tarp-424b3.htm
Filed
Pursuant to Rule 424(B)(3)
Registration
No. 333-157144
PROSPECTUS
FARMERS
CAPITAL BANK CORPORATION
Fixed
Rate Cumulative Perpetual Preferred Stock, Series A
Warrant
to Purchase 223,992 Shares of Common Stock
223,992
Shares of Common Stock
This
prospectus relates to the potential resale from time to time by selling
securityholders of some or all of the shares of our Fixed Rate Cumulative
Perpetual Preferred Stock, Series A (the “Series A Preferred
Stock”), a warrant to purchase 223,992 shares of our common stock (the
“Warrant”), and
any shares of our common stock issuable from time to time upon exercise of the
Warrant. In this prospectus, we refer to the shares of Series A
Preferred Stock, the Warrant and the shares of common stock issuable upon
exercise of the Warrant, collectively, as the “securities.” We issued
the Series A Preferred Stock and the Warrant pursuant to the Letter Agreement
dated January 9, 2009, and the related Securities Purchase Agreement — Standard
Terms, between us and the United States Department of the Treasury (the “Treasury”), in a
transaction exempt from the registration requirements of the Securities Act of
1933 (the “Securities
Act”).
The
Treasury and its successors, including transferees, which we collectively refer
to as the “selling
securityholders,” may offer the securities from time to time directly or
through underwriters, broker-dealers or agents and in one or more public or
private transactions and at fixed prices, prevailing market prices, at prices
related to prevailing market prices or at negotiated prices. If these
securities are sold through underwriters, broker-dealers or agents, the selling
securityholders will be responsible for underwriting discounts or commissions or
agents’ commissions.
We will
not receive any proceeds from the sale of the securities by the selling
securityholders.
Neither
the Series A Preferred Stock nor the Warrant is listed on an exchange. Unless
requested by the Treasury, we do not intend to list the Series A Preferred Stock
on any exchange. We do not intend to list the Warrant on any
exchange.
Our
common stock is listed on the NASDAQ Global Select Market under the symbol
“FFKT.” On March 6, 2009, the closing price of our common stock on
the NASDAQ Global Select Market was $12.76 per share. You are urged
to obtain current market quotations of our common stock.
Our
principal executive offices are located at P.O. Box 309, 202 W. Main St.,
Frankfort, KY 40602 and our telephone number is (502) 227-1668. Our
Internet address is http://www.farmerscapital.com.
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Investing
in our securities involves a high degree of risk. See “Risk Factors”
beginning on page 1.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus or
any accompanying prospectus supplement is truthful or complete. Any
representation to the contrary is a criminal offense.
These
securities are unsecured and are not savings accounts, deposits or other
obligations of any of our bank or non-bank subsidiaries, and are not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency. These securities involve investment risks, including
possible loss of principal.
_______________________
The date
of this prospectus is March 10, 2009
Table
of Contents
This
prospectus is part of a registration statement that we filed with the Securities
and Exchange Commission (the “SEC”) using a “shelf”
registration process. Under this shelf process, the selling
securityholders may, from time to time, sell in one or more offerings, the
securities described in this prospectus.
We may
provide a prospectus supplement containing specific information about the terms
of a particular offering by the selling securityholders. The
prospectus supplement may add, update or change information in this
prospectus. If the information in this prospectus is inconsistent
with a prospectus supplement, you should rely on the information in that
prospectus supplement. We urge you to read both this prospectus and, if
applicable, any prospectus supplement together with additional information
described under the headings “Available
Information” and “Incorporation of Certain
Documents by Reference” on page 2 in this prospectus.
As used
in this prospectus, “Farmers Capital,”
“the Company,”
“we,” “us,” and “ours” refer to
Farmers Capital Bank Corporation and its subsidiaries.
