STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is
made and entered into as of August 6, 1998, by and between
1ST BANCORP, an Indiana corporation ("Issuer"), and GERMAN
AMERICAN BANCORP, an Indiana corporation ("Grantee").
WHEREAS, Grantee and Issuer have entered into that
certain Agreement and Plan of Reorganization, dated as of
August 6, 1998 (the "Merger Agreement"), providing for,
among other things, the merger of Issuer with and into
Grantee with Grantee as the surviving entity; and
WHEREAS, as a condition and inducement to
Grantee's execution of the Merger Agreement, Grantee has
required that Issuer agree, and Issuer has agreed, to grant
Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the respective
representations, warranties, covenants and agreements set
forth herein and in the Merger Agreement, and intending to
be legally bound hereby, Issuer and Grantee agree as
follows:
1 . DEFINED TERMS. Capitalized terms which are used
but not defined herein shall
have the meanings ascribed to such terms in the Merger
Agreement.
2. GRANT OF OPTION. Subject to the terms and
conditions set forth herein, Issuer hereby grants to Grantee
an irrevocable option (the "Option") to purchase up to
218,142 shares (as adjusted as set forth herein, the "Option
Shares," which shall include the Option Shares before and
after any transfer of such Option Shares) of common stock,
$1.00 par value per share ("Issuer Common Stock"), of Issuer
at a purchase price per Option Share (subject to adjustment
as set forth herein, the "Purchase Price") equal to $50.94
provided, however, that in no event shall the number of
shares of Issuer Common Stock for which this Option is
exercisable exceed the lesser of (i) 19.9% of the lssuer's
issued and outstanding shares of Issuer Common Stock without
giving effect to any shares subject to or issued pursuant to
the Option and (ii) that minimum number of shares of Issuer
Common Stock which when aggregated with any other shares of
Issuer Common Stock beneficially owned by Grantee or any
Affiliate thereof would cause the provisions of any Takeover
Laws of the IBCL to be applicable to the Merger or the
Option.
3. EXERCISE OF OPTION.
(a) Provided that (i) Grantee or Holder (as hereinafter
defined), as applicable, shall not be in material breach of its
agreements or covenants contained in this Agreement or the Merger
Agreement, and (ii) no preliminary or permanent injunction or
other order against the delivery of shares covered by the Option
issued by any court of competent jurisdiction in the United
States shall be in effect, Holder may exercise the Option, in
whole or in part, at any time and from time to time following the
occurrence of a Purchase Event and prior to the termination of
the Option. The Option shall terminate and be of no further
force and effect upon the earliest to occur of (A) the Effective
Time, (B) termination of the Merger Agreement in accordance with
the terms thereof prior to the occurrence of a Purchase Event or
a Preliminary Purchase Event (other than a termination of the
Merger Agreement by Grantee pursuant to (i) Section 7.02 thereof
(but only if such termination was a result of a willful breach by
Issuer) or (ii) Section
Exhibit 2.4
7.05 thereof (but only if such termination was as a result of the
failure of the shareholders of Issuer to approve the Merger)
(each a "Default Termination")), (C) 18 months after a Default
Termination, and (D) 18 months after any termination of the
Merger Agreement following the occurrence of a Purchase Event or
a Preliminary Purchase Event. Any purchase of shares upon
exercise of the Option shall be subject to compliance with
applicable law, including, without limitation, any required
regulatory approvals under the Bank Holding Company Act of 1956,
as amended (the "BHC Act"), and the Savings and Loan Holding
Company Act. The term "Holder" shall mean the holder or holders
of the Option from time to time, and which initially is the
Grantee. The rights set forth in Section 8 shall terminate when
the right to exercise the Option terminates (other than as a
result of a complete exercise of the Option) as set forth herein.
