descendants(such Persons together
with the Persons described in clauses (A) and (B) being collectively
referred to as the "Family Members"); (D) any trust which is in
existence on the date of this Agreement and which has been established
by one or more Family Members and any estate of a Family Member who
died on or before the date of this Agreement (collectively defined as
the "Family Entities"); (E) any estate of a Family Member who dies
after the date hereof, or any trust established after the date hereof
by one or more Family Members or Family Entities, provided that one or
more Family Members, Family Entities or charitable organizations which
qualify as exempt organizations under Section 501(c) of the Internal
Revenue Code of 1986, as amended ("Charitable Organizations"),
collectively, are the beneficiaries of at least 50% of the
actuarially-determined beneficial interests in such estate or trust;
(F) any Charitable Organization which is established by one or more
Family Members or Family Entities (a "Family Charitable
Organization"); (G) any corporation of which a majority of the voting
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power is held, directly or indirectly, by or for the benefit of one or
more Family Members, Family Entities, estates or trusts described in
clause (E) above, or Family Charitable Organizations; and (H) any
partnership or other entity or arrangement of which a majority of the
voting interest is held, directly or indirectly, by or for the benefit
of one or more Family Members, Family Entities, estates or trusts
described in clause (D) or (E) above or Family Charitable
Organizations; or (y) any Person who or which has entered into any
agreement or arrangement with the Company or any Subsidiary of the
Company providing for an Acquisition Transaction (as defined in
Section 1(b) hereof).
(b) "Acquisition Transaction" shall mean (x) a merger,
consolidation or similar transaction involving the Company or any of
its Subsidiaries as a result of which stockholders of the Company will
own less than 60% of the outstanding shares of Common Stock of the
Company or a publicly traded entity which controls the Company or, if
appropriate, the entity into which the Company may be merged,
consolidated or otherwise combined (based solely on the shares of
Common Stock received or retained by such stockholders, in their
capacity as stockholders of the Company, pursuant to such
transaction), (y) a purchase or other acquisition of all or a
substantial portion of the assets of the Company and its Subsidiaries,
or (z) a purchase or other acquisition of securities representing 15%
or more of the shares of Common Stock then outstanding.
(c) "Act" shall mean the Securities Act of 1933, as
amended.
(d) "Affected Transaction" shall have the meaning set
forth in Section 23(c)(i)(B)(x) hereof.
(e) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act.
(f) A Person shall be deemed the "Beneficial Owner"
of, and shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, owns or has the
right to acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon
the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; PROVIDED, HOWEVER, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any of
such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, or (B)
securities issuable upon exercise of Rights at any time prior to
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the occurrence of a Triggering Event (as hereinafter defined), or
(C) securities issuable upon exercise of Rights from and after
the occurrence of a Triggering Event which Rights were acquired
by such Person or any of such Person's Affiliates or Associates
prior to the Distribution Date (as hereinafter defined) or
pursuant to Section 3(a) or Section 22 hereof (the "Original
Rights") or pursuant to Section 11(i) or Section 11(p) hereof in
connection with an adjustment made with respect to any Original
Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to vote or dispose of or has "beneficial ownership" of (as
determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or not in
writing; PROVIDED, HOWEVER, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security
under this subparagraph (ii) as a result of an agreement,
arrangement or understanding (whether or not in writing) to vote
such security if such agreement, arrangement or understanding:
(A) arises solely from a revocable proxy or consent given in
response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable provisions of the
General Rules and Regulations under the Exchange Act, and (B) is
not also then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly
or indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy
as described in the proviso to subparagraph (ii) of this
paragraph (f)) or disposing of any voting securities of the
Company; PROVIDED, HOWEVER, that nothing in this paragraph (f)
shall cause a Person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "beneficially
own," any securities acquired or which such Person has the right
to acquire through such Person's participation in good faith in a
firm commitment underwriting until the expiration of forty days
after the date of such acquisition.
(g) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State
of Illinois are authorized or obligated by law or executive order to
close.
(h) "Close of business" on any given date shall mean
5:00 P.M., Mattoon, Illinois time, on such date; PROVIDED, HOWEVER,
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that if such date is not a Business Day, it shall mean 5:00 P.M.,
Mattoon, Illinois time, on the next succeeding Business Day.
(i) "Common Stock" shall mean the common stock, par
value $4.00 per share, of the Company, except that "Common Stock" when
used with reference to any Person other than the Company shall mean
the capital stock of such Person with the greatest voting power, or
the equity securities or other equity interest having power to control
or direct the management, of such Person.
(j) "Common Stock Equivalents" shall have the meaning
set forth in Section 11(a) (iii) hereof.
(k) "Current Market Price" shall have the meaning set
forth in Section 11(d) hereof.
(l) "Current Value" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(m) "Distribution Date" shall have the meaning set
forth in Section 3(a) hereof.
(n) "Equivalent Common Stock" shall have the meaning
set forth in Section 11(b) hereof.
(o) "Exchange Act" shall have the meaning set forth in
Section 1(a) hereof.
(p) "Exchange Ratio" shall have the meaning set forth
in Section 24(a) hereof.
(q) "Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(r) "Final Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(s) "Interest" shall have the meaning set forth in
Section 23(c)(i)(B)(x) hereof.
(t) "Person" shall mean any individual, firm,
corporation, partnership, limited liability company, limited liability
partnership, trust, syndicate or other entity and includes, without
limitation, an unincorporated group of persons who, by formal or
informal agreement or arrangement (whether or not in writing), have
embarked on a common purpose or act.
(u) "Principal Party" shall have the meaning set forth
in Section 13(b) hereof.
(v) "Purchase Price" shall have the meaning set forth
in Section 4(a) hereof.
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(w) "Record Date" shall have the meaning set forth in
the WHEREAS clause at the beginning of this Agreement.
(x) "Rights" shall have the meaning set forth in the
WHEREAS clause at the beginning of this Agreement.
(y) "Rights Agent" shall have the meaning set forth in
the parties clause at the beginning of this Agreement.
(z) "Rights Certificate" shall have the meaning set
forth in Section 3(a) hereof.
(aa) "Rights Dividend Declaration Date" shall have the
meaning set forth in the WHEREAS clause at the beginning of this
Agreement.
(bb) "Section 11 (a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(cc) "Section 13 Event" shall mean any event described
in clauses (x), (y) or (z) of Section 13(a) hereof.
(dd) "Special Period" shall have the meaning set forth
in Section 23(c) hereof.
(ee) "Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(ff) "Stock Acquisition Date" shall mean the earlier of
(i) the first date of public announcement by the Company that an
Acquiring Person has become such pursuant to clause (x) of the
definition of Acquiring Person, and (ii) the date that an Acquiring
Person has become such pursuant to clause (y) of the definition of
Acquiring Person.
(gg) "Subsidiary" shall mean, with reference to any
Person, any corporation or other entity of which an amount of voting
securities (or other ownership interests having ordinary voting power)
sufficient to elect at least a majority of the directors (or other
persons performing similar functions) of such corporation or other
entity is directly or indirectly beneficially owned or otherwise
controlled by such Person.
(hh) "Substitution Period" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(ii) "Trading Day" shall have the meaning set forth in
Section 11(d) hereof.
(jj) "Transaction" shall have the meaning set forth in
Section 23(c)(i)(B)(x) hereof.
6
(kk) "Triggering Event" shall mean any Section
11(a)(ii) Event or any Section 13 Event.
(ll) "Value Enhancement Procedures" shall mean (i) the
selection by the Board of an independent financial advisor (the
"Independent Advisor") from among financial advisors which have
established expertise in advising on mergers, acquisitions and related
matters and have no Interest relating to an Affected Transaction, and
have not during the preceding year provided services to, been engaged
by or been a financing source for any other party to an Affected
Transaction or any Affiliate of any such party or of any director
(other than the Company and its Subsidiaries); (ii) whether or not
there is a then-pending Affected Transaction, the receipt by the Board
from its Independent Advisor of (A) such advisor's view (expressed in
such form and subject to such qualifications and limitations as the
Independent Advisor deems appropriate) regarding whether redemption of
the Rights will serve the best interests of the Company and its
stockholders or (B) such advisor's statement that it is unable to
express such a view, setting forth the reasons therefor; and (iii) if
there is a then-pending Affected Transaction, (A) the establishment
and implementation by the Board, with the advice of its Independent
Advisor, of a process and procedures which the Board and such advisor
conclude would be most likely to result in the best value reasonably
available to stockholders (regardless of whether such Affected
Transaction involves a "sale of control" or "break-up" of the Company
for Delaware law purposes), (B) the Board (x) receiving the opinion of
its Independent Advisor, in customary form and content for
transactions of the type involved, that the Affected Transaction is
fair to the Company's stockholders from a financial point of view and
(y) determining, and the Independent Advisor confirming, that it has
no reason to believe that a superior transaction is reasonably
available for the benefit of the Company's stockholders, and (C) the
execution of a definitive transaction agreement and other definitive
documentation necessary to effect the Affected Transaction.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof, shall
prior to the Distribution Date also be the holders of the Common
Stock) in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company may from
time to time appoint such co-rights agents as it may deem necessary or
desirable.
