Registration
No. 333-151131
|
SECURITY
FEDERAL CORPORATION
|
(Exact Name of
Registrant as Specified in Its
Charter)
|
South
Carolina
(State
or Other Jurisdiction
of
Incorporation or Organization)
|
6035
(Primary
Standard Industrial
Classification
Code Number)
|
57-
08580504
(I.R.S.
Employer
Identification
Number)
|
238 Richland Avenue, West,
Aiken, South Carolina 29801; (803)
641-3000
|
(Address,
Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive
Offices)
|
Timothy
W. Simmons, President and CEO
|
Security Federal
Corporation
|
238 Richland Avenue,
West
|
Aiken,
South Carolina 29801; (803) 641-3000
|
(Address,
Including Zip Code, and Telephone Number, Including Area Code, of Agent
for Service)
|
John
F. Breyer, Jr., Esquire
Breyer
& Associates PC
8180
Greensboro Drive, Suite 785
McLean,
Virginia 22102
(703)
883-1100
|
Dave
M. Muchnikoff, P.C.
Silver,
Freedman & Taff, L.L.P.
3299
K Street, N.W., Suite 100
Washington,
D.C. 20007
(202)
295-4500
|
Large
accelerated filer
o
|
Accelerated
filer
o
|
||
Non-accelerated
filer
o
(Do not check if
a smaller reporting company)
|
Smaller
reporting company
x
|
Title
of each class of
securities
to be registered
|
Amount
to
be
registered
|
Proposed
maximum
offering
price
per
share
|
Proposed
maximum
aggregate
offering
price
(1)
|
Amount
of
registration
fee
|
8.0%
Convertible Senior Debentures Due 2029
|
$15,000,000
|
100%
|
$15,000,000
|
$837
|
Common
Stock, par value $.01 per share
|
750,000
shares
|
(2)
|
(2)
|
N/A
(2)
|
(2) Pursuant
to Rule 457(i), such indeterminate amount of shares as may be issuable
upon conversion of the debentures, including such additional shares as may
be issuable as a result of adjustments to the conversion
price.
|
Price
to Public(1)
|
Proceeds
to Security Federal Corporation(1)(2)
|
|||||||
Per
Debenture
|
100 | % | 100 | % | ||||
Per
Minimum
Purchase
|
$ | 5,000 | $ | 5,000 | ||||
Total
Minimum
|
$ | 5,000,000 | $ | 5,000,000 | ||||
Total Maximum
|
$ | 15,000,000 | $ | 15,000,000 | ||||
Total
|
·
|
Annual
Report on Form 10-K for the fiscal year ended March 31,
2009.
|
Debentures
Offered
|
Up
to $15.0 million aggregate principal amount of 8.0% Convertible Senior
Debentures due 2029.
|
|
Maturity
Date
|
December
1, 2029
|
|
Interest
Payment Dates
|
June
1 and December 1 of each year, commencing December 1,
2009.
|
|
Conversion
Rights
|
The
debentures are convertible into our common stock at any time prior to
maturity, unless previously redeemed. The debentures are convertible into
our common stock at a conversion rate of 50 shares of common stock for
each $1,000 principal amount of debentures (equivalent to a conversion
price of $20.00 per share), subject to adjustment in certain events
described herein, unless previously redeemed. See "Description of the
Debentures - Conversion Rights."
|
|
Optional
Redemption by us
|
The
debentures may be redeemed at our option, whole or in part, at any time on
or after December 1, 2019 at the redemption price equal to 100% of the
principal amount of the debentures to be redeemed, plus accrued and unpaid
interest, if any, to but excluding the redemption date. See "Description
of the Debentures - Optional Redemption."
|
|
Mandatory
Redemption
|
None.
|
|
Fundamental
change
|
If
at any time after the earlier of (i) December 19, 2011 and (ii) the date
on which all of the shares of the Series A Preferred Stock have been
redeemed by us or transferred by Treasury to third parties, we undergo a
fundamental change (as defined herein), holders may require us to
repurchase all or a portion of their debentures at a repurchase price
equal to 101% of the principal amount of the debentures to be repurchased
plus any accrued and unpaid interest, if any, to, but excluding, the
repurchase date. See "Description of the Debentures–Fundamental Change
Permits Holders to Require Us to Repurchase Debentures."
|
Ranking | The debentures will rank: |
●
|
senior in right of payment to all our existing and future subordinated indebtedness, including our $5.2 million of floating rate junior subordinated deferrable interest debentures due 2036; |
● | equal in right of payment to all our present and future unsecured indebtedness that is not expressly subordinated; and |
● | effectively subordinated to all of our subsidiaries' obligations (including secured and unsecured obligations) and subordinated in right of payment to our secured obligations, to the extent of the assets securing such obligations. |
As of March 31, 2009, we had no indebtedness senior or equal in right of payment to the dedentures. While the indenture governing the terms and conditions of the debentures prohibits us from incurring unsecured indebtedness that would be senior in right of payment to the debentures, it does not otherwise prohibit or limit the incurrence of additional indebtedness. Because Security Federal Corporation is a corporation without significant assets, other than its equity interest in the Bank, in a bankruptcy or liquidation proceeding, claims of holders of the debentures may be satisfied solely from the equity interest in the Bank remaining after satisfaction of all claims of creditors of the Bank (including depositors). |
Sinking Fund | None. |
Covenants | The debentures and the related indenture do not contain any financial maintenance or similar covenants. However, the indenture, among its other provisions, restricts our ability to grant liens, enter into certain transactions with affiliates, dispose of the Bank or its assets, pay dividends on, or repurchase our common stock under certain circumstances, and prohibits us from consolidating or mergin with another entity unless: |
●
|
the other entity assumes our obligations under the indenture, |
●
|
immediately after the merger or consolidation takes effect, we will not be in default and no event which, after notice or lapse of time or both, would become a default, under the indenture, and |
●
|
certain other conditions are met including delivery by us to the indenture trustee of an appropriate opinion of counsel. See "Description of te Debentures - Consolidation, Merger and Sale of Assets." |
Rights of Acceleration |
If an
event of default has occurred and is continuing, the trustee or the
holders of at least 25% in pricipal amount of the then outstanding
debentures may declare the principal amount of all the debentures,
tegether with accrued but unpaid interest thereon, to be immediately due
and payable, subject in certain circumstances to rescission or waiver by
the holders of at least a majority in principal amount of
debentures. See "Description of the Debentures - Events of
Default."
|
Use of Proceeds |
We intend
to utilize up to $5.0 million of the net proceeds to repay a line of
credit with another financial institution. The unsecured line of
credit has an interest rate equal to one month LIBOR plus 2.0%. At
March 31, 2009 the interest rate was 2.52%. We intend to utilize any
remaining net proceeds for general corporate purposes, which may include
future acquisitions as well as investments in or extensions of credit to
Security Federal Bank and our existing or future subsidiaries. See
"Use of Proceeds."
|
Common Stock Outstanding |
At March
31, 2009, there were 2,459,595 shares of Security Federal Corporation
common stock issued and outstanding and 18,000 shares of our preferred
stock issued and outstanding, all of which consisted of our Series A
Preferred Stock, which we issued, along with a ten-year warrant to
purchase 137,966 shares of our common stock, to Treasury on December 19,
2008 pursuant to Treasury's Troubled Asset Relief Program Capital Purchase
Program. In addition, an aggregate of 100,500 shares of common stock
were issuable upon exercise of oustanding stock options at March 31, 2009,
none of which had an exercise price less than the market price of the
common stock as of that date.
|
Risk Factors |
See "Risk
Factors."
|
Listing | It is not our intention to list the debentures on any securities exchange. Our common stock is quoted on the OTC Bulletin Board under the symbol "SFDL.OB". |
●
|
We
potentially face increased regulation of our industry. Compliance with
such regulation may increase our costs and limit our ability to pursue
business opportunities.
|
●
|
Our
ability to assess the creditworthiness of our customers may be impaired if
the models and approaches we use to select, manage and underwrite our
customers become less predictive of future
behaviors.
|
●
|
The
process we use to estimate losses inherent in our loan and investment
portfolios requires difficult, subjective and complex judgments, including
forecasts of economic conditions, particularly with respect to how these
economic conditions might impair the ability of our borrowers and trust
preferred securities issuers to repay their debts. The level of
uncertainty concerning economic conditions may adversely affect the
accuracy of our estimates which may, in turn, impact the reliability of
the process.
|
●
|
Competition
in our industry could intensify as a result of the increasing
consolidation of financial services companies in connection with current
market conditions.
|
·
|
incentive
compensation arrangements may not encourage officers to take unnecessary
risks;
|
·
|
any
bonus or incentive compensation paid to an officer based on statements of
earnings, gains or other criteria that are later proved to be materially
inaccurate must be repaid (known as "clawback");
and
|
·
|
payments
to an officer upon termination of employment may not exceed 2.99 times the
officer's base amount (as defined in Section 280G of the Internal Revenue
Code of 1986) (known as a "golden parachute
payment").
|
·
|
a
prohibition on any compensation plan that would encourage manipulation of
reported earnings;
|
·
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subjecting
bonus, incentive and retention payments made to the named executive
officers and the next 20 most highly compensated employees to recovery if
based on statements of earnings, revenues, gains or other criteria that
are later found to be materially
inaccurate;
|
·
|
a
prohibition on making golden parachute payments (in any amount) to the
named executive officers and the next five most highly compensated
employees for departure from us other than compensation earned for
services rendered or accrued benefits;
and
|
·
|
a
prohibition on paying bonus, incentive or retention compensation to the
named executive officers, other than certain awards of long-term
restricted stock or bonuses payable under existing employment
agreements.
|
·
|
loan
delinquencies may increase;
|
·
|
problem
assets and foreclosures may
increase;
|
·
|
demand
for our products and services may decline;
and
|
·
|
collateral
for loans made by us, especially real estate, may decline in value, in
turn reducing a customer's borrowing power and reducing the value of
assets and collateral securing our
loans.
|
·
|
require
us to maintain any financial ratios or specific levels of net worth,
revenues, income, cash flow or liquidity and, accordingly, does not
protect holders of the debentures in the event that we experience
significant adverse changes in our financial condition or results of
operations;
|
·
|
limit
our subsidiaries' ability to incur indebtedness, which could effectively
rank senior to the debentures;
|
·
|
limit
our ability to incur substantial secured indebtedness that would
effectively rank senior to the debentures to the extent of the value of
the assets securing the
indebtedness;
|
·
|
limit
our ability to incur indebtedness that is equal in right of payment to the
debentures;
|
·
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restrict
our subsidiaries' ability to issue securities or otherwise incur
indebtedness that would be senior to our equity interests in our
subsidiaries;
|
·
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restrict
our ability to repurchase or prepay our securities;
or
|
·
|
restrict
our ability to make investments or to repurchase or pay dividends or make
other payments in respect of our common stock or other securities ranking
junior to the debentures.
|
·
|
actual
or anticipated quarterly fluctuations in our operating and financial
results;
|
·
|
developments
related to investigations, proceedings or litigation that involve
us;
|
·
|
actions
of our current shareholders, including sales of common stock by existing
shareholders and our directors and executive
officers;
|
·
|
fluctuations
in the stock prices and operating results of our
competitors;
|
·
|
regulatory
developments; and
|
·
|
developments
related to the financial services
industry.
|
At
Or For The Year Ended March 31,
|
|||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||
Key
Financial Ratios:
|
|||||||||||
Interest
Rate Spread Information:
|
|||||||||||
Average
During
Period
|
2.45%
|
2.44%
|
2.47%
|
2.52%
|
2.44%
|
||||||
End
Of
Period
|
2.58%
|
2.14%
|
2.51%
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2.59%
|
2.45%
|
||||||
Other
Data:
|
|||||||||||
Net
Interest Margin (Net Interest Income/Average Earning
Assets)
|
2.63%
|
2.69%
|
2.76%
|
2.79%
|
2.64%
|
||||||
Average
Interest-Earning Assets To
Average
Interest-Bearing
Liabilities
|
105.80%
|
106.30%
|
108.00%
|
110.25%
|
109.07%
|
||||||
Common
Equity To Total
Assets
|
4.98%
|
5.65%
|
5.78%
|
5.71%
|
5.99%
|
||||||
Non-Performing
Assets Total Assets
(2)
|
1.51%
|
0.81%
|
0.15%
|
0.20%
|
0.42%
|
||||||
Return
On Assets (Ratio Of Net Income To Average Total Assets)
|
0.24%
|
0.54%
|
0.59%
|
0.62%
|
0.63%
|
||||||
Return
On Common Equity (Ratio Of Net Income To Average Common
Equity)
|
4.72%
|
9.54%
|
10.24%
|
10.27%
|
10.28%
|
||||||
Common
Equity To Assets Ratio (Ratio Of Average Common Equity To Average Total
Assets)
|
5.10%
|
5.66%
|
5.78%
|
6.03%
|
6.09%
|
||||||
Dividend
Pay-Out Ratio On Common
Shares
|
36.59%
|
16.90%
|
15.11%
|
10.67%
|
7.96%
|
||||||
Bank
Regulatory Capital Ratios:
|
|||||||||||
Tier
1 (core) capital (to tangible
assets)
|
7.0%
|
6.3%
|
6.2%
|
6.0%
|
6.1%
|
||||||
Total
risk-based capital (to risk-weighted
assets)
|
12.2%
|
10.6%
|
10.7%
|
10.9%
|
11.8%
|
||||||
Tier
1 risk-based capital (to risk-weighted
assets)
|
10.9%
|
9.4%
|
9.5%
|
9.7%
|
10.5%
|
(1)
|
Includes
loans held for sale.
|
(2)
|
Non-performing
assets consist of non-accrual loans and repossessed
assets.
|
·
|
statements
of our goals, intentions and
expectations;
|
·
|
statements
regarding our business plans, prospects, growth and operating
strategies;
|
·
|
statements
regarding the quality of our loan and investment portfolios;
and
|
·
|
estimates
of our risks and future costs and
benefits.
