SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 20, 1997
--------------------
Illini Corporation
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(Exact name of registrant as specified in its charter)
Illinois
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(State or other jurisdiction of incorporation)
0-13343 37-1135429
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(Commission File Number) (IRS Employer Identification No.)
120 South Chatham Road
Springfield, Illinois 62704
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (217) 787-1651
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Exhibit Index is located on page 7.
<PAGE> 2
ITEM 5. OTHER EVENTS
(a) Adoption of Shareholder Rights Plan:
-----------------------------------
On June 20, 1997, the Board of Directors of Illini Corporation
(the "Company") declared a dividend distribution of one Right for each
outstanding share of Common Stock, $10.00 par value (the "Common
Stock"), of the Company to the stockholders of record on July 7, 1997
(the "Record Date"). Each Right entitles the registered holder to
purchase from the Company one share of Common Stock at a price of
$80.00 per share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and Illinois
Stock Transfer Company, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) the tenth business day after a
public announcement that a person or group of affiliated or associated
persons acquired, or obtained the right to acquire, beneficial
ownership of 10% or more of the outstanding shares of Common Stock of
the Company (such person or group being called an "Acquiring Person"
and such date of first public announcement being called the "Stock
Acquisition Date"), or (ii) the tenth business day after the
commencement or announcement of an intention to make a tender offer or
exchange offer which would result in any person or group of affiliated
or associated persons becoming an Acquiring Person (the earlier of
such dates being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Company's Common Stock
certificates outstanding as of the Record Date, by such Common Stock
certificate with a copy of a summary of the terms of the Rights (the
"Summary of Rights") attached thereto. Mae H. Noll, together with all
her Affiliates and Associates (as such terms are defined in the Rights
Agreement), will not be deemed to be Acquiring Persons as long as all
such persons beneficially own in the aggregate no more than 14.3% of
the Common Stock of the Company. The Rights Agreement provides that,
until the Distribution Date, the Rights will be transferred with and
only with the Company's Common Stock. Until the Distribution Date (or
earlier redemption or expiration of the Rights), new Common Stock
certificates issued after the Record Date upon transfer or new
issuance of the Company's Common Stock will contain a notation
incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights),
the surrender for transfer of any of the Company's Common Stock
certificates outstanding as of the Record Date will also constitute
the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights
("Rights Certificates") will be mailed to holders of record of the
Company's Common Stock as of the close of business on the Distribution
Date and, thereafter, such separate Rights Certificates alone will
evidence the Rights.
<PAGE> 3
The Rights are not exercisable until the Distribution Date. The
Rights will expire on July 7, 2007, unless earlier redeemed by the
Company as described below.
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 to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination
or reclassification of the Common Stock, (ii) upon the grant to
holders of Common Stock of certain rights, options or warrants to
subscribe for shares of Common Stock or convertible securities at less
than the current market price of the Common Stock or (iii) upon the
distribution to holders of Common Stock of evidences of indebtedness
or assets (excluding (a) a regular periodic cash dividend or (b) a
dividend payable in Common Stock) or of subscription rights, options
or warrants (other than those referred to above).
In the event that a person becomes the beneficial owner of 10% or
more of the outstanding shares of Common Stock (i.e., becomes an
Acquiring Person), each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will be void), will
have the right to receive upon exercise thereof, that number of shares
of Common Stock having a market value of two times the exercise price
of the Right (such right being called the "Flip-In" right).
In the event that, on or after the Stock Acquisition Date, the
Company were acquired in a merger or other business combination, or
50% or more of its assets or earning power were sold, proper provision
shall be made so that each holder of a Right shall thereafter have the
right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction would have
a market value of two times the exercise price of the Right. In the
event that the Company were the surviving corporation in a merger
involving the Acquiring Person and the Common Stock were not changed
or exchanged, proper provision shall be made so that each holder of a
Right, other than Rights beneficially owned by the Acquiring Person
(which will be void), will thereafter have the right to receive upon
exercise that number of shares of the Common Stock having a market
value of two times the exercise price of the Right (such right being
called the "Flip-Over" right). The holder of a right will no longer
have a Flip-Over right if, and to the extent that, he has exercised
his Flip-In right.
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at
least 1% in such Purchase Price. No fractional shares will be issued
and, in lieu thereof, a cash payment will be made based on the market
price of the Common Stock on the last trading date prior to the date
of exercise.
At any time prior to the time that there is an Acquiring Person,
the Company may, at its option, redeem the Rights in whole but not in
part, at a price of $0.01 per Right (the "Redemption Price").
<PAGE> 4
Immediately upon the authorization of the redemption of the Rights by
the Board of Directors of the Company, the Rights will terminate and
the only right of the holders of Rights will be to receive the
Redemption Price.
One Right will be distributed to shareholders of the Company for
each share of Common Stock owned of record by them as of the close of
business on July 7, 1997. Until the Distribution Date, the Company
will issue one Right with each share of Common Stock that shall become
outstanding so that all shares of Common Stock will have attached
Rights.
The Rights have certain anti-takeover effects. The Rights may
cause substantial dilution to a person or group that attempts to
acquire the Company on terms not approved in advance by the Board of
Directors of the Company. The Rights should not interfere with any
merger of other business combination approved by the Board of
Directors prior to the time that a person or group has acquired
beneficial ownership of 10% or more of the Common Stock, since until
such time the Rights may be redeemed by the Company at $0.01 per
Right.
The present dividend distribution of the Rights is not taxable to
the Company or its shareholders. The Rights are not dilutive and will
not affect reported earnings per share. The Company will receive no
proceeds from the issuance of the Rights as a dividend.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
The Board of Directors of the Company may amend the Rights
Agreement from time to time, provided that any such changes do not
adversely affect the interest of the holders of the Rights, and
provided further that the Rights Agreement may not be supplemented or
amended in any way after an Acquiring Person has become such.
The Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, including the form of Rights
Certificate and the Summary of Rights is attached hereto as an exhibit
and incorporated herein by reference. A copy of the Rights Agreement
is available to all Right holders free of charge from the Company.
The foregoing description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement.
(b) Adoption of Amended and Restated Bylaws:
---------------------------------------
On June 20, 1997, the Board of Directors of the Company adopted
Amended and Restated Bylaws for the Company that provide for, among
other things, an advance notice procedure with regard to the
nomination, other than by or at the direction of the Board of
Directors of the Company, of candidates for election as directors (the
<PAGE> 5
"Nomination Procedure") and with regard to certain matters to be
brought before an annual meeting of shareholders of the Company (the
"Business Procedure").
The Nomination Procedure provides that only persons who are
nominated by, or at the direction of, the Board of Directors or by a
shareholder who has given timely written notice to the Secretary of
the Company prior to the meeting at which directors are to be elected
will be eligible for election as directors of the Company. The
Business Procedure provides that at an annual meeting, and subject to
any other applicable requirements, only such business may be conducted
as has been brought before the meeting by, or at the direction of, the
Board of Directors or by a shareholder who has given timely prior
written notice to the Secretary of the Company of such shareholder's
intention to bring such business before the meeting. Any proposed
business to be brought before an annual meeting by a shareholder must
also be a proper matter for shareholder action.
In all cases, to be timely, notice must be received by the
Company not later than the close of business on the 60th day nor
earlier than the close of business on the 90th day prior to the first
anniversary of the preceding year's annual meeting. In the event that
the number of directors to be elected to the Board of Directors is
increased and there is no public disclosure by the Company naming all
of the nominees for director or specifying the size of the increased
Board of Directors at least 70 days prior to the first anniversary of
the preceding year's annual meeting, a shareholder's notice shall be
timely, but only with respect to nominees for any new positions
created by such increase, if it is received by the Secretary of the
Company at the Company's principal executive offices not later than
the close of business on the 10th day following the day on which such
public disclosure is first made by the Company.
Under the Nomination Procedure, notice to the Company from a
shareholder who proposes to nominate a person at an annual meeting for
election as a director must contain such person's name, age, address,
occupation and ownership interest in the Company, together with such
person's written consent to being named as a nominee and to serving as
a director if elected. Under the Business Procedure, notice relating
to the conduct of business other than the nomination of directors at
an annual meeting must contain certain information about such
business, including a brief description of the business the
shareholder proposes to bring before the meeting, the reasons for
conducting such business at such meeting and any material interest
that the shareholder or the beneficial owner of the Common Stock, if
any, on whose behalf the notice was given, has in the business so
proposed. Any notice given under the Nomination Procedure or the
Business Procedure must also contain certain information about the
shareholder giving such notice and the beneficial owner, if any, on
whose behalf such notice is given, including the name and address of
the shareholder, as they appear on the Company's books, the name and
address of the beneficial owner, if any, and the class and number of
shares of the Company's stock that are owned beneficially and of
record by such shareholder and beneficial owner, if any.
<PAGE> 6
If the Chairman or other officer presiding at a meeting
determines that a person was not nominated in accordance with the
Nomination Procedure, such person will not be eligible for election as
a director, or if such Chairman or other officer presiding at a
meeting determines that business was not properly brought before such
meeting in accordance with the Business Procedure, such business will
not be conducted at such meeting. Nothing in the Nomination Procedure
or the Business Procedure will preclude discussion by any shareholder
of any nomination properly made or business properly brought before an
annual meeting in accordance with the above-mentioned procedures.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(c) Exhibits:
Exhibit 3 Amended and Restated Bylaws of Illini
Corporation, effective June 20, 1997.
Exhibit 4 Rights Agreement dated June 20, 1997
between Illini Corporation and Illinois
Stock Transfer Company, as Rights Agent.
Exhibit 99 June 23, 1997 Press Release.
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
ILLINI CORPORATION
(Registrant)
BY: /s/ Burnard K. McHone
------------------------------
Burnard K. McHone, President
Dated: June 25, 1997
<PAGE> 8
EXHIBIT INDEX
Number Description
------ -----------
3 Amended and Restated Bylaws of Illini Corporation, effective
June 20, 1997.
4 Rights Agreement dated June 20, 1997 between Illini
Corporation and Illinois Stock Transfer Company, as Rights
Agent.
99 June 23, 1997 Press Release<PAGE>
AMENDED AND RESTATED
BYLAWS
OF
ILLINI CORPORATION
As Adopted on June 20, 1997
<PAGE> 10
TABLE OF CONTENTS
Page
----
ARTICLE I OFFICES . . . . . . . . . . . . . . . . . . . . . . 12
Section 1.1 Principal Office . . . . . . . . . . . . . . . . 12
Section 1.2 Registered Office . . . . . . . . . . . . . . . . 12
ARTICLE II SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . 12
Section 2.1 Annual Meeting . . . . . . . . . . . . . . . . . 12
Section 2.2 Special Meetings . . . . . . . . . . . . . . . . 12
Section 2.3 Place of Meeting . . . . . . . . . . . . . . . . 12
Section 2.4 Notice of Meetings . . . . . . . . . . . . . . . 13
Section 2.5 Meeting of all Shareholders . . . . . . . . . . . 13
Section 2.6 Advance Notice of Shareholder Proposals . . . . . 13
Section 2.7 Fixing of Record Date . . . . . . . . . . . . . . 14
Section 2.8 Voting Lists . . . . . . . . . . . . . . . . . . 14
Section 2.9 Quorum . . . . . . . . . . . . . . . . . . . . . 15
Section 2.10 Proxies . . . . . . . . . . . . . . . . . . . . . 15
Section 2.11 Voting of Shares . . . . . . . . . . . . . . . . 15
Section 2.12 Voting of Shares by Certain Holders . . . . . . . 15
Section 2.13 Inspectors . . . . . . . . . . . . . . . . . . . 16
Section 2.14 Informal Action by Shareholders . . . . . . . . . 16
Section 2.15 Voting by Ballot . . . . . . . . . . . . . . . . 17
ARTICLE III DIRECTORS . . . . . . . . . . . . . . . . . . . . . 17
Section 3.1 General Powers . . . . . . . . . . . . . . . . . 17
Section 3.2 Number, Tenure and Qualifications . . . . . . . . 17
Section 3.3 Regular Meetings . . . . . . . . . . . . . . . . 18
Section 3.4 Special Meetings . . . . . . . . . . . . . . . . 18
Section 3.5 Notice . . . . . . . . . . . . . . . . . . . . . 19
Section 3.6 Quorum . . . . . . . . . . . . . . . . . . . . . 19
Section 3.7 Manner of Acting . . . . . . . . . . . . . . . . 19
Section 3.8 Resignations . . . . . . . . . . . . . . . . . . 19
Section 3.9 Vacancies . . . . . . . . . . . . . . . . . . . . 19
Section 3.10 Informal Action by Directors . . . . . . . . . . 20
Section 3.11 Committees . . . . . . . . . . . . . . . . . . . 20
Section 3.12 Compensation . . . . . . . . . . . . . . . . . . 22
Section 3.13 Presumption of Assent . . . . . . . . . . . . . . 22
Section 3.14 Advance Notice of Nominations for Directors. . . 23
ARTICLE IV OFFICERS . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.1 Number . . . . . . . . . . . . . . . . . . . . . 25
Section 4.2 Election and Term of Office . . . . . . . . . . . 25
Section 4.3 Removal . . . . . . . . . . . . . . . . . . . . . 25
Section 4.4 Vacancies . . . . . . . . . . . . . . . . . . . . 25
Section 4.5 Chairman and Vice-Chairman of the Board . . . . . 25
Section 4.6 President . . . . . . . . . . . . . . . . . . . . 26
Section 4.7 The Vice Presidents . . . . . . . . . . . . . . . 26
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 11
Section 4.8 The Treasurer . . . . . . . . . . . . . . . . . . 27
Section 4.9 The Secretary . . . . . . . . . . . . . . . . . . 27
Section 4.10 Assistant Treasurers and Assistant Secretaries . 27
ARTICLE V CONTRACTS, LOANS, CHECKS AND DEPOSITS . . . . . . . 28
Section 5.1 Contracts . . . . . . . . . . . . . . . . . . . . 28
Section 5.2 Loans . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.3 Checks, Drafts, Etc. . . . . . . . . . . . . . . 28
Section 5.4 Deposits . . . . . . . . . . . . . . . . . . . . 28
ARTICLE VI CERTIFICATES FOR SHARES AND THEIR TRANSFER . . . . . 28
Section 6.1 Certificates for Shares . . . . . . . . . . . . . 28
Section 6.2 Lost Certificates . . . . . . . . . . . . . . . . 28
Section 6.3 Transfers of Shares . . . . . . . . . . . . . . . 29
ARTICLE VII VOTING OF SECURITIES . . . . . . . . . . . . . . . . 29
ARTICLE VIII INDEMNIFICATION . . . . . . . . . . . . . . . . . . 29
ARTICLE IX FISCAL YEAR . . . . . . . . . . . . . . . . . . . . 32
ARTICLE X DIVIDENDS . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE XI SEAL . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE XII WAIVER OF NOTICE . . . . . . . . . . . . . . . . . . 33
ARTICLE XIII AMENDMENTS . . . . . . . . . . . . . . . . . . . . . 33
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 12
BYLAWS
OF
ILLINI CORPORATION
ARTICLE I
OFFICES
SECTION 1.1 PRINCIPAL OFFICE. The principal office of the
Corporation in the State of Illinois shall be located in the City of
Springfield and County of Sangamon. The Corporation may have such
other offices, either within or without the State of Illinois, as the
business of the Corporation may require from time to time.