You
should not assume that the information contained in this prospectus or any
prospectus supplement is accurate as of any date other than the date on the
front cover of such documents. Neither the delivery of this
prospectus or any applicable prospectus supplement nor any distribution of
securities pursuant to such documents creates any implication, under any
circumstances, that there has been no change in the information set forth in
this prospectus or any applicable prospectus supplement or in our affairs since
the date of this prospectus or any applicable prospectus
supplement.
Investing
in our securities involves risk. In addition to the risk factor below
please see the “Risk Factors” section in our most recent Annual Report on Form
10-K, along with any risk factor disclosure contained in our subsequent periodic
reports, which are incorporated by reference into this prospectus, as updated by
our future filings with the SEC. If we file a prospectus supplement
it may also contain a discussion of additional risks. Before you
invest in our securities, you should carefully consider these risks as well as
other information contained or incorporated by reference in this
prospectus. Each of the risks described in these sections and
documents could materially and adversely affect our business, financial
condition, results of operations and prospects, and could result in a partial or
complete loss of your investment. Additionally, risks that we
currently deem immaterial or that are presently unknown to us may also impair
our business, financial condition, results of operations and the value of our
securities.
Because of our participation in the
United States Department of the Treasury Capital Purchase Program, we are
subject to several restrictions including restrictions on our ability to declare
or pay dividends and repurchase our stock.
On
January 9, 2009, we sold directly to the Treasury for aggregate consideration of
$30 million (1) 30,000 shares of our Series A Preferred Stock and (2) a Warrant
to purchase 223,992 shares of our common stock. We issued these
securities pursuant to a letter agreement dated January 9, 2009 and the
Securities Purchase Agreement – Standard Terms attached thereto between us and
the Treasury (collectively, the “Purchase
Agreement”). Pursuant to the terms of the Purchase Agreement,
our ability to declare or pay dividends on any of our stock is
limited. Specifically, we are unable to declare dividend payments on
shares of our common or junior preferred stock if we are in arrears on the
dividends on the Series A Preferred Stock. Similarly, dividends on
preferred stock that has the same liquidation and distribution preference as the
Series A Preferred Stock may only receive dividends pro rata with the Series A
Preferred Stock during any period in which dividends on the Series A Preferred
Stock are in arrears. Further, until January 9, 2012, we must have
the Treasury’s approval before we may increase dividends on our common stock
above the amount of the last quarterly cash dividend per share we declared prior
to October 14, 2008, which was $0.33 per share. This restriction no
longer applies if all the Series A Preferred Stock has been redeemed by us or
transferred by the Treasury.
In
addition, our ability to repurchase our shares is restricted. Until
January 9, 2012, we generally must have the Treasury’s approval before we may
repurchase any of our shares of common stock, unless all of the Series A
Preferred Stock has been redeemed by us or transferred by the
Treasury.
We file
annual, quarterly and current reports, proxy statements and other information
required by the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with
the SEC. You may read and copy any of these filed documents at the
SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, DC,
20549. Please call the SEC at 1-800-SEC-0330 for further
information. Our SEC filings are also available to the public from
the SEC’s website at http://www.sec.gov.
Our
Internet address is www.farmerscapital.com. We make available through
our website, free of charge, our periodic and current reports, proxy and
information statements and other information we file with the SEC and amendments
thereto as soon as reasonably practicable after we file such material with, or
furnish such material to, the SEC, as applicable. Unless specifically
incorporated by reference, the information on our website is not part of this
prospectus.
This
prospectus is part of a Registration Statement and does not contain all of the
information included in the Registration Statement. Whenever a
reference is made in this prospectus or any prospectus supplement to any
contract or other document of ours, you should refer to the exhibits that are a
part of the Registration Statement for a copy of the referenced contract or
document. Statements contained in this prospectus concerning the
provisions of any documents are necessarily summaries of those documents, and
each statement is qualified in its entirety by reference to the copy of the
document filed with the SEC.
