EXHIBIT 10.4
FORM OF
WARRANT AGREEMENT
THIS AGREEMENT is made and entered into as of the __ day of _________,
2000, by and between PINNACLE FINANCIAL PARTNERS, INC., a Tennessee corporation
(the "Corporation"), and _________________________ (the "Warrant Holder").
W I T N E S S E T H
WHEREAS, the Warrant Holder has served as an organizer in the formation
of the Corporation and the formation and establishment of Pinnacle National Bank
(the "Bank"), the wholly-owned subsidiary of the Corporation; and
WHEREAS, the Warrant Holder has purchased __________ shares of the
Corporation's common stock, $1.00 par value per share (the "Common Stock"), at a
price of $10.00 per share; and
WHEREAS, the Corporation, in recognition of the financial risk
undertaken by the Warrant Holder in organizing the Bank and the Corporation and
in order to encourage the Warrant Holder's continued involvement in the
successful operation of the Corporation and the Bank, desires to issue to the
Warrant Holder the right to acquire additional shares of the Corporation's
Common Stock.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. GRANT OF WARRANT. Subject to the terms, restriction, limitations and
conditions stated herein, the Corporation hereby grants to the Warrant Holder
the right (the "Warrant") to purchase all or any part of an aggregate of
_______________ shares of the Common Stock, subject to adjustment in accordance
with Section 7 hereof.
2. TERM.
(a) The term for the exercise of the Warrant begins at 9:00
a.m., Eastern Time, on the first anniversary of the date that the
Securities and Exchange Commission delcare effective the Corporation's
registration statement on Form SB-2, registration number 333-38018
(the "Issue Date"), and ends at 5:00 p.m., Eastern Time, on the tenth
anniversary of the issuance date (the "Expiration Time"). The Warrant
will vest in annual one-third (1/3) increments over a period of three
years, beginning on the first anniversary of the Issue Date. The vested
portion of the Warrant may be exercised in whole, or from time to time
in part, at any time prior to the Expiration Time.
(b) Notwithstanding any other provision of this Agreement, if
the Bank's capital falls below the minimum requirements as determined
by the primary federal or state regulator of the Corporation or the
Bank (the "Regulator"), the Regulator may direct the Corporation to
require the Warrant Holder to exercise or forfeit his or her Warrant.
The Corporation will notify the Warrant Holder within 45 days from the
date the Regulator notifies the Corporation in writing that the Warrant
Holder must exercise or forfeit this Warrant. The Corporation will
cancel the Warrant if not exercised within 21 days of the Corporation's
notification to the Warrant Holder. The Corporation agrees to comply
with any Regulator's request that the Corporation invoke its right to
require the Warrant Holder to exercise or forfeit his or her Warrant
under the circumstances stated above.
3. PURCHASE PRICE. The price per share to be paid by the Warrant Holder
for the shares of Common Stock subject to this Warrant shall be $10.00, subject
to adjustment as set forth in Section 6 hereof (such price, as adjusted,
hereinafter called the "Purchase Price").
4. EXERCISE OF WARRANT. The Warrant may be exercised by the Warrant
Holder by delivery to the Corporation, at the address of the Corporation set
forth under Section 10(a) hereof or such other address as to which the
Corporation advises the Warrant Holder pursuant to Section 10(a) hereof, of the
following:
(a) Written notice of exercise specifying the number of shares
of Common Stock with respect to which the Warrant is being exercised;
and
(b) A cashier's or certified check payable to the Corporation
for the full amount of the aggregate Purchase Price for the number of
shares as to which the Warrant is being exercised.
5. ISSUANCE OF SHARES. Upon receipt of the items set forth in Section
4, and subject to the terms hereof, the Corporation shall cause to be delivered
to the Warrant Holder stock certificates for the number of shares specified in
the notice to exercise, such share or shares to be registered under the name of
the Warrant Holder. Notwithstanding the foregoing, the Corporation shall not be
required to issue or deliver any certificate for shares of Common Stock
purchased upon the exercise of the Warrant or any portion thereof prior to the
fulfillment of the following conditions:
(a) The admission of such shares for listing on all stock
exchanges on which the Common Stock is then listed;
(b) The completion of any registration or other qualification
of such shares which the Corporation shall deem necessary or advisable
under any federal or state law or under the rulings or regulations of
the Securities and Exchange Commission or any other governmental
regulatory body;
(c) The obtaining of any approval or other clearance from any
federal or state governmental agency or body, which the Corporation
shall determine to be necessary or advisable; or
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(d) The lapse of such reasonable period of time following the
exercise of the Warrant as the Corporation may from time to time
establish for reasons of administrative convenience.
The Corporation shall have no obligation to obtain the fulfillment of
these conditions; provided, however, the Warrant Holder shall have one full
calendar year after these conditions have been fulfilled to exercise his or her
Warrant, notwithstanding any other provision herein.