(b) As used herein, a "Purchase Event" means any of
the following events subsequent to the date of this Agreement:
(i) without Grantee's prior written consent,
Issuer shall have authorized, recommended, publicly
proposed or publicly announced an intention to authorize,
recommend or propose, or entered into an agreement with
any person (other than Grantee or any Subsidiary of Grantee)
to effect an Acquisition Transaction (as defined below). As
used herein, the term Acquisition Transaction shall mean (A)
a merger, consolidation or similar transaction involving
Issuer, or any of its Subsidiaries (other than transactions
solely between Issuer's Subsidiaries and transactions
involving Issuer or any Subsidiary in which the voting
securities of Issuer outstanding immediately prior thereto
continue to represent (by either remaining outstanding or
being converted into securities of the surviving entity or
the parent thereof) at least 75% of the combined voting
power of the voting securities of the Issuer or the
surviving entity or the parent thereof outstanding
immediately after the consummation of the transaction), (B)
the disposition, by sale, lease, exchange or otherwise, of
Assets of Issuer or any of its Subsidiaries representing in
either case 20% or more of the consolidated assets of Issuer
and its Subsidiaries, or (C) the issuance, sale or other
disposition of (including by way of merger, consolidation,
share exchange or any similar transaction) securities
representing 20% or more of the voting power of Issuer or
any of its Subsidiaries (any of the foregoing, an
"Acquisition Transaction"); or
(ii) any person (other than Grantee or any
Subsidiary of Grantee) shall have acquired beneficial
ownership (as such term is defined in Rule 13d-3 promulgated
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), of or the right to acquire beneficial
ownership of, or any "group" (as such term is defined under
the Exchange Act), other than a group of which Grantee or
any of its Subsidiaries is a member, shall have been formed
which beneficially owns or has the right to acquire
beneficial ownership of, 20% or more of the then-outstanding
shares of Issuer Common Stock,
(c) As used herein, a "Preliminary Purchase Event"
means any of the following
events:
(i) any person (other than Grantee or any
Subsidiary of Grantee) shall have commenced (as such term
is defined in Rule 14d-2 under the Exchange Act), or shall
have filed a registration statement under the Securities Act
of 1933, as amended (the "Securities Act") with respect to,
a tender offer or exchange offer to purchase any shares of
Issuer Common Stock such that, upon consummation of such
offer, such person would own or control 20% or more of the
then-outstanding shares of Issuer Common Stock (such an
offer being referred to herein as a "Tender Offer" or an
"Exchange Offer," respectively); or
(ii) the holders of Issuer Common Stock shall not
have approved the Merger Agreement at the meeting of
such stockholders held for the purpose of voting on the
Merger Agreement, such meeting shall not have been held or
shall have been canceled prior to termination of the Merger
Agreement, or Issuer's Board of Directors shall have
withdrawn or modified in a manner adverse to Grantee the
recommendation of Issuer's Board of Directors with respect
to the Merger Agreement, in each case after it shall have
been publicly announced that any person (other than Grantee
or any Subsidiary of Grantee) shall have (A) made a proposal
to engage in an Acquisition Transaction, (B) commenced a
Tender Offer or filed a registration statement under the
Securities Act with respect to an Exchange Offer, or (C)
filed an application (or given a notice), whether in draft
or final form, under any federal or state statute or
regulation (including a notice filed under the HSR Act and
an application, or notice filed under the BHC Act, the Bank
Merger Act, or the Change in Bank Control Act of 1978)
seeking the Consent to an Acquisition Transaction from any
federal or state governmental or regulatory authority or
agency.
As used in this Agreement, "person" shall have the meaning
specified in Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
(d) In the event Holder wishes to exercise the
Option, it shall send to Issuer a written notice (the date of
which being herein referred to as the "Notice Date") specifying
(i) the total number of Option Shares it intends to purchase
pursuant to such exercise and (ii) a place and date not earlier
than three business days nor later than 30 business days from the
Notice Date for the closing (the "Closing") of such purchase (the
"Closing Date_). If prior Consent of any governmental or
regulatory agency or authority is required in connection with
such purchase, Issuer shall cooperate with Holder in the filing
of the required notice or application for such Consent and the
obtaining of such Consent and the Closing shall occur immediately
following receipt of such Consents (and expiration of any
mandatory waiting periods).
4. PAYMENT AND DELIVERY OF CERTIFICATES.
(a) On each Closing Date, Holder shall (i) pay to
Issuer, in immediately available funds by wire transfer to a bank
account designated by Issuer, an amount equal to the Purchase
Price multiplied by the number of Option Shares to be purchased
on such Closing Date, and (ii) present and surrender this
Agreement to the Issuer at the address of the Issuer specified in
Section 13(f) hereof.
(b) At each Closing, simultaneously with the delivery
of immediately available funds and surrender of this Agreement as
provided in Section 4(a), (i) Issuer shall deliver to Holder (A)
a certificate or certificates representing the Option Shares to
be purchased at such Closing, which Option Shares shall be free
and clear of all liens, claims, charges and encumbrances of any
kind whatsoever and subject to no pre-emptive rights, and (B) if
the Option is exercised in part only, an executed new agreement
with the same terms as this Agreement evidencing the right to
purchase the balance of the shares of Issuer Common Stock
purchasable hereunder, and (ii) Holder shall deliver to Issuer a
letter agreeing that Holder shall not offer to sell or otherwise
dispose of such Option Shares in violation of applicable federal
and state law or of the provisions of this Agreement.
(c) In addition to any other legend that is required
by applicable law, certificates for the Option Shares delivered
at each Closing shall be endorsed with a restrictive legend which
shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND PURSUANT TO THE TERMS OF A STOCK
OPTION AGREEMENT DATED AS OF AUGUST 6, 1998. A COPY OF SUCH
AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT
CHARGE UPON RECEIPT BY THE ISSUER OF A WRITTEN REQUEST
THEREFOR.
It is understood and agreed that: (i) the references in the above
legend to resale restrictions of the Securities Act shall be
removed by delivery of substitute certificate(s) without such
reference if Holder shall have delivered to Issuer a copy of a
letter from the staff of the SEC, or an opinion of counsel in
form and substance reasonably satisfactory to Issuer and its
counsel, to the effect that such legend is not required for
purposes of the Securities Act: (ii) the references in the above
legend to the provisions of this Agreement shall be removed by
delivery of substitute certificate(s) without such reference if
the shares have been sold or transferred in compliance with the
provisions of this Agreement and under circumstances that do not
require the retention of such reference; and (iii) the legend
shall be removed in its entirety if the conditions in the
preceding clauses (i) and (ii) are both satisfied.