The SEC
allows us to “incorporate by reference” into this prospectus information that we
file with the SEC in other documents. This means that we can disclose
important information to you by referring you to other documents filed
separately with the SEC. The information that we incorporate by
reference is considered to be part of this prospectus, and information that we
file later with the SEC will automatically update and supersede the information
contained in this prospectus.
We
incorporate by reference the documents listed below and any future filings we
make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this prospectus and prior to the termination of the offering
covered by this prospectus:
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Our
Annual Report on Form 10-K (File No.
000-144412)
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Year Ended
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Filing Date
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December
31, 2007
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March
13, 2007
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Our
Quarterly Reports on Form 10-Q (File No.
000-144412)
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Quarter Ended
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Filing Date
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March
31, 2008
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May
8, 2008
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June
30, 2008
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August
8, 2008
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September
30, 2008
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November
7, 2008
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Our
Current Reports on Form 8-K (File No.
000-144412)
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Filing Dates:
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January
22, 2008, January 29, 2008, April 23, 2008, April 29, 2008 (2 reports),
May 29, 2008,
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July
23, 2008, August 4, 2008, September 10, 2008, October 22, 2008, October
28, 2008,
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November
3, 2008, December 16, 2008, January 12, 2009, January 13, 2009, January
21, 2009
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and
January 27, 2009.
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Portions
of DEFN 14A (our definitive Proxy Statement for our Annual Meeting of
Shareholders held on May 13, 2008) that are incorporated by reference into
Items 11, 12, 13 and 14 of our Annual Report on Form 10-K for year ended
December 31, 2007.
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Description
of our common stock contained in our registration statement filed under
Section 12 of the Exchange Act, including all amendments or reports filed
for the purpose of updating such
description.
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We also
incorporate by reference additional documents that we will file with the SEC
under Section 13(a), 13(c), 14, or 15(d) of the Exchange Act after the date of
this prospectus and before the termination of the offering (other than
information in such additional documents that is deemed, under SEC rules, to
have been furnished and not to have been filed). These additional documents will
be deemed to be incorporated by reference, and to be a part of, this prospectus
from the date of their filing. These documents include proxy statements and
periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q, and, to the extent they are considered filed, Current Reports on Form
8-K. To the extent any information incorporated by reference from
later filed documents is inconsistent with information that is included in this
prospectus, any applicable prospectus supplement or incorporated by reference
from earlier documents, then the later information shall supersede the earlier
information to the extent they are inconsistent.
On the
written or oral request of each person, including any beneficial owner, to whom
a copy of this prospectus is delivered, we will provide, without charge, a copy
of any or all of the documents incorporated by reference in this prospectus or
in any related prospectus supplement, except exhibits to those documents, unless
the exhibits are specifically incorporated by reference.
Written
requests for copies should be directed to P.O. Box 309, 202 W. Main St.,
Frankfort, KY 40602, Attention: C. Douglas
Carpenter. Telephone requests for copies should be directed to (502)
227-1668.
You
should rely only upon the information provided in this document, or incorporated
in this document by reference. We have not authorized anyone to
provide you with different information. You should not assume that
the information in this document, including any information incorporated by
reference, is accurate as of any date other than the date indicated on the front
cover or the date given in the applicable document.
This
prospectus includes “forward-looking statements” within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking
statements discuss future expectations, describe future plans and strategies,
contain projections of results of operations or of financial condition or state
other forward-looking information. Forward-looking statements are generally
identifiable by the use of forward-looking terminology such as “anticipate,”
“believe,” “continue,” “could,” “endeavor,” “estimate,” “expect,” “forecast,”
“goal,” “intend,” “may,” “objective,” “potential,” “predict,” “pro-forma,”
“project,” “seek,” “should,” “will” and other similar words and expressions of
future intent.