|
·
|
the
credit risks of lending activities, including changes in the level and
trend of loan delinquencies and write
offs;
|
·
|
changes
in general economic conditions, either nationally or in our market area,
that are worse than expected;
|
·
|
changes
in the levels of general interest rates, deposit interest rates, deposit
flows, our net interest margin and funding
sources;
|
·
|
potential
changes in direction, volatility and relative movement (basis risk) of
interest rates, which may affect demand for our products and the
management and success of our interest rate risk management
strategies;
|
·
|
fluctuations
in the demand for loans, the number of unsold homes and other properties
and fluctuations in real estate values in our market
areas;
|
·
|
a
large percentage of our loans are collateralized by residential and
commercial real estate, and an adverse change in the residential or
commercial real estate market may result in losses and adversely affect
our portfolio;
|
·
|
our
ability to manage loan delinquency rates, which may be impacted
by deterioration in the housing real estate market, that may
lead to increased losses and non-performing assets in our loan portfolios,
and may result in our allowance for loan losses not being adequate to
cover actual losses, and require us to materially increase our
reserves;
|
·
|
results
of examinations by the OTS, the Federal Deposit Insurance
Corporation, or other regulatory authorities, including the
possibility that any such regulatory authority may, among other things,
require us to increase our reserve for loan losses, write-down assets, or
affect our ability to borrow funds or maintain or increase deposits, which
could adversely affect our liquidity and
earnings;
|
·
|
our
ability to control operating costs and
expenses;
|
·
|
the
use of estimates in determining fair value of certain of our assets, which
estimates may prove to be incorrect and result in significant declines in
valuation;
|
·
|
difficulties
in reducing risk associated with the loans on our balance
sheet;
|
·
|
staffing
fluctuations in response to product demand or the implementation of
corporate strategies that affect our work force and potential associated
charges;
|
·
|
the
network and computer systems on which we depend could fail or experience a
security breach;
|
·
|
our
ability to retain key members of our senior management
team;
|
·
|
costs
and effects of litigation, including settlements and
judgments;
|
·
|
increased
competitive pressures among financial services
companies;
|
·
|
changes
in consumer spending, borrowing, and savings
habits;
|
·
|
legislative
or regulatory changes that adversely affect our business, including
changes in the interpretation of regulatory capital or other
rules;
|
·
|
the
availability of resources to address changes in laws, rules, or
regulations or to respond to regulatory
actions;
|
·
|
adverse
changes in the securities markets;
|
·
|
inability
of key third-party providers to perform their obligations to
us;
|
·
|
the
amount of time to lease excess space in buildings we
own;
|
·
|
changes
in accounting policies and principles, as may be adopted by the financial
institution regulatory agencies or the Financial Accounting Standards
Board, or their application to our business or final audit adjustments,
including additional guidance and interpretation on accounting issues and
details of the implementation of new accounting
methods;
|
·
|
the
economic impact of war or terrorist activities;
and
|
·
|
other
economic, competitive, governmental, regulatory, and technological factors
affecting our operations, pricing, products, and services and the other
risks described elsewhere in this
prospectus.
|
·
|
market
and economic factors such as the price at which the common stock is
trading in the market, the volume of trading, the attractiveness of other
investment alternatives in terms of the rate of return and risk involved
in the investment, the ability to increase the book value and/or earnings
per share of the remaining outstanding shares, and the effect on our
return on equity;
|
·
|
the
avoidance of dilution to stockholders by not having to issue additional
shares to cover the exercise of stock options or to fund employee stock
benefit plans; and
|
·
|
any
other circumstances in which repurchases would be in the best interests of
Security Federal Corporation and its
stockholders.
|
·
|
reducing
our overall market value;
|
·
|
increasing
the overall cost of capital;
|
·
|
promoting
a temporary demand for common stock;
and
|
·
|
increasing
the percentage of shares outstanding held by stockholders, including
management.
|
Fiscal
Year Ended March 31,
|
|||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
|||||
Ratio
of earnings to fixed charges:
|
|||||||||
Including
interest on
customer
deposits
|
114.1x
|
121.5x
|
126.2x
|
135.0x
|
145.3x
|
||||
Excluding
interest on
customer
deposits
|
326.2x
|
432.0x
|
453.4x
|
476.2x
|
439.6x
|
Bid
Prices
|
Cash
Dividends
|
|||||
High
|
Low
|
Declared
|
||||
Fiscal 2007 Quarter
Ended
|
||||||
June
30
|
$
|
25.50
|
$
|
22.70
|
$
|
0.06
|
September
30
|
23.50
|
22.10
|
0.06
|
|||
December
31
|
24.00
|
23.00
|
0.06
|
|||
March
31
|
25.00
|
23.30
|
0.06
|
|||
Fiscal 2008 Quarter
Ended
|
||||||
June
30
|
24.75
|
24.00
|
0.07
|
|||
September
30
|
24.85
|
24.10
|
0.07
|
|||
December
31
|
24.15
|
22.75
|
0.07
|
|||
March
31
|
23.00
|
23.00
|
0.07
|
|||
Fiscal 2009 Quarter
Ended
|
||||||
June
30
|
23.05
|
22.50
|
0.08
|
|||
September
30
|
22.85
|
20.00
|
0.08
|
|||
December
31
|
20.00
|
15.75
|
0.08
|
|||
March
31
|
20.00
|
12.25
|
-
|
At
March 31, 2009
|
|||||||||||
Actual
|
As
Adjusted
$5.0
million
(minimum)
(1)
|
As
Adjusted
$15.0
million
(maximum)
(1)
|
|||||||||
(In
Thousands)
|
|||||||||||
Indebtedness
|
$
|
9,942
|
$
|
9,942
|
$
|
9,942
|
|||||
Convertible
Senior Debentures due 2029
|
--
|
5,000
|
15,000
|
||||||||
Total
Indebtedness
|
9,942
|
14,942
|
24,942
|
||||||||
Stockholders'
Equity:
|
|||||||||||
Serial
preferred stock, $.01 par value - 200,000 shares authorized, 18,000 shares
of Series A Preferred Stock outstanding
|
17,620
|
17,620
|
17,620
|
||||||||
Warrants
issued in connection with Series A Preferred Stock
|
400
|
400
|
400
|
||||||||
Common
stock, $.01 par value - 5,000,000 shares authorized, 2,459,595 shares
issued and
outstanding
(2)
|
26
|
26
|
26
|
||||||||
Additional
paid-in capital
|
5,299
|
5,299
|
5,299
|
||||||||
Retained
earnings
|
48,078
|
48,078
|
48,078
|
||||||||
Treasury
stock – 200,933 shares, at cost
|
(4,331)
|
(4,331)
|
(4,331)
|
||||||||
Total
stockholders' equity
|
67,092
|
67,092
|
67,092
|
||||||||
Total
capitalization
|
$
|
77,034
|
82,034
|
92,034
|
(1)
|
Reflects
the issuance of the debentures offered hereby. In addition, the table
assumes the debentures have not been converted into common
stock.
|
(2)
|
Excludes
50,000 shares reserved for issuance pursuant to Security Federal
Corporation's stock option plans, 137,966 reserved for issuance upon
exercise of the warrant issued to Treasury, and up to 750,000 shares
reserved for issuance upon conversion of the debentures offered
hereby.
|
·
|
dividends
(and other distributions) payable in common stock on any class of capital
stock of Security Federal
Corporation;
|
·
|
the
issuance to all holders of common stock of rights, warrants or options
entitling them to subscribe for or purchase common stock at less than the
current market price (determined as provided in the
indenture);
|
·
|
subdivisions,
combinations and reclassifications of common
stock;
|
·
|
distributions
to all holders of common stock of evidences of indebtedness or assets
(including securities, but excluding those dividends, rights, warrants,
options and distributions referred to above and dividends and
distributions paid exclusively in cash) of Security Federal
Corporation;
|
·
|
distributions
consisting exclusively of cash (excluding any cash portion of
distributions referred to in the immediately preceding bullet point or
cash distributed upon a merger or consolidation) to all holders of common
stock in an aggregate amount that, combined together with (x) all other
such all cash distributions made within the preceding 12 months in respect
of which no adjustment has been made and (y) the aggregate of any cash and
the fair market value of other consideration payable in respect of any
tender offer by Security Federal Corporation or any of its subsidiaries
for common stock concluded within the preceding 12 months in respect of
which no adjustment has been made, exceeds 10% of Security Federal
Corporation's market capitalization (being the product of the current
market price of the common stock on the date for the determination of
holders of shares of common stock entitled to receive such distribution
times the number of shares of common stock then outstanding);
and
|
·
|
the
purchase of common stock pursuant to a tender offer made by Security
Federal Corporation or any of its subsidiaries which involves an aggregate
consideration that, together with (x) the aggregate of any cash and the
fair market value of consideration payable in any other tender offer by
Security Federal Corporation or any of its subsidiaries for common stock
expiring within the 12 months preceding such tender offer in respect of
which no adjustment has been made and (y) the aggregate amount of any such
all-cash distributions referred to in the immediately preceding bullet
point above to all holders of common stock within the 12 months preceding
the expiration of such tender offer in respect of which no adjustments
have been made, exceeds 10% of Security Federal Corporation's market
capitalization on the expiration of such tender
offer.
|
(1)
|
a
"person" or "group" within the meaning of Section 13(d) of the
Securities Exchange Act of 1934, or the Exchange Act, other than us, our
subsidiaries or our or their employee benefit plans, has become the direct
or indirect "beneficial owner," as defined in Rule 13d-3 under the
Exchange Act, of our common equity representing more than 50% of the
voting power of our common equity;
|
(2)
|
consummation
of (A) any recapitalization, reclassification or change of our common
stock (other than changes resulting from a subdivision or combination) as
a result of which our common stock will be converted into, or exchanged
for, stock, other securities, other property or assets or (B) any
share exchange, consolidation or merger of us pursuant to which our common
stock will be converted into cash, securities or other property or any
sale, lease or other transfer in one transaction or a series of
transactions of all or substantially all of the consolidated assets of us
and our subsidiaries, taken as a whole, to any person other than one of
our subsidiaries; provided, however, that a share exchange, consolidation
or merger transaction where the holders of more than 50% of all classes of
our common equity immediately prior to such transaction own, directly or
indirectly, more than 50% of all classes of common equity of the
continuing or surviving corporation or transferee or the parent thereof
immediately after such event will not constitute a fundamental
change;
|
(3)
|
continuing
directors cease to constitute at least a majority of our board of
directors (or, if applicable, a successor person to us);
or
|
(4)
|
our
shareholders approve any plan or proposal for the liquidation or
dissolution of us.
|
·
|
the
events causing the fundamental
change;
|
·
|
the
date of the fundamental change;
|
·
|
the
last date on which a holder may exercise the repurchase
right;
|
·
|
the
fundamental change repurchase
price;
|
·
|
the
fundamental change repurchase date;
|
·
|
the
name and address of the paying agent and the conversion agent, if
applicable;
|
·
|
if
applicable, the applicable conversion rate and any adjustments to the
applicable conversion rate;
|
·
|
if
applicable, that the debentures with respect to which a fundamental change
repurchase notice has been delivered by a holder may be converted only if
the holder withdraws the fundamental change repurchase notice in
accordance with the terms of the indenture;
and
|
·
|
the
procedures that holders must follow to require us to repurchase their
debentures.
|
·
|
the
certificate numbers of your debentures to be delivered for
repurchase;
|
·
|
the
portion of the principal amount of debentures to be repurchased, which
must be $1,000 or a multiple thereof;
and
|
·
|
that
the debentures are to be repurchased by us pursuant to the applicable
provisions of the debentures and the
indenture.
|
·
|
the
principal amount of the withdrawn
debentures;
|
·
|
the
certificate numbers of the withdrawn debentures;
and
|
·
|
the
principal amount, if any, that remains subject to the repurchase notice,
which principal amount must be equal to $1,000 or an integral multiple of
$1,000.
|
·
|
the
debentures will cease to be outstanding and interest, including defaulted
interest, if any, will cease to accrue;
and
|
·
|
all
other rights of the holder will terminate (other than the right to receive
the fundamental change repurchase price and previously accrued and unpaid
interest upon delivery or transfer of the
debentures).
|
·
|
comply
with the provisions of the tender offer rules under the Exchange Act that
may then be applicable; and
|
·
|
file
a Schedule TO or any other required schedule under the Exchange
Act.
|
·
|
senior
in right of payment to all our existing and future unsecured indebtedness
if the appropriate instruments defining such indebtedness provide that
such indebtedness is subordinate in right of payment to the debentures,
including our $5.2 million of floating rate junior subordinated deferrable
interest debentures due 2036;
|
·
|
equal
in right of payment to all of our present and future unsecured
indebtedness that is not expressly subordinated;
and
|
·
|
effectively
subordinated to all of our subsidiaries' obligations (including secured
and unsecured obligation) and subordinated in right of payment to our
secured obligations, to the extent of the assets securing each
obligations.
|
·
|
declare
or pay any dividend or make any other distribution on any junior
securities, except dividends or distributions payable in junior
securities; or
|
·
|
purchase,
redeem or otherwise acquire or retire for value any junior securities,
except junior securities acquired upon conversion thereof into other
junior securities; or
|
·
|
permit
a subsidiary to purchase, redeem or otherwise acquire or retire for value
any junior securities;
|
·
|
shares
of common stock of Security Federal
Corporation;
|
·
|
shares
of preferred stock of Security Federal
Corporation;
|
·
|
shares
of any other class or classes of capital stock of Security Federal
Corporation;
|
·
|
any
other non-debt securities of Security Federal Corporation (whether or not
such other securities are convertible into junior securities);
or
|
·
|
unsecured
debt securities of Security Federal Corporation (other than the
debentures) as to which, in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is provided that such
debt securities do not rank equal in right of payment with the
debentures.
