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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
St. Francis Capital Corporation
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(Exact name of registrant as specified in its charter)
Wisconsin 39-1747461
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(State of incorporation (I.R.S. Employer
or organization) Identification No.)
13400 Bishops Lane, Suite 350, Brookfield, WI 53005-6203
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(Address of principal executive offices) (Zip Code)
If this Form relates to the registration of a class of debt securities and is
effective upon filing pursuant to General Instruction A.(c)(1), please check
the following box. [ ]
If this Form relates to the registration of a class of debt securities and is
to become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box. [ ]
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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N/A N/A
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Preferred Stock Purchase Rights
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(Title of class)
COPY TO:
James P. Peterson
Michael Best & Friedrich LLP
100 East Wisconsin Avenue
Suite 3300
Milwaukee, Wisconsin 53202
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
On September 25, 1997, the Board of Directors (the "Board") of St.
Francis Capital Corporation (the "Company") declared a dividend of one
preferred stock purchase right (a "Right") for each outstanding share of
Common Stock, $.01 par value per share (the "Common Stock"), of the
Company. The dividend is payable on October 10, 1997 (the "Record Date")
to the holders of record of the Common Stock at 5:00 p.m. Wisconsin time
on such date. Except as described below, each Right entitles the holder
thereof, at any time on or after the Business Day (as hereinafter defined)
following the Distribution Date (as hereinafter defined) and prior to the
earliest of the close of business on the "Final Expiration Date" (as
hereinafter defined) and the time at which such Rights are exchanged, to
purchase from the Company one one-hundredth of a share of the Company's
Series A Junior Participating Preferred Stock, $.01 par value per share
(the "Preferred Shares"), at a price of $150 per one one-hundredth of a
Preferred Share, subject to adjustment (the "Exercise Price"). The Rights
may not be exercised until the Business Day after the Distribution Date.
The terms of the Rights are set forth in the Shareholder Rights Agreement
dated as of September 25, 1997 (the "Rights Agreement") between the
Company and Firstar Trust Co., as Rights Agent (the "Rights Agent").
Initially, the Rights associated with the Common Stock outstanding as of
the Record Date will be evidenced solely by the certificates for shares of
Common Stock, with a copy of a "Summary of Rights" attached thereto.
Certificates for shares of Common Stock delivered by or on behalf of the
Company after the Record Date and prior to the earliest of the
Distribution Date, redemption of the Rights or the Final Expiration Date,
either upon transfer of outstanding shares, including certificates for
shares of Common Stock which were reacquired by the Company and then
transferred, or original issuance of additional shares of Common Stock,
will contain a notation incorporating the Rights Agreement by reference.
Until the Distribution Date, redemption of the Rights or the Final
Expiration Date, the Rights may be transferred only with the associated
shares of Common Stock and the surrender for transfer of any certificate
for shares of Common Stock, with or without a notation and whether or not
a copy of a Summary of Rights is attached thereto, shall constitute the
transfer of the Rights associated with the shares of Common Stock
represented by such stock certificate.
The Rights will separate from the Common Stock upon the earliest to
occur of: (i) the close of business on the tenth Business Day after the
first date on which there shall be, as determined by a majority of the
Disinterested Directors (as hereinafter defined) then in office in their
sole discretion, a public announcement by the Company or any individual,
firm, corporation, partnership, limited liability company, association or
other entity, and any successor of the foregoing (a "Person") that such
Person has become an Acquiring Person (as hereinafter defined); (ii) the
close of business on the tenth Business Day (or such later Business Day as
may be determined by action of the Board) after commencement by any Person
(other than an Exempt Person) of, or the first public announcement of the
intention of any Person to commence, a tender or
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exchange offer if, upon consummation thereof, such Person would be the
beneficial owner of 15% or more of the outstanding shares of Common Stock
(provided, however, that if such tender or exchange offer is cancelled,
terminated or otherwise withdrawn prior to the Distribution Date without
the purchase of any Common Stock, such offer shall be deemed for purposes
of the definition of "Distribution Date" never to have been commenced or
publicly announced); and (iii) the close of business on the tenth Business
Day after a determination by at least a majority of the Disinterested
Directors who are not officers of the Company that a Person has become an
Adverse Person (as hereinafter defined). The earliest of the dates
specified in clauses (i), (ii) and (iii) is the "Distribution Date." After
the Distribution Date, the Rights will be evidenced solely by separate
certificates.
An "Acquiring Person" is any Person who or which, together with its
affiliates and associates, has become the beneficial owner of 15% or more
of the shares of Common Stock then outstanding, but does not include (i)
the Company, (ii) any subsidiary of the Company, (iii) any employee stock
ownership plan, employee benefit plan or other compensation program or
arrangement of the Company or of any subsidiary, (iv) any Person holding
shares of Common Stock for or pursuant to the terms of any such plan,
program or arrangement set forth in (iii) above, (v) any Person who
becomes the beneficial owner of 15% or more of the outstanding Common
Stock solely as a result of an acquisition of Common Stock by the Company,
until such time as such Person acquires additional Common Stock, or (vi)
any Person who becomes an Acquiring Person without any plan or intent to
seek or affect control of the Company if such Person promptly enters into
an irrevocable commitment promptly to divest and thereafter promptly
divests such Common Stock so that such Person ceases to be the beneficial
owner of 15% or more of the outstanding Common Stock (the Persons
specified in clauses (i) through (iv) being herein collectively called
"Exempt Persons"). An "Adverse Person" is any Person who or which,
together with its affiliates and associates, has acquired 10% or more of
the Common Stock outstanding and has been determined, by at least a
majority of the Disinterested Directors who are not officers of the
Company, to be reasonably likely to cause the Company to take action which
would provide such Person with a short-term financial gain not in the best
long-term interests of the Company and its shareholders or is reasonably
likely to have a material adverse effect on the business or prospects of
the Company. "Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of Wisconsin
are authorized or obligated by law or executive order to close. A
"Disinterested Director" is any member of the Board who is not a
Restricted Person (as hereinafter defined), or a representative or nominee
of a Restricted Person, and who was a member of the Board as of the date
of the Rights Agreement, or any individual who subsequently becomes a
member of the Board and is not a Restricted Person or a representative or
nominee of a Restricted Person, if such Person's nomination for election
to the Board is recommended or approved by a majority of the Disinterested
Directors then in office. A "Restricted Person" is an Acquiring Person, an
Adverse Person or any affiliate or associate thereof.
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As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed
to the holders of record of the Common Stock as of the close of business
on the Distribution Date. Each share of Common Stock issued by the
Company after the Distribution Date and prior to the Final Expiration
Date, including shares of Common Stock issued by reason of the exercise of
any option, warrant, right (other than the Rights) or conversion or
exchange privilege (other than the Rights) or convertible or exchangeable
security issued by the Company prior to the Distribution Date, will be
accompanied by a Right (unless the Board expressly provides to the
contrary at the time of issuance of any such option, warrant, right or
convertible or exchangeable security), and Rights Certificates evidencing
such Rights will be issued at the same time as the certificates for the
associated shares of Common Stock.
The Preferred Shares receivable upon exercise of the Rights will not be
redeemable. Each Preferred Share will entitle the record holder thereof
to receive a preferential dividend equal to 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions
(other than in shares of Common Stock) declared on the Common Stock,
adjusted to give effect to any dividend on the Common Stock payable in
shares of Common Stock or any subdivision, combination or reclassification
of the Common Stock (a "Dilution Event"). In the event of liquidation of
the Company, the holder of each Preferred Share will be entitled to
receive a preferential liquidation payment equal to the greater of $1.00
and 100 times the aggregate per share amount to be distributed to the
holders of the Common Stock, adjusted to give effect to any Dilution
Event, plus an amount equal to accrued and unpaid dividends and
distributions on such Preferred Share, whether or not declared, to the
date of such payment. Each Preferred Share will entitle the holder
thereof to 100 votes on all matters submitted to a vote of the
shareholders of the Company, voting together as a single class with the
holders of the Common Stock and the holders of any other class of capital
stock having general voting rights, adjusted to give effect to any
Dilution Event. In the event of any merger, consolidation or other
transaction in which the outstanding shares of Common Stock of the Company
are exchanged for or converted into other capital stock, securities, cash
or other property, each Preferred Share will be similarly exchanged or
converted into 100 times the per share amount applicable to the Common
Stock, adjusted to give effect to any Dilution Event. The Rights will
expire on the close of business on September 25, 2007 (the "Final
Expiration Date"), unless the Final Expiration Date is extended or the
Rights are earlier redeemed or exchanged by the Company. Until a Right is
exercised, the holder thereof, as such, will have no rights as a
shareholder of the Company, including, without limitation, the right to
vote or to receive dividends.
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In the event that (i) a Person becomes an Acquiring Person, (ii) a
Person (other than an Exempt Person) commences or first publicly announces
the intention of a Person (other than an Exempt Person) to commence a
tender or exchange offer if, upon the consummation thereof, such Person
would be the beneficial owner of 15% or more of the shares of Common Stock
outstanding, or (iii) a person is declared to be an Adverse Person (where
the earliest of such events shall be referred to as a "Flip-In Event"),
proper provision will be made so that the registered holder of each Right
(other than Rights beneficially owned by a Restricted Person or their
designated transferees) will thereafter have the right, unless the Rights
are earlier redeemed, exchanged or expire, to acquire, upon exercise and
payment of the Exercise Price, to receive the number of shares of Common
Stock which, at the time of the occurrence of such event, will have a
market value equal to two times the then current Exercise Price. After a
Flip-In Event, all rights which are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by a
Restricted Person or designated transferees therefrom, will be or become
void. Under no circumstances may a Right be exercised unless the
Company's option to redeem the Rights has expired.
At any time after a Flip-In Event and prior to the time that any Person
(other than an Exempt Person), together with its affiliates and
associates, has become the beneficial owner of 50% or more of the
outstanding shares of Common Stock, the Board may direct that all or any
part of the outstanding and exercisable Rights (other than Rights which
have become void) be exchanged for shares of Common Stock at the exchange
rate of one share of Common Stock per Right, adjusted to give effect to
any Dilution Event. Any partial exchange will be effected pro rata among
the registered holders of the Rights based upon the number of Rights held.
If, on or after the occurrence of a Flip-In Event: (i) the Company
merges into or consolidates with an Interested Shareholder (as
hereinafter defined) or, unless all holders of the Common Stock are
treated the same, another Person (with limited designated exceptions);
(ii) an Interested Shareholder or, unless all holders of the Common Stock
are treated the same, another Person (with limited exceptions) merges into
the Company and either (A) all or part of the outstanding shares of Common
Stock of the Company are converted into capital stock or other securities
of any other Person (or the Company), cash and/or other property, or (B)
such shares remain outstanding, unconverted and unchanged; or (iii) the
Company sells or transfers 50% or more of its consolidated assets or
earning power in one or a series of related transactions to an Interested
Shareholder or, unless all holders of the Company's outstanding shares of
Common Stock are treated the same, another Person (with limited
exceptions); then proper provision will be made so that the registered
holder of each Right (other than Rights which have become void) will
thereafter have the right to acquire, upon exercise and payment of the
Exercise Price, the number of common shares of the acquiror (or of another
Person affiliated therewith) which, at the time of consummation of such
transaction, will have a market value equal to two times the then current
Exercise Price. An "Interested Shareholder" is any Restricted Person or
any affiliate or associate
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of any other Person in which such Restricted Person has an interest,
or any Person acting, directly or indirectly, on behalf of or in
concert with any such Restricted Person.
The Exercise Price payable and the number and kind of shares of
capital stock issuable upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a
dividend payable in Preferred Shares on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) upon the grant to the
holders of the Preferred Shares of certain options, warrants or rights to
subscribe for or purchase Preferred Shares at a price, or securities
convertible into or exchangeable for Preferred Shares with a conversion or
exchange price, less than the then current market price of the Preferred
Shares, or (iii) upon the distribution to the holders of the Preferred
Shares of cash, securities, evidences of indebtedness or other property
(other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or options, warrants or rights (other than those
referred to in clause (ii) above). The number of outstanding Rights and
the number of one one-hundredths of a Preferred Share issuable upon
exercise of each Right also are subject to adjustment in the event of a
dividend on the Common Stock payable in shares of Common Stock or a
subdivision, combination or reclassification of the Common Stock
occurring, in any such case, prior to the Distribution Date.
With certain specified exceptions, no adjustment in the Exercise Price
will be made until the cumulative adjustments required equal at least 1%
of the Exercise Price. The Company is not required to issue fractional
Preferred Shares (other than fractions which are multiples of one one-
hundredth of a Preferred Share), but in lieu thereof the Company will make
a cash payment based upon the market value of the Preferred Shares on the
trading day immediately preceding the date of exercise.
At any time prior to the earliest of the Distribution Date and the Final
Expiration Date, the Board may redeem the Rights in whole, but not in
part, at the redemption price of $.01 per Right, adjusted to give effect
to any Dilution Event (the "Redemption Price"); provided, however, that,
under certain circumstances specified in the Rights Agreement, the Rights
may not be redeemed unless there is more than one Disinterested Director
in office and such redemption is approved by at least a majority of such
Disinterested Directors. The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the
Board, in its sole discretion, may establish. Immediately after
action by the Board directing the redemption of the Rights, the option to
exercise the Rights will terminate, and thereafter each registered holder
of the Rights will only be entitled to receive the Redemption Price
therefor.
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Prior to the Distribution Date, the terms of the Rights and the Rights
Agreement may be supplemented or amended by the Board in any manner. From
and after the Distribution Date, the Rights may be supplemented or amended
by the Board, without the approval of the holders of the Rights, in
certain respects which do not materially adversely affect, as determined
by the Board (with the concurrence of at least a majority of the
Disinterested Directors), the interests of such holders (excluding the
interests of any Restricted Person); provided, however, that the Rights
Agreement cannot be amended to lengthen (i) any time period unless such
lengthening is approved by at least a majority of the Disinterested
Directors, and such lengthening is for the benefit of the holders of
the Rights (excluding the interests of any Acquiring Person, Adverse
Person or affiliate or associate thereof), or (ii) any time period
relating to when the Rights may be redeemed if at such time the Rights are
not then redeemable.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the
Company in certain circumstances. Accordingly, the existence of the
Rights may deter certain potential acquirors from making certain takeover
proposals or tender offers. The Rights should not interfere with any
merger or other business combination approved by the Board of Directors
since the Rights may be redeemed by the Company as described above.
A copy of the Rights Agreement is attached hereto as an exhibit and
incorporated herein by reference. The foregoing description of the
Rights is qualified in its entirety by reference to the Rights Agreement
and such exhibits thereto.
ITEM 2. EXHIBITS
1 Shareholder Rights Agreement dated as of September 25, 1997 between St.
Francis Capital Corporation and Firstar Trust Co., which includes as
Exhibit A the Form of Certificate of Designation, Preferences, Rights
and Limitations of Series A Junior Participating Preferred Stock of St.
Francis Capital Corporation, as Exhibit B the Form of Rights
Certificate, and as Exhibit C a Summary of Rights to Purchase Shares of
Series A Junior Participating Preferred Stock. Pursuant to the Rights
Agreement, Rights Certificates will not be mailed until after the
earliest of certain events to occur.
2 Press Release dated September 25, 1997.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the Registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
ST. FRANCIS CAPITAL CORPORATION
Date: September 25, 1997
By:/s/ Thomas R. Perz
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Thomas R. Perz, President and
Chief Executive Officer
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ST. FRANCIS CAPITAL CORPORATION
FORM 8-A REGISTRATION STATEMENT
Exhibit Index
Exhibit No. Page
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1 Shareholder Rights Agreement dated as of
September 25, 1997 between St. Francis
Capital Corporation and Firstar Trust Co.,
which includes as Exhibit A the Form of
Certificate of Designation, Preferences,
Rights and Limitations of Series A Junior
Participating Preferred Stock of St.
Francis Capital Corporation, as Exhibit B
the Form of Rights Certificate, and as
Exhibit C a Summary of Rights to Purchase
Shares of Series A Junior Participating
Preferred Stock..........................
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2 Press Release dated September 25, 1997 __
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EXHIBIT 1
SHAREHOLDER RIGHTS AGREEMENT DATED AS OF
SEPTEMBER 25, 1997 BETWEEN ST. FRANCIS
CAPITAL CORPORATION AND FIRSTAR TRUST CO.,
WHICH INCLUDES AS EXHIBIT A THE FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES,
RIGHTS AND LIMITATIONS OF SERIES A JUNIOR
PARTICIPATING PREFERRED STOCK OF ST. FRANCIS
CAPITAL CORPORATION, AS EXHIBIT B THE
FORM OF RIGHTS CERTIFICATE, AND AS EXHIBIT
C A SUMMARY OF RIGHTS TO PURCHASE SHARES OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK.
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SHAREHOLDER RIGHTS AGREEMENT
DATED AS OF SEPTEMBER 25, 1997
BETWEEN
ST. FRANCIS CAPITAL CORPORATION
AND
FIRSTAR TRUST CO.
