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Exhibit 4.2
WARRANT TO PURCHASE COMMON STOCK
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR
OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT
RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
SUCH ACT OR SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT
TO THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF A
SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE
SECURITIES AND THE INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS
ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED BY
THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR OTHER
TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.
WARRANT
to purchase
50,111
Shares of Common Stock
of Emclaire Financial Corp.
Issue Date: December 23, 2008
1.
Definitions . Unless the context otherwise
requires, when used herein the following terms shall have the
meanings indicated.
“ Affiliate ” has the meaning ascribed to it
in the Purchase Agreement.
“ Appraisal Procedure ” means a procedure
whereby two independent appraisers, one chosen by the Company and
one by the Original Warrantholder, shall mutually agree upon the
determinations then the subject of appraisal. Each party
shall deliver a notice to the other appointing its appraiser within
15 days after the Appraisal Procedure is invoked. If
within 30 days after appointment of the two appraisers they are
unable to agree upon the amount in question, a third independent
appraiser shall be chosen within 10 days thereafter by the mutual
consent of such first two appraisers. The decision of
the third appraiser so appointed and chosen shall be given within
30 days after the selection of such third appraiser. If
three appraisers shall be appointed and the determination of one
appraiser is disparate from the middle determination by more than
twice the amount by which the other determination is disparate from
the middle determination, then the determination of such appraiser
shall be excluded, the remaining two determinations shall be
averaged and such average shall be binding and conclusive upon the
Company and the Original Warrantholder; otherwise, the average of
all three determinations shall be binding upon the Company and the
Original Warrantholder. The costs of conducting any
Appraisal Procedure shall be borne by the Company.
“ Board of Directors ” means the board of
directors of the Company, including any duly authorized committee
thereof.
“ Business Combination ” means a merger,
consolidation, statutory share exchange or similar transaction that
requires the approval of the Company’s stockholders.
“ business day ” means any day except
Saturday, Sunday and any day on which banking institutions in the
State of New York generally are authorized or required by law or
other governmental actions to close.
“ Capital Stock ” means (A) with respect to
any Person that is a corporation or company, any and all shares,
interests, participations or other equivalents (however designated)
of capital or capital stock of such Person and (B) with respect to
any Person that is not a corporation or company, any and all
partnership or other equity interests of such Person.
“ Charter ” means, with respect to any
Person, its certificate or articles of incorporation, articles of
association, or similar organizational document.
“ Common Stock ” has the meaning ascribed to
it in the Purchase Agreement.
“ Company ” means the Person whose name,
corporate or other organizational form and jurisdiction of
organization is set forth in Item 1 of Schedule A hereto.
“ conversion ” has the meaning set forth in
Section 13(B).
“ convertible securities ” has the meaning
set forth in Section 13(B).
“ CPP ” has the meaning ascribed to it in the
Purchase Agreement.
“ Exchange Act ” means the Securities
Exchange Act of 1934, as amended, or any successor statute, and the
rules and regulations promulgated thereunder.
“ Exercise Price ” means the amount set forth
in Item 2 of Schedule A hereto.
“ Expiration Time ” has the meaning set forth
in Section 3.
“ Fair Market Value ” means, with respect to
any security or other property, the fair market value of such
security or other property as determined by the Board of Directors,
acting in good faith or, with respect to Section 14, as determined
by the Original Warrantholder acting in good faith. For
so long as the Original Warrantholder holds this Warrant or any
portion thereof, it may object in writing to the Board of
Director’s calculation of fair market value within 10 days of
receipt of written notice thereof. If the Original
Warrantholder and the Company are unable to agree on fair market
value during the 10-day period following the delivery of the
Original Warrantholder’s objection, the Appraisal Procedure
may be invoked by either party to determine Fair Market Value by
delivering written notification thereof not later than the 30th day
after delivery of the Original Warrantholder’s objection.