|
·
|
certain
events of bankruptcy of Security Federal Corporation or receivership of
any major depository institution subsidiary (as defined in the
Indenture);
|
·
|
default
for 30 days in payment of interest on any
debenture;
|
·
|
default
in payment of principal of (or premium, if any, on) or the fundamental
change repurchase price on any debenture when the same shall become due
and payable, whether at stated maturity, by acceleration or
otherwise;
|
·
|
failure
by Security Federal Corporation for 60 days after due notice to remedy a
default in performance or the breach of any material representation,
covenant or warranty in the
indenture;
|
·
|
failure
by Security Federal Corporation or any subsidiary to pay indebtedness for
money borrowed in an aggregate principal amount exceeding $5.0 million
when due or upon the expiration of any applicable period of grace with
respect to such principal amount; or acceleration of the maturity of any
indebtedness of Security Federal Corporation or any subsidiary for
borrowed money in excess of $5.0 million if such failure to pay or
acceleration results from a default under the instrument giving rise to,
or securing, such indebtedness and is not annulled within 10 days after
due notice has been given, unless the validity of such default is
contested by Security Federal Corporation in good faith by appropriate
proceedings;
|
·
|
the
failure of the Bank to meet the criteria required for classification as an
"adequately capitalized" insured depository institution under the
regulations of the FDIC if such failure is not cured within a period of 90
days from the date of such failure or, if such failure is the result of a
change in statute or regulation, such failure is not cured within a period
of 180 days from the date of such failure;
or
|
·
|
at
such time as the Bank becomes subject to a statutory or regulatory
prohibition against the payment of dividends or other capital
distributions and such prohibition is not removed or otherwise made
inapplicable within a period of 90 days from the date on which such
limitation became effective.
|
·
|
the
successor is a person organized and validly existing under the laws of any
domestic jurisdiction;
|
·
|
the
successor person, if other than Security Federal Corporation, assumes
Security Federal Corporation's obligations with respect to the debentures
and under the indenture,
|
·
|
after
giving effect to the transaction, no event of default, and no event which,
after notice or lapse of time or both would become an event of default,
shall have occurred and be continuing;
and
|
·
|
certain
other conditions are met, including delivery by us to the indenture
trustee of an appropriate opinion of
counsel.
|
·
|
the
holder has previously given written notice to the trustee of a continuing
event of default;
|
·
|
the
holders of not less than 25% in principal amount of the outstanding
debentures shall have made written request to the trustee to institute
proceedings in respect of such event of
default;
|
·
|
the
holder(s) shall have offered to the trustee reasonable indemnity against
the costs, expenses and liabilities to be incurred in compliance with such
request;
|
·
|
the
trustee for 60 days after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding;
and
|
·
|
no
direction inconsistent with such written request has been given to the
trustee during such 60-day period by the holders of a majority in
principal amount of the outstanding
debentures.
|
·
|
in
the case of a transaction involving real property, the aggregate rental or
sale price of such real property shall be the fair market rental or sale
value of such real property as determined by a written opinion from a
certified expert with experience in appraising the terms and conditions of
the type of transaction or series of transactions for which approval is
required; and
|
·
|
in
all other cases, Security Federal Corporation delivers to the trustee a
written opinion of a certified expert with experience in appraising the
terms and conditions of the type of transaction or series of transactions
to the effect that the transaction or series of transactions are fair to
Security Federal Corporation or such subsidiary from a financial point of
view.
|
·
|
transactions
entered into pursuant to any agreement in effect on the date of the
indenture,
|
·
|
residential
mortgage, credit card or other consumer loans to an affiliate who is an
officer, director or employee of Security Federal Corporation or any of
its subsidiaries provided that such loan is made on terms and conditions
consistent with the practices and policies of the Bank as of the date of
the indenture, or
|
·
|
any
indemnification by Security Federal Corporation made pursuant to the
indemnification provisions contained in Security Federal Corporation's
articles of incorporation or bylaws as of the date of the
indenture.
|
·
|
change
the stated maturity of the principal of, or time of payment on any
installment of interest on, any
debenture;
|
·
|
reduce
the principal amount of, or interest on, any
debenture;
|
·
|
change
the currency of payment of principal of, or rate of interest on, any
debenture;
|
·
|
impair
the right to institute suit for the enforcement of any payment on or with
respect to any debenture;
|
·
|
adversely
affect the right to convert
debentures;
|
·
|
reduce
the fundamental change repurchase price of any debenture or amend or
modify in any manner adverse to the holders of debentures our obligation
to make such payment, whether through an amendment or waiver of provisions
in the indenture (including the definitions contained therein) or
otherwise;
|
·
|
change
the ranking of the debentures in a manner adverse to the holders of the
debentures;
|
·
|
reduce
the above-stated percentage of outstanding debentures necessary to modify
or amend the indenture; or
|
·
|
reduce
the percentage of aggregate principal amount of outstanding debentures
necessary for waiver of compliance with certain provisions of the
indenture or for waiver of certain
defaults.
|
·
|
cure
any ambiguity or correct any omission, defect or inconsistency in the
indenture, so long as such action will not materially and adversely affect
the interests of holders of the debentures; provided that any such
amendment made solely to conform the provisions of the indenture to this
prospectus supplement will be deemed not to adversely affect the interests
of holders of the debentures;
|
·
|
provide
for the assumption by a successor corporation, partnership, trust or
limited liability company of our obligations under the
indenture;
|
·
|
add
guarantees with respect to the
debentures;
|
·
|
secure
the debentures;
|
·
|
add
to our covenants for the benefit of the holders or surrender any right or
power conferred upon us;
|
·
|
make
any change that does not materially adversely affect the rights of any
holder; or
|
·
|
comply
with any requirement in connection with the qualification of the indenture
under the Trust Indenture Act.
|
·
|
depositing
with the trustee money and/or U.S. government obligations that, through
the payment of interest and principal in accordance with their terms, will
provide money in an amount sufficient in the opinion of a nationally
recognized firm of independent public accountants to pay and discharge
each installment of principal of and interest, if any, on the debentures
on the dates such installments of principal and interest are due in
accordance with the terms of the indenture and the debentures;
and
|
·
|
delivering
to the trustee an opinion of counsel to the effect that the holders of the
debentures will not recognize income, gain or loss for United States
federal income tax purposes as a result of the deposit and related
covenant defeasance.
|
·
|
amend
our articles of incorporation or the articles of amendment for the Series
A Preferred Stock to authorize or create or increase the authorized amount
of, or any issuance of, any shares of, or any securities convertible into
or exchangeable or exercisable for shares of, any class or series of stock
ranking senior to the Series A Preferred Stock with respect to the payment
of dividends and/or the distribution of assets on any liquidation,
dissolution or winding up of Security Federal Corporation;
or
|
·
|
amend
our articles of incorporation or the articles of amendment for the Series
A Preferred Stock in a way that materially and adversely affect the
rights, preferences, privileges or voting powers of the Series A Preferred
Stock; or
|
·
|
consummate a binding share
exchange or reclassification involving the Series A Preferred Stock or a
merger or consolidation of Security Federal Corporation with another
entity, unless (i) the shares of Series A Preferred Stock remain
outstanding or, in the case of a merger or consolidation in which Security
Federal Corporation is not the surviving or resulting entity, are
converted into or exchanged for preference securities of the surviving or
resulting entity or its ultimate parent, and (ii) the shares of
Series A Preferred Stock remaining outstanding or such preference
securities, have such rights, preferences, privileges, voting powers,
limitations and restrictions, taken as a whole, as are not materially less
favorable than the rights, preferences, privileges, voting powers,
limitations and restrictions of the Series A Preferred Stock prior to
consummation of the transaction, taken as a
whole
;
|
·
|
it
would result in a monopoly or substantially lessen
competition;
|
·
|
the
financial condition of the acquiring person might jeopardize the financial
stability of the institution; or
|
·
|
the
competence, experience or integrity of the acquiring person indicates that
it would not be in the interest of the depositors or of the public to
permit the acquisition of control by such
person.
|
·
|
tax
consequences to holders who may be subject to special tax treatment,
including dealers in securities or currencies, financial institutions,
regulated investment companies, real estate investment trusts, tax-exempt
entities, insurance companies, or traders in securities that elect to use
a mark-to-market method of accounting for their
securities;
|
·
|
tax
consequences to persons holding debentures or common stock as a part of a
hedging, integrated or conversion transaction or a straddle or persons
deemed to sell debentures or common stock under the constructive sale
provisions of the Code;
|
·
|
tax
consequences to U.S. holders (as defined below) of debentures or shares of
common stock whose "functional currency" is not the U.S.
dollar;
|
·
|
tax
consequences to investors in pass-through
entities;
|
·
|
alternative
minimum tax consequences, if any;
|
·
|
any
state, local or foreign tax consequences;
and
|
·
|
estate
or gift tax consequences, if any.
|
·
|
an
individual citizen or resident of the United
States;
|
·
|
a
corporation (or any other entity treated as a corporation for U.S. federal
income tax purposes) created or organized in or under the laws of the
United States, any state thereof or the District of
Columbia;
|
·
|
an
estate the income of which is subject to U.S. federal income taxation
regardless of its source; or
|
·
|
a
trust, if it
|
(1)
|
is
subject to the primary supervision of a court within the United States and
one or more United States persons have the authority to control all
substantial decisions of the trust,
or
|
(2)
|
has
a valid election in effect under applicable United States Treasury
regulations to be treated as a United States
person.
|
|
|
Amount(1)
|
|||
*
|
|
Registrant's
Legal Fees and Expenses
|
|
$
|
|
*
|
|
Registrant's
Accounting Fees and Expenses
|
|
||
*
|
|
Trustee
Fees and Expenses
|
|
||
*
|
|
Printing,
Postage and Mailing, EDGAR
|
|
||
*
|
|
Filing
Fees
|
|
||
*
|
Blue
Sky legal fees and filing fees
|
||||
*
|
|
Certificate
Printing
|
|
||
*
|
|
Other
|
|
||
*
|
|
Total
|
|
$
|
*
|
Amounts
to be included by amendment
|
|
(b)
|
Financial
Statement Schedules
|
|
(1)
|
To
file, during any period in which it offers or sales are being made, a
post-effective amendment to this registration
statement:
|
|
(i)
|
To
include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
|
|
(ii)
|
To
reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration
statement;
|
|
(iii)
|
To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration
statement.
|
|
(2)
|
That,
for the purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
|
|
(3)
|
To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
|
|
(4)
|
The
undersigned registrant hereby undertakes to provide to the underwriter at
the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriter
to permit prompt delivery to each
purchaser.
|
SECURITY FEDERAL CORPORATION | |
/s/Timothy W. Simmons | |
By: Timothy W. Simmons | |
President, Chief Executive Officer and Director |
3.2
|
Articles
of Amendment, including Certificate of Designation relating to the
Company’s Fixed Rate Cumulative Perpetual Preferred Stock
Series
A
(2)
|
4.2
|
Warrant
to purchase shares of the Company’s common stock dated December 19, 2008
(2)
|
4.3
|
Letter
Agreement (including Securities Purchase Agreement – Standard Terms,
attached as Exhibit A) dated December 19, 2008 between the Company and the
United States Department of the Treasury
(2)
|
4.4
|
Form
of Indenture with respect to the Registrant’s 8.0% Convertible Senior
Debentures Due 2029
|
4.5
|
Specimen
Convertible Senior Debenture Due 2029 (found in Sections 2.02 and 2.03 of
the Form of Indenture filed as Exhibit
4.4)
|
10.9
|
Form
of incentive stock option agreement and non-qualified stock option
agreement pursuant to the 2006 Stock Option Plan
(9)
|
99.1
|
Subscription
Order Form and Instructions
|
(1)
|
Included
as an exhibit to the Registrant’s 1998 Proxy Statement filed on June 26,
1998 and incorporated herein by
reference.
|
(2)
|
Incorporated
by reference to the Registrant’s Current Report on Form 8-K on December
23, 2008.
|
(3)
|
Included
as an exhibit to the Registrant’s Registration Statement on Form S-8 filed
on March 2, 2000 and incorporated herein by
reference.
|
(4)
|
Included
as an exhibit to the Registrant’s Registration Statement on Form 8-A filed
on August 12, 1987 and incorporated herein by
reference.
|
(5)
|
Filed
on June 28, 1993, as an exhibit to the Registrant's Annual Report on Form
10-KSB and incorporated herein by
reference.
|
(6)
|
Filed
as an exhibit to the Registrant's Quarterly Report on Form 10-QSB for the
quarter ended September 30, 1993 and incorporated herein by
reference.
|
(7)
|
Filed
on May 24, 2006 as an exhibit to the Registrant's Current Report on Form
8-K dated May 18, 2006 and incorporated herein by
reference.
|
(8)
|
Filed
on June 19, 2002 as an exhibit to the Registrant's Proxy Statement and
incorporated herein by reference.
|
(9)
|
Filed
on August 22, 2006, as an exhibit to the Registrant’s Registration
Statement on Form S-8 (Registration Statement No. 333-136813) and
incorporated herein by reference.
|
(10)
|
Filed
on June 20, 2008, as an exhibit to the Registrant’s Proxy Statement and
incorporated herein by reference.
|
(11)
|
Filed
on June 18, 2004 as an exhibit to the Registrant’s Proxy Statement and
incorporated herein by reference.
|
(12)
|
Filed
on May 24, 2006 as an exhibit to the Registrant’s Current
Report on Form 8-K and incorporated herein by
reference.
|
(13)
|
Filed
on June 27, 2007, as an exhibit to the Registrant’s Annual Report on Form
10-K and incorporated herein by
reference.