5. REPRESENTATIONS AND WARRANTIES OF ISSUER. Issuer
hereby represents and warrants to Grantee as follows:
(a) Issuer has all requisite corporate power and
authority to enter into this Agreement and, subject to any
approvals referred to herein, to consummate the transactions
contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate
action on the part of Issuer. This Agreement has been duly
executed and delivered by Issuer.
(b) Issuer has taken all necessary corporate action to
authorize and reserve and to permit it to issue, and, at all
times from the date hereof until the obligation to deliver Issuer
Common Stock upon the exercise of the Option terminates, will
have reserved for issuance, upon exercise of the Option, the
number of shares of Issuer Common Stock necessary for Holder to
exercise the Option, and Issuer will take all necessary corporate
action, to authorize and reserve for issuance all additional
shares of Issuer Common Stock or other securities which may be
issued pursuant to Section 7 upon exercise of the Option. The
shares of Issuer Common Stock to be issued upon due exercise of
the Option, including all additional Shares of Issuer Common
Stock or other securities which may be issuable pursuant to
Section 7, upon issuance pursuant hereto, shall be duly and
validly issued, fully paid, and nonassessable, and shall be
delivered free and clear of all liens, claims, charges, and
encumbrances of any kind or nature whatsoever, including any
preemptive rights of any stockholder of Issuer.
(c) Issuer has taken all action so that the entering
into of this Agreement and the consummation of the transactions
contemplated by this Agreement do not and will not result in the
grant of any rights to any Person under the Articles of
Incorporation, Bylaws, or other governing instruments of Issuer
or any of its subsidiaries or restrict or impair the ability of
Grantee to vote, or otherwise to exercise the rights of a
stockholder with respect to, shares of Issuer or any of its
subsidiaries that may be directly or indirectly acquired or
controlled by it.
6. REPRESENTATIONS AND WARRANTIES OF GRANTEE. Grantee
hereby represents and warrants to Issuer that:
(a) Grantee has all requisite corporate power and
authority to enter into this Agreement and, subject to any
approvals or consents referred to herein, to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Grantee. This Agreement has been
duly executed and delivered by Grantee.
(b) This Option is not being, and any Option Shares
or other securities acquired by Grantee upon exercise of the
Option will not be, acquired with a view to the public
distribution thereof and will not be transferred or otherwise
disposed of except in a transaction registered or exempt from
registration under any applicable securities laws.
(c) Grantee has taken all necessary action to exempt
the transactions contemplated by this Agreement from any
applicable Takeover Laws.
7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(a) In the event of any change in Issuer Common Stock
by reason of a stock dividend, stock split, split-up,
recapitalization, combination, exchange of shares or similar
transaction, the type and number of shares or securities subject
to the Option, and the Purchase Price therefor, shall be adjusted
appropriately, and proper provision shall be made in the
agreements governing such transaction, if any, so that Holder
shall receive, upon exercise of the Option, the number and class
of shares or other securities or property that Holder would have
received in respect of Issuer Common Stock if the Option had been
exercised immediately prior to such event, or the record date
therefor, as applicable. If any additional shares of Issuer
Common Stock are issued after the date of this Agreement (other
than pursuant to an event described in the first sentence of this
Section 7(a) or pursuant to this Option), the number of shares of
Issuer Common Stock subject to the Option shall be adjusted so
that, after such issuance, it, together with any shares of Issuer
Common Stock previously issued pursuant hereto, shall not exceed
the lesser of (i) 19.9% of the number of shares of Issuer Common
Stock then issued and outstanding, without giving effect to any
shares subject to or issued pursuant to the Option and (ii) that
minimum number of shares of Issuer Common Stock, which when
aggregated with any other shares of Issuer Common Stock
beneficially owned by Grantee or any Affiliate thereof would
cause the provisions of any Takeover Laws of the IBCL to be
applicable to the Merger or the Option.
(b) In the event that Issuer shall enter in an
agreement (i) to consolidate with or merge into any person, other
than Grantee or one of its Subsidiaries, and shall not be the
continuing or surviving corporation of such consolidation or
merger; (ii) to permit any person, other than Grantee or one of
its Subsidiaries, to merge into Issuer and Issuer shall be the
continuing or surviving corporation, but, in connection with such
merger, the then outstanding shares of Issuer Common Stock shall
be changed into or exchanged for stock or other securities of
Issuer or any other person or cash or any other property and the
outstanding shares of Issuer Common Stock immediately prior to
such merger shall after such merger represent less than 50% of
the outstanding shares and share equivalents of the merged
company; or (iii) to sell or otherwise transfer all or
substantially all of its assets to any person, other than Grantee
or one of its Subsidiaries, then, and in each such case, the
agreement governing such transaction shall make proper provisions
so that the Option shall, upon the consummation of any such
transaction and upon the terms and conditions set forth herein,
be converted into, or exchanged for, an option (the "Substitute
Option"), at the election of Grantee, of either (x) the Acquiring
Corporation (as defined below) or (y) any person that controls
the Acquiring Corporation (in each case, such person being
referred to as the "Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as
the Option, provided that, if the terms of the Substitute Option
cannot, for legal reasons, be the same as the Option, such terms
shall be as similar as possible and in no event less advantageous
to Grantee. The Substitute Option Issuer shall also enter into
an agreement with the then holder or holders of the Substitute
Option in substantially the same form as this Agreement, which
shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for
such number of shares of the Substitute Common Stock (as
hereinafter defined) as is equal to the Assigned Value (as
hereinafter defined) multiplied by the number of shares of the
Issuer Common Stock for which the Option was theretofore
exercisable, divided by the Average Price (as hereinafter
defined). The exercise price of the Substitute Option per share
of the Substitute Common Stock (the "Substitute Purchase Price")
shall then be equal to the Purchase Price, multiplied by a
fraction in which the numerator is the number of shares of the
Issuer Common Stock for which the Option was theretofore
exercisable and the denominator is the number of shares for which
the Substitute Option is exercisable.