Section 3. ISSUANCE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the close of business on
the twentieth day after the Stock Acquisition Date (or, if the
twentieth day after the Stock Acquisition Date occurs before the
Record Date, the close of business on the Record Date), or (ii) the
close of business on the twentieth day (or such specified or
unspecified later date as the Board shall determine, PROVIDED,
7
HOWEVER, that no deferral of a Distribution Date by the Board pursuant
to this clause (ii) may be made at any time during the Special Period)
after the date that a tender or exchange offer by any Person (other
than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan) is first published or sent or
given within the meaning of Rule 14d-2 (a) of the General Rules and
Regulations under the Exchange Act, if upon consummation thereof, such
Person would be the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding (the earlier of (i) and (ii) being
herein referred to as the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of paragraphs (b) and (c) of this
Section 3) by the certificates for the Common Stock registered in the
names of the holders thereof (which certificates for Common Stock
shall be deemed also to be certificates for Rights) and not by
separate certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common Stock
(including a transfer to the Company). As soon as practicable after
the Distribution Date, the Rights Agent will send at the expense of
the Company and by first-class, insured, postage prepaid mail, to each
record holder of the Common Stock as of the close of business on the
Distribution Date, at the address of such holder shown on the records
of the Company, one or more right certificates, substantially in the
form of EXHIBIT A hereto (the "Rights Certificates"), evidencing one
Right for each share of Common Stock so held, subject to adjustment as
provided herein. In the event that an adjustment in the number of
Rights per share of Common Stock has been made pursuant to Section
11(i) or Section 11(p) hereof, at the time of distribution of the
Rights Certificates, the Company shall not be required to issue Rights
Certificates evidencing fractional rights, but may, in lieu thereof,
make the necessary and appropriate rounding adjustments (in accordance
with Section 14(a) hereof) so that Rights Certificates representing
only whole numbers of Rights are distributed and cash is paid in lieu
of any fractional Rights. As of and after the Distribution Date, the
Rights will be evidenced solely by such Rights Certificates.
(b) As soon as practicable after the Record Date, the
Company will send a copy of a Summary of Rights, substantially in the
form attached as EXHIBIT B (the "Summary of Rights"), by first-class,
postage prepaid mail, to each record holder of Common Stock as of the
close of business on the Record Date, at the address of such holder
then shown on the records of the Company. With respect to
certificates for the Common Stock outstanding as of the Record Date,
as set forth in paragraph (a) above, until the earlier of the
Distribution Date or the Expiration Date, the Rights will be evidenced
by such certificates for the Common Stock with or without a copy of
the Summary of Rights attached, and the registered holders of the
Common Stock shall also be the registered holders of the associated
Rights. Until the earlier of the Distribution Date or the Expiration
Date, the transfer of any certificates representing shares of Common
Stock in respect of which Rights have been issued shall also
8
constitute the transfer of the Rights associated with such shares of
Common Stock.
(c) Rights shall be issued in respect of all shares of
Common Stock which are issued (whether originally issued or from the
Company's treasury) after the Record Date but prior to the earlier of
the Distribution Date or the Expiration Date, and to the extent
provided in Section 22 hereof, in respect of shares of Common Stock
issued after the Distribution Date and prior to the Expiration Date.
Certificates representing such shares of Common Stock shall also be
deemed to be certificates for Rights, and shall, as promptly as
practicable following the Record Date, bear the following legend:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES
THE HOLDER HEREOF TO CERTAIN RIGHTS AS SET FORTH
IN THE RIGHTS AGREEMENT BETWEEN FIRST MID-ILLINOIS
BANCSHARES, INC. (THE "COMPANY") AND THE RIGHTS
AGENT THEREUNDER, DATED AS OF SEPTEMBER 21, 1999,
AS THE SAME MAY BE AMENDED, RESTATED, RENEWED OR
EXTENDED FROM TIME TO TIME (THE "RIGHTS
AGREEMENT"), THE TERMS OF WHICH ARE HEREBY
INCORPORATED HEREIN BY REFERENCE AND A COPY OF
WHICH IS ON FILE AT THE PRINCIPAL OFFICES OF THE
COMPANY. UNDER CERTAIN CIRCUMSTANCES, AS SET
FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE
EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO
LONGER BE EVIDENCED BY THIS CERTIFICATE. THE
COMPANY WILL MAIL TO THE HOLDER OF THIS
CERTIFICATE A COPY OF THE RIGHTS AGREEMENT, AS IN
EFFECT ON THE DATE OF MAILING, WITHOUT CHARGE,
PROMPTLY AFTER RECEIPT OF A WRITTEN REQUEST
THEREFOR. UNDER CERTAIN CIRCUMSTANCES SET FORTH
IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR
BENEFICIALLY OWNED BY, ANY PERSON WHO IS, WAS OR
BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR
ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY
OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT
HOLDER, MAY BECOME NULL AND VOID.
With respect to such certificates containing the foregoing legend,
until the earlier of (i) the Distribution Date or (ii) the Expiration
Date, the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone and
registered holders of Common Stock shall also be the registered
holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.
9
Section 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election
to purchase and of assignment to be printed on the reverse thereof)
shall each be substantially in the form attached hereto as EXHIBIT A
and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable
law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from
time to time be listed, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the Record
Date and on their face shall entitle the holders thereof to purchase
such number of Common Stock as shall be set forth therein at the price
set forth therein (such exercise price per share, as adjusted from
time to time hereunder, the "Purchase Price"), but the amount and type
of securities purchasable upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided
herein.
(b) Any Rights Certificate issued pursuant to Section
3(a), Section 11(i) or Section 22 hereof that represents Rights
beneficially owned by: (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding (whether or not in
writing) regarding the transferred Rights or (B) a transfer which the
Board, in its sole discretion, has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect
avoidance of the provisions of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent
feasible) the following legend:
THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID
10
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(E) OF
THE RIGHTS AGREEMENT.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its President or
any Vice President, either manually or by facsimile signature, and
shall have affixed thereto the Company's seal or a facsimile thereof
which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Rights
Certificates shall be countersigned by an authorized signatory of the
Rights Agent, either manually or by facsimile signature, and shall not
be valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Rights Certificates
shall cease to be such officer of the Company before countersignature
by an authorized signatory of the Rights Agent and issuance and
delivery by the Company, such Rights Certificates, nevertheless, may
be countersigned by an authorized signatory of the Rights Agent and
issued and delivered by the Company with the same force and effect as
though the person who signed such Rights Certificates had not ceased
to be such officer of the Company; and any Rights Certificates may be
signed on behalf of the Company by any person who, at the actual date
of the execution of such Rights Certificate, shall be a proper officer
of the Company to sign such Rights Certificate, although at the date
of the execution of this Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent
will keep, or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the
Rights Certificates, the number of Rights evidenced on its face by
each of the Rights Certificates and the date of each of the Rights
Certificates.
Section 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF
RIGHTS CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS
CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section
7(e) and Section 14 hereof, at any time after the close of business on
the Distribution Date, and at or prior to the close of business on the
Expiration Date, any Rights Certificate or Certificates (other than
Rights Certificates representing Rights that may have been exchanged
pursuant to Section 24 hereof) may be transferred, split up, combined
or exchanged for another Rights Certificate or Certificates, entitling
the registered holder to purchase a like number of shares of Common
Stock (or, following the occurrence of a Triggering Event, other
securities, cash or other assets, as the case may be) as the Rights
11
Certificate or Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up, combined or
exchanged, with the forms of assignment and certificate contained
therein duly executed, at the principal office or offices of the
Rights Agent designated for such purpose. Neither the Rights Agent
nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights Certificate
until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of
such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall, subject to
Section 4(b), Section 7(e), Section 14 hereof and Section 24 hereof,
countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment from the holder of a
Rights Certificate of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the
Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION
DATE OF RIGHTS.
(a) Subject to Section 7(e) hereof, the registered
holder of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein including, without
limitation, the restrictions on exercisability set forth in Section 9
(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or in part
at any time after the Distribution Date upon surrender of the Rights
Certificate, with the form of election to purchase and the certificate
contained therein duly executed, to the Rights Agent at the principal
office or offices of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price with respect to
the total number of shares of Common Stock (or, following the
occurrence of a Triggering Event, other securities, cash or other
12
assets, as the case may be) as to which such surrendered Rights are
then exercisable, at or prior to the earliest of (i) 5:00 P.M.,
Mattoon, Illinois time, on September 21, 2009 (such date, the "Final
Expiration Date"), or (ii) the time at which all of the Rights are
redeemed or exchanged as provided in Section 23 or Section 24 hereof,
respectively (the earliest of (i) and (ii) being herein referred to as
the "Expiration Date").