|
Trust
Indenture Act Section
|
Indenture
Section
|
||||
§
310 (a) (1)
|
609
|
||||
(a) (2)
|
609
|
||||
(a) (3)
|
Not
Applicable
|
||||
(a) (4)
|
Not
Applicable
|
||||
(a) (5)
|
609
|
||||
(b)
|
608;
610
|
||||
§
311 (a)
|
613
|
||||
(b)
|
613
|
||||
§
312 (a)
|
701;
702 (a)
|
||||
(b)
|
702
(b)
|
||||
(c)
|
702
(c)
|
||||
§
313 (a)
|
703
(a)
|
||||
(a) (4)
|
101;
703
|
||||
(b)
|
703
(a)
|
||||
(c)
|
703
(a)
|
||||
(d)
|
703
(b)
|
||||
§
314 (a)
|
704
|
||||
(b)
|
Not
Applicable
|
||||
(c) (1)
|
102
|
||||
(c) (2)
|
102
|
||||
(c) (3)
|
Not
Applicable
|
||||
(d)
|
Not
Applicable
|
||||
(e)
|
102
|
||||
§
315 (a)
|
601
|
||||
(b)
|
602
|
||||
(c)
|
601
|
||||
(d)
|
601
|
||||
(e)
|
514
|
||||
§
316 (a)
|
101
|
||||
(a) (1) (A)
|
502;
512
|
||||
(a) (1) (B)
|
513
|
||||
(a) (2)
|
Not
Applicable
|
||||
(b)
|
508
|
||||
(c)
|
104
(c)
|
||||
§
317 (a) (1)
|
503
|
||||
(a) (2)
|
504
|
||||
(b)
|
1003
|
||||
§
318 (a)
|
107
|
||||
Page
|
|
Recitals
of the Company
|
1
|
SECTION
101. Definitions
|
||
“Act”
|
2
|
|
“Affiliate”
|
2
|
|
“Authenticating
Agent”
|
2
|
|
“Bank”
|
2
|
|
“Bankruptcy
Law”
|
2
|
|
“Board
of Directors”
|
2
|
|
“Board
Resolution”
|
2
|
|
“Business
Day”
|
2
|
|
“Capital
Stock”
|
2
|
|
“Closing
Price”
|
2
|
|
“Commission”
|
2
|
|
“Common
Stock”
|
2
|
|
“Company”
|
3
|
|
“Company
Request” or “Company Order”
|
3
|
|
“Continuing
Director”
|
3
|
|
“Conversion
Agent”
|
3
|
|
“Conversion
Price”
|
3
|
|
“Corporate
Trust Office”
|
3
|
|
“Corporation”
|
3
|
|
“Date
of Issue”
|
3
|
|
“Default”
|
3
|
|
“Defaulted
Interest”
|
3
|
|
“Disinterested
Director”
|
3
|
|
“Event
of Default”
|
3
|
|
“Exchange
Act”
|
3
|
|
“Expiration
Time”
|
3
|
|
“FDIC”
|
3
|
|
“FRB”
|
3
|
|
“Fundamental
Change”
|
3
|
|
“Fundamental
Change Company Notice”
|
4
|
|
“Fundamental
Change Repurchase Date”
|
4
|
|
“Fundamental
Change Repurchase Notice”
|
4
|
|
“Fundamental
Change Repurchase Price”
|
4
|
|
“Holder"
|
4
|
|
“Indebtedness”
|
4
|
|
“indebtedness
for money borrowed”
|
5
|
|
“Indenture”
|
5
|
|
“Insured
Depositary Institution”
|
5
|
|
“Interest
Payment Date”
|
5
|
“Junior
Securities”
|
5
|
|
“Major
Depository Institution Subsidiary”
|
5
|
|
“Maturity”
|
5
|
|
“OTS”
|
5
|
|
“Officers'
Certificate”
|
5
|
|
“Opinion
of Counsel”
|
6
|
|
“Outstanding”
|
6
|
|
“Paying
Agent”
|
6
|
|
“Person”
|
6
|
|
“Place
of Payment”
|
6
|
|
“Predecessor
Security”
|
6
|
|
“Publicly
Traded Securities”
|
7
|
|
“Purchased
Shares”
|
7
|
|
“Redemption
Date”
|
7
|
|
“Redemption
Price”
|
7
|
|
“Regular
Record Date”
|
7
|
|
“Regulatory
Capital”
|
7
|
|
“Regulatory
Capital Requirement”
|
7
|
|
“Responsible
Officer”
|
7
|
|
“Security”
|
7
|
|
“Security
Register” and “Security Registrar”
|
7
|
|
“Special
Record Date”
|
7
|
|
“Stated
Maturity”
|
8
|
|
“Subsidiary”
|
8
|
|
“Trading
Day”
|
8
|
|
“Trustee”
|
8
|
|
“Trust
Indenture Act”
|
8
|
|
“Vice
President”
|
8
|
|
“Wholly
Owned Subsidiary”
|
8
|
|
SECTION
102. Compliance Certificates and Opinions
|
8
|
|
SECTION
103. Form of Documents Delivered to
Trustee
|
9
|
|
SECTION
104. Acts of Holders; Record Dates
|
9
|
|
SECTION
105. Notices, Etc., to Trustee and
Company
|
10
|
|
SECTION
106. Notice to Holders; Waiver
|
10
|
|
SECTION
107. Conflict with Trust Indenture Act
|
10
|
|
SECTION
108. Effect of Headings and Table of
Contents
|
11
|
|
SECTION
109. Successors and Assigns
|
11
|
|
SECTION
110. Separability Clause
|
11
|
|
SECTION
111. Benefits of Indenture
|
11
|
|
SECTION
112. Governing Law
|
11
|
|
SECTION
113. Legal Holidays
|
11
|
|
SECTION
114. Calculations in Respect of
Securities
|
11
|
SECTION
201. Forms Generally
|
12
|
SECTION
202. Form of Face of Security
|
12
|
SECTION
203. Form of Reverse of Security
|
13
|
SECTION
204. Form of Trustee's Certificate of
Authentication
|
17
|
SECTION
205. Form of Conversion Notice
|
17
|
SECTION
206. Form of Fundamental Change Repurchase
Notice
|
18
|
SECTION
207. Form of Assignment and Transfer
|
19
|
SECTION
301. Title and Terms
|
19
|
SECTION
302. Ranking
|
20
|
SECTION
303. Denominations
|
20
|
SECTION
304. Execution, Authentication, Delivery and
Dating
|
20
|
SECTION
305. Temporary Securities
|
21
|
SECTION
306. Registration; Registration of Transfer and
Exchange
|
21
|
SECTION
307. Mutilated, Destroyed, Lost and
Stolen
|
22
|
SECTION
308. Payment of Interest; Interest Rights
Preserved
|
22
|
SECTION
309. Persons Deemed Owners
|
24
|
SECTION
310. Cancellation
|
24
|
SECTION
311. Computation of Interest
|
24
|
SECTION
312. Authentication and Delivery of Original
Issue
|
24
|
SECTION
401. Discharge of Indenture
|
24
|
SECTION
402. Deposited Monies to be Held in Trust by
Trustee
|
25
|
SECTION
403. Paying Agent to Repay Monies Held
|
25
|
SECTION
404. Return of Unclaimed Monies
|
25
|
SECTION
405. Reinstatement
|
25
|
SECTION
501. Events of Default
|
26
|
SECTION
502. Acceleration of Maturity; Rescission and
Annulment
|
28
|
SECTION
503. Collection of Indebtedness and Suite for Enforcement
by Trustee
|
28
|
SECTION
504. Trustee May File Proofs of Claim
|
29
|
SECTION
505. Trustee May Enforce Claims Without Possession of
Securities
|
29
|
SECTION
506. Application of Money Collected
|
29
|
SECTION
507. Limitation on Suits
|
30
|
SECTION
508. Unconditional Right of Holders to Receive Principal,
Premium and Interest to Convert
|
30
|
SECTION
509. Restoration of Rights and Remedies
|
31
|
SECTION
510. Rights and Remedies Cumulative
|
31
|
SECTION
511. Delay or Omission Not Waiver
|
31
|
SECTION
512. Control by Holders
|
31
|
SECTION
513. Waiver of Past Defaults
|
31
|
SECTION
514. Undertaking for Costs
|
32
|
SECTION
515. Waiver of Stay or Extension Laws
|
32
|
SECTION
601. Certain Duties and Responsibilities
|
32
|
SECTION
602. Notice of Defaults
|
33
|
SECTION
603. Certain Rights of Trustee
|
34
|
SECTION
604. Not Responsible for Recitals or Issuance of
Securities
|
35
|
SECTION
605. May Hold Securities
|
35
|
SECTION
606. Money Held in Trust
|
36
|
SECTION
607. Compensation and Reimbursement
|
36
|
SECTION
608. Disqualification; Conflicting
Interests
|
37
|
SECTION
609. Corporate Trustee Required;
Eligibility
|
37
|
SECTION
610. Resignation and Removal; Appointment of
Successor
|
37
|
SECTION
611. Acceptance of Appointment by
Successor
|
38
|
SECTION
612. Merger, Conversion, Consolidation or Succession to
Business
|
38
|
SECTION
613. Preferential Collection of Claims Against
company
|
39
|
SECTION
614. Appointment of Authenticating Agent
|
39
|
SECTION
701. Company to Furnish Trustee Names and Addresses of
Holders
|
41
|
SECTION
702. Preservation of Information; Communications to
Holders
|
41
|
SECTION
703. Reports by Trustee
|
41
|
SECTION
704. Reports by Company
|
41
|
SECTION
801. Company May Consolidate, Etc., Only on Certain
Terms
|
42
|
SECTION
802. Successor Substituted
|
42
|
SECTION
901. Supplemental indentures Without Consent of
Holders
|
43
|
SECTION
902. Supplemental Indentures With Consent of
Holders
|
43
|
SECTION
903. Execution of Supplemental indentures
|
44
|
SECTION
904. Effect of Supplemental Indentures
|
44
|
SECTION
905. Conformity with Trust Indenture Act
|
45
|
SECTION
906. Reference in Securities to Supplemental
Indentures
|
45
|
SECTION
907. Notice to Holders of Supplemental
Indenture
|
45
|
SECTION
1001. Payment of Principal, Premium and
Interest
|
45
|
SECTION
1002. Maintenance of Office or Agency
|
45
|
SECTION
1003. Money for Security to Be Held in
Trust
|
45
|
SECTION
1004. Payment of Taxes and Other Claims
|
46
|
SECTION
1005. Maintenance of Properties
|
46
|
SECTION
1006. Corporate Existence of the Company and
Subsidiaries
|
47
|
SECTION
1007. Insurance
|
47
|
SECTION
1008. Limitations on Dividends, Redemptions,
Etc.
|
47
|
SECTION
1009. Restrictions on Issuance and Sale of Capital Stock
or Dispositions of the Bank
|
48
|
SECTION
1010. Limitations on Transactions with
Affiliates
|
48
|
SECTION
1011. Books and Records
|
48
|
SECTION
1012. Statement as to Compliance
|
48
|
SECTION
1013. Limitation on Indebtedness Senior to
Securities
|
48
|
SECTION
1014. Notice of Events of Default or
Defaults
|
49
|
SECTION
1015. Limitation on Liens on Bank
|
49
|
SECTION
1016. Compliance with Requirements of Article
Fourteen
|
49
|
SECTION
1017. Waiver of Certain Covenants
|
50
|
SECTION
1101. Right of Redemption
|
50
|
SECTION
1102. Applicability of Article
|
50
|
SECTION
1103. Election to Redeem; Notice to
Trustee.
|
50
|
SECTION
1104. Selection by Trustee of Securities to Be
Redeemed
|
50
|
SECTION
1105. Notice of Redemption
|
51
|
SECTION
1106. Deposit of Redemption Price
|
51
|
SECTION
1107. Securities Payable on Redemption
Date
|
51
|
SECTION
1108. Securities Redeemed in Part
|
52
|
SECTION
1201. Defeasance Upon Deposit of Monies or U.S.
Government Obligations
|
52
|
SECTION
1202. Deposited Monies and U.S. Government Obligations to
be Held in Trust
|
54
|
SECTION
1203. Repayment to Company
|
54
|
SECTION
1204. Inability of Trustee or Paying Agent to Apply
Money
|
54
|
SECTION
1301. Conversion Privilege and Conversion
Price
|
54
|
SECTION
1302. Exercise of Conversion Privilege
|
55
|
SECTION
1303. Fractions of Shares
|
56
|
SECTION
1304. Adjustment of Conversion Price
|
56
|
SECTION
1305. Notice of Adjustments of Conversion
Price
|
59
|
SECTION
1306. Notice of Certain Corporate Action
|
60
|
SECTION
1307. Company to Reserve Common Stock
|
60
|
SECTION
1308. Taxes on Conversions
|
61
|
SECTION
1309. Covenant as to Common Stock
|
61
|
SECTION
1310. Cancellation of Converted
Securities
|
61
|
SECTION
1311. Provisions in Case of Consolidation, Merger or Sale
of Assets
|
61
|
SECTION
1312. Trustee’s Disclaimer
|
62
|
SECTION
1401. Repurchase at Option of Holders Upon a Fundamental
Change
|
62
|
SECTION
1402. Effect of Fundamental Change Repurchase
Price
|
64
|
SECTION
1403. Withdrawal of Fundamental Change Repurchase
Notice
|
64
|
SECTION
1404. Deposit of Fundamental Change Repurchase
Price
|
65
|
SECTION
1405. Securities Repurchased in Whole or in
Part
|
65
|
SECTION
1406. Covenant to Comply With Securities Laws Upon
Repurchase of Securities
|
65
|
SECTION
1407. Repayment to the Company
|
65
|
(1)
|
the
terms defined in this Article have the meanings assigned to them in this
Article and include the plural as well as the
singular;
|
(2)
|
all
other terms used herein which are defined in the Trust Indenture Act,
either directly or by reference therein, have the meanings assigned to
them therein;
|
(3)
|
all
accounting terms not otherwise defined herein have the meanings assigned
to them in accordance with generally accepted accounting principles, and,
except as otherwise herein expressly provided, the term "generally
accepted accounting principles" or “GAAP” with respect to any computation
required or permitted hereunder shall mean such accounting principles as
are generally accepted in the United States at the date of such
computation; and
|
(4)
|
the
words "herein," "hereof" and "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
|
(1)
|
a
“person” or “group” within the meaning of Section 13(d) of the
Exchange Act other than the Company, its Subsidiaries or its or their
employee benefit plans becomes the direct or indirect “beneficial owner,”
as defined in Rule 13d-3 under the Exchange Act, of the Company’s common
equity representing more than 50% of the voting power of the Company’s
common equity;
|
(2)
|
consummation
of (A) any recapitalization, reclassification or change of the Common
Stock (other than changes resulting from a subdivision or combination) as
a result of which the Common Stock will be converted into, or exchanged
for, stock, other securities, other property or assets or (B) any
share exchange, consolidation or merger of the Company pursuant to which
the Common Stock will be converted into cash, securities or other property
or any sale, lease or other transfer in one transaction or a series of
transactions of all or substantially all of the consolidated assets of the
Company and its Subsidiaries, taken as a whole, to any person other than
one of the Company’s Subsidiaries;
provided
,
however, that a transaction where the holders of more than 50% of all
classes of the Company’s common equity immediately prior to such
transaction own, directly or indirectly, more than 50% of all classes of
common equity of the continuing or surviving corporation or transferee or
the parent thereof immediately after such event shall not constitute a
Fundamental Change;
|
(3)
|
Continuing
Directors cease to constitute at least a majority of the Company’s Board
of Directors; or
|
(4)
|
the
Company’s shareholders approve any plan or proposal for the liquidation or
dissolution of the Company.