(e) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (x) the
continuing or surviving corporation of a consolidation or
merger with Issuer (if other than Issuer), (y) Issuer in a
merger in which Issuer is the continuing or surviving
person, and (z) the transferee of all or any substantial
part of the Issuer's assets (or the assets of its
Subsidiaries).
(ii) "Substitute Common Stock" shall mean the
common stock issued
by the Substitute Option Issuer upon exercise of the
Substitute Option.
(iii) "Assigned Value" shall mean the highest
of (x) the price per share of the Issuer Common Stock at
which a Tender Offer or Exchange Offer therefor has been
made by any person (other than Grantee), (y) the price per
share of the Issuer Common Stock to be paid by any person
(other than the Grantee) pursuant to an agreement with
Issuer, and (z) the highest last sale price per share of
Issuer Common Stock quoted on the Nasdaq National Market (or
if Issuer Common Stock is not quoted on such exchange, the
highest bid price per share on any day as quoted on the
principal trading market or securities exchange on which
such shares are traded as reported by a recognized source
chosen by Grantee) within the six-month period immediately
preceding the agreement; provided, that in the event of a
sale of less than all of Issuer's assets, the Assigned Value
shall be the sum of the price paid in such sale for such
assets and the current market value of the remaining assets
of Issuer as determined by a nationally recognized
investment banking firm selected by Grantee (or by a
majority in interest of the Grantees if there shall be more
than one Grantee (a "Grantee Majority")) and reasonably
acceptable to Issuer, divided by the number of shares of the
Issuer Common Stock outstanding at the time of such sale.
In the event that an exchange offer is made for the Issuer
Common Stock or an agreement is entered into for a merger or
consolidation involving consideration other than cash, the
value of the securities or other property issuable or
deliverable in exchange for the Issuer Common Stock shall be
determined by a nationally recognized investment banking
firm selected by Grantee and reasonably acceptable to Issuer
(or if applicable, Acquiring Corporation). (If there shall
be more than one Grantee, any such selection shall be made
by a Grantee Majority.)
(iv) "Average Price" shall mean the average
closing price of a share of the Substitute Common Stock
for the one year immediately preceding the consolidation,
merger or sale in question, but in no event higher than the
last sale price of the shares of the Substitute Common Stock
on the day preceding such consolidation, merger or sale;
provided that if Issuer is the issuer of the Substitute
Option, the Average Price shall be computed with respect to
a share of common stock issued by Issuer, the person merging
into Issuer or by any company which controls or is
controlled by such merger person, as Grantee may elect.
(f) In no event pursuant to any of the foregoing
paragraphs shall the Substitute Option be exercisable for more
than 19.9% of the aggregate of the shares of the Substitute
Common Stock outstanding prior to exercise of the Substitute
Option. In the event that the Substitute Option would be
exercisable for more than 19.9% of the aggregate of the shares of
Substitute Common Stock but for this clause (f), the Substitute
Option Issuer shall make a cash payment to Grantee equal to the
excess of (i) the value of the Substitute Option without giving
effect to the limitation in this clause (f) over (ii) the value
of the Substitute Option after giving effect to the limitation in
this clause (f). This difference in value shall be determined by
a nationally recognized investment banking firm selected by
Grantee (or a Grantee Majority) and reasonably acceptable to the
Acquiring Corporation.
(g) Issuer shall not enter into any transaction
described in subsection (b) of this Section 7 unless the
Acquiring Corporation and any person that controls the Acquiring
Corporation assume in writing all the obligations of Issuer
hereunder and take all other actions that may be necessary so
that the provisions of this Section 7 are given full force and
effect (including, without limitation, any action that may be
necessary so that the shares of Substitute Common Stock are in no
way distinguishable from or have lesser economic value than other
shares of common stock issued by the Substitute Option Issuer).
(h) The provisions of Sections 8, 9, 10, and 11 shall
apply, with appropriate adjustments, to any securities for which
the Option becomes exercisable pursuant to this Section 7 and, as
applicable, references in such sections to "Issuer," "Option,"
"Purchase Price" and "Issuer Common Stock" shall be deemed to be
references to "Substitute Option Issuer," "Substitute Option,"
"Substitute Purchase Price" and "Substitute Common Stock,"
respectively.