Our
ability to predict results or the actual effect of future plans or strategies is
inherently uncertain. Although we believe that the expectations reflected in
such forward-looking statements are based on reasonable assumptions, actual
results and performance could differ materially from those set forth in the
forward-looking statements. Factors that could cause actual results and
performance to differ from those expressed in our forward-looking statements
include, but are not limited to:
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our
ability to manage effectively interest rate risk and other market, credit
and operational risk,
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the
quality and composition of our loan and investment
portfolios,
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our
ability to manage fluctuations in the value of assets and liabilities and
off-balance sheet exposure so as to maintain sufficient capital and
liquidity to support our business,
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new
legislation and regulations and changes in existing legislation and
regulations,
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possible
changes in general economic and business conditions in the United States
in general, and in the Kentucky communities we serve in particular, may
lead to a deterioration in asset and credit
quality,
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monetary
and fiscal policies of the United States Government,
and
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the
cost and other effects of material contingencies, including litigation
contingencies.
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We do not
have a policy of updating or revising forward-looking statements except as
otherwise required by law, and silence by management over time should not be
construed to mean that actual events are occurring as estimated in such
forward-looking statements. For further information on other factors
that could affect us is included in the SEC filings incorporated by reference in
this prospectus. See also “Risk Factors”
contained herein and therein.
Farmers Capital Bank Corporation is a
Kentucky corporation and a registered financial holding company headquartered in
Frankfort, Kentucky. Our operating subsidiaries provide a wide range
of banking and bank-related services to customers throughout Central and
Northern Kentucky. The bank subsidiaries owned by Farmers Capital
include Farmers Bank & Capital Trust Co. (Frankfort, Kentucky), United Bank
& Trust Co. (Versailles, Kentucky), Citizens Bank of Northern Kentucky, Inc.
(Newport, Kentucky), LNB (Lawrenceburg, Kentucky), and First Citizens Bank
(Elizabethtown, Kentucky). We also own FCB Services, Inc., a nonbank
data processing subsidiary located in Frankfort, Kentucky, which provides
services primarily to our bank subsidiaries, Kentucky General Life Insurance
Company, Inc., an insurance agency subsidiary located in Frankfort, Kentucky,
and Kentucky General Holdings, LLC, in Frankfort, Kentucky. Kentucky
General holds a 50% voting interest in KHL Holdings, LLC, which owns the
Kentucky Home Life Insurance Company. Further, we own EKT Properties,
Inc., which is involved in real estate management and liquidation for certain
properties repossessed by our subsidiary banks.
We will
not receive any proceeds from any sale of the securities by the selling
securityholders.
Our
consolidated ratios of earnings to fixed charges for each of the periods
indicated is as follow:
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Nine
Months
Ended
September
30,
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Year
Ended
December
31,
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2008
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2007
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2006
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2005
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2004
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2003
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Ratio
of Earnings to Fixed Charges:
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Excluding
Interest on Deposits
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1.2x
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2.8x
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2.9x
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4.4x
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5.7x
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5.9x
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Including
Interest on Deposits
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1.1x
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1.4x
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1.4x
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1.7x
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2.0x
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1.9x
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As of the
date of this prospectus, we had 30,000 shares of preferred stock outstanding
that we issued on January 9, 2009. We were not required to pay any
dividends on the preferred stock for the periods indicated in the above
table. For the purpose of computing the ratios of earnings to fixed
charges, earnings consist of consolidated income from continuing operations
before income tax expense and fixed charges. Fixed charges include the estimated
interest portion of rents.
The
following is a brief description of the terms of our Series A Preferred
Stock. This summary does not purport to be complete in all
respects. This description is subject to and is qualified in its
entirety by reference to the Articles of Amendment to our Second Amended and
Restated Articles of Incorporation with respect to the Series A Preferred Stock,
a copy of which we filed with the SEC as Exhibit 3.1 to our Current Report on
Form 8-K filed on January 13, 2009, which is incorporated herein by reference
and is also available upon request from us.
General.
