REPUBLIC BANCORP, INC. RIGHT OF FIRST OFFER AGREEMENT
Exhibit
99.8
REPUBLIC
BANCORP, INC.
This
Right of First Offer Agreement (the "Agreement") is made and entered into
effective as of September 19, 2007, by and among Republic Bancorp, Inc., a
Kentucky corporation (the “Company”), 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, and Teebank Family Limited Partnership (the “Shareholder”), a
Kentucky limited partnership, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000.
Recitals
A.
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The
Shareholder is the owner of over 6 million shares of the Class A
common
stock (the “Class A Stock”) of the
Company.
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B.
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The
Company and the Shareholder desire to enter into this Agreement to
provide
for order and continuity in the succession of the ownership and management
of the Company.
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C.
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Upon
the date of death (the “Trigger Date”) of the second to die of the
spouses, Xxxxxxx X. and Xxxx X. Xxxxxx (the “Tragers”), that person’s
estate will be subject to a significant estate tax liability under
current
estate tax laws, related in large part to the value of stock in the
Company held by them outright and via interests in other entities
like the
Shareholder.
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D.
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The
Shareholder’s grant to the Company of a right of first offer may allow the
Company to prevent a large block of Class A Stock being sold at one
time
on the open market, and the possible detrimental effects of such
a
sale.
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E.
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The
Company also desires to enter into this Agreement to have the potential
ability to purchase the Shares as an investment and then to either
retire
them or use them to fund employee benefit and incentive compensation
arrangements that the Company has established for its employees and
directors, which ultimately promote the growth and profitability
of the
Company.
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Agreement
In
consideration of the premises and the mutual covenants and obligations
hereinafter set forth, the parties agree as follows:
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Section
1—Definitions
1.1 “Change
in Control” shall have the meaning given that term in the Republic
Bancorp, Inc. 2005 Stock Incentive Plan, as such Plan may be amended from time
to time.
1.2 “Fair
Market Value” shall mean as of any date, the value of a share of
Class A Stock determined as follows:
(a) If
the shares of Class A Stock are listed on any established stock exchange or
a
national market system, including, without limitation, the Nasdaq Global Select
Market (“Nasdaq”), its Fair Market Value shall be the average of the closing
market prices of the Class A Stock as reported on the 20 business days before
the date of determination, as quoted on such system or exchange, or the exchange
with the greatest volume of trading in Class A Stock for the last market trading
day before the date of determination, as reported in any reliable securities
quotation source; or
(b) If
the shares of Class A Stock are regularly quoted by a recognized securities
dealer but selling prices are not reported, its Fair Market Value shall be
the
mean between the high bid and low asked prices for the shares for the last
20
business days before the date of determination, as reported in any reliable
securities quotation source; and
(c) If
and to the extent any stock splits, stock dividends or similar changes in
capital structure occur between the dates from which market prices are averaged
hereunder, the average shall be proportionately adjusted to reflect such
changes.
1.3 “Offer
Period” shall mean the 9-month period beginning
on the Trigger Date and ending on the ninth month anniversary
thereof.
1.4 “Shares”
shall mean 1,000,000 (as adjusted pursuant to Section 2.6) shares of the Class
A
Stock.
1.5 “Transfer”
means any sale, transfer or other disposition of any shares of Class A Stock,
or
of any interest in such shares of Class A Stock, whether voluntary or by
operation of law.
Section
2 –Option to Purchase at Death
2.1 Generally. During
the Offer Period, any Transfer of any of the Shares by the Shareholder, other
than according to the terms of this Agreement, shall be void and transfer no
right, title or interest in or to any such Shares to the purported
transferee.
2.2 Permitted
Transfers. From the date hereof until the Trigger Date,
there are no restrictions hereunder upon the Transfer of the Shares and a
transferee of the Shares will receive them free and clear of any restrictions
hereunder. During the Offer Period, the Shareholder may Transfer, without
compliance with Sections 2.3 through 2.5 of this Agreement, any or all of the
Shares to an affiliate of the Tragers’ descendents or to a trust established for
the benefit thereof, or dispose of them pursuant to a judicial decree or order
(provided that, in each such case, the
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Company
receives written notice of such Transfer, that this Agreement shall be binding
upon each such transferee and, before the completion of such Transfer, each
transferee or his or her legal representative shall have executed documents
assuming the obligations of the transferring Shareholder under this Agreement
with respect to the transferred shares of Class A
Stock).
2.3 Offer
for Sale; Notice of Proposed Sale. During the Offer
Period, if the Shareholder desires to Transfer any of the Shares in any
transaction other than pursuant to Section 2.2 of this Agreement, the
Shareholder shall first deliver written notice of such desire to do so (the
“Notice”) to the Company. The Notice shall include: (i) the number of Shares the
Shareholder proposes to Transfer (the “Shares Proposed for Transfer”), (ii) the
Shareholder’s covenant to sell the Shares Proposed for Transfer for
consideration (the “Purchase Price”) equal to their Fair Market Value as of the
date of Closing (as defined below), subject to the terms and conditions of
this
Agreement, and (iii) any other material terms and conditions of the proposed
transaction.