6. ANTIDILUTION, ETC.
(a) If, prior to the Expiration Time, the Corporation shall
subdivide its outstanding shares of Common Stock into a greater number
of shares, or declare and pay a dividend of its Common Stock payable in
additional shares of its Common Stock, the Purchase Price as then in
effect shall be proportionately reduced, and the number of shares of
Common Stock then subject to exercise under the Warrant (and not
previously exercised) shall be proportionately increased.
(b) If, prior to the Expiration Time, the Corporation shall
combine its outstanding shares of the Common Stock into a smaller
number of shares, the Purchase Price, as then in effect, shall be
proportionately increased, and the number of shares of Common Stock
then subject to exercise under the Warrant (and not previously
exercised), shall be proportionately reduced.
7. REORGANIZATION, RECLASSIFICATION, CONSOLIDATION OR MERGER. If, prior
to the Expiration Time, there shall be any reorganization or reclassification of
the Common Stock (other than a subdivision or combination of shares provided for
in Section 6 hereof), or any consolidation or merger of the Corporation with
another entity, the Warrant Holder shall thereafter be entitled to receive,
during the term hereof and upon payment of the Purchase Price, the number of
shares of stock or other securities or property of the Corporation or of the
successor entity (or its parent company) resulting from such consolidation or
merger, as the case may be, to which a holder of the Common Stock, deliverable
upon the exercise of this Warrant, would have been entitled upon such
reorganization, reclassification, consolidation or merger; and in any case,
appropriate adjustment (as determined by the Board of Directors of the
Corporation in its sole discretion) shall be made in the application of the
provisions herein set forth with respect to the rights and interest thereafter
of the Warrant Holder to the end that the provisions set forth herein (including
the adjustment of the Purchase Price and the number of shares issuable upon the
exercise of this Warrant) shall thereafter be applicable, as near as may
reasonably be practicable, in relation to any shares or other property
thereafter deliverable upon the exercise hereof.
8. NOTICE OF ADJUSTMENTS. Upon any adjustment provided for in Section 6
or Section 7 hereof, the Corporation, within thirty (30) days thereafter, shall
give written notice thereof to the Warrant Holder at the address set forth under
Section 10(a) hereof or such other address as the Warrant Holder may advise the
Corporation pursuant to Section 10(a) hereof, which notice shall state the
Warrant Price as adjusted and the increased or decreased number of shares
purchasable upon the exercise of this Warrant, setting forth in reasonable
detail the method of calculation of each.
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9. TRANSFER AND ASSIGNMENT.
(a) During Warrant Holder's lifetime, this Warrant and any
rights thereunder shall be exercisable only by the Warrant Holder (or
by the Warrant Holder's guardian or legal representative, should one be
appointed). Except assignments or transfers made by will or under the
laws of descent and distribution, this Warrant or any rights thereunder
may not be assigned, transferred, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of this Warrant
excepted as provided for in this Section 9 shall be null and void and
without legal effect.
(b) Shares of Common Stock acquired by exercise of the Warrant
granted hereby may not be transferred or sold unless the transfer is
exempt from further regulatory approval or otherwise permissible under
applicable law, including state and federal securities laws, and will
bear a legend to this effect.
10. MISCELLANEOUS.
(a) All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed
to have been duly given when delivered by hand, telegram or facsimile
transmission, or if mailed, by postage prepaid first class mail, on the
third business day after mailing, to the following address (or at such
other address as a party may notify the other hereunder):
To the Corporation:
Pinnacle Financial Partners, Inc.
The Commerce Center
000 Xxxxxxxx Xxxxxx, Xxxxx ____
Xxxxxxxxx, XX 00000
Attention: M. Xxxxx Xxxxxx, President
To the Warrant Holder:
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(b) The Corporation covenants that it has reserved and will
keep available, solely for the purpose of issue upon the exercise
hereof, a sufficient number of shares of Common Stock to permit the
exercise hereof in full.
(c) No holder of this Warrant, as such, shall be entitled to
vote or receive dividends with respect to the shares of Common Stock
subject hereto or be deemed to be
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a shareholder of the Corporation for any purpose until such Common
Stock has been issued.
(d) This Warrant Agreement shall constitute the entire
agreement contemplated by the Corporation and the Warrant Holder and
may be amended only by an instrument in writing executed by the party
against whom enforcement of the amendment is sought.
(e) This Warrant may be executed in counterparts, each of
which shall be deemed an original, but all of which shall constitute
one and the same instrument.
(f) This Warrant shall be governed by and construed and
enforced in accordance with the laws of the State of Tennessee.
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IN WITNESS WHEREOF, the Corporation has caused this Warrant to be
signed by its duly authorized officers and its corporate seal to be affixed
hereto, and the Warrant Holder has executed this Warrant under seal, all as of
the day and year first above written.
PINNACLE FINANCIAL PARTNERS, INC.
By:
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M. Xxxxx Xxxxxx
President and Chief Executive Officer
WARRANT HOLDER
(SEAL)
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Print Name:
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