SECTION 1.2 REGISTERED OFFICE. The registered office of the
Corporation required by the Illinois Business Corporation Act of 1983
to be maintained in the State of Illinois may be, but need not be,
identical with the principal office in the State of Illinois.
ARTICLE II
SHAREHOLDERS
SECTION 2.1 ANNUAL MEETING. The annual meeting of the
shareholders shall be held on the third Thursday in April in each year
beginning in 1993, at the hour of 10:00 a.m., for the purpose of
electing directors and for the transaction of such other business as
may come before the meeting. If the day fixed for the annual meeting
shall be a legal holiday, such meeting shall be held on the next
succeeding business day. If the election of Directors shall not be
held on the day designated herein for any annual meeting, or at any
adjournment thereof, the Board of Directors shall cause the election
to be held at a meeting of the shareholders as soon thereafter as may
be convenient.
SECTION 2.2 SPECIAL MEETINGS. Special meetings of the
shareholders may be called by the President, by the Board of Directors
or by the holders of not less than one-fifth of all the outstanding
shares of the Corporation.
SECTION 2.3 PLACE OF MEETING. The Board of Directors may
designate any place, either within or without the State of Illinois,
as the place of meeting for any annual meeting or for any special
meeting called by the Board of Directors. A waiver of notice signed
by all shareholders may designate any place, either within or without
the State of Illinois, as the place for the holding of such meeting.
If no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the registered office of the
Corporation in the State of Illinois, except as otherwise provided in
Section 2.5, MEETING OF ALL SHAREHOLDERS.
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE 13>
SECTION 2.4 NOTICE OF MEETINGS. Written or printed notice
stating the place, day and hour of the meeting, and in the case of a
special meeting, the purpose or purposes for which the meeting is
called, shall be delivered not less than ten (10) nor more than sixty
(60) days before the date of the meeting, or in the case of a merger,
consolidation, share exchange, dissolution or sale, lease or exchange
of assets not less than twenty (20) nor more than sixty (60) days
before the meeting, either personally or by mail, by or at the
direction of the President, or the Secretary, or the officer or
persons calling the meeting, to each shareholder of record entitled to
vote at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, addressed to the
shareholder at his address as it appears on the records of the
Corporation, with postage thereon prepaid. When a meeting is
adjourned to another time or place, notice need not be given of the
adjourned meeting if the time and place thereof are announced at the
meeting at which the adjournment is taken.
SECTION 2.5 MEETING OF ALL SHAREHOLDERS. If all of the
shareholders shall meet at any time and place, either within or
without the State of Illinois, and consent to the holding of a meeting
at such time and place, such meeting shall be valid without call or
notice, and at such meeting any corporate action may be taken.
SECTION 2.6 ADVANCE NOTICE OF SHAREHOLDER PROPOSALS. (a)
Business to be considered by the shareholders shall be brought before
an annual meeting (i) pursuant to the Corporation's notice of meeting,
(ii) by or at the direction of the Board of Directors or (iii) by any
shareholder of the Corporation who was a shareholder of record at the
time of giving of notice provided for in this Section 2.6(a), who is
entitled to vote with respect thereto and who complies with the notice
procedures set forth in this Section 2.6(a). For business to be
properly brought before an annual meeting by a shareholder, the
shareholder must have given timely notice thereof in writing to the
Secretary of the Corporation and such proposed business must otherwise
be a proper matter for shareholder action. To be timely, a
shareholder's notice must be delivered to or mailed to and received by
the Secretary at the principal executive offices of the Corporation
not later than the close of business on the 60th day nor earlier than
the close of business on the 90th day prior to the first anniversary
of the preceding year's annual meeting. In no event shall the public
or other announcement of an adjournment of an annual meeting or the
adjournment thereof commence a new time period for the giving of a
shareholder's notice as described above. Such shareholder's notice to
the Secretary shall set forth (i) as to any business the shareholder
proposes to bring before the annual meeting, (A) a brief description
of the business desired to be brought before the annual meeting, (B)
the reasons for conducting such business at the annual meeting, (C)
any material interest in such business of such shareholder and (D) the
beneficial owner, if any, on whose behalf the proposal is made, and
(ii) as to the shareholder giving the notice and the beneficial owner,
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 14
if any, on whose behalf the proposed business is to be brought, (A)
the name and address of such shareholder, as they appear on the
Corporation's books, and the name and address of such beneficial owner
and (B) the class and number of shares of the Corporation's capital
stock that are owned beneficially and of record by such shareholder
and such beneficial owner.
(b) At any special meeting of the shareholders, only such
business shall be conducted as shall have been brought before the
meeting pursuant to the Corporation's notice of meeting.
(c) Notwithstanding anything in these Bylaws of the Corporation
to the contrary, only such business shall be brought before or
conducted at a meeting of shareholders as shall have been brought
before the meeting in accordance with the procedures set forth in this
Section 2.6. The officer of the Corporation or other person presiding
over the meeting shall, if the facts so warrant, determine and declare
to the meeting that business was not brought before the meeting in
accordance with the provisions of this Section 2.6 and, if such person
should so determine, such person shall so declare to the meeting and
any such business so determined not to be properly before the meeting
shall be disregarded.
SECTION 2.7 FIXING OF RECORD DATE. For the purpose of
determining shareholders entitled to notice of or to vote at any
meeting of shareholders, or shareholders entitled to receive payment
of any dividend, or in order to make a determination of shareholders
for any other proper purpose, the Board of Directors of the
Corporation may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not more
than sixty (60) days and, for a meeting of shareholders, not less than
ten (10) days, or in the case of a merger, consolidation, share
exchange, dissolution or sale, lease or exchange of assets, not less
than twenty (20) days, immediately preceding the date of such meeting.
If no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or
shareholders entitled to receive payment of a dividend, the date on
which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is
adopted, as the case may be, shall be, the record date for such
determination of shareholders. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as
provided in this Section, such determination shall apply to any
adjournment thereof.
SECTION 2.8 VOTING LISTS. The officer or agent having charge of
the transfer books for shares of the Corporation shall make, within
twenty (20) days after the record date for a meeting of shareholders
or ten (10) days before such meeting, whichever is earlier, a complete
list of the shareholders entitled to vote at such meeting, arranged in
alphabetical order, showing the address of and the number of shares
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 15
registered in the name of the shareholder. For a period of ten (10)
days prior to such meeting, such list shall be kept on file at the
registered office of the Corporation and shall be open to inspection
by any shareholder, and to copying at the shareholder's expense, at
any time during usual business hours. Such list shall also be
produced and kept open at the time and place of the meeting and may be
inspected by any shareholder during the whole time of the meeting.
The original share ledger or transfer book, or a duplicate thereof
kept in the State of Illinois, shall be PRIMA FACIE evidence as to the
shareholders who are entitled to examine such list, share ledger or
transfer book or to vote at any meeting of shareholders.
SECTION 2.9 QUORUM. A majority of the outstanding shares of the
Corporation, represented in person or by proxy, shall constitute a
quorum at any meeting of shareholders; provided, that if less than a
majority of the outstanding shares are represented at said meeting, a
majority of the shares so represented may adjourn the meeting from
time to time without further notice. If a quorum is present, the
affirmative vote of the majority of the shares represented at the
meeting shall be the act of the shareholders, unless the vote of a
greater number or voting by classes is required by the Illinois
Business Corporation Act of 1983, the Articles of Incorporation or
these Bylaws. At any adjourned meeting at which a quorum shall be
present, any business may be transacted which might have been
transacted at the original meeting. Withdrawal of shareholders from
any meeting shall not cause failure of a duly constituted quorum at
that meeting.
SECTION 2.10 PROXIES. At all meetings of shareholders, a
shareholder may vote by proxy, executed in writing by the shareholder
or by his duly authorized attorney-in-fact. Such proxy shall be filed
with the Secretary of the Corporation before or at the time of the
meeting. No proxy shall be valid after eleven months from the date of
its execution, unless otherwise provided in the proxy.
SECTION 2.11 VOTING OF SHARES. Unless otherwise provided in the
Articles of Incorporation, each outstanding share shall be entitled to
one (1) vote upon each matter submitted to vote at a meeting of
shareholders, and in all elections for directors, every shareholder
shall have the right to vote the number of shares owned by such
shareholder for as many persons as there are directors to be elected,
or to cumulate such votes and give one candidate as many votes as
shall equal the number of directors multiplied by the number of such
shares or to distribute such cumulative votes in any proportion among
any number of candidates.
SECTION 2.12 VOTING OF SHARES BY CERTAIN HOLDERS. Shares of the
Corporation held by the Corporation in a fiduciary capacity may be
voted and shall be counted in determining the total number of
outstanding shares entitled to vote at any given time.
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 16
Shares registered in the name of another corporation, domestic or
foreign, may be voted by any officer, agent, proxy or other legal
representative authorized to vote such shares under the law of
incorporation of such corporation. The Corporation may treat the
president and other person holding the position of chief executive
officer of such other corporation as authorized to vote such shares,
together with any other person indicated and any other holder of any
office indicated by the corporate shareholder to the corporation as a
person or an officer authorized to vote such shares. Such persons and
officers indicated shall be registered by the Corporation on the
transfer books for shares and included in any voting list prepared in
accordance with Section 2.8, VOTING LISTS, of these Bylaws.
Shares registered in the name of a deceased person, a minor ward
or a person under legal disability may be voted by his or her
administrator, executor, or court appointed guardian, either in person
or by proxy, without a transfer of such shares into the name of such
administrator, executor, or court appointed guardian. Shares
registered in the name of a trustee may be voted by him or her, either
in person or by proxy.
Shares registered in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be
voted by such receiver without the transfer thereof into his name if
authority so to do be contained in an appropriate order of the court
by which such receiver was appointed. A shareholder whose shares are
pledged shall be entitled to vote such shares until the shares have
been transferred into the name of the pledgee, and thereafter the
pledgee shall be entitled to vote the shares so transferred.
SECTION 2.13 INSPECTORS. At any meeting of shareholders, the
chairperson of the meeting may, or upon the request of any shareholder
shall, appoint one or more persons as inspectors for such meeting.
Such inspectors shall ascertain and report the number of shares
represented at the meeting based upon their determination of the
validity and effect of proxies, count all votes and report the
results, and do such other acts as are proper to conduct the election
and voting with impartiality and fairness to all the shareholders.
Each report of an inspector shall be in writing and signed by him or
by a majority of the inspectors if there be more than one inspector
acting at such meeting. If there is more than one inspector, the
report of a majority shall be the report of the inspectors. The
report of the inspector or inspectors on the number of shares
represented at the meeting and the results of the voting shall be
PRIMA FACIE evidence thereof.
SECTION 2.14 INFORMAL ACTION BY SHAREHOLDERS. Unless otherwise
provided in the Articles of Incorporation or Section 12.10 of the
Illinois Business Corporation Act of 1983, any action required to be
taken at any annual or special meeting of the shareholders, or any
other action which may be taken at a meeting of the shareholders, may
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 17
be taken without a meeting and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed (a) by the
holders of outstanding shares having not less than the minimum number
of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and
voting or (b) by all of the shareholders entitled to vote with respect
to the subject matter thereof. If such consent is signed by less than
all of the shareholders entitled to vote, then such consent shall
become effective only if at least five days prior to the execution of
the consent a notice in writing is delivered to all the shareholders
entitled to vote with respect to the subject matter thereof and, after
the effective date of the consent, prompt notice of the taking of the
corporation action without a meeting by less than unanimous written
consent shall be delivered in writing to those shareholders who have
not consented in writing.
SECTION 2.15 VOTING BY BALLOT. Voting on any question or in any
election may be by voice unless the presiding officer shall order or
any shareholder shall demand that voting be by ballot.
ARTICLE III
DIRECTORS
SECTION 3.1 GENERAL POWERS. The business and affairs of the
Corporation shall be managed by or under the direction its Board of
Directors.
SECTION 3.2 NUMBER, TENURE AND QUALIFICATIONS. (a) The number
of Directors of the Corporation shall be not less than nine (9) nor
more than fourteen (14), with the exact number of directors to be
fixed from time to time pursuant to a resolution adopted by a majority
of the Board of Directors then in office. No amendment or change of
these Bylaws shall act to change the election of or term of or class
of any member of the Board of Directors who is properly elected and
serving at the time of such amendment or change.
(b) The Board of Directors of the Corporation shall be divided
into three classes, the classes to be as nearly equal in number as
possible. The class of each member of the first Board of Directors
shall be designated by resolution of the incorporators. At each
annual meeting of shareholders, directors chosen to succeed those
whose terms expire shall be elected for a term expiring at the third
succeeding annual meeting of shareholders following their election so
that the term of office of one class of directors shall expire in each
year.
(c) In order to be eligible for nomination, election,
appointment or service as a member of the Board of Directors, an
individual must meet the following qualifications:
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 18
(i) Directors must be at least twenty-one years of
age;
(ii) Directors need not be residents of Illinois;
(iii) Directors must be shareholders of Illini
Corporation;
(iv) Directors must meet any and all qualifications
established for Directors of bank holding
companies and banks by the Federal Reserve Board,
Federal Deposit Insurance Corporation, Illinois
Office of Banks and Real Estate, or any other
Federal or State Banking Agency having regulatory
authority over or concerning Illini Corporation or
any of its subsidiaries;
(v) Directors shall not be a principal, officer,
director or employee of any corporation,
unincorporated association or partnership,
primarily engaged in the issue, underwriting,
public sale or distribution at wholesale or
retail, of stocks, bonds or other similar
securities;
(vi) Directors shall not be officers, directors or
employees of any depository institution or
depository institution holding company other than
the corporation or its subsidiary, or other
institutions or companies in which the corporation
may own stock; and
(vii) Directors shall not be persons who have been
removed or disqualified by operation of law or
regulation from being or serving as a shareholder,
director, officer or employee of an insured
financial institution.