AS RIGHTS AGENT
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SHAREHOLDER RIGHTS AGREEMENT
THIS SHAREHOLDERS RIGHTS AGREEMENT (this "Agreement") is dated as of
September 25, 1997 between St. Francis Capital Corporation, a Wisconsin
corporation (the "Company"), and Firstar Trust Co., a Wisconsin-chartered trust
company (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company (the "Board") desires
to provide all shareholders of the Company with the opportunity to benefit from
the long-term prospects and value of the Company and to ensure that all such
shareholders receive fair and equal treatment in the event of any proposed
takeover of the Company; and
WHEREAS, on September 25, 1997, the Board authorized and declared a
dividend of one preferred stock purchase right (individually a "Right" and
collectively the "Rights") for each share of Common Stock (as hereinafter
defined) of the Company outstanding at the Close of Business (as hereinafter
defined) on October 10, 1997 (the "Record Date"), each Right representing the
right to purchase one one-hundredth of a Preferred Share (as hereinafter
defined), upon the terms and subject to the conditions hereinafter set forth,
and contemplates that one Right will be issued with respect to each share of
Common Stock which shall become outstanding after the Record Date and prior to
the earlier of the Redemption Date and the Final Expiration Date (as such terms
are hereinafter defined), including any shares of Common Stock issued by reason
of the exercise of any option, warrant, right (other than the Rights) or
conversion or exchange privilege contained in any option, warrant, right (other
than the Rights) or convertible or exchangeable security issued by the Company
prior to the Distribution Date (as hereinafter defined), unless the Board shall
expressly provide to the contrary at the time of issuance of any such option,
warrant, right or convertible or exchangeable security;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 CERTAIN DEFINITIONS. For the purposes of this Agreement, the
following terms shall have the respective meanings set forth below:
(a) "Acquiring Person" shall mean any Person (as
hereinafter defined) who or which, together with all Affiliates and Associates
(as hereinafter defined) of such Person, shall be the Beneficial Owner (as
hereinafter defined) of 15% or more of the shares of Common Stock of the
Company then outstanding, but shall not include (i) the Company, (ii) any
Subsidiary (as hereinafter defined) of the Company, (iii) any employee stock
ownership plan, employee benefit plan or other compensation program or
arrangement of the Company or any Subsidiary, or (iv)
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any Person holding such shares of Common Stock for or pursuant to the terms of
any such plan, program or arrangement set forth in (iii) above (collectively,
"Exempt Persons"). Notwithstanding the preceding sentence, (A) no Person shall
become an Acquiring Person as the result of an acquisition by the Company of
shares of its Common Stock which, by reason of reducing the number of then
outstanding shares of Common Stock, increases the percentage of then
outstanding shares of Common Stock Beneficially Owned by such Person to 15% or
more; provided, however, that if such Person shall, after such acquisition by
the Company, become the Beneficial Owner (as hereinafter defined) of any
additional shares of Common Stock of the Company, then such Person shall be
deemed to be an Acquiring Person, and (B) an Acquiring Person shall not include
any Person who is the Beneficial Owner of 15% or more of the outstanding shares
of Common Stock but who acquired Beneficial Ownership of shares of Common Stock
without any plan or intention to seek or affect control of the Company, if such
Person promptly enters into an irrevocable commitment promptly to divest, and
thereafter promptly divests (without exercising or retaining any power,
including voting, with respect to such shares) sufficient shares of Common
Stock (or securities convertible into, exchangeable into or exercisable for
Common Stock), so that such Person ceases to be the Beneficial Owner of 15% or
more of the outstanding shares of Common Stock, in which case such Person shall
then be deemed never to have become an Acquiring Person.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 (as may be amended from time to
time) promulgated under the Exchange Act (as hereinafter defined); provided,
however, that no director or officer of the Company shall be deemed an
Affiliate or Associate of any other director or officer of the Company solely
as a result of his or her being a director or officer of the Company.
(c) "Beneficial Owner" (including the terms "Beneficially
Own" and "Beneficial Ownership"), when used with respect to any Person, shall
be deemed to include any securities which:
(i) such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly (determined as
provided in Rule 13d-3 [as may be amended from time to time]
promulgated under the Exchange Act);
(ii) 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 or
upon the satisfaction of any
conditions, or both) pursuant to any
written or oral agreement,
arrangement or understanding (other
than customary agreements with and
among underwriters and selling group
members with respect to a bona fide
public offering of securities), upon
the exercise of any options,
warrants, rights (other than the
Rights) or conversion or exchange
privileges or otherwise; provided,
however, that a Person shall not be
deemed the Beneficial Owner of, or
to Beneficially Own securities
tendered
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pursuant to a tender or exchange
offer made by or on behalf of such
Person or any of such Person's
Affiliates or Associates until such
tendered securities are accepted for
purchase or exchange, and securities
issuable upon exercise of the Rights
at any time prior to the
Distribution Date, or
(B) the right to vote pursuant to any
written or oral agreement,
arrangement or understanding;
provided, however, that a Person
shall not be deemed the Beneficial
Owner of, or to Beneficially Own,
any security otherwise subject to
this item (B) if such agreement,
arrangement or understanding to vote
arises solely from a revocable proxy
or consent given to such Person or
any of such Person's Affiliates or
Associates in response to a public
proxy or consent solicitation made
pursuant to, and in accordance with,
the applicable rules and regulations
under the Exchange Act, and is not
also then reportable by such Person
on Schedule 13D (or any comparable
or successor report then in effect)
under the Exchange Act, or
(C) the right to dispose of pursuant to
any written or oral agreement,
arrangement or understanding (other
than customary agreements with and
among underwriters and selling group
members with respect to a bona fide
public offering of securities); or
(iii) are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such
Person's Affiliates or Associates has any written or oral agreement,
arrangement or understanding (other than customary agreements with and
among underwriters and selling group members with respect to a bona
fide public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso to
Section 1.1(c)(ii)(B) hereof) or disposing of any securities of the
Company.
Notwithstanding anything contained in Section 1.1(c)(i) hereof, no director or
officer of the Company or any of its Subsidiaries shall be deemed to be the
Beneficial Owner of, or to Beneficially Own, shares of Common Stock or other
securities of the Company beneficially owned by any other director or officer
of the Company or any of its Subsidiaries solely as a result of his or her
being a director or officer of the Company or any of its Subsidiaries.
(d) "Business Day" shall mean any day other than a
Saturday, a Sunday or a day on which banking institutions in the State of
Wisconsin are authorized or obligated by law or executive order to close.
(e) "Certificate of Designations" shall mean the
Certificate of Designations for the Preferred Shares in substantially the form
attached hereto as EXHIBIT A.
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(f) "Close of Business" on any given date shall mean 5:00
P.M., Wisconsin time, on such date or, if such date is not a Business Day, then
5:00 P.M., Wisconsin time, on the next succeeding Business Day.
(g) "Common Stock," when used with reference to the
Company, shall mean the Common Stock, $.01 par value per share, of the Company.
"Common Stock," when used with reference to any Person other than the Company,
shall mean the capital stock with the greatest voting power (or the other
equity securities or equity interests having the power to control or direct
management) of such Person or, if such Person is a Subsidiary of another
Person, of the Person which ultimately controls such first-mentioned Person and
which has issued and outstanding such capital stock, equity securities or
equity interests.
(h) "Disinterested Director" shall mean any member of the
Board who is not a Restricted Person (as hereinafter defined), or a
representative or nominee of a Restricted Person, who was a member of the Board
as of the date of this Agreement, or any individual who subsequently becomes a
member of the Board after the date of this Agreement who is not a Restricted
Person, or a representative or nominee of a Restricted Person, if such
individual's nomination for election or election to the Board is recommended or
approved by a majority of the Disinterested Directors then in office.
(i) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(j) "Fair Market Value," when used with respect to
Preferred Shares or shares of Common Stock or other capital stock of any class
(collectively, the "Stock"), to any option, warrant, right or other security or
evidence of indebtedness (collectively, a "Security") or to any other property,
shall be determined as follows:
(i) In the case of any Stock or Security which is
publicly traded, the Fair Market Value on any date shall be deemed to
be the average of the daily closing prices per share of such Stock or
per unit of such Security for the 30 consecutive Trading Days (as
hereinafter defined) immediately prior to such date; provided,
however, that in the event that the Fair Market Value per share of any
Stock is determined during a period commencing after the public
announcement by its issuer of a dividend or distribution on such Stock
payable in shares of such Stock or securities convertible into or
exchangeable for shares of such Stock or a subdivision, combination,
consolidation or reclassification of such Stock, and ending prior to
the expiration of the 30 Trading Days after the ex-dividend date for
such dividend or distribution, or the record date for such
subdivision, combination, consolidation or reclassification, then, in
each such case, the Fair Market Value of such Stock shall be properly
adjusted to take into account "ex-dividend" trading. The closing
price for each day shall be the last sale price, regular way, or, in
case no such sale shall take 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, as reported in
the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the principal national
securities exchange on which such Stock or Security is listed or
admitted to trading; or if such Stock or Security is not listed or
admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the
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average of the last quoted high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or any other similar
system then in use; or if on any such day no bid for such Stock or
Security is quoted by any such organization, the average of the
closing bid and asked prices, as furnished by a professional market
maker making a market in such Stock or Security selected by the Board.
If during any relevant period no market maker is making a market in
such Stock or Security, its Fair Market Value on a specified date shall
be determined reasonably and with good faith to the holders of the
Rights by the Board; provided, however, that if at the time of such
determination there shall be an Acquiring Person or an Adverse Person
(as hereinafter defined), the Fair Market Value of such Stock or
Security on such date shall be determined by a nationally
recognized investment banking firm selected by the Board, which
determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Company, the Rights Agent and the
holders of the Rights.
(ii) In the case of any Stock or Security which is
not publicly traded, the Fair Market Value on any date shall be the
fair value per share of such Stock or per unit of such Security as
determined reasonably and with utmost good faith to the holders of the
Rights by the Board; provided, however, that if at the time of such
determination there shall be an Acquiring Person or an Adverse Person,
the Fair Market Value of such Stock or Security on such date shall be
determined by a nationally recognized investment banking firm selected
by the Board, which determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Company, the
Rights Agent and the holders of the Rights.
(iii) In the case of any property which is not a
Stock or a Security, the Fair Market Value on any date shall be
determined reasonably and with utmost good faith to the holders of
Rights by the Board; provided, however, that if at the time of such
determination there shall be an Acquiring Person or an Adverse Person,
the Fair Market Value of such property on such date shall be
determined by a nationally recognized investment banking firm selected
by the Board, which determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Company, the
Rights Agent and the holders of the Rights.
(k) "Interested Shareholder" shall mean any Restricted
Person and any Affiliate or Associate of any other Person in which such
Restricted Person has an interest, and any Person acting, directly or
indirectly, on behalf of or in concert with any such Restricted Person.
(l) "Permitted Offer" shall mean any tender or exchange
offer for all of the outstanding shares of Common Stock of the Company at a
price and on terms determined, prior to the purchase of shares under such
tender or exchange offer, by at least a majority of the Disinterested Directors
who are not officers of the Company to be appropriate (taking into account all
factors which such Disinterested Directors deem relevant, including, without
limitation, prices reasonably obtainable if the Company or its assets were sold
on an orderly basis designed to realize maximum value) and otherwise in the
best interests of the Company and its shareholders (other than the Person or
any Affiliate or Associate thereof on whose behalf or for whose benefit such
tender or exchange offer is being made).
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(m) "Person" shall mean any individual, firm,
corporation, partnership, limited liability company, association or other
entity, and shall include any successor (by merger or otherwise) of any of the
foregoing.
(n) "Preferred Shares" shall mean the Series A Junior
Participating Preferred Stock, $.01 par value per share, of the Company, which
series shall have the powers, preferences and other rights set forth in the
Certificate of Designations.
(o) "Principal Party" shall mean: in the case of any
transaction described in Section 3.3(a)(i) or (ii), the Person which is the
issuer of the securities into which shares of Common Stock of the Company are
being converted or exchanged in such transaction or, if there shall be more
than one such issuer, the issuer having shares of Common Stock with the
greatest aggregate market value; or if no securities are being issued in such
transaction for shares of Common Stock of the Company, the Person which is the
other party to such transaction or, if there shall be more than one such
Person, the Person having shares of Common Stock with the greatest aggregate
market value; and in the case of any transaction described in Section
3.3(a)(iii), the Person which is the party receiving the greatest portion of
the assets or earning power sold or otherwise transferred pursuant to such
transaction or transactions; provided, however, that in any such case (i) if
the shares of Common Stock of such Person shall not at the time of the
consummation of such transaction been continuously registered under Section 12
of the Exchange Act during the immediately preceding twelve-month period, and
such Person shall be a direct or indirect Subsidiary or Affiliate of another
Person the shares of Common Stock of which shall have been so registered,
"Principal Party" shall mean such other Person; (ii) if such Person shall be a
direct or indirect Subsidiary or Affiliate of more than one other Person, the
shares of Common Stock of two or more of which shall have been so registered,
"Principal Party" shall mean whichever of such other Persons shall have Common
Stock with the greatest aggregate market value; or (iii) if such Person shall
be owned, directly or indirectly, by a joint venture formed by two or more
Persons which are not owned, directly or indirectly, by the same Person, the
rules set forth in clauses (i) and (ii) of this proviso shall apply to each
chain of ownership of any joint venturer as though such joint venture were a
"Subsidiary" of all of such joint venturers, and the Principal Party in each
such chain shall bear the obligations and duties set forth in Section 3.3 in
the same proportion as their direct or indirect ownership interest in such
Person bears to the total of such ownership interests.
(p) "Restricted Person" shall mean an Acquiring Person,
an Adverse Person and any Affiliate or Associate of an Acquiring Person or an
Adverse Person.
(q) "Rights Certificates" shall mean the certificates
evidencing the Rights after the Distribution Date.
(r) "Securities Act" shall mean the Securities Act of
1933, as amended.
(s) "Share Acquisition Date" shall mean the first date on
which there shall be, as determined by a majority of the Disinterested
Directors then in office in their sole discretion, a public announcement (which
shall include, without limitation, any press release or publicly available
filing with the Securities and Exchange Commission or any other federal or
state governmental authority or agency) by the Company or any Person that such
Person has become an Acquiring Person.
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(t) "Subsidiary" of any Person shall mean any
corporation, limited liability company or other entity of which a majority of
the voting power (with respect to such Person's equity securities or equity
interests having the power to control or direct management) is owned, directly
or indirectly, by such Person.
(u) "Summary of Rights" shall mean the Summary of Rights
to Purchase shares of Series A Junior Participating Preferred Stock in
substantially the form attached hereto as EXHIBIT C.
(v) "Trading Day" shall mean a day on which the principal
national securities exchange on which such Stock or Security is listed or
admitted to trading is open for the transaction of business or, if such Stock
or Security is not listed or admitted to trading on any national securities
exchange, a Business Day.
ARTICLE II
THE RIGHTS
2.1 ISSUANCE OF RIGHTS CERTIFICATES.
(a) The Rights shall be evidenced (subject to the
provisions of paragraph (b) of this Section) by the certificates for shares of
Common Stock registered in the names of holders of Common Stock (which
certificates for shares of Common Stock also shall be deemed to be certificates
for Rights) and not by separate certificates until the earliest of (such date
being hereinafter the "Distribution Date"):
(i) The Close of Business on the tenth Business Day
after the Share Acquisition Date (or, if the Share Acquisition Date
shall have occurred prior to the Record Date, the Close of Business on
the tenth Business Day after the Record Date);
(ii) The Close of Business on the tenth Business Day
(or such other Business Day as may be determined, in compliance with
this Agreement, by action of the Board) after the date of the
commencement by any Person (other than an Exempt Person) of, or the
first public announcement of the intention of any Person (other than
an Exempt Person) to commence, a tender or exchange offer if, upon the
consummation thereof, such Person would be the Beneficial Owner of 15%
or more of the shares of Common Stock of the Company then outstanding;
and
(iii) The Close of Business on the tenth Business Day
after at least a majority of the Disinterested Directors who are not
officers of the Company shall have determined that a Person is an
"Adverse Person" (as hereinafter defined).
Such date shall be referred to herein as the "Distribution Date"; provided,
however, that if any tender or exchange offer referred to in Section 2.1(a)(ii)
is cancelled, terminated or otherwise withdrawn prior to the Distribution Date
without the purchase of any Common Stock pursuant thereto, such offer shall be
deemed for the purposes of the definition of "Distribution Date" never to have
been commenced or publicly announced.
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(b) As soon as practicable after the Distribution Date
(or, in the case of any shares of Common Stock of the Company which are issued
or otherwise become outstanding after the Distribution Date and prior to the
Final Expiration Date, including any shares of Common Stock issued by reason of
the exercise of any option, warrant, right (other than the Rights) or
conversion or exchange privilege contained in any option, warrant, right (other
than the Rights) or convertible or exchangeable security issued by the Company
prior to the Distribution Date, unless the Board shall have expressly provided
to the contrary at the time of issuance of any such option, warrant, right or
convertible or exchangeable security, simultaneously with the issuance of stock
certificates for such shares of Common Stock), the Company shall prepare and
execute, the Rights Agent shall countersign and the Company shall deliver or
cause to be delivered or the Rights Agent shall, if requested, deliver, by
first-class mail, postage prepaid, to each record holder of shares of Common
Stock of the Company as of the Close of Business on the Distribution Date or,
in the case of shares of Common Stock issued or otherwise becoming outstanding
after the Distribution Date (unless otherwise provided), to each record holder
of the shares of Common Stock so being issued or becoming outstanding at the
time of such occurrence, at the record holder's last address shown on the
registry books of the transfer agent for the Common Stock of the Company, one
or more Rights Certificates evidencing one Right for each share of Common Stock
of the Company so held, issued or becoming outstanding. As of and after the
Distribution Date, the Rights shall be evidenced solely by the Rights
Certificates.
(c) On the Record Date, or as soon as practicable
thereafter, the Company shall send a copy of the Summary of Rights, by
first-class mail, postage prepaid, to each record holder of shares of Common
Stock of the Company as of the Close of Business on the Record Date, at such
record holder's last address as shown by the records of the Company.