Under our
articles of incorporation, as amended, we have authority to issue up to
1,000,000 shares of preferred stock, no par value. Of such number of
shares of preferred stock authorized, 30,000 shares have been designated as
Series A Preferred Stock, all of which shares of Series A Preferred Stock were
issued on January 9, 2009 to the Treasury in a transaction exempt from the
registration requirements of the Securities Act. No other shares of preferred
stock are issued and outstanding as of the date hereof.
Dividends
Payable on Series A Preferred Stock.
Holders
of Series A Preferred Stock are entitled to receive if, as and when declared by
our board of directors, out of legally available funds, cumulative cash
dividends at a rate per annum of 5% on a liquidation preference of $1,000 per
share of Series A Preferred Stock with respect to each dividend period from
January 9, 2009 to, but excluding, February 15, 2014. From and after
February 15, 2014, holders of Series A Preferred Stock are entitled to receive
cumulative cash dividends at a rate per annum of 9% on a liquidation preference
of $1,000 per share of Series A Preferred Stock with respect to each dividend
period thereafter.
Dividends
are payable quarterly in arrears on each February 15, May 15, August 15 and
November 15 (each a “dividend payment
date”), starting with February 15, 2009. On January 27, 2009,
our board of directors declared the full dividend due on the Series A Preferred
Stock for the period from January 9, 2009 through February 14, 2009 payable on
February 15, 2009. If any dividend payment date is not a business
day, then the next business day will be the applicable dividend payment date,
and no additional dividends will accrue as a result of the applicable
postponement of the dividend payment date. Dividends payable during
any dividend period are computed on the basis of a 360-day year consisting of
twelve 30-day months. Dividends payable with respect to our Series A
Preferred Stock are payable to holders of record on the date that is 15 calendar
days immediately preceding the applicable dividend payment date or such other
record date as our board of directors or any duly authorized board committee
determines, so long as such record date is not more than 60 nor less than 10
days prior to the applicable dividend payment date.
If we
determine not to pay any dividend or a full dividend with respect to Series A
Preferred Stock, we are required to provide written notice to the holders of
Series A Preferred Stock prior to the applicable dividend payment
date.
We are
subject to various regulatory policies and requirements relating to the payment
of dividends, including requirements to maintain adequate capital above
regulatory minimums. The Federal Reserve Board (“FRB”) is authorized
to determine, under certain circumstances relating to the financial condition of
a financial holding company, such as us, that the payment of dividends would be
an unsafe or unsound practice and to prohibit payment of that
dividend.
Priority
of Dividends.
With
respect to the payment of dividends and the amounts to be paid upon liquidation,
Series A Preferred Stock will rank:
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senior
to our common stock and all other equity securities ranking junior to
Series A Preferred Stock as to dividends and/or rights on liquidation,
dissolution or winding up of the Company,
and
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at
least equally with all other equity securities designated as ranking on a
parity with Series A Preferred Stock (“parity stock”),
with respect to the payment of dividends and distribution of assets upon
our liquidation, dissolution or winding up of the
Company.
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So long
as any shares of Series A Preferred Stock remain outstanding, unless all accrued
and unpaid dividends for all prior dividend periods have been paid or are
contemporaneously declared and paid in full, no dividend whatsoever may be paid
or declared on our common stock or other junior stock, other than a dividend
payable solely in common stock.
Further,
without the Treasury’s approval or unless all of the Series A Preferred Stock
has been redeemed or transferred by the Treasury, until January 9, 2012, we are
not permitted to increase dividends on our common stock above the amount of the
last quarterly cash dividend per share we declared prior to October 14, 2008,
which was $0.33 per share.
On any
dividend payment date on Series A Preferred Stock and any other parity stock for
which full dividends are not paid or declared and funds set aside for payment,
all dividends paid or declared for payment on that dividend payment date (or,
with respect to parity stock with a different dividend payment date, on the
applicable dividend date falling within the dividend period and related to the
dividend payment date for Series A Preferred Stock), must be declared ratably
among the holders of any such shares of Series A Preferred Stock and other
parity stock who have the right to receive dividends, in proportion to the
respective amounts of the undeclared and unpaid dividends payable on such
dividend payment date.