|
(1)
|
Securities
theretofore canceled by the Trustee or delivered to the Trustee for
cancellation;
|
(2)
|
Securities
for whose payment or redemption money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the Company (if
the Company shall act as its own Paying Agent) for the Holders of such
Securities; provided that, if such Securities are to be redeemed, notice
of such redemption has been duly given pursuant to this Indenture or
provision therefore satisfactory to the Trustee has been made;
and
|
(3)
|
Securities
which have been paid pursuant to Section 307 or in exchange for or in lieu
of which other Securities have been authenticated and delivered pursuant
to this Indenture, other than any such Securities in respect of which
there shall have been presented to the Trustee proof satisfactory to it
that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the
Company;
|
(1)
|
a
statement that each individual signing such certificate or opinion has
read such covenant or condition and the definitions herein relating
thereto;
|
(2)
|
a
brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
|
(3)
|
a
statement that, in the opinion of each such individual, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
|
(4)
|
a
statement as to whether or not, in the opinion of each such individual,
such condition or covenant has been complied
with.
|
(1)
|
Any
request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by Holders
may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by their
agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are received by the Trustee and, where it is hereby expressly
required, by the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and (subject
to Section 601) conclusive in favor of the Trustee and the Company, if
made in the manner provided in this
Section.
|
(2)
|
The
fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or
by a certificate of a notary public or other officer authorized by law to
take acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and
|
|
date
of the execution of any such instrument or writing, or the authority of
the Person executing the same, may also be proved in any other manner
which the Trustee deems sufficient.
|
(3)
|
The
Company may, in the circumstances permitted by the Trust Indenture Act, by
Board Resolution fix any day as the record date for the purpose of
determining the Holders entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to
vote on any action, authorized or permitted to be given or taken by
Holders. If not set by the Company prior to the first solicitation of a
Holder made by any Person in respect of any such action, or, in the case
of any such vote, prior to such vote, the record date for any such action
or vote shall be the 30th day (or, if later, the date of the most recent
list of Holders required to be provided pursuant to Section 701)
prior to such first solicitation or vote, as the case may be. With regard
to any record date, only the Holders on such date (or their duly
designated proxies) shall be entitled to give or take, or vote on, the
relevant action.
|
(4)
|
The
ownership of Securities shall be proved by the Security
Register.
|
(5)
|
Any
request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of
the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of
such action is made upon such
Security.
|
(1)
|
the
Trustee by any Holder or by the Company shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing to or with
the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Administration; or
|
(2)
|
the
Company by the Trustee or by any Holder shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed
to it at the address of its principal office specified in the first
paragraph of this instrument or at any other address previously furnished
in writing to the Trustee by the
Company.
|
(1)
|
The
Company may elect to make payment of any Defaulted Interest to the Persons
in whose names the Securities (or their respective Predecessor Securities)
are registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security and the date of
the proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which shall be not
more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at his address as it appears
in the Security Register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities (or
their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause
(2).
|
(2)
|
The
Company may make payment of any Defaulted Interest in any other lawful
manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the
Trustee.
|
(1)
|
the
entry by a court having jurisdiction in the premises of a decree or order
for relief in respect of the Company in an involuntary case or proceeding
under the Bankruptcy Law, as now or hereafter constituted, and the
continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days; or
|
(2)
|
the
commencement by the Company of a voluntary case or proceeding under
the Bankruptcy Law, as now or hereafter constituted, or the consent by the
Company to the entry of a decree or order for relief in an involuntary
case or proceeding under any such law;
or
|
(3)
|
(i)
the appointment by the FRB, the FDIC or the OTS (or other competent
government agency having primary regulatory authority over any Major
Depository Institution Subsidiary) under any applicable federal or state
banking, insolvency or other similar law now or hereafter in effect of a
receiver, conservator or other similar official for any Major Depository
Institution Subsidiary or for all or substantially all of its assets or
(ii) the entry of a decree or order in any case or proceeding under any
applicable federal or state banking, insolvency or other similar law now
or hereafter in effect adjudging any Major Depository Institution
Subsidiary insolvent or bankrupt, or appointing any receiver, conservator
or other similar official for any Major Depository Institution Subsidiary
or for all or substantially all of its assets, or ordering the winding up
or liquidation of its affairs;
or
|
(4)
|
(i)
the filing by any Major Depository Institution Subsidiary with the FRB,
the FDIC or the OTS (or other competent government agency having primary
regulatory authority over any Major Depository Institution Subsidiary) of
a notice of voluntary liquidation or other similar action under any
applicable federal or state banking, insolvency or other similar law now
or hereafter in effect or (ii) the commencement by any Major Depository
Institution Subsidiary of any case or proceeding under any applicable
federal or state banking, insolvency or other similar law now or hereafter
in effect to be adjudicated insolvent or bankrupt or seeking the
appointment of a receiver, conservator or other similar official for any
Major Depository Institution Subsidiary or for all or substantially all of
its assets, or the consent by any Major Depository Institution Subsidiary
to the entry of a decree or order in any case or proceeding under the
federal or state banking, insolvency or other similar laws adjudging any
Major Depository Institution
Subsidiary
|
|
insolvent
or bankrupt, or appointing any receiver, conservator or other similar
official for any Major Depository Institution Subsidiary or for all or
substantially all of its assets, or ordering the winding up or liquidation
of its affairs, or the taking of any corporate action by any Major
Depository Institution Subsidiary in furtherance of such action;
or
|
(5)
|
default
in the payment of any interest upon any Security or any amount payable
hereunder when the same shall become due and payable, and continuance of
such default for a period of 30 days;
or
|
(6)
|
default
in the payment of the principal of (or premium, if any, on) or Fundamental
Change Repurchase Price on any Security when the same shall become due and
payable, whether at the Stated Maturity thereof, by acceleration or
otherwise; or
|
(7)
|
Subject
to Section 602, default in the performance, or breach, of any material
covenant or warranty of the Company contained in this Indenture (other
than a covenant or warranty a default in whose performance or whose breach
is elsewhere in this Section specifically dealt with), and continuance of
such default or breach for a period of 60 days after there has been given,
by registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal amount
of the Outstanding Securities a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
|
(8)
|
a
default under any bond, debenture, note or other evidence of indebtedness
for money borrowed by the Company or a Subsidiary or under any mortgage,
indenture or instrument under which there may be issued or by which there
may be secured or evidenced any indebtedness for money borrowed by the
Company or a Subsidiary (including this Indenture), whether such
indebtedness now exists or shall hereafter be created, which default shall
have resulted (i) in a failure to pay an aggregate principal amount
exceeding $5.0 million of such indebtedness when due or upon the
expiration of any applicable grace period with respect thereto or (ii) in
such indebtedness in an amount exceeding $5.0 million becoming or, with
the giving of notice or lapse of time or both, being declared due and
payable prior to the date on which it would otherwise have become due and
payable, without such indebtedness having been discharged, or such
acceleration having been rescinded or annulled, within a period of 10 days
after there shall have been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 25% in principal amount of the Outstanding Securities a written
notice specifying such default and requiring the Company to cause such
indebtedness to be discharged or cause such acceleration to be
rescinded or annulled and stating that such notice is a "Notice of
Default" hereunder; provided, however, that any such default shall not be
deemed to have occurred if and so long as the Company shall contest the
validity thereof in good faith by appropriate proceedings;
or
|
(9)
|
the
Bank shall at any time become subject to a statutory or regulatory
prohibition against the payment of dividends or other capital
distributions to the Company and such prohibition is not removed or
otherwise made inapplicable within a period of 90 days from the date on
which such prohibition first became applicable;
or
|
(10)
|
the
Bank shall fail to meet the criteria required for classification as an
“adequately capitalized” Insured Depositary Institution within the meaning
of 12 U.S.C. 1831o and any implementing regulations or any successor
provisions and such failure is not cured within a period of 90 days from
the date of such failure or, if such failure is the result of a change in
statute or regulation, such failure is not cured within a period of 180
days from the date of such failure.
|
(1)
|
the
Company has paid or deposited with the Trustee a sum sufficient to
pay
|
(a)
|
all
overdue interest on all Securities;
|
(b)
|
the
principal of (and premium, if any, on) any Securities which have become
due otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the
Securities;
|
(c)
|
to
the extent that payment of such interest is lawful, interest upon overdue
interest at the rate borne by the Securities;
and
|
(d)
|
all
sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel;
|
(2)
|
all
Events of Defaults, other than the non-payment of the principal of the
Securities which have become due solely by such
acceleration, have been cured or waived as provided in Section
513.
|
(1)
|
such
Holder has previously given written notice to the Trustee of a continuing
Event of Default;
|
(2)
|
the
Holders of not less than 25% in principal amount of the Outstanding
Securities shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;
|
(3)
|
such
Holder or Holders have offered to the Trustee satisfactory Indemnity
against the costs, expenses and liabilities to be incurred in compliance
with such request;
|
(4)
|
the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding;
and
|
(5)
|
no
direction inconsistent with such written request has been given to the
Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding
Securities;
|
SECTION
508.
|
Unconditional Right of
Holders to Receive Principal, Premium and Interest and to
Convert
.
|
(1)
|
such
direction shall not be in conflict with any rule of law or with the
Indenture, and
|
(2)
|
the
Trustee may take any other action deemed proper by the Trustee which is
not inconsistent with such direction;
and
|
(3)
|
the
Trustee need not take any action that might involve it in personal
liability or be unduly prejudicial to the Holders of Securities not
joining therein (but the Trustee shall have no obligation as to the
determination of such undue
prejudice).
|
(1)
|
in
the payment of the principal of (or premium, if any) or the Fundamental
Change Repurchase Price or interest on any Security,
or
|
(2)
|
in
respect of a covenant or provision hereof which under Article Nine cannot
be modified or amended without the consent of the Holder of each
Outstanding Security affected.
|
(1)
|
Except
during the continuance of an Event of
Default,
|
(a)
|
the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture, and the Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee;
and
|
(b)
|
in
the absence of bad faith on its part, the Trustee may conclusively rely,
as to the truth of the statements and correctness of the opinions
expressed therein, upon any statements, certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture; but
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform on their face to the requirements of this
Indenture.
|
(2)
|
In
case an Event of Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of his own
affairs.
|
(3)
|
No
provision of this Indenture shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct, except
that:
|
(a)
|
this
Subsection shall not be construed to limit the effect of Subsection (1) of
this Section;
|
(b)
|
the
Trustee shall not be liable for any error of judgment made in good faith
by a Responsible Officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent
facts;
|
(c)
|
the
Trustee shall not be liable with respect to any action taken or omitted to
be taken by it in good faith in accordance with the direction of the
Holders of a majority in principal amount of the Outstanding Securities
relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture;
and
|
(d)
|
no
provision of this Indenture shall require the Trustee 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 any of
its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to
it.
|
(4)
|
Whether
or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this
Section and subject to Section 315 and 316 of the
TIA.
|
(1)
|
the
Trustee may rely and shall be protected in acting or refraining from
acting upon any resolution, Officer's Certificate, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or
parties;
|
(2)
|
any
request or direction of the Company mentioned herein shall be sufficiently
evidenced by a Company Request or Company Order and any resolution of the
Board of Directors may be sufficiently evidenced by a Board
Resolution;
|
(3)
|
whenever
in the administration of this Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers'
Certificate;
|
(4)
|
before
the Trustee acts or refrains from acting, the Trustee may consult with
counsel and the advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon;
|
(5)
|
the
Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request or direction of any
of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with
such request or direction;
|
(6)
|
prior
to the occurrence of an Event of Default hereunder and after the curing or
waiving of all Events of Default, the Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
Officer's Certificate, or other certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, appraisal,
bond, debenture, note, coupon, security, or other paper or document unless
requested in writing so to do by the Holders of not less than a majority
in aggregate principal amount of the Securities then outstanding; provided
that, if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require satisfactory indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of every
such examination shall be paid by the Company or, if advanced by the
Trustee, shall be repaid by the Company upon
demand;
|
(7)
|
the
Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys and
the Trustee shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by it
hereunder;
|
(8)
|
the
Trustee shall not be liable for any action it takes or omits to take in
good faith which action or omission it believes to be authorized or within
its rights or powers;
|
(9)
|
the
Trustee shall not be required to give any bond or surety in respect of the
performance of its powers and duties
hereunder;
|
(10)
|
the
Trustee shall not be bound to ascertain or inquire as to the performance
or observance of any covenants, conditions or agreements on the part of
the Company, except as otherwise set forth herein, but the Trustee may
require of the Company full information and advice as to the performance
of the covenants, conditions and agreements contained herein and shall be
entitled in connection herewith to examine the books, records and premises
of the Company;
|
(11)
|
the
permissive rights of the Trustee to do things enumerated in this Indenture
shall not be construed as a duty and the Trustee shall not be
answerable for other than its negligence or willful default;
and
|
(12)
|
except
for an Event of Default under Section 501(5) or (6) hereof, or a Default
which a Responsible Officer of the Trustee has "actual knowledge", the
Trustee shall not be deemed to have notice of or knowledge of any Default
or Event of Default unless specifically notified in writing of such event
by the Company or the Holders of not less than 25% in aggregate principal
amount of the Securities Outstanding; as used herein, the term "actual
knowledge" means the actual fact or statement of knowing, without any duty
to make any investigation with regard
thereto;
|
(13)
|
in
no event shall the Trustee be responsible or liable for special, indirect,
or consequential loss or damage of any kind whatsoever (including, but not
limited to, loss of profit) irrespective of whether the Trustee has been
advised of the likelihood of such loss or damage and regardless of the
form of action;
|
(14)
|
the
rights, privileges, protections, immunities and benefits given to the
Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its
capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder; and
|
(15)
|
the
Trustee may request that the Company deliver a certificate setting forth
the names of individuals and/or titles of officers authorized at such time
to take specified actions pursuant to this
Indenture.