(d) Until the Distribution Date, no Rights Certificates
shall be issued. Each stock certificate for shares of Common Stock of the
Company outstanding as of the Record Date, until the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date, shall be
deemed also to constitute a certificate for the Rights associated with the
shares represented thereby, together with a copy of the Summary of Rights
attached thereto and the registered holder of such shares also shall be the
registered holder of the associated Rights. Until the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date, the
surrender for transfer of any such stock certificate, with or without a copy of
the Summary of Rights attached thereto, shall constitute the transfer of the
Rights associated with the shares of Common Stock represented thereby.
(e) Any stock certificate for shares of Common Stock of
the Company which shall be delivered by or on behalf of the Company (including,
without limitation, stock certificates for shares of Common Stock which are
reacquired by the Company and then transferred) after the Record Date and prior
to the earliest of the Distribution Date, the Redemption Date and the Final
Expiration Date shall have impressed, printed or written thereon, or otherwise
affixed thereto, the following legend:
"This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Shareholder Rights Agreement dated
as of September 25, 1997 (the "Rights Agreement") between St. Francis
Capital Corporation and Firstar Trust Co., as Rights Agent, the terms,
provisions and conditions of which are incorporated herein by
reference and made a part hereof. The Rights Agreement
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is on file at the principal office of the Rights Agent, and the Rights
Agent will mail to the holder of this certificate a copy without
charge after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by
this certificate. Under certain circumstances set forth in the
Rights Agreement, the Rights may be redeemed at a redemption price
(subject to adjustment) of $.01 per Right, may be exchanged, in whole
or in part, for shares of Common Stock at an exchange rate (subject to
adjustment) of one share of Common Stock per Right or may become
exercisable for securities or assets of the Company or another entity.
Under certain circumstances set forth in the Rights Agreement, Rights
Beneficially Owned by a Restricted Person (as such terms are defined
in the Rights Agreement) or by certain transferees from a Restricted
Person, shall be or become void."
Each stock certificate containing the foregoing legend, until the earliest of
the Distribution Date, the Redemption Date and the Final Expiration Date, shall
be deemed also to constitute a certificate for the Rights associated with the
shares represented thereby, and the registered holder of such shares also shall
be the registered holder of the associated Rights. The omission of the
foregoing legend shall not in any manner whatsoever affect the application or
interpretation of Section 2.5(c).
(f) In the event that the Company shall reacquire any
shares of its Common Stock after the Record Date and prior to the Distribution
Date, the Rights associated with such shares shall be deemed cancelled and
retired, the Company not being entitled to exercise any Rights associated with
shares of its Common Stock which are no longer outstanding.
2.2 FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (including the Form of
Election to Purchase and Certification of Status and the Form of Assignment and
Certificate of Status to be set forth on the reverse side thereof) shall be in
substantially the form attached hereto as EXHIBIT B and may have such marks of
identification or designation and such legends, summaries or endorsements set
forth thereon as the Company may deem appropriate or to comply with any
applicable law or 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. Subject to the terms of this Agreement, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date (or, in the case of
Rights with respect to shares of Common Stock issued or becoming outstanding
after the Record Date, the same date as the stock certificate evidencing such
shares), shall (if the Company shall so require) indicate the date of
countersignature by the Rights Agent and shall entitle the holders thereof to
purchase such number of one one-hundredths of a Preferred Share at the Exercise
Price as shall be set forth therein, subject to adjustment as provided herein.
(b) Any Rights Certificate that represents Rights
Beneficially Owned by: (i) a Restricted Person, (ii) a transferee from a
Restricted Person who becomes a transferee after the Acquiring Person or
Adverse Person becomes such, or (iii) a transferee from a Restricted Person who
becomes a transferee prior to or concurrently with the Acquiring Person or
Adverse Person becoming such and receives such Rights pursuant to either a
transfer (whether or not for
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consideration) from such Acquiring Person or Adverse Person (or any Affiliate
or Associate thereof) to holders of equity interests in such Acquiring Person
or Adverse Person (or any such Affiliate or Associate) or to any Person with
whom such Acquiring Person or Adverse Person (or any such Affiliate or
Associate) has any continuing written or oral agreement, arrangement or
understanding regarding the transferred Rights or a transfer which the Board
has determined is part of a plan, arrangement or understanding which intends to
effect the avoidance of Section 2.5(c) (collectively, a "Restricted
Person/Transferee"), and any Rights Certificate issued pursuant to the
transfer, exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall have deleted therefrom the second sentence
of the legend on the Rights Certificate attached hereto as EXHIBIT B and, in
lieu thereof, shall contain the following two sentences:
"The Rights represented by this Rights Certificate are or were
Beneficially Owned by a Restricted Person as such term is defined in
the Rights Agreement. This Rights Certificate and the Rights
represented hereby shall be or become void under the circumstances
specified in Section 2.5(c) of the Rights Agreement."
The Company shall give prompt written notice to the Rights Agent after becoming
aware of the existence and identity of any Restricted Person. The failure to
insert the foregoing sentences on any such Rights Certificate or any defect
therein shall not in any manner whatsoever affect the application or
interpretation of Section 2.5(c). The Company shall specify to the Rights
Agent in writing which Rights Certificates are to be so legended.
2.3 COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf
of the Company by its Chairman of the Board, its President, any of its Vice
Presidents or its Treasurer, either manually or by facsimile signature attested
by its Secretary or any of its Assistant Secretaries, either manually or by
facsimile signature. The Rights Certificates shall be manually countersigned
by an authorized signatory of the Rights Agent and shall not be valid or
obligatory for any purpose unless so countersigned. In case any officer of the
Company who shall have executed any Rights Certificate shall cease to be such
officer of the Company before such Rights Certificate shall have been
countersigned by an authorized signatory of the Rights Agent and issued and
delivered by or on behalf of the Company, such Rights Certificate,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by or on behalf of the Company with the same force and effect as though the
individual who executed such Rights Certificate or who attested the Company's
seal thereon had not ceased to be such officer; and any Rights Certificate may
be executed on behalf of the Company by any individual who, at the actual date
of such execution, shall be a proper officer of the Company, although at the
date of execution of this Rights Agreement such person was not such an officer.
(b) After the Distribution Date, the Rights Agent shall
keep or cause to be kept, at its principal office, books for registration and
transfer of the Rights Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of the Rights Certificates,
the number of Rights evidenced on its face by each Rights Certificate, the date
of each Rights Certificate and (if required by the Company) the date of
countersignature by the Rights Agent.
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2.4 MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) If any mutilated Rights Certificate is surrendered to
the Rights Agent prior to the earlier to occur of the Final Expiration Date,
the time at which the Rights are exercised pursuant to Section 2.5 and the time
at which Rights are exchanged pursuant to the provisions of Section 3.2, the
Company shall execute and the Rights Agent shall countersign and deliver in
exchange therefor a new Rights Certificate evidencing the same number of Rights
as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the
Rights Agent prior to the Final Expiration Date evidence to their satisfaction
of the destruction, loss or theft of any Rights Certificate and such security
or indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to the terms of this Agreement and in the
absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights
Certificate under this Section, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this
Section in lieu of any destroyed, lost or stolen Rights Certificate shall
evidence an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Agreement equally and proportionately with any and all other Rights duly issued
hereunder.
2.5 EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION DATE OF RIGHTS.
(a) No Right may be exercised until the Business Day
after the Distribution Date. At any time on and after the Business Day after
the Distribution Date and prior to the earliest of (i) the Close of Business on
September 25, 2007 (the "Final Expiration Date"), and (ii) the time at which
such Rights are exchanged as provided in Section 3.2, the registered holder of
any Rights Certificate may exercise the Rights evidenced thereby, except as
otherwise provided herein and subject to Section 2.5(c), in whole or in part,
upon surrender of such Rights Certificate, with the Form of Election to
Purchase and Certification of Status on the reverse side thereof duly executed,
together with such signature guarantees and other documentation as the Rights
Agent may reasonably request, to the Rights Agent at its principal office,
accompanied by payment (as provided in Section 2.5(b)) of the Exercise Price
for each one one-hundredth of a Preferred Share (or after a "Triggering Event"
[as hereinafter defined], the securities, cash and other property purchasable
in lieu thereof) as to which the surrendered Rights are then being exercised.
(b) Upon receipt of a Rights Certificate representing
then exercisable Rights, with the Form of Election to Purchase and
Certification of Status on the reverse side thereof duly
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executed, together with such signature guarantees and other documentation as
the Rights Agent may reasonably request, accompanied by payment of the Exercise
Price for the number of one one-hundredths of a Preferred Share (or after a
Triggering Event, the securities, cash and other property purchasable in lieu
thereof) being purchased, plus the amount of any applicable transfer tax (as
determined by the Rights Agent) required to be paid by the holder of such
Rights Certificate, by certified or cashier's check or money order payable to
the order of the Company, the Rights Agent shall, subject to the terms and
conditions of this Agreement, thereupon promptly:
(i) Requisition from any transfer agent for the
Preferred Shares (or, if the Rights Agent is such a transfer agent,
make available) stock certificates for the number of one
one-hundredths of a Preferred Share being purchased, the Company
hereby irrevocably authorizing any such transfer agent to comply with
all such requests;
(ii) Requisition from the depository agent depository
receipts for the number of one one-hundredths of a Preferred Share
being purchased (in which case stock certificates for the Preferred
Shares represented by such depository receipts shall be deposited by
the transfer agent for the Preferred Shares with the depository agent
and to which the Company hereby irrevocably authorizing any such
depository agent to comply with all such requests) if the Company
shall have elected to deposit the Preferred Shares issuable upon
exercise of the Rights with a depository agent;
(iii) Requisition or obtain from the appropriate
Person or Persons such securities, cash and other property as may then
be purchasable in lieu of Preferred Shares after a Triggering Event
(the Company hereby irrevocably authorizing all such requests);
(iv) Requisition from the Company the amount of cash
to be paid in lieu of the issuance of any fractional share of
Preferred Shares when appropriate; and
(v) Cause the same to be delivered to or upon the
order of the registered holder of such Rights Certificate, registered
(when appropriate) in such name or names as may be designated by such
registered holder promptly after receipt of such stock certificates,
depository receipts, securities, cash and/or other property.
(c) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Flip-In Event (as
hereinafter defined), any Rights Beneficially Owned by a Restricted
Person/Transferee shall be or become void without any further action. No
holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise, from and
after such first occurrence. The Company shall use all reasonable efforts to
ensure that the provisions of this Section and Section 2.2(b) are complied
with, but shall have no liability to any holder of the Rights Certificates or
to any other Person as a result of the Company's failure to make any applicable
finding or determination with respect to any Restricted Person, or any
transferee of any thereof.
(d) Notwithstanding Section 2.5(a), a Right may be
exercised by the holder thereof on or after the Business Day after the
Distribution Date and prior to the receipt of the associated Rights Certificate
by notifying the Rights Agent in writing and furnishing to the Rights Agent
such information and evidence as to such election as the Rights Agent may
reasonably
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request; provided, however, that the Rights Agent shall not be required to take
any of the actions specified in this Section until such holder shall have fully
satisfied the applicable requirements specified therein.
(e) Neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to any Rights or Rights
Certificate upon the purported exercise or transfer thereof unless the
registered holder thereof shall have completed and signed the Certification of
Status following the Form of Election to Purchase or the Form of Assignment, as
the case may be, set forth on the reverse side of the Rights Certificate
surrendered for such exercise or transfer, and provided such additional
evidence as to the identity of the Beneficial Owner (or former Beneficial
Owner) thereof or the Affiliates or Associates thereof as the Company shall
reasonably request.
(f) In case the registered holder of any Rights
Certificate shall exercise less than all of the Rights evidenced thereby, then,
subject to the provisions of Section 5.6, a new Rights Certificate evidencing
the Rights remaining unexercised shall be prepared and executed by the Company
and countersigned and delivered by the Rights Agent to the registered holder of
such surrendered Rights Certificate or to such registered holder's duly
authorized assigns.
2.6 EXERCISE PRICE. The price for each one one-hundredth of a
Preferred Share purchased upon exercise of the Rights shall initially be $150
(the "Exercise Price"), shall be subject to adjustment from time to time as
provided in this Agreement and shall be payable in lawful money of the United
States of America in accordance with Section 2.5(b).
2.7 ADJUSTMENT OF EXERCISE PRICE, NUMBER AND KIND OF SHARES AND
RIGHTS.
(a) In the event that the Company shall at any time after
the date of this Agreement declare a dividend on the Preferred Shares payable
in Preferred Shares, subdivide the outstanding Preferred Shares into a greater
number of Preferred Shares, combine or consolidate the outstanding Preferred
Shares into a smaller number of Preferred Shares or issue any shares of capital
stock of any class in a reclassification of the Preferred Shares (including any
such reclassification in connection with a combination or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 2.7 and in Section 2.5(c), the Exercise Price in
effect at the Close of Business on the record date for such dividend or at the
effective time of such subdivision, combination, consolidation or
reclassification, and the number and kind of shares of capital stock issuable
upon exercise of the Rights at such date or time, shall be proportionately
adjusted so that the registered holder of each Right exercised after such date
or time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date or time and at a time when the registry books of the transfer agent for
the Preferred Shares were open, such registered holder would have been entitled
to receive by reason of such dividend, subdivision, combination, consolidation
or reclassification; 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 thereof. If an event shall occur which would require an
adjustment under both this paragraph and Section 3.1, the adjustment provided
for in this paragraph shall be in addition to, and shall be made prior to, any
adjustment required pursuant to such Section 3.1.
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(b) In the event that the Company shall fix a record date
for the making of any distribution to all registered holders of Preferred
Shares of options, warrants or rights entitling them (for a period expiring not
later than 45 calendar days after such record date) to subscribe for or
purchase (i) Preferred Shares or shares of capital stock of any class of the
Company having the same or more favorable powers, preferences and rights as the
Preferred Shares ("Equivalent Preferred Shares"), or (ii) securities
convertible into or exchangeable for Preferred Shares or Equivalent Preferred
Shares, at a price per Preferred Share or per Equivalent Preferred Share (or
having a conversion or exchange price per share, in the case of securities
convertible into or exchangeable for Preferred Shares or Equivalent Preferred
Shares) less than the Fair Market Value of one Preferred Share on such record
date, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date, plus the number of Preferred
Shares which the aggregate offering price of the total number of Preferred
Shares and/or Equivalent Preferred Shares so to be offered (and/or the
aggregate initial conversion or exchange price, in the case of convertible or
exchangeable securities so to be offered) would purchase at such Fair Market
Value, and the denominator of which shall be the number of Preferred Shares
outstanding on such record date, plus the total number of Preferred Shares
and/or Equivalent Preferred Shares so to be offered (and/or into or for which
the convertible or exchangeable securities so to be offered are initially
convertible or exchangeable); 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 thereof. In case all or part of such subscription price may be
paid in a form other than cash, the value of such non-cash consideration shall
be its Fair Market Value. Preferred Shares owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any computation
provided for in this subsection. The adjustment required by this subsection
shall be made successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the Exercise Price shall be
adjusted to the Exercise Price which would have been in effect if such record
date had not been fixed.
(c) In the event that the Company shall fix a record date
for the making of any distribution to all registered holders of Preferred
Shares (including any such distribution made in connection with a combination
or merger in which the Company is the continuing or surviving corporation) of
cash (other than a regular quarterly cash dividend), options, warrants or
rights (other than those referred to in Section 3.1), securities, evidences of
indebtedness or other property (excluding any dividend payable in Preferred
Shares, but including any dividend payable in other shares of capital stock),
the Exercise Price to be in effect after such record date shall be determined
by multiplying the Exercise Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the Fair Market Value of
one one-hundredth of a Preferred Share on such record date, less the Fair
Market Value of the cash, options, warrants, rights, securities, evidences of
indebtedness or other property so to be distributed and properly attributable
to one one-hundredth of a Preferred Share, and the denominator of which shall
be such Fair Market Value of one one-hundredth of a Preferred Share. The
adjustment required by this subsection shall be made successively whenever such
a record date is fixed; and in the event that such distribution is not so made,
the Exercise Price shall be adjusted to the Exercise Price which would have
been in effect if such record date had not been fixed.
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(d) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least 1.0%
in the Exercise Price then in effect; provided, however, that any adjustments
which by reason of this subsection are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section shall be made to the nearest whole cent, to the nearest one
ten-thousandth of a share of Common Stock or other capital stock of any class
(other than Preferred Shares) or to the nearest one one-millionth of a
Preferred Share, as the case may be. Notwithstanding the first sentence of
this subsection, any adjustment required by this Section shall be made no later
than the earliest to occur of three years after the date of the occurrence
requiring such adjustment, the Redemption Date, and the Final Expiration Date.
(e) If as a result of an adjustment required by any
Triggering Event the holder of any Rights thereafter exercised shall become
entitled to receive any shares of capital stock of any class of the Company
(other than Preferred Shares), the number of such other shares so receivable
upon exercise of any Rights shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as reasonably possible to the
provisions with respect to the Preferred Shares contained in this Section, and
the provisions of this Agreement with respect to the Preferred Shares shall
apply on like terms to any such other shares.
(f) All Rights originally issued by the Company
subsequent to any adjustment made to the Exercise Price hereunder shall
evidence the right to purchase, at the adjusted Exercise Price, the number of
one one-hundredths of a Preferred Share purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(g) Before taking any action which would cause an
adjustment reducing the Exercise Price below one one-hundredth of the then par
value, if any, of the Preferred Shares 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 Preferred Shares at such adjusted Exercise Price.