SECTION 3.3 REGULAR MEETINGS. A regular meeting of the Board of
Directors shall be held without other notice than this bylaw
immediately after, and at the same place as, the annual meeting of
shareholders. The Board of Directors may provide, by resolution, the
time and place, either within or without the State of Illinois, for
the holding of additional regular meetings without other notice than
such resolution.
SECTION 3.4 SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by or at the request of the President or any
Director. The person or persons authorized to call special meetings
of the Board of Directors may fix any place, either within or without
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 19
the State of Illinois, as the place for holding any special meeting of
the Board of Directors called by them.
SECTION 3.5 NOTICE. Notice of any special meeting of the Board
of Directors shall be given at least two (2) days before the meeting
or within such shorter period before the meeting as the person or
persons calling such meeting deem appropriate in the circumstances.
Such notice shall be delivered to each director personally, by mail to
each director at his or her business address, by telegram, by
telephone or by facsimile. Any Director may waive notice of any
meeting. The attendance of a Director at any meeting shall constitute
a waiver of notice of such meeting, except where a Director attends a
meeting for the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified
in the notice or waiver of notice of such meeting.
SECTION 3.6 QUORUM. Unless otherwise provided in the Articles
of Incorporation, a majority of the number of Directors fixed by these
Bylaws shall constitute a quorum for the transaction of business at
any meeting of the Board of Directors, provided, that if less than a
majority of such number of Directors are present at said meeting, a
majority of the Directors present may adjourn the meeting from time to
time without further notice. Unless specifically prohibited by the
Articles of Incorporation, members of the Board of Directors or of any
committee of the Board of Directors may participate in and act at any
meeting of such board or committee through the use of a conference
telephone or other communications equipment by means of which all
persons participating in the meeting can hear each other.
Participation in such meeting shall constitute attendance and presence
in person at the meeting of the person or persons so participating.
SECTION 3.7 MANNER OF ACTING. The act of the majority of the
Directors present at a meeting at which a quorum is present shall be
the act of the Board of Directors, unless the act of a greater number
is required by statute, these Bylaws or the Articles of Incorporation.
SECTION 3.8 RESIGNATIONS. A Director may resign at any time by
giving written notice to the Board of Directors, its Chairperson, if
any, or to the President or Secretary of the Corporation. A
resignation shall be effective when the notice is given unless the
notice specifies a future date. Acceptance of such resignation shall
not be necessary to make it effective. The pending vacancy may be
filled before the effective date, but the successor shall not take
office until the effective date.
SECTION 3.9 VACANCIES. Any vacancy occurring in the Board of
Directors and any directorship to be filled by reason of an increase
in the number of Directors, may be filled by election at an annual
meeting or at a special meeting of shareholders called for that
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 20
purpose or by appointment by a majority vote of the Directors then in
office, though less than quorum. A Director elected by shareholders
to fill a vacancy shall hold office for the balance of the term for
which he or she is elected. A Director appointed by the Board of
Directors to fill a vacancy shall serve until the next meeting of
shareholders at which Directors are to be elected.
SECTION 3.10 INFORMAL ACTION BY DIRECTORS. Unless specifically
prohibited by the Articles of Incorporation or by other provisions of
these Bylaws, any action required to be taken at a meeting of the
Board of Directors, or any other action which may be taken at a
meeting of the Board of Directors, or of any committee thereof, may be
taken without a meeting if a consent in writing, setting forth the
action so taken, shall be signed by all the Directors entitled to vote
with respect to the subject matter thereof, or by all the members of
such committee, as the case may be. Any such consent signed by all
the Directors or all the members of the committee shall have the same
effect as a unanimous vote, and may be stated as such in any document
filed with the Secretary of State of the State of Illinois or with
anyone else.
SECTION 3.11 COMMITTEES. (a) A majority of the Directors fixed
by these Bylaws may, by resolution, create one or more committees and
appoint members of the Board to serve on any one or more of such
committees. Each committee shall have two (2) or more members who
shall serve at the pleasure of the Board. A majority of any committee
shall constitute a quorum and a majority of a quorum is necessary for
committee action. Each committee, to the extent provided by the Board
of Directors in such resolution, shall have and exercise all of the
authority of the Board of Directors in the management of the
Corporation, except that a committee may not authorize distributions;
approve or recommend to shareholders any act required by statute to be
approved by shareholders; fill vacancies on the Board or on any of its
committees; elect or remove officers or fix the compensation of any
member of the committee; adopt, amend or repeal the Bylaws; approve a
plan of merger not requiring shareholder approval; authorize or
approve the reacquisition of shares, except according to a general
formula or method prescribed by the Board; authorize or approve the
issuance or sale, or contract for sale, of shares or determine the
designation and relative rights, preferences, and limitations of a
series of shares, except that the Board may direct a committee to fix
the specific terms of issuance or sale or contract for sale or the
number of shares to be allocated to particular employees under an
employee benefit plan; or amend, alter, repeal, or take action
inconsistent with any resolution or action of the Board of Directors
when the resolution or action of the Board of Directors provides by
its terms that it shall not be amended, altered or repealed by action
of a committee. Vacancies in the membership of any committee shall be
filled by the Board of Directors. Each committee shall keep regular
minutes of its proceedings and report the same to the Board when
required. A committee may act by unanimous consent in writing without
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 21
a meeting and, subject to action by the Board of Directors, each
committee, by a majority vote of its members, shall determine the time
and place of meetings and the notice therefor.
(b) The Board of Directors shall establish, as permanent or
standing committees, an Executive Committee, an Audit Committee, a
Compensation Committee and a Nominating Committee. Other standing and
ad hoc committees may be established by the Board of Directors in the
normal course of business. The Chairman of the Board of the
Corporation shall be an ex officio member of all committees. Except
for the Audit Committee, the President of the Corporation will also be
an ex officio member of all committees.
(c) The EXECUTIVE COMMITTEE shall be composed of the Chairman of
the Board, the President, and at least one other director who is not
an active officer at the time of his appointment, and shall be
appointed at the Corporation s annual organizational meeting. The
Executive Committee shall have the authority to function as the
management of the Corporation (subject to subsection (a) above) and is
empowered to act directly on behalf of the Board of Directors during
interim periods between Board of Directors meetings and during
emergencies.
(d) The AUDIT COMMITTEE shall be composed of members of the
Board of Directors appointed by the Board at its annual organizational
meeting. The membership of the Audit Committee so appointed or
otherwise designated by the Board shall be comprised of members none
of whom may be an officer or employee of the Corporation or any of its
subsidiaries and all of whom shall, in the opinion of the Board of
Directors, be free from any relationship which would interfere with
the exercise of their independent judgment in exercising their duty as
a member of the Committee. This Committee shall review and make
recommendations to the Board of Directors with respect to the
following matters as they relate to the Corporation and its
subsidiaries: (1) the engagement or re-engagement of an independent
accounting firm to perform audits and report on the Corporation s
financial statements and provide other audit related services; (2) the
engagement of an independent accounting firm to provide non-audit
services; (3) the accounting policies, procedures, and principles
adopted or continued by the operating management of the Corporation
which will conform to the required accounting standards; (4) the
adequate implementation of the internal audit function, including a
general audit plan, and the competence of the personnel engaged in
such function; (5) the procedures to provide and encourage access to
the Committee, and to require such access by a duly authorized
representative of the independent accounting firms retained; (6) to
determine at least quarterly the adequacy of the Corporation s or
subsidiaries separate or consolidated allowance for loan losses,
including any other valuation accounts which may become required by
banking regulations; and (7) the conduct of such investigations
relating to financial affairs, records, accounts and reports as the
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 22
Committee may deem desirable from time to time, or as the Board of
Directors requests. This Committee shall also employ such experts as
deemed necessary in its judgment to perform its duties and satisfy its
responsibilities.
(e) The COMPENSATION COMMITTEE shall be composed of members who
are appointed annually at the annual organizational meeting and shall
include the Chairman of the Board, the President, and at least one
other director who is not an active officer of the Corporation or a
subsidiary thereof. This Committee shall have sole responsibility for
any matters directly or indirectly related to compensation of
employees of the Corporation or its subsidiaries (including the number
of positions created or existing, job descriptions, annual raises and
salary ranges) employee benefits, and general personnel policies and
related issues. Notwithstanding the membership stated above, any
serving member of the Committee who is an active officer in any
capacity whatsoever, including the President, shall abstain from
voting on any compensation issue or question in which that person has
an economic conflict of interest however direct or indirect that
interest might be.
(f) The NOMINATING COMMITTEE shall be composed of members of the
Board of Directors appointed by the Board at its annual organizational
meeting. The duties of the Nominating Committee are to: nominate
individuals to stand for election to the Board of Directors of the
Corporation, which nomination shall be subject to approval of the
Board of Directors; recommend procedures for the orderly and fair
nomination and election of Directors (subject to Section 3.14 below),
which procedures are subject to approval of the Board of Directors;
and review and evaluate the qualifications of and eligibility of any
and all nominees for election to the Board regardless of how such
nominee is nominated.
SECTION 3.12 COMPENSATION. The Board of Directors, by the
affirmative vote of a majority of Directors then in office, and
irrespective of any personal interest of any of its members, shall
have authority to establish reasonable compensation of all Directors
for services to the Corporation as Directors, officers or otherwise.
By resolution of the Board of Directors, the Directors may be paid
their expenses, if any, of attendance at each meeting of the Board.
No such payment previously mentioned in this Section shall preclude
any Director from serving the Corporation in any other capacity and
receiving compensation therefor.
SECTION 3.13 PRESUMPTION OF ASSENT. A Director of the
Corporation who is present at a meeting of the Board of Directors at
which action on any corporate matter is taken shall be conclusively
presumed to have assented to the action taken unless his or her
dissent shall be entered in the minutes of the meeting or unless he or
she shall file a written dissent to such action with the person acting
as the Secretary of the meeting before the adjournment thereof or
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 23
forward such dissent by registered or certified mail to the Secretary
of the Corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a Director who voted in favor
of such action.
SECTION 3.14 ADVANCE NOTICE OF NOMINATIONS FOR DIRECTORS. (a)
Nominations of persons for election to the Board of Directors shall be
brought before an annual meeting (i) pursuant to the Corporation's
notice of meeting, (ii) by or at the direction of the Board of
Directors or (iii) by any shareholder of the Corporation who was a
shareholder of record at the time of giving of notice provided for in
this Section 3.14, who is entitled to vote with respect thereto and
who complies with the notice procedures set forth in this Section
3.14. For nominations to be properly brought before an annual meeting
by a shareholder, the shareholder must have given timely notice
thereof in writing to the Secretary of the Corporation. To be timely,
a shareholder's notice must be delivered to or mailed to and received
by the Secretary at the principal executive offices of the Corporation
not later than the close of business on the 60th day nor earlier than
the close of business on the 90th day prior to the first anniversary
of the preceding year's annual meeting. In no event shall the public
or other announcement of an adjournment of an annual meeting or the
adjournment thereof commence a new time period for the giving of a
shareholder's notice as described above. Such shareholder's notice to
the Secretary shall set forth (i) as to each person whom such
shareholder proposes to nominate for election or reelection as a
director, the (A) name, age, business and residential address, (B)
principal occupation or employment, and (C) the class and number of
shares of the Corporation's capital stock that are owned beneficially
and of record by such person (including such person's written consent
to being named in the proxy statement as a nominee and to serving as a
Director, if elected), and (ii) as to the shareholder giving the
notice and the beneficial owner, if any, on whose behalf the
nomination is made, (A) the name and address of such shareholder, as
they appear on the Corporation's books, and the name and address of
such beneficial owner and (B) the class and number of shares of the
Corporation's capital stock that are owned beneficially and of record
by such shareholder and such beneficial owner.
Notwithstanding anything in the third sentence of the preceding
paragraph of this Section 3.14 to the contrary, in the event that the
number of directors to be elected to the Board of Directors of the
Corporation is increased and there is no public disclosure by the
Corporation naming all of the nominees for director or specifying the
size of the increased Board of Directors at least 70 days prior to the
first anniversary of the preceding year's annual meeting, a
shareholder's notice required by this Section 3.14 shall also be
considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be delivered to or
mailed to and received by the Secretary at the principal executive
offices of the Corporation not later than the close of business on the
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 24
10th day following the day on which such public disclosure is first
made by the Corporation.
(b) Nominations of persons for election to the Board of
Directors of the Corporation may be made at a special meeting of
shareholders at which Directors are to be elected (i) pursuant to the
Corporation's notice of meeting (ii) by or at the direction of the
Board of Directors or, (iii) provided that the Board of Directors has
determined that Directors shall be elected at such special meeting, by
any shareholder of the Corporation who is a shareholder of record at
the time of the giving of notice provided for in this Section 3.14,
who is entitled to vote for the election of Directors at the meeting
and who complies with the notice procedures set forth in this Section
3.14. In the event the Corporation calls a special meeting of
shareholders for the purpose of electing one or more Directors to the
Board, any such shareholder may nominate a person or persons (as the
case may be) for election to such position(s) as specified in the
Corporation's notice of meeting if the shareholder's notice required
by Section 3.14 shall be delivered to the Secretary at the principal
executive offices of the Corporation not later than the close of
business on the 14th day following (i) the date on which public
disclosure of the date of such meeting and of the nominees proposed by
the Board of Directors to be elected at such meeting is first made by
the Corporation or (ii) the date on which notice of such meeting is
mailed to the shareholders, whichever is earlier; provided, however,
that if such public disclosure is not made by the Corporation or
notice of such meeting is not mailed to the shareholders more than 21
days before the date of such special meeting, the shareholder's notice
required by Section 3.14 shall be delivered to the Secretary at the
principal executive offices of the Corporation not later than the
close of business on the 7th day following the date on which such
public disclosure is first made by the Corporation or notice of such
meeting is mailed to the shareholders, whichever is earlier. In no
event shall the public or other announcement of an adjournment of a
special meeting or the adjournment thereof commence a new time period
for the giving of a shareholder's notice as described above.
