SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 15, 2003
FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
(Exact Name of Registrant as specified in Charter)
Kentucky 1-18832 61-1168311
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
2323 Ring Road, Elizabethtown, Kentucky 42701
(Address of principal executive offices) (Zip code)
Registrant's telephone number,
including area code: (270) 765-2131
N/A
(Former name or former address, if changed since last report.)
INFORMATION TO BE INCLUDED IN THE REPORT
Items 1, 2, 3, 4, 6, 8, 9, 10, and 12 are not applicable and are omitted from this Report.
Item 5. Other Events
On April 15, 2003, the Board of Directors of First Federal Financial Corporation of Kentucky (the "Company") declared a 10%
stock dividend on each outstanding share of the Company's common stock. The stock dividend is payable on May 14, 2003 to
shareholders of record on April 28, 2003.
Also, the Board of Directors of the Company declared a dividend of one Junior Participating Preferred Stock Purchase Right
on each outstanding share of the Company's common stock, as set forth in the Rights Agreement dated as of April 15, 2003, between the
Company and Illinois Stock Transfer Company. The dividend distribution will be made on May 9, 2003, payable to shareholders of
record on that date.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(a) Financial Statements of Business Acquired.
Not Applicable.
(b) Pro Forma Financial Information.
Not Applicable
(c) Exhibits.
The following exhibits are filed with this Report on Form 8-K:
REGULATION S-K
EXHIBIT NUMBERS EXHIBIT
4 and 10 Rights Agreement dated April 15, 2003 between First Federal
Financial Corporation of Kentucky and Illinois Stock Transfer
Company
99.1 Press Release dated April 15, 2003 regarding the 10% stock
dividend
99.2 Press Release dated April 15, 2003 regarding the approval of the
Rights Agreement
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
FIRST FEDERAL FINANCIAL CORPORATION
OF KENTUCKY
Date: April 15, 2003 By /s/ B. Keith Johnson
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B. Keith Johnson
President and Chief Executive Officer
Exhibit 4 and 10
RIGHTS AGREEMENT
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RIGHTS AGREEMENT, dated as of April 15, 2003 (the "Agreement"), between First Federal Financial
Corporation of Kentucky, a Kentucky corporation (the "Company"), and Illinois Stock Transfer Company (the "Rights
Agent").
W I T N E S S E T H
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WHEREAS, on April 15, 2003 (the "Rights Dividend Declaration Date"), the Board of Directors of the
Company authorized and declared a dividend distribution of one right for each share of common stock of the
Company (the "Common Stock") outstanding at the close of business on May 9, 2003 (the "Record Date"), and has
authorized the issuance of one Right (as such number may hereinafter be adjusted pursuant to the provisions of
Section 11(p) hereof) for each share of Common Stock of the Company issued between the Record Date (whether
originally issued or delivered from the Company's treasury) and the earlier of the Distribution Date or the
Expiration Date, each Right initially representing the right to purchase one one-hundredth of a share of Junior
Participating Preferred Stock of the Company having the rights, powers and preferences set forth in the form of
Articles of Amendment attached hereto as Exhibit A, upon the terms and subject to the conditions hereinafter set
forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties
hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the following terms have the
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meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together with all Affiliates and Associates of
such Person, shall be the Beneficial Owner of 15% or more of the shares of Common Stock then outstanding, but
shall not include an Exempt Person, provided, however, that (i) if the Board of Directors of the Company
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determines in good faith that a Person who would otherwise be an "Acquiring Person" became such inadvertently
(including, without limitation, because (A) such Person was unaware that it beneficially owned a percentage of
Common Stock that would otherwise cause such Person to be an "Acquiring Person" or (B) such Person was aware of
the extent of its Beneficial Ownership of Common Stock but had no actual knowledge of the consequences of such
Beneficial Ownership under this Agreement) and without any intention of changing or influencing control of the
Company, and if such Person as promptly as practicable divested or divests itself of Beneficial Ownership of a
sufficient number of shares of Common Stock so that such person would no longer be an "Acquiring Person," then
such person shall not be deemed to be or to have become an "Acquiring Person" for any purposes of this Agreement;
(ii) if, as of the date hereof, any Person, together with all Affiliates and Associates of such Person, is the
Beneficial Owner of 15% or more of the shares of Common Stock outstanding, such Person shall not be or become an
"Acquiring Person" unless and until such time as such Person shall become, together with all Affiliates and
Associates of such Person, the Beneficial Owner of additional outstanding shares of Common Stock or securities
convertible into Common Stock (other than shares acquired as a result of the death of a parent or spouse or
pursuant to a profit-sharing, stock-based incentive compensation or other employee benefit plan maintained by the
Company, to a dividend or distribution paid or made by the Company on the outstanding Common Stock in shares of
Common Stock, or to a split or subdivision of the outstanding Common Stock); and (iii) no Person shall become an
"Acquiring Person" as the result of an acquisition of shares of Common Stock by the Company which, by reducing
the number of shares outstanding, increases the proportionate number of shares of Common Stock beneficially owned
by such Person to 15% or more of the shares of Common Stock then outstanding, provided, however, that if a Person
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shall become the Beneficial Owner of 15% or more of the shares of Common Stock then outstanding by reason of such
share acquisitions by the Company and shall thereafter become the Beneficial Owner of any additional shares of
Common Stock (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding
Common Stock in shares of Common Stock or pursuant to a split or subdivision of the outstanding Common Stock),
then such Person shall be deemed to be an "Acquiring Person" unless upon becoming the Beneficial Owner of such
additional shares of Common Stock such Person does not beneficially own 15% or more of the shares of Common Stock
then outstanding.
For all purposes of this Agreement, any calculation of the number of shares of Common Stock outstanding
at any particular time, including for purposes of determining the particular percentage of such outstanding
shares of Common Stock of which any Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(l)(i) of the General Rules and Regulations under the Exchange Act, as in effect on the
date hereof.
(b) "Affiliate" and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Securities Exchange Act of 1934, as amended and in effect on the date
of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be deemed to "beneficially own," any
securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; provided, however, that a Person shall not
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be deemed the "Beneficial Owner" of, or to "beneficially own," (A) securities tendered pursuant
to a tender offer or exchange offer made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or exchange, or (B)
securities issuable upon exercise of Rights at any time before the occurrence of a Triggering
Event, or (C) securities issuable upon exercise of Rights from and after the occurrence of a
Triggering Event which Rights were acquired by such Person or any of such Person's Affiliates
or Associates before the Distribution Date or pursuant to Section 3(a) or Section 22 hereof
(the "Original Rights") or pursuant to Section 11(i) or Section 11(p) hereof in connection with
an adjustment made with respect to any Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or has "beneficial
ownership" of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations under
the Exchange Act), including pursuant to any agreement, arrangement or understanding, whether
or not in writing; provided, however, that a Person shall not be deemed the "Beneficial Owner"
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of, or to "beneficially own," any security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such security if such agreement, arrangement or
understanding: (A) arises solely from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable provisions of the
General Rules and Regulations under the Exchange Act, and (B) is not also then reportable by
such Person on Schedule 13D under the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person (or any of such
Person's Affiliates or Associates) has any agreement, arrangement or understanding (whether or
not in writing), for the purpose of acquiring, holding, voting (except pursuant to a revocable
proxy as described in the proviso to subparagraph (ii) of this paragraph (c)) or disposing of
any voting securities of the Company; provided, however, that nothing in this paragraph (c)
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shall cause a person engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities acquired through such person's
participation in good faith in a firm commitment underwriting until the expiration of forty
days after the date of such acquisition;
provided, however, that no Person who is an officer, director or employee of an Exempt Person
shall be deemed, solely by reason of such Person's status or authority as such, to be the
"Beneficial Owner" of, to have "Beneficial Ownership" of or to "beneficially own" any
securities that are "beneficially owned" (as defined in this Section 1(c)), including, without
limitation, in a fiduciary capacity, by an Exempt Person or by any other such officer, director
or employee of an Exempt Person.
(d) "Business Day" shall mean any day other than a Saturday, Sunday or a day on which banking institutions
in the Commonwealth of Kentucky are authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 P.M., Eastern standard time, on such date;
provided, however, that if such date is not a Business Day it shall mean 5:00 P.M., Eastern standard time, on the
next succeeding Business Day.
(f) "Common Stock" shall mean the common stock of the Company. "Common Stock" when used with reference to
any Person other than the Company shall mean the common stock (or, in the case of an unincorporated entity, the
equivalent equity interest) with the greatest voting power of such other Person or, if such other Person is
subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned person.
(g) "Common stock equivalents" shall have the meaning set forth in Section 11(a)(iii) hereof.
(h) "Continuing Director" shall mean (i) any member of the Board of Directors of the Company, while such
Person is a member of the Board, who is not an Acquiring Person or an Affiliate or Associate of any such Person,
or a representative of any such Person, Affiliate or Associate, and was a member of the Board before the date an
Acquiring Person became such, or (ii) any Person who subsequently becomes a member of the Board, while such
Person is a member of the Board, who is not an Acquiring Person or an Affiliate or Associate of any such Person,
or a representative of any such Person, Affiliate or Associate, if such Person's nomination for election or
election to the Board is recommended or approved by a majority of the Continuing Directors.
(i) "Current market price" shall have the meaning set forth in Section 11(d)(i) hereof.
(j) "Current Value" shall have the meaning set forth in Section 11(a)(iii) hereof.
(k) "Distribution Date" shall have the meaning set forth in Section 3(a) hereof.
(l) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
(m) "Exempt Person" shall mean the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan.
(n) "Expiration Date" shall have the meaning set forth in Section 7(a) hereof.
(o) "Final Expiration Date" shall have the meaning set forth in Section 7(a) hereof.
(p) "Person" shall mean any individual, firm, corporation, partnership or other entity.
(q) "Preferred Stock" shall mean shares of Junior Participating Preferred Stock of the Company, and to the
extent that there are not a sufficient number of shares of Junior Participating Preferred Stock authorized to
permit the full exercise of the Rights, any other series of Preferred Stock of the Company designated for such
purpose containing terms substantially similar to the terms of the Junior Participating Preferred Stock.
