KENTUCKY NATIONAL BANK
(IN ORGANIZATION)
STOCK TRANSFER AGREEMENT
THIS AGREEMENT is made and entered into by and among
Kentucky National Bank (the "Bank"), Xxxxxx X. Xxxxxxx, M.D.,
Xxxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxx, Xxxxx X. Xxxxxxxxx, Xxxxx
X. Xxxxxxxx, Xxxx X. Xxxx, Xxxxxxx X. Xxxxxxx, Xxxxxxxxxxx X.
Xxxxxx, M.D. and Xxxxxxx X. XxXxxx (collectively, the
"Organizers") and all persons ("Subscribers") subscribing to
shares ("Shares") of the Common Stock of the Bank pursuant to
the terms of the Subscription Agreement for such Shares executed
by each such Subscriber.
WHEREAS the parties hereto consider it to be in their best
interests and in the best interests of the Bank to maintain and
preserve the community ownership of the Shares of the Bank and
to provide for the orderly disposition of the Shares held at any
time by the individual parties;
NOW, THEREFORE, in consideration of the mutual promises,
covenants, provisions, terms and conditions hereinafter stated,
the parties hereto agree as follows:
1. RESTRICTIONS ON TRANSFERS OF SHARES.
(a) Except as otherwise expressly provided in this
Agreement, no Shares held by a Subscriber shall be assigned,
transferred, sold, pledged, encumbered or otherwise disposed of
during the term of the restrictions on transfer (the "Transfer
Restrictions") contained in this Agreement except in accordance
with the applicable provisions hereof.
(b) The Transfer Restrictions shall not apply to the
following transactions:
(ii) Any pledge of Shares as collateral
security for a loan or other extension of credit
(except any transfer of Shares upon foreclosure on
such pledge shall be subject to the Transfer
Restrictions);
(ii) Any transfer of Shares by a Subscriber (a)
by gift or otherwise, to or for the benefit of the
Subscriber, the Subscriber's spouse or the
Subscriber's descendants and (b) by gift to any other
person (each of the foregoing being a "Permitted
Transferee"); and a Permitted Transferee may transfer
the Shares back to the transferor Subscriber.
A Permitted Transferee shall receive and hold the Shares subject
to the terms of this Agreement, with all of the rights and
subject to all of the obligations hereunder of the transferor
Subscriber, the personal representative of the transferor
Subscriber or the transferee of the transferor Subscriber, and
there shall be no further transfer of such Shares except in
accordance with the terms of this Agreement.
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(c) Any purported transfer or acquisition of Shares
in violation of Paragraph 1(a) of this Agreement shall be null
and void. Each Subscriber agrees that any such transfer or
acquisition may and should be enjoined. A purported transfer in
violation of Paragraph 1(a) of this Agreement will not affect
the beneficial ownership of the Shares.
(d) If any Subscriber ("Selling Subscriber") desires
to sell, and has received a Bona Fide Offer (as defined below)
to purchase, all or some number of the Shares owned by such
Selling Subscriber, the Selling Subscriber shall deliver to the
Bank a copy of the Bona Fide Offer together with an offer in
writing ("Offer to the Organizers") to sell all the Shares
desired to be sold (the "Offered Shares") pursuant to this
Agreement for the purchase price specified in the Bona Fide
Offer. Within two business days of the date the Bona Fide Offer
and the Offer to the Organizers are received by the Bank, the
Bank shall transmit the Bona Fide Offer and the Offer to the
Organizers to each of Xxxxxx X. Xxxxxxx, M.D., Xxxxxxxx X.
Xxxxxxx, Xxxxxx X. Xxxxx, Xxxxx X. Xxxxxxxxx, Xxxxx X. Xxxxxxxx,
Xxxx X. Xxxx, Xxxxxxx X. Xxxxxxx, Xxxxxxxxxxx X. Xxxxxx, M.D.
and Xxxxxxx X. XxXxxx by personal delivery or by registered
mail, return receipt requested, at the last known place of
residence of each such Organizer. Within thirty (30) days
following the delivery to the Bank of the Offer to the
Organizers ("Offering Period"), each Organizer shall deliver to
the Selling Subscriber notice that the Organizer either accepts
the Offer to the Organizers or rejects the Offer to the
Organizers. Any Organizer that fails to deliver such notice to
the Selling Subscriber within the Offering Period shall be
deemed to have rejected the Offer to the Organizers.