8. REPURCHASE AT THE OPTION OF HOLDER.
(a) Subject to the last sentence of Section 3(a), at
the request of Holder at any time commencing upon the first
occurrence of a Repurchase Event (as defined in Section 8(d)) and
ending 18 months immediately thereafter, Issuer shall repurchase
from Holder the Option and all shares of Issuer Common Stock
purchased by Holder pursuant hereto with respect to which Holder
then has beneficial ownership. The date on which Holder
exercises its rights under this Section 8 is referred to as the
"Request Date." Such repurchase shall be at an aggregate price
(the "Section 8 Repurchase Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by Holder
for any shares of Issuer Common Stock acquired by
Holder pursuant to the Option with respect to which Holder
then has beneficial ownership;
(ii) the excess, if any, of (x) the Applicable
Price (as defined below) for each share of Issuer Common
Stock over (y) the Purchase Price (subject to adjustment
pursuant to Section 7), multiplied by the number of shares
of Issuer Common Stock with respect to which the Option has
not been exercised; and
(iii) the excess, if any, of the Applicable
Price over the Purchase Price (subject to adjustment
pursuant to Section 7) paid (or, in the case of Option
Shares with respect to which the Option has been exercised
but the Closing Date has not occurred, payable) by Holder
for each share of Issuer Common Stock with respect to which
the Option has been exercised and with respect to which
Holder then has beneficial ownership, multiplied by the
number of such shares.
(b) If Holder exercises its rights under this Section
8, Issuer shall, within ten business days after the Request Date,
pay the Section 8 Repurchase Consideration to Holder in
immediately available funds, and contemporaneously with such
payment Holder shall surrender to Issuer the Option and the
certificates evidencing the shares of' Issuer Common Stock
purchased thereunder with respect to which Holder then has
beneficial ownership, and Holder shall warrant that it has sole
record and beneficial ownership of such shares and that the same
are then free and clear of all liens, claims, charges and
encumbrances of any kind whatsoever. Notwithstanding the
foregoing, to the extent that prior notification to or Consent of
any governmental or regulatory agency or authority is required in
connection with the payment of all or any portion of the Section
8 Repurchase Consideration, Holder shall have the ongoing option
to revoke its request for repurchase pursuant to Section 8, in
whole or in part, or to require that Issuer deliver from time to
time that portion of the Section 8 Repurchase Consideration that
it is not then so prohibited from paying and promptly file the
required notice or application for Consent and expeditiously
process the same (and each party shall cooperate with the other
in the filing of any such notice or application and the obtaining
of any such Consent). If any governmental or regulatory agency
or authority disapproves of any part of Issuer's proposed
repurchase pursuant to this Section 8, Issuer shall promptly give
notice of such fact to Holder. If any governmental or regulatory
agency or authority prohibits the repurchase in part but not in
whole, then Holder shall have the right (i) to revoke the
repurchase request or (ii) to the extent permitted by such agency
or authority, determine whether the repurchase should apply to
the Option and/or Option Shares and to what extent to each, and
Holder shall thereupon have the right to exercise the Option as
to the number of Option Shares for which the Option was
exercisable at the Request Date less the sum of the number of
shares covered by the Option in respect of which payment has been
made pursuant to Section 8(a)(ii) and the number of shares
covered by the portion of the Option (if any) that has been
repurchased. Holder shall notify Issuer of its determination
under the preceding sentence within five business days of receipt
of notice of disapproval of the repurchase.
Notwithstanding anything herein to the contrary, all of
Holder's rights under this Section 8 shall terminate on the date
of termination of this Option pursuant to Section 3(a).
(c) For purposes of this Agreement, the "Applicable
Price" means the highest of (i) the highest price per share of
Issuer Common Stock paid for any such share by the person or
groups described in Section 8(d)(i), (ii) the price per share of
Issuer Common Stock received by holders of Issuer Common Stock in
connection with any merger or other business combination
transaction described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii),
or (iii) the highest last sale price per share of Issuer Common
Stock quoted on the Nasdaq National Market (or if Issuer Common
Stock is not quoted on such exchange, the highest bid price per
share as quoted on the principal trading market or securities
exchange on which such shares are traded as reported by a
recognized source chosen by Holder) during the 60 business days
preceding the Request Date; provided, however, that in the event
of a sale of less than all of Issuer's Assets, the Applicable
Price shall be the sum of the price paid in such sale for such
assets and the current market value of the remaining assets of
Issuer as determined by an independent nationally recognized
investment banking firm selected by Holder and reasonably
acceptable to Issuer (which determination shall be conclusive for
all purposes of this Agreement), divided by the number of shares
of the Issuer Common Stock outstanding at the time of such sale.
If the consideration to be offered, paid or received pursuant to
either of the foregoing clauses (i) or (ii) shall be other than
in cash, the value of such consideration shall be determined in
good faith by an independent nationally recognized investment
banking firm selected by Holder and reasonably acceptable to
Issuer, which determination shall be conclusive for all purposes
of this Agreement.