(b) The Purchase Price for each share of Common Stock
pursuant to the exercise of a Right shall initially be $125.00, and
shall be subject to adjustment from time to time as provided in
Section 11 and Section 13(a) hereof and shall be payable in accordance
with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to
each Right so exercised, of the Purchase Price (as such amount may be
reduced pursuant to Section 11(a)(iii) hereof) per share of Common
Stock (or other securities, cash or other assets, as the case may be)
to be purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to Section
20(k) hereof, thereupon promptly (i) (A) requisition from any transfer
agent of the shares of Common Stock (or make available, if the Rights
Agent is the transfer agent for such shares) certificates for the
total number of shares of Common Stock to be purchased, and the
Company hereby irrevocably authorizes its transfer agent to comply
with all such requests, or (B) if the Company shall have elected to
deposit the total number of shares of Common Stock issuable upon
exercise of the Rights hereunder with a depositary agent, requisition
from the depositary agent depositary receipts representing such number
of shares of Common Stock as are to be purchased (in which case
certificates for the shares of Common Stock represented by such
receipts shall be deposited by the transfer agent with the depositary
agent), and the Company will direct the depositary agent to comply
with such request, (ii) requisition from the Company the amount of
cash, if any, to be paid in lieu of fractional shares in accordance
with Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or, upon the
order of the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, and (iv)
after receipt thereof, deliver such cash, if any, to or upon the order
of the registered holder of such Rights Certificate. The payment of
the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) shall be made in cash or by certified bank check or
bank draft payable to the order of the Company. In the event that the
Company is obligated to issue other securities of the Company, pay
cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such
other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate. The
Company reserves the right to require prior to the occurrence of a
13
Triggering Event that, upon any exercise of Rights, a number of Rights
be exercised so that only whole shares of Common Stock would be
issued.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby,
a new Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered holder of such
Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14
hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii)
Event, any Rights beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Affiliate or Associate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Affiliate or
Associate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding (whether or not in
writing) regarding the transferred Rights or (B) a transfer which the
Board has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section
7(e), shall become null and void without any further action and no
holder of such Rights shall have any rights whatsoever with respect to
such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure
that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights
Certificates or any other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated
to undertake any action with respect to a registered holder of a
Rights Certificate upon the occurrence of any purported assignment or
exercise as set forth in this Section 7 unless such registered holder
shall have (i) completed and signed the certificate contained in the
form of assignment or election to purchase set forth on the reverse
side of the Rights Certificate surrendered for such assignment or
exercise, and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS
CERTIFICATES. All Rights Certificates surrendered for the purpose of
14
exercise, transfer, split-up, combination or exchange shall, if
surrendered to the Company or any of its agents, be delivered to the
Rights Agent for cancellation or in canceled form, or, if surrendered
to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any other Rights
Certificate purchased or acquired by the Company otherwise than upon
the exercise thereof. The Rights Agent shall deliver all canceled
Rights Certificates to the Company.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized and
unissued shares of Common Stock (or, following the occurrence of a
Triggering Event, out of its authorized and issued shares held in its
treasury), the number of shares of Common Stock that, as provided in
this Agreement including Section 11(a)(iii) hereof, will be sufficient
to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Common Stock (or,
following the occurrence of a Triggering Event, other securities, as
the case may be) issuable and deliverable upon the exercise of the
Rights may be listed on any national securities exchange, the Company
shall use all reasonable efforts to cause, from and after such time as
the Rights become exercisable, all shares reserved for such issuance
to be listed on such exchange upon official notice of issuance upon
such exercise.
(c) The Company shall use its reasonable best efforts
to (i) file, as soon as practicable following the earliest date after
the first occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section 11 (a)(iii)
hereof, or as soon as is required by law following the Distribution
Date, as the case may be, a registration statement on an appropriate
form under the Act, with respect to the Common Stock or other
securities purchasable upon exercise of the Rights, (ii) cause such
registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which
the Rights are no longer exercisable for such securities, and (B) the
date of the expiration of the Rights. The Company will also take such
action as may be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in connection with
the excercisibility of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days after the
date set forth in clause (i) of the first sentence of this Section
9(c), the excercisibility of the Rights in order to prepare and file
15
such registration statement and permit it to become effective. Upon
any such suspension, the Company shall issue a public announcement
stating that the excercisibility of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. In addition, if the Company shall
determine that a registration statement is required in other
circumstances following the Distribution Date, the Company similarly
may temporarily suspend the excercisibility of the Rights until such
time as a registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been obtained, or
the exercise thereof shall not be permitted under applicable law, or a
registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all shares of
Common Stock (or, following the occurrence of a Triggering Event,
other securities, as the case may be) delivered upon exercise of
Rights shall at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the issuance or
delivery of the Rights Certificates and of any certificates for a
number of shares of Common Stock (or other securities, as the case may
be) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Rights Certificates to a Person other
than, or the issuance or delivery of a number of shares of Common
Stock (or other securities, as the case may be) in a name other than
that of the registered holder of the Rights Certificates evidencing
Rights surrendered for exercise or to issue or deliver any
certificates for a number of shares of Common Stock (or other
securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall
have been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
Section 10 COMMON STOCK RECORD DATE. Each person in whose
name any certificate for a number of shares of Common Stock (or other
securities, as the case may be) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record
of such shares of Common Stock (or other securities, as the case may
be) 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 Purchase Price (and all applicable
transfer taxes) was made; PROVIDED, HOWEVER, that if the date of such
surrender and payment is a date upon which the Common Stock (or other
16
securities, as the case may be) transfer books of the Company are
closed, such Person shall be deemed to have become the record holder
of such shares (fractional or otherwise) on, and such certificate
shall be dated, the next succeeding Business Day on which the Common
Stock (or other securities, as the case may be) transfer books of the
Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Rights Certificate, as such, shall not be
entitled to any rights of a stockholder of the Company with respect to
shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Company,
except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND
OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and
kind of shares, or fractions thereof, purchasable upon exercise of
each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any
time after the date of this Agreement (A) declare a dividend
on the Common Stock payable in shares of Common Stock, (B)
subdivide or split the outstanding Common Stock, (C) combine
or consolidate the outstanding Common Stock into a smaller
number of shares, or (D) issue any shares of its capital
stock in a reclassification of the Common Stock (including
any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this
Section 11(a) and Section 7(e) hereof, the Purchase Price in
effect at the time of the record date for such dividend or
of the effective date of such subdivision, split,
combination, consolidation or reclassification, and the
number and kind of shares of Common Stock (or other capital
stock, as the case may be,) issuable on such date, shall be
proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate
number and kind of shares of Common Stock or capital stock,
as the case may be, which, if such Right had been exercised
immediately prior to such date (whether or not such Right
was then exercisable) and at a time when the transfer books
for the Common Stock (or other capital stock, as the case
may be) of the Company were open, such holder would have
owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, split, combination,
consolidation or reclassification. If an event occurs which
would require an adjustment under both this Section 11(a)(i)
and Section 11(a)(ii) hereof, the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be
17
made prior to, any adjustment required pursuant to Section
11(a)(ii) hereof.
(ii) In the event any Person shall, at any time
after the Rights Dividend Declaration Date, become an
Acquiring Person, unless the event causing such Person to
become an Acquiring Person is a transaction set forth in
Section 13(a) hereof, then, promptly following the
occurrence of such event, proper provision shall be made so
that each holder of a Right (except as provided below and in
Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, such
number of shares of Common Stock of the Company as shall
equal the result obtained by (x) multiplying the then
current Purchase Price by the then number of shares of
Common Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event
(whether or not such Right was then issued or exercisable),
and (y) dividing that product (which, following such first
occurrence, shall thereafter be referred to as the "Purchase
Price" for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price (determined
pursuant to Section 11(d) hereof) per share of Common Stock
on the date of such first occurrence (such number of shares,
the "Adjustment Shares").
(iii) In the event that the number of shares
of Common Stock which are authorized by the Company's
Restated Certificate of Incorporation, as amended (the
"Restated Certificated of Incorporation"), but which are not
outstanding or reserved for issuance for purposes other than
upon exercise of the Rights, is not sufficient to permit the
exercise in full of the Rights in accordance with the
foregoing subparagraph (ii) of this Section 11(a), the
Company, acting by resolution of the Board, shall (A)
determine the value of the Adjustment Shares issuable upon
the exercise of a Right (the "Current Value"), and (B) with
respect to each Right (subject to Section 7(e) hereof), make
adequate provision to substitute for the Adjustment Shares,
upon the exercise of such Right and payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Stock or other equity securities
of the Company (including, without limitation, shares or
units of shares of preferred stock or other securities which
the Board has deemed to have essentially the same value or
economic rights as shares of Common Stock (such shares being
referred to as "Common Stock Equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value
equal to the Current Value, where such aggregate value has
been determined by the Board based upon the advice of a
18
nationally recognized investment banking firm selected by
the Board; PROVIDED, HOWEVER, that if the Company shall not
have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the later
of (x) the first occurrence of a Section 11(a)(ii) Event and
(y) the date on which the Company's right of redemption
pursuant to Section 23(a) hereof expires (the later of (x)
and (y) being referred to herein as the "Section 11(a)(ii)
Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, shares of
Common Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate
value equal to the Spread. For purposes of the preceding
sentence, the term "Spread" shall mean the excess of (i) the
Current Value over (ii) the Purchase Price. If the Board
determines in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the thirty
(30) day period set forth above may be extended to the
extent necessary, but not more than ninety (90) days after
the Section 11(a)(ii) Trigger Date, in order that the
Company may seek stockholder approval for the authorization
of such additional shares (such thirty (30) day period, as
it may be extended, is herein called the "Substitution
Period"). To the extent that action is to be taken pursuant
to the first and/or third sentences of this Section
11(a)(iii), the Company (1) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly
to all outstanding Rights, and (2) may suspend the
excercisibility of the Rights until the expiration of the
Substitution Period in order to seek such stockholder
approval for such authorization of additional shares and/or
to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value
thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the
excercisibility of the Rights has been temporarily
suspended, as well as a public announcement at such time as
the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of each Adjustment Share shall
be the Current Market Price (as defined in Section 11(d)
hereof) per share of the Common Stock on the Section
11(a)(ii) Trigger Date, and the per share or per unit value
of any Common Stock Equivalent shall be deemed to equal the
Current Market Price per share of the Common Stock on such
date. Notwithstanding the foregoing provisions of this
subparagraph (iii), in the event that, pursuant to this
subparagraph (iii), upon the exercise of the Rights the
Company shall be required to deliver value in any form other
than shares of Common Stock, such value shall be delivered
only to the extent and at the time that, if required, the
19
approval by appropriate financial regulatory authorities
with supervisory jurisdiction over the Company or its
financial institution Subsidiaries of such delivery of such
value shall have been obtained.