(h) Anything in this Section to the contrary
notwithstanding, the Board shall be entitled to make reductions in the Exercise
Price, in addition to the adjustments expressly required by this Section, as
and to the extent that the Board, in its sole discretion, shall determine to be
advisable in order that any dividend on the Preferred Shares payable in
Preferred Shares, any subdivision, combination or consolidation of the
Preferred Shares (by reclassification or otherwise than by payment of dividends
in Preferred Shares) into a greater or lesser number of Preferred Shares, any
issuance of Preferred Shares solely for cash at less than the Fair Market Value
thereof, any issuance solely for cash of Preferred Shares or securities which
by their terms are convertible into or exchangeable for Preferred Shares or any
issuance of options, warrants, rights, securities, evidences of indebtedness or
other property subject to subsection (b) or (c) of this Section, hereafter made
by the Company to the holders of the Preferred Shares, shall not be taxable to
such holders.
(i) Unless the Company shall have exercised the option
provided in Section 2.7(b), upon each adjustment of the Exercise Price as a
result of the calculations required by Sections 2.7(b) and 2.7(c), each Right
outstanding immediately prior to the making of such Exercise Price adjustment
shall thereafter evidence the right to purchase, at the adjusted Exercise
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<PAGE> 18
Price, the number of one one-hundredths of a Preferred Share (calculated to the
nearest one onemillionth) determined by (i) multiplying the number of one
one-hundredths of a Preferred Share purchasable upon exercise of such Right
immediately prior to such adjustment by the Exercise Price in effect
immediately prior to such adjustment and (ii) dividing the product so obtained
by the Exercise Price in effect immediately after such adjustment.
(j) The Company may elect, on or after the date on which
any adjustment of the Exercise Price is required to be made hereunder, to
adjust the number of Rights outstanding in substitution for making an
adjustment in the number of one one-hundredths of a Preferred Share purchasable
upon exercise of each Right. Each Right outstanding after such an adjustment
in the number of Rights shall be exercisable for the same number of one
one-hundredths of a Preferred Share as such Right was exercisable for
immediately prior to such adjustment; but each Right held of record prior to
such adjustment shall become the number of Rights (calculated to the nearest
one ten- thousandth) determined by dividing the Exercise Price in effect
immediately prior to the occurrence requiring the adjustment of the Exercise
Price by the Exercise Price in effect immediately after such adjustment of the
Exercise Price. The Company shall make a prompt public announcement of its
election to adjust the number of Rights outstanding, indicating the record date
for the adjustment and, if known at the time of such announcement, the amount
of the adjustment to be made. Such record date may be the date on which the
Exercise Price is required to be adjusted or any day thereafter, unless the
Rights Certificates shall have been issued, in which case such record date
shall be at least ten days after the date of such public announcement. If the
Rights Certificates shall have been issued, upon each adjustment of the number
of Rights outstanding pursuant to this subsection, the Company shall, as
promptly as practicable, cause to be distributed to each registered holder of
the Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 5.6, the additional Rights to which such registered holder
shall be entitled as a result of such adjustment; or, at its option, the
Company shall cause to be distributed to each such registered holder, in
substitution and replacement for the Rights Certificates held by such
registered holder prior to the date of such adjustment, but only upon surrender
thereof (if so required by the Company), new Rights Certificates evidencing all
the Rights to which such registered holder shall be entitled after such
adjustment. Rights Certificates so distributed shall be executed and
countersigned in the manner provided by this Agreement (and may designate, at
the option of the Company, the adjusted Exercise Price) and shall be registered
in the names of the registered holders of the Rights Certificates on the record
date specified in the aforesaid public announcement.
(k) In the event that the Company shall at any time after
the date of this Agreement and prior to the Distribution Date declare a
dividend on its outstanding shares of Common Stock payable in shares of Common
Stock or effect a subdivision, combination or consolidation of its outstanding
shares of Common Stock (by reclassification or otherwise than by payment of
dividends in shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then, in each such case, the number of one one-hundredths of a
Preferred Share purchasable after such event upon proper exercise of each Right
shall be determined by multiplying the number of one one-hundredths of a
Preferred Share so purchasable immediately prior to such event by a fraction,
the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such event and the denominator of which shall
be the number of shares of Common Stock outstanding immediately after such
event; and each share of Common Stock outstanding immediately after such event
shall have issued with respect
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<PAGE> 19
to it the same number of Rights which each share of Common Stock outstanding
immediately prior to such event had issued with respect to it. This adjustment
shall be made successively whenever such a dividend is declared or such a
subdivision, combination or consolidation is effected.
(l) Irrespective of any adjustment or change in the
Exercise Price or the number of one one-hundredths of a Preferred Share
issuable upon exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to designate the Exercise Price and the number
of one one-hundredths of a Preferred Share which were designated in the Rights
Certificates originally issued hereunder.
(m) In any case in which this Section shall require an
adjustment of the Exercise Price effective as of the record date for a
particular event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Rights exercised after such record date
of the Preferred Shares (and/or the other shares of capital stock, securities
or other property of the Company, if any) issuable upon such exercise in excess
of the Preferred Shares (and/or the other shares of capital stock, securities
or other property of the Company, if any) issuable upon such exercise on the
basis of the Exercise Price in effect immediately 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
excess upon the occurrence of such event.
2.8 CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights 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. If the
Rights Certificates are in cancelled form when surrendered to the Rights Agent,
they shall be cancelled by it. No Rights Certificates shall be issued in lieu
of the cancelled Rights Certificates except as expressly permitted by this
Agreement. The Company shall deliver to the Rights Agent for cancellation, and
the Rights Agent shall cancel, any other Rights Certificate purchased or
reacquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to the Company or shall,
at the written request of the Company, destroy such cancelled Rights
Certificates and deliver a certificate of the destruction thereof to the
Company.
2.9 RESERVATION AND AVAILABILITY OF PREFERRED SHARES.
(a) The Company covenants and agrees that it will cause
to be reserved and kept available out of its authorized and unissued Preferred
Shares, or any authorized and issued Preferred Shares held in its treasury, the
number of Preferred Shares required to permit the exercise in full of all
outstanding Rights.
(b) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all Preferred Shares
delivered upon exercise of the Rights shall, at the time of delivery of the
stock certificates therefor in accordance with Section 2.5(b) (including the
receipt of payment of the Exercise Price), be duly and validly authorized and
issued and fully paid and nonassessable.
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(c) The Company covenants and agrees that it will use its
best efforts to (i) file, as soon as practicable after the occurrence of a
Flip-In Event for which the consideration to be delivered by the Company upon
exercise of the Rights has been determined, or as soon as required by law after
the Distribution Date, as the case may be, a registration statement on an
appropriate form under the Securities Act with respect to the securities
purchasable upon exercise of the Rights, (ii) cause such registration statement
to become effective as soon as practicable after such filing, and (iii) cause
such registration statement to remain effective (with a prospectus which at all
times meets the requirements of the Securities Act) until the earliest of the
date as of which the Rights are no longer exercisable for such securities, the
Redemption Date and the Final Expiration Date. The Company further covenants
and agrees that it will take such action as may be appropriate under, and which
will ensure compliance with, the securities or "blue sky" laws of such
jurisdictions as may be necessary or appropriate in connection with the
exercisability of the Rights. The Company may temporarily suspend, for not
more than 120 days after the applicable date specified in the first sentence of
this subsection, the exercisability of the Rights in order to prepare and file
such registration statement and permit it to become effective and to complete
such securities or "blue sky" law action. Upon such suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, and the Company also shall issue a public
announcement at such time as the suspension shall no longer be in effect.
Failure of the Company to notify the Rights Agent of any such suspension shall
not affect the effectiveness thereof. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification or exemption in such
jurisdiction shall have been effected. Until otherwise notified in writing by
the Company, the Rights Agent may assume that each purported exercise of the
Rights is permitted by this Agreement and by applicable law, and the Rights
Agent shall not be liable for acting in reliance upon such assumption.
(d) The Company covenants and agrees that, subject to
Section 2.4, it will pay when due and payable any and all federal and state
original issue or transfer taxes and charges which may be payable in respect of
the issuance or delivery of the Rights or the Rights Certificates or of any
stock certificate for Preferred Shares issued upon exercise of the Rights. The
Company shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of any Rights Certificate to a
Person other than, or the issuance of any stock certificate for Preferred
Shares upon exercise of any of the Rights represented by such Rights
Certificate in a name other than, the registered holder of such Rights
Certificate or to issue or deliver any Rights Certificate or stock certificate
for Preferred Shares upon such transfer or exercise until any such tax shall
have been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender thereof) or until it has been established
to the Company's reasonable satisfaction that no such tax is due.
(e) After a Triggering Event, the provisions of this
Section shall apply, to the extent applicable and appropriate, to all shares of
capital stock and other securities then purchasable upon exercise of the
Rights.
2.10 RECORD DATE OF PREFERRED SHARE OWNERSHIP. The Person in whose
name any stock certificate for Preferred Shares is issued upon exercise of any
of the Rights shall for all purposes be deemed to have become the holder of
record of the Preferred Shares represented thereby on, and such stock
certificate shall be dated, the date upon which the Rights Certificate
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<PAGE> 21
evidencing such Rights was duly surrendered to the Rights Agent with
proper payment of the Exercise Price (and all applicable transfer
taxes, if any); provided, however, that if the date of such surrender
and payment shall be a date upon which the registry books of the
transfer agent for the Preferred Shares are closed, such Person shall
be deemed to have become the record holder of such Preferred Shares
on, and such stock certificate shall be dated, the next succeeding
Business Day on which such registry books are open.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF
CERTAIN TRANSACTIONS
3.1 FLIP-IN.
(a) For purposes of this Article III, the "Product" shall
be defined as the product of the then current Exercise Price and the number of
one one-hundredths of a Preferred Share for which such Right was exercisable
prior to such occurrence.
(b) Subject to Section 3.2, promptly upon the occurrence
of an event described in (i), (ii) or (iii) below (where each event shall be
referred to herein as a "Flip-In Event") proper provision shall be made so that
the registered holder of each Right, except as otherwise provided in Section
2.5(c), shall thereafter have the right to receive, upon exercise thereof and
payment of the Product, in accordance with this Agreement, in lieu of Preferred
Shares, the number of shares of Common Stock determined dividing the Product by
50% of the Fair Market Value of one share of Common Stock on the date of such
occurrence:
(i) The occurrence of a Share Acquisition Date;
(ii) The commencement by any Person (other than an
Exempt Person) of, or the first public announcement of the intention
of any Person (other than an Exempt Person) to commence, a tender or
exchange offer if, upon the consummation thereof, such Person would be
the Beneficial Owner of 15% or more of the shares of Common Stock of
the Company then outstanding; provided, however, that if any such
tender or exchange offer is cancelled, terminated or otherwise
withdrawn prior to the Distribution Date without the purchase of any
Common Stock pursuant thereto, such offer shall be deemed never to
have been commenced or publicly announced; or
(iii) At least a majority of the Disinterested
Directors who are not officers of the Company shall declare that any
Person is an " Adverse Person." A Person may be declared as an
Adverse Person if it is determined by at least a majority of the
Disinterested Directors who are not officers of the Company after
reasonable inquiry and investigation (including such consultation, if
any, with such Person as such Disinterested Directors shall deem
appropriate) that a Person, either alone or with its Affiliates and
Associates, has become the Beneficial Owner of 10% or more of the
outstanding shares of Common Stock of the Company and that:
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(A) such Beneficial Ownership by such
Person is intended to cause, is
reasonably likely to cause or will
cause the Company to repurchase the
shares of Common Stock Beneficially
Owned by such Person (and/or its
Affiliates and Associates) or the
Company to take other action or
enter into one or a series of
related transactions which would
provide such Person (and/or its
Affiliates and Associates) with
short-term financial gain under
circumstances which would not be, in
the judgment of such Disinterested
Directors, in the best long-term
interests of the Company and its
shareholders, or
(B) such Beneficial Ownership is having
or reasonably likely to have a
material adverse effect (including,
but not limited to, impairment of
the Company's relationships with
customers or its ability to maintain
its competitive position) on the
business or prospects of the Company
(provided, however, that such
Disinterested Directors may
determine not to declare a Person to
be an Adverse Person if, prior to
the time that such Person acquired
10% or more of the then outstanding
shares of Common Stock of the
Company, such Person provides a
written statement of its purposes
and intentions in connection with
its proposed acquisition of such
shares of Common Stock, together
with any other information
reasonably requested of such Person
by such Disinterested Directors, and
such Disinterested Directors, based
on such written statement and
information and such further inquiry
and investigation as such
Disinterested Directors shall deem
necessary or appropriate, notify
such Person in writing that such
Person will not then be declared to
be an Adverse Person.
The Disinterested Directors may expressly condition in any manner their
determination not to declare a Person to be an Adverse Person in such respects
as they deem appropriate, including, without limitation, such Person's not
acquiring more than a specified amount or percentage of the Company's then
outstanding capital stock or other securities and/or such Person's not taking
actions inconsistent with the purposes and intentions disclosed in its written
statement provided to the Board.
(c) No delay or failure by at least a majority of the
Disinterested Directors who are not officers of the Company to declare any
Person to be an Adverse Person shall in any way waive or otherwise affect the
power of such Disinterested Directors thereafter to declare such Person to be
an Adverse Person. In the event that at least a majority of such Disinterested
Directors should at any time determine, after reasonable inquiry and
investigation, including such consultation, if any, with such Person as such
Disinterested Directors shall deem necessary or appropriate, that such Person
has not met or complied with any condition specified by such Disinterested
Directors, such
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Disinterested Directors may at any time thereafter declare such Person to be an
Adverse Person.
(d) In the event that there shall not be sufficient
authorized and unissued or treasury shares of Common Stock to permit the
exercise in full of the Rights in accordance with Section 3.1(b), the Company
shall take all necessary action to authorize and reserve for issuance such
number of additional shares of Common Stock as may from time to time be
required to be issued upon the exercise in full of all outstanding Rights and,
if necessary, shall use its best efforts to obtain shareholder approval
thereof. Notwithstanding the preceding sentence, if at least a majority of the
Disinterested Directors shall determine that such action is necessary or
appropriate and is not contrary to the best interests of the holders of the
Rights or if a sufficient number of shares of Common Stock cannot be issued for
such purpose in accordance with the provisions hereof, such Disinterested
Directors may cause the Company, in lieu of issuing shares of Common Stock to
distribute, upon the exercise of each Right, cash, debt securities, shares of
preferred stock of the Company, other property or any combination thereof,
having an aggregate Fair Market Value equal to the Fair Market Value of the
number of shares of Common Stock which otherwise would have been issuable. Any
such decision by a majority of the Disinterested Directors must be made and
publicly announced within 45 days after the occurrence of any Flip-In Event.
3.2 EXCHANGE.
(a) The Board may, at its option, at any time on or after
the occurrence of a Flip-In Event, exchange all or any part of the then
outstanding and exercisable Rights (which shall not include any Rights which
have become void pursuant to Section 2.5(c)) for shares of Common Stock of the
Company at an exchange rate of one share of Common Stock per Right,
appropriately adjusted (such exchange rate being hereinafter called the
"Exchange Rate"); provided, however, that the Board shall not be authorized to
effect such an exchange at any time after any Person (other than an Exempt
Person), together with the Affiliates and Associates of such Person, shall have
become the Beneficial Owner of 50.0% or more of the then outstanding shares of
Common Stock of the Company.
(b) Immediately after action by the Board directing the
exchange of any Rights pursuant to this Section, and without any further action
and without any notice, the right to exercise such Rights shall terminate, and
thereafter each registered holder of such Rights shall only be entitled to
receive the number of shares of Common Stock of the Company which shall equal
the number of such Rights held by such registered holder multiplied by the
Exchange Rate then in effect. The Company shall give prompt written notice to
the Rights Agent and prompt public notice to the holders of the Rights of any
such exchange; provided, however, that the failure to give, or any defect in,
any such notice shall not affect the validity of such exchange. Within 15
Business Days after action by the Board directing the exchange of any Rights,
the Company shall mail (or cause the Rights Agent to mail) a notice of exchange
to each registered holder of such Rights, at its last address appearing on 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 of the Company. Any
notice which is mailed in the manner provided in this subsection (b) shall be
deemed given, whether or not received by the registered holder to whom sent.
Each notice of exchange shall state the method by which the exchange of shares
of Common Stock for Rights
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<PAGE> 24
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 among the registered holders of the Rights based upon the number of Rights
held (excluding Rights which shall have become void pursuant to Section
2.5(c)); and, in such case, a new Rights Certificate evidencing the Rights not
being exchanged shall be prepared and executed by the Company and countersigned
and delivered by the Rights Agent to the registered holder of such Rights.
(c) In any exchange pursuant to this Section, the
Company, at its option, may substitute Preferred Shares (or Equivalent
Preferred Shares) for shares of Common Stock in effecting an exchange for
Rights, at the initial rate of one one-hundredth of a Preferred Share (or
Equivalent Preferred Share) for each share of Common Stock, appropriately
adjusted to reflect any adjustments in the voting rights of the Preferred
Shares pursuant to the Certificate of Designations attached hereto as EXHIBIT
A, so that the fractional Preferred Share delivered in lieu of each share of
Common Stock shall have the same voting rights as one share of Common Stock.
(d) In the event that there shall not be sufficient
authorized and unissued or treasury shares of Common Stock or Preferred Shares
(or Equivalent Preferred Shares) to permit the exchange of Rights directed by
the Board, the Company shall take all necessary action to authorize and reserve
for issuance such number of additional shares of Common Stock or Preferred
Shares (or Equivalent Preferred Shares) as may be required for issuance upon
such exchange and, if necessary, shall use its best efforts to obtain
shareholder approval thereof.