(c) Notwithstanding anything in the Bylaws to the contrary, only
such persons who are nominated in accordance with the procedures set
forth in this Section 3.14 shall be eligible for election as
Directors. The officer of the Corporation or other person presiding
over the meeting shall, if the facts so warrant, determine and declare
to the meeting that a nomination was not made in accordance with the
provisions of this Section 3.14 and, if such person should so
determine, such person shall so declare to the meeting and any such
defective nomination shall be disregarded.
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 25
ARTICLE IV
OFFICERS
SECTION 4.1 NUMBER. The officers of the Corporation shall be a
Chairman of the Board, a Vice-Chairman, a President, a Treasurer, and
a Secretary, and such Vice Presidents, Assistant Treasurers, Assistant
Secretaries or other officers as may be elected or appointed by the
Board of Directors. Any two (2) or more offices may be held by the
same person.
SECTION 4.2 ELECTION AND TERM OF OFFICE. The officers of the
Corporation shall be elected annually by the Board of Directors at the
first meeting of the Board of Directors held after each annual meeting
of shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as may be
convenient. Vacancies may be filled or new offices created and filled
at any meeting of the Board of Directors. Each officer shall hold
office until his successor shall have been duly elected and shall have
qualified or until his death or until he shall resign or shall have
been removed in the manner hereinafter provided. Election or
appointment of an officer or agent shall not of itself create contract
rights. Any officer may resign at any time by giving notice to the
Board of Directors or to the President or the Secretary. A
resignation of an officer need not be accepted in order to be
effective.
SECTION 4.3 REMOVAL. Any officer or agent may be removed by the
Board of Directors whenever in its judgment the best interests of the
Corporation would be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the person so removed.
SECTION 4.4 VACANCIES. A vacancy in any office because of
death, resignation, removal, disqualification or otherwise, may be
filled by the Board of Directors for the unexpired portion of the
term.
SECTION 4.5 CHAIRMAN AND VICE-CHAIRMAN OF THE BOARD. (a) The
Chairman of the Board shall preside at all annual, regular and special
meetings of the Board of Directors. He may sign, with the President
or any other proper officer of the Corporation thereunto authorized by
the Board of Directors, certificates for shares of the Corporation,
any deeds, mortgages, bonds, contracts, or other instruments which the
Board of Directors has authorized to be executed, except in cases
where the signing and execution thereof shall be expressly delegated
by the Board of Directors or by these Bylaws to some other officer, or
shall be required by law to be otherwise signed or executed; and in
general shall perform all duties incident to the office of Chairman of
the Board and such other duties as may be prescribed by the Board of
Directors from time to time. The Chairman of the Board is the senior
corporate officer of the Corporation and all other officers are
subordinate.
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 26
(b) The Vice-Chairman shall serve as Chairman and perform those
duties as enumerated thereunder provided the duly elected and serving
Chairman is absent for known reasons, or at the direction of the
Chairman, or upon the event the Chairman is temporarily incapable of
serving due to health, and upon the condition that the latter
circumstance is acknowledged in the corporate minutes by a majority of
the Board of Directors.
SECTION 4.6 PRESIDENT. The President shall be the principal
executive officer of the Corporation and shall, in general, supervise
and control all of the business and affairs of the Corporation. In
the absence of the Chairman of the Board and the Vice-Chairman, the
President shall preside at all meetings of the shareholders and of the
Board of Directors. The President may sign, with the Secretary or any
other proper officer of the Corporation thereunto authorized by the
Board of Directors, certificates for shares of the Corporation and any
deeds, mortgages, bond, contracts, or other instruments which the
Board of Directors has authorized to be executed, except in cases
where the signing and execution thereof shall be expressly delegated
by the Board of Directors or by these Bylaws to some other officer or
agent of the Corporation, or shall be required by law to be otherwise
signed or executed, and in general, shall perform all duties incident
to the office of President and such other duties as may be prescribed
by the Board of Directors.
SECTION 4.7 THE VICE PRESIDENTS. The Vice President (or in the
event there be more than one Vice President, each of the Vice
Presidents) shall assist the President in the discharge of the
President's duties as the President may direct and shall perform such
other duties as from time to time may be assigned by the President or
by the Board of Directors. In the absence of the President or in the
event of the President's inability or refusal to act, the Vice
President (or in the event there be more than one Vice President, the
Vice Presidents in the order designated by the Board of Directors, or
by the President if the Board of Directors has not made such a
designation, or in the absence of any designation, then in the order
of seniority of tenure as Vice President) shall perform the duties of
the President, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the President. Except in those
instances in which the authority to execute is expressly delegated to
another officer or agent of the Corporation or a different mode of
execution is expressly prescribed by the Board of Directors or these
Bylaws, the Vice President (or each of them if there are more than
one) may execute for the Corporation certificates for its shares and
any contracts, deeds, mortgages, bonds or other instruments which the
Board of Directors has authorized to be executed, and the Vice
President may accomplish such execution either under or without the
seal of the Corporation and either individually or with the Secretary,
any Assistant Secretary, or any other officer thereunto authorized by
the Board of Directors, according to the requirements of the form of
the instrument.
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 27
SECTION 4.8 THE TREASURER. If required by the Board of
Directors, the Treasurer shall give a bond for the faithful discharge
of duties in such sum and with such surety or sureties as the Board of
Directors shall determine. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the
Corporation; (b) receive and give receipts for moneys due and payable
to the Corporation from any source whatsoever, and deposit all such
moneys in the name of the Corporation in such banks, trust companies
or other depositaries as shall be selected in accordance with the
provisions of Section 5.4, DEPOSITS, of these Bylaws; and (c) in
general perform all the duties incident to the office of Treasurer and
such other duties as from time to time may be assigned to him by the
President or by the Board of Directors.
SECTION 4.9 THE SECRETARY. The Secretary shall: (a) keep the
minutes of the meetings of the shareholders, the Board of Directors
and committee of Directors, in one or more books provided for that
purpose; (b) see that all notices are duly given in accordance with
the provisions of these Bylaws or as required by law; (c) be custodian
of the corporate records and of the seal of the Corporation and see
that the seal of the Corporation is affixed to all certificates for
shares prior to the issue thereof and to all documents, the execution
of which on behalf of the Corporation under its seal is duly
authorized in accordance with the provisions of these Bylaws; (d) keep
a register of the post-office address of each shareholder which shall
be furnished to the Secretary by such shareholder; (e) sign with the
President, or a Vice President, certificates for shares of the
Corporation, the issue of which shall have been authorized by
resolution of the Board of Directors; (f) have general charge of the
stock transfer books of the Corporation; and (g) in general perform
all duties incident to the office of Secretary and such other duties
as from time to time may be assigned by the President or by the Board
of Directors.
SECTION 4.10 ASSISTANT TREASURERS AND ASSISTANT SECRETARIES.
The Assistant Treasurers shall respectively, if required by the Board
of Directors, give bonds for the faithful discharge of their duties in
such sums and with such sureties as the Board of Directors shall
determine. The Assistant Secretaries as thereunto authorized by the
Board of Directors may sign with the President or a Vice President
certificates for shares of the Corporation, the issue of which shall
have been authorized by a resolution of the Board of Directors. The
Assistant Treasurers and Assistant Secretaries, in general, shall
perform such duties as shall be assigned to them by the Treasurer or
the Secretary, respectively, or by the President or the Board of
Directors.
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 28
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 5.1 CONTRACTS. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or
execute and deliver any instrument in the name of and on behalf of the
Corporation, and such authority may be general or confined to specific
instances.
SECTION 5.2 LOANS. No loans shall be contracted on behalf of
the Corporation and no evidences of indebtedness shall be issued in
its name unless authorized by a resolution of the Board of Directors.
Such authority may be general or confined to specific instances.
SECTION 5.3 CHECKS, DRAFTS, ETC. All checks, drafts or other
orders for the payment of money, notes or other evidences of
indebtedness issued in the name of the Corporation, shall be signed by
such officer or officers, agent or agents of the Corporation and in
such manner as shall from time to time be determined by resolution of
the Board of Directors.
SECTION 5.4 DEPOSITS. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the credit
of the Corporation in such banks, trust companies or other
depositaries as the Board of Directors may select.
ARTICLE VI
CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 6.1 CERTIFICATES FOR SHARES. The issued shares of the
Corporation shall be represented by certificates or shall be
uncertificated shares. The certificates shall be in such form as
shall be determined by the Board of Directors, and shall be numbered
and entered in the books of the Corporation as they are issued. Each
certificate shall exhibit the registered holder's name and the number
and class of shares, and the designation of any series, that it
evidences, shall set forth such other statements as may be required by
statute, and shall be signed by the chief executive officer or a vice
president and by the treasurer or an assistant treasurer or by the
secretary or an assistant secretary, any or all of whose signatures
may be facsimile if such certificate is countersigned by a transfer
agent or registered by a registrar. In case any one (1) or more of
the officers who have signed or whose facsimile signatures appear on
any such certificate shall cease to be such officer or officers of the
Corporation, or an officer of the transfer agent or registrar, before
such certificate is issued and delivered, it may nonetheless be issued
and delivered with the same effect as if such officer or officers had
continued in office.
SECTION 6.2 LOST CERTIFICATES. If a certificate representing
shares has allegedly been lost or destroyed, the Board of Directors
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 29
may in its discretion, except as may be required by law, direct that a
new certificate be issued upon such indemnification and other
reasonable requirements as it may impose.
SECTION 6.3 TRANSFERS OF SHARES. Transfers of shares of the
Corporation shall be made only on the books of the Corporation by the
holder of record thereof or by his legal representative, who shall
furnish proper evidence of authority to transfer, or by his attorney
thereunto authorized by power of attorney duly executed and filed with
the Secretary of the Corporation, and on surrender for cancellation of
the certificate for such shares.
ARTICLE VII
VOTING OF SECURITIES
The President shall have full authority, in the name and on
behalf of the Corporation, to attend, act and vote at any meeting of
security holders of any corporation in which the Corporation may hold
securities, and at any such meeting shall possess and may exercise any
and all rights and powers incident to the ownership of such securities
and which, as the holder thereof, the Corporation might possess and
exercise if personally present, and may exercise such power and
authority through the execution of proxies or may delegate such power
and authority to any other officer, agent or employee of this
Corporation.
ARTICLE VIII
INDEMNIFICATION
(a) The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the Corporation) by reason of the fact that he or she is or
was a director or officer of the Corporation or is or was a director
or officer of the Corporation serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding, if such
person acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his or her conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person
did not act in good faith and in a manner which he or she reasonably
believed to be in or not opposed to the best interests of the
Corporation, or, with respect to any criminal action or proceeding,
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 30
that the person had reasonable cause to believe that his or her
conduct was unlawful.
(b) The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that such person
is or was a director or officer of the Corporation, or is or was a
director or officer of the Corporation serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees), actually and reasonably
incurred by such person in connection with the defense or settlement
of such action or suit if such person acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the
best interests of the Corporation, provided that no indemnification
shall be made with respect to any claim, issue or matter as to which
such person has been adjudged to have been liable to the Corporation
unless and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for
such expenses which the court shall deem proper.
(c) The Corporation may indemnify any person who is or was an
employee or agent of the Corporation, or is or was an employee or
agent of the Corporation serving at the request of the Corporation as
a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust or other enterprise to the extent
and under the circumstances provided by subsections (a) and (b) of
this Article VIII with respect to a person who is or was a director or
officer of the Corporation. To the extent that an employee or agent
of the Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections
(a), (b) and (c) of this Article VIII, or in defense of any claim,
issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred
by such person in connection therewith.
(d) Any indemnification under subsections (a), (b) and (c) of
this Article VIII (unless ordered by the court) shall be made by the
Corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee
or agent is proper in the circumstances because he or she has met the
applicable standard of conduct set forth therein. Such determination
shall be made (i) by the Board of Directors by a majority vote of a
quorum consisting of directors who were not parties to such action,
suit or proceeding, or (ii) if such a quorum is not obtainable, or
even if obtainable, if a quorum of disinterested directors so directs,
by independent legal counsel in a written opinion or (iii) by the
shareholders.
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 31
(e) Expenses incurred by an officer or director in defending a
civil or criminal action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if it shall ultimately be
determined that he or she is not entitled to be indemnified by the
Corporation as authorized in this Article VIII. Such expenses
(including attorneys' fees) incurred by other employees and agents may
be so paid upon such terms and conditions, if any, as the Board of
Directors deems appropriate.
(f) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Article VIII shall not be deemed
exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any bylaw, agreement,
vote of shareholders or disinterested directors or otherwise, both as
to action in his or her official capacity and as to action in another
capacity while holding such office.
(g) The Corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred by him
or her in any such capacity, or arising out of his or her status as
such, whether or not the Corporation would have the power to indemnify
such person against such liability under the provisions of this
Article VIII.
(h) If the Corporation has paid indemnity or has advanced
expenses to a director, officer, employee or agent, the Corporation
shall report the indemnification or advance in writing to the
shareholders with or before the notice of the next shareholders
meeting.
(i) For purposes of this Article VIII, references to "the
Corporation" shall include, in addition to the resulting corporation,
any merging corporation (including any entity having merged with a
merging corporation) absorbed in a merger which, if its separate
existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of
such merging corporation, or is or was serving at the request of such
merging corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under the provisions of
this Article VIII with respect to the resulting or surviving
corporation as he or she would have with respect to such merging
corporation if its separate existence had continued.
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 32
(j) For purposes of this Article VIII, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at
the request of the Corporation" shall include any service as a
director, officer, employee or agent of the Corporation which imposes
duties on, or involves services by, such director, officer, employee
or agent with respect to an employee benefit plan, its participants,
or beneficiaries; and a person who acted in good faith and in a manner
he or she reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of
the Corporation" as referred to in this Article VIII.
(k) The indemnification and advancement of expenses provided by,
or granted pursuant to, this Article VIII shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of that person.
(l) The provisions of this Article VIII shall be deemed to be a
contract between the Corporation and each person who serves as such
officer or director in any such capacity at any time while this
Article VIII and the relevant provisions of the Illinois Business
Corporation Act or other applicable laws, if any, are in effect, and
any repeal or modification of any such law or of this Article VIII
shall not affect any rights or obligations then existing with respect
to any state of facts then or theretofore existing or any action, suit
or proceeding theretofore or thereafter brought or threatened based in
whole or in part upon any such state of facts."