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of Common
Stock entitling them to subscribe for or purchase (for a period
expiring within forty-five (45) calendar days after such record date)
Common Stock (or shares having the same rights, privileges and
preferences as the shares of Common Stock ("Equivalent Common Stock"))
or securities convertible into Common Stock or Equivalent Common Stock
at a price per share of Common Stock or per share of Equivalent Common
Stock (or having a conversion price per share, if a security
convertible into Common Stock or Equivalent Common Stock) less than
the Current Market Price (as determined pursuant to Section 11(d)
hereof) per share of Common Stock on such record date, the Purchase
Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding on such record date, plus the
number of shares of Common Stock which the aggregate subscription or
offering price of the total number of shares of Common Stock and/or
Equivalent Common Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such Current Market Price, and the denominator of which
shall be the number of shares of Common Stock outstanding on such
record date, plus the number of additional shares of Common Stock
and/or Equivalent Common Stock to be offered for subscription or
purchase (or into which the convertible securities so to be offered
are initially convertible). In case such subscription price may be
paid by delivery of consideration, part or all of which may be in a
form other than cash, the value of such consideration shall be as
determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights. Shares of
Common Stock owned by or held for the account of the Company shall not
be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is
fixed, and in the event that such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in
which the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend out of
the earnings or retained earnings of the Company), assets (other than
a dividend payable in Common Stock, but including any dividend payable
in stock other than Common Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase
20
Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Current
Market Price (as determined pursuant to Section 11(d) hereof) per
share of Common Stock on such record date, less the fair market value
(as determined in good faith by the Board, whose determination shall
be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to a share of Common Stock, and the
denominator of which shall be such Current Market Price (as determined
pursuant to Section 11(d) hereof) per share of Common Stock. Such
adjustments shall be made successively whenever such a record date is
fixed, and in the event that such distribution is not so made, the
Purchase Price shall be adjusted to be the Purchase Price which would
have been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii) hereof,
the Current Market Price per share of Common Stock on any date shall
be deemed to be the average of the daily closing prices per share of
such Common Stock for the thirty (30) consecutive Trading Days (as
such term is hereinafter defined) immediately prior to such date, and
for purposes of computations made pursuant to Section 11(a)(iii)
hereof, the "Current Market Price" per share of Common Stock on any
date shall be deemed to be the average of the daily closing prices per
share of such Common Stock for the ten (10) consecutive Trading Days
immediately following such date; PROVIDED, HOWEVER, that in the event
that the Current Market Price per share of the Common Stock is
determined during a period following the announcement by the issuer of
such Common Stock of (A) a dividend or distribution on such Common
Stock payable in shares of such Common Stock or securities convertible
into shares of such Common Stock (other than the Rights), or (B) any
subdivision, combination, consolidation, reverse stock split or
reclassification of such Common Stock, and the ex-dividend date for
such dividend or distribution, or the record date for such
subdivision, combination, consolidation, reverse stock split or
reclassification shall not have occurred prior to the commencement of
the requisite thirty (30) Trading Day or ten (10) Trading Day period,
as set forth above, then, and in each such case, the Current Market
Price shall be properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the
New York Stock Exchange or, if the shares of Common Stock are not
listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system or
as quoted by the Nasdaq National Market with respect to securities
listed or admitted to trading on another national securities exchange
or quoted by the Nasdaq National Market, respectively, or if the
21
shares of Common Stock are not listed or admitted to trading on any
national securities exchange or quoted by the Nasdaq National Market,
the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported
by The Nasdaq Stock Market or such other quotation system then in use,
or, if on any such date the shares of Common Stock are not quoted by
any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the
Common Stock selected by the Board. If on any such date the Common
Stock is not publicly held and is not so listed, admitted to trading
or quoted, and no market maker is making a market in the Common Stock,
Current Market Price shall mean the fair value of such shares on such
date as determined in good faith by the Board, which determination
shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. The term "Trading Day" shall
mean a day on which the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading is
open for the transaction of business or, if the shares of Common Stock
are not listed or admitted to trading on any national securities
exchange, a Business Day.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease in the Purchase Price
of at least one percent (1%); PROVIDED, HOWEVER, that any adjustments
which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest ten-thousandth of a share of Common
Stock or other share, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three (3)
years from the date of the transaction which mandates such adjustment,
or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of
capital stock other than Common Stock, thereafter the number of such
other shares so receivable upon exercise of any Right and the Purchase
Price thereof (or the number of Rights) shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Stock
contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k)
and (m) hereof, and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Common Stock shall apply on like terms to
any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase Price,
the number of shares of Common Stock purchasable from time to time
22
hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i) hereof, upon each adjustment of
the Purchase Price as a result of the calculations made in Sections
11(b) and (c) hereof, each Right outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of shares of
Common Stock (calculated to the nearest ten-thousandth) obtained by
(i) multiplying (x) the number of shares covered by a Right
immediately prior to this adjustment, by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price, and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
lieu of any adjustment in the number of shares of Common Stock
purchasable upon the exercise of a Right. Each of the Rights
outstanding after the adjustment in the number of Rights shall be
exercisable for the number of shares of Common Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right held
of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one-ten-
thousandth of a Right) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to
be made. This record date may be the date on which the Purchase Price
is adjusted or any day thereafter, but, if the Rights Certificates
have been issued, shall be at least ten (10) days later than the date
of the public announcement. If Rights Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record
date Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result
of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which
such holders shall be entitled after such adjustment. Rights
Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
23
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of shares of Common Stock issuable upon
the exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per one
one-hundredth of a share and the number of one one-hundredths of a
share which were expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated value, if
any, of the number of shares of Common Stock issuable upon exercise of
the Rights, the Company shall use all reasonable efforts to take any
corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue,
fully paid and nonassessable, such number of shares of Common Stock at
such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuance to the holder of any
Right exercised after such record date of the number of shares of
Common Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the number of shares
of Common Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise on the basis of the Purchase Price
in effect prior to such adjustment; PROVIDED, HOWEVER, that the
Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of
the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
adjustments in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that in
its good faith judgment the Board shall determine to be advisable in
order that any (i) consolidation or subdivision of the Common Stock,
(ii) issuance wholly for cash of any shares of Common Stock at less
than the Current Market Price, (iii) issuance wholly for cash of
shares of Common Stock or securities which by their terms are
convertible into or exchangeable for shares of Common Stock, (iv)
stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to
holders of its Common Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall
not, at any time after the Distribution Date, (i) consolidate with any
other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), (ii) merge with or into any
other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), or (iii) sell or transfer
24
(or permit any Subsidiary to sell or transfer), in one transaction, or
a series of related transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if (x)
at the time of or immediately after such consolidation, merger, sale
or transfer there are any rights, warrants or other instruments or
securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to
be afforded by the Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger, sale or transfer, the
stockholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or
any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or
Section 27 hereof, take (or permit any Subsidiary to take) any action
if at the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the
benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after
the Rights Dividend Declaration Date and prior to the Distribution
Date (i) declare a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock, or (iii) combine or consolidate the
outstanding shares of Common Stock into a smaller number of shares,
the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to the
Distribution Date (or issued or delivered on or after the Distribution
Date pursuant to Section 22), shall be proportionately adjusted so
that the number of Rights thereafter associated with each share of
Common Stock following any such event shall equal the result obtained
by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common
Stock outstanding immediately following the occurrence of such event.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR
NUMBER OF SHARES. Whenever an adjustment is made as provided in
Section 11 and Section 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the
Common Stock, a copy of such certificate, and (c) if a Distribution
Date has occurred, mail or cause the Rights Agent to mail a brief
25
summary thereof to each holder of a Rights Certificate in accordance
with Section 26 hereof. Failure to promptly prepare or file such
certificate, or to mail a brief summary thereof, shall not affect the
legality or validity of any adjustment made pursuant to Section 11 or
Section 13 hereof. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein
contained and shall not be obligated or responsible for calculating
any adjustments nor shall it be deemed to have knowledge of any such
adjustment unless and until it shall have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER.