(d) As used herein, a "Repurchase Event" shall occur
if (i) any person (other than Grantee or any subsidiary of
Grantee) shall have acquired beneficial ownership (as such term
is defined in Rule 13d-3 promulgated under the Exchange Act), or
the right to acquire beneficial ownership, or any "group" (as
such term is defined under the Exchange Act) shall have been
formed which beneficially owns or has the right to acquire
beneficial ownership of 50% or more of the then-outstanding
shares of Issuer Common Stock, or (ii) any of the transactions
described in Section 7(b)(i), 7(b)(ii), or 7(iii) shall be
consummated.
9. REGISTRATION RIGHTS.
(a) Issuer shall, subject to the conditions of
subparagraph (c) below, if requested by any Holder, including
Grantee and any permitted transferee ("Selling Holder"), as
expeditiously as possible prepare and file a registration
statement under the Securities Laws if necessary in order to
permit the sale or other disposition of any or all shares of
Issuer Common Stock or other securities that have been acquired
by or are issuable to Selling Holder upon exercise of the Option
in accordance with the intended method of sale or other
disposition stated by Holder in such request (it being understood
and agreed that any such sale or other disposition shall be
effected on a widely distributed basis so that, upon consummation
thereof, no purchaser or transferee shall beneficially own more
than 5% of the shares of Issuer Common Stock then outstanding),
including, without limitation, a "shelf" registration statement
under Rule 415 under the Securities Act or any successor
provision, and Issuer shall use its best efforts to qualify such
shares or other securities for sale under any applicable state
securities laws. Each such Holder shall provide all information
reasonably requested by Issuer for inclusion in any registration
statement to be filed hereunder.
(b) If Issuer at any time after the exercise of the
Option, but prior to the termination of the Option, proposes to
register any shares of Issuer Common Stock under the Securities
Laws in connection with an underwritten public offering of such
Issuer Common Stock, Issuer will promptly give written notice to
Holder of its intention to do so and, upon the written request of
Holder given within 30 days after receipt of any such notice
(which request shall specify the number of shares of Issuer
Common Stock intended to be included in such underwritten public
offering by Selling Holder), Issuer will use all reasonable
efforts to cause all such shares, the holders of which shall have
requested participation in such registration, to be so registered
and included in such underwritten public offering; provided, that
Issuer may elect to not cause any such shares to be so registered
(i) if the underwriters in good faith determine that the
inclusion of such shares would interfere with the successful
marketing of the shares of Issuer Common Stock for the account of
Issuer, or (ii) in the case of a registration solely to implement
a dividend reinvestment or similar plan, an employee benefit plan
or a registration filed on Form S-4 or any successor form, or a
registration filed on a form which does not permit registrations
of resales; provided, further, that such election pursuant to
clause (i) may only be made once. If some but not all the shares
of Issuer Common Stock, with respect to which Issuer shall have
received requests for registration pursuant to this subparagraph
(b), shall be excluded from such registration, Issuer shall make
appropriate allocation of shares to be registered among Selling
Holders and any other person (other than Issuer or any person
exercising demand registration rights in connection with such
registration) who or which is permitted to register their shares
of Issuer Common Stock in connection with such registration pro
rata in the proportion that the number of shares requested to be
registered by each Selling Holder bears to the total number of
shares requested to be registered by all persons then desiring to
have Issuer Common Stock registered for sale (other than Issuer
or any person exercising demand registration rights in connection
with such registration).
(c) Issuer shall use all reasonable efforts to cause
the registration statement referred to in subparagraph (a) above
to become effective and to obtain all consents or waivers of
other parties which are required therefor and to keep such
registration statement effective, provided, that Issuer may delay
any registration of Option Shares required pursuant to
subparagraph (a) above for a period not exceeding 90 days,
provided Issuer shall in good faith determine that any such
registration would adversely affect an offerings, or contemplated
offering of other securities by Issuer. Notwithstanding anything
to the contrary contained herein, Issuer shall not be required
to register Option Shares under the Securities Laws pursuant to
subparagraph (a) above:
(i) prior to the occurrence of a Purchase Event
and following the termination of the Option;
(ii) more than twice;
(iii)within 90 days after the effective date of a
registration referred to in subparagraph (b) above
pursuant to which the Selling Holders concerned were
afforded the opportunity to register such shares under the
Securities Laws and such shares were registered as
requested; and
(iv) unless a request therefor is made to Issuer
by Selling Holders holding at least 15% or more of the
aggregate number of Option Shares then outstanding or the
right to acquire at least 15% of the Option Shares.
In addition to the foregoing, Issuer shall not be
required to maintain the effectiveness of any registration
statement after the expiration of 120 days from the effective
date of such registration statement. Issuer shall use all
reasonable efforts to make any filings, and take all steps, under
all applicable state securities laws to the extent necessary to
permit the sale or other disposition of the Option Shares so
registered in accordance with the intended method of distribution
for such shares, provided, that Issuer shall not be required to
consent to general jurisdiction or qualify to do business in any
state where it is not otherwise required to so consent to such
jurisdiction or to so qualify to do business.