Subject
to the foregoing restrictions, our board of directors may declare and pay
dividends (payable in cash, stock or otherwise) on our common stock and any
other stock ranking equally with or junior to the Series A Preferred Stock from
time to time out of any funds legally available for such payment. The
Series A Preferred Stock will not be entitled to participate in any such
dividend.
In
addition, we may not purchase, redeem or otherwise acquire for consideration any
shares of our common stock or other junior stock or parity stock unless we have
paid in full all accrued dividends on Series A Preferred Stock for all prior
dividend periods, other than:
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redemptions,
purchases or other acquisitions of our common stock or other junior stock
in connection with the administration of our employee benefit plans in the
ordinary course of business, |
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purchases
or other acquisitions by any broker-dealer subsidiaries of the Company
solely for the purpose of market-making, stabilization or customer
facilitation transactions in junior stock or parity stock in the ordinary
course of its business,
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purchases
or other acquisitions by any broker-dealer subsidiaries of the Company for
resale pursuant to an offering by us of our stock that is underwritten by
the related broker-dealer
subsidiary,
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any
dividends or distributions of rights or junior stock in connection with
any shareholders’ rights plan or repurchases of rights pursuant to any
shareholders’ rights plan,
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acquisition
by us or our subsidiaries of record ownership of junior stock or parity
stock for the beneficial ownership of any other person (other than us),
including as trustees or custodians,
and
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the
exchange or conversion of (a) junior stock for or into other junior stock
or (b) parity stock for or into other parity stock or junior stock, but
only to the extent that (x) the acquisition is required pursuant to
binding contractual agreements entered into before January 9, 2009 or (y)
any subsequent agreement for the accelerated exercise, settlement or
exchange thereof for common stock.
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Redemption.
The
articles of amendment that created the Series A Preferred Stock state that we
may not redeem shares of our Series A Preferred Stock prior to February 15,
2012, unless we have received aggregate gross proceeds from one or more
qualified equity offerings (as described below) equal to
$7,500,000. In such a case, we may redeem the Series A Preferred
Stock, subject to the approval of the FRB, in whole or in part, upon notice as
described below, up to a maximum amount equal to the aggregate net cash proceeds
received by us from qualified equity offerings. A “qualified equity
offering” means the Company’s sale and issuance for cash, to persons
other than the Company or our subsidiaries after January 9, 2009, of shares of
perpetual preferred stock, common stock or a combination thereof, that in each
case qualify as tier 1 capital of the Company at the time of issuance under the
applicable risk-based capital guidelines of the FRB. Qualified equity
offerings do not include issuances made in connection with acquisitions,
issuances of trust preferred securities and issuances of common stock and/or
perpetual preferred stock made pursuant to agreements or arrangements entered
into, or pursuant to financing plans that were publicly announced, on or prior
to October 13, 2008.
After
February 15, 2012, the Series A Preferred Stock may be redeemed at any time,
subject to the approval of the FRB, in whole or in part, subject to notice as
described below.
The American Recovery and Reinvestment Act of 2009 was signed into
law on February 17, 2009, after we issued shares of our Series A Preferred Stock
to the Treasury. Under this act, subject to consultation with the FRB, the
Treasury must permit us to redeem the shares of Series A Preferred Stock it
purchased without regard to the above waiting period restrictions or our source
of funds for such redemption.
In any
redemption, the redemption price will be an amount equal to the per share
liquidation amount plus accrued and unpaid dividends to but excluding the date
fixed for redemption.
The
Series A Preferred Stock will not be subject to any mandatory redemption,
sinking fund or similar provisions. Holders of shares of Series A Preferred
Stock have no right to require the redemption or repurchase of the Series A
Preferred Stock.