(a) In the event that, on or after the Stock
Acquisition Date, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person or Persons
(other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or merger,
(y) any Person or Persons (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the Company
shall be the continuing or surviving corporation of such consolidation
or merger, or (z) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets or earning
power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole and calculated on the
basis of the Company's most recent regularly prepared financial
statements) to any Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions each of which
complies with Section 11(o) hereof), then, and in each such case,
proper provision shall be made so that: (i) each holder of a Right,
except as provided in Section 7(e) hereof, shall, from and after the
later of (A) the date of the first occurrence of any such Section 13
Event or (B) the date of the expiration of the period within which the
Rights may be redeemed pursuant to Section 23 hereof (as the same may
be amended), have the right to receive, upon the exercise thereof at
the then current Purchase Price in accordance with the terms of this
Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable shares of Common Stock of the
Principal Party (as such term is hereinafter defined), not subject to
any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1) multiplying
the then current Purchase Price by the number of shares of Common
Stock for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has
occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such shares for which a Right was
exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event by the Purchase Price in effect immediately prior to
such first occurrence), and (2) dividing that product (which,
26
following the first occurrence of a Section 13 Event, shall be
referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50% of the Current Market Price
(determined pursuant to Section 11(d) hereof) per share of the Common
Stock of such Principal Party on the date of consummation of such
Section 13 Event; (ii) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following
the first occurrence of a Section 13 Event; (iv) such Principal Party
shall take such steps (including, but not limited to, the reservation
of a sufficient number of shares of its Common Stock) in connection
with the consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no effect following
the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a), the
Person that is the issuer of any securities into which shares of
Common Stock of the Company are converted, changed or exchanged
in such merger or consolidation, or if no securities are so
issued, the Person that is the other party to such merger or
consolidation, or if the other party to the merger does not
survive the merger, the Person that does survive the merger
(including the Company, if it survives); and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13 (a), the Person
that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions;
PROVIDED, HOWEVER, that in any such case, (1) if the Common Stock of
such Person is not at such time and has not been continuously over the
preceding twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so
registered, "Principal Party" shall refer to such other Person; and
(2) if the Common Stock of such Person is not and has not been so
registered and such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Stocks of two or more of which are
and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the
greatest aggregate market value.
27
(c) The Company shall not consummate any such Section
13 Event unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company
and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement confirming that the requirements
of Section 13(a) and Section 13(b) hereof shall promptly be performed
in accordance with their terms and further providing that, as soon as
practicable after the date of any such Section 13 Event, the Principal
Party will
(i) prepare and file a registration statement under
the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form,
and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Act) until the Expiration
Date; and
(ii) take all such other action as may be necessary to
enable the Principal Party to issue the securities purchasable
upon exercise of the Rights, including but not limited to the
registration or qualification of such securities under all
requisite securities laws of jurisdictions of the various states
and the listing of such securities on such exchanges and trading
markets as may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 (or any successor form) under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence
of a Section 11(a)(ii) Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the manner
described in Section 13(a).
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as provided
in Section 11(i) and Section 11(p) hereof, or to distribute Rights
Certificates which evidence fractional Rights. In lieu of any such
fractional Rights, there shall be paid to the registered holders of
the Rights Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For purposes
28
of this Section 14(a), the current market value of a whole Right shall
be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any Trading
Day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if
the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system or the Nasdaq National Market with respect to
securities listed on another national securities exchange or quoted by
the Nasdaq National Market, respectively, or if the Rights are not
listed or admitted to trading on any national securities exchange or
quoted by the Nasdaq National Market, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by The Nasdaq Stock Market or
such other quotation system then in use or, if on any such date the
Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market
maker making a market in the Rights, selected by the Board. If on any
such date no such market maker is making a market in the Rights, the
fair value of the Rights on such date as determined in good faith by
the Board shall be used.
(b) The Company shall not be required to issue
fractions of shares of Common Stock upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Common
Stock. In lieu of fractional shares of Common Stock, the Company may
pay to the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one whole share of Common
Stock. For purposes of this Section 14(b), the current market value of
one share of Common Stock shall be the closing price of the Common
Stock, or if unavailable, the appropriate alternative price (in each
case, as determined pursuant to Section 11(d) hereof) for the Trading
Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event,
the Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates
which evidence fractional shares of Common Stock. In lieu of
fractional shares of Common Stock, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one (1) share of Common Stock.
For purposes of this Section 14(c), the current market value of one
share of Common Stock shall be the closing price of one share of
Common Stock, or if unavailable, the appropriate alternative price (in
each case, as determined pursuant to Section 11(d) hereof) for the
Trading Day immediately prior to the date of such exercise.
29
The holder of a Right by the acceptance of that Right expressly waives
such holder's right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by this Section
14.
Section 15. RIGHTS OF ACTION. All rights of action in
respect of this Agreement, other than rights of action vested in the
Rights Agent pursuant to Section 18 hereof, are vested in the
respective registered holders of the Rights Certificates (and, prior
to the Distribution Date, the registered holders of the Common Stock);
and any registered holder of any Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), without the consent of the
Rights Agent or of the holder of any other Rights Certificate (or,
prior to the Distribution Date, of the Common Stock), may, in such
holder's own behalf and for such holder's own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, such holder's
right to exercise the Rights evidenced by such Rights Certificate in
the manner provided in such 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 shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person
subject to this Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a
Right by accepting the same consents and agrees with the Company and
the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of shares of Common
Stock;
(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the Rights
Agent if surrendered at the principal office or offices of the Rights
Agent designated for such purposes, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and
certificates contained therein duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof,
the Company and the Rights Agent may deem and treat the person in
whose name a Rights Certificate (or, prior to the Distribution Date,
the associated Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Rights Certificates or the
associated Common Stock certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last sentence of
30
Section 7(e) hereof, shall be required to be affected by any notice to
the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or
any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; PROVIDED, HOWEVER, that
the Company must use its reasonable best efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as
possible.
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER. No holder, as such, of any Rights Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the
holder of the number of shares of Common Stock or any other securities
of the Company which may at any time be issuable upon the exercise of
the Rights represented thereby, nor shall anything contained herein or
in any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon
any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice
of meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced
by such Rights Certificate shall have been exercised in accordance
with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, reimbursement for
its reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder.
The Company also agrees to indemnify the Rights Agent for, and to hold
it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability in
the premises. The costs and expenses of enforcing this right of
indemnification shall also be paid by the Company. The
indemnification provided for hereunder shall survive the expiration of
the Rights and termination of this Agreement.
31
(b) The Rights Agent may conclusively rely upon and
shall be protected and shall incur no liability for or in respect of
any action taken, suffered or omitted by it in good faith in
connection with its administration of this Agreement in reliance upon
any Rights Certificate or certificate for Common Stock or for other
securities of the Company, or any instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document
reasonably believed by it to be genuine and to be signed, executed
and, where necessary, verified or acknowledged, by the proper Person
or Persons.
(c) Notwithstanding anything in this Agreement to the
contrary, in no event shall the Rights Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage and
regardless of the form of the action.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the corporate
trust, stock transfer or other shareholder services business of the
Rights Agent or any successor Rights Agent, shall be the successor to
the Rights Agent under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties
hereto, but only if such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21 hereof.
If at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Rights Certificates shall have
been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Rights Certificates
either in the name of the predecessor or in the name of the successor
Rights Agent; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this
Agreement.
(b) If at any time the name of the Rights Agent shall
be changed and at such time any of the Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates
so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in
32
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.
Section 20 DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon
the following terms and conditions, and no implied duties or
obligations shall be read into this Agreement against the Rights
Agent, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from
acting, the Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent
as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the identity
of any Acquiring Person and the determination of Current Market Price)
be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by the
Chairman of the Board, the Vice Chairman, the President, any Vice
President, the Treasurer and Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent;
and such certificate shall be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only
for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in this
Agreement or in the Rights Certificates, nor shall it be required to
verify the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the
Rights Agent) or in respect of the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under the provisions of
Section 11, Section 13 or Section 24 hereof or responsible for the
33
manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except
with respect to the exercise of Rights evidenced by Rights
Certificates after receipt of a certificate describing any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of
any shares of Common Stock to be issued pursuant to this Agreement or
any Rights Certificate or as to whether any shares of Common Stock
will, when so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the Vice Chairman, the
President, any Vice President, the Secretary, any Assistant Secretary,
the Treasurer or any Assistant Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any
such officer. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the
Rights Agent under this Agreement and the date on or after which such
action shall be taken or such omission shall be effective. The Rights
Agent shall not be liable for any action taken by, or omission of, the
Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which
date shall not be less than ten Business Days after the date any
officer of the Company actually receives such application, unless any
such officer shall have consented in writing to an earlier date)
unless, prior to taking any such action (or the effective date in the
case of an omission), the Rights Agent shall have received written
instructions in response to such application subject to the proposed
action or omission and/or specifying the action to be taken or
omitted.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any
of the Rights or other securities of the Company, or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
34
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect or
misconduct; PROVIDED, HOWEVER, reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder
(other than internal costs incurred by the Rights Agent in providing
services to the Company in the ordinary course of its business as
Rights Agent) or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of election to
purchase, as the case may be, has either not been completed or
indicates an affirmative response to clause 1 and/or 2 thereof, the
Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the
Company.