“ Governmental Entities ” has the meaning
ascribed to it in the Purchase Agreement.
“ Initial Number ” has the meaning set forth
in Section 13(B).
“Issue Date” means the date set forth in Item
3 of Schedule A hereto.
“ Market Price ” means, with respect to a
particular security, on any given day, the last reported sale price
regular way or, in case no such reported sale takes place on such
day, the average of the last closing bid and ask prices regular
way, in either case on the principal national securities exchange
on which the applicable securities are listed or admitted to
trading, or if not listed or admitted to trading on any national
securities exchange, the average of the closing bid and ask prices
as furnished by two members of the Financial Industry Regulatory
Authority, Inc. selected from time to time by the Company for that
purpose. “Market Price” shall be determined
without reference to after hours or extended hours
trading. If such security is not listed and traded in a
manner that the quotations referred to above are available for the
period required hereunder, the Market Price per share of Common
Stock shall be deemed to be (i) in the event that any portion of
the Warrant is held by the Original Warrantholder, the fair market
value per share of such security as determined in good faith by the
Original Warrantholder or (ii) in all other circumstances, the fair
market value per share of such security as determined in good faith
by the Board of Directors in reliance on an opinion of a nationally
recognized independent investment banking corporation retained by
the Company for this purpose and certified in a resolution to the
Warrantholder. For the purposes of determining the
Market Price of the Common Stock on the "trading day" preceding, on
or following the occurrence of an event, (i) that trading day shall
be deemed to commence immediately after the regular scheduled
closing time of trading on the New York Stock Exchange or, if
trading is closed at an earlier time, such earlier time and (ii)
that trading day shall end at the next regular scheduled closing
time, or if trading is closed at an earlier time, such earlier time
(for the avoidance of doubt, and as an example, if the Market Price
is to be determined as of the last trading day preceding a
specified event and the closing time of trading on a particular day
is 4:00 p.m. and the specified event occurs at 5:00 p.m. on that
day, the Market Price would be determined by reference to such 4:00
p.m. closing price).
“ Ordinary Cash Dividends ” means a regular
quarterly cash dividend on shares of Common Stock out of surplus or
net profits legally available therefor (determined in accordance
with generally accepted accounting principles in effect from time
to time), provided that Ordinary Cash Dividends shall not
include any cash dividends paid subsequent to the Issue Date to the
extent the aggregate per share dividends paid on the outstanding
Common Stock in any quarter exceed the amount set forth in Item 4
of Schedule A hereto, as adjusted for any stock split, stock
dividend, reverse stock split, reclassification or similar
transaction.
“ Original Warrantholder ” means the United
States Department of the Treasury. Any actions specified
to be taken by the Original Warrantholder hereunder may only be
taken by such Person and not by any other Warrantholder.
“ Permitted Transactions ” has the meaning
set forth in Section 13(B).
“ Person ” has the meaning given to it in
Section 3(a)(9) of the Exchange Act and as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act.
“ Per Share Fair Market Value ” has the
meaning set forth in Section 13(C).
“Preferred Shares ” means the perpetual
preferred stock issued to the Original Warrantholder on the Issue
Date pursuant to the Purchase Agreement.
“ Pro Rata Repurchases ” means any purchase
of shares of Common Stock by the Company or any Affiliate thereof
pursuant to (A) any tender offer or exchange offer subject to
Section 13(e) or 14(e) of the Exchange Act or Regulation 14E
promulgated thereunder or (B) any other offer available to
substantially all holders of Common Stock, in the case of both (A)
or (B), whether for cash, shares of Capital Stock of the Company,
other securities of the Company, evidences of indebtedness of the
Company or any other Person or any other property (including,
without limitation, shares of Capital Stock, other securities or
evidences of indebtedness of a subsidiary), or any combination
thereof, effected while this Warrant is outstanding. The
“ Effective Date ” of a Pro Rata Repurchase
shall mean the date of acceptance of shares for purchase or
exchange by the Company under any tender or exchange offer which is
a Pro Rata Repurchase or the date of purchase with respect to any
Pro Rata Repurchase that is not a tender or exchange offer.