(r) "Principal Party" shall have the meaning set forth in Section 13(b) hereof.
(s) "Purchase Price" shall have the meaning set forth in Section 4(a) hereof.
(t) "Redemption Price" shall have the meaning set forth in Section 23(a) hereof.
(u) "Rights" shall have the meaning set forth in the WHEREAS clause at the beginning of this Agreement.
(v) "Rights Certificates" shall have the meaning set forth in Section 3(a) hereof.
(w) "Section 11(a)(ii) Event" shall mean an event described in Section 11(a)(ii) hereof.
(x) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth in Section 11(a)(iii) hereof.
(y) "Section 13 Event" shall mean any event described in clauses (x), (y) or (z) of Section 13(a) hereof.
(z) "Spread" shall have the meaning set forth in Section 11(a)(iii) hereof.
(aa) "Stock Acquisition Date" shall mean the first date of public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed pursuant to Section 13(d) under the Exchange Act)
by the Company or an Acquiring Person that an Acquiring Person has become such.
(aa) "Subsidiary" shall mean, with reference to any Person, any corporation of which an amount of voting
securities sufficient to elect at least a majority of the directors of such corporation is beneficially owned,
directly or indirectly, by such Person or otherwise controlled by such Person.
(bb) "Substitution Period" shall have the meaning set forth in Section 11(a)(iii) hereof.
(cc) "Trading Day" shall have the meaning set forth in Section 11(d)(i) hereof.
(dd) "Triggering Event" shall mean any Section 11(a)(ii) Event or Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as
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agent for the Company and the holders of the Rights (who, in accordance with Section 3 hereof, shall before the
Distribution Date also be the holders of the Common Stock) in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such Co-Rights
Agents as it may deem necessary or desirable.
Section 3. Issue of Rights Certificates.
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(a) Until the earlier of (i) the close of business on the tenth business day after the Stock Acquisition
Date or (ii) the close of business on the tenth Business Day after the date that a tender offer or exchange offer
by any Person (other than an Exempt Person) is first published or sent or given with the meaning of Rule 14d-2(a)
of the General Rules and Regulations under the Exchange Act, if upon consummation thereof, such Person would be
the Beneficial Owner of 15% or more of the shares of Common Stock then outstanding, (the earlier of (i) and (ii)
being herein referred to as the "Distribution Date") (provided, however, that if either of such dates occurs
after the date of this Agreement and on or prior to the Record Date, then the Distribution Date shall be the
Record Date), (x) the Rights will be evidenced (subject to the provisions of paragraph (b) of this Section 3) by
the certificates for the Common Stock registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be certificates for Rights) and not by separate
certificates, and (y) the Rights will be transferable only in connection with the transfer of the underlying
shares of Common Stock (including a transfer to the Company). As soon as practicable after the Distribution
Date, the Rights Agent will send by first-class, insured, postage prepaid mail, to each record holder of the
Common Stock as of the close of business on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more rights certificates, in substantially the form of Exhibit B hereto (the
"Rights Certificates"), evidencing one Right for each share of Common Stock so held, subject to adjustment as
provided herein. If an adjustment in the number of Rights per share of Common Stock has been made pursuant to
Section 11(p) hereof, at the time of distribution of the Rights Certificates, the Company shall make the
necessary and appropriate rounding adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional
Rights. As of and after the Distribution Date, the Rights will be evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the Company will send a copy of a Summary of
Rights, in substantially the form attached hereto as Exhibit C (the "Summary of Rights"), by first-class, postage
prepaid mail, to each record holder of the Common Stock as of the close of business on the Record Date, at the
address of such holder shown on the records of the Company. With respect to certificates for the Common Stock
outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates
for the Common Stock together with the Summary of Rights and the registered holders of the Common Stock shall
also be the registered holders of the associated Rights. Until the earlier of the Distribution Date or the
Expiration Date (as such term is defined in Section 7 hereof), the transfer of any certificates representing
shares of Common Stock in respect of which Rights have been issued shall also constitute the transfer of the
Rights associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common Stock which are issued (whether originally
issued or from the Company's treasury, if any) after the Record Date but before the earlier of the Distribution
Date or the Expiration Date. Certificates representing such shares of Common Stock shall also be deemed to be
certificates for Rights, and all certificates issued for newly issued shares or transfers of Common Stock after
the Record Date shall bear the following legend:
This certificate also evidences and entitles the holder hereof to certain Rights as set forth
in the Rights Agreement between First Federal Financial Corporation of Kentucky (the "Company")
and Illinois Stock Transfer Company (the "Rights Agent") dated as of April 15, 2003 (the
"Rights Agreement"), the terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal offices of the Company. Under certain circumstances, as
set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on the date of mailing, without charge
promptly after receipt of a written request therefor. Under certain circumstances set forth in
the Rights Agreement, Rights issued to, or held by, any Person who is, was or becomes an
Acquiring Person or any Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such Person or by any subsequent holder,
may become null and void.
With respect to such certificates containing the foregoing legend, until the earlier of (i) the
Distribution Date or (ii) the Expiration Date, the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone and registered holders of Common Stock shall also be
the registered holders of the associated Rights, and the transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the Common Stock represented by such certificates.
Notwithstanding this paragraph (c), the omission of a legend shall not affect the enforceability of any
part of this Agreement or the rights of any holder of the Rights.
Section 4. Form of Rights Certificates
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(a) The Rights Certificates (and the forms of election to purchase and of assignment to be printed on the
reverse thereof) shall each be substantially in the form set forth in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply
with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Rights may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Rights Certificates, whenever distributed, shall be dated as
of the Record Date and on their face shall entitle the holders thereof to purchase such number of one
one-hundredths of a share of Preferred Stock as shall be set forth therein at the price set forth therein (such
exercise price per one one-hundredth of a share, the "Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price thereof shall be subject to adjustment as
provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22 hereof that represents Rights
beneficially owned by: (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after such
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee before or concurrently with the Acquiring Person becoming such and receives
such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the
Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect avoidance of Section 7(e) hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement).
Accordingly, this Rights Certificate and the Rights represented hereby have
become null and void in the circumstances and with the effect specified in
Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
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(a) The Rights Certificates shall be executed on behalf of the Company by its Chairman of the Board and
President, or any Vice President of the Company, either manually or by facsimile signature, and shall have affixed thereto
the Company's seal or a facsimile thereof which shall be attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The Rights Certificates shall be countersigned manually by the
Rights Agent and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Rights Certificates shall cease to be such officer of the Company before countersignature by
the Rights Agent and issuance and delivery by the Company, such Rights Certificates, nevertheless, may be countersigned
by the Rights Agent and issued and delivered by the Company with the same force and effect as though the person who
signed such Rights Certificates had not ceased to be such officer of the Company; and any Rights Certificates may be
signed on behalf of the Company by any person who, at the actual date of the execution of such Rights Certificate, shall
be a proper officer of the Company to sign such Rights Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its principal office
or offices designated as the appropriate place for surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Rights Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the certificate number and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated,
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Destroyed, Lost or Stolen Rights Certificates.
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(a) Subject to the provisions of Section 4(b), Section 7(e), Section 14 and Section 24 hereof, at any time
after the close of business on the Distribution Date, and at or before the close of business on the Expiration
Date, any Rights Certificate or Certificates may be transferred, split up, combined or exchanged for another
Rights Certificate or Certificates, entitling the registered holder to purchase a like number of one
one-hundredths of a share of Preferred Stock (or, following a Triggering Event, Common Stock, other securities,
cash or other assets, as the case may be) as the Rights Certificate or Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the principal office or offices of the Rights Agent designated for such
purpose. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect
to the transfer of any such surrendered Rights Certificate until the registered holder shall have completed and
signed the certificate contained in the form of assignment on the reverse side of such Rights Certificate and
shall have provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall reasonably request. Thereupon the Rights Agent shall,
subject to Section 4(b), Section 7(e) and Section 14 hereof, countersign and deliver to the Person entitled
thereto a Rights Certificate or Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the
loss, theft, destruction or mutilation of a Rights Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will execute and deliver a new Rights Certificate of like tenor to the
Rights Agent for countersignature and delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
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(a) Subject to Section 7(e) hereof, the registered holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or in part at any
time after the Distribution Date upon surrender of the Rights Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed, to the Rights Agent at the principal office or
offices of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price
with respect to the total number of one one-hundredths of a share of Preferred Stock (or other securities, cash
or other assets, as the case may be) as to which such surrendered Rights are then exercisable, at or before the
earliest of (i) the close of business on May 9, 2013 (the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof or (iii) the time at which such Rights are exchanged as
provided in Section 24 hereof (the earlier of (i), (ii) and (iii) being herein referred to as the "Expiration
Date").
(b) The Purchase Price for each one one-hundredths of a share of Preferred Stock pursuant to the exercise of
a Right shall initially be $90.00, and shall be subject to adjustment from time to time as provided in Sections
11 and 13(a) hereof and shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable Rights, with the form of election to
purchase and the certificate on the reverse side thereof duly executed, accompanied by payment, with respect to
each right so exercised, of the Purchase Price per one one-hundredth of a share of Preferred Stock (or other
shares, securities, cash or other assets, as the case may be) to be purchased as set forth below and an amount
equal to any applicable transfer tax, the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly
(i) (A) requisition from any transfer agent of the shares of Preferred Stock (or make available, if the Rights
Agent is the transfer agent for such shares) certificates for the total number of one one-hundredths of a share
of Preferred Stock to be purchased and the Company hereby irrevocably authorizes its transfer agent to comply
with all such requests, or (B) if the Company shall have elected to deposit the total number of shares of
Preferred Stock issuable upon exercise of the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of one one-hundredths of a share of Preferred Stock
as are to be purchased (in which case certificates for the shares of Preferred Stock represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the Company will direct the depositary
agent to comply with such request, (ii) requisition from the Company the amount of cash, if any, to be paid in
lieu of fractional shares in accordance with Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the registered holder of such Rights Certificate.