(l) The Rights Agent shall not be required to take
notice or be deemed to have any notice of any fact, event or
determination (including, without limitation, any dates or events
defined in this Agreement or the designation of any Person as an
Acquiring Person, Affiliate or Associate) under this Agreement unless
and until the Rights Agent shall be specifically notified in writing
by the Company of such fact, event or determination.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties
under this Agreement upon thirty (30) days' notice in writing mailed
to the Company, and to each transfer agent of the Common Stock, by
registered or certified mail, and, if such resignation occurs after
the Distribution Date, to the registered holders of the Rights
Certificates by first-class mail at the expense of the Company. The
Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent
of the Common Stock, by registered or certified mail, and, if such
removal occurs after the Distribution Date, to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty
35
(30) days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning
or incapacitated Rights Agent or by the holder of a Rights Certificate
(who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a legal
business entity organized and doing business under the laws of the
United States or of any state of the United States, in good standing,
which is authorized under such laws to exercise corporate trust powers
and is subject to supervision or examination by a 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 or (b) an
Affiliate of a legal business entity described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or
deed; but the predecessor Rights Agent shall deliver and transfer to
the successor Rights Agent any property at the time held by it
hereunder, and shall execute and deliver any further assurance,
conveyance, act or deed necessary for that purpose. Not later than the
effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock, and, if such appointment occurs after the
Distribution Date, mail a notice thereof in writing to the registered
holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of
the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be approved
by the Board to reflect any adjustment or change in the Purchase Price
and the number or kind or class of shares or other securities or
property purchasable under the Rights Certificates made in accordance
with the provisions of this Agreement. In addition, in connection with
the issuance or sale of shares of Common Stock following the
Distribution Date and prior to the redemption or expiration of the
Rights, the Company (a) shall, with respect to shares of Common Stock
so issued or sold pursuant to the exercise of stock options or under
any employee plan or arrangement, granted or awarded as of the
Distribution Date, or upon the exercise, conversion or exchange of
securities hereafter issued by the Company, and (b) may, in any other
case, if deemed necessary or appropriate by the Board, issue Rights
Certificates representing the appropriate number of Rights in
connection with such issuance or sale; PROVIDED, HOWEVER, that (i) no
such Rights Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would
36
create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued,
and (ii) no such Rights Certificate shall be issued if, and to the
extent that, appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof.
Section 23. REDEMPTION AND TERMINATION.
(a) The Board may, at its option, at any time prior to
the earlier of (i) the close of business on the twentieth day
following the Stock Acquisition Date (or, if the Stock Acquisition
Date shall have occurred prior to the Record Date, the close of
business on the twentieth day following the Record Date), or (ii) the
Final Expiration Date, direct the Company to, and if directed, the
Company shall, redeem all but not less than all of the then
outstanding Rights at a redemption price of $.01 per Right, as such
amount may be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption
Price"). Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired. The Company may,
at its option, pay the Redemption Price in cash, shares of Common
Stock (based on the Current Market Price, as defined in Section 11(d)
hereof, of the Common Stock at the time of redemption) or any other
form of consideration deemed appropriate by the Board.
(b) Immediately upon the action of the Board directing
the Company to make the redemption of the Rights, evidence of which
shall have been filed with the Rights Agent and without any further
action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall
be to receive the Redemption Price for each Right so held. Promptly
after the action of the Board directing the Company to make the
redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to each such holder at such holder's
last address as it appears upon the registry books of the Rights
Agent, or, prior to the Distribution Date, on the registry books of
the transfer agent for the Common Stock. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made.
(c) Notwithstanding the provisions of Section 23(a)
hereof, if there is an election of directors (whether at one or more
stockholder meetings and/or pursuant to written stockholder consent)
resulting in a majority of the Board being comprised of persons who
were not nominated by the Board in office immediately prior to such
election, and if prior to such election there was a public
announcement by a third party of an intent or proposal to engage
37
(without the current and continuing concurrence of the Board) in a
transaction involving an acquisition of or business combination with
the Company or otherwise to become an Acquiring Person and such
announcement or proposal had not been withdrawn or effectively
abandoned, then following the effectiveness of such election for a
period of 180 days (the "Special Period") the Rights, if otherwise
then redeemable absent the provisions of this paragraph (c), shall be
redeemable upon either of the following conditions being satisfied,
but not otherwise:
(i) by a vote of a majority of the directors then
in office, provided that (A) before such vote, the Board shall have
implemented the Value Enhancement Procedures and (B) promptly after
such vote, the Company publicly announces such vote and (w) the manner
in which the Value Enhancement Procedures were implemented, (x) any
material financial, business, personal or other benefit or
relationship (an "Interest") which each director and each Affiliate of
such director (identifying each director and Affiliate separately in
relation to each such Interest) has in connection with any suggested,
proposed or pending transaction with or involving the Company (a
"Transaction"), or with any other party or Affiliate of any other
party to a Transaction, where such Transaction would or might, or is
intended to, be permitted or facilitated by redemption of the Rights
(an "Affected Transaction"), other than treatment as a stockholder on
a pro rata basis with other stockholders or pursuant to compensation
arrangements as a director or employee of the Company or a Subsidiary
which have been previously disclosed by the Company, (y) the
individual vote of each director on the motion to redeem the Rights,
and (z) the statement of any director who voted for or against the
motion to redeem the Rights and desires to have a statement included
in such announcement; or
(ii) if clause (i) is not applicable, by vote of a
majority of the directors then in office, provided that (A) if there
is a challenge to the directors' action approving redemption and/or
any related Affected Transaction as a breach of the fiduciary duty of
care or loyalty, the directors, solely for the purposes of determining
the effectiveness of such redemption pursuant to this clause (ii), are
able to establish the entire fairness of such redemption and, if
applicable, such related Affected Transaction, and (B) the Company
shall have publicly announced the vote of the Board approving such
redemption and, if applicable, such related Affected Transaction,
which announcement shall set forth the information prescribed by
clauses (i)(B)(x), (y) and (z) above.
(d) Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any
time in any manner other than that specifically set forth in this
Section 23 and other than in connection with the purchase or
repurchase by any of them of Common Stock prior to the Distribution
Date.
38
Section 24. EXCHANGE.
(a) The Board may, at its option, at any time after
the first occurrence of a Section 11(a)(ii) Event, exchange all or
part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of
Section 7(e) hereof) for Common Stock at an exchange ratio of one
share of Common Stock per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the
date hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"); PROVIDED, HOWEVER, that no such exchange of the
Rights may be authorized by the Board during the Special Period or at
any time when the Rights are not redeemable. Notwithstanding the
foregoing, the Board shall not be empowered to effect such exchange at
any time after any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Stock for or pursuant to the
terms of any such plan), together with all Affiliates and Associates
of such Person, becomes the Beneficial Owner of 50% or more of the
Common Stock then outstanding.
(b) Immediately upon the action of the Board ordering
the exchange of any Rights pursuant to subsection (a) of this Section
24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of
a holder of such Rights shall be to receive that number of shares of
Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange; PROVIDED, HOWEVER, that the
failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company promptly shall mail a notice of
any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the
Common Stock for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of
Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In the event that the number of shares of Common
Stock which are authorized by the Company's Restated Certificate of
Incorporation but which are not outstanding or reserved for issuance
for purposes other then upon exercise of the Rights is not sufficient
to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Board shall take all such action as may be
necessary to authorize additional shares of Common Stock for issuance
upon exchange of the Rights.
39
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time
after the Distribution Date, (i) to pay any dividend payable in stock
of any class to the holders of Common Stock or to make any other
distribution to the holders of Common Stock (other than a regular
periodic cash dividend out of earnings or retained earnings of the
Company), or (ii) to offer to the holders of Common Stock rights or
warrants to subscribe for or to purchase any additional shares of
Common Stock or shares of stock of any class or any other securities,
rights or options, or (iii) to effect any reclassification of its
Common Stock (other than a reclassification involving only the
subdivision or split of outstanding shares of Common Stock), or (iv)
to effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one transaction or a series of related
transactions, of 50% or more of the assets or earning power of the
Company and/or its Subsidiaries (taken as a whole) to any other Person
or Persons (other than the Company and/or any of its Subsidiaries in
one or more transactions each of which complies with Section 11(o)
hereof), or (v) to effect the liquidation, dissolution or winding up
of the Company, then, in each such case, the Company shall give to
each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 26 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the shares of Common Stock,
if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least
twenty (20) days prior to the record date for determining holders of
the shares of Common Stock for purposes of such action, and in the
case of any such other action, at least twenty (20) days prior to the
date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Common Stock
whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur,
then, in any such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the extent
feasible and in accordance with Section 26 hereof, a notice of the
occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii)
hereof, and (ii) all references in the preceding paragraph to Common
Stock shall be deemed thereafter to refer to Common Stock and/or, if
appropriate, other securities.
Section 26. NOTICES. Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the
40
holder of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the
Rights Agent by the Company) as follows:
First Mid-Illinois Bancshares, Inc.
1515 Charleston Avenue
P.O. Box 499
Mattoon, Illinois 61938
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by
the holder of any Rights Certificate to or on the Rights Agent shall
be sufficiently given or made if sent by registered or certified mail
and shall be deemed given upon receipt, addressed (until another
address is filed in writing by the Rights Agent with the Company) as
follows:
Harris Trust and Savings Bank
311 West Monroe Street
14th Floor
Chicago, Illinois 60606
Attention: Shareholder Services
Notices or demands authorized by this Agreement to be given
or made by the Company or the Rights Agent to the holder of any Rights
Certificate (or, if prior to the Distribution Date, to the holder of
any certificate representing shares of Common Stock) shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS.