“ Purchase Agreement ” means the Securities
Purchase Agreement – Standard Terms incorporated into the
Letter Agreement, dated as of the date set forth in Item 5 of
Schedule A hereto, as amended from time to time, between the
Company and the United States Department of the Treasury (the
“ Letter Agreement ”), including all annexes and
schedules thereto.
“ Qualified Equity Offering ” has the meaning
ascribed to it in the Purchase Agreement.
“ Regulatory Approvals ” with respect to the
Warrantholder, means, to the extent applicable and required to
permit the Warrantholder to exercise this Warrant for shares of
Common Stock and to own such Common Stock without the Warrantholder
being in violation of applicable law, rule or regulation, the
receipt of any necessary approvals and authorizations of, filings
and registrations with, notifications to, or expiration or
termination of any applicable waiting period under, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations thereunder.
“ SEC ” means the U.S. Securities and
Exchange Commission.
“ Securities Act ” means the Securities Act
of 1933, as amended, or any successor statute, and the rules and
regulations promulgated thereunder.
“ Shares ” has the meaning set forth in
Section 2.
“trading day” means (A) if the shares of
Common Stock are not traded on any national or regional securities
exchange or association or over-the-counter market, a business day
or (B) if the shares of Common Stock are traded on any national or
regional securities exchange or association or over-the-counter
market, a business day on which such relevant exchange or quotation
system is scheduled to be open for business and on which the shares
of Common Stock (i) are not suspended from trading on any national
or regional securities exchange or association or over-the-counter
market for any period or periods aggregating one half hour or
longer; and (ii) have traded at least once on the national or
regional securities exchange or association or over-the-counter
market that is the primary market for the trading of the shares of
Common Stock.
“ U.S. GAAP ” means United States generally
accepted accounting principles.
“ Warrantholder ” has the meaning set forth
in Section 2.
“ Warrant ” means this Warrant, issued
pursuant to the Purchase Agreement.
2. Number of
Shares; Exercise Price . This certifies that, for
value received, the United States Department of the Treasury or its
permitted assigns (the “ Warrantholder ”) is
entitled, upon the terms and subject to the conditions hereinafter
set forth, to acquire from the Company, in whole or in part, after
the receipt of all applicable Regulatory Approvals, if any, up to
an aggregate of the number of fully paid and nonassessable shares
of Common Stock set forth in Item 6 of Schedule A hereto, at a
purchase price per share of Common Stock equal to the Exercise
Price. The number of shares of Common Stock (the “
Shares ”) and the Exercise Price are subject to
adjustment as provided herein, and all references to “Common
Stock,” “Shares” and “Exercise Price”
herein shall be deemed to include any such adjustment or series of
adjustments.
3. Exercise
of Warrant; Term . Subject to Section 2, to the
extent permitted by applicable laws and regulations, the right to
purchase the Shares represented by this Warrant is exercisable, in
whole or in part by the Warrantholder, at any time or from time to
time after the execution and delivery of this Warrant by the
Company on the date hereof, but in no event later than 5:00 p.m.,
New York City time on the tenth anniversary of the Issue Date (the
“ Expiration Time ”), by (A) the surrender of
this Warrant and Notice of Exercise annexed hereto, duly completed
and executed on behalf of the Warrantholder, at the principal
executive office of the Company located at the address set forth in
Item 7 of Schedule A hereto (or such other office or agency of the
Company in the United States as it may designate by notice in
writing to the Warrantholder at the address of the Warrantholder
appearing on the books of the Company), and (B) payment of the
Exercise Price for the Shares thereby purchased:
(i) by having the Company withhold, from the shares of Common
Stock that would otherwise be delivered to the Warrantholder upon
such exercise, shares of Common stock issuable upon exercise of the
Warrant equal in value to the aggregate Exercise Price as to which
this Warrant is so exercised based on the Market Price of the
Common Stock on the trading day on which this Warrant is exercised
and the Notice of Exercise is delivered to the Company pursuant to
this Section 3, or
(ii) with the consent of both the Company and the Warrantholder,
by tendering in cash, by certified or cashier’s check payable
to the order of the Company, or by wire transfer of immediately
available funds to an account designated by the Company.