The payment of the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii) hereof) may be
made in cash or by certified bank check or bank draft payable to the order of the Company. If the Company is
obligated to issue other securities (including Common Stock) of the Company, pay cash and/or distribute other
property pursuant to Section 11(a) hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the Rights Agent, if and when
appropriate. The Company reserves the right to require before the occurrence of a Triggering Event that, upon
any exercise of Rights, a number of Rights be exercised so that only whole shares of Preferred Stock would be
issued.
(d) In case the registered holder of any Rights Certificate shall exercise less than all the Rights
evidenced thereby, a new Rights Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or upon the order of, the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such holder, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a
Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person, or an Associate or Affiliate
of an Acquiring Person, (ii) a direct or indirect transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a direct or indirect
transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee before or
concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors of the Company has determined is
part of a plan, arrangement or understanding which has a primary purpose or effect the avoidance of this Section
7(e), shall become null and void without any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. The Company
shall use all reasonable efforts to insure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights Certificates or other Person as a result of
its failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or
transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the Company
shall be obligated to undertake any action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless such registered holder shall have (i) completed and
signed the certificate contained in the form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably
request.
Section 8. Cancellation and Destruction of Rights Certificates. All Rights Certificates
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surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the
Company or any of its agents, be delivered to the Rights Agent for cancellation or in canceled form, or, if
surrendered to the Rights Agent, shall be canceled by it, and no Rights Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other
Rights Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the Company, or shall, at the written request of the
Company, destroy such canceled Rights Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital Stock
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(a) The Company covenants and agrees that it will cause to be reserved and kept available out of its
authorized and unissued shares of Preferred Stock (and, following the occurrence of a Triggering Event, out of
its authorized and unissued shares of Common Stock and/or other securities or out of its authorized and issued
shares held in its treasury), the number of shares of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) that, as provided in this Agreement, including Section
11(a)(iii) hereof, will be sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) issuable and deliverable upon the exercise of the Rights may be traded on any
national securities exchange, the Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such issuance to be traded on such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as practicable following the first
occurrence of a Section 11(a)(ii) Event, or, if applicable, as soon as practicable following the earliest date
after the first occurrence of a Section 11(a)(ii) Event on which the consideration to be delivered by the Company
upon the exercise of the Rights has been determined in accordance with Section 11(a)(iii) hereof, a registration
statement on an appropriate form under the Securities Act of 1933 (the "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
at all times meeting the requirements of the Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities, and (B) the date of the expiration of the Rights. The Company will also
take such action as may be appropriate under, or to ensure compliance with, the securities or "blue sky" laws of
the various states in connection with the exercisability of the Rights. The Company may temporarily suspend, for
a period of time not to exceed ninety (90) days after the date set forth in clause (i) of the first sentence of
this Section 9(c), the exercisability of the Rights in order to prepare and file such registration statement and
permit it to become effective. Upon any such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. In addition, if the Company shall determine that a registration
statement is required following the Distribution Date, the Company may temporarily suspend the exercisability of
the Rights until such time as a registration statement has been declared effective. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained, the exercise thereof shall not be
permitted under applicable law or a registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take all such action as may be necessary to ensure that
all one one-hundredths of a share of Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due and payable any and all federal and
state transfer taxes and charges that may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for a number of one one-hundredths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) upon the exercise of Rights. The Company shall not, however,
be required to pay any transfer tax that may be payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or delivery of a number of one one-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be) in respect of a name other than
that of, the registered holder of the Rights Certificates evidencing Rights surrendered for exercise or to issue
or deliver any certificates for a number of one one-hundredths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in a name other than that of the registered holder upon the exercise
of any Rights until such tax shall have been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to the Company's satisfaction that no such
tax is due.
Section 10. Preferred Stock Record Date. Each person in whose name any certificate for a number
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of one one-hundredths of a share of Preferred Stock (or Common Stock and/or other securities, as the case may be)
is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of
such fractional shares of Preferred Stock (or Common Stock and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price (and all applicable transfer taxes)
was made; provided, however, that if the date of such surrender and payment is a date upon which the Preferred
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Stock (or Common Stock and/or other securities, as the case may be) transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such shares (fractional or otherwise) on, and
such certificate shall be dated, the next succeeding Business Day on which the Preferred Stock (or Common Stock
and/or other securities, as the case may be) transfer books of the Company are open. Before the exercise of the
Rights evidenced thereby, the holder of a Rights Certificate, as such, shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The
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Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a) (i) If the Company shall at any time after the date of this Agreement (A) declare a
dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred
Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of
its capital stock in a reclassification of the Preferred Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision, combination or reclassification, and
the number and kind of shares of Preferred Stock or capital stock, as the case may be, issuable on such date,
shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred
Stock or capital stock, as the case may be, which, if such Right had been exercised immediately before such date
and at a time when the Preferred Stock transfer books of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification.
If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made before,
any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24 of this Agreement, in the event any Person (other than
an Exempt Person), alone or together with its Affiliates and Associates, shall, at any time after the Rights
Dividend Declaration Date, become an Acquiring Person, then promptly following the first occurrence of a Section
11(a)(ii) Event, proper provision shall be made so that each holder of a Right (except as provided below and in
Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-hundredths of a
share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained
by (x) multiplying the then current Purchase Price by the then number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately before the first occurrence of a Section 11(a)(ii)
Event whether or not such Right was then exercisable, and (y) dividing that product (which, following such first
occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the current market price (as determined pursuant to Section 11(d)(i) hereof) per share of
Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares").
(iii) If the number of shares of Common Stock that are authorized by the Company's
Articles of Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company shall, to the extent permitted by applicable law and
regulation: (A) determine the excess of (l) the value of the Adjustment Shares issuable upon the exercise of a
Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each
Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the
Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of
Directors of the Company has deemed to have the same value as shares of Common Stock (such shares of preferred
stock, "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination
of the foregoing, having an aggregate value equal to the Current Value, where such aggregate has been determined
by the Board of Directors of the Company based upon the advice of an investment banking firm selected by the
Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to
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deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to
Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the
Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be
extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in
order that the Company may seek shareholder approval for the authorization of such additional shares (such
period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some
action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x)
shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights,
and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to
seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the Common Stock shall be the current market price (as determined
pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the
value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights, options or warrants to all holders of
Preferred Stock entitling them to subscribe for or purchase (for a period expiring within forty-five (45)
calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and
preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into
Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent
preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or
equivalent preferred stock) less than the current market price (as determined pursuant to Section 11(d) hereof)
per share of Preferred Stock on such record date, the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately before such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the
number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred
Stock and/or equivalent preferred stock so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current market price, and the denominator of
which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of
additional shares of Preferred Stock and/or equivalent preferred stock to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially convertible). In case such subscription
price may be paid by delivery of consideration part or all of which may be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Shares of Preferred Stock owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed, and in the event that such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) If the Company shall fix a record date for a distribution to all holders of Preferred Stock (including
any such distribution made in connection with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings
or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any
dividend payable in stock other than Preferred Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately before such record date by a fraction, the
numerator of which shall be the current market price (as determined pursuant to Section 11(d) hereof) per share
of Preferred Stock on such record date, less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent) of
the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights
or warrants applicable to a share of Preferred Stock and the denominator of which shall be such current market
price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock. Such adjustments shall be
made successively whenever such a record date is fixed, and if such distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price that would have been in effect if such record date has not been
fixed.
(d) (i) For the purpose of any computation hereunder, other than computations made pursuant to
Section 11(a)(iii) hereof, the "current market price" per share of Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such Common Stock for the thirty (30) consecutive Trading
Days (as such term is hereinafter defined) immediately before such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the "current market price" per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such Common Stock for the ten (10) consecutive
Trading Days immediately following such date; provided, however, that if the current market price per share of
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the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of
(A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities
convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification shall not have occurred before the commencement of the
requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, then, and in each such
case, the "current market price" shall be properly adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the shares of Common Stock are listed or
admitted to trading or, if the shares of Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or such other system then in use, or, if on any such date the shares of Common Stock
are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected by the Board of Directors of the Company.
If on any such date no market maker is making a market in the Common Stock, the fair value of such shares on such
date as determined in good faith by the Board of Directors of the Company shall be used. The term "Trading Day"
shall mean a day on which the principal national securities exchange on which the shares of Common Stock are
listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, a Business Day. If the Common Stock is not
publicly held or not so listed or traded, "current market price" per share shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "current market price" per
share of Preferred Stock shall be determined in the same manner as set forth above for the Common Stock in clause
(i) of this Section 11(d) (other than the last sentence thereof). If the current market price per share of
Preferred Stock cannot be determined in the manner provided above or if the Preferred Stock is not publicly held
or listed or traded in a manner described in clause (i) of this Section 11(d), the "current market price" per
share of Preferred Stock shall be conclusively deemed to be an amount equal to 100 (as such number may be
appropriately adjusted for such events as stock splits, stock dividends and recapitalizations with respect to the
Common Stock occurring after the date of this Agreement) multiplied by the current market price per share of the
Common Stock. If neither the Common Stock nor the Preferred Stock is publicly held or so listed or traded,
"current market price" per share of the Preferred Stock shall mean the fair value per share as determined in good
faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes. For all purposes of this Agreement, the "current
market price" of one one-hundredth of a share of Preferred Stock shall be equal to the "current market price" of
one share of Preferred Stock divided by 100.
