Exhibit 4.1
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
299,829
Shares of Common
Stock
of PORTER BANCORP,
INC.
Issue Date: November 21,
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) Subject
to c