|
(1)
|
to
pay to the Trustee from time to time reasonable compensation (it being
understood and agreed that the fees set forth in the Trustee’s fee
agreement or fee schedule are deemed reasonable) for all services rendered
by it hereunder, including extraordinary services rendered in connection
with or during the continuation of a default hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);
|
(2)
|
except
as otherwise expressly provided herein, to reimburse each of the Trustee
and any predecessor Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by it in accordance with any
provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except to the
extent any such expense, disbursement or advance may be attributable to
its gross negligence or bad faith; and (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except to the extent any such expense, disbursement or advance
may be attributable to its gross negligence or bad faith;
and
|
(3)
|
to
indemnify the Trustee and each of its respective directors, officers,
agents and employees for, and to hold each of them harmless against, any
loss, liability or expense, arising out of or in connection with the
acceptance or administration of the trust or trusts or the performance of
its duties hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder except to the extent
any such loss, liability or expense may be attributable to its own gross
negligence or bad faith.
|
(1)
|
No
resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirement of Section
609.
|
(2)
|
The
Trustee may resign at any time with respect to the Securities by giving
written notice thereof to the Company. If an instrument of acceptance by a
successor Trustee shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee
may (at the sole cost and expense of the Company) petition any court of
competent jurisdiction for the appointment of a successor
Trustee.
|
(3)
|
The
Trustee may be removed at any time with respect to the Securities by Act
of the Holders of a majority in principal amount of the Outstanding
Securities delivered to the Trustee and to the
Company.
|
(4)
|
If
at any time:
|
(a)
|
the
Trustee shall fail to comply with the provisions of Section 613 or TIA
Section 310(b) after written request therefor by the Company or by any
Holder of a Security who has been a bona fide Holder of a Security for at
least six months, or
|
(b)
|
the
Trustee shall cease to be eligible under Section 609 and shall fail to
resign after written request therefor by the Company or by any Holder of a
Security who has been a bona fide Holder of a Security for at least six
months, or
|
(c)
|
the
Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, (i)
the Company by or pursuant to a Board Resolution may remove the Trustee
and appoint a successor Trustee with respect to the Securities, or (ii)
subject to TIA Section 315(e), any Holder of a Security who has been a
bona fide Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to the Securities
and the appointment of a successor Trustee or
Trustees.
|
(5)
|
If
the Trustee shall resign, be removed or become incapable of acting, or if
a vacancy shall occur in the office of Trustee for any cause with respect
to the Securities of one or more series, the Company, by or pursuant to a
Board Resolution, shall promptly appoint a successor Trustee or Trustees
with respect to the Securities. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities shall be appointed by the
Holders of a majority in principal amount of the outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment,
become the successor Trustee with respect to the Securities and to that
extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities shall have been so
appointed by the Company or the Holders of Securities and accepted
appointment in the manner hereinafter provided, any Holder of a Security
who has been a bona fide Holder of a Security for at least six months may,
on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities.
|
(6)
|
The
Company shall give notice of each resignation and each removal of the
Trustee with respect to the Securities and each appointment of a successor
Trustee in the manner provided for notices to the Holders of Securities in
Section 106. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust
Office.
|
(1)
|
semi-annually,
not more than 15 days after each Regular Record Date, a list, in such form
as the Trustee may reasonably require, of the names and addresses of the
Holders as of such Regular Record Date,
and
|
(2)
|
at
such other times as the Trustee may request in writing, within 30 days
after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such
list is furnished;
|
(1)
|
The
Trustee shall preserve, in as current a form as is reasonably practicable,
the names and addresses of Holders contained in the most recent list
furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so
furnished.
|
(2)
|
The
rights of Holders to communicate with other Holders with respect to their
rights under this Indenture or under the Securities, and the corresponding
rights and duties of the Trustee, shall be as provided by the Trust
Indenture Act.
|
(3)
|
Every
Holder of Securities, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any
agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made
pursuant to the Trust Indenture
Act.
|
(1)
|
in
case the Company shall consolidate with or merge into another Person or
convey, transfer or lease its properties and assets substantially as an
entirety to any Person, the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership or trust,
shall be organized and validly existing under the laws of the United
States of America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of (and premium, if any) and interest on
all the Securities and the performance or observance of every covenant of
this Indenture on the part of the Company to be performed or observed and
shall have provided for conversion rights in accordance with Section
1311;
|
(2)
|
immediately
after giving effect to such transaction, no Default or Event of Default,
shall have happened and be
continuing;
|
(3)
|
immediately
after giving effect to such transaction, each Insured Depository
Institution controlled by the entity which is formed by such
consolidation, share exchange or business combination or with which the
Company is merged, or by the Person which acquired by conveyance or
transfer all or substantially all of the properties and assets of the
Company, shall be in compliance with all applicable minimum Regulatory
Capital Requirements; and
|
(4)
|
the
Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied
with.
|
(1)
|
to
cure any ambiguity or correct any omission, defect or inconsistency
contained herein, so long as such action will not materially and adversely
affect the interest of the Holders;
provided
that any such
amendment made solely to conform the provisions of the Indenture to the
description thereof contained in the Prospectus shall be deemed not to
adversely affect the interests of the Holders of the
Securities;
|
(2)
|
to
provide for the assumption by a successor corporation, partnership, trust
or limited liability company of the obligations of the Company contained
herein;
|
(3)
|
to
add guarantees with respect to the
Securities;
|
(4)
|
to
secure the Securities;
|
(5)
|
to
add to the covenants of the Company for the benefit of the Holders of the
Securities, or to surrender any right or power herein conferred upon the
Company;
|
(6)
|
to
add or modify any other provision herein with respect to matters or
questions arising hereunder which the Company and the Trustee may deem
necessary or desirable and which does not materially and adversely affect
the rights of any Holder of the Securities;
and
|
(7)
|
to
modify, eliminate or add to the provisions of the Indenture to such extent
as shall be necessary to effect the qualification of the Indenture under
the Trust Indenture Act, or under any similar federal statute hereafter
enacted.
|
(1)
|
reduce
the principal amount of Outstanding Securities whose Holders are required
for any waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder
|
|
their
consequences provided for in this Indenture or a supplemental indenture or
an amendment to the Indenture;
|
(2)
|
reduce
the rate or extend the time of payment of any interest, including any
Defaulted Interest, on any
Security;
|
(3)
|
reduce
the principal of, or extend the Stated Maturity of, any
Security;
|
(4)
|
make
any change that impairs or adversely affects the conversion rights or
Conversion Price of any Security;
|
(5)
|
reduce
the Fundamental Change Repurchase Price of any Security or amend or modify
in any manner adverse to the Holders of Securities the Company’s
obligation to make such payments, whether through an amendment or waiver
of provisions in the covenants, definitions or
otherwise;
|
(6)
|
make
any Security payable in currency other than that stated in such
Security;
|
(7)
|
change
the ranking of the Securities in any manner that adversely affects the
rights of Holders of Securities under the
Indenture;
|
(8)
|
impair
the right of a Holder to receive payment of principal and interest,
including any Defaulted Interest, on such Holder’s Securities, or alter
the due date therefore or to institute a suit for the enforcement of any
payment on or with respect to such Holder’s Securities;
or
|
(9)
|
modify
any of the provisions of Section 902(1) through
(8).
|
(1)
|
hold
all sums held by it for the payment of principal of (and premium, if any)
or interest on Securities in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided;
|
(2)
|
give
the Trustee notice of any default by the Company (or any other obligor
upon the Securities) in the making of any such payment of principal (and
premium, if any) or interest; and
|
(3)
|
at
any time during the continuance of any such default, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
|
(1)
|
a
review of the activities of the Company during such year and of
performance under this Indenture has been made under his or her
supervision; and
|
(2)
|
to
the best of his or her knowledge, based on such review, the Company has
fulfilled all the conditions and covenants set forth in Article Ten and
any other obligation specifically imposed upon it under this Indenture
throughout such year, or, if there has been a default in the fulfillment
of any such condition, covenant or obligation, the Company shall deliver
to the Trustee as soon as possible, and in any event within five days
after the Company becomes aware or should reasonably have become aware of
the occurrence of any Default or Event of Default, an Officers'
Certificate specifying each such default known to him or her and the
nature and status thereof and what action the Company is taking or
proposes to take with respect
thereto.
|
(1)
|
the
Redemption Date,
|
(2)
|
the
Redemption Price,
|
(3)
|
if
less than all Outstanding Securities are to be redeemed, the
identification (and, in the case of partial redemption, the respective
principal amounts) of the Securities to be
redeemed,
|
(4)
|
that
on the Redemption Date the Redemption Price will become due and payable
upon each such Security, and that interest thereon shall cease to accrue
from and after said date, and
|
(5)
|
the
place where such Securities are to be surrendered for payment of the
Redemption Price, which shall be an office or agency of the Company in
each Place of Payment.
|
(1)
|
the
Company shall have irrevocably deposited or caused to be irrevocably
deposited with the Trustee, as trust funds and/or obligations in trust,
specifically pledged as security for, and dedicated solely to, the benefit
of the Holders of the Securities (i) money in an amount, or (ii) U.S.
Government Obligations (as defined below) which through the payment of
interest and principal in respect thereof in accordance with their terms,
without consideration of any reinvestment thereof, will provide, not later
than one day before the due date of any payment, money in an amount, or
(iii) a combination of (i) and (ii), sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee (upon which the
Trustee may conclusively and exclusively rely), to pay and discharge the
principal of (and premium, if any), and interest on, the outstanding
Securities on the dates such installments of interest or principal and
premiums are due;
|
(2)
|
such
deposit shall not cause the Trustee with respect to the Securities to have
a conflicting interest as defined in Section 608 and for purposes of the
Trust Indenture Act with respect to the
Securities;
|
(3)
|
the
Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that such deposit will not result in an Event of Default under
Section 501 or an event which with the giving of notice or lapse of time,
or both, would become an Event of Default under Section
501.
|
(4)
|
the
Company shall have delivered to the Trustee an Officer's Certificate to
the effect that no Event of Default or event (including such deposit)
which, with notice or lapse of time or both, would become Event of Default
with respect to the Securities shall have occurred and be continuing on
the date of such deposit and no Event of Default or event which with the
giving of notice or lapse of time, or both, would become an Event of
Default shall have occurred and be continuing on the 91st day after such
date of deposit; and that such deposit shall not result in a breach or
violation of or constitute a default under any other agreement or
instrument, material to the Company, to which the Company is a party or by
which it is bound.
|
(5)
|
the
Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that all conditions precedent herein provided for relating to the
defeasance contemplated in this Section 1201 have been complied with and
an Opinion of Counsel (or, in lieu of such Opinion of Counsel, the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling) to the effect that the Holders of the Securities or
Security Owners will not recognize income, gain or loss for Federal income
tax purposes as a result of such deposit, defeasance or Discharge;
and
|
(6)
|
if
the Securities are to be redeemed, either notice of such redemption shall
have been given or the Company shall have given the Trustee irrevocable
direction to give notice of such redemption in the name and at the expense
of the Company, pursuant to Article
Eleven.
|
(1)
|
In
case the Company shall pay or make a dividend or other distribution on any
class of capital stock of the Company in Common Stock, the Conversion
Price in effect at the opening of business on the day following the date
fixed for the determination of stockholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination and the denominator shall be the sum
of such number of shares and the total number of shares constituting such
dividend or other distribution, such reduction to become effective
immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this paragraph (1),
the number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company will not pay any dividend
or make any distribution on shares of Common Stock held in the treasury of
the Company.
|
(2)
|
In
case the Company shall issue rights, options or warrants to all holders of
its Common Stock (not being available on an equivalent basis to Holders of
the Securities upon conversion) entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than the current
market price per share (determined as provided in paragraph (8) of this
Section) of the Common Stock on the date fixed for the determination of
stockholders entitled to receive such rights, options or warrants (other
than pursuant to a dividend reinvestment plan), the Conversion Price in
effect at the opening of business on the day following the date fixed for
such determination shall be reduced by multiplying such Conversion Price
by a fraction of
|
|
which
the numerator shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination plus the
number of shares of Common Stock which the aggregate of the offering price
of the total number of shares of Common Stock so offered for subscription
or purchase would purchase at such current market price and the
denominator shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination plus the
number of shares of Common Stock so offered for subscription or purchase,
such reduction to become effective immediately after the opening of
business on the day following the date fixed for such determination. For
the purposes of this paragraph (2), the number of shares of Common Stock
at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Company will not issue any rights, options or warrants in respect of
shares of Common Stock held in the treasury of the
Company.
|
(3)
|
In
case outstanding shares of Common Stock shall be subdivided into a greater
number of shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and,
conversely, in case outstanding shares of Common Stock shall each be
combined into a smaller number of shares of Common Stock, the Conversion
Price in effect at the opening of business on the day following the day
upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to become
effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes
effective.
|
(4)
|
In
case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness or assets
(including securities, but excluding any rights, options or warrants
referred to in paragraph (2) of this Section, any dividend or distribution
paid exclusively in cash and any dividend or distribution referred to in
paragraph (1) of this Section), the Conversion Price shall be adjusted so
that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the close of business on
the date fixed for the determination of stockholders entitled to receive
such distribution by a fraction of which the numerator shall be the
current market price per share (determined as provided in paragraph (8) of
this Section) of the Common Stock on the date fixed for such determination
less the then fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board
Resolution filed with the Trustee) of the portion of the assets or
evidences of indebtedness so distributed applicable to one share of Common
Stock and the denominator shall be such current market price per share of
the Common Stock, such adjustment to become effective immediately prior to
the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such distribution. In
any case in which this paragraph (4) is applicable, paragraph (2) of this
Section shall not be applicable.