(e) Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made shall
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be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth of a share of Common Stock or other share or
one-millionth of a share of Preferred Stock, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three
(3) years from the date of the transaction which mandates such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii) or Section 13(a) hereof, the holder
of any Right thereafter exercised shall become entitled to receive any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Preferred Stock contained in Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect
to the Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of one one-hundredths
of a share of Preferred Stock purchasable from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in Section 11(i), upon each adjustment
of the Purchase Price as a result of the calculations made in Sections 11(b) and (c), each Right outstanding
immediately before the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one one-hundredths of a share covered by a Right
immediately before this adjustment, by (y) the Purchase Price in effect immediately before such adjustment of the
Purchase Price, and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number
of Rights, in lieu of any adjustment in the number of one one-hundredths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of one one-hundredths of a share of Preferred Stock for which a Right
was exercisable immediately before such adjustment. Each Right held of record before such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price in effect immediately before adjustment of the Purchase Price by the Purchase Price
in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement of
its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders before the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates evidencing all the Rights to which
such holders shall be entitled after such adjustment. Rights Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the number of one one-hundredths of a
share of Preferred Stock issuable upon the exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per one one-hundredth of a share and the number of
one one-hundredths of a share that were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the Purchase Price below the then
stated value, if any, of the number of one one-hundredths of a share of Preferred Stock issuable upon exercise of
the Rights, the Company shall take any corporate action that may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and nonassessable such number of one
one-hundredths of a share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment in the Purchase Price be made
effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date the number of one one-hundredths
of a share of Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of one one-hundredths of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect
before such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other
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appropriate instrument evidencing such holder's right to receive such additional shares (fractional or otherwise)
or securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and
to the extent that in their good faith judgment the Board of Directors of the Company shall determine to be
advisable in order that any (i) consolidation or subdivision of the Preferred Stock, (ii) issuance wholly for
cash of any shares of Preferred Stock at less than the current market price, (iii) issuance wholly for cash of
shares of Preferred Stock or securities which by their terms are convertible into or exchangeable for shares of
Preferred Stock, (iv) stock dividends or (v) issuance of rights, options or warrants referred to in this Section
11, hereafter made by the Company to holders of its Preferred Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any time after the Distribution Date, (i)
consolidate with any other Person (other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), (ii) merge with or into any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to sell
or transfer), in one transaction, or a series of related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(o) thereof), if (x) at the time of or immediately after such consolidation, merger
or sale there are any rights, warrants or other instruments or securities outstanding or agreements in effect
that would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights or
(y) before, simultaneously with or immediately after such consolidation, merger or sale, the shareholders of the
Person who constitute, or would constitute, the "Principal Party" for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution Date, it will not, except as permitted by
Section 23 or Section 27 hereof, take (or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially or otherwise eliminate the
benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, if the Company shall at any time on or after
the Rights Dividend Declaration Date and before the Distribution Date (i) declare a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock,
(iii) combine the outstanding shares of Common Stock into a smaller number of shares, or (iv) otherwise
reclassify the outstanding Common Shares, the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered hereafter but before the Distribution Date, shall be proportionately adjusted
so that the number of Rights thereafter associated with each share of Common Stock following any such event shall
equal the result obtained by multiplying the number of Rights associated with each share of Common Stock
immediately before such event by a fraction (the "Adjustment Fraction") the numerator of which shall be the total
number of shares of Common Stock outstanding immediately before the occurrence of the event and the denominator
of which shall be the total number of shares of Common Stock outstanding immediately following the occurrence of
such event. In lieu of such adjustment in the number of Rights associated with one Common Share, the Company may
elect to adjust the number of one one-hundredths of a Preferred Share purchasable upon the exercise of one Right
and the Purchase Price. If the Company makes such election, the number of Rights associated with ones Common
Share shall remain unchanged, and the number of one one-hundredths of a Preferred Share purchasable upon exercise
of one Right and the Purchase Price shall be proportionately adjusted so that (i) the number of one
one-hundredths of a Preferred Share purchasable upon exercise of a Right following such adjustment shall equal
the product of the number of one one-hundredths of a Preferred Share purchasable upon exercise of a Right
immediately prior to such adjustment multiplied by the Adjustment Fraction and (ii) the Purchase Price following
such adjustment shall equal the product of the Purchase Price immediately prior to such adjustment multiplied by
the Adjustment Fraction.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is
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made as provided in Section 11 and Section 13 hereof, the Company shall (a) promptly prepare a certificate
setting forth such adjustment and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Preferred Stock and the Common Stock, a copy of
such certificate, and (c) mail a brief summary thereof to each holder of a Rights Certificate (or, if before the
Distribution Date, to each holder of a certificate representing shares of Common Stock) in accordance with
Section 26 hereof. The Rights Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of such adjustment unless and until it
shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.
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(a) If, following the Stock Acquisition Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), and the Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof) shall consolidate with, or merge with or into, the Company, and the Company shall be
the continuing or surviving corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common Stock shall be changed into or exchanged
for stock or other securities of any other Person or cash or any other property, or (z) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one transaction or a
series of related transactions, assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions each of which complies with Section 11(o) hereof), then,
and in each such case proper provision shall be made so that: (i) each holder of a Right, except as provided in
Section 7(e) hereof, shall thereafter have the right to receive, upon the exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, such number of validly authorized and issued,
fully paid, non-assessable and freely tradeable shares of Common Stock of the Principal Party (as such term is
hereinafter defined), not subject to any liens, encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then current Purchase Price by the number of one
one-hundredths of a share of Preferred Stock for which a Right is exercisable immediately before the first
occurrence of Section 13 Event (or, if a Section 11(a)(ii) Event has occurred before the first occurrence of a
Section 13 Event, multiplying the number of such one one-hundredths of a share of Preferred Stock for which a
Right was exercisable immediately before the first occurrence of a Section 11(a)(ii) Event by the Purchase Price
in effect immediately before such first occurrence), and dividing that product (which, following the first
occurrence of a Section 13 Event, shall be referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by (2) 50% of the current market price (determined pursuant to Section 11(d)(i)
hereof) per share of the Common Stock of such Principal Party on the date of consummation of such Section 13
Event; (ii) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first occurrence of a Section 13 Event;
(iv) such Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock) in connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in
relation to its shares of Common Stock thereafter deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no effect following the first occurrence of any Section 13
Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a), the Person that is the issuer of
any securities into which shares of Common Stock of the Company are converted
in such merger or consolidation, and if no securities are so issued, the
Person that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of the first sentence
of Section 13(a), the Person that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such Person is not at such time and has not
- --------
been continuously over the preceding twelve (12) month period registered under Section 12 of the Exchange Act,
and such Person is a direct or indirect Subsidiary of another Person the Common Stock of which is and has been so
registered, "Principal Party" shall refer to such other Person; and (2) in case such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the issuer of the Common Stock having
the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger, sale or transfer unless the Principal
Party shall have a sufficient number of authorized shares of its Common Stock that have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any consolidation, merger or sale of assets mentioned in
paragraph (a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement under the Act, with respect to the
Rights and securities purchasable upon exercise of the Rights on an appropriate form, and will
use its best efforts to cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a prospectus at all times meeting
the requirements of the Act) until the Expiration Date; and
(ii) will deliver to holders of the Rights historical financial statements for the
Principal Party and each of its Affiliates that comply in all respects with the requirements
for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other
transfers. If a Section 13 Event shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights that have not theretofore been exercised shall thereafter become exercisable in the manner described in
Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
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(a) The Company shall not be required to issue fractions of Rights, except before the Distribution Date as
provided in Section 11(p) hereof, or to distribute Rights Certificates which evidence fractional Rights. In lieu
of such fractional Rights, there shall be paid to the registered holders of the Rights Certificates with regard
to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading Day immediately before the date on which such
fractional Rights would have been otherwise issuable. The closing price of the Rights for any day shall be the
last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading, or if the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use or, if on any
such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights selected by the Board of Directors of the
Company. If on any such date no such market maker is making a market in the Rights, the fair value of the Rights
on such date as determined in good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of shares of Preferred Stock (other than fractions
which are integral multiples of one one-hundredth of a share of Preferred Stock) upon exercise of the Rights or
to distribute certificates that evidence fractional shares of Preferred Stock (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock). In lieu of fractional shares of
Preferred Stock that are not integral multiples of one one-hundredth of a share of Preferred Stock, the Company
may pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value of one one-hundredth of a share of
Preferred Stock shall be one one-hundredth of the closing price of a share of Preferred Stock (as determined
pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately before the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to distribute certificates which evidence fractional shares
of Common Stock. In lieu of fractional shares of Common Stock, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one (1) share of Common Stock. For purposes of this Section 14(c), the
current market value of one share of Common Stock shall be the closing price of one share of Common Stock (as
determined pursuant to Section 11(d)(i) hereof) for the Trading Day immediately before the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights expressly waives his right to receive any
fractional Rights or any fractional shares upon exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this Agreement, other than
-----------------
rights of action vested in the Rights Agent pursuant to Section 18 hereof, are vested in the respective
registered holders of the Rights Certificates (and, before the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, before the Distribution Date, of the
Common Stock), without the consent of the Rights Agent or of the holder of any other Rights Certificate (or,
before the Distribution Date, of the Common Stock), may, in his own behalf and for his own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Rights Certificate in the manner provided in such
Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy
at law for any breach of this Agreement and shall be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened violations of the obligations hereunder of any
Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by accepting the same consents
----------------------------
and agrees with the Company and the Rights Agent and with every other holder of a Right that:
(a) before the Distribution Date, the Rights will be transferable only in connection with the transfer of
Common Stock;
(b) after the Distribution Date, the Rights Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the principal office or offices of the Rights Agent designated for such purposes,
duly endorsed or accompanied by a proper instrument of transfer and with the appropriate forms and certificates
fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the Rights Agent may deem and treat the
person in whose name a Rights Certificate (or, before the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Rights Certificates or the associated Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent, subject to the last sentence of Section 7(e) hereof, shall be required to be affected by any notice
to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights Agent
shall have any liability to any holder of a Right or other Person as a result of its inability to perform any of
its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree
or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation; provided, however, the Company
--------
must use its best efforts to have any such order, decree or ruling lifted or otherwise overturned as soon as
possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Rights
----------------------------------------------------
Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the number of
one one-hundredths of a share of Preferred Stock or any other securities of the Company which may at any time be
issuable upon the exercise of the Rights represented thereby, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights Certificate, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent
-------------------------------
(a) The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and
to hold it harmless against, any loss, liability, or expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with
the acceptance and administration of this Agreement, including the costs and expenses of defending against any
claim of liability in the premises.