(d) Except where applicable state law prohibits such
payments, Issuer will pay all expenses (including without
limitation registration fees, qualification fees, blue sky fees
and expenses (including the fees and expenses of Issuer's
counsel), accounting expenses, printing expenses, expenses of
underwriters, excluding discounts and commissions but including
liability insurance if Issuer so desires or the underwriters so
require, and the reasonable fees and expenses of any necessary
special experts) in connection with each registration pursuant to
subparagraph (a) or (b) above (including the related offerings
and sales by Selling Holders) and all other qualifications,
notifications or exemptions pursuant to subparagraph (a) or (b)
above. Underwriting discounts and commissions relating to Option
Shares and any other expenses incurred by such Selling Holders in
connection with any such registration (including expenses of
Selling Holders' counsel) shall be borne by such Selling Holders.
(e) In connection with any registration under
subparagraph (a) or (b) above Issuer hereby agrees to indemnify
the Selling Holders, and each underwriter thereof, including each
person, if any, who controls such holder or underwriter within
the meaning of Section 15 of the Securities Act, against all
expenses, losses, claims, damages and liabilities caused by any
untrue statement of a material fact contained in any registration
statement or prospectus (including any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except
insofar as such expenses, losses, claims, damages or liabilities
of such indemnified party are caused by any untrue statement or
alleged untrue statement or any omission or alleged omission made
in reliance upon and in conformity with, information furnished in
writing to Issuer by such indemnified party expressly for use
therein, and Issuer and each officer, director and controlling
person of Issuer shall be indemnified by such Selling Holder, or
by such underwriter, as the case may be, for all such expenses,
losses, claims, damages and liabilities caused by any untrue, or
alleged untrue, statement or omission made in reliance upon, and
in conformity with, information furnished in writing to Issuer by
such holder or such underwriter, as the case may be, expressly
for such use.
Promptly upon receipt by a party indemnified under this
subparagraph (e) of notice of the commencement of any action
against such indemnified party in respect of which indemnity or
reimbursement may be sought against any indemnifying party under
this subparagraph (e), such indemnified party shall notify the
indemnifying party in writing of the commencement of such action,
but the failure so to notify the indemnifying party shall not
relieve it of any liability which it may otherwise have to any
indemnified party under this subparagraph (e), except to the
extent such failure to notify materially prejudices the
indemnifying party. In case notice of commencement of any such
action shall be given to the indemnifying party as above
provided, the indemnifying party shall be entitled to participate
in and, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense of
such action at its own expense, with counsel chosen by it and
reasonably satisfactory to such indemnified party. The
indemnified party shall have the right to employ separate counsel
in any such action and participate in the defense thereof, but
the fees and expenses of such counsel (other than reasonable
costs of investigation) shall be paid by the indemnified party
unless (i) the indemnifying party either agrees to pay the same,
(ii) the indemnifying party falls to assume the defense of such
action with counsel satisfactory to the indemnified party, or
(iii) the indemnified party has been advised by counsel that one
or more legal defenses may be available to the indemnifying party
that may be contrary to the interest of the indemnified party, in
which case the indemnifying party shall be entitled to assume the
defense of such action notwithstanding its obligation to bear
fees and expenses of such counsel; provided, however, that the
indemnifying party shall not be liable for the expenses of more
than one firm of counsel for all indemnified parties in any
jurisdiction. No indemnifying party shall be liable for any
settlement entered into without its consent, which consent may
not be unreasonably withheld
If the indemnification provided for in this subparagraph (e)
is unavailable to a party otherwise entitled to be indemnified in
respect of any expenses, losses, claims, damages or liabilities
referred to herein, then the indemnifying party, in lieu of
indemnifying such party otherwise entitled to be indemnified,
shall contribute to the amount paid or payable by such party to
be indemnified as a result of such expenses, losses, claims,
damages or liabilities in such proportion as is appropriate to
reflect the relative benefits received by issuer, all Selling
Holders and the underwriters from the offering of the securities
and also the relative fault of Issuer, all Selling Holders and
the underwriters in connection with the statements or omissions
which resulted in such expenses, losses, claims, damages or
liabilities, as well as any other relevant equitable
considerations. The amount paid or payable by a party as a
result of the expenses, losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim; provided,
that in no case shall any Selling Holder be responsible, in the
aggregate, for any amount in excess of the net offering proceeds
attributable to its Option Shares included in the offering. No
person guilty of fraudulent misrepresentation (within the meaning
of Section 1 (f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. Any obligation by any holder to
indemnify shall be several and not joint with other holders.
In connection with any registration pursuant to
subparagraph (a) or (b) above, Issuer and each Selling Holder
(other than Grantee) shall enter into an agreement containing the
indemnification provisions of this subparagraph (e).
(f) Issuer shall use its best efforts to comply with
all reporting requirements and will do all such other things as
may be necessary to permit the expeditious sale at any time of
any Option Shares by Holder in accordance with and to the extent
permitted by any rule or regulation promulgated by the SEC from
time to time, including, without limitation, Rules 144 and 144A.
(g) Issuer will pay all stamp taxes in connection
with the issuance and the sale of the Option Shares and in
connection with the exercise of the Option, and will save Holder
harmless, without limitation as to time, against any and all
liabilities, with respect to all such taxes.