ARTICLE IX
FISCAL YEAR
The fiscal year of the Corporation shall begin on the first day
of January in each year and end on the last day of December in each
year.
ARTICLE X
DIVIDENDS
The Board of Directors may from time to time declare, and the
Corporation may pay, dividends on its outstanding shares in the manner
and upon the terms and conditions provided by law and the Articles of
Incorporation.
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
<PAGE> 33
ARTICLE XI
SEAL
The Corporation may have, but shall not be required to have, a
corporate seal as shall be determined by the Secretary of the
Corporation in the Secretary's discretion. If a corporate seal is
obtained, the seal shall contain the name of the Corporation and the
words "Corporate Seal, Illinois", and the use thereof shall be
determined from time to time by the officer or officers executing and
delivering instruments on behalf of the Corporation, provided that the
affixing of a corporate seal to an instrument shall not give the
instrument additional force or effect or change the construction
thereof. The seal, if any, may be used by causing it or a facsimile
thereof to be impressed or affixed or in any other manner reproduced.
ARTICLE XII
WAIVER OF NOTICE
Whenever any notice whatever is required to be given under the
provisions of these Bylaws or under the provisions of the Articles of
Incorporation or under the provisions of the Illinois Business
Corporation Act of 1983, a waiver thereof in writing, signed by the
person or persons entitled to such notice, whether before or after the
time stated therein, shall be deemed equivalent to the giving of such
notice. Attendance by a person at any meeting shall constitute waiver
of notice thereof unless at the meeting such person objects to the
holding of the meeting because proper notice was not given.
ARTICLE XIII
AMENDMENTS
Unless otherwise provided in the Articles of Incorporation, these
Bylaws may be made, altered, amended or repealed by the shareholders
or the Board of Directors.
Amended and Restated Bylaws of Illini Corporation
As Adopted on June 20, 1997
RIGHTS AGREEMENT
by and between
ILLINI CORPORATION
and
ILLINOIS STOCK TRANSFER COMPANY
as rights agent
Dated as of June 20, 1997
<PAGE> 35
TABLE OF CONTENTS
-----------------
Page
----
Section 1. Certain Definitions . . . . . . . . . . . . . . . . 37
Section 2. Appointment of Rights Agent . . . . . . . . . . . . 40
Section 3. Issue of Right Certificates . . . . . . . . . . . . 40
Section 4. Form of Right Certificates . . . . . . . . . . . . . 42
Section 5. Countersignature and Registration . . . . . . . . . 42
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates . . . . . . . . . . . . . 43
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights . . . . . . . . . . . . . 44
Section 8. Cancellation and Destruction of Right Certificates . 46
Section 9. Reservation and Availability of Shares of Common
Stock. . . . . . . . . . . . . . . . . . . . . . . . 46
Section 10. Common Stock Record Date . . . . . . . . . . . . . . 47
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights . . . . . . . . . . . . . . . . . . 48
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares . . . . . . . . . . . . . . . . . . 54
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power . . . . . . . . . . . . . . . . . . 55
Section 14. Additional Covenants . . . . . . . . . . . . . . . . 57
Section 15. Fractional Rights and Fractional Shares . . . . . . 58
Section 16. Rights of Action . . . . . . . . . . . . . . . . . . 59
Section 17. Agreement of Right Holders . . . . . . . . . . . . . 59
Section 18. Right Certificate Holder Not Deemed a Stockholder . 60
Section 19. Concerning the Rights Agent . . . . . . . . . . . . 60
<PAGE> 36
Section 20. Merger or Consolidation or Change of
Name of Rights Agent . . . . . . . . . . . . . . . . 60
Section 21. Terms and Conditions to Duties of Rights Agent . . . 61
Section 22. Change of Rights Agent . . . . . . . . . . . . . . . 63
Section 23. Issuance of New Right Certificates . . . . . . . . . 64
Section 24. Redemption . . . . . . . . . . . . . . . . . . . . . 64
Section 25. Exchange . . . . . . . . . . . . . . . . . . . . . . 65
Section 26. Notice of Certain Events . . . . . . . . . . . . . . 66
Section 27. Notices . . . . . . . . . . . . . . . . . . . . . . 67
Section 28. Supplements and Amendments . . . . . . . . . . . . . 67
Section 29. Determination and Actions by the Board of
Directors, etc. . . . . . . . . . . . . . . . . . . 68
Section 30. Successors . . . . . . . . . . . . . . . . . . . . . 68
Section 31. Benefits of this Agreement . . . . . . . . . . . . . 68
Section 32. Governing Law . . . . . . . . . . . . . . . . . . . 68
Section 33. Counterparts . . . . . . . . . . . . . . . . . . . . 69
Section 34. Descriptive Headings . . . . . . . . . . . . . . . . 69
Section 35. Severability . . . . . . . . . . . . . . . . . . . . 69
Exhibit A - Form of Rights Certificate 70
Exhibit B - Form of Summary of Rights 77
<PAGE> 37
RIGHTS AGREEMENT
----------------
This Agreement, dated as of June 20, 1997, is made by and between
Illini Corporation, an Illinois corporation (the "Company"), and
Illinois Stock Transfer Company, an Illinois corporation (the "Rights
Agent").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend distribution (the "Distribution") of one Right (as
hereinafter defined) for each share of Common Stock, $10.00 par value,
of the Company outstanding at the close of business on July 7, 1997
(the "Record Date") and has further authorized the issuance of one
Right in respect of each share of Common Stock of the Company issued
between such date and the earlier of the Distribution Date or the
Expiration Date (as such terms are hereinafter defined), each Right
initially representing the right to purchase one share of Common Stock
of the Company (the "Rights"), all upon the terms, with the
adjustments and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of a Substantial Block or who was such a
Beneficial Owner at any time after the date hereof, whether or not
such Person continues to be the Beneficial Owner of a Substantial
Block, but shall not include the Company, any Subsidiary of or other
Person controlled by the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, any Person appointed as
trustee by the Company or such Subsidiary pursuant to the terms of any
such plan in that Person's capacity as trustee or any Excluded
Acquiring Person. Notwithstanding the foregoing, no Person shall
become an "Acquiring Person" (i) as a result of the acquisition of
shares of Common Stock by the Company which, by reducing the number of
shares of Common Stock outstanding, increases the proportional number
of shares beneficially owned by such Person together with all
Affiliates and Associates of such Person; PROVIDED HOWEVER, that if
(1) a Person would become an Acquiring Person (but for the operation
of this subclause (i)) as a result of the acquisition of shares of
Common Stock by the Company, and (2) after such share acquisition by
the Company, such Person, or an Affiliate or Associate of such Person,
becomes the Beneficial Owner of any additional shares of Common Stock,
then such Person shall be deemed an Acquiring Person; or (ii) if the
<PAGE> 38
Board of Directors determines that such Person became an Acquiring
Person inadvertently, and such Person promptly divests itself of a
sufficient number of shares of Common Stock so that such Person is the
Beneficial Owner of such number of shares of Common Stock so that such
Person no longer would be an Acquiring Person.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934 (the "Exchange
Act"), as in effect on the date of this Agreement, but shall not
include the Company, any Subsidiary of or other Person controlled by
the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any Person appointed as trustee by the
Company or such Subsidiary pursuant to the terms of any such plan in
that Person's capacity as trustee.
(c) A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "beneficially own" any securities:
(i) of which such Person or any of such Person's Affiliates
or Associates directly or indirectly has "beneficial
ownership," as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act, as in
effect on the date of this Agreement;
(ii) which such Person or any of such Person's Affiliates
or Associates directly or indirectly has (A) the right to
acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or
upon the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be
deemed the Beneficial Owner of, or to "beneficially own,"
securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are
accepted for purchase; or (B) the right (whether sole or
shared) to vote or dispose of 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 clause (B) pursuant to an agreement, arrangement
or understanding to vote such security that (1) 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 Exchange Act and the rules and
regulations thereunder and (2) is not also then required to
be reported as beneficially owned on a Schedule 13D under
the Exchange Act (or any comparable or successor report); or
<PAGE> 39
(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 clause (B) of subparagraph (ii) of this
paragraph (c)) or disposing of any securities of the
Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when used
with reference to a Person's Beneficial Ownership of securities of the
Company, shall mean the number of such securities then issued and
outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed to
own beneficially hereunder.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday or a legal holiday for banking institutions in the State of
Illinois.
(e) "Close of business" on any given date shall mean 5:00 P.M.,
Central Time, on such date; PROVIDED, HOWEVER, that if such date is
not a Business Day it shall mean 5:00 P.M., Central Time, on the next
succeeding Business Day.
(f) "Common Stock" when used with reference to the Company shall
mean the Common Stock, $10.00 par value, of the Company. "Common
Stock" when used with reference to any Person other than the Company
shall mean the capital stock with the greatest aggregate voting power
or the equity securities or other equity interests having power to
control or direct the management of such Person or, if such Person is
a subsidiary of or controlled by another Person, the Person which
ultimately controls such first-mentioned Person and which has issued
and outstanding such capital stock, equity securities or equity
interests.
(g) "Excluded Acquiring Person" shall mean Mae H. Noll, together
with all her Affiliates and Associates, so long as Mae H. Noll,
together with all her Affiliates and Associates, beneficially own no
more than 14.3% of the shares of Common Stock of the Company then
outstanding.
(h) "Person" shall mean any individual, firm, corporation,
partnership, trust, association, joint venture, syndicate or other
entity, and shall include any successor (by merger or otherwise) of
such entity.
(i) "Stock Acquisition Date" shall mean the first date of public
announcement (which shall include, without limitation, a report filed
<PAGE> 40
pursuant to the Exchange Act) by the Company or an Acquiring Person of
facts that show that an Acquiring Person has become such.
(j) "Subsidiary" of any Person shall mean any corporation or
other Person of which a majority of the voting power of the voting
equity securities or equity interest is owned, directly or indirectly,
by such Person, or which is otherwise controlled by such Person.
(k) "Substantial Block" shall mean a number of shares of Common
Stock of the Company which equals or exceeds 10% of the number of
shares of Common Stock of the Company then outstanding.
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. In the event the Company appoints one or more Co-Rights
Agents, the respective duties of the Rights Agent and the Co-Rights
Agents shall be as the Company determines.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of the close of business on (i) the tenth
business day after the Stock Acquisition Date or (ii) the tenth
business day after the commencement of, or first public announcement
of, the intent of any Person (other than the Company or any of its
Subsidiaries or any employee benefit plan of the Company or of any
Subsidiary of the Company or any Person appointed as trustee by the
Company or such Subsidiary pursuant to the terms of any such plan in
such Person's capacity as trustee) to commence (which intention to
commence remains in effect for five business days after such
announcement) a tender or exchange offer which would result in such
Person becoming an Acquiring Person (including any such day which is
after the date of this Agreement and prior to the issuance of the
Rights, the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced by the
certificates for the Common Stock of the Company registered in the
names of the holders of the Common Stock (which certificates for
Common Stock shall be deemed also to be Right Certificates) and not by
separate Right Certificates, and (y) the right to receive Right
Certificates will be transferable only in connection with the transfer
of Common Stock. As soon as practicable after the Distribution Date,
the Rights Agent will send, by first-class, insured, postage prepaid
mail, to each record holder of the Common Stock as of the close of
business on the Distribution Date, at the address of such holder shown
on the records of the Company, a certificate for Rights, in
substantially the form of Exhibit A hereto (the "Rights
Certificates"), evidencing one Right for each share of Common Stock so
<PAGE> 41
held. As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) As soon as practicable after the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Common Stock, in
substantially the form attached hereto as Exhibit B (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record holder
of the Common Stock as of the close of business on the Record Date, at
the address of such holder shown on the records of the Company. With
respect to certificates for the Common Stock outstanding as of the
Record Date, until the Distribution Date, the Rights will be evidenced
by such certificates for the Common Stock registered in the names of
the holders of the Common Stock. Until the Distribution Date (or
earlier Expiration Date), the surrender for transfer of any of the
certificates for the Common Stock outstanding on the Record Date shall
also constitute the transfer of the Rights associated with the Common
Stock represented by such certificate.
(c) Rights shall be issued in respect of all shares of Common
Stock which become outstanding after the Record Date but prior to the
earlier of the Distribution Date or the Expiration Date. Certificates
representing such shares shall have impressed on, printed on, written
on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement
between Illini Corporation and Illinois Stock Transfer
Company dated as of June 20, 1997 (the "Rights Agreement"),
the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal
executive offices of Illini Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such
Rights may be redeemed, may expire or may be evidenced by
separate certificates and will no longer be evidenced by
this certificate. Illini Corporation will mail to the
holder of this certificate a copy of the Rights Agreement
without charge promptly upon receipt of a written request
therefor. Under certain circumstances, Rights issued to, or
held by, an Acquiring Person or Associates or Affiliates of
an Acquiring Person (as defined in the Rights Agreement) and
any subsequent holder of such Rights may become null and
void.
With respect to such certificates containing the foregoing legend,
until the Distribution Date, the Rights associated with the Common
Stock represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any of such
certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
<PAGE> 42
SECTION 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse
thereof) shall be substantially the same as Exhibit A hereto and may
have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of
Section 11 and Section 23 hereof, the Right Certificates, whenever
issued, shall be dated as of the Record Date, and on their face shall
entitle the holders thereof to purchase such number of shares of
Common Stock as shall be set forth therein at the price per share set
forth therein (the "Purchase Price"), but the number of such shares
and the Purchase Price shall be subject to adjustments as provided
herein.
(b) Any Right Certificate that represents Rights beneficially
owned by an Acquiring Person or any Associate or Affiliate of an
Acquiring Person and any Rights Certificate issued at any time upon
the transfer of any Rights to such an Acquiring Person or any
Associate or Affiliate thereof or to any nominee of such Acquiring
Person, Associate or Affiliate, and any Rights Certificate issued
pursuant to Section 6 or Section 11 upon transfer, exchange,
replacement or adjustment of any other Rights Certificate referred to
in this sentence, shall contain the following legend:
The Rights represented by this Rights Certificate were
issued to a Person who was an Acquiring Person or an
Affiliate or an Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement, dated as of June
20, 1997). This Rights Certificate and the Rights
represented hereby have become void to the extent provided
by Section 7(e) of the Rights Agreement.