(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 or certificate for Common Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement,
or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified
or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
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(a) Any corporation into which the Rights Agent or any successor Rights Agent may be merged or with which it
may be consolidated, or any corporation resulting from any merger or consolidation to which the Rights Agent or
any successor Rights Agent shall be a party, or any corporation succeeding to the corporate trust business of the
Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of any of the parties hereto;
provided, however, that such corporation would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Rights Certificates shall have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
(b) 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 Rights Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties and obligations
------------------------
imposed by this Agreement upon the following terms and conditions, by all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary
or desirable that any fact or matter (including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") be proved or established by the Company before taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chairman of
the Board and President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals
contained in this Agreement or in the Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any adjustment required under the provisions of Section 11 or
Section 13 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt of the certificate described in Section 12 hereof setting forth
any such adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any shares of Common Stock or Preferred Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Common Stock or Preferred Stock will, when so
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept instructions with respect to the
performance of its duties hereunder from the Chairman of the Board and President, any Vice President, the
Secretary or any Assistant Secretary of the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or suffered to be taken by it in good
faith in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or employee of the Rights Agent may buy, sell or
deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction
in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully
and freely as though it were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any
duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any
loss to the Company resulting from any such act, default, neglect or misconduct; provided, however, reasonable
--------
care was exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of
its rights if there shall be reasonable grounds for believing that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not
take any further action with respect to such requested exercise or transfer without first consulting with the
Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and
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be discharged from its duties under this Agreement upon thirty (30) days' notice in writing mailed to the
Company, and to each transfer agent of the Common Stock and Preferred Stock, by registered or certified mail, and
to the holders, if any, of the Rights Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon ten (10) days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock and Preferred Stock, by
registered or certified mail, and to the holders of the Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such appointment within a period of ten (10)
days after giving notice of such removal, or within a period of thirty (30) days after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate for inspection by the Company), as
the case may be, then any registered holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a corporation organized and doing business under the laws of the United
States or of any state of the United States, which is in good standing, is authorized under such laws to exercise
transfer agent or corporate trust powers, is subject to supervision or examination by federal or state authority
and is qualified to act as a Transfer Agent under the rules of the New York Stock Exchange. After appointment,
the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver
and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of
any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock and the Preferred Stock, and mail a notice thereof in writing to the
registered holders of the Rights Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of the provisions of this
-------------------------------------
Agreement or of the Rights to the contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under
the Rights Certificates made in accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution Date and before the redemption or
expiration of the Rights, the Company (a) shall, with respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or under any employee plan or arrangement, granted or awarded on or
before the Distribution Date, or upon the exercise, conversion or exchange of securities hereinafter issued by
the Company, and (b) may, in any other case, if deemed necessary or appropriate by the Board of Directors of the
Company, issue Rights Certificates representing the appropriate number of Rights in connection with such issuance
or sale; provided, however that (i) no such Rights Certificate shall be issued if, and to the extent that, the
--------
Company shall be advised by counsel that such issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Rights Certificate would be issued, and (ii) no such
Rights Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have been
made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
--------------------------
(a) The Board of Directors of the Company may, at its option, at any time before the Final
Expiration Date, redeem all but not less than all the then outstanding Rights at a redemption price of $.01 per
Right, as such amount may be appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being hereinafter referred to as the
"Redemption Price"); provided, however, if the Board of Directors of the Company authorizes redemption of the
--------
Rights on or after the time a Person becomes an Acquiring Person, then there must be Continuing Directors then in
office and such authorization shall require the concurrence of a majority of such Continuing Directors. The
Company may, at its option, pay the Redemption Price in cash, shares of Common Stock (based on the "current
market price," as defined in Section 11(d)(i) hereof, of the Common Stock at the time of redemption) or any other
form of consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors of the Company ordering the redemption of the
Rights, evidence of which shall have been filed with the Rights Agent, and without any further action and without
any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price for each Right so held. Promptly after the action of the Board
of Directors ordering the redemption of the Rights, the Company shall give notice of such redemption to the
Rights Agent and the holders of the then outstanding Rights by mailing such notice to all such holders at each
holder's last address as it appears upon the registry books of the Rights Agent or, before the Distribution Date,
on the registry books of the Transfer Agent for the Common Stock. Any notice mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be made.
Section 24. Exchange.
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(a) The Board of Directors of the Company may, at its option, at any time and from time to time
after the first occurrence of a Section 11(a)(ii) Event, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void pursuant to the provisions of Section
7(e) hereof) for shares of Common Stock or common stock equivalents (as defined in Section 11(a)(iii) hereof), or
any combination thereof, at an exchange ratio of one share of Common Stock, or such number of common stock
equivalents or units representing fractions thereof as would be deemed to have the same value as one share of
Common Stock, per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to effect such exchange at any time
after an Acquiring Person shall have become the Beneficial Owner of shares of Common Stock aggregating 50% or
more of the shares of Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the Company ordering the exchange of any Rights
pursuant to Section 24(a) and without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number
of shares of Common Stock and/or common stock equivalents equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such exchange; provided,
--------
however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange.
- -------
The Company promptly shall mail a notice of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the shares of Common Stock and/or common stock equivalents for Rights
will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights (other than Rights that have become void
pursuant to the provisions of Section 7(e) hereof) held by each holder of Rights.
(c) If the number of shares of Common Stock that are authorized by the Company's Articles of Incorporation
but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not
sufficient to permit an exchange of Rights as contemplated in accordance with this Section 24, the Company may,
at its option, take all such action as may be necessary to seek to authorize additional shares of Common Stock
for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of shares of Common Stock or to distribute
certificates that evidence fractional shares of Common Stock. In lieu of such fractional shares of Common Stock,
the Company shall pay to the registered holders of Rights with regard to which such fractional shares of Common
Stock would otherwise be issuable an amount in cash equal to the same fraction of the value of a whole share of
Common Stock. For purposes of this Section 24, the value of a whole share of Common Stock shall be the closing
price (as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
before the date of exchange pursuant to this Section 24, and the value of any common stock equivalent shall be
deemed to have the same value as the Common Stock on such date.
Section 25. Notice of Certain Events.
------------------------
(a) In case the Company shall propose, at any time after the Distribution Date, (i) to pay any
dividend payable in stock of any class to the holders of Preferred Stock or to make any other distribution to the
holders of Preferred Stock (other than a regular quarterly cash dividend out of earnings or retained earnings of
the Company), or (ii) to offer to the holders of Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of stock of any class or any other securities, rights
or options, or (iii) to effect any reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock), or (iv) to effect any consolidation or
merger into or with any other Person (other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one transaction or a series of related transactions, of more than 50% of
the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), or (v) to effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Preferred Stock, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (i) or (ii) above at least twenty (20) days
before the record date for determining holders of the shares of Preferred Stock for purposes of such action, and
in the case of any such other action, at least twenty (20) days before the date of the taking of such proposed
action or the date of participation therein by the holders of the shares of Preferred Stock, whichever shall be
the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in any such case, (i) the Company shall as soon
as practicable thereafter give to each holder of a Rights Certificate, to the extent feasible and in accordance
with Section 26 hereof, a notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all references in the
preceding paragraph to Preferred Stock shall be deemed thereafter to refer to Common Stock and/or, if
appropriate, other securities.
Section 26. Notices. Notices or demands authorized by this Agreement to be given or made by the
-----------
Rights Agent or by the holders of any Rights Certificate to or on the Company shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the
Rights Agent) as follows:
First Federal Financial Corporation of Kentucky
2323 Ring Road
Elizabethtown, Kentucky 42702-5006
Attn: B. Keith Johnson, President and Chief Executive Officer
Subject to the provisions of Section 21, any notice or demand authorized by this Agreement to be given or made by
the Company or by the holder of any Rights Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
Illinois Stock Transfer Company
209 West Jackson Boulevard, Suite 903
Chicago, Illinois 60606
Attn: Robert G. Pearson, President
Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the
holder of any Rights Certificate (or, if before the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. Before the Stock Acquisition Date and subject to the
----------------------------
penultimate sentence of this Section 27, the Company and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the Stock Acquisition Date and subject to the penultimate
sentence of this Section 27, the Company and the Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of Rights Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein that may be defective or inconsistent
with any other provision herein, (iii) to shorten or lengthen any time period hereunder (which lengthening or
shortening, following the first occurrence of an event set forth in clauses (i) or (ii) of the first proviso to
Section 23(a) hereof, shall be effective only if there are Continuing Directors and shall require the concurrence
of a majority of such Continuing Directors), or (iv) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and which shall not adversely affect the interests of
the holders of Rights Certificates (other than an Acquiring Person or an Affiliate or Associate of any such
Person); provided, that, from and after the Stock Acquisition Date, this Agreement may not be supplemented or
-------- ----
amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating to when the Rights may
be redeemed at such time as the Rights are not then redeemable, or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights of, and/or the benefits to, the
holders of Rights. Upon the delivery of a certificate from an appropriate officer of the Company which states
that the proposed supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. Notwithstanding anything contained in this Agreement to the
contrary, from and after the Stock Acquisition Date, no supplement or amendment shall be made which changes the
Redemption Price, the Final Expiration Date, the Purchase Price or the number of one one-hundredths of a share of
Preferred Stock for which a Right is exercisable. Before the Stock Acquisition Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of this Agreement by or for the benefit
--------------
of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Determinations and Actions by the Board of Directors, etc. For all purposes of this
------------------------------------------------------------
Agreement, any calculation of the number of shares of Common Stock outstanding at any particular time, including
for purposes of determining the particular percentage of such outstanding shares of Common Stock of which any
Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act as in effect of the date hereof. The Board of Directors of
the Company (with, where specifically provided for herein, the concurrence of the Continuing Directors) shall
have the exclusive power and authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board (with, where specifically provided for herein, the concurrence of the
Continuing Directors) or to the Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret the provisions of this Agreement,
and (ii) make all determinations deemed necessary or advisable for the administration of this Agreement
(including, but not limited to, a determination to redeem or not redeem the Rights or to amend the Agreement).