If the Warrantholder does not exercise this Warrant in its
entirety, the Warrantholder will be entitled to receive from the
Company within a reasonable time, and in any event not exceeding
three business days, a new warrant in substantially identical form
for the purchase of that number of Shares equal to the difference
between the number of Shares subject to this Warrant and the number
of Shares as to which this Warrant is so
exercised. Notwithstanding anything in this Warrant to
the contrary, the Warrantholder hereby acknowledges and agrees that
its exercise of this Warrant for Shares is subject to the condition
that the Warrantholder will have first received any applicable
Regulatory Approvals.
4. Issuance
of Shares; Authorization; Listing . Certificates for
Shares issued upon exercise of this Warrant will be issued in such
name or names as the Warrantholder may designate and will be
delivered to such named Person or Persons within a reasonable time,
not to exceed three business days after the date on which this
Warrant has been duly exercised in accordance with the terms of
this Warrant. The Company hereby represents and warrants
that any Shares issued upon the exercise of this Warrant in
accordance with the provisions of Section 3 will be duly and
validly authorized and issued, fully paid and nonassessable and
free from all taxes, liens and charges (other than liens or charges
created by the Warrantholder, income and franchise taxes incurred
in connection with the exercise of the Warrant or taxes in respect
of any transfer occurring contemporaneously
therewith). The Company agrees that the Shares so issued
will be deemed to have been issued to the Warrantholder as of the
close of business on the date on which this Warrant and payment of
the Exercise Price are delivered to the Company in accordance with
the terms of this Warrant, notwithstanding that the stock transfer
books of the Company may then be closed or certificates
representing such Shares may not be actually delivered on such
date. The Company will at all times reserve and keep
available, out of its authorized but unissued Common Stock, solely
for the purpose of providing for the exercise of this Warrant, the
aggregate number of shares of Common Stock then issuable upon
exercise of this Warrant at any time. The Company will
(A) procure, at its sole expense, the listing of the Shares
issuable upon exercise of this Warrant at any time, subject to
issuance or notice of issuance, on all principal stock exchanges on
which the Common Stock is then listed or traded and (B) maintain
such listings of such Shares at all times after
issuance. The Company will use reasonable best efforts
to ensure that the Shares may be issued without violation of any
applicable law or regulation or of any requirement of any
securities exchange on which the Shares are listed or traded.
5. No
Fractional Shares or Scrip . No fractional Shares or
scrip representing fractional Shares shall be issued upon any
exercise of this Warrant. In lieu of any fractional
Share to which the Warrantholder would otherwise be entitled, the
Warrantholder shall be entitled to receive a cash payment equal to
the Market Price of the Common Stock on the last trading day
preceding the date of exercise less the pro-rated Exercise Price
for such fractional share.
6. No Rights
as Stockholders; Transfer Books . This Warrant does
not entitle the Warrantholder to any voting rights or other rights
as a stockholder of the Company prior to the date of exercise
hereof. The Company will at no time close its transfer
books against transfer of this Warrant in any manner which
interferes with the timely exercise of this Warrant.
7. Charges,
Taxes and Expenses . Issuance of certificates for
Shares to the Warrantholder upon the exercise of this Warrant shall
be made without charge to the Warrantholder for any issue or
transfer tax or other incidental expense in respect of the issuance
of such certificates, all of which taxes and expenses shall be paid
by the Company.
8.
Transfer/Assignment .
(A) &nb
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