(e) If within the Offering Period any Organizer
delivers notice to the Selling Subscriber that the Organizer
accepts the Offer to the Organizers, then each Accepting
Organizer shall purchase, and the Selling Subscriber shall sell
to the Accepting Organizer, that number of the shares of Offered
Shares which bears the same ratio to the total number of the
shares of Offered Shares as the number of shares of Common Stock
of the Bank owned by the Organizer bears to the total number of
shares of Common Stock of the Bank owned by all the Accepting
Organizers. Each sale to an Accepting Organizer shall be made
upon the same payment terms and conditions as in the Bona Fide
Offer. Each sale and purchase shall be closed at the principal
office of the Bank within ninety (90) days after the end of the
Offering Period. For purposes of this Paragraph 1(e), the
shares of Common Stock of the Bank owned by an Accepting
Organizer shall include all shares of the Bank's Common Stock
directly owned or controlled by or for the benefit of the
Organizer and the Organizer's spouse.
(f) If all of the Offered Shares fail to be sold
under Paragraphs 1(d) and 1(e) above, and if such failure is not
the result of default by the Selling Subscriber, then the
Selling Subscriber may sell any remaining Offered Shares to the
person who made the Bona Fide Offer, provided that (i) the sale
is closed within sixty (60) days after the expiration of the
Offering Period, (ii) the sale is made strictly upon the terms
and conditions stated in the Bona Fide Offer, and (iii) the
person who made the Bona Fide Offer executes an agreement, in a
form approved by the Organizers, containing substantially the
same terms as are contained in this Paragraph 1. If the sale is
not so closed, sale of the Offered Shares shall again become
subject to all the restrictions and requirements in this
Agreement to the same extent as if the Offered Shares had not
been previously offered for sale to the Organizers.
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(g) Any amendment to the Bona Fide Offer, or any
counter offer to the Bona Fide Offer, shall be deemed to be a
new Bona Fide Offer subject to all the restrictions and
requirements in this Agreement.
(h) Any other disposition, pledge or assignment of
Shares not subject to this Agreement (including, but not limited
to, a gift, transfer by operation of law or testamentary
disposition) shall be valid only if the transferee executes an
agreement, in a form approved by the Organizers, containing
substantially the same terms as are contained in this Paragraph
1. Prompt notice of such transfer, including the identity of
the transferee and a description of the transfer together with
the executed agreement described above shall be promptly given
to the Bank by the transferee. Failure to give such notice
shall mean that the Bank need not register the transfer on its
books or recognize the rights of the transferee as a holder of
Shares.
(i) The term "Bona Fide Offer," as used in this
Agreement, means a written offer to purchase all or some number
of the shares of Common Stock of the Bank owned by the Selling
Subscriber for a specified purchase price, which offer is made
in good faith and which the Selling Subscriber intends to
accept.
(j) The Transfer Restrictions contained in this
Agreement shall terminate upon the occurrence of any of the
following events:
(i) Cessation of the Bank's business;
(ii) Upon the effectiveness of any merger or
consolidation of the Bank with or into another bank,
or any sale, lease, exchange, transfer or other or any
disposition, including, without limitation, a mortgage
security device, of all or any substantial part of the
assets of the Bank to another bank or corporation;
provided, however, that any merger or consolidation
with another bank or financial institution or transfer
or sale of assets proposed solely to facilitate the
formation of a bank holding company to own the Bank or
the conversion of the Bank to another type of financial
institution and as a result of which the Organizers
shall own shares in such holding company or other
financial institution shall not cause a termination of
this Agreement;
(iii) The mutual written agreement of the
holders of at least seventy-five percent (75%) of the
Shares subject to this Agreement to terminate this
Agreement;
(iv) The unanimous agreement of the Organizers;
or
(v) The tenth anniversary of the day upon
which the first Shares are issued to any person (the
"Effective Date").
(k) All the terms, restrictions, and requirements in
this Agreement shall apply not only to the Shares presently
subscribed to by the Subscriber but also to any additional Shares
that are required by such Subscriber.
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(l) The following legends shall be placed on each
certificate evidencing ownership of any Shares of the Bank:
(i) On the front of the certificate:
"NOTICE"
"THIS CERTIFICATE IS SUBJECT TO THE RESTRICTIONS NOTED
ON THE REVERSE SIDE HEREOF."
(ii) On the back of the certificate:
"NOTICE"
"THE TRANSFER OF THE SHARES OF STOCK REPRESENTED BY
THIS CERTIFICATE IS RESTRICTED UNDER THE TERMS OF A
RESTRICTIVE STOCK TRANSFER AGREEMENT DATED SEPTEMBER,
1997, A COPY OF WHICH IS ON FILE WITH THE BANK AT ITS
PRINCIPAL OFFICE IN ELIZABETHTOWN, KENTUCKY AND
AVAILABLE FOR INSPECTION DURING NORMAL BUSINESS HOURS
AT THE PRINCIPAL OFFICE OF THE BANK. NO TRANSFER OF
THE SHARES EVIDENCED BY THIS CERTIFICATE MAY BE MADE
EXCEPT IN ACCORDANCE WITH AND, SUBJECT TO THE TERMS,
RESTRICTIONS, AND REQUIREMENTS IN THAT AGREEMENT."