(a) Prior to the Distribution Date, and subject to the
provisions of Section 27(b) hereof, the Company and the Rights Agent
shall, if the Company so directs and at the expense of the Company,
supplement or amend any provision of this Agreement (including,
without limitation, any extension of the period in which the Rights
may be redeemed, any increase in the Purchase Price and any extension
of the Final Expiration Date) without the approval of any holders of
certificates representing shares of Common Stock. From and after the
Distribution Date, and subject to the provisions of Section 27(b)
hereof, the Company and the Rights Agent shall, if the Company so
directs and at the expense of the Company, supplement or amend this
Agreement without the approval of any holders of Rights Certificates
in order (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent with
any other provisions herein, (iii) to shorten or lengthen any time
period hereunder, or (iv) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the
41
holders of Rights Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person). Upon the delivery of
a certificate from an appropriate officer of the Company which states
that the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such
supplement or amendment. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock.
(b) Notwithstanding anything herein to the contrary,
no supplement or amendment shall be made to this Agreement (i) during
the Special Period or at a time when the Rights are not redeemable,
except as contemplated by clause (i) or (ii) of Section 27(a) hereof
or (ii) that changes the rights and duties of the Rights Agent under
this Agreement without the execution of such supplement or amendment
by the Rights Agent.
Section 28. SUCCESSORS. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS, ETC. For all purposes of this Agreement, any calculation
of the number of shares of Common Stock outstanding at any particular
time, including for purposes of determining the particular percentage
of such outstanding shares of Common Stock of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence
of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act. The Board shall have the exclusive power and authority
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
(including a determination to redeem or not redeem the Rights or to
amend this Agreement). All such actions, calculations, interpretations
and determinations (including, for purposes of 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 or any of the directors on the
Board to any liability to the holders of the Rights.
Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered holders
of the Common Stock) any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered
42
holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 31. SEVERABILITY. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no
way be affected, impaired or invalidated; PROVIDED, HOWEVER, that
notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section
23 hereof shall be reinstated and shall not expire until the close of
business on the fifteenth day following the date of such determination
by the Board. Without limiting the foregoing, if any provision of this
Agreement requiring that a determination be made by, or with the
concurrence of, less than the entire Board is held by any court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, such determination shall then be made by the Board in
accordance with applicable law and the Company's Restated Certificate
of Incorporation and By-laws.
Section 32. GOVERNING LAW. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with the
laws of such State applicable to contracts made and to be performed
entirely within such State.
Section 33. COUNTERPARTS. This Agreement may be executed
in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of
the several sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of
any of the provisions hereof.
43
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and attested as of the day and year first above
written.
Attest: FIRST MID-ILLINOIS BANCSHARES,
INC.
By: /s/ Christie Burich
--------------------------- By: /s/ William S. Rowland
Name: Christie Burich ---------------------------
-------------------- Name: William S. Rowland
Title: Secretary -------------------
-------------------- Title: President
-------------------
Attest: HARRIS TRUST AND SAVINGS BANK,
as Rights Agent
By: /s/ Susan M. Shadel By: /s/ Susan A. Knaack
--------------------------- ------------------------------
Name: Susan M. Shadel Name: Susan A. Knaack
-------------------- ------------------
Title: Vice President Title: Officer
-------------------- ------------------
44
EXHIBIT A
---------
[FORM OF RIGHTS CERTIFICATE]
CERTIFICATE NO. R- _________ RIGHTS
NOT EXERCISABLE AFTER SEPTEMBER 21, 2009, SUBJECT TO EARLIER
REDEMPTION OR EXPIRATION PURSUANT TO THE RIGHTS AGREEMENT. THE RIGHTS
ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF ANY SUCH PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
7(e) OF SUCH AGREEMENT.] *
_______________________
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
A-1
RIGHTS CERTIFICATE
FIRST MID-ILLINOIS BANCSHARES, INC.
This certifies that _________________________________, or
registered assigns, is the registered owner of the number of Rights
set forth above, each of which entitles the owner thereof, subject to
the terms, provisions and conditions of the Rights Agreement, dated as
of September 21, 1999 (as amended, restated, renewed or extended from
time to time, the "Rights Agreement") , between First Mid-Illinois
Bancshares, Inc., a Delaware corporation (the "Company"), and Harris
Trust and Savings Bank, an Illinois banking corporation (the "Rights
Agent"), to purchase from the Company at any time prior to 5:00 P.M.
(Mattoon, Illinois time) on September 21, 2009 at the office or
offices of the Rights Agent, or its successors as Rights Agent,
designated for such purpose, one fully paid, non-assessable share of
common stock, par value $4.00 per share, of the Company (the "Common
Stock"), at a purchase price of $125.00 per share (the "Purchase
Price"), upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase and related Certificate duly
completed and executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Purchase Price set forth
above, are the number and Purchase Price as of September 21, 1999,
based on the Common Stock as constituted at such date. The Company
reserves the right to require prior to the occurrence of a Triggering
Event (as such term is defined in the Rights Agreement) that a number
of Rights be exercised so that only whole shares of Common Stock will
be issued.
As more fully set forth in the Rights Agreement, from and
after the first occurrence of a Section 11(a)(ii) Event (as such term
is defined in the Rights Agreement) , if the Rights evidenced by this
Rights Certificate are beneficially owned by (i) an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such
terms are defined in the Rights Agreement), (ii) a transferee of any
such Acquiring Person, Associate or Affiliate, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of such
Acquiring Person (or of any such Affiliate or Associate) who becomes a
transferee prior to or concurrently with such Acquiring Person
becoming such, such Rights shall become null and void without any
further action, and no holder hereof shall have any right with respect
to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Common Stock or other securities
which may be purchased upon the exercise of the Rights evidenced by
this Rights Certificate are subject to modification and adjustment
upon the happening of certain events, including Triggering Events.
A-2
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by reference
and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of the Rights
Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the
excercisibility of such Rights under the specific circumstances set
forth in the Rights Agreement. Copies of the Rights Agreement are on
file at the above-mentioned office of the Rights Agent and are also
available upon written request to the Rights Agent .
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office or offices of the Rights
Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate number of
shares of Common Stock as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have entitled
such holder to purchase. If this Rights Certificate shall be exercised
in part, the 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, the
Rights evidenced by this Certificate may be redeemed by the Company at
its option at a redemption price of $.01 per Right at any time prior
to the earlier of (i) the close of business on the twentieth day
following the Stock Acquisition Date, and (ii) the Final Expiration
Date. For 180 days following a change in control of the Board of
Directors of the Company that has not been approved by the Board of
Directors, which change in control occurs after an announcement (which
has not been withdrawn or abandoned) of an unsolicited third party
acquisition or business combination proposal or of a third party's
intent or proposal otherwise to become an Acquiring Person, the new
directors are entitled to redeem the rights (assuming the rights would
have otherwise been redeemable), including to facilitate an
acquisition or business combination transaction involving the Company,
but only (1) if they have followed certain prescribed procedures or
(2) if such procedures are not followed, and if their decision
regarding redemption and any acquisition or business combination is
challenged as a breach of fiduciary duty of care or loyalty, the
directors (solely for purposes of the effectiveness of the redemption
decision) are able to establish the entire fairness of the redemption
or transaction. In addition, under certain circumstances following
the Stock Acquisition Date, the Rights may be exchanged, in whole or
in part, for shares of the Common Stock, or shares of preferred stock
of the Company having essentially the same value or economic rights as
such shares. Immediately upon the action of the Board of Directors of
the Company authorizing any such exchange, and without any further
action or any notice, the Rights (other than Rights which are not
A-3
subject to such exchange) will terminate and the Rights will only
enable holders to receive the shares issuable upon such exchange.
If the Company so determines, no fractional shares of Common
Stock will be issued upon the exercise of any Right or Rights
evidenced hereby, but in lieu thereof, a cash payment will be made, as
provided in the Rights Agreement. The Company, at its election, may
require that a number of Rights be exercised so that only whole shares
of Common Stock would be issued.
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 shares of Common Stock or of any other securities of the
Company which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give consent to or withhold consent from any
corporate action, or, to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights Agreement) ,
or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Rights Certificate shall have
been exercised 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 and its corporate seal.
Dated as of _________________________,______
ATTEST: FIRST MID-ILLINOIS BANCSHARES, INC.
________________________________ By:______________________________
Secretary Title:
Countersigned:
HARRIS TRUST AND SAVINGS BANK,
as Rights Agent
By:_________________________________________
Authorized Signature
A-4
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer the 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
herein, 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: _______________________________, ______
____________________________________
Signature
Signature Medallion Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person.
Dated: _________________, _____ _________________________________
Signature
Signature Medallion Guaranteed:
NOTICE
The signature(s) to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or
any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented
by the Rights Certificate.)
To FIRST MID-ILLINOIS BANCSHARES, INC.:
The undersigned hereby irrevocably elects to exercise
__________ Rights represented by this Rights Certificate to purchase
the shares of Common Stock issuable upon the exercise of the Rights
(or such other securities of the Company or of any other Person which
may be issuable or such other assets which may be deliverable upon the
exercise of the Rights) and requests that certificates for any such
shares or securities be issued in the name of and delivered to:
______________________________________________________________________
(Please print name and address)
______________________________________________________________________
Please insert social security
or other identifying 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:
______________________________________________________________________
(Please print name and address)
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Please insert social security
or other identifying number:
Dated: _______________________________, ______
________________________________________
Signature
Signature Medallion Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned
[ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person.