|
(5)
|
In
case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock cash (excluding any cash that is distributed
upon a merger or consolidation to which Section 1311 applies or
as part of a distribution referred to in paragraph (4) of this Section) in
an aggregate amount that, combined together with (1) the aggregate amount
of any other distributions to all holders of its Common Stock made
exclusively in cash within the 12 months preceding the date of payment of
such distribution and in respect of which no adjustment pursuant to
this paragraph (5) has been made and (2) the aggregate of any cash plus
the fair
|
|
market
value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a Board Resolution) of consideration
payable in respect of any tender offer by the Company or any of its
subsidiaries for all or any portion of the Common Stock concluded within
the 12 months preceding the date of payment of such distribution and in
respect of which no adjustment pursuant to paragraph (6) of this Section
has been made, exceeds 10% of the product of the current market price per
share of the Common Stock on the date for the determination of holders of
shares of Common Stock entitled to receive such distribution times the
number of shares of Common Stock outstanding on such date, then, and in
each such case, immediately after the close of business on such date for
determination, the Conversion Price shall be reduced so that the same
shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on the date fixed for
determination of the stockholders entitled to receive such distribution by
a fraction (i) the numerator of which shall be equal to the current market
price per share (determined as provided in paragraph (8) of this Section)
of the Common Stock on the date fixed for such determination less an
amount equal to the quotient of (x) the excess of such combined amount
over such 10% and (y) the number of shares of Common Stock outstanding on
such date for determination and (ii) the denominator of which shall
be equal to the current market price per share (determined as provided in
paragraph (8) of this Section) of the Common Stock on such date for
determination.
|
(6)
|
In
case a tender offer made by the Company or any Subsidiary for all or any
portion of the Common Stock shall expire and such tender offer (as amended
upon the expiration thereof) shall require the payment to stockholders
(based on the acceptance (up to any maximum specified in the terms of the
tender offer) of Purchased Shares (as defined below)) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a
Board Resolution) that combined together with (1) the aggregate of the
cash plus the fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board
Resolution), as of the expiration of such tender offer, of consideration
payable in respect of any other tender offer, by the Company or any
Subsidiary for all or any portion of the Common Stock expiring within the
12 months preceding the expiration of such tender offer and in respect of
which no adjustment pursuant to this paragraph (6) has been made and (2)
the aggregate amount of any distributions to all holders of the Company's
Common Stock made exclusively in cash within 12 months preceding the
expiration of such tender offer and in respect of which no adjustment
pursuant to paragraph (5) of this Section has been made, exceeds 10% of
the product of the current market price per share of the Common Stock
(determined as provided in paragraph (8) of this Section) as of the last
time (the "Expiration Time") tenders could have been made pursuant to such
tender offer (as it may be amended) times the number of shares of Common
Stock outstanding (including any tendered shares) on the Expiration Time,
then, and in each such case, immediately prior to the opening of business
on the day after the date of the Expiration Time, the Conversion Price
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to close of
business on the date of the Expiration Time by a fraction (i) the
numerator of which shall be equal to (A) the product of (i) the current
market price per share of the Common Stock (determined as provided in
paragraph (8) of this Section) on the date of the Expiration Time and (ii)
the number of shares of Common Stock outstanding (including any tendered
shares) on the Expiration Time less (B) the amount of cash plus the fair
market value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender offer) of Purchased Shares, and (ii)
the denominator of which shall be equal to the product of (A) the current
market price per share of the Common Stock
(determined
|
|
as
provided in paragraph (8) of this Section) as of the Expiration Time and
(B) the number of shares of Common Stock outstanding (including any
tendered shares) as of the Expiration Time less the number of all shares
validly tendered and not withdrawn as of the Expiration Time (the shares
deemed so accepted up to any such maximum, being referred to as the
"Purchased Shares").
|
(7)
|
The
reclassification of Common Stock into securities including securities
other than Common Stock (other than any reclassification upon a
consolidation or merger to which Section 1311 applies) shall be deemed to
involve (i) a distribution of such securities other than Common Stock to
all holders of Common Stock (and the effective date of such
reclassification shall be deemed to be "the date fixed for the
determination of stockholders entitled to receive such distribution" and
the "date fixed for such determination" within the meaning of paragraph
(4) of this Section), and (ii) a subdivision or combination, as the case
may be, of the number of shares of Common Stock outstanding immediately
prior to such reclassification into the number of shares of Common Stock
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such
subdivision becomes effective" or "the day upon which such, combination
becomes effective," as the case may be, and "the day. upon which such
subdivision or combination becomes effective" within the meaning of
paragraph (3) of this Section).
|
(8)
|
For
the purpose of any computation under paragraphs (2), (4), (5) and (6)
of this Section, the current market price per share of Common Stock on any
date shall be deemed to be the average of the daily Closing Prices for the
5 consecutive Trading Days selected by the Company commencing not more
than 20 Trading Days before, and ending not later than, the earlier of the
day in question and the day before the "ex" date with respect to the
issuance or distribution requiring such computation. The "Closing
Price" for each Trading Day shall be the reported last sale price regular
way or, in case no such reported sale takes place on such day, the average
of the reported closing bid and asked prices regular way, in either case
on the OTC Bulletin Board or the principal national securities exchange on
which the Common Stock is then listed or admitted to trading or, if not
listed or admitted to trading on the OTC Bulletin Board or any national
securities exchange, the average of the closing bid and asked prices in
the over-the-counter market as furnished by any New York Stock Exchange
member firm selected from time to time by the Company for that purpose.
For purposes of this paragraph, the term "'ex' date," when used with
respect to any issuance or distribution, shall mean the first date on
which the Common Stock trades regular way on such exchange or in such
market without the right to receive such issuance or
distribution.
|
(9)
|
No
adjustment in the Conversion Price shall be required unless such
adjustment (plus any adjustments not previously made by reason of this
paragraph (9)) would require an increase or decrease of at least 1% in
such price; provided, however, that any adjustments which by reason of
this paragraph (9) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations
under this paragraph (9) shall be made to the nearest
cent.
|
(10)
|
The
Company may make such reductions in the Conversion Price, in addition to
those required by paragraphs (1), (2), (3), (4), (5) and (6) of this
Section, as it considers to be advisable in order to avoid or diminish any
income tax to any holders of shares of Common Stock resulting from any
dividend or distribution of stock or issuance of rights or warrants to
purchase or subscribe for stock or from any event treated as such for
Federal income tax purposes or for any
other
|
|
reasons.
The Company shall have the power to resolve any ambiguity or correct any
error in this paragraph (10) and its actions in so doing shall be final
and conclusive.
|
(1)
|
The
Company shall compute the adjusted conversion price in accordance with
Section 1304 and shall prepare a certificate signed by the Treasurer of
the Company setting forth the adjusted conversion price and showing in
reasonable detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed at each office or agency maintained
for the purpose of conversion of Securities pursuant to Section 1002 and
provided to the Trustee and the Conversion Agent, if different;
and
|
(2)
|
a
notice stating that the Conversion Price has been adjusted and setting
forth the adjusted Conversion Price shall forthwith be required, and as
soon as practicable after it is required, such notice shall be mailed by
the Company to all Holders at their last addresses as they shall appear in
the Security Register.
|
(1)
|
In
case:
|
(a)
|
the
Company shall declare a dividend (or any other distribution) on its Common
Stock payable otherwise than in cash out of its earned surplus;
or
|
(b)
|
the
Company shall authorize the granting to the holders of its Common Stock of
rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any other rights;
or
|
(c)
|
of
any reclassification of the Common Stock of the Company (other than a
subdivision or combination of its outstanding shares of Common Stock), or
of any consolidation, merger or share exchange to which the Company
is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the
assets of the Company; or
|
(d)
|
of
the voluntary or involuntary dissolution, liquidation or winding up of the
Company;
|
(1)
|
If
a Fundamental Change occurs at any time prior to the Maturity of the
Securities, then each Security Holder shall have the right, at such
Holder’s option, to require the Company to repurchase all of such Holder’s
Securities or any portion thereof that is a multiple of $1,000, on a
Business Day specified by the Company that is no later than the 35th
calendar day after the date of the Fundamental Change Company Notice (as
defined below), subject to extension to comply with applicable law (the “
Fundamental Change Repurchase Date ”), at a repurchase price equal to 101%
of the principal amount thereof, together with accrued and unpaid interest
thereon, to, but excluding, the Fundamental Change Repurchase Date (the “
Fundamental Change Repurchase Price ”); provided, however, that if
Securities are repurchased pursuant to this Section 1401 between a
regular Record Date and any Interest Payment Date, the interest, including
Defaulted Interest, if any, payable in respect of such Interest Payment
Date to which such Record Date relates, shall be payable to the Holders of
record as of the corresponding Record
Date.
|
(2)
|
Repurchases
of Securities under this Section 1401 shall be made, at the option of
a Holder of the Securities thereof, upon delivery to the Trustee (or other
Paying Agent appointed by the Company) by a Holder, prior to the close of
business on the Business Day immediately preceding the Fundamental Change
Repurchase Date, subject to extension to comply with applicable law, of a
duly completed notice (the “ Fundamental Change Repurchase Notice ”) in
the form set forth on the reverse of the Securities or otherwise
specifying:
|
(a)
|
the
certificate numbers of Securities to be delivered for
repurchase;
|
(b)
|
the
portion of the principal amount of Securities to be repurchased, which
must be $1,000 or an integral multiple thereof;
and
|
(c)
|
that
the Securities are to be repurchased by the Company pursuant to the
applicable provisions of the Securities and the
Indenture.
|
(3)
|
On
or before the 20th day after the occurrence of a Fundamental Change, the
Company shall provide to all Holders of record of the Securities and the
Trustee and Paying Agent a notice (the “Fundamental Change Company
Notice”) of the occurrence of such Fundamental Change and of the
repurchase right at the option of the Holders arising as a result thereof.
Such mailing shall be by first class mail. Simultaneously with providing
such Fundamental Change Company Notice, the Company shall publish a notice
containing the information included therein once in a newspaper of general
circulation in The City of Aiken or publish such information on the
Company’s website or through such other public medium as the Company may
use at such time.
|
(a)
|
the
events causing the Fundamental Change and the date of the Fundamental
Change;
|
(b)
|
the
last date on which a Holder may exercise the repurchase
right;
|
(c)
|
the
Fundamental Change Repurchase
Price;
|
(d)
|
the
Fundamental Change Repurchase Date;
|
(e)
|
the
name and address of the Paying Agent and the Conversion Agent, if
applicable;
|
(f)
|
if
applicable, the applicable Conversion Rate and any adjustments to the
applicable Conversion Rate;
|
(g)
|
if
applicable, that the Securities with respect to which a Fundamental Change
Repurchase Notice has been delivered by a Holder may be converted only if
the Holder withdraws the Fundamental Change Repurchase Notice in
accordance with Section 1403;
and
|
(h)
|
the
procedures that Holders must follow to require the Company to repurchase
their Securities.
|
(4)
|
There
shall be no repurchase of any Securities pursuant to this
Section 1401 if there has occurred (prior to, on or after, as the
case may be, the giving, by the Holders of such Securities, of the
required Fundamental Change Repurchase Notice) and is continuing an Event
of Default (other than a default that is cured by the payment of the
Fundamental Change Repurchase Price with respect to such Securities). The
Paying Agent will promptly return to the respective Holders thereof any
Securities (i) with respect to which a Fundamental Change Repurchase
Notice has been withdrawn in compliance with this Indenture, or
(ii) held by it during the continuance of an
|
|
Event
of Default (other than a default that is cured by the payment of the
Fundamental Change Repurchase Price with respect to such Securities) in
which case, upon such return, the Fundamental Change Repurchase Notice
with respect thereto shall be deemed to have been
withdrawn.
|
(5)
|
The
Securities to be repurchased pursuant to this Section 1401 shall be
paid for in cash.
|
(1)
|
A
Fundamental Change Repurchase Notice may be withdrawn by means of a
written notice of withdrawal delivered to the Paying Agent and the Trustee
in accordance with the Fundamental Change Company Notice at any time prior
to the close of business on the Business Day immediately preceding the
Fundamental Change Repurchase Date,
specifying:
|
(a)
|
the
principal amount of the Securities with respect to which such notice of
withdrawal is being submitted;
|
(b)
|
the
certificate numbers of the withdrawn Securities;
and
|
(c)
|
the
principal amount of such Securities that remains subject to the original
Fundamental Change Repurchase Notice, which portion must be in principal
amounts of $1,000 or an integral multiple of
$1,000.
|
Very truly yours, | |
/s/Breyer & Associates PC | |
Breyer &Associates PC |
Delaware
|
51-0055023
|
(Jurisdiction
of incorporation of organization if not a U.S. national
bank)
|
(I.R.S.