All such actions, calculations, interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board (with, where specifically
provided for herein, the concurrence of the Continuing Directors) in good faith, shall (x) be final, conclusive
and binding on the Company, the Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board (or the Continuing Directors) to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall be construed to give to
-------------------------------
any Person other than the Company, the Rights Agent and the registered holders of the Rights Certificates (and,
before the Distribution Date, registered holders of the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, before the Distribution Date, registered
holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant or restriction of this Agreement is
------------
held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated; provided, however, that notwithstanding anything in this
--------
Agreement to the contrary, if any such term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board of Directors of the Company determines in its good
faith judgment that severing the invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof shall be reinstated and shall
not expire until the close of business on the tenth day following the date of such determination by the Board of
Directors. Without limiting the foregoing, if any provisions requiring that a determination be made by less than
the entire Board is held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, such determination shall then be made by the entire Board.
Section 32. Governing Law. This Agreement, each Right and each Rights Certificate issued
--------------
hereunder shall be deemed to be a contract made under the laws of the Commonwealth of Kentucky and for all
purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts
made and to be performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any number of counterparts and each
----------------
of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several Sections of this Agreement
---------------------
are inserted for convenience only and shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and their
respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written.
Attest: FIRST FEDERAL FINANCIAL
CORPORATION OF KENTUCKY
By /s/ Rebecca Bowling By /s/ B. Keith Johnson
------------------- ---------------------
Rebecca Bowling B. Keith Johnson
Corporate Secretary President
Attest: ILLINOIS STOCK TRANSFER
COMPANY
By /s/ Janel Pavey By /s/ Robert G. Pearson
- ------------------ ------------------------
Janel Pavey Robert G. Pearson
Secretary President
Exhibit A
---------
FORM OF ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
FIRST FEDERAL FINANCIAL
CORPORATION OF KENTUCKY
Pursuant to KRS 271B.6-010(3) and KRS 271B.6-020(4), these Articles of Amendment to the Articles of
Incorporation of First Federal Financial Corporation of Kentucky (the "Corporation") are being delivered to the
Kentucky Secretary of State for filing. The information required by KRS 271B.6-020(4) is as follows:
FIRST: The name of the Corporation is First Federal Financial Corporation of Kentucky.
SECOND: These Articles of Amendment amend current ARTICLE VII of the Corporation's Articles of
Incorporation by establishing a new Junior Participating Preferred Stock. As amended, a new subsection C shall
be added to ARTICLE VII, which subsection C shall read in its entirety as follows:
C. Junior Participating Preferred Stock.
------------------------------------
1. Designation. The designation of the series of the Preferred Stock
-----------
created by the Board of Directors shall be "2003A Junior Participating Preferred Stock"
(hereinafter called this "Series") and the number of shares constituting this Series is
one-hundred thousand (100,000).
2. Dividends.
---------
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to the shares of this
Series with respect to dividends, the holders of shares of this Series shall be entitled to
receive, when and as declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on March 31, June 30, September 30 and December 31
of each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of this Series, in an amount per share (rounded to the nearest cent) equal
to the greater of (A) $1.00 or (B) subject to the provision for adjustment hereinafter set
forth, 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 a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the Common Stock of the
Corporation since the immediately preceding Quarterly Dividend Payment Date, or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction
of a share of this Series. If the Corporation shall at any time on or after April 15, 2003
(the "Rights Declaration Date") (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 this Series were entitled immediately before such event under clause (B) of the
preceding sentence 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
before such event (the "Adjustment Ratio").
(B) The Corporation shall declare a dividend or distribution on
this Series as provided in clause (A) of the preceding paragraph (1) immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided that, in the event no dividend or distribution shall have
been declared on the Common Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on this
Series shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of this Series from the Quarterly Dividend Payment Date next preceding the
date of issue of such shares of this Series unless the date of issue of such shares is before
the record date for the first Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such shares, or unless the date of issue
is a Quarterly Dividend Payment Date or is a date after the record date for the determination
of holders of shares of this Series entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue
and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of this Series in an amount less than the
total amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of holders of shares of this
Series entitled to receive payment of a dividend or distribution declared thereon, which record
date shall be no more than 30 days before the date fixed for the payment thereof.
(D) No full dividends shall be declared or paid or set apart for
payment on the Preferred Stock of any series ranking, as to dividends, on a parity with or
junior to this Series for any period unless full cumulative dividends have been or
contemporaneously are declared and a sum sufficient for the payment thereof set apart for such
payment on this Series for all dividend payment periods terminating on or prior to the date of
payment of such full cumulative dividends. When dividends are not paid in full, as aforesaid,
upon the shares of this Series and any other Preferred Stock ranking on a parity as to
dividends with this Series, all dividends declared upon shares of this Series and any other
Preferred Stock ranking on a parity as to dividends with this Series shall be declared pro rata
so that the amount of dividends declared per share on this Series and such other Preferred
Stock shall in all cases bear to each other the same ratio that accrued dividends per share on
the shares of this Series and such other Preferred Stock bear to each other. Holders of shares
of this Series shall not be entitled to any dividends, whether payable in cash, property or
stock, in excess of full cumulative dividends, as herein provided, on this Series. No interest,
or sum of money in lieu of interest, shall be payable in respect of any dividend payment or
payments on this Series that may be in arrears.
(E) So long as any shares of this Series are outstanding, no
dividend (other than a dividend in Common Stock or in any other stock ranking junior to this
Series as to dividends and upon liquidation and other than as provided in subsection C.2.(D)
shall be declared or paid or set aside for payment or other distribution declared or made upon
the Common Stock or upon any other stock ranking junior to or on a parity with this Series as
to dividends or upon liquidation, nor shall any Common Stock or any other stock of the
Corporation ranking junior to or on a parity with this Series as to dividends or upon
liquidation be redeemed, purchased or otherwise acquired for any consideration (or any moneys
be paid to or made available for a sinking fund for the redemption of any shares of any such
stock) by the Corporation (except by conversion into or exchange for stock of the Corporation
ranking junior to this Series as to dividends and upon liquidation) unless, in each case, the
full cumulative dividends on all outstanding shares of this Series shall have been paid for all
past dividend payment periods.
3. Conversion or Exchange. The holders of shares of this Series shall
------------------------
not have any rights to convert such shares into or exchange such shares for shares of any other
class or classes or of any other series of any class or classes of capital stock of the
Corporation.
4. Voting Rights. The holders of shares of a Series 2003A Junior
--------------
Participating Preferred Stock shall have the following voting rights:
(A) Each share of Series 2003A Junior Participating Preferred
Stock shall entitle the holder thereof to a number of votes equal to 100 multiplied by the
Adjustment Ratio on all matters submitted to a vote of the stockholders of the Corporation.
(B) Except as required by law or the Corporation's Articles of
Incorporation, holders of Series 2003A Junior Participating Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the extent they are
titled to vote with holders of Common Stock as set forth herein) for taking any corporate
action.
5. Liquidation Rights.
------------------
(A) Upon the dissolution, liquidation (voluntary or otherwise),
or winding up of the Corporation, the holders of the shares of this Series shall be entitled to
receive out of the assets of the Corporation, before any payment of distribution shall be made
on the Common Stock, or on any other class of stock ranking junior to the Preferred Stock upon
liquidation, the amount of $9,000.00 per share, plus a sum equal to all dividends (whether or
not earned or declared) on such shares accrued and unpaid thereon to the date of final
distribution (the "Liquidation Preference"). Following the payment of the full amount of the
Liquidation Preference, no additional distributions shall be made to the holders of shares of
this Series unless, prior thereto, the holders of shares of Common Stock shall have received an
amount per share (the "Common Adjustment") equal to the quotient obtained by dividing (i) the
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in subsection
C.5.(B) below to reflect such events as stock splits, stock dividends and recapitalizations
with respect to the Common Stock) (such number in clause (ii), the "Adjustment Number").
Following the payment of the full amount of the Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Junior Participating Preferred Stock and
Common Stock, respectively, holders of this Series and holders of Common Stock shall receive
their ratable and proportionate share of the remaining assets to be distributed in the ratio of
the Adjustment Number to 1 with respect to such Preferred Stock and Common Stock, on a per
share basis, respectively.
(B) If the Corporation shall at any time on or after the Rights
Declaration Date (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 Adjustment Number in effect immediately
before such event shall be adjusted by multiplying such Adjustment Number 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 before such event.
(C) The sale, conveyance, exchange or transfer (for cash, shares
of stock, securities or other consideration) of all or substantially all the property and
assets of the Corporation shall be deemed a voluntary dissolution, liquidation or winding up of
the Corporation for the purposes of this subsection C.5., but the merger or consolidation of
the Corporation into or with another corporation or the merger or consolidation of any other
corporation into or with the Corporation, shall not be deemed to be a dissolution, liquidation
or winding up, voluntarily or involuntarily, for the purposes of this subsection C.5.
(D) After the payment to the holders of the shares of this
Series of the full preferential amounts provided for in this subsection C.5., the holders of
this Series as such shall have no right or claim to any of the remaining assets of the
Corporation.
(E) If the assets of the Corporation available for distribution
to the holders of shares of this Series upon any dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, shall be insufficient to pay in full all amounts
to which such holders are entitled pursuant to subsection C.5. (A), no such distribution shall
be made on account of any shares of any other class or series of Preferred Stock ranking on a
parity with the shares of this Series upon such dissolution, liquidation or winding up unless
proportionate distributive amounts shall be paid on account of the shares of this Series,
ratably, in proportion to the full distributable amounts for which holders of all such parity
shares are respectively entitled upon such dissolution, liquidation or winding up. If,
however, there are not sufficient assets available to permit payment in full of the Common
Adjustment, then such remaining assets shall be distributed ratably to the holders of Common
Stock.