(e) The Company shall not be required to issue fractional
shares of Common Stock in exchange for Rights or to distribute stock
certificates which evidence fractional shares of Common Stock. If the Company
shall determine not to issue fractional shares of Common Stock, the Company
shall pay to the registered holders of the Rights with respect to which such
fractional shares would otherwise be issuable an amount in cash equal to the
same fraction of the Fair Market Value for the Trading Day immediately prior to
the date of such exchange) of one share of Common Stock.
3.3 FLIP-OVER.
(a) In the event that, on or after the occurrence of a
Flip-In Event, and an event described in (i), (ii) or (ii) below (where each
such event shall be referred to herein as a "Flip-Over Event," and where a
Flip-In Event or a Flip-Over Event shall sometimes be referred to herein as a
"Triggering Event"), proper provision shall be made so that the registered
holder of each Right, except as otherwise provided in Section 2.5(c), shall
thereafter have the right to receive, upon exercise thereof and payment of an
amount equal to the Product, in accordance with this Agreement, in lieu of
Preferred Shares, the number of freely tradable shares (which shall be duly
authorized, validly issued, fully paid and nonassessable) of Common Stock of
the Principal Party or, in the case of a merger described in clause (ii) of
this Section 3.3(a) in which the Common Stock of the Company shall remain
outstanding, unconverted and unchanged, of the Company, free and clear of all
rights of call or first refusal, liens, encumbrances or other adverse claims,
determined by dividing the Product by 50% of the Fair Market Value of the
shares of Common Stock of such Principal Party (or, if appropriate, the
Company) on the date of consummation of a Flip-Over Event. Such Flip-Over
Events are as follows:
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(i) The Company shall consolidate with, or merge
with and into, any Interested Shareholder or, if in such consolidation
or merger all holders of the Common Stock of the Company are not
treated the same, any other Person (other than a wholly-owned
Subsidiary of the Company in a transaction not prohibited by Section
3.3(i), so that the Company shall not be the continuing or surviving
corporation;
(ii) Any Interested Shareholder or, if in such
merger all holders of the Common Stock of the Company are not
treated the same, any other Person (other than a wholly-owned
Subsidiary of the Company in a transaction not prohibited by Section
3.3(i)) shall merge with and into the Company, so that the Company
shall be the continuing or surviving corporation, and in connection
with such merger either all or part of the outstanding shares of
Common Stock of the Company shall be converted or changed into or
exchanged for capital stock or other securities of any other Person
(or the Company), cash and/or other property or such shares of Common
Stock shall remain outstanding, unconverted and unchanged; or
(iii) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer),
in one or a series of related transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any Interested Shareholder
or, if in such transaction or transactions the holders of the Common
Stock of the Company are not treated the same, any other Person or
Persons (other than the Company or one or more of its wholly-owned
Subsidiaries in one or more transactions, each of which is not
prohibited by Section 3.3(i));
(b) Upon the consummation of a Flip-Over Event, such
Principal Party shall thereafter be liable for, and shall assume, by reason of
the consummation of such Flip-Over Event, all the obligations and duties of the
Company under this Agreement. The term "Company" shall thereafter be deemed to
refer to such Principal Party, it being specifically intended that the
applicable provisions of this Agreement shall apply to such Principal Party and
such Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its shares of Common Stock to permit
exercise of all outstanding Rights in accordance with this subsection and the
distribution of cash, debt securities, shares and other property in accordance
with Section 3.1(d)) in connection with the consummation of a Flip-Over Event
as may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably possible, in relation to the shares of
Common Stock thereafter deliverable upon exercise of the Rights.
(c) After the Distribution Date, the Company shall not
consolidate or merge with any other Person (other than a wholly owned
Subsidiary of the Company in a transaction not prohibited by Section 3.3(i)),
or sell or otherwise transfer (or permit one or more of its Subsidiaries to
sell or otherwise transfer), in one or a series of related transactions, assets
or earning power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company or one or more of its wholly-owned Subsidiaries in one
or more transactions, each of which is not prohibited by Section 3.3(i)), if
(i) at the time of or immediately after the consummation of such transaction
there are any options, warrants, rights, conversion or exchange privileges or
securities
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<PAGE> 26
outstanding or any written or oral agreements, arrangements or understandings
(including provisions contained in the Company's Certificate of Incorporation
or Bylaws) in effect which, as a result of the consummation of such
transaction, would eliminate or substantially diminish the benefits intended to
be afforded by the Rights, or (ii) prior to, simultaneously with or immediately
after such transaction the shareholders of the Person who constitutes, or would
constitute, the Principal Party for the purpose of subsection (a) of this
Section shall have received a distribution of Rights previously owned by such
Person or any of its Affiliates or Associates.
(d) The Company shall not consummate any Flip-Over Event
unless prior thereto (i) the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued or reserved
for issuance to permit the exercise in full of the Rights in accordance with
this Section, and (ii) the Company, the Principal Party and each other Person
who may become the Principal Party as a result of the consummation of such
Flip-Over Event shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the implementation of all the terms and
conditions set forth in this Section and that, as soon as practicable after the
date of such Flip-Over Event, the Principal Party, at its own expense, shall:
(i) Prepare and file a registration statement on
an appropriate form under the Securities Act with respect to the
Rights and the securities purchasable upon exercise thereof, and use
its best efforts to cause such registration statement to become
effective as soon as practicable after such filing and to remain
effective (with a prospectus which at all times meets the requirements
of the Securities Act) until the earliest of the date as of which the
Rights are no longer exercisable for such securities, the Redemption
Date and the Final Expiration Date;
(ii) Use its best efforts to qualify or register
the Rights and the securities purchasable upon exercise thereof under
the securities or "blue sky" laws of such jurisdictions as may be
necessary or appropriate in connection with the exercisability of the
Rights;
(iii) Use its best efforts to list (or continue the
listing of) the Rights and the securities purchasable upon exercise
thereof on a national securities exchange or to meet the eligibility
requirements for quotation on Nasdaq; and
(iv) Deliver to the registered holders of the
Rights historical financial statements for the Principal Party and
each of its Affiliates complying in all material respects with the
requirements for registration of securities on Form 10 under the
Exchange Act.
(e) Notwithstanding anything in this Agreement to the
contrary, this Section shall not apply if (i) such transaction is consummated
with a Person or Persons who acquired their shares of Common Stock of the
Company pursuant to a Permitted Offer, (ii) the price per share of Common Stock
of the Company provided in such transaction shall not be less than the price
per share of Common Stock paid to all holders whose shares were purchased
pursuant to such Permitted Offer, and (iii) the form of consideration being
offered to the remaining holders of the Common Stock of the Company pursuant to
such transaction is the same as the form of
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consideration paid pursuant to such Permitted Offer. Upon consummation of any
transaction authorized by this subsection (e), all Rights shall expire.
(f) If, in the case of any transaction described in
clause (iii) of subsection (a) of this Section, the Person or Persons to whom
assets or earning power are sold or otherwise transferred are individuals,
then, in lieu of any other payment or distribution required by this Section,
the Company shall require as a condition to such transaction that, such Person
or Persons shall pay to each holder of a Rights Certificate, upon its surrender
to the Rights Agent and in exchange therefor (without requiring any payment by
such holder), cash in the amount determined by multiplying the then current
Exercise Price by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable.
(g) In no event shall the Rights Agent have any
obligations or duties in respect of any Flip-Over Event, except as expressly
set forth in this Agreement. The Rights Agent may rely, and shall be fully
protected in relying upon, a certificate of the Company stating that the
provisions of this Section have been fulfilled. The prior written consent of
the Rights Agent shall be required in connection with any supplemental
agreement which alters or impairs the rights, obligations, duties or immunities
of the Rights Agent hereunder.
(h) The provisions of this Section shall similarly apply
to successive consolidations, mergers, sales or other transfers. In the event
that a Flip-Over Event shall occur at any time after the occurrence of a
Flip-In Event, the Rights which have not been theretofore exercised shall
thereafter be exercisable in the manner described in this Section.
(i) Except as permitted by Sections 5.1 and 5.9, the
Company covenants and agrees that, after the Distribution Date, it will not
take, or permit any of its Subsidiaries to take, any action if at the time such
action would be taken it is reasonably foreseeable that such action would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights.
3.4 CERTIFICATE OF ADJUSTED EXERCISE PRICE OR NUMBER OF SHARES.
Whenever any adjustment shall be required, the Company shall promptly (i)
prepare a certificate setting forth such adjustment and a brief statement of
the facts requiring such adjustment, (ii) file with the Rights Agent and with
each transfer agent (if different than the Rights Agent) for the Preferred
Shares or the Common Stock of the Company a copy of such certificate and (iii)
mail a brief summary thereof to each registered holder of the Rights in
accordance with Section 5.8. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment described therein and
shall not be deemed to have knowledge of any such adjustment unless and until
it shall have received such certificate.
ARTICLE IV
THE RIGHTS AGENT
4.1 APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights in
accordance with the terms and conditions of this Agreement. The Rights Agent
hereby accepts such appointment. The
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Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable.
4.2 CONCERNING THE RIGHTS AGENT.
(a) The Company covenants and agrees to pay to the Rights
Agent reasonable compensation for all services rendered by it hereunder and,
from time to time on the written request of the Rights Agent, to reimburse it
for all reasonable expenses and counsel fees incurred in connection with the
acceptance and administration of this Agreement and the performance of its
obligations and duties hereunder. The Company also covenants and 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 its part, for any action taken, suffered or omitted by it in
connection with the acceptance and administration of this Agreement and the
performance of its obligations and duties hereunder, including the costs and
expenses of defending against any claim of liability arising therefrom,
directly or indirectly.
(b) The Rights Agent shall be protected and shall incur
no liability for, or in respect of, any action taken, suffered or omitted by it
in connection with its administration of this Agreement in reliance upon any
Rights Certificate, stock certificate for Preferred Shares, Common Stock or
other shares of capital stock of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, notice, direction,
consent, certificate, statement or other paper or document believed by it to be
genuine and to be executed and, where necessary, verified or acknowledged by
the proper Person or Persons.
4.3 MERGER OR CONSOLIDATION OF THE 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 shareholder services or 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 hereto, provided that such
corporation would be eligible for appointment as successor Rights Agent under
Section 4.5. In case at the time any successor Rights Agent shall succeed to
the agency created by this Agreement any of the Rights Certificates
countersigned by its predecessor Rights Agent shall not have been delivered,
such successor Rights Agent may adopt the countersignature of its predecessor
Rights Agent and deliver the Rights Certificates so countersigned; or in case
at such time any of the Rights Certificates shall not have been countersigned,
such successor Rights Agent may countersign such Rights Certificates either in
the name of its predecessor Rights Agent or in the name of such successor
Rights Agent; and in all such cases, such Rights Certificates shall have the
full force and effect provided therein 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 Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver the Rights Certificates so
countersigned; or in case at such time any of the Rights Certificates shall not
have
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been countersigned, the Rights Agent may countersign such Rights Certificates
either in its prior name or in its changed name; and in all such cases, such
Rights Certificates shall have the full force and effect provided therein and
in this Agreement.
4.4 DUTIES OF THE RIGHTS AGENT. The Rights Agent undertakes the
obligations and duties imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of the Rights
Certificates (or, prior to the Distribution Date, the stock certificates for
the Common Stock of the Company), by accepting the same, shall be bound, and no
implied obligations or duties shall be read into this Agreement against the
Rights Agent.
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the written opinion of such legal
counsel shall be authorization and protection to the Rights Agent as to any
action taken, suffered 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, suffering 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 executed by any one of the
Chairman of the Board, the President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be authorization and protection to the Rights Agent as to any
action taken, suffered or omitted by it in good faith in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or in
the Rights Certificates (except its countersignature thereon) 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 responsible for the
validity of this Agreement or the execution and delivery hereof (except for its
due execution hereof) or for the validity or execution of any Rights
Certificate (except for its countersignature thereon); nor shall the Rights
Agent be responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor shall the Rights
Agent be responsible for any change in the exercisability of the Rights
(including Rights becoming void pursuant to Section 2.5(c)), for any adjustment
or change (or for the manner or method of determining same) in the terms of the
Rights (including any adjustment or change in the Exercise Price or in the
number or kind of shares, securities or other property issuable upon the
exercise thereof) required by this Agreement or for ascertaining the existence
of facts which would require any such change or adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after actual notice,
in the manner provided in Section 3.3, that such change or adjustment is
required); nor shall the Rights Agent by any act hereunder be deemed to have
made any representation or warranty as to the authorization or reservation of
any Preferred Shares or shares of Common
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Stock to be issued pursuant to this Agreement or any Rights Certificate or as
to whether any Preferred Shares or shares of Common Stock will, when issued, be
validly authorized and issued and 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 acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its obligations and
duties hereunder from any one of the Chairman of the Board, the President, any
Vice President, the Treasurer or the Secretary of the Company, and to apply to
such officers for advice or instructions in connection with its obligations and
duties; and the Rights Agent shall not be liable for any action taken, suffered
or omitted by it in good faith and in accordance with the written instructions
of any such officer or for any delay in acting while waiting for such
instructions.
(h) The Rights Agent and any shareholder, director,
officer or employee of the Rights Agent may buy, sell or deal in the Rights or
in any other securities of the Company (including the Preferred Shares and its
Common Stock) or become pecuniarily interested in any transaction in which the
Company (or any of its Subsidiaries) may be interested, or contract with or
lend money to the Company (or any of its Subsidiaries), and may otherwise act
as fully and freely as though it were not the Rights Agent under this
Agreement; and nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company, any of its Subsidiaries or any other
entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any of its obligations or
duties hereunder either directly 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 attorney or agent or for any loss to the
Company resulting from any such act, default, neglect or misconduct, provided
the Rights Agent exercised reasonable care in the selection and continued
employment of such attorney or agent.
(j) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the Form of
Certification of Status attached to the Form of Election to Purchase or the
Form of Assignment, as the case may be, has either not been completed or
indicates an affirmative response to Question 1 and/or 2 thereof, the Rights
Agent shall not take any further action with respect to the requested exercise
or transfer without first consulting with the Company.
(k) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its obligations or duties or in the
exercise of its rights or powers hereunder if there shall be reasonable grounds
for believing that repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured.
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4.5 RESIGNATION OR REMOVAL OF THE RIGHTS AGENT. The Rights Agent
or any successor Rights Agent may resign and be discharged from its obligations
and duties under this Agreement upon 30 days' prior notice to the Company and
to each transfer agent for the Preferred Shares and for the Common Stock of the
Company, sent by registered or certified mail, postage prepaid, and to each
registered holder of the Rights Certificates, sent by first-class mail, postage
prepaid. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' prior notice to the Rights Agent or successor Rights Agent, as
the case may be, and to each transfer agent for the Preferred Shares and for
the Common Stock of the Company, sent by registered or certified mail, postage
prepaid, and to each registered holder of the Rights Certificates, sent by
first class mail, postage prepaid. If the Rights Agent or any successor Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor Rights Agent. If the Company shall fail
to make such appointment within 30 days after giving notice of such removal or
after receiving notice of such resignation or incapacity, either from the
resigning or incapacitated Rights Agent or from the registered holder of any
Rights Certificate (who shall, with such notice, submit its Rights Certificate
for inspection by the Company), then the incumbent Rights Agent or the
registered holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a successor 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 of
America or the State of Wisconsin (or of any other state so long as such
corporation is authorized to do business as a banking institution in the State
of Wisconsin), be in good standing under the laws of the jurisdiction of its
incorporation, have an office in the State of Wisconsin, be authorized under
such laws to exercise corporate trust or stock transfer powers, be subject to
supervision or examination by federal or state authority and have at the time
of its appointment as Rights Agent a combined capital and surplus of at least
$50,000,000. After its appointment, the successor Rights Agent shall be vested
with the same rights, powers, obligations, duties and immunities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent for the Preferred Shares and for the Common Stock of the Company, and
mail notice thereof to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section, however, or any defect
therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or any successor Rights Agent or the appointment of
any successor thereto.
ARTICLE V
MISCELLANEOUS
5.1 REDEMPTION.
(a) The Board may, at its option, at any time prior to
the earliest of the (i) Distribution Date, and (ii) the Final Expiration Date
(where such date at which Rights are redeemed pursuant to this Section shall be
referred to herein as the "Redemption Date"), redeem all, but not less than
all, of the then outstanding Rights at a redemption price of $.01 per Right, as
may be adjusted as provided in Section 5.1(f) (the "Redemption Price"),
provided that, if the Board shall authorize the redemption of the Rights in the
circumstances set forth in either of
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clauses (A) or (B) below, there must be more than one Disinterested Director
then in office and such authorization shall require the concurrence of at least
a majority of such Disinterested Directors: (A) such authorization shall occur
on or after the date a Person becomes an Acquiring Person or an Adverse Person,
or (B) such authorization shall occur on or after the date of a change
(resulting from a solicitation of either proxies or one or more written
shareholder consents) in a majority of the directors in office at the
commencement of such solicitation if any Person who shall be a participant in
such solicitation has stated (or, if upon the commencement of such
solicitation, at least a majority of the Disinterested Directors shall have
determined in good faith) that such Person (or any of its Affiliates or
Associates) intends to take, or may consider taking, any action which would
result in such Person becoming an Acquiring Person or an Adverse Person.
(b) Notwithstanding any other provision of this
Agreement, the Rights shall not be exercisable after the first occurrence of a
Flip-Over Event until such time as the Company's right of redemption under this
Section shall have expired.
(c) In considering whether to redeem the Rights, the
Board and the Disinterested Directors may consider the best long and short term
interests of the Company and its shareholders, including, without limitation,
the effects of the redemption of the Rights upon employees, creditors,
suppliers and customers of the Company or of its Subsidiaries and upon the
communities in which offices or other establishments of the Company and such
Subsidiaries are located and all other pertinent factors. The redemption of
the Rights by the Board may be made effective at such time, on such basis and
with such conditions as the Board, in its sole discretion, may establish.