2.4 Option
to Purchase.
(a) The
Company shall have the option (the “Option”) to purchase all of the Shares
Proposed for Transfer for the consideration per share and on the terms and
conditions specified in the Notice. The Option must be exercised no later than
20 business days after such Notice has been delivered, subject to satisfaction
of any required regulatory notice requirements and receipt of all required
regulatory approvals within 60 days of the Option exercise. The Option shall
be
exercised by delivery of written notice to the Shareholder.
(b) If
the Company duly exercises its Option to purchase the Shares Proposed for
Transfer, the closing of such purchase (the “Closing”) shall take place at the
offices of the Company on a single date agreed to between the Shareholder and
the Company, which date shall be not later than 60 days after the date of Option
exercise.
(c) If
the Company fails to timely exercise its Option to purchase the Shares Proposed
for Transfer, during the remaining term of this Agreement the Shareholder may
transfer the Shares Proposed for Transfer in accordance with the material terms
and conditions of the proposed transfer set forth in the Notice at a per share
price not less than 95% of the Fair Market Value per share on the Notice
date.
(d) Notwithstanding
any other provision of this Agreement, the Shareholder shall not be required
to
sell the Shares Proposed for Transfer if the Fair Market Value per share on
the
Closing date is less than 95% of the Fair Market Value per share on the Notice
date.
2.5 Option
Exercise. The Option shall be exercised if, and only if,
a majority of the Company’s independent directors (as defined under Item 407(a)
of Regulation S-K of the Securities and Exchange Commission, or any successor
regulation) determine at the time that exercise of the Option is in the
Company's best interests, following consultation with legal and financial
advisers as the independent directors determine appropriate.
2.6 Adjustments
In Number of Shares Subject to the Option. In the event
of any merger, reorganization, consolidation, recapitalization, separation,
liquidation, stock dividend,
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split-up,
share combination, or other change in the corporate structure of the Company
affecting the number of outstanding shares of its stock or the kind of shares
or
securities, an appropriate and proportionate adjustment shall be made in the
number and kind of Shares which may be delivered under the this
Agreement. If the Company shall at any time merge or consolidate with
or into another corporation or association, Shares subject to this Agreement
shall thereafter be the securities or property to which the Shareholder would
have been entitled upon such merger or consolidation.
Section
3 – Time and Manner of Payment
3.1 Payment
in Cash; Closing. The Company shall pay the Purchase
Price for the Shares Proposed for Transfer in cash or other immediately
available funds on the Closing date, which date may occur after the end of
the
Offer Period.
3.2 Insurance. The
Company may procure and maintain on the life of either or both of the Tragers
policies of insurance in order to facilitate the purchase of the Shares
hereunder, and the Tragers hereby agree to cooperate in the purchase of such
insurance and consent to its purchase if and as reasonably requested by the
Company to do so.
Section
4 – Representations and Warranties
4.1 Representations
and Warranties of Shareholder. The Shareholder hereby
represents and warrants to the Company:
(a) The
Shareholder has, and will transfer and deliver to the Company
upon any purchase hereunder, good and marketable title to the Shares free and
clear of all liens, security interests, claims and encumbrances
whatsoever.
(b) There
are not, and will not be at the Closing, any outstanding options, agreements
or
other rights entitling anyone to purchase any of the Shares, except as set
forth
in this Agreement.
(c) The
Shareholder has, and upon any delivery of the Shares will have, full right,
power, authority and/or capacity, as applicable, to execute this Agreement
and
perform the Shareholder's obligations hereunder. This Agreement
constitutes a legal, valid and binding obligation of the Shareholder,
enforceable against the Shareholder in accordance with its terms.
(d) None
of the Shares are, or upon any delivery of the Shares will be, subject to any
stock restriction, stock purchase or stock redemption agreement, or to any
other
restriction on transfer whatsoever except such restrictions as may exist under
applicable federal or state securities laws and this Agreement.
(e) The
Shareholder has such knowledge and experience in financial and business matters
that the Shareholder is capable of evaluating the merits and risks of granting
this option to purchase the Shares.
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4.2 Representations
and Warranties of the Company. The Company represents
and warrants to the Shareholder as follows:
(a) The
execution, delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby
are within the Company's corporate powers and have been duly authorized by
all
necessary corporate action on the part of the Company. This Agreement
has been duly executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company enforceable against the Company
in
accordance with its terms.
(b) There
are no claims of any kind or any actions, suits, proceedings, arbitrations
or
investigations pending or, to the Company's knowledge, threatened in any court
or before any governmental agency or instrumentality or arbitration panel or
otherwise which would prevent the performance of this Agreement or any of the
transactions contemplated hereby, or which declare the same unlawful or cause
the rescission thereof.
4.3 Survival
of Representations and Warranties. All representations
and warranties of the Shareholder made in this Agreement shall survive the
delivery of the Shares by the Shareholder and the consummation of the
transactions contemplated herein, and any investigation made by any party
hereto.
Section
5—Legend
Upon
the
Trigger Date, the following legend shall immediately be placed upon each
certificate evidencing the Shares:
A
Right
of First Offer Agreement dated as of September 19, 2007 has been entered into
by
the Shareholder and the Company and has been delivered to the Secretary to
be
kept on file at the Company's registered office. That agreement sets forth
restrictions on the transfer of the shares represented by this
certificate.