6. Priority. For purposes of this resolution, any stock of any class or
--------
classes of the Corporation shall be deemed to rank:
(A) prior to the shares of this Series, either as to dividends
or upon liquidation, if the holders of such class or classes shall be entitled to the receipt
of dividends or of amounts distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or priority to the holders of shares of this
Series;
(B) on a parity with shares of this Series, either as to
dividends or upon liquidation, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share or sinking fund provisions, if any, be different
from those of this Series, if the holders of such stock shall be entitled to the receipt of
dividends or of amounts distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in proportion to their respective dividend rates or
liquidation prices, without preference or priority, one over the other, as between the holders
of such stock and the holders of shares of this Series; and
(C) junior to shares of this Series, either as to dividends or
upon liquidation, if the holders of shares of this Series shall be entitled to receipt of
dividends or of amounts distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or priority to the holders of shares of such
class or classes."
THIRD: These Articles of Amendment were duly adopted by the Corporation's Board of Directors on April
15, 2003. Shareholder approval was not required.
/s/ B. Keith Johnson
--------------------
B. Keith Johnson
President and Chief Executive Officer
Date: April 15, 2003
Exhibit B
---------
[Form of Rights Certificate]
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER MAY 9, 2013, OR EARLIER IF REDEEMED OR EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*
Rights Certificate
FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
This certifies that ________________________, or registered assigns, is the registered owner of the
number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of April 15, 2003 (the "Rights Agreement"), between First Federal
Financial Corporation of Kentucky, a Kentucky corporation (the "Company"), and Illinois Stock Transfer Company
(the "Rights Agent"), to purchase from the Company at any time before 5:00 P.M. (Eastern standard time) on May 9,
2013, at the office or offices of the Rights Agent designated for such purpose, or its successors as Rights
Agent, one one-hundredth of a fully paid, non-assessable share of Junior Participating Preferred Stock (the
"Preferred Stock") of the Company, at a purchase price of $__________ per one one-hundredth of a share (the
"Purchase Price"), upon presentation and surrender of this Rights Certificate with the Form of Election to
Purchase and related Certificate duly executed. The number of Rights evidenced by this Rights Certificate (and
the number of shares that may be purchased upon exercise thereof) set forth above, and the Purchase Price per
share set forth above, are the number and Purchase Price as of May 9, 2003, based on the Preferred Stock as
constituted at such date. The Company reserves the right to require before the occurrence of a Triggering Event
(as such term is defined in the Rights Agreement) that a number of Rights be exercised so that only whole shares
of Preferred Stock will be issued.
- -------------------
* The portion of the legend in brackets shall be inserted only if applicable and shall replace the preceding
sentence.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights Agreement), if
the Rights evidenced by this Rights Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate
or Associate of any such Person (as such terms are defined in the Rights Agreement), (ii) a transferee of any
such Acquiring Person, Associate or Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an Acquiring Person or an Affiliate or
Associate of any such Person, such Rights shall become null and void and no holder hereof shall have any right
with respect to such Rights from and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number and kind of shares of Preferred
Stock or other securities that may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of certain events, including Triggering
Events (as such term is defined in the Rights Agreement).
This Rights Certificate is subject to all of the terms, provisions and conditions of the Rights
Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations
of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include the temporary suspension of the exercisability of such
Rights under the specific circumstances set forth in the Rights Agreement. Copies of the Rights Agreements are
on file at the above-mentioned office of the Rights Agent and are also available upon written request to the
Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon surrender at the principal
office or offices of the Rights Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificate of like tenor and date evidencing Rights entitling the holder to purchase a
like aggregate number of one one-hundredths of a share of Preferred Stock as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have entitled such holder to purchase. If this Rights
Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another
Rights Certificate or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate (i) may be
redeemed by the Company at its option at a redemption price of $.01 per Right at any time; provided, however,
that any such redemption after a person has become an Acquiring Person may be authorized only if the Company has
Continuing Directors (as such term is defined in the Rights Agreement) then in office and the redemption is
authorized with the concurrence of a majority of such Continuing Directors; or (ii) may be exchanged in whole or
in part for shares of the Company's Common Stock and/or other equity securities of the Company deemed to have the
same value as shares of Common Stock. After the expiration of the redemption period, the Company's right of
redemption may be reinstated if an Acquiring Person reduces his beneficial ownership to 10% or less of the
outstanding shares of Common Stock in a transaction or series of transactions not involving the Company. Under
certain circumstances set forth in the Rights Agreement, the decision to redeem shall require the concurrence of
a majority of the Continuing Directors.
No fractional shares of Preferred Stock will be issued upon the exercise of any Right or Rights
evidenced hereby (other than fractions that are integral multiples of one one-hundredth of a share of Preferred
Stock, which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof a
cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or receive dividends or be deemed for any
purpose the holder of shares of Preferred Stock or of any other securities of the Company that may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein by construed to
confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or, to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Rights Certificate shall have been exercised as provided
in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose until it shall have been
countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.
Dated:
ATTEST: FIRST FEDERAL FINANCIAL
CORPORATION OF KENTUCKY
By By
---------------------------- --------------------------------------
Rebecca Bowling B. Keith Johnson
Corporate Secretary President and Chief Executive Officer
Countersigned:
ILLINOIS STOCK TRANSFER COMPANY
By_________________________________
Authorized Officer
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED hereby sells, assigns and transfers unto
---------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint __________________ Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ______________________
---------------------------------------
Signature
Signature Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and transferred by or on behalf
of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not acquire
the Rights evidenced by this Rights Certificate from any Person who is, was or subsequently became, an Acquiring
Person or an Affiliate or Associate of any such Person.
Dated: ______________________
---------------------------------
Signature
Signature Guaranteed:
NOTICE
------
The signature to the foregoing Assignment and Certificate must correspond to the name as written upon
the face of this Rights Certificate in every particular, without alteration or enlargement or any change
whatsoever.
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise Rights represented by the Rights
Certificate.)
To: FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
The undersigned hereby irrevocably elects to exercise _____________ Rights represented by this Rights
Certificate to purchase the shares of Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person that may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name of and delivered to:
Please insert social security
or other identifying number
- ---------------------------------------------------------------------------------------
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a new Rights
Certificate for the balance of such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
- ---------------------------------------------------------------------------------------
Dated:
--------------------
--------------------------
Signature
Signature Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not being exercised by
or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Person (as
such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Rights Certificate from any Person who is, was or became an Acquiring Person
or an Affiliate or Associate of any such Person.
Dated:
------------- ------------------------
Signature
Signature Guaranteed:
NOTICE
------
The signature to the foregoing Election to Purchase and Certificate must correspond to the name as
written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any
change whatsoever.
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT, THE RIGHTS DESCRIBED HEREBY MAY BECOME
NULL AND VOID.
Exhibit C
---------
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On April 15, 2003, the Board of Directors of First Federal Financial Corporation of Kentucky (the
"Company") declared a dividend distribution of one Right for each outstanding share of the Company's Common
Stock, $1.00 par value (the "Common Stock"), to stockholders of record at the close of business on May 9, 2003.
Each Right entitles the registered holder to purchase from the Company a unit consisting of one-hundredth of a
share (a "Unit") of Junior Participating Preferred Stock (the "Preferred Stock") at a Purchase Price of $90.00
per Unit, subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement
(the "Rights Agreement") between the Company and Illinois Stock Transfer Company, as Rights Agent.
Initially, the Rights will be attached to all Common Stock certificates representing shares then
outstanding, and no separate Rights Certificates will be distributed. The Rights will separate from the Common
Stock and a Distribution Date will occur upon the earlier of (i) the tenth day following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring Person") has acquired, or obtained the
right to acquire, beneficial ownership of 15% or more of the outstanding shares of Common Stock (the "Stock
Acquisition Date") or (ii) the tenth business day following the commencement of a tender offer or exchange offer
that would result in a person or group beneficially owning 15% or more of such outstanding shares of Common
Stock.
Until the Distribution Date, (i) the Rights will be evidenced by the Common Stock certificates and will
be transferred with and only with such Common Stock certificates, (ii) new Common Stock certificates issued after
May 9, 2003, will contain a notation incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Stock outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. Pursuant to the Rights Agreement, the Company
reserves the right to require before the occurrence of a Triggering Event (as defined below) that, upon any
exercise of Rights, a number of Rights be exercised so that only whole shares of Preferred Stock will be issued.
The Rights are not exercisable until the Distribution Date and will expire at the close of business on
May 9, 2013, unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates will be mailed to holders of
record of the Common Stock as of the close of business on the Distribution Date and, thereafter, the separate
Rights Certificates alone will represent the Rights. Except as otherwise determined by the Board of Directors,
only shares of Common Stock issued before the Distribution Date will be issued with Rights.
Following any Stock Acquisition Date, (i) each holder of a Right not owned by an Acquiring Person (or by
certain related parties) will have the right to receive, upon exercise, Common Stock (or, in certain
circumstances, cash, property or other securities of the Company) having a value equal to two times the exercise
price of the Right; and (ii) all Rights that are, or (under certain circumstances specified in the Rights
Agreement) were beneficially owned by any Acquiring Person will be null and void.
For example, at an exercise price of $90.00 per Right, each Right not owned by an Acquiring Person (or
by certain related parties) following a Stock Acquisition Date would entitle its holder to purchase $180.00 worth
of Common Stock based on the current market price (as defined in the Agreement) of the Common Stock for $90.00.
Assuming that the current market price of the Common Stock is $30.00 per share, the holder of each valid Right
would be entitled to purchase six shares of Common Stock for $90.00.
If, at any time following the Stock Acquisition Date, (i) the Company is acquired in a merger or other
business combination transaction in which the Company is not the surviving corporation (other than a merger that
follows an offer described in the second preceding paragraph), or (ii) 50% or more of the Company's assets or
earning power is sold or transferred, each holder of a Right (except Rights that previously have been voided as
set forth above) shall thereafter have the right to receive, upon exercise, common stock of the acquiring company
having a value equal to two times the exercise price of the Right. The term "Triggering Event" refers to any
person becoming an Acquiring Person or the occurrence of an event described in this paragraph.
The Purchase Price payable, and the number of Units of Preferred Stock or other securities or property
issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Stock, (ii) if
holders of the Preferred Stock are granted certain rights or warrants to subscribe for Preferred Stock or
convertible securities at less than the current market price of the Preferred Stock, or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be required until cumulative
adjustments amount to at least 1% of the Purchase Price. No fractional Units will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of the Preferred Stock on the last trading
date before the date of exercise.