Employer Identification No.)
|
(Exact
name of obligor as specified in its charter)
|
|
South
Carolina
|
57-08580504
|
(State
or other jurisdiction or incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
|
(a)
|
Name
and address of each examining or supervising authority to which it is
subject.
|
Federal
Reserve Bank of Philadelphia
|
State
Bank Commissioner
|
Ten
Independence Mall
|
555 East Lockerman Street, Suite
210
|
Philadelphia,
PA 19106-1574
|
Dover,
Delaware 19901
|
|
(b)
|
Whether
it is authorized to exercise corporate trust
powers.
|
|
The
trustee is authorized to exercise corporate trust
powers.
|
|
[SEAL]
|
WILMINGTON TRUST
COMPANY
|
|
Assistant
Secretary
|
Name: Denise
M. Geran
|
|
Title: Vice
President
|
|
(1)
|
To
sue and be sued, complain and defend in any Court of law or equity and to
make and use a common seal, and alter the seal at pleasure, to hold,
purchase, convey, mortgage or otherwise deal in real and personal estate
and property, and to appoint such officers and agents as the business of
the Corporation shall require, to make by-laws not inconsistent with the
Constitution or laws of the United States or of this State, to discount
bills, notes or other evidences of debt, to receive deposits of money, or
securities for money, to buy gold and silver bullion and foreign coins, to
buy and sell bills of exchange, and generally to use, exercise and enjoy
all the powers, rights, privileges and franchises incident to a
corporation which are proper or necessary for the transaction of the
business of the Corporation hereby
created.
|
|
(2)
|
To
insure titles to real and personal property, or any estate or interests
therein, and to guarantee the holder of such property, real or personal,
against any claim or
|
claims,
adverse to his interest therein, and to prepare and give certificates of
title for any lands or premises in the State of Delaware, or
elsewhere.
|
||
|
(3)
|
To
act as factor, agent, broker or attorney in the receipt, collection,
custody, investment and management of funds, and the purchase, sale,
management and disposal of property of all descriptions, and to prepare
and execute all papers which may be necessary or proper in such
business.
|
|
(4)
|
To
prepare and draw agreements, contracts, deeds, leases, conveyances,
mortgages, bonds and legal papers of every description, and to carry on
the business of conveyance in all its
branches.
|
|
(5)
|
To
receive upon deposit for safekeeping money, jewelry, plate, deeds, bonds
and any and all other personal property of every sort and kind, from
executors, administrators, guardians, public officers, courts, receivers,
assignees, trustees, and from all fiduciaries, and from all other persons
and individuals, and from all corporations whether state, municipal,
corporate or private, and to rent boxes, safes, vaults and other
receptacles for such property.
|
|
(6)
|
To
act as agent or otherwise for the purpose of registering, issuing,
certificating, countersigning, transferring or underwriting the stock,
bonds or other obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund therefore on
such terms as may be agreed upon between the two parties, and in like
manner may act as Treasurer of any corporation or
municipality.
|
|
(7)
|
To
act as Trustee under any deed of trust, mortgage, bond or other instrument
issued by any state, municipality, body politic, corporation, association
or person, either alone or in conjunction with any other person or
persons, corporation or
corporations.
|
|
(8)
|
To
guarantee the validity, performance or effect of any contract or
agreement, and the fidelity of persons holding places of responsibility or
trust; to become surety for any person, or persons, for the faithful
performance of any trust, office, duty, contract or agreement, either by
itself or in conjunction with any other person, or persons, corporation,
or corporations, or in like manner become surety upon any bond,
recognizance, obligation, judgment, suit, order, or decree to be entered
in any court of record within the State of Delaware or elsewhere, or which
may now or hereafter be required by any law, judge, officer or court in
the State of Delaware or elsewhere.
|
|
(9)
|
To
act by any and every method of appointment as trustee, trustee in
bankruptcy, receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and all estates and
property, real, personal or mixed, and to be appointed as such trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian or bailee by any persons, corporations,
court, officer, or authority, in the State of Delaware or
elsewhere;
|
and
whenever this Corporation is so appointed by any person, corporation,
court, officer or authority such trustee, trustee in bankruptcy, receiver,
assignee, assignee in bankruptcy, executor, administrator, guardian,
bailee, or in any other trust capacity, it shall not be required to give
bond with surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon it by such
appointment.
|
||
|
(10)
|
And
for its care, management and trouble, and the exercise of any of its
powers hereby given, or for the performance of any of the duties which it
may undertake or be called upon to perform, or for the assumption of any
responsibility the said Corporation may be entitled to receive a proper
compensation.
|
|
(11)
|
To
purchase, receive, hold and own bonds, mortgages, debentures, shares of
capital stock, and other securities, obligations, contracts and evidences
of indebtedness, of any private, public or municipal corporation within
and without the State of Delaware, or of the Government of the United
States, or of any state, territory, colony, or possession thereof, or of
any foreign government or country; to receive, collect, receipt for, and
dispose of interest, dividends and income upon and from any of the bonds,
mortgages, debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other property held
and owned by it, and to exercise in respect of all such bonds, mortgages,
debentures, notes, shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property, any and all the
rights, powers and privileges of individual owners thereof, including the
right to vote thereon; to invest and deal in and with any of the moneys of
the Corporation upon such securities and in such manner as it may think
fit and proper, and from time to time to vary or realize such investments;
to issue bonds and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the property held or owned
by the Corporation, and to sell and pledge such bonds, as and when the
Board of Directors shall determine, and in the promotion of its said
corporate business of investment and to the extent authorized by law, to
lease, purchase, hold, sell, assign, transfer, pledge, mortgage and convey
real and personal property of any name and nature and any estate or
interest therein.
|
|
(1)
|
To
do any or all of the things herein set forth, to the same extent as
natural persons might or could do, and in any part of the
world.
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(2)
|
To
acquire the good will, rights, property and franchises and to undertake
the whole or any part of the assets and liabilities of any
person, firm, association or corporation, and to pay for the same in cash,
stock of this Corporation, bonds or otherwise; to hold or in any manner to
dispose of the whole or any part of the property so purchased; to conduct
in any lawful manner the whole or any part of any business so acquired,
and to exercise all the powers necessary or convenient in and about the
conduct and management of such
business.
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(3)
|
To
take, hold, own, deal in, mortgage or otherwise lien, and to lease, sell,
exchange, transfer, or in any manner whatever dispose of property, real,
personal or mixed, wherever
situated.
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(4)
|
To
enter into, make, perform and carry out contracts of every kind with any
person, firm, association or corporation, and, without limit as to amount,
to draw, make, accept, endorse, discount, execute and issue
promissory notes, drafts, bills of exchange, warrants, bonds, debentures,
and other negotiable or transferable
instruments.
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(5)
|
To
have one or more offices, to carry on all or any of its operations and
businesses, without restriction to the same extent as natural persons
might or could do, to purchase or otherwise acquire, to hold, own, to
mortgage, sell, convey or otherwise dispose of, real and personal
property, of every class and description, in any State, District,
Territory or Colony of the United States, and in any foreign country or
place.
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(6)
|
It
is the intention that the objects, purposes and powers specified and
clauses contained in this paragraph shall (except where otherwise
expressed in said paragraph) be nowise limited or restricted by reference
to or inference from the terms of any other clause of this or any other
paragraph in this charter, but that the objects, purposes and powers
specified in each of the clauses of this paragraph shall be regarded as
independent objects, purposes and
powers.
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(1)
|
One
million (1,000,000) shares of Preferred stock, par value $10.00 per share
(hereinafter referred to as "Preferred Stock");
and
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(2)
|
Forty
million (40,000,000) shares of Common Stock, par value $1.00 per share
(hereinafter referred to as "Common
Stock").
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|
(1)
|
The
distinctive designation of, and the number of shares of Preferred Stock
which shall constitute such series, which number may be increased (except
where otherwise provided by the Board of Directors) or decreased (but not
below the number of shares thereof then outstanding) from time to time by
like action of the Board of
Directors;
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(2)
|
The
rate and times at which, and the terms and conditions on which, dividends,
if any, on Preferred Stock of such series shall be paid, the extent of the
preference or relation, if any, of such dividends to the dividends payable
on any other class or classes, or series of the same or other class of
stock and whether such dividends shall be cumulative or
non-cumulative;
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(3)
|
The
right, if any, of the holders of Preferred Stock of such series to convert
the same into or exchange the same for, shares of any other class or
classes or of any series of the same or any other class or classes of
stock of the Corporation and the terms and conditions of such conversion
or exchange;
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(4)
|
Whether
or not Preferred Stock of such series shall be subject to redemption, and
the redemption price or prices and the time or times at which, and the
terms and conditions on which, Preferred Stock of such series may be
redeemed.
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|
(5)
|
The
rights, if any, of the holders of Preferred Stock of such series upon the
voluntary or involuntary liquidation, merger, consolidation, distribution
or sale of assets, dissolution or winding-up, of the
Corporation.
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|
(6)
|
The
terms of the sinking fund or redemption or purchase account, if any, to be
provided for the Preferred Stock of such series;
and
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|
(7)
|
The
voting powers, if any, of the holders of such series of Preferred Stock
which may, without limiting the generality of the foregoing include the
right, voting as a series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a class, to elect one
or more directors of the Corporation if there shall have been a default in
the payment of dividends on any one or more series of Preferred Stock or
under such circumstances and on such conditions as the Board of Directors
may determine.
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(c) (1) After the requirements with respect
to preferential dividends on the Preferred Stock (fixed in accordance with
the provisions of section (b) of this Article
Fourth
), if any, shall
have been met and after the Corporation shall have complied with all the
requirements, if any, with respect to the setting aside of sums as sinking
funds or redemption or purchase accounts (fixed in accordance with the
provisions of section (b) of this Article
Fourth
), and subject
further to any conditions which may be fixed in accordance with the
provisions of section (b) of this Article
Fourth
, then and not
otherwise the holders of Common Stock shall be entitled to receive such
dividends as may be declared from time to time by the Board of
Directors.
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(2)
|
After
distribution in full of the preferential amount, if any, (fixed in
accordance
|
with
the provisions of section (b) of this Article
Fourth
), to be
distributed to the holders of Preferred Stock in the event of voluntary or
involuntary liquidation, distribution or sale of assets, dissolution or
winding-up, of the Corporation, the holders of the Common Stock shall be
entitled to receive all of the remaining assets of the Corporation,
tangible and intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares of Common Stock
held by them respectively.
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||
|
(3)
|
Except
as may otherwise be required by law or by the provisions of such
resolution or resolutions as may be adopted by the Board of Directors
pursuant to section (b) of this Article
Fourth
, each holder of
Common Stock shall have one vote in respect of each share of Common Stock
held on all matters voted upon by the
stockholders.
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|
(A)
|
any
merger or consolidation of the Corporation or any Subsidiary (as
hereinafter defined) with or into (i) any Interested Stockholder (as
hereinafter defined) or (ii) any other corporation (whether or not itself
an Interested Stockholder), which, after such merger or consolidation,
would be an Affiliate (as hereinafter defined) of an Interested
Stockholder, or
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|
(B)
|
any
sale, lease, exchange, mortgage, pledge, transfer or other disposition (in
one transaction or a series of related transactions) to or with any
Interested Stockholder or any Affiliate of any Interested Stockholder of
any assets of the Corporation or any Subsidiary having an aggregate fair
market value of $1,000,000 or more,
or
|
|
(C)
|
the
issuance or transfer by the Corporation or any Subsidiary (in one
transaction or a series of related transactions) of any securities of the
Corporation or any Subsidiary to any Interested Stockholder or any
Affiliate of any Interested Stockholder in exchange for cash, securities
or other property (or a combination thereof) having an aggregate fair
market value of $1,000,000 or more,
or
|
|
(D)
|
the
adoption of any plan or proposal for the liquidation or dissolution of the
Corporation, or
|
|
(E)
|
any
reclassification of securities (including any reverse stock split), or
recapitalization of the Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar transaction
(whether or not with or into or otherwise involving an Interested
Stockholder) which has the effect, directly or indirectly, of increasing
the proportionate share of the outstanding shares of any class of equity
or convertible securities of the Corporation or any Subsidiary which is
directly or indirectly owned by any Interested Stockholder, or any
Affiliate of any Interested
Stockholder,
|
|
(2)
|
The
term "business combination" as used in this Article
Fifteenth
shall mean any
transaction which is referred to in any one or more of clauses (A) through
(E) of paragraph 1 of the section
(a).
|
|
(2)
|
"Interested
Stockholder" shall mean, in respect of any business combination, any
person (other than the Corporation or any Subsidiary) who or which as of
the record date for the determination of stockholders entitled to notice
of and to vote on such business combination, or immediately prior to the
consummation of any such
transaction:
|
|
(A)
|
is
the beneficial owner, directly or indirectly, of more than 10% of the
Voting Shares, or
|
|
(B)
|
is
an Affiliate of the Corporation and at any time within two years prior
thereto was the beneficial owner, directly or indirectly, of not less than
10% of the then outstanding voting Shares,
or
|
|
(C)
|
is
an assignee of or has otherwise succeeded in any share of capital stock of
the Corporation which were at any time within two years prior thereto
beneficially owned by any Interested Stockholder, and such assignment or
succession shall have occurred in the course of a transaction or series of
transactions not involving a public offering within the meaning of the
Securities Act of 1933.
|
|
(A)
|
which
such person or any of its Affiliates and Associates (as hereafter defined)
beneficially own, directly or indirectly,
or
|
|
(B)
|
which
such person or any of its Affiliates or Associates has (i) the right to
acquire (whether such right is exercisable immediately or only after the
passage of time), pursuant to any agreement, arrangement or understanding
or upon the exercise of conversion rights, exchange rights, warrants or
options, or otherwise, or (ii) the right to vote pursuant to any
agreement, arrangement or understanding,
or
|
|
(C)
|
which
are beneficially owned, directly or indirectly, by any other person with
which such first mentioned person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any shares of capital stock of
the Corporation.
|
|
(4)
|
The
outstanding Voting Shares shall include shares deemed owned through
application of paragraph (3) above but shall not include any other Voting
Shares
|
which may be issuable pursuant to any agreement, or upon exercise of conversion rights, warrants or options or otherwise. | ||
|
(5)
|
"Affiliate"
and "Associate" shall have the respective meanings given those terms in
Rule 12b-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as in effect on December 31,
1981.
|
|
(6)
|
"Subsidiary"
shall mean any corporation of which a majority of any class of equity
security (as defined in Rule 3a11-1 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on December 31,
1981) is owned, directly or indirectly, by the Corporation; provided,
however, that for the purposes of the definition of Investment Stockholder
set forth in paragraph (2) of this section (c), the term "Subsidiary"
shall mean only a corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the
Corporation.
|
|
WILMINGTON TRUST
COMPANY
|
Dated: July
7, 2009
|
By: /s/
Denise M. Geran
|
Name: Denise
M. Geran
|
Title: Vice
President
|
T TO:
|
|
Security
Federal Corporation
238
Richland Avenue West
Aiken,
SC 29801
|
SECURITY
FEDERAL CORPORATION BANCSHARES, INC.
|
|||
By:
Title
|
Signature
of Subscriber
|
Signature
of Subscriber
|
|||||
Printed
Name
|
Printed
Name
|
|||||
Social Security or Employer
Identification
No.
|
Social Security or Employer
Identification
No.
|