If
the
Shareholder does not have sufficient shares then certificated (as opposed to
being held in “book entry” form), then the Shareholder hereby covenants and
agrees to instruct its broker to have the Shares governed by this Agreement
separately certificated, so that such legend can be placed on the certificate,
and agrees and understands that the Company will advise the Company's transfer
agent of the legend and restriction on the Shares represented by that
certificate.
Section
6 -- Miscellaneous
6.1 Notices. Any
notice required or permitted to be given under this Agreement shall be deemed
sufficiently given for all purposes when hand-delivered, sent by confirmed
facsimile or when mailed by registered mail, postage prepaid and return receipt
requested, addressed to the intended recipient at (a) the intended recipient's
address as set forth in the preamble to this Agreement, or (b) such other
address as the intended recipient shall specify by written notice to
the other parties hereto, and to the following advisors (or their substitutes, per notice from any party):
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the other parties hereto, and to the following advisors (or their substitutes, per notice from any party):
If
to the
Shareholder, also
to: Xxxxxxx
X. Xxxxxx
Lynch,
Cox, Xxxxxx & Xxxxx P.S.C.
000
Xxxx
Xxxxxxxxx Xx.
Xxxxx
0000
Xxxxxxxxxx
XX 00000
If
to the
Company, also
to: R.
Xxxxx Xxxxxx
Xxxxx
Xxxxx Xxxx LLC
000
Xxxx
Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx,
XX 00000-0000
6.2 Amendment
or Termination. This Agreement may be amended only in a
written amendment executed by the Company and the Shareholder and Xxxx and
Xxxxxxx Xxxxxx, or the survivor of them, as third party beneficiaries
hereof. This Agreement shall terminate and be of no further force or
effect on the first to occur of the following: (i) a Change in
Control of the Company, (ii) the Company’s duty to file reports required under
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 is
suspended, or (iii) 14 months following the Trigger Date. In
addition, the Shareholder may terminate this Agreement following a material
change in the anticipated impact of the estate tax laws and regulations upon
the
Tragers or their estates.
6.3 Remedy
at Law. The Shareholder and the Company agree and
declare that it is impossible to measure in money the damages that will occur
if
any party to this Agreement fails to perform that party's duties under this
Agreement. Accordingly, it is agreed that no party in any action or
proceeding to enforce any provision of this Agreement will assert any contention
that there is an adequate remedy at law for the default upon which such action
or proceeding is based.
6.4 Benefit;
Assignment. This Agreement shall benefit and bind (a)
the Company, its successors and assigns and (b) the Shareholder and the
Shareholder's partners, beneficiaries and assigns. The Company may
assign its option to purchase Shares hereunder to any party it may select,
without the prior written consent of the Shareholder. Except as
permitted under Section 2.2, the Shareholder may only assign its obligations
hereunder with the express written consent of the Company, which consent may
be
withheld if the original purposes for the Agreement are no longer served, in
the
Company's sole judgment, by assignment hereof.
6.5 Headings. The
headings used in this Agreement have been included for ease of reference, and
shall not be considered in the interpretation or construction of this
Agreement.
6.6 Severability. If
any provision of this Agreement or its application shall be invalid, illegal
or
unenforceable in any respect, the validity, legality and enforceability of
all
other applications of that provision and of all other provisions and
applications hereof shall not in any way be affected or impaired. If
any court shall determine that any provision of this Agreement is in any way
unenforceable, such provision shall be reduced to whatever extent is necessary
to make such provision enforceable.
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6.7 Entire
Agreement. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior and other understandings with respect to the subject
matter
hereof.
6.8 Governing
Law. The laws of the Commonwealth of Kentucky shall
govern the validity, construction, interpretation and enforcement of this
Agreement.
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IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date set forth in the preamble hereto, but actually on the dates
set
forth below, with the Tragers’ execution and delivery for the sole purpose of
agreeing to Section 3.2 hereof.
REPUBLIC BANCORP, INC. | TEEBANK FAMILY LIMITED PARTNERSHIP | |
By /s/ Xxxxx Xxxxx | By /s/ Xxxxxx X. Xxxxxx | |
Xxxxxx X. Xxxxxx, General Partner | ||
Title: Executive Vice President & Chief Finanical Officer | ||
Date: /s/ September 19, 2007 | ||
Date: /s/ September 19, 2007 | ||
By /s/ Xxxx X. Xxxxxx | ||
By /s/ Xxxxxx X. Xxxxxx | ||
Xxxx X. Xxxxxx Trust, General Partner | ||
Xxxxxx X. Xxxxxx, Trustee | ||
Date: /s/ September 19, 2007 | ||
/s/ Xxxxxxx X. Xxxxxx | ||
Xxxxxxx X. Xxxxxx | ||
Date: /s/ September 19, 2007 | ||
/s/ Xxxx X. Xxxxxx | ||
Xxxx X. Xxxxxx | ||
Date: /s/ September 19, 2007 |
15189215.1
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