(d) Immediately after action by the Board directing the
redemption of the Rights and without any further action and without any notice,
the right to exercise the Rights shall terminate, and thereafter each
registered holder of the Rights shall only be entitled to receive the
Redemption Price therefor. The Company shall give prompt written notice to the
Rights Agent and prompt public notice to the holders of the Rights of any such
redemption; provided, however, that the failure to give, or any defect in, any
such notice shall not affect the validity of such redemption. Within ten days
after action by the Board directing the redemption of the Rights, the Company
shall mail (or cause the Rights Agent to mail) a notice of redemption to each
registered holder of the then outstanding Rights, at its last address appearing
on 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 of the
Company. Any notice which is mailed in the manner provided in this subsection
shall be deemed given, whether or not received by the registered holder to whom
sent. Each notice of redemption shall state the method by which payment of the
Redemption Price is to be made. Neither the Company nor any of its Affiliates
or Associates may at any time redeem, acquire or purchase for value any Rights
other than in the manner set forth in this Section and Section 3.2 or in
connection with any purchase of outstanding shares of its Common Stock prior to
the Distribution Date.
(e) The Company may, at its option, pay the Redemption
Price in cash, shares of Common Stock (based on its Fair Market Value) as of
the date of redemption) or any other form of consideration deemed appropriate
by the Board.
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(f) In the event that the Company shall at any time after
the date of this Agreement (i) declare a dividend on its outstanding shares of
Common Stock payable in shares of Common Stock, or (ii) effect a subdivision,
combination or consolidation of its outstanding shares of Common Stock (by
reclassification or otherwise than by payment of dividends in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then, in each
such case, the Redemption Price after such event shall equal the Redemption
Price in effect immediately prior to such event multiplied by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the
number of shares of Common Stock outstanding immediately after such event;
provided, however, that such adjustment shall be made only if the amount of the
Redemption Price would be reduced or increased by at least $0.001 per Right.
5.2 RIGHTS OF ACTION. All rights of action in respect of this
Agreement, other than rights of action which the Rights Agent may have under
Sections 4.2 and 4.4, are vested in the registered holders of the Rights
Certificates (or, prior to the Distribution Date, the registered holders of the
Common Stock of the Company); and the registered holder of any Rights
Certificate (or, prior to the Distribution Date, of any stock certificate for
shares of such Common Stock), without the consent of the Rights Agent or of the
holder of any other Rights Certificate (or, prior to the Distribution Date, of
any other stock certificate for shares of Common Stock), may, on such
registered holder's own behalf and for such registered holder's own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, such registered
holder's right to exercise the Rights evidenced by such Rights Certificate (or,
prior to the Distribution Date, such stock certificate) in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the
generality of the foregoing or any remedies available to the holders of the
Rights, it is specifically acknowledged that the registered holders of the
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 and
duties under, and injunctive relief against any actual or threatened violations
of the obligations and duties of any Person subject to, this Agreement.
5.3 AGREEMENTS OF HOLDERS OF THE RIGHTS. Each holder of a Right,
by accepting the same, consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) Prior to the Distribution Date, the Rights shall be
transferable only simultaneously and together with the transfer of shares of
Common Stock of the Company;
(b) After the Distribution Date, the Rights Certificates
shall be transferable on the registry books of the Rights Agent only if
surrendered at the principal office of the Rights Agent, with the Form of
Assignment and Certification of Status on the reverse side thereof duly
executed, together with such signature guarantees and other documentation as
the Rights Agent may reasonably request;
(c) Subject to Sections 2.4 and 2.5(c), the Company and
the Rights Agent may deem and treat the Person in whose name any Rights
Certificate (or, prior to the Distribution Date, any stock certificate for the
Common Stock of the Company) is registered as the absolute owner thereof and of
the Rights represented thereby (notwithstanding any notations of ownership
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or other writing on such Rights Certificate or 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; and
(d) Neither the Company nor the Rights Agent shall have
any liability to any holder of a Right or to any other Person because of its
inability to perform any of its obligations or duties under this Agreement by
reason of any applicable law, any preliminary or permanent injunction or other
order, decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission or any rule,
regulation or executive order promulgated or enacted by any such governmental
authority prohibiting or otherwise restraining performance of any such
obligation or duty; provided, however, that the Company shall use its best
efforts to have any such injunction, order, decree or ruling lifted or
otherwise overturned as soon as reasonably possible.
5.4 RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No holder,
as such, of any Rights Certificate shall be entitled to vote, to receive
dividends or other distributions on or to exercise any preemptive rights with
respect to, or shall be deemed for any other purpose to be the holder of, the
Preferred Shares or other shares of capital stock of any class of the Company
which may at the time be issuable upon exercise of the Rights represented
thereby; nor shall anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights Certificate, as such, any of
the rights of a shareholder of the Company, or any right to vote for the
election of directors or upon any other matter submitted to shareholders at any
meeting thereof, to give or withhold consent to any corporate action, to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 5.7) or to receive dividends, subscription rights or other
distributions, until the Rights represented by such Rights Certificate shall
have been exercised, in whole or in part, in accordance with the provisions
hereof.
5.5 ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any
provision of this Agreement or of the Rights Certificates to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing the Rights
in such form as may be approved by the Board to reflect any adjustment or
change in the Exercise Price or in the number or kind of shares, securities or
other property issuable upon exercise of the Rights in accordance with the
provisions of this Agreement; provided, however, that (i) no such Rights
Certificates shall be issued if, and to the extent that, the Company shall be
advised by counsel that such issuance could create a significant risk of
material adverse tax consequences to the Company or to the Persons to whom such
Rights Certificates would be issued and (ii) no such Rights Certificates shall
be issued if, and to the extent that, appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.
5.6 FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractional
Rights or to distribute Rights Certificates which evidence fractional Rights.
If the Company shall determine not to issue fractional Rights, the Company
shall pay, to the registered holders of the Rights with respect to which
fractional Rights would otherwise be issuable an amount in cash equal to the
same fraction
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of the Fair Market Value for the Trading Day immediately prior to the date on
which such fractional Rights would otherwise have been issued) of one Right in
lieu of issuing fractional Rights.
(b) The Company shall not be required to issue fractional
Preferred Shares (other than fractions which are multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute stock
certificates which evidence fractional Preferred Shares (other than fractions
which are multiples of one one-hundredth of a Preferred Share). If the Company
shall determine not to issue fractional Preferred Shares that are not multiples
of one one-hundredth of a Preferred Share, the Company shall pay to the
registered holders of the Rights Certificates at the time Rights represented
thereby are exercised, in lieu of such fractional Preferred Shares, an amount
in cash equal to the same fraction of the Fair Market Value for the Trading Day
immediately prior to the date of such exercise of one one-hundredth of a
Preferred Share.
(c) Each holder of a Right, by accepting the same,
expressly waives such holder's right to receive or exercise any fractional
Right or to receive any fractional Preferred Share upon the exercise of such
Right (except as provided in this Section).
5.7 NOTICE TO HOLDERS OF RIGHTS CERTIFICATES OF CERTAIN EVENTS.
(a) In the event that any time after the Distribution
Date, the Company shall propose: (i) to pay any dividend payable in shares of
capital stock of any class of the Company to the holders of Preferred Shares
(other than a regular quarterly cash dividend); (ii) to effect any
reclassification of the Preferred Shares (other than a reclassification
involving only the subdivision of the outstanding Preferred Shares); (iii) to
make any distribution to the holders of Preferred Shares described in Section
2.7(b) or 2.7(c); (iv) to effect any Flip-Over Event; (v) to pay any dividend
on its shares of Common Stock payable in shares of Common Stock or to effect a
subdivision, combination or consolidation of its outstanding shares of Common
Stock (by reclassification or otherwise than by payment of dividends in shares
of Common Stock); or (vi) to effect the liquidation, dissolution or winding up
of the Company; then, in each such case, the Company shall give to the Rights
Agent and each registered holder of the Rights, in the manner provided in
Section 5.8, written notice of such proposed action, which shall specify the
record date for such stock dividend or distribution or the date on which such
reclassification, Flip-Over Event, liquidation, dissolution or winding up is
expected to occur (and the date for participation therein by the holders of the
Common Stock and/or Preferred Shares if any such date is to be fixed). Such
notice shall be given, in the case of any action described in clause (i) or
(iii) of the preceding sentence, at least ten days prior to the record date
and, in the case of any other such action, at least 20 days prior to the date
of taking of such proposed action or the date for participation therein by the
holders of Preferred Shares, whichever shall be the earlier.
(b) In case any Section Flip-In Event shall occur, the
Company shall, as soon as practicable thereafter, give to the Rights Agent and
each registered holder of the Rights, in the manner provided in Section 5.8,
written notice of the occurrence thereof, which notice shall describe such
occurrence and its consequences in reasonable detail.
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5.8 NOTICES. Except as otherwise provided herein, notices or
demands authorized by this Agreement to be given or made by the Rights Agent or
by the registered holder of any Rights, Rights Certificate or stock certificate
for shares of Common Stock of the Company to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address shall be filed in writing with the Rights
Agent) as follows:
St. Francis Capital Corporation
13400 Bishops Lane, Suite 350
Brookfield, Wisconsin 53005-6203
Attention: Thomas R. Perz, President/CEO
Except as otherwise provided herein, notices or demands authorized by this
Agreement to be given or made by the Company or by the registered holder of any
Rights, Rights Certificate or stock certificate for shares of Common Stock of
the Company to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address
shall be filed in writing with the Company) as follows:
Firstar Trust Co.
1555 North RiverCenter Drive
Suite 301
Milwaukee, Wisconsin 53212
Attention: Eugene R. Lee, Vice President
Except as otherwise provided herein, notices or demands authorized by this
Agreement to be given or made by the Company or the Rights Agent to the
registered holder of any Rights, Rights Certificate or stock certificate for
shares of Common Stock of the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed to such holder at its last
address appearing on 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 of the Company.
5.9 SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution Date,
but subject to the last sentence of this Section, the Company and the Rights
Agent, if so directed in writing by the Company may supplement or amend any
term, provision or condition of this Agreement, without the approval of the
registered holders of the stock certificates representing the Common Stock and
the Rights. From and after the Distribution Date, but subject to the last
sentence of this Section, the Company and the Rights Agent, if so directed in
writing by the Company may supplement or amend this Agreement, without the
approval of the registered holders of the Rights (however represented), in
order to: (i) cure any ambiguity; (ii) correct or supplement any term,
provision or condition of this Agreement which may be defective or inconsistent
with any other term, provision or condition hereof; (iii) shorten or lengthen
any time period specified herein (except that after the first occurrence of an
event described in either clause (A) or (B) in the first sentence of Section
5.1(a), there must be Disinterested Directors then in office and any such
shortening or lengthening shall require the concurrence of at least a majority
of such Disinterested Directors); or (iv) change or supplement one or more of
the terms, provisions or conditions hereof, other than as described in (iii)
above, in any manner which the Company may deem necessary or desirable and
which shall not materially adversely affect, as determined by the Board (with
the concurrence of at least a majority of the Disinterested Directors), the
interests of the
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<PAGE> 37
holders (other than a Restricted Person or the transferees thereof specified in
Section 2.5(c)) of the Rights (however represented); provided, however, that
this Agreement may not be supplemented or amended pursuant to clause (iii) of
this sentence (A) to lengthen any time period unless (I) approved by at least a
majority of the Disinterested Directors, and (II) such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders (other than a Restricted Person or the transferees
thereof specified in Section 2.5(c)) of the Rights, or (B) to lengthen any time
period relating to when the Rights may be redeemed if at such time the Rights
are not then redeemable. Upon the delivery of a certificate from an
appropriate officer of the Company stating that the proposed supplement or
amendment is in compliance with the terms of this Section, the Rights Agent
shall execute such supplement or amendment; provided, however, that the Rights
Agent shall not be required to execute any supplement or amendment which
affects any of the Rights Agent's rights, powers, obligations, duties or
immunities under this Agreement without its consent. On and after the
Distribution Date, no supplement or amendment shall be made which changes the
Exercise Price, the number of one one-hundredths of a Preferred Share for which
a Right is exercisable, the Redemption Price or the Final Expiration Date.
Prior to the Distribution Date, the interests of the holders of the Rights
shall be deemed coincident with the interests of the holders of the Common
Stock of the Company.
5.10 SUCCESSORS. All of the terms, provisions and conditions 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.
5.11 CERTAIN DETERMINATIONS AND ACTIONS BY THE BOARD. For all
purposes of this Agreement, any calculation of the number of shares of Common
Stock outstanding at any particular time, including the determination of the
percentage of such outstanding shares of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i), as in effect on the date hereof, under the Exchange Act. The
Board (or, as and when set forth herein, the Disinterested Directors) shall
have the exclusive power and authority to interpret this Agreement and to
exercise all rights and powers specifically granted to the Board or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to make all
determinations deemed necessary or advisable for such administration,
including, without limitation, a determination to redeem or not to redeem the
Rights, to exchange or not to exchange the Rights, to declare a Person to be an
Adverse Person or to supplement or amend this Agreement. All such
calculations, determinations, interpretations and exercises (including, for
purposes of clause (ii) below, all omissions with respect to the foregoing)
which are done or made by the Board (or the Disinterested Directors) in good
faith shall (i) be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and all other Persons and (ii) not subject any
director (including any Disinterested Director) to any liability to the holders
of the Rights or to any other Person.
5.12 BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the stock certificates for the
Common Stock of the Company) 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
35
<PAGE> 38
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, the registered holders of the stock certificates for
the Common Stock of the Company).
5.13 SEVERABILITY. If any term, provision or condition of this
Agreement shall be held by a court of competent jurisdiction or other lawful
authority to be invalid, void or unenforceable, the remaining terms,
provisions, and conditions of this Agreement shall remain in full force and
effect and shall in no way affected, impaired or invalidated; provided,
however, that if any such term, provision or condition is held by such court or
authority to be invalid, void or unenforceable and the Board (with the
concurrence of at least a majority of the Disinterested Directors then in
office) shall determine in good faith that severing the same from this
Agreement would adversely affect the purposes or effect of this Agreement, the
right of redemption set forth in Section 5.6 shall be reinstated and shall not
expire until the Close of Business on the tenth day following the date of such
determination by the Board.
5.14 GOVERNING LAW. This Agreement and each Rights Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Wisconsin and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts made and to be
performed entirely within such State.
5.15 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall for all purposes be deemed to be an original,
but all such counterparts shall together constitute one and the same
instrument.
5.16 DESCRIPTIVE READINGS. 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.
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<PAGE> 39
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.
ST. FRANCIS CAPITAL CORPORATION
By: /s/ Thomas R. Perz
---------------------------------
Thomas R. Perz, President/CEO
FIRSTAR TRUST CO.
By: /s/ Eugene R. Lee
---------------------------------
Eugene R. Lee, Vice President
ATTEST
By: /s/ William Caruso
---------------------------------
William Caruso, Assistant Secretary
37
<PAGE> 40
EXHIBIT A
FORM
OF
CERTIFICATE OF DESIGNATION, PREFERENCES, RIGHTS AND LIMITATIONS
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
ST. FRANCIS CAPITAL CORPORATION
(Pursuant to Section 180.0602 of the Wisconsin Business Corporation Law)
St. Francis Capital Corporation, a corporation organized and existing
under the Wisconsin Business Corporation Law (the " Corporation"), does hereby
certify that, pursuant to authority conferred upon its Board of Directors by
its Articles of Incorporation and by the provisions of 180.0602 of the
Wisconsin Business Corporation Law, the following resolution was adopted by its
Board of Directors at a meeting duly called and held on September 25, 1997:
RESOLVED, that pursuant to the authority conferred upon the
Board of Directors of the Corporation (the "Board") by the provisions
of the Articles of Incorporation of the Corporation and the provisions
of Section 180.0602 of the Wisconsin Business Corporation Law, there
is hereby created a series of Preferred Stock of the Corporation,
which series shall have the following powers, designations,
preferences and relative, participating, optional and other special
rights, and the qualifications, limitations or restrictions thereof,
in addition to those set forth in the Articles of Incorporation of the
Corporation:
SECTION 1. DESIGNATION OF SERIES: NUMBER OF SHARES. There is
designated a series of Preferred Stock titled as "Series A Junior Participating
Preferred Stock," par value $.01 per share (the "Series A Preferred Stock"),
and the authorized number of shares constituting the Series A Preferred Stock
shall be 120,000. Such number of authorized shares may be increased or
decreased, from time to time, by resolution of the Board; provided, however,
that no such decrease shall reduce the number of authorized shares of the
Series A Preferred Stock to a number less than the number of shares of the
Series A Preferred Stock then outstanding, plus the number of such shares then
reserved for issuance upon the exercise of any outstanding options, warrants or
rights or the exercise of any conversion or exchange privilege contained in any
outstanding security issued by the Corporation.
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<PAGE> 41
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of shares of any
other series of Preferred Stock (or shares of any other class of capital stock
of the Corporation) ranking senior to the Series A Preferred Stock with respect
to dividends, the holders of shares of the Series A Preferred Stock, in
preference to the holders of shares of Common Stock and of any other class of
capital stock of the Corporation ranking junior to the Series A Preferred Stock
with respect to dividends, shall be entitled to receive, when, as and if
declared by the Board out of funds legally available therefor, such dividends,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock. In the event the Company shall at
any time after September 25, 1997 (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such amount by a fraction the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Board shall declare, out of funds legally
available therefor, a dividend or distribution on the Series A Preferred Stock,
as provided in paragraph (A) of this Section 2, immediately after it has
declared a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock).