Dated: _________________, _____ _________________________________
Signature
Signature Medallion Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of
this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever .
EXHIBIT B
---------
FIRST MID-ILLINOIS BANCSHARES, INC.
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On September 21, 1999, the Board of Directors (the "Board") of
First Mid-Illinois Bancshares, Inc. (the "Corporation") declared a
dividend distribution of one right (each a "Right") for each
outstanding share of the common stock, par value $4.00 per share, of
the Corporation ("Common Stock") to stockholders of record at the
close of business on October 12, 1999 (the "Record Date"). Each Right
will entitle the registered holder to purchase from the Corporation
one share of Common Stock at an exercise price of $125.00, subject to
adjustment (as adjusted from time to time, the "Purchase Price"). The
description and terms of the Rights are set forth in a Rights
Agreement, dated as of September 21, 1999 (the "Rights Agreement"),
between the Corporation and Harris Trust and Savings Bank, an Illinois
corporation, as Rights Agent.
Initially following the Record Date, the Rights will be attached
to all certificates representing shares of Common Stock then
outstanding, and no separate Rights Certificates will be distributed.
Unless previously redeemed by the Board in accordance with the Rights
Agreement, the Rights will separate from the Common Stock and a
"Distribution Date" will occur upon the earlier of (i) 20 days
following the Stock Acquisition Date (as defined below) or (ii) 20
days (or such later date as the Board shall determine, provided that
no deferral of such date may be made by the Board at any time during
the Special Period (as defined below)) after the date a tender or
exchange offer that would result in a person or group beneficially
owning 15 % or more of the outstanding shares of Common Stock is first
published, sent or given to the Corporation's stockholders. The
"Special Period" is defined as the 180-day period following the
effectiveness of any election of directors, which election occurs
after a public announcement (and prior to the withdrawal or
abandonment of such announcement) by a third party of an intent or
proposal to engage (without the current and continuing concurrence of
the Board) in a transaction involving an acquisition of or business
combination with the Corporation or otherwise to become an Acquiring
Person (as defined below), and which election results in a majority of
the Board being comprised of persons who were not nominated by the
Board in office immediately prior to such election.
The "Stock Acquisition Date" is defined as the twentieth day
following the earlier of (x) the first date of public announcement by
the Corporation that any person or group (other than certain exempt
persons or groups) has acquired, or obtained the right to acquire,
beneficial ownership of 15 % or more of the shares of Common Stock
then outstanding or (y) the date that any Person enters into an
B-1
agreement or arrangement with the Corporation or any of its
Subsidiaries providing for an Acquisition Transaction (as defined
below) (any person described in clause (x) or clause (y) above is
referred to as an "Acquiring Person"). None of Margaret Lumpkin Keon,
Mary Lumpkin Sparks or Richard Anthony Lumpkin, or any of their
respective spouses or descendants, or certain related trusts or other
entities (or a group comprised solely of such persons) will be deemed
to be an Acquiring Person as long as all such persons beneficially own
less than 15% of the outstanding shares of Common Stock. An
"Acquisition Transaction" is defined as (a) a merger, consolidation
or similar transaction as a result of which stockholders of the
Corporation will own less than 60% of the outstanding shares of Common
Stock or the common stock of a publicly traded entity which controls
the Corporation or into which the Corporation has been merged or
otherwise combined (based solely on the shares of Common Stock
received by such stockholders, in their capacity as stockholders of
the Corporation, pursuant to such transaction), (b) a purchase or
other acquisition of all or a substantial portion of the assets of the
Corporation and its subsidiaries, or (c) a purchase or other
acquisition of securities representing 15% or more of the shares of
Common Stock then outstanding.
Following the Record Date and until the Distribution Date, (i)
the Rights will be evidenced by the Common Stock certificates and will
be transferred with and only with such Common Stock certificates, (ii)
new Common Stock certificates issued after the Record Date will
contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificate for Common Stock
outstanding will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
The Rights will not be exercisable until the Distribution Date
and will expire at the close of business on September 21, 2009, unless
earlier redeemed by the Corporation as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock
as of the close of business on the Distribution Date and, thereafter,
the separate Rights Certificates alone will represent the Rights.
Except as otherwise determined by the Board, only shares of Common
Stock issued prior to the Distribution Date will be issued with
Rights.
In the event (a "Flip-in Event") that any person, at any time
after the date of the Rights Agreement, becomes an Acquiring Person,
each holder of a Right thereafter will have the right to receive, upon
exercise thereof, Common Stock (or, in certain circumstances, cash,
property or other securities of the Corporation) having a value equal
to two times the Purchase Price. Notwithstanding any of the foregoing,
following the occurrence of a Flip-in Event, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by an Acquiring Person, any of its associates or
B-2
affiliates, and certain of its transferees, will be null and void.
Moreover, the Rights will not be exercisable following the first
occurrence of a Flip-in Event until such time as the Rights are no
longer redeemable by the Corporation as described below.
In the event that, at any time following the Stock Acquisition
Date, (i) the Corporation is acquired in a merger or other business
combination transaction or (ii) 50% or more of the Corporation's
assets or earning power is sold or transferred (each, a "Flip-over
Event"), each holder of a Right (except Rights which previously have
been voided as described above) shall thereafter have the right to
receive, upon exercise thereof, common stock or other securities of
the acquiring company having a value equal to two times the Purchase
Price.
The Purchase Price payable, and the number of shares of Common
Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time in accordance with
customary antidilution provisions.
With certain exceptions, no adjustment to the Purchase Price will
be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional shares will be issued. Instead, a cash
payment will be made in lieu of fractional shares based on the market
price of the Common Stock on the last trading day prior to the date of
exercise.
At any time after the Rights become exercisable for Common Stock,
the Board may exchange the unexercised Rights (other then Rights owned
by any Acquiring Person which have become void), in whole or in part,
at an exchange ratio of one share of Common Stock (or of a share of a
class or series of the Corporation's stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).
Notwithstanding the foregoing, no such exchange of the Rights may be
authorized by the Board during the Special Period or at any time when
the Rights are not redeemable.
The Board is empowered to redeem the Rights in whole, but not in
part, at a price of $0.01 per Right (the "Redemption Price") at any
time before the earlier of (i) the close of business on the 20th day
following the Stock Acquisition Date or (ii) the final expiration date
of the Rights. Immediately upon the action of the Board ordering
redemption of the Rights, the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption Price.
Notwithstanding the foregoing, in the event that after a public
announcement (and prior to the withdrawal or abandonment of such
announcement) by a third party of an intent or proposal to engage
(without the current and continuing concurrence of the Board) in a
transaction involving an acquisition of or business combination with
the Corporation or otherwise to become an Acquiring Person, there is
an election of directors (whether at one or more stockholder meetings
B-3
and/or pursuant to written stockholder consents) resulting in a
majority of the Board being comprised of persons who were not
nominated by the Board in office immediately prior to such election,
then following such election and for a period of 180 days (the
"Special Period"), the Rights, if otherwise then redeemable, will only
be redeemable by the Board either (1) if the Board has followed
certain prescribed procedures or (2) in any other case, provided that,
if in any such other case the Board's decision regarding redemption
and any acquisition or business combination is challenged as a breach
of fiduciary duty of care or loyalty, the directors can establish the
entire fairness of such decision without the benefit of any business
judgement rule or other presumption. The procedures required under
clause (1) include: (a) the retention of an independent financial
advisor, and the receipt by the Board of (i) the views of such advisor
regarding whether redemption of the Rights will serve the best
interests of the Corporation and its stockholders, or (ii) such
advisor's statement that it is unable to express such a view, setting
forth the reasons therefor; and (b) with respect to any pending
acquisition or business combination proposal (i) the implementation by
the Board, with the advice of its independent financial advisor, of a
process and procedures which the Board and such advisor conclude would
be most likely to result in the best value reasonably available to
stockholders, (ii) receipt of a fairness opinion from such advisor,
and the Board determining, and such advisor confirming, that it has no
reason to believe that a superior transaction is reasonably available,
and (iii) execution of a definitive transaction agreement.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Corporation, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to stockholders or to
the Corporation, stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) or for common
stock of an acquiring company as set forth above.
The Rights Agreement may be amended by the Board without the
approval of any holders of Rights (a) prior to the Distribution Date,
in any manner and (b) after the Distribution Date, in order to (i)
cure any ambiguity, (ii) correct or supplement provisions which may be
defective or inconsistent, (iii) make changes which do not adversely
affect the interests of holders of Rights (other than those held by an
Acquiring Person or certain related persons) or (iv) shorten or
lengthen any time period under the Rights Agreement (including the
time period governing redemption), provided that no supplement or
amendment to the Rights Agreement may be made during the Special
Period or at any time when the Rights are nonredeemable other than
supplements or amendments of the type contemplated by clause (i) or
(ii) above.
The Rights may have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group that attempts to
B-4
acquire the Corporation unless the acquisition is conditioned on a
substantial number of Rights being acquired. The Rights should not
interfere with any merger or other business combination properly
approved by the Board.
A copy of the Rights Agreement will be filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A. A copy of the Rights Agreement is available to all Rights
holders free of charge from the Corporation. This summary description
of the Rights does not purport to be complete and is qualified in its
entirety by reference to the full text of the Rights Agreement, which
is hereby incorporated by this reference.
* * * * * * * * * * * * * * * *
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