The Company may redeem the Rights in whole, but not in part, at a price of $.01 per Right (payable in
cash, Common Stock or other consideration deemed appropriate by the Board of Directors). The decision to redeem
after a Person becomes an Acquiring Person requires the concurrence of a majority of the Continuing Directors.
Immediately upon the action of the Board of Directors ordering redemption of the Rights (with the concurrence of
the Continuing Directors), the Rights terminate and the only remaining right of the holders of Rights will be to
receive the $.01 redemption price.
The term "Continuing Directors" means any member of the Board of Directors of the Company who was a
member of the Board before the date an Acquiring Person became such, and any person who is subsequently elected
to the Board if such person is recommended or approved by a majority of the Continuing Directors, but shall not
include an Acquiring Person or an affiliate or associate of an Acquiring Person or any representative of the
foregoing entities.
At any time after the Rights become exercisable for Common Stock (or other consideration) of the
Company, the Board of Directors may exchange the Rights (other than Rights owned by an Acquiring Person that have
become void), in whole or in part, at an exchange ratio of one Common Share, and/or other equity securities
deemed to have the same value as one Common Share, per Right, subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the
Company, including, without limitation, the right to vote or to receive dividends. While the distribution of the
Rights will not be taxable to stockholders or to the Company, stockholders may, depending upon the circumstances,
recognize taxable income if the Rights become exercisable for Common Stock (or other consideration) of the
Company or for common stock of the acquiring company as set forth above, or are exchanged as set forth above.
Other than those provisions relating to the principal economic terms of the Rights, any of the
provisions of the Rights Agreement may be amended by the Board of Directors of the Company before the
Distribution Date. After the Distribution Date, the provisions of the Rights Agreement may be amended by the
Board (in certain circumstances, with the concurrence of the Continuing Directors) in order to cure any
ambiguity, to make changes that do not adversely affect the interests of the holders of Rights (excluding the
interests of any Acquiring Person or an affiliate or associate of any such person), or to shorten or lengthen any
time period under the Rights Agreement; provided, however, that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not redeemable.
A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as an Exhibit
to a Registration Statement on Form 8-K dated as of April 15, 2003. 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.
FIRST FEDERAL FINANCIAL
CORPORATION OF KENTUCKY
and
ILLINOIS STOCK TRANSFER COMPANY
Rights Agent
----------
Rights Agreement
Dated as of April 15, 2003
TABLE OF CONTENTS
Section PAGE
- ------- ----
1. Certain Definitions.............................................................1
-------------------
2. Appointment of Rights Agent.....................................................5
---------------------------
3. Issue of Rights Certificates....................................................6
----------------------------
4. Form of Rights Certificates.....................................................7
---------------------------
5. Countersignature and Registration...............................................8
---------------------------------
6. Transfer, Split Up, Combination and Exchange of
------------------------------------------------
Rights Certificates; Mutilated, Destroyed, Lost or Stolen
---------------------------------------------------------
Rights Certificates.............................................................9
-------------------
7. Exercise of Rights; Purchase Price; Expiration Date of Rights..................10
-------------------------------------------------------------
8. Cancellation and Destruction of Rights Certificates............................11
---------------------------------------------------
9. Reservation and Availability of Capital Stock..................................12
---------------------------------------------
10. Preferred Stock Record Date....................................................13
---------------------------
11. Adjustment of Purchase Price, Number and Kind of Shares
--------------------------------------------------------
or Number of Rights 14
-------------------
12. Certificate of Adjusted Purchase Price or Number of Shares.....................21
----------------------------------------------------------
13. Consolidation, Merger or Sale or Transfer of Assets
----------------------------------------------------
or Earning Power 21
----------------
14. Fractional Rights and Fractional Shares........................................24
---------------------------------------
15. Rights of Action...............................................................25
----------------
16. Agreement of Rights Holders....................................................25
---------------------------
17. Rights Certificate Holder Not Deemed a Stockholder.............................26
--------------------------------------------------
18. Concerning the Rights Agent....................................................26
---------------------------
19. Merger or Consolidation or Change of Name of Rights Agent......................27
---------------------------------------------------------
20. Duties of Rights Agent.........................................................27
----------------------
21. Change of Rights Agent.........................................................29
----------------------
22. Issuance of New Rights Certificates............................................30
-----------------------------------
23. Redemption and Termination.....................................................30
--------------------------
24. Exchange.......................................................................31
--------
25. Notice of Certain Events.......................................................32
------------------------
26. Notices........................................................................33
-------
27. Supplements and Amendments.....................................................33
--------------------------
28. Successors.....................................................................34
----------
29. Determinations and Actions by the Board of Directors, etc......................34
---------------------------------------------------------
30. Benefits of this Agreement.....................................................34
--------------------------
31. Severability...................................................................34
------------
32. Governing Law..................................................................35
-------------
33. Counterparts...................................................................35
------------
34. Descriptive Headings...........................................................35
--------------------
Exhibit A -Form of Articles of Amendment
Exhibit B -- Form of Rights Certificate
Exhibit C -- Form of Summary of Rights
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
-------------------------
Release Date: April 16, 2003
For Further Information Contact: B. Keith Johnson
President & CEO
(270) 765-2131
FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
------------------------------------------------
DECLARES 10% STOCK DIVIDEND
-------------------------------
Elizabethtown, KY -- First Federal Financial Corporation of Kentucky (Nasdaq:FFKY) today announced a 10%
dividend on the Company's common stock. The stock dividend is payable on May 14, 2003 to shareholders of record
at the close of business on April 28, 2003. The stock dividend is in addition to the payment of First Federal's
regular quarterly cash dividends.
"We believed a stock dividend was an appropriate way to improve the liquidity of First Federal's common
stock and increase the return to our shareholders," said B. Keith Johnson, President & CEO of First Federal.
First Federal Financial Corporation of Kentucky is the parent bank holding company of First Federal
Savings Bank of Elizabethtown which was chartered in 1923. Today, the Bank serves Central Kentucky through its 13
full-service banking centers.
First Federal's stock is traded on the Nasdaq National Market under the symbol "FFKY." Market makers for
the stock are:
J.J.B. Hilliard, W.L. Lyons Company, Inc. Keefe, Bruyette & Woods, Inc.
Stifel Nicholas & Company Goldman, Sachs & Company
First Tennessee Securities Knight Securities, LP
Trident Securities Spear, Leeds & Kellog
Sandler O'Neill Howe Barnes Investments, Inc.
#####
EXHIBIT 99.2
FOR IMMEDIATE RELEASE
-------------------------
Release Date: April 16, 2003
For Further Information Contact: Rebecca Bowling, Corporate Secretary
(270) 765-2131
FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
------------------------------------------------
ADOPTS RIGHTS PLAN
----------------------
Elizabethtown, KY -- On April 16, 2003, the Board of Directors of First Federal Financial Corporation of
Kentucky (Nasdaq:FFKY) adopted a shareholder rights plan and declared a dividend of one right on each outstanding
share of FFKY common stock.
The shareholder rights plan is similar to shareholder protection plans that have been adopted by more
than 2,000 corporations, including over 200 financial institutions.
The rights dividend is payable on May 9, 2003 to shareholders of record on that date. In addition to
the rights dividend on currently outstanding shares, the plan provides for the automatic issuance of one right
with respect to each share of common stock issued after May 9, 2003.
"The rights plan was adopted to protect the interests of First Federal shareholders and to help ensure
that they receive fair treatment in the event of a takeover attempt," said B. Keith Johnson, President and CEO of
First Federal. "The rights plan is not intended to prevent an acquisition of the Company for a full and fair
price in a transaction that is in the best interests of the Company, its shareholders and other constituencies
the Board may consider. The rights are not being distributed in response to any effort to acquire control of the
Company and the Board is not aware of any such effort."
Until separate rights certificates are issued following a triggering event, the rights will be evidenced
by FFKY common stock certificates, will automatically trade with the common stock, and will not be exercisable.
A triggering event would generally be the attempt by someone or group to acquire 15% or more of First Federal's
outstanding common shares.
Following the acquisition of 15% or more of First Federal's outstanding common shares by an Acquiring
Person, each right (other than rights held by an Acquiring Person) will entitle its holder to purchase, for the
$90 exercise price, a number of shares of FFKY common stock having a market value of twice the exercise price.
However, any rights held by an Acquiring Person cannot be exercised. The rights plan provides additional
shareholder protection should the rights be triggered.
First Federal may redeem rights for $0.01 per right at any time.
"The plan provides our Board of Directors flexibility in dealing with any takeover action that might
occur," said Mr. Johnson. "It would not impede any transaction that the Board feels is in the best interests of
First Federal and its shareholders. On the other hand, the dilutive consequences of triggering the rights should
be a deterrent to actions that are not in the best interests of First Federal and its shareholders. It is
currently the view of our Board of Directors that it would be in the best interests of First Federal and its
shareholders for our Company to remain an independent institution committed to providing a full range of
financial services to the Kentucky communities it currently serves."
The issuance of rights has no financial effect on First Federal, is not dilutive to shareholders, is not
taxable to the Company or its shareholders, and will not change the way in which First Federal common shares are
traded. Rights are not exercisable until the distribution date and will expire at the close of business on May
9, 2013, unless earlier redeemed by First Federal.
First Federal Financial Corporation of Kentucky is the parent bank holding company of First Federal
Savings Bank of Elizabethtown which was chartered in 1923. Today, the Bank serves Central Kentucky through its 13
full-service banking centers.
First Federal's stock is traded on the Nasdaq National Market under the symbol "FFKY." Market makers for
the stock are:
J.J.B. Hilliard, W.L. Lyons Company, Inc. Keefe, Bruyette & Woods, Inc.
Stifel Nicholas & Company Goldman, Sachs & Company
First Tennessee Securities Knight Securities, LP
Trident Securities Spear, Leeds & Kellog
Sandler O'Neill Howe Barnes Investments, Inc.
#####