10. QUOTATION; LISTING. If Issuer Common Stock or any
other securities to be acquired upon exercise of the Option are
then authorized for quotation or trading or listing on any
securities exchange or any automated quotations system maintained
by a self-regulatory organization, Issuer, upon the request of
Holder, will promptly file an application, if required, to
authorize for quotation or trading or listing the shares of
Issuer Common Stock or other securities to be acquired upon
exercise of the Option on the securities exchange or any
automated quotations system maintained by a self-regulatory
organization and will use its best efforts to obtain approval, if
required, of such quotation or listing as soon as practicable.
11. DIVISION OF OPTION. This Agreement (and the Option
granted hereby) are exchangeable, without expense, at the option
of Holder, upon presentation and surrender of this Agreement at
the principal office of Issuer for other Agreements providing for
Options of different denominations entitling the holder thereof
to purchase in the aggregate the same number of shares of Issuer
Common Stock purchasable hereunder. The terms "Agreement" and
"Option" as used herein include any other Agreements and related
Options for which this Agreement (and the Option granted hereby)
may be exchanged. Upon receipt by Issuer of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation
of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Agreement, if mutilated,
Issuer will execute and deliver a new Agreement of like tenor and
date. Any such new Agreement executed and delivered shall
constitute an additional contractual obligation on the part of
Issuer, whether or not the Agreement so lost, stolen, destroyed
or mutilated shall at any time be enforceable by anyone.
12. MISCELLANEOUS.
(a) EXPENSES. Except as otherwise provided in Section
9, each of the parties hereto shall bear and pay all costs and
expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including fees and expenses
of its own financial consultants, investment bankers, accountants
and counsel.
(b) WAIVER AND AMENDMENT. Any provision oft his
Agreement may be waived at any time by the party that is entitled
to the benefits of such provision. This Agreement may not be
modified, amended, altered or supplemented except upon the
execution and delivery of a written agreement executed by the
parties hereto.
(c) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARY;
SEVERABILITY. This Agreement, together with the Merger Agreement
and the other documents and instruments referred to herein and
therein, between Grantee and Issuer (a) constitutes the entire
agreement and supersedes all prior agreements and understandings,
both written and oral, between the parties with respect to the
subject matter hereof and (b) is not intended to confer upon any
person other than the parties hereto (other than any transferees
of the Option Shares or any permitted transferee of this
Agreement pursuant to Section 12(h) and other than as provided in
the Merger Agreement) any rights or remedies hereunder. If any
term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or a federal or state
governmental or regulatory agency or authority to be invalid,
void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated. If for any reason such court or regulatory agency
determines that the Option does not permit Holder to acquire, or
does not require Issuer to repurchase, the full number of shares
of Issuer Common Stock as provided in Sections 3 and 8 (as
adjusted pursuant to Section 7), it is the express intention of
Issuer to allow Holder to acquire or to require Issuer to
repurchase such lesser number of shares as may be permissible
without any amendment or modification hereof.
(d) GOVERNING LAW. This Agreement shall be governed
and construed in accordance with the laws of the State of Indiana
without regard to any applicable conflicts of law rules.
(e) DESCRIPTIVE HEADINGS. The descriptive headings
contained herein are for convenience of reference only and shall
not affect in any way the meaning or interpretation of this
Agreement.
(f) NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed given if
delivered personally, telecopied (with confirmation) or mailed by
registered or certified mail (return receipt requested) to the
parties at the addresses set forth in the Merger Agreement (or at
such other address for a party as shall be specified by like
notice).
(g) COUNTERPARTS. This Agreement and any amendments
hereto may be executed in two counterparts, each of which shall
be considered one and the same agreement and shall become
effective when both counterparts have been signed, it being
understood that both parties need not sign the same counterpart.
(h) ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder or under the Option
shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent
of the other party, except that Grantee may assign this Agreement
to a wholly owned Subsidiary of Grantee and Grantee may assign
its rights hereunder in whole or in part after the occurrence of
a Purchase Event. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and
assigns.
(i) FURTHER ASSURANCES. In the event of any exercise
of the Option by Holder, Issuer and Holder shall execute and
deliver all other documents and instruments and take all other
action that may be reasonably necessary in order to consummate
the transactions provided for by such exercise.
(j) SPECIFIC PERFORMANCE. The parties hereto agree
that this Agreement may be enforced by either party through
specific performance, injunctive relief and other equitable
relief. Both parties further agree to waive any requirement for
the securing or posting of any bond in connection with the
obtaining of any such equitable relief and that this provision is
without prejudice to any other rights that the parties hereto may
have for any failure to perform this Agreement.
(k) CONFIDENTIALITY AGREEMENTS. The parties hereto
agree that this Agreement supersedes any provision of the
Confidentiality Agreements that could be interpreted to preclude
the exercise of any rights or the fulfillment of any obligations
under this Agreement, and that none of the provisions included in
the Confidentiality Agreements will act to preclude Holder from
exercising the Option or exercising any other rights under this
Agreement or act to preclude Issuer from fulfilling any of its
obligations under this Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this
Stock Option Agreement to be signed by their respective officers
thereunto duly authorized, all as of the day and year first
written above.
GERMAN AMERICAN BANCORP
By/s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Chairman of the Board and
Chief E
1ST BANCORP
By/s/C. Xxxxx XxXxxxxxx
C. Xxxxx XxXxxxxxx
Chairman of the Board and
Chief