The provisions of Section 7(e) of this Rights Agreement shall be
operative whether or not the foregoing legend is contained on any such
Rights Certificate.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board or its President or any Vice
President, either manually or by facsimile signature, and have affixed
thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Right Certificates
shall be countersigned by the Rights Agent manually or by facsimile
and shall not be valid for any purpose unless so countersigned. In
<PAGE> 43
case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, nevertheless, may be countersigned
by the Rights Agent, issued and delivered with the same force and
effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Company; and any Right Certificate
may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although
at the date of the execution of this Rights Agreement any such person
was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at one of its offices designated for such
purpose, books for registration and transfer of the Right Certificates
issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates and the date
of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
CERTIFICATES.
(a) Subject to the provisions of Section 15 hereof, at any time
after the close of business on the Distribution Date, and at or prior
to the close of business on the Expiration Date, any Right Certificate
or Certificates may be transferred, split up, combined or exchanged
for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of shares of Common Stock
as the Right Certificate or Right Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and shall
surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office
of the Rights Agent. Thereupon the Rights Agent shall countersign and
deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to 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 Right Certificate if mutilated,
the Company will make and deliver a new Right Certificate of like
<PAGE> 44
tenor to the Rights Agent for delivery to the registered owner in lieu
of the Right Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION
DATE OF RIGHTS.
(a) The registered holder of any Right Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein) in
whole or in part at any time after the Distribution Date, upon
surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights
Agent at the principal office of the Rights Agent in Chicago,
Illinois, together with payment of the Purchase Price for each share
of Common Stock of the Company as to which the Rights are exercised,
at or prior to the close of business on the earlier of the close of
business on (i) July 7, 2007 (the "Final Expiration Date"), or (ii)
the date on which the Rights are redeemed pursuant to Section 24 (such
earlier date 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 $80.00, shall be subject
to adjustment from time to time as provided in Sections 11 and 13 and
shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the shares to be
purchased, and an amount equal to any applicable transfer tax in cash,
or by certified check or bank draft payable to the order of the
Company, the Rights specified in the election shall be exercised, and
the Rights Agent shall, subject to Section 21(j), thereupon promptly
(i) (A) requisition from any transfer agent of the Common Stock of the
Company (or make available, if the Rights Agent is the transfer agent)
certificates for the 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, in its sole
discretion, shall have elected to deposit the shares of Common Stock
issuable upon exercise of the Rights hereunder into a depositary,
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) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 15, (iii) promptly after receipt of such
certificates, cause the same to be delivered to or upon the order of
the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder and (iv) when
appropriate, after receipt promptly deliver such cash to or upon the
order of the registered holder of such Right Certificate. The payment
<PAGE> 45
of the Purchase Price may be made (x) in cash or by certified bank
check or bank draft payable to the order of the Company, or (y) by
delivery of a certificate or certificates (with appropriate stock
powers executed in blank attached thereto) evidencing a number of
shares of Common Stock equal to the then Purchase Price divided by the
closing price (as determined pursuant to Section 11(d) hereof) per
share of Common Stock on the Trading Day immediately preceding the
date of such exercise. In the event that the Company is obligated to
issue other securities (including shares of Common Stock) of the
Company, pay cash and/or distribute other property pursuant to Section
11(a) hereof, the Company will make all arrangements necessary so that
such other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate. In
addition, in the case of an exercise of the Rights by a holder
pursuant to Section 11(a)(ii), the Rights Agent shall return such
Rights Certificate to the registered holder thereof after imprinting,
stamping or otherwise indicating thereon that the rights represented
by such Rights Certificate no longer include the rights provided by
Section 11(a)(ii) of the Rights Agreement and if less than all the
Rights represented by such Rights Certificate were so exercised, the
Rights Agent shall indicate on the Rights Certificate the number of
Rights represented thereby which continue to include the rights
provided by Section 11(a)(ii).
(d) In case the registered holder of any Right Certificate shall
exercise (except pursuant to Section 11(a)(ii)) less than all the
Rights evidenced thereby, a new Right Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate or to
his duly authorized assigns, subject to the provisions of Section 15.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of an event described in Section
11(a)(ii), any Rights beneficially owned (including beneficial
ownership that can be deemed to exist because of the transfer of
voting rights pursuant to a voting trust or similar arrangement) by an
Acquiring Person or an Associate or Affiliate of an Acquiring Person
shall be void and any holder of such Rights shall thereafter have no
right to exercise such Rights under any provision of this Agreement.
No Rights Certificate shall be issued pursuant to Section 3 that
represents Rights beneficially owned by an Acquiring Person whose
Rights are void pursuant to the preceding sentence or any Associate or
Affiliate thereof; no Rights Certificate shall be issued at any time
upon the transfer of any Rights to an Acquiring Person whose Rights
are void pursuant to the preceding sentence or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person,
Associate or Affiliate; and any Rights Certificate delivered to the
Rights Agent for transfer to an Acquiring Person (or Associate or
Affiliate thereof) whose Rights are void pursuant to the preceding
sentence shall be canceled.
<PAGE> 46
(f) Notwithstanding anything in this Agreement to the contrary,
the Rights shall not be effectively exercised and neither the Rights
Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported
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 election to purchase set forth on the reverse side of the
Right Certificate surrendered for such exercise, and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT
CERTIFICATES. All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to
the Rights Agent for cancellation or in canceled form, or, if
surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The
Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other
Right Certificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such canceled Right Certificates, and
in such case shall deliver a certificate of destruction thereof to the
Company.
SECTION 9. RESERVATION AND AVAILABILITY OF SHARES OF COMMON
STOCK.
(a) The Company covenants and agrees that after the occurrence
of an event described in Section 11 it will cause to be reserved and
kept available, and not reserved for other purposes, out of its
authorized and unissued shares of Common Stock or its authorized and
issued shares of Common Stock held in its treasury, the number of
shares of Common Stock that will be sufficient to permit the exercise
in full of all outstanding Rights.
(b) So long as the Common Stock issuable upon the exercise of
Rights may be listed on any national securities exchange, the Company
shall use its best efforts to cause, from and after the Distribution
Date, all shares reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to insure that all shares of Common Stock
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 shares.
<PAGE> 47
(d) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of
the Right Certificates or of any shares of Common Stock 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
involved in the transfer or delivery of Right Certificates or the
issuance or delivery of certificates for Common Stock in a name other
than that of the registered holder of the Right Certificate evidencing
Rights surrendered for exercise or to issue or deliver any
certificates for shares of Common Stock upon the exercise of any
Rights until any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
(e) The Company shall use its best efforts to (i) file, as soon
as practicable following the Distribution Date, a registration
statement under the Securities Act of 1933 (the "Act"), with respect
to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become
effective as soon as 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 and the rules and
regulations thereunder) until the earlier of (A) the date as of which
the Rights are no longer exercisable for such securities, and (B) the
Expiration Date. 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
exercisability of the Rights.
SECTION 10. COMMON STOCK RECORD DATE. Each person in whose
name any certificate for shares of Common Stock is issued upon the
exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Common Stock represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made in
accordance with Section 7; PROVIDED, HOWEVER, that if the date of such
surrender and payment is a date upon which the Common Stock transfer
books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall
be dated, the next succeeding business day on which the Common Stock
transfer books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate 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.
<PAGE> 48
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number of shares covered by
each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Common Stock
payable in shares of Common Stock, (B) subdivide the outstanding
shares of Common Stock, (C) combine the outstanding shares of Common
Stock into a smaller number of shares or (D) issue any shares of its
capital stock in a reclassification or recapitalization of the Common
Stock (including any such reclassification or recapitalization in
connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided
this Section 11(a) and in Section 7(e), the Purchase Price in effect
at the time of the record date for such dividend or of the effective
date of such subdivision, combination, reclassification or
recapitalization, and the number and kind of shares of capital stock
issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock,
other securities and/or property which, if such Right had been
exercised immediately prior to such date and at a time when the Common
Stock transfer books of the Company were open, such holder would have
owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination, reclassification or
recapitalization; PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company
issuable upon the exercise of one Right. If an event occurs which
would require an adjustment under both Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall
be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii).
(ii) In the event that at any time after the date hereof,
any Person, alone or together with its Affiliates and Associates,
shall become an Acquiring Person then proper provision shall be made
so that each holder of a Right, except as provided in Section 7(e)
hereof, shall have a 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 is then exercisable and dividing that product by (y) 50% of
the current market price for one share of Common Stock (determined
pursuant to Section 11(d)) on the date of the occurrence of the event
set forth above in this subparagraph (ii) (such number of shares being
referred to as the "number of Adjustment Shares"); PROVIDED, HOWEVER,
that if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of Section 13
<PAGE> 49
hereof, then only the provisions of Section 13 hereof shall apply and
no adjustment shall be made pursuant to this Section 11(a)(ii).
(iii) In the event that there shall not be sufficient
treasury shares or authorized but unissued shares of Common Stock to
permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii) or, if any regulatory approvals for the
issuance of such Common Stock has not been obtained by the Company,
and the Rights become so exercisable, notwithstanding any other
provision of this Agreement, to the extent necessary and permitted by
applicable law and any agreements in effect on the date hereof to
which it is a party, the Company shall, with respect to each Right,
make adequate provision to substitute upon exercise of such Right to
the extent necessary and on a pro rata or such other basis as the
Company deems appropriate, (1) cash, (2) a reduction in the Purchase
Price, (3) other equity securities of the Company (including without
limitation shares or units of shares of preferred stock or other
securities), (4) debt securities of the Company, (5) other assets, or
(6) any combination of the foregoing, having an aggregate value equal
to the "current per share market price" (as determined pursuant to
Section 11(d) hereof) of the Common Stock for which such Right is
otherwise exercisable, where such aggregate value has been determined
by the Board of Directors of the Company based upon the advice of an
investment banking firm selected by the Board of Directors of the
Company.
(b) In case a record date is fixed by the Company or otherwise
established for the issuance of rights, options or warrants to all
holders of Common Stock entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or purchase
Common Stock (or securities convertible into Common Stock) at a price
per share of Common Stock (or having a conversion price per share of
Common Stock, if a security convertible into Common Stock) less than
the current market price (as defined in Section 11(d)) 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,
of which the numerator 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 offering price of the total number of shares
of 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 of which the denominator
shall be the number of shares of Common Stock outstanding on such
record date plus the number of additional shares of Common Stock to be
offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); PROVIDED,
HOWEVER, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one
Right. In case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the value of
<PAGE> 50
such consideration shall be as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent. 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 or
established; and in the event that such rights, options 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 or established.
(c) If the Company shall fix a record date for the making of 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),
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)), the
Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the current market price (as defined in Section 11(d)) per share of
Common Stock on such record date, less the fair market value (as
determined reasonably and with good faith to the holders of Rights by
the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription
rights or warrants distributable in respect of one share of Common
Stock and the denominator of which shall be the current market price
per share of the Common Stock; PROVIDED, HOWEVER, that in no event
shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of one Right. 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 again be adjusted to be the Purchase Price which would be in
effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, 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 Common Stock
for the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; PROVIDED, HOWEVER, that in
the event that the current market price per share of Common Stock is
determined during a period following the announcement by the issuer of
the Common Stock of (i) a dividend or distribution on the Common Stock
payable in shares of Common Stock or securities convertible into
shares of Common Stock or (ii) any subdivision, combination or
reclassification of the Common Stock, and prior to the expiration of
30 Trading Days after the ex-dividend date for such dividend or
<PAGE> 51
distribution, or the record date for such subdivision, combination or
reclassification, as the case may be, then, and in each such case, the
"current market price" shall be appropriately adjusted to reflect the
current market price per common share equivalent. The closing price
for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if
the shares of Common Stock are not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if the shares of Common
Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ") or such other system then in
use, or, if on any such date the shares of Common Stock are not quoted
by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in
the Common Stock selected by the Board of Directors of the Company,
except that, if on any such date no market maker is making a market in
the Common Stock, the fair value of such shares on such date as
determined in good faith by the Board of Directors of the Company
shall be used. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or admitted
to trading on any national securities exchange, a Business Day. If
the Common Stock is not publicly held or not so listed or traded,
"current market price" per share shall mean the fair value per share
as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the
Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1%
in such price; 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 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 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), the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the
<PAGE> 52
Company other than shares of Common Stock, thereafter the number of
such other shares so receivable upon exercise of any Right shall be
subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the
shares contained in Section 11(a) through (c), inclusive, and the
provisions of Sections 7, 9, 10, 13 and 15 with respect to the shares
of 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 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), upon each adjustment of the Purchase Price
as a result of the calculations made in Section 11(b) and (c), 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 (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 substitution
for any adjustment in the number of shares of Common Stock purchasable
upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of 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 ten-thousandth) 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. Such record date may
be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, the
record date shall be at least 10 days later than the date of the
public announcement. If Right 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 Right Certificates on such record
date Right Certificates evidencing, subject to Section 15, the
additional Rights to which such holders shall be entitled as a result
<PAGE> 53
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 Right Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which
such holders shall be entitled after such adjustment. Right
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 Right Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common Stock issuable upon the
exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price per share
and the number of shares which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the per share Purchase Price below the then par value per
share, if any, of the shares of Common Stock issuable upon exercise of
the Rights, the Company shall 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 shares of such
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 issuing to the holder of any Right
exercised after such record date the shares of Common Stock and other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the 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 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 reductions in the Purchase
Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that any consolidation or
subdivision of the Common Stock, issuance wholly for cash of any
shares of Common Stock at less than the current market price, 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,
stock dividends or issuance of rights, options or warrants referred to
<PAGE> 54
hereinabove in this Section 11, hereafter made by the Company to
holders of its Common Stock shall not be taxable to such stockholders.
(n) Anything in this Agreement to the contrary notwithstanding,
in the event that the Company shall at any time after the date of this
Agreement (i) declare a dividend on the outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, (iii) combine the outstanding Common Stock
into a smaller number of shares or (iv) issue any shares of its
capital stock in a reclassification of the outstanding Common Stock,
the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the
number of Rights thereafter associated with each share of Common Stock
following any such event shall equal the result obtained by
multiplying the number of Rights associated with each share of Common
Stock immediately prior to such event (or, in the event that any
adjustment is made in connection with such event by reason of Section
11(i), after such adjustment) 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 after the occurrence of the event.