SECTION 3. VOTING RIGHTS. In addition to any other voting
rights required by applicable law, the holders of shares of the Series A
Preferred Stock shall have the following voting rights:
(A) Each share of the Series A Preferred Stock shall
entitle the holder thereof to 100 votes on all matters submitted to a vote of
the shareholders of the Corporation. The multiple of 100 (the "Voting
Multiple") set forth in the preceding sentence shall be adjusted from time to
time as hereinafter provided in this paragraph (A). In the event that the
Corporation shall at any time after the effective date of this Resolution of
the Board ("Resolution") (i) declare or pay any dividend on Common Stock
payable in shares of Common Stock, or (ii) effect a subdivision, combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then, in each such case,
the Voting Multiple thereafter applicable to the determination of the number of
votes per share to which the holders of shares of the Series A Preferred Stock
shall be entitled shall be the Voting Multiple in effect immediately prior to
such event multiplied by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.
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<PAGE> 42
(B) Except as otherwise provided in this Resolution, in
any other resolution establishing another series of Preferred Stock (or any
series of any other class of capital stock of the Corporation) or by applicable
law, the holders of the Series A Preferred Stock, the holders of Common Stock
and the holders of any other class of capital stock of the Corporation having
general voting rights shall vote together as a single class on all matters
submitted to a vote of the shareholders of the Corporation.
(C) Except as otherwise provided in this Resolution or by
applicable law, the holders of the Series A Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the
extent provided in paragraph (B) of this Section 3) for the taking of any
corporate action.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever dividends or other distributions payable on
the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on outstanding shares of the Series A Preferred Stock
shall have been paid in full, the Corporation shall not:
(i) Declare or pay dividends or make any other
distributions on any shares of any class of capital stock of
the Corporation ranking junior (either as to dividends or upon
liquidation, dissolution or winding up of the Corporation) to
the Series A Preferred Stock;
(ii) Declare or pay dividends, or make any other
distributions, on any shares of any class of capital stock of
the Corporation ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up of the
Corporation) with the Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and all
such parity stock on which dividends are accrued and unpaid in
proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) Redeem, purchase or otherwise acquire for
consideration any shares of any class of capital stock of the
Corporation ranking junior (either as to dividends or upon
liquidation, dissolution or winding up of the Corporation) to
the Series A Preferred Stock, except that the Corporation may
at any time redeem, purchase or otherwise acquire any shares
of such junior stock in exchange for other shares of any class
of capital stock of the Corporation ranking junior (both as to
dividends and upon dissolution, liquidation or winding up of
the Corporation) to the Series A Preferred Stock; or
(iv) Purchase or otherwise acquire for
consideration any shares of the Series A Preferred Stock or
any shares of any class of capital stock of the Corporation
ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up of the Corporation)
with the Series A Preferred Stock, or redeem any shares of
such parity stock, except in accordance with a purchase offer
made in writing or by publication to the holders of all such
shares upon such
3
<PAGE> 43
terms and conditions as the Board, after taking into
consideration the respective annual dividend rates and the
other relative powers, preferences and rights of the
respective series and classes of such shares, shall determine
in good faith will result in fair and equitable treatment
among the respective holders of shares of all such series and
classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration any shares
of any class of capital stock of the Corporation unless the Corporation could,
under paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
SECTION 5. REACQUIRED SHARES. Any shares of the Series A
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled promptly after such purchase
or acquisition. All such cancelled shares shall thereupon become authorized
and unissued shares of Preferred Stock and may be reissued as part of any new
series of Preferred Stock, subject to the conditions and restrictions on
issuance set forth in the Articles of Incorporation of the Corporation, from
time to time, in any other resolution establishing another series of Preferred
Stock (or any series of any other class of capital stock of the Corporation) or
in any applicable law.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation (whether voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made (a) to the holders of shares of any
class of capital stock of the Corporation ranking junior (either as to
dividends or upon liquidation, dissolution or winding up of the Corporation) to
the Series A Preferred Stock unless, prior thereto, the holder of each
outstanding share of the Series A Preferred Stock shall have received an amount
equal to the accrued and unpaid dividends and distributions thereon, whether or
not declared, to the date of such payment, plus an amount equal to the greater
of (i) $1.00, and (ii) an aggregate amount, subject to adjustment as
hereinafter provided in this Section 6, equal to 100 times the aggregate per
share amount to be distributed to the holders of Common Stock, or (b) to the
holders of shares of any class of capital stock of the Corporation ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up
of the Corporation) with the Series A Preferred Stock, except distributions
made ratably on the Series A Preferred Stock and all such parity stock in
proportion to the total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up. In the event that
the Corporation shall at any time after the effective date of this Resolution
(a) declare or pay any dividend on Common Stock payable in shares of Common
Stock, or (b) effect a subdivision, combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then, in each such case, the aggregate amount
per share to which the holders of shares of the Series A Preferred Stock would
have been entitled to receive immediately prior to such event pursuant to
clause (a)(ii) of the preceding sentence shall be adjusted by multiplying such
aggregate per share amount by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which shall be the number of shares of Common Stock that
were outstanding immediately prior to such event.
4
<PAGE> 44
SECTION 7. CONSOLIDATION, MERGER, ETC. In the event that the
Corporation shall be a party to any consolidation, merger, combination or other
transaction in which the outstanding shares of Common Stock are converted or
changed into or exchanged for other capital stock, securities, cash or other
property, or any combination thereof, then, in each such case, each share of
the Series A Preferred Stock shall at the same time be similarly converted or
changed into or exchanged for an aggregate amount, subject to adjustment as
hereinafter provided in this Section 7, equal to 100 times the aggregate amount
of capital stock, securities, cash and/or other property (payable in kind), as
the case may be, into which or for which each share of Common Stock is being
converted or changed or exchanged. In the event that the Corporation shall at
any time after the effective date of this Resolution declare or pay any
dividend on Common Stock payable in shares of Common Stock or effect a
subdivision, combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock,
then, in each such case, the aggregate amount per share to which the holders of
shares of the Series A Preferred Stock would have been entitled to receive
immediately prior to such event pursuant to the preceding sentence shall be
adjusted by multiplying such aggregate per share amount by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately after such event and the denominator of which shall be the number
of shares of Common Stock that were outstanding immediately prior to such
event.
SECTION 8. NO REDEMPTION. The shares of the Series A Preferred
Stock shall not be redeemable at any time.
SECTION 9. RANK. Unless otherwise provided in the resolution
establishing another series of Preferred Stock after the effective date of this
Resolution, the Series A Preferred Stock shall rank, as to the payment of
dividends and the making of any other distribution of assets of the
Corporation, senior to the Common Stock, but junior to all other series of the
Preferred Stock.
SECTION 10. AMENDMENTS. The Articles of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences and rights of the Series A Preferred Stock so as
to adversely affect any thereof without the affirmative vote of the holders of
at least two-thirds of the outstanding shares of the Series A Preferred Stock,
voting separately as a single class.
SECTION 11. FRACTIONAL SHARES. Fractional shares of the Series A
Preferred Stock may be issued, but, unless the Board shall otherwise determine,
only in multiples of one one-hundredth of a share. The holder of any
fractional share of the Series A Preferred Stock shall be entitled to receive
dividends, participate in distributions, exercise voting rights and have the
benefit of all other powers, preferences and rights relating to the Series A
Preferred Stock in the same proportion as such fractional share bears to a
whole share.
5
<PAGE> 45
IN WITNESS WHEREOF, St. Francis Capital Corporation has caused this
Certificate to be executed and attested by its duly authorized officers this
25th day of September, 1997.
ST. FRANCIS CAPITAL CORPORATION
By /s/ Thomas R. Perz
----------------------------------------
Name: Thomas R. Perz
Title: President/CEO
Attest: /s/ William R. Hotz
----------------------------------
Name: William R. Hotz
Title: Executive Vice President/Secretary
6
<PAGE> 46
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R-__________________ _____________ Rights
NOT EXERCISABLE AFTER SEPTEMBER 25, 2007 OR
EARLIER IF REDEMPTION OR EXCHANGE OCCURS.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF ST. FRANCIS CAPITAL CORPORATION,
AT $.0l PER RIGHT, AND EXCHANGE ON THE TERMS
SET FORTH IN THE SHAREHOLDER RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES DESCRIBED IN SUCH
SHAREHOLDER RIGHTS AGREEMENT, RIGHTS
BENEFICIALLY OWNED BY A RESTRICTED PERSON
(AS SUCH TERM IS DEFINED IN SUCH AGREEMENT),
OR BY CERTAIN TRANSFEREES FROM A RESTRICTED
PERSON, SHALL BE OR BECOME VOID.
RIGHTS CERTIFICATE
ST. FRANCIS CAPITAL 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, subject to the terms, provisions and conditions of the
Shareholder Rights Agreement dated as of September 25, 1997 (the "Rights
Agreement") between St. Francis Capital Corporation, a Wisconsin corporation
(the "Company"), and Firstar Trust Co., a Wisconsin-chartered trust company
(the "Rights Agent"), to purchase from the Company at any time after the
Distribution Date and prior to the Close of Business on September 25, 2007, at
the principal office of the Rights Agent or its successor as Rights Agent, one
one-hundredth of a fully paid and nonassessable share of Series A Junior
Participating Preferred Stock, $.01 par value per share (the "Preferred
Shares"), of the Company at a purchase price of $150 per one one-hundredth of a
Preferred Share (the "Exercise Price"), upon presentation and surrender of this
Rights Certificate with the Form of Election to Purchase and the related Form
of Certification of Status duly executed, together with such signature
guarantees and other documentation as the Rights Agent may reasonably request.
The number of Rights evidenced by this Rights Certificate (as well as the
number of one one-hundredths of a Preferred Share which may be purchased upon
the exercise of each Right) set forth above, and the Exercise Price set forth
above, are the numbers and the Exercise Price as of _________________, ______,
based on the Preferred Shares as constituted on such date. As provided in
the Rights Agreement, such number of Rights (and/or such number of one
one-hundredths of a Preferred Share) and such Exercise Price are subject to
change and adjustment upon the happening of certain events specified in the
Rights Agreement. Capitalized terms not defined herein have the respective
meanings specified in the Rights Agreement.
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<PAGE> 47
From and after the first occurrence of a Flip-In Event, if the Rights
evidenced by this Rights Certificate are Beneficially Owned by (i) a Restricted
Person, (ii) a transferee from a Restricted Person who becomes a transferee
after the Acquiring Person or Adverse Person becomes such, or (iii) under
certain circumstances specified in the Rights Agreement, a transferee from a
Restricted Person who becomes a transferee prior to or concurrently with the
Acquiring Person or Adverse Person becoming such, such Rights shall be or
become void, and no holder hereof shall have any rights whatsoever with respect
to such Rights.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
incorporated herein by reference and made a part hereof, to which Rights
Agreement reference is hereby made for a full description of the rights,
powers, obligations, duties and immunities hereunder of the Company, the Rights
Agent and the holders of the Rights Certificates. Under the circumstances set
forth in the Rights Agreement, the exercisability of the Rights represented
hereby may be temporarily suspended. The Rights Agreement is on file at the
principal office of the Company and at the principal office of the Rights
Agent, and a copy will be provided upon written request to the Secretary of the
Company.
Upon surrender at the principal office of the Rights Agent, this
Rights Certificate, with or without other Rights Certificates, may be exchanged
for one or more Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase the same aggregate number of one
one-hundredths of a Preferred Share as the Rights evidenced by the Rights
Certificates so surrendered. If this Rights Certificate shall be exercised in
part, the holder hereof shall be entitled to receive, upon surrender hereof,
one or more Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Rights Certificate (i) may be redeemed, at the direction of
the Board, at a redemption price (subject to adjustment) of $.0l per Right
(payable in cash, shares of Common Stock of the Company or any other form of
consideration deemed appropriate by the Board), or (ii) under certain
circumstances, may be exchanged, in whole or in part, at the direction of the
Board, for shares of Common Stock of the Company or Preferred Shares at an
exchange rate (subject to adjustment) of one share of Common Stock or one
one-hundredth of a Preferred Share per Right.
No fractional Preferred Share will be issued upon the exercise of any
Rights represented hereby (other than fractions which are a multiple of one
one-hundredth of a Preferred Share), but in lieu thereof a cash payment will be
made as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase
securities of an entity other than the Company or securities or assets of the
Company other than the Preferred Shares, all as provided in the Rights
Agreement.
No holder, as such, of this Rights Certificate shall be entitled to
vote, to receive dividends or other distributions on or to exercise any
preemptive rights with respect to, or shall be deemed for any other purpose to
be the holder of, the Preferred Shares or other shares of capital stock
2
<PAGE> 48
of any class of the Company which may at any time be issuable upon exercise
hereof; nor shall anything contained herein or in the Rights Agreement be
construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company, or any right to vote for the election of directors
or upon any other matter submitted to shareholders at any meeting thereof, to
give or withhold consent to any corporate action, to receive notice of meetings
or other actions affecting shareholders (except as provided in the Rights
Agreement) or to receive dividends, subscription rights or other distributions,
until the Rights evidenced by this Rights Certificate shall have been
exercised, in whole or in part, in accordance with the provisions of 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.
IN WITNESS WHEREOF, this Rights Certificate has been executed by the
Company by the duly authorized facsimile signature of a proper officer of the
Company and a facsimile of its corporate seal has been imprinted hereon and
duly attested by the duly authorized facsimile signature of a proper officer of
the Company.
Dated as of ___________________________, _____.
ST. FRANCIS CAPITAL CORPORATION
By: ________________________________
Name:
Title:
ATTEST: ____________________________
Name:
Title:
Countersigned:
FIRSTAR TRUST CO. (AS RIGHTS AGENT)
By:________________________________
Authorized Signature
ATTEST:____________________________
Name:
Title:
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<PAGE> 49
[Reverse Side of Rights Certificate]
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires to exercise
Rights represented by this Rights Certificate)
TO: ST. FRANCIS CAPITAL CORPORATION
The undersigned hereby irrevocably elects to exercise ________________
Rights represented by this Rights Certificate to purchase the Preferred Shares
(or other securities, cash or property) issuable upon the exercise of such
Rights and requests that certificates for such Preferred Shares be issued in
the name of:
Please print name and address: ___________________________________
___________________________________
___________________________________________________________________________
___________________________________________________________________________
Please insert social security,
taxpayer identification
or other identifying number: ___________________________________
If such number of Rights shall not be all the Rights represented by
this Rights Certificate, a new Rights Certificate for the remaining unexercised
Rights shall be registered in the name of and delivered to:
Please print name and address: ___________________________________
___________________________________
___________________________________________________________________________
___________________________________________________________________________
Please insert social security,
taxpayer identification
or other identifying number: ___________________________________
Dated: _____________________, ________________________________________
Signature
Signatures must be guaranteed by an Eligible Guarantor Institution, as
defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934,
as amended.
Signature Guaranteed:_____________________________________________________
4
<PAGE> 50
CERTIFICATION OF STATUS
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being exercised
by or on behalf of a Person who is or was a Restricted Person (as such term is
defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire, directly or indirectly, the
Rights evidenced by this Rights Certificate from any Person who is, was or
subsequently became a Restricted Person.
Dated: _______________________, _______________________________________
Signature
Signatures must be guaranteed by an Eligible Guarantor Institution, as
defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934,
as amended.
Signature Guaranteed:___________________________________________________________
NOTICE
The signature(s) on the foregoing Form of Election to Purchase and
Certification of Status must correspond to the name written upon the face of
this Rights Certificate in every particular, without alteration or any change
whatsoever.
In the event the Certification of Status set forth above is not
completed, the Company will deem the beneficial owner of the Rights represented
by this Rights Certificate to be a Restricted Person (as such term is defined
in the Rights Agreement), will not honor the Election to Purchase and will
affix a legend to such effect on this Rights Certificate and on any Rights
Certificates issued in exchange for this Rights Certificate.
5
<PAGE> 51
[Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer this Rights Certificate)
FOR VALUE RECEIVED _____________________________ hereby sells, assigns
and transfers unto _____________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _________________ Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _______________________, _______________________________
Signature
Signatures must be guaranteed by an Eligible Guarantor Institution, as
defined in SEC Rule 17Ad-15 promulgated under the Securities Exchange Act of
1934, as amended.
Signature Guaranteed:___________________________________________________________
6
<PAGE> 52
CERTIFICATION OF STATUS
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned or transferred by or on behalf of a Person who is or was a Restricted
Person (as such term is defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire, directly or indirectly, the
Rights evidenced by this Rights Certificate from any Person who is, was or
subsequently became a Restricted Person.
Dated: _______________________, __________________________________
Signature
Signatures must be guaranteed by an Eligible Guarantor Institution, as
defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934,
as amended.
Signature Guaranteed:___________________________________________________________
NOTICE
The signature(s) on the foregoing Form of Assignment and Certification
of Status must correspond to the name written upon the face of this Rights
Certificate in every particular, without alteration or any change whatsoever.
In the event the Certification of Status set forth above is not
completed, the Company will deem the beneficial owner of the Rights represented
by this Rights Certificate to be a Restricted Person (as such term is defined
in the Rights Agreement), will not honor the Assignment and will affix a legend
to such effect on this Rights Certificate and on any Rights Certificates issued
in exchange for this Rights Certificate.
7
<PAGE> 53
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
On September 25, 1997, the Board of Directors (the " Board") of St.