(m) Upon termination of this Agreement, a Subscriber
may surrender his or her certificate or certificates representing
the Shares, and the Bank shall issue in lieu thereof a new
certificate or certificates for an equal number of shares without
the endorsement set forth in Paragraph 1(l).
(n) In the event any Shares are attempted to be sold,
pledged or transferred contrary to, or in violation of, the
provisions of this Agreement, the purported purchaser or
transferee thereof shall not be entitled to have such Shares
transferred on the books of the Bank, or be vested with any
voting rights or other rights of the Subscriber, such Shares
shall remain subject to all the provisions in this Agreement, and
such purported sales, transfer or pledge shall be null and void
and of no force or effect.
2. GENERAL PROVISIONS
(a) Notices. Any notice, offer, consent, or other
communication required or permitted by this Agreement to be given
to any person shall be deemed to have been given when either
personally delivered, sent by overnight courier, or two days
after being deposited in the United States mail, certified,
postage prepaid, addressed to the person to whom it is intended
to be given, which address, in the case of the Bank, shall be the
address of its principal place of business, and in the case of a
Subscriber or a Organizer, shall be the last known address of
such person as shown on the records of the Bank.
(b) Separability. In any provision of this Agreement
or the application thereof to any person or circumstances shall
be invalid or unenforceable to any extent, the remainder of this
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Agreement and the application of such provisions to other persons
or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
(c) Injunctive Relief and Specific Performance. The
parties hereto recognize that irreparable injury will result to
the Bank, its business and its property as well as to the
remaining Subscribers in the event of a breach of this Agreement
by any Subscriber. It is therefore agreed that, in the event any
Subscriber breaches or threatens to breach this Agreement, the
Bank and the Organizers shall be entitled, in addition to any
other remedies and damages available, to an injunction (i) to
restrain the violation hereof by such party, such party's
partners, agents, servants, employers and employees, and all
persons acting for or with such party, and (ii) to compel
specific performance of the terms and conditions of this
Agreement. Nothing herein shall be construed as prohibiting the
Organizers or the Bank from pursuing any other remedies available
to the Organizers or the Bank for such breach including the
recovery of damages from the breaching Subscriber.
(d) Entire Agreement. This Agreement constitutes the
entire agreement among the parties hereto with respect to the
subject matter hereof and may be amended only by a writing
executed by all parties.
(e) Modifications and Amendments. The terms and
provisions of this Agreement may not be modified or amended or
the breach of any of the terms or provisions hereof, waived,
except pursuant to the written consent of the parties hereto.
(f) Governing Law. This Agreement shall be enforced,
governed, and construed in all respects in accordance with the
laws of the Commonwealth of Kentucky.
(g) Counterparts. This Agreement may be executed by
the parties on any number of separate counterparts, and all such
counterparts so executed constitute one agreement binding on all
the parties notwithstanding that all the parties are not
signatories to the same counterpart.
(h) Signatory Warranty. Each person executing this
Agreement warrants that he or she is authorized to do so on
behalf of the party for whom he or she signs this Agreement.
(i) Effective Date. This Agreement shall become
binding and effective on the Effective Date as defined in
Paragraph 1(j)(v) hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the Effective Date.
KENTUCKY NATIONAL BANK
By:/s/Xxxxxx X. Xxxxxxx, M.D.
--------------------------
Xxxxxx X. Xxxxxxx, M.D.
Chairman
Organizers:
/s/Xxxxxx X. Xxxxxxx, M.D.
--------------------------
Xxxxxx X. Xxxxxxx, M.D.
/s/Xxxxxxxx X. Xxxxxxx
--------------------------
Xxxxxxxx X. Xxxxxxx
/s/Xxxxxx X. Xxxxx
-----------------------------
Xxxxxx X. Xxxxx
/s/Xxxxx X. Xxxxxxxxx
-----------------------------
Xxxxx X. Xxxxxxxxx
/s/Xxxxx X. Xxxxxxxx
-----------------------------
Xxxxx X. Xxxxxxxx
/s/Xxxx X. Xxxx
-----------------------------
Xxxx X. Xxxx
/s/Xxxxxxx X. Xxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxx
/s/Xxxxxxxxxxx X. Xxxxxx, M.D.
-----------------------------
Xxxxxxxxxxx X. Xxxxxx, M.D.
/s/Xxxxxxx X. XxXxxx
-----------------------------
Xxxxxxx X. XxXxxx
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