(o) Notwithstanding any other provision of this Agreement, no
adjustment to the Purchase Price, the number of shares of Common Stock
(or fractions of a share) for which a Right is exercisable or the
number of Rights outstanding (except as permitted by Section 24
hereof) or any similar adjustment shall be made or be effective if
such adjustment would have the effect of reducing or limiting the
benefits the holders of the Rights would have had absent such
adjustment, including, without limitation, the benefits under Section
11(a)(ii) and Section 13, unless the terms of this Agreement are
amended so as to preserve such benefits.
(p) The Company covenants and agrees that, following the
Distribution Date, except as permitted by Section 24 or Section 26
hereof, it will not, directly or indirectly, take any action the
purpose or effect of which is to eliminate or otherwise diminish the
benefits intended to be afforded by the Rights.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES. Whenever an adjustment is made as provided in Section 11
or 13, 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) mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 26. The Rights Agent shall be
fully protected in relying on any such certificate and on any
adjustment contained therein.
<PAGE> 55
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, (i) the Company shall consolidate with, or
merge with and into, any other Person, and the Company shall not be
the continuing or surviving corporation, (ii) any Person shall
consolidate with the Company, or merge with and into the Company, and
the Company shall be the continuing or surviving corporation and, in
connection therewith, all or part of the Common Stock of the Company
shall be changed into or exchanged for stock or other securities of
any other Person or cash or any other property, or (iii) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one or more 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, then, and in each such case, proper provision
shall be made so that (A) each holder of a Right, subject to Section
7(e), shall thereafter have the right to receive, upon the exercise
thereof at the then-current Purchase Price in accordance with the
terms of this Agreement, such number of validly authorized and issued,
fully paid, non-assessable and freely tradeable shares of Common Stock
of the Principal Party (as hereinafter defined), free and clear of any
liens, encumbrances and adverse claims and not subject to any rights
of call, purchase or first refusal, as shall be equal to the result
obtained by (x) multiplying the then current Purchase Price by the
number of shares of Common Stock for which a Right is then exercisable
(without taking into account any adjustment previously made pursuant
to Section 11(a)(ii) hereof) and dividing that product by (y) 50% of
the current market price (determined pursuant to Section 11(d)) per
share of the Common Stock of the Principal Party on the date of
consummation of such consolidation, merger, sale or transfer; (B) such
Principal Party shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (C)
the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following
the first occurrence of an event set forth in Section 13(a) hereof;
and (D) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its
Common Stock in accordance with Section 9) in connection with such
consummation as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in
relation to the shares of its Common Stock or cash, property or other
securities thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean (i) in the case of any
transaction described in (i) or (ii) 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 in such merger or
consolidation, and if no securities are so issued, the Person that is
<PAGE> 56
the other party to such merger or consolidation; and (ii) in the case
of any transaction described in (iii) of the first sentence in 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
shares of Common Stock of such Person are not at such time and have
not been continuously over the preceding twelve month period
registered under Section 12 of the Exchange Act ("Registered Common
Shares") or such Person is not a corporation, and such Person is
directly or indirectly controlled by another Person which has
Registered Common Shares outstanding, "Principal Party" shall refer to
such other Person; (2) if the shares of Common Stock of such Person
are not Registered Common Shares or such Person is not a corporation,
and such Person is directly or indirectly controlled by another Person
which does not have Registered Common Shares outstanding, "Principal
Party" shall refer to the controlling Person of such first-mentioned
Person; (3) if the shares of Common Stock of such Person are not
Registered Common Shares or such Person is not a corporation, and such
Person is directly or indirectly controlled by more than one Person,
and one or more of such controlling Persons have Registered Common
Shares outstanding, "Principal Party" shall refer to whichever of such
controlling Persons is the issuer of the Registered Common Shares
having the greatest aggregate market value; and (4) if the shares of
Common Stock of such Person are not Registered Common Shares or such
Person is not a corporation, and such Person is directly or indirectly
controlled by more than one Person, and none of such controlling
Persons have Registered Common Shares outstanding, "Principal Party"
shall refer to whichever controlling Person is the corporation having
the greatest stockholders equity or, if no such controlling Person is
a corporation, shall refer to whichever controlling Person has the
greatest net assets.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent
a legally valid, binding and enforceable supplemental agreement in
compliance with the provisions set forth in Section 13(a) and (b), and
if applicable Section 13(d), and further providing that, as soon as
practicable after the date of any consolidation, merger or sale of
assets mentioned in this Section 13, such issuer 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) use its best efforts to qualify or register the Rights and
the securities purchasable upon exercise of the Rights under the blue
sky laws of such jurisdictions as may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical financial statements
for such issuer and each of its Affiliates which comply in all
<PAGE> 57
respects with the requirements for registration on Form 10 under the
Exchange Act.
(d) Notwithstanding anything in Section 13(b) and (c) to the
contrary, if the Principal Party as determined pursuant to paragraph
(b) above is not a corporation or does not have shares of Common
Stock, proper provision shall be made so that such Principal Party
shall create or otherwise make available for purposes of the exercise
of the Rights in accordance with the terms of this Agreement, cash or
a type or types of securities having a fair market value (as
determined by a nationally recognized investment banking firm selected
by the Board of Directors of the Company) equal to at least the value
of the shares of Common Stock which each holder of a Right would have
been entitled to receive if such Principal Party had been a
corporation or had shares of Common Stock.
(e) The Company covenants and agrees that, following the
Distribution Date, it shall not consummate any of the transactions
described in clauses (i), (ii) and (iii) of the first sentence of
Section 13(a) if at the time of or after such consummation there would
be any charter or by-law provisions or any rights, warrants or other
instruments or securities outstanding or agreements in effect or any
other action taken which would diminish or eliminate the benefits
intended to be afforded by the Rights, unless prior thereto the
Principal Party shall have amended or repealed such charter or by-law
provisions, instruments or securities, agreements or actions or
otherwise protected the holders of the Rights from such diminution or
elimination of benefits, and the Company and the Principal Party shall
have executed and delivered to the Rights Agent a legally valid,
binding and enforceable supplemental agreement providing for such
amendment, repeal or other protection.
(f) The provisions of this Section 13 shall similarly apply to
successive mergers, consolidations, sales or other transfers.
Notwithstanding the occurrence of any transaction set forth in Section
11(a)(ii), in the event that any transaction set forth in Section 13
subsequently occurs, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described
in this Section 13.
SECTION 14. ADDITIONAL COVENANTS.
(a) After the Stock Acquisition Date, the Company covenants and
agrees that it shall not (i) consolidate with, (ii) merge with or
into, or (iii) sell or transfer to, in one or more 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,
any other Person if at the time of or after such consolidation, merger
or sale there are any charter or by-law provisions or any rights,
warrants or other instruments outstanding or any other action taken
which would diminish or otherwise eliminate the benefits intended to
be afforded by the Rights. The Company shall not consummate any such
<PAGE> 58
consolidation, merger or sale unless prior thereto the Company and
such other Person shall have executed and delivered to the Rights
Agent a supplemental agreement evidencing compliance with this
subsection.
SECTION 15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal
to the same fraction of the current market value of a whole Right.
For the purposes of this Section 15(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights
would have been otherwise issuable. The closing price for any day
shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if
the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in
the Rights selected by the Board of Directors of the Company, except
that, 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 of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of
shares upon exercise of the Rights or to distribute certificates which
evidence fractional shares. In lieu of fractional shares, the Company
may pay to the registered holders of Right Certificates at the time
such Right Certificates are exercised as herein provided an amount in
cash equal to the same fraction of the current market value of a share
of Common Stock. For purposes of this Section 15(b), the current
market value of a share of Common Stock shall be the closing price of
a share of Common Stock (as determined pursuant to the second sentence
of Section 11(d)) for the Trading Day immediately prior to the date of
such exercise.
<PAGE> 59
(c) Each holder of a Right or Rights by the acceptance of the
Rights expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right or Rights.
SECTION 16. RIGHTS OF ACTION. All rights of action in respect
of this Agreement are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the
registered holders of the Common Stock); and any registered holder of
any Right 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 Right Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in
this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against
actual or threatened violations of, the obligations of any Person
subject to this Agreement. Holders of Rights shall be entitled to
recover the reasonable costs and expenses, including attorneys' fees,
incurred by them in any action to enforce the provisions of this
Agreement.
SECTION 17. AGREEMENT OF RIGHT 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 close of business on the Distribution Date, the
Rights will be transferable only in connection with the transfer of
Common Stock;
(b) after the close of business on the Distribution Date, the
Rights will be transferable only by transfer of the Right
Certificates, which are transferable only on the registry books of the
Rights Agent if surrendered at the principal office of the Rights
Agent, duly endorsed or accompanied by a proper instrument of
transfer; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name each Right 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
Right Certificate 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 shall be
affected by any notice to the contrary.
<PAGE> 60
SECTION 18. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Right Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of
Common Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby,
nor shall anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate, as such,
any of the rights of a stockholder of the Company 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), or
to receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
SECTION 19. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of
its duties hereunder. The Company also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful misconduct
on the part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and administration of
this Agreement, including the costs and expenses of defending against
any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted
by it in connection with its administration of this Agreement in
reliance upon any Right Certificate or certificate for Common Stock or
for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement or other paper or document
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons.
SECTION 20. 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 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
<PAGE> 61
hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 22. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates
shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent;
and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates
so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have
the full force provided in the Right Certificates and in this
Agreement.
SECTION 21. TERMS AND CONDITIONS TO DUTIES OF RIGHTS AGENT.
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall
be full authorization to the Rights Agent for 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 be proved or established by the Company prior to
taking or omitting any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the President or any
Vice President and by the Treasurer or any Assistant Treasurer or the
Secretary or any Assistant Secretary of the Company and delivered to
the Rights Agent; and such certificate shall be full authorization to
the Rights Agent for any action taken or omitted by it in good faith
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.
<PAGE> 62
(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 Right Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are
and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent)
or in respect of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition contained in
this Agreement or in any Right Certificate; nor shall it be
responsible for any adjustment required under the provisions of
Sections 11 or 13 or responsible for the manner, method or amount of
any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise
of Rights evidenced by Right Certificates after actual notice of any
such adjustment); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation
of any shares of Common Stock to be issued pursuant to this Agreement
or any Right Certificate or as to whether any shares of Common Stock
will, when 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
determinations, interpretations and instructions with respect to the
performance of its duties hereunder from the Chairman of the Board,
the President or any Vice President or the Secretary or any Assistant
Secretary or the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with
determinations, interpretations and instructions of any such officer.
(h) The Rights Agent and any shareholder, 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.
<PAGE> 63
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent
shall not be answerable or accountable for any act, default, neglect
or misconduct of any such attorneys or agents or for any loss to the
Company resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued
employment thereof.
(j) 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 of transfer
without first consulting with the Company.
SECTION 22. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties
under this Agreement upon 30 days' notice in writing mailed to the
Company and to each transfer agent of the Common Stock by registered
or certified mail, and to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Stock by registered or certified
mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting or shall repeatedly fail or
refuse to act, the Company shall appoint a successor to the Rights
Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity or repeated
failure or refusal to act by the Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the registered holder
of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of
the United States or of the State of Illinois (or of any other state
of the United States so long as such corporation is authorized to do
business in the State of Illinois), in good standing, which is
authorized under such laws to exercise corporate trust powers and is
subject to supervision or examination by federal or state authority
and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000. After
appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed, and the
predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and
<PAGE> 64
execute and deliver any further assurance, conveyance, act or deed
necessary for the purpose. Not later than the effective date of any
such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the
Common Stock, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice
provided for in this Section 22, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of
the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
SECTION 23. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Right Certificates evidencing Rights in such form as may be approved
by its Board of Directors to reflect any adjustment or change in the
Purchase Price per share and the number or kind or class of shares of
stock or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.
SECTION 24. REDEMPTION.
(a) The Board of Directors of the Company may, at its option, at
any time prior to the earlier of (i) the Stock Acquisition Date or
(ii) the Final Expiration Date, redeem all but not less than all the
then outstanding Rights at a redemption price of $0.01 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").
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further
action and without any notice, the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the
Redemption Price. As soon as practicable after the action of the
Board of Directors ordering the redemption of the Rights, the Company
shall give notice of such redemption to the holders of the then
outstanding Rights by mailing such notice to all such holders at their
last addresses as they appear upon the 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. Such notice of redemption shall state the
method by which the payment of the Redemption Price will be made.
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 24, and
other than in connection with the repurchase of Common Stock prior to
the Distribution Date.
<PAGE> 65
(c) The Company may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press release
announcing the manner of redemption of the Rights and (ii) mailing
payment of the Redemption Price to the registered holders of the
Rights at their last addresses as they appear on the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent of the Common Stock, and upon such action,
all outstanding Rights Certificates shall be null and void without any
further action by the Company.
SECTION 25. EXCHANGE.
(a) Subject to Section 25(c), the Board of Directors of the
Company may, at its option, at any time after the time that any Person
becomes an Acquiring Person, 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) and
Section 11(a)(ii) hereof) for shares of Common Stock of the Company 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").
Notwithstanding the foregoing, the Board of Directors 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, any entity holding shares
of Common Stock for or pursuant to the terms of any such plan or any
trustee, administrator or fiduciary of such a plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the shares of Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a)
of this Section 25 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 shares of 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) and Section 11(a)(ii)
hereof) held by each holder of Rights.
<PAGE> 66
(c) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this
Section 25, the Company shall take all such action as may be necessary
to authorize additional shares of Common Stock for issuance upon
exchange of the Rights; and, consistent with the provisions of Section
9(e) and Section 11(a)(iii) hereof, in the event the Company is unable
to cause shares of Common Stock to be delivered in exchange for Rights
for any reason within 90 days after the announcement of the decision
to exchange Rights pursuant to Section (a) of this Section 25, the
Company shall substitute for each share of Common Stock otherwise
issuable upon the exchange of Rights, cash, other assets or other
securities of the Company (or any combination of the foregoing) having
an aggregate value equal to the "current per share market price" (as
determined pursuant to Section 11(d)(ii) hereof), as determined by the
Board of Directors of the Company.