Francis Capital Corporation (the "Company") declared a dividend of one preferred
stock purchase right (a "Right") for each outstanding share of Common Stock,
$.01 par value per share (the "Common Stock"), of the Company. The dividend is
payable to the holders of record of the Common Stock at the Close of Business on
October 10, 1997 (the "Record Date"). Except as described below, each Right
entitles the holder thereof, at any time on or after the Business Day (as
hereinafter defined) following the Distribution Date (as hereinafter defined)
and prior to the earliest of the Close of Business on the "Final Expiration
Date" (as hereinafter defined) and the time at which such Rights are exchanged,
to purchase from the Company one one-hundredth of a share of the Company's
Series A Junior Participating Preferred Stock, $.01 par value per share (the
"Preferred Shares"), at a price of $150 per one one-hundredth of a Preferred
Share, subject to adjustment (the "Exercise Price"). The Rights may not be
exercised until the Business Day after the Distribution Date. The terms of the
Rights are set forth in the Shareholder Rights Agreement dated as of September
25, 1997 (the "Rights Agreement") between the Company and Firstar Trust Co., as
Rights Agent (the "Rights Agent"). Capitalized terms not defined herein have
the respective meanings specified in the Rights Agreement.
1. DISTRIBUTION DATE; TRANSFER OF RIGHTS.
Initially, the Rights associated with the Common Stock outstanding as
of the Record Date will be evidenced solely by the certificates for shares of
Common Stock, with a copy of this Summary of Rights attached thereto.
Certificates for shares of Common Stock delivered by or on behalf of the
Company after the Record Date and prior to the earliest of the Distribution
Date, redemption of the Rights or the Final Expiration Date, either upon
transfer of outstanding shares, including certificates for shares of Common
Stock which were reacquired by the Company and then transferred, or original
issuance of additional shares of Common Stock, will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date,
redemption of the Rights or the Final Expiration Date, the Rights may be
transferred only with the associated shares of Common Stock and the surrender
for transfer of any certificate for shares of Common Stock, with or without a
notation and whether or not a copy of this Summary of Rights is attached
thereto, shall constitute the transfer of the Rights associated with the shares
of Common Stock represented by such stock certificate.
The Rights will separate from the Common Stock upon the earliest to
occur of: (i) the Close of Business on the tenth Business Day after the first
date on which there shall be, as determined by a majority of the Disinterested
Directors (as hereinafter defined) then in office in their sole discretion, a
public announcement by the Company or any Person that such Person has become an
Acquiring Person (as hereinafter defined); (ii) the Close of Business on the
tenth Business Day (or such later Business Day as may be determined by action
of the Board) after the commencement by any Person (other than an Exempt
Person) of, or the first public announcement
1
<PAGE> 54
of the intention of any Person to commence, a tender or exchange offer if, upon
consummation thereof, such Person would be the Beneficial Owner of 15% or more
of the outstanding shares of Common Stock (provided, however, that if such
tender or exchange offer is cancelled, terminated or otherwise withdrawn prior
to the Distribution Date without the purchase of any Common Stock, such offer
shall be deemed for purposes of the definition of "Distribution Date" never to
have been commenced or publicly announced); and (iii) the Close of Business on
the tenth Business Day after a determination by at least a majority of the
Disinterested Directors who are not officers of the Company that a Person has
become an Adverse Person (as hereinafter defined). The earliest of the dates
specified in clauses (i), (ii) and (iii) is the "Distribution Date." After the
Distribution Date, the Rights will be evidenced solely by separate
certificates.
An "Acquiring Person" is any Person who or which, together with its
Affiliates and Associates, has become the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding, but does not include (i) the
Company, (ii) any Subsidiary of the Company, (iii) any employee stock ownership
plan, employee benefit plan or other compensation program or arrangement of the
Company or of any Subsidiary, (iv) any Person holding shares of Common Stock
for or pursuant to the terms of any such plan, program or arrangement set forth
in (iii) above, (v) any Person who becomes the Beneficial Owner of 15% or more
of the outstanding Common Stock solely as a result of an acquisition of Common
Stock by the Company, until such time as such Person acquires additional Common
Stock, or (vi) any Person who becomes an Acquiring Person without any plan or
intent to seek or affect control of the Company if such Person promptly enters
into an irrevocable commitment promptly to divest and thereafter promptly
divests such Common Stock so that such Person ceases to be the Beneficial Owner
of 15% or more of the outstanding Common Stock (the Persons specified in
clauses (i) through (iv) being herein collectively called "Exempt Persons").
An "Adverse Person" is any Person who or which, together with its Affiliates
and Associates, has acquired 10% or more of the Common Stock outstanding and
has been determined, by at least a majority of the Disinterested Directors who
are not officers of the Company, to be reasonably likely to cause the Company
to take action which would provide such Person with a short-term financial gain
not in the best long-term interests of the Company and its shareholders or is
reasonably likely to have a material adverse effect on the business or
prospects of the Company. A "Disinterested Director" is any member of the
Board who is not a Restricted Person (as hereinafter defined), or a
representative or nominee of a Restricted Person, and who was a member of the
Board as of the date of the Rights Agreement, or any individual who
subsequently becomes a member of the Board and is not a Restricted Person or a
representative or nominee of a Restricted Person, if such Person's nomination
for election to the Board is recommended or approved by a majority of the
Disinterested Directors then in office. A "Restricted Person" is an Acquiring
Person, an Adverse Person or any Affiliate or Associate thereof.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
the holders of record of the Common Stock as of the Close of Business on the
Distribution Date. Each share of Common Stock issued by the Company after the
Distribution Date and prior to the Final Expiration Date, including shares of
Common Stock issued by reason of the exercise of any option, warrant, right
(other than the Rights) or conversion or exchange privilege (other than the
Rights) or convertible or exchangeable security issued by the Company prior to
the Distribution Date, will be accompanied
2
<PAGE> 55
by a Right (unless the Board expressly provides to the contrary at the time of
issuance of any such option, warrant, right or convertible or exchangeable
security), and Rights Certificates evidencing such Rights will be issued at the
same time as the certificates for the associated shares of Common Stock.
2. TERMS OF PREFERRED SHARES.
The Preferred Shares receivable upon exercise of the Rights will not
be redeemable. Each Preferred Share will entitle the record holder thereof to
receive a preferential dividend equal to 100 times the aggregate per share
amount of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions (other than
in shares of Common Stock) declared on the Common Stock, adjusted to give
effect to any dividend on the Common Stock payable in shares of Common Stock or
any subdivision, combination or reclassification of the Common Stock (a
"Dilution Event"). In the event of liquidation of the Company, the holder of
each Preferred Share will be entitled to receive a preferential liquidation
payment equal to the greater of $1.00 and 100 times the aggregate per share
amount to be distributed to the holders of the Common Stock, adjusted to give
effect to any Dilution Event, plus an amount equal to accrued and unpaid
dividends and distributions on such Preferred Share, whether or not declared,
to the date of such payment. Each Preferred Share will entitle the holder
thereof to 100 votes on all matters submitted to a vote of the shareholders of
the Company, voting together as a single class with the holders of the Common
Stock and the holders of any other class of capital stock having general voting
rights, adjusted to give effect to any Dilution Event. In the event of any
merger, consolidation or other transaction in which the outstanding shares of
Common Stock of the Company are exchanged for or converted into other capital
stock, securities, cash or other property, each Preferred Share will be
similarly exchanged or converted into 100 times the per share amount applicable
to the Common Stock, adjusted to give effect to any Dilution Event.
3. EXERCISE OR EXCHANGE OF RIGHTS UNDER CERTAIN CIRCUMSTANCES.
In the event that (i) a Person becomes an Acquiring Person, (ii) a
Person (other than an Exempt Person) commences or first publicly announces the
intention of a Person (other than an Exempt Person) to commence a tender or
exchange offer if, upon the consummation thereof, such Person would be the
Beneficial Owner of 15% or more of the shares of Common Stock outstanding, or
(iii) a person is declared to be an Adverse Person (where the earliest of such
events shall be referred to as a "Flip-In Event"), proper provision will be
made so that the registered holder of each Right (other than Rights
Beneficially Owned by a Restricted Person or their designated transferees) will
thereafter have the right, unless the Rights are earlier redeemed, exchanged or
expire, to acquire, upon exercise and payment of the Exercise Price, to receive
the number of shares of Common Stock which, at the time of the occurrence of
such event, will have a market value equal to two times the then current
Exercise Price. After a Flip-In Event, all rights which are, or (under certain
circumstances specified in the Rights Agreement) were, Beneficially Owned by a
Restricted Person or designated transferees therefrom, will be or become void.
Under no circumstances may a Right be exercised unless the Company's option to
redeem the Rights has expired.
3
<PAGE> 56
At any time after a Flip-In Event and prior to the time that any
Person (other than an Exempt Person), together with its Affiliates and
Associates, has become the Beneficial Owner of 50% or more of the outstanding
shares of Common Stock, the Board may direct that all or any part of the
outstanding and exercisable Rights (other than Rights which have become void)
be exchanged for shares of Common Stock at the exchange rate of one share of
Common Stock per Right, adjusted to give effect to any Dilution Event. Any
partial exchange will be effected pro rata among the registered holders of the
Rights based upon the number of Rights held.
If, on or after the occurrence of a Flip-In Event: (i) the Company
merges into or consolidates with an Interested Shareholder (as hereinafter
defined) or, unless all holders of the Common Stock are treated the same,
another Person (with limited designated exceptions); (ii) an Interested
Shareholder or, unless all holders of the Common Stock are treated the same,
another Person (with limited exceptions) merges into the Company and either (A)
all or part of the outstanding shares of Common Stock of the Company are
converted into capital stock or other securities of any other Person (or the
Company), cash and/or other property, or (B) such shares remain outstanding,
unconverted and unchanged; or (iii) the Company sells or transfers 50% or more
of its consolidated assets or earning power in one or a series of related
transactions to an Interested Shareholder or, unless all holders of the
Company's outstanding shares of Common Stock are treated the same, another
Person (with limited exceptions); then proper provision will be made so that
the registered holder of each Right (other than Rights which have become void)
will thereafter have the right to acquire, upon exercise and payment of the
Exercise Price, the number of common shares of the acquiror (or of another
Person affiliated therewith) which, at the time of consummation of such
transaction, will have a market value equal to two times the then current
Exercise Price. An "Interested Shareholder" is any Restricted Person or any
Affiliate or Associate of any other Person in which such Restricted Person has
an interest, or any Person acting, directly or indirectly, on behalf of or in
concert with any such Restricted Person.
4. ADJUSTMENTS TO EXERCISE PRICE AND STOCK PURCHASABLE UPON
EXERCISE.
The Exercise Price payable and the number and kind of shares of
capital stock issuable upon exercise of the Rights are subject to adjustment
from time to time to prevent dilution (i) in the event of a dividend payable in
Preferred Shares on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to the holders of the Preferred Shares of
certain options, warrants or rights to subscribe for or purchase Preferred
Shares at a price, or securities convertible into or exchangeable for Preferred
Shares with a conversion or exchange price, less than the then current market
price of the Preferred Shares, or (iii) upon the distribution to the holders of
the Preferred Shares of cash, securities, evidences of indebtedness or other
property (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or options, warrants or rights (other than those referred to
in clause (ii) above). The number of outstanding Rights and the number of one
one-hundredths of a Preferred Share issuable upon exercise of each Right also
are subject to adjustment in the event of a dividend on the Common Stock
payable in shares of Common Stock or a subdivision, combination or
reclassification of the Common Stock occurring, in any such case, prior to the
Distribution Date.
4
<PAGE> 57
With certain specified exceptions, no adjustment in the Exercise Price
will be made until the cumulative adjustments required equal at least 1% of the
Exercise Price. The Company is not required to issue fractional Preferred
Shares (other than fractions which are multiples of one one-hundredth of a
Preferred Share), but in lieu thereof the Company will make a cash payment
based upon the market value of the Preferred Shares on the trading day
immediately preceding the date of exercise.
5. REDEMPTION OF RIGHTS.
At any time prior to the earliest of the Distribution Date and the
Final Expiration Date, the Board may redeem the Rights in whole, but not in
part, at the redemption price of $.0l per Right, adjusted to give effect to any
Dilution Event (the "Redemption Price"); provided, however, that, under certain
circumstances specified in the Rights Agreement, the Rights may not be redeemed
unless there is more than one Disinterested Director in office and such
redemption is approved by at least a majority of such Disinterested Directors.
The redemption of the Rights may be made effective at such time, on such basis
and with such conditions as the Board, in its sole discretion, may establish.
Immediately after action by the Board directing the redemption of the Rights,
the option to exercise the Rights will terminate, and thereafter each
registered holder of the Rights will only be entitled to receive the Redemption
Price therefor.
6. AMENDMENT OF THE RIGHTS.
Prior to the Distribution Date, the terms of the Rights and the Rights
Agreement may be supplemented or amended by the Board in any manner. From and
after the Distribution Date, the Rights may be supplemented or amended by the
Board, without the approval of the holders of the Rights, in certain respects
which do not materially adversely affect, as determined by the Board (with the
concurrence of at least a majority of the Disinterested Directors), the
interests of such holders (excluding the interests of any Restricted Person);
provided, however, that the Rights Agreement cannot be amended to lengthen (i)
any time period unless such lengthening is approved by at least a majority of
the Disinterested Directors, and such lengthening is for the benefit of the
holders of the Rights (excluding the interests of any Acquiring Person, Adverse
Person or Affiliate or Associate thereof), or (ii) any time period relating to
when the Rights may be redeemed if at such time the Rights are not then
redeemable.
7. MISCELLANEOUS.
The Rights will expire on the Close of Business on September 25, 2007
(the " Final Expiration Date"), unless the Final Expiration Date is extended or
the Rights are earlier redeemed or exchanged by the Company. Until a Right is
exercised, the holder thereof, as such, will have no rights as a shareholder of
the Company, including, without limitation, the right to vote or to receive
dividends. A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to Form 8-K dated September 25, 1997. A
copy of the Rights Agreement is available 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
incorporated herein by reference.
5
<PAGE> 1
EXHIBIT 2
PRESS RELEASE DATED SEPTEMBER 25, 1997
<PAGE> 2
ST. FRANCIS CAPITAL CORPORATION NEWS RELEASE
FOR IMMEDIATE RELEASE
ST. FRANCIS CAPITAL CORPORATION
ADOPTS SHAREHOLDER
RIGHTS PLAN
For More Information Contact:
Jon D. Sorenson
Chief Financial Officer
(414) 486-8700
Brookfield, Wisconsin - September 25, 1997 - 4:00 p.m. (CDT) . . . St.
Francis Capital Corporation ("St. Francis") (NASDAQ/NMS: STFR) announced today
that its board of directors has adopted a Shareholder Rights Plan (the "Rights
Plan"). Although the Rights Plan has not been adopted in response to any
specific offer or threat of takeover, Thomas R. Perz, President and Chief
Executive Officer of St. Francis, said that "the Rights Plan is designed to
protect St. Francis's shareholders from any unfair or coercive takeover
attempt."
Under the Rights Plan, St. Francis's shareholders of record as of
October 10, 1997 will receive a dividend distribution of one preferred stock
purchase right (a "Right") for each outstanding share of St. Francis common
stock. Subject to the terms of the Rights Plan, each Right entitles the
registered holder to purchase one one-hundredth of a share of St. Francis's new
series of preferred stock at an exercise price of $150. Until Rights become
exercisable, outstanding St. Francis stock certificates will represent both
shares of St. Francis common stock and Rights. Rights will trade with the
shares of St. Francis's common stock until such time as they might become
exercisable.
Rights would not become exercisable until eleven business days after
any person or group has acquired, commenced, or announced its intention to
commence a tender or exchange offer to acquire 15% or more of St. Francis's
common stock. Rights also become exercisable eleven business days after the
disinterested members of St. Francis's Board of Directors determine that a
person or group beneficially owning 10% or more of St. Francis's common stock
is likely to (i) seek short-term financial gain to the detriment of the best
long-term interests of St. Francis or its shareholders, or (ii) materially and
adversely effect the business or prospects of St. Francis. At any time prior
to such eleventh business day, the Company is entitled to redeem the Rights at
$.01 per Right. If Rights become exercisable, holders of each Right, other
than the acquiring or adverse person, will have the right, upon payment of the
exercise price, to purchase the number of shares of the Company's common stock
(in lieu of the preferred stock) which, at that time, have a market value of
two times the exercise price of a Right. If the Rights become exercisable, St.
Francis's Board of Directors may also exchange Rights, other than those held by
the acquiring person or adverse person, in whole or in part, at an exchange
ratio of one share of the Company's common stock per Right.
<PAGE> 3
At any time after a person or group acquires 15% or more of the
Company's common stock, if the Company is acquired in a merger or other
business combination or 50% or more of its consolidated assets or earning power
are sold, Rights holders other than the acquiring person or group will have the
right, upon payment of the exercise price, to purchase that number of shares of
common stock of the acquiring company (in lieu of preferred shares) which, at
the time of the transaction, have a market value equal to two times the
exercise price of a Right.
Rights will expire on September 25, 2007. Details of the Rights
distribution are contained in a "Summary of Rights" which will be mailed to all
of St. Francis's shareholders of record as of October 10, 1997.
St. Francis Capital Corporation is a unitary thrift holding company
incorporated under the laws of the State of Wisconsin and engaged in the
financial services business through its wholly-owned subsidiary, St.
Francis Bank, F.S.B. St. Francis's principal business is attracting retail
deposits from the general public and investing those deposits, together with
funds generated from other operations, primarily to originate commercial,
consumer and mortgage loans within Milwaukee, Waukesha, Ozaukee, Washington,
Walworth and Kenosha counties and to invest in mortgage-backed and related
securities. Primary areas of lending include commercial loans, single-family
and multi-family residential mortgages, home equity lines of credit, second
mortgages and commercial real estate loans.
# # #