SECTION 26. NOTICE OF CERTAIN EVENTS. In case the Company
shall propose (a) to pay any dividend payable in stock of any class to
the holders of its Common Stock or to make any other distribution to
the holders of its Common Stock (other than a regular periodic cash
dividend out of earnings or retained earnings or other than a special
cash dividend declared at a time when there is no Acquiring Person out
of earnings or retained earnings, or (b) to offer to the holders of
its 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 (c) to effect any
reclassification of its Common Stock (other than a reclassification
involving only the subdivision of outstanding shares of Common Stock),
or (d) to effect any consolidation or merger into or with, 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 or more
transactions, of more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person
or Persons, or (e) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to
each holder of a Right, in accordance with Section 26, a notice of
such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights, 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 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 (a) or (b) above at least twenty days
prior to the record date for determining holders of the Common Stock
for purposes of such action, and in the case of any such other action,
at least twenty days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of Common
Stock, whichever shall be the earlier.
In case any of the transactions set forth in Section 11(a)(ii) of
this Agreement shall occur, then, in any such case, the Company shall
<PAGE> 67
as soon as practicable thereafter give to each holder of a Right, in
accordance with Section 26, 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).
SECTION 27. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of
any Right Certificate to or on the Company shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent) as follows:
Illini Corporation
120 South Chatham Road
Springfield, Illinois 62704
Attention: Secretary
Subject to the provisions of Section 22, any notice or demand
authorized by this Agreement to be given or made by the Company or by
the holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the
Company) as follows:
Illinois Stock Transfer Company
223 West Jackson Boulevard
Suite 1210
Chicago, Illinois 60606
Attention: Robert G. Pearson, President
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate
shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
SECTION 28. SUPPLEMENTS AND AMENDMENTS. The Company and the
Rights Agent may from time to time supplement or amend this Agreement
without approval of any holders of Right Certificates in order to cure
any ambiguity, to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions
herein, to extend the period of redemption provided for in Section 24
hereof, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Rights Agent may
deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates; PROVIDED, HOWEVER,
that this Agreement may not be supplemented or amended in any way
after an Acquiring Person has become such. 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 28, the Rights Agent shall execute such
<PAGE> 68
supplement or amendment unless the Rights Agent shall have determined
in good faith that such supplement or amendment would adversely affect
its interest under this Agreement. Prior to the Distribution Date,
the interests of the holders of Rights shall be deemed coincident with
the interests of the holders of Common Stock.
SECTION 29. DETERMINATION 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 or any other securities 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 of Directors of the
Company shall have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers specifically
granted to the Board, or 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 the
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 Certificates and
all other parties, and (y) not subject the Board to any liability to
the holders of the Rights Certificates.
SECTION 30. 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 31. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any person or corporation
other than the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the
Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates.
SECTION 32. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Illinois and for all purposes shall be
governed by and construed in accordance with the laws of such state
applicable to contracts to be made and performed entirely within such
state.
<PAGE> 69
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.
SECTION 35. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement shall be held by a court of competent
jurisdiction or other authority to be invalid, void, illegal or
unenforceable, the validity or enforceability of the remainder of the
terms, provisions, covenants and restrictions shall not be affected
thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above
written.
Attest: ILLINI CORPORATION
By /s/ Ronald E. Cramer By /s/ Burnard K. McHone
------------------------------- ---------------------------
Title: Secretary Title: President
Attest: ILLINOIS STOCK TRANSFER COMPANY
By /s/ Veronica Gall By /s/ Robert G. Pearson
------------------------------- ---------------------------
Title: Executive Vice President Title: President and CEO
<PAGE> 70
EXHIBIT A
---------
FORM OF RIGHTS CERTIFICATE
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER JULY 7, 2007, OR EARLIER IF
NOTICE OF REDEMPTION OR EXCHANGE IS GIVEN. 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 BETWEEN ILLINI COR-
PORATION AND ILLINOIS STOCK TRANSFER COMPANY (THE
"RIGHTS AGREEMENT"). [THE RIGHTS REPRESENTED BY
THIS RIGHTS CERTIFICATE WERE ISSUED TO A PERSON
WHO WAS AN ACQUIRING PERSON OR AN AFFILIATE OR AN
ASSOCIATE OF AN ACQUIRING PERSON. THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY HAVE
BECOME VOID TO THE EXTENT PROVIDED BY SECTION 7(e)
OF THE RIGHTS AGREEMENT.]*
RIGHTS CERTIFICATE
ILLINI CORPORATION
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 June 20, 1997 (the
"Rights Agreement"), between Illini Corporation, an Illinois
corporation (the "Company"), and Illinois Stock Transfer Company, a
___________ corporation (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M. (Central time)
on July 7, 2007, at the principal office of the Rights Agent in
Chicago, Illinois, one fully paid, non-assessable share of the Common
Stock, $10.00 par value (the "Common Stock"), of the Company, at a
purchase price of $________ per share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the
appropriate Form of Election to Purchase duly 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 ___________, 19__ based on the Common Stock of the Company as
constituted at such date.
* The portion of the legend in brackets shall be inserted only if
applicable.
<PAGE> 71
As provided in the Rights Agreement, the Purchase Price and the
number 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.
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. Copies
of the Rights Agreement are on file at the principal office of the
Company, and are also available upon written request to the Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent
designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor 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 (other than pursuant to Section 11(a)(ii) of the Rights
Agreement) 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. If this Rights Certificate
shall be exercised in whole or in part pursuant to Section 11(a)(ii)
of the Rights Agreement, the holder shall be entitled to receive this
Rights Certificate duly marked to indicate such exercise has occurred
as set forth in the Rights Agreement.
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. Subject to the
provisions of the Rights Agreement, the Company, at its option, may
elect to mail payment of the redemption price to the registered holder
of the Right at the time of redemption, in which event this
Certificate may become void without any further action by the Company.
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.
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
<PAGE> 72
shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or,
to receive notice of meetings or other actions affecting shareholders
(except as provided in the Rights Agreement), or to receive dividends
or subscription rights, or otherwise, until the 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 __________, 19___.
[SEAL] ATTEST: ILLINI CORPORATION
By: ___________________________ By: ___________________________
Name: _____________________ Name: _________________________
Title: ____________________ Title: ________________________
Countersigned:
ILLINOIS STOCK TRANSFER COMPANY
By: ___________________________
Authorized Signatory
Name: _____________________
Title: ____________________
<PAGE> 73
[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
therein, and does hereby irrevocably constitute and appoint
____________________ Attorney, to transfer the within Rights
Certificate on the books of the within-named Company, with full power
of substitution.
Dated: __________ __, 19___
_____________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank, savings association,
credit union or trust company having an office or correspondent in the
United States or other eligible guarantor institution which is a
participant in a signature guarantee medallion program.
Certificate
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being sold, assigned or transferred by or on behalf
of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Rights Certificate from any Person who is or was or
subsequently became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person.
<PAGE> 74
Dated: _____________ __, ____
________________________________
Signature
<PAGE> 75
[Form of Reverse Side of Rights Certificate -- continued]
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise the Rights Certificate
pursuant to Section 11(a)(ii) of the Rights Agreement.)
To: Illini Corporation
The undersigned hereby irrevocably elects to exercise ____ Rights
represented by this Rights Certificate to purchase the shares of
Common Stock (or other securities of the Company) issuable upon the
exercise of such Rights and requests that certificates for such shares
be issued in the name of:
_____________________________________________________________________
(Please insert social security or other identifying number)
_____________________________________________________________________
(Please print name and address)
The Rights Certificate indicating the balance, if any, of such
Rights that may still be exercised pursuant to Section 11(a)(ii) of
the Rights Agreement shall be returned to the undersigned unless such
person requests that the Rights Certificate be registered in the name
of and delivered to:
_____________________________________________________________________
(Please insert social security or other identifying number.)
(Complete only if the Rights Certificate is to be registered in
a name other than the undersigned's.)
_____________________________________________________________________
(Please print name and address)
Dated: ____________ __, ____ ___________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank, savings association,
credit union or trust company having an office or correspondent in the
United States or other eligible guarantor institution which is a
participant in a signature guarantee medallion program.
[Form of Reverse Side of Rights Certificate -- continued]
<PAGE> 76
Certificate
-----------
The undersigned hereby certifies that 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 pursuant to the Rights
Agreement);
(2) 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;
(3) after due inquiry and to the best knowledge of the
undersigned, it [ ] 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
NOTICE
------
The signature on the foregoing Forms of Assignment and Election
to Purchase and Certificates 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.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is
not completed, the Company and the Rights Agent will deem the
Beneficial Owner of the Rights evidenced by this Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
<PAGE> 77
EXHIBIT B
ILLINI CORPORATION
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On June 20, 1997, the Board of Directors of Illini Corporation
(the "Company") declared a dividend distribution of one Right for each
outstanding share of Common Stock, $10.00 par value (the "Common
Stock"), of the Company to the stockholders of record on July 7, 1997
(the "Record Date"). Each Right entitles the registered holder to
purchase from the Company one share of Common Stock at a price of
$80.00 per share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and Illinois
Stock Transfer Company, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) the tenth business day after a
public announcement that a person or group of affiliated or associated
persons acquired, or obtained the right to acquire, beneficial
ownership of 10% or more of the outstanding shares of Common Stock of
the Company (such person or group being called an "Acquiring Person"
and such date of first public announcement being called the "Stock
Acquisition Date"), or (ii) the tenth business day after the
commencement or announcement of an intention to make a tender offer or
exchange offer which would result in any person or group of affiliated
or associated persons becoming an Acquiring Person (the earlier of
such dates being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Company's Common Stock
certificates outstanding as of the Record Date, by such Common Stock
certificate with a copy of this Summary of Rights attached thereto.
Mae H. Noll, together with all her Affiliates and Associates (as such
terms are defined in the Rights Agreement), will not be deemed to be
Acquiring Persons as long as all such persons beneficially own in the
aggregate no more than 14.3% of the Common Stock of the Company. The
Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Company's Common
Stock. Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Stock certificates issued after
the Record Date upon transfer or new issuance of the Company's Common
Stock will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any of the
Company's Common Stock certificates outstanding as of the Record Date
will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing the
Rights ("Rights Certificates") will be mailed to holders of record of
the Company's Common Stock as of the close of business on the
Distribution Date and, thereafter, such separate Rights Certificates
alone will evidence the Rights.
<PAGE> 78
The Rights are not exercisable until the Distribution Date. The
Rights will expire on July 7, 2007, unless earlier redeemed by the
Company as described below.
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 to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination
or reclassification of the Common Stock, (ii) upon the grant to
holders of Common Stock of certain rights, options or warrants to
subscribe for shares of Common Stock or convertible securities at less
than the current market price of the Common Stock or (iii) upon the
distribution to holders of Common Stock of evidences of indebtedness
or assets (excluding (a) a regular periodic cash dividend or (b) a
dividend payable in Common Stock) or of subscription rights, options
or warrants (other than those referred to above).
In the event that a person becomes the beneficial owner of 10% or
more of the outstanding shares of Common Stock (i.e., becomes an
Acquiring Person), each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will be void), will
have the right to receive upon exercise thereof, that number of shares
of Common Stock having a market value of two times the exercise price
of the Right (such right being called the "Flip-In" right).
In the event that, on or after the Stock Acquisition Date, the
Company were acquired in a merger or other business combination, or
50% or more of its assets or earning power were sold, proper provision
shall be made so that each holder of a Right shall thereafter have the
right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction would have
a market value of two times the exercise price of the Right. In the
event that the Company were the surviving corporation in a merger
involving the Acquiring Person and the Common Stock were not changed
or exchanged, proper provision shall be made so that each holder of a
Right, other than Rights beneficially owned by the Acquiring Person
(which will be void), will thereafter have the right to receive upon
exercise that number of shares of the Common Stock having a market
value of two times the exercise price of the Right (such right being
called the "Flip-Over" right). The holder of a right will no longer
have a Flip-Over right if, and to the extent that, he has exercised
his Flip-In right.
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at
least 1% in such Purchase Price. No fractional shares will be issued
and, in lieu thereof, a cash payment will be made based on the market
price of the Common Stock on the last trading date prior to the date
of exercise.
<PAGE> 79
At any time prior to the time that there is an Acquiring Person,
the Company may, at its option, redeem the Rights in whole but not in
part, at a price of $0.01 per Right (the "Redemption Price").
Immediately upon the authorization of the redemption of the Rights by
the Board of Directors of the Company, the Rights will terminate and
the only right of the holders of Rights will be to receive the
Redemption Price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
The Board of Directors of the Company may amend the Rights
Agreement from time to time, provided that any such changes do not
adversely affect the interest of the holders of the Rights, and
provided further that the Rights Agreement may not be supplemented or
amended in any way after an Acquiring Person has become such.
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 Company. This summary description of
the Rights does not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement, which is hereby
incorporated herein by reference.
* * * * * * * * *
EXHIBIT 99
ILLINI CORPORATION NEWS RELEASE
FOR IMMEDIATE RELEASE
June 23, 1997
CORPORATE OFFICES:
120 South Chatham Road
Springfield, Illinois 62704
Phone: (217) 787-1651
CONTACT:
Burnard K. McHone, President
(217) 787-1651
ILLINI CORPORATION
STOCKHOLDER RIGHTS PLAN
SPRINGFIELD, IL On Friday, June 20, 1997, the Board of Directors of
Illini Corporation adopted a Stockholder Rights Plan. Under the plan,
if any person or group becomes the beneficial owner of 10% or more of
the common stock of Illini Corporation, then upon payment of the
exercise price of $80.00, the holder of each right will be entitled to
purchase shares of Illini Corporation's common stock having a market
value of twice the right's exercise price. In adopting the plan, the
Board of Directors sought to offer additional protection to
stockholders from attempts to acquire control of Illini Corporation at
an inadequate price. The plan will provide additional protection to
the full value of a stockholder s investment in Illini Corporation
while not foreclosing a fair acquisition bid for Illini Corporation.
"The plan is designed to encourage potential buyers to negotiate with
the Board of Directors prior to attempting a takeover of the company
and will therefore provide the Board with additional flexibility in
protecting and realizing the long-term value of a stockholder's
investment in the company," said Burnard K. McHone, President of
Illini Corporation. "It gives our Board greater ability to respond in
a meaningful way to the negative effects of abusive share accumulation
tactics such as "greenmail" and "two-tier" takeover attempts and
tender offers that do not offer an adequate price to all
stockholders." The plan is described in more detail in a letter that
is being mailed to all Illini Corporation stockholders.
Illini Corporation is the holding company for Illini Bank,
Springfield, Illinois.