In case
of any redemption of less than all of the shares of Series A Preferred Stock,
the shares to be redeemed will be selected either pro rata or in such other
manner as our board of directors may determine to be fair and
equitable.
We will
mail notice of any redemption of Series A Preferred Stock by first class mail,
postage prepaid, addressed to the holders of record of the shares of Series A
Preferred Stock to be redeemed at their respective last addresses appearing on
our books. This mailing will be at least 30 days and not more than 60
days before the date fixed for redemption. Any notice mailed or otherwise given
as described in this paragraph will be conclusively presumed to have been duly
given, whether or not the holder receives the notice, and failure duly to give
the notice by mail or otherwise, or any defect in the notice or in the mailing
or provision of the notice, to any holder of Series A Preferred Stock designated
for redemption will not affect the redemption of any other Series A Preferred
Stock. Each notice of redemption will set forth the applicable
redemption date, the redemption price, the place where shares of Series A
Preferred Stock are to be redeemed, and the number of shares of Series A
Preferred Stock to be redeemed (and, if less than all shares of Series A
Preferred Stock held by the applicable holder, the number of shares to be
redeemed from the holder).
Shares of
Series A Preferred Stock that we redeem, repurchase or otherwise acquire will
revert to authorized but unissued shares of our preferred stock. Such
shares may be reissued as another series of preferred stock, but may not be
reissued as Series A Preferred Stock.
Liquidation
Rights.
In the
event that we dissolve or wind up our affairs, holders of Series A Preferred
Stock will be entitled to receive an amount per share, referred to as the total
liquidation amount, equal to the fixed liquidation preference of $1,000 per
share, plus any accrued and unpaid dividends, whether or not declared, to the
date of payment. Holders of Series A Preferred Stock will be entitled
to receive the total liquidation amount out of our assets that are available for
distribution to shareholders, after payment or provision for payment of our
debts and other liabilities but before any distribution of assets is made to
holders of our common stock or any other shares of our stock ranking, as to that
distribution, junior to the Series A Preferred Stock.
If our
assets are not sufficient to pay the total liquidation amount in full to all
holders of Series A Preferred Stock and all holders of any shares of outstanding
parity stock, the amounts paid to the holders of Series A Preferred Stock and
other shares of parity stock will be paid pro rata in accordance
with
the
respective total liquidation amount for those holders. If the total
liquidation amount per share of Series A Preferred Stock has been paid in full
to all holders of Series A Preferred Stock and other shares of parity stock, the
holders of our common stock or any other shares ranking, as to such
distribution, junior to Series A Preferred Stock will be entitled to receive all
of our remaining assets according to their respective rights and
preferences.
For
purposes of the liquidation rights, neither the sale, conveyance, exchange or
transfer of all or substantially all of our property and assets, nor the
consolidation or merger by us with or into, any other corporation or by another
corporation with or into us, will constitute a liquidation, dissolution or
winding-up of our affairs.
Voting
Rights.
Except as
indicated below or otherwise required by law, the holders of Series A Preferred
Stock will not have any voting rights.
Election of Two Directors upon
Non-Payment of Dividends. If the dividends on the Series A
Preferred Stock have not been paid for an aggregate of six quarterly dividend
periods or more (whether or not consecutive), the authorized number of directors
then constituting the Company’s board of directors will be automatically
increased by two. Holders of Series A Preferred Stock, together with
the holders of any outstanding parity stock with like voting rights (the “Voting Parity Stock”), voting as a
single class, will be entitled to elect the two additional members of the
Company’s board of directors (the “Preferred Stock Directors”), at the
next annual meeting (or at a special meeting called for the purpose of electing
the Preferred Stock Directors prior to the next annual meeting) and at each
subsequent annual meeting until all accrued and unpaid dividends for all past
dividend periods have been paid in full. The election of any
Preferred Stock Director is subject to the qualification that the election would
not cause us to violate the corporate governance requirement of the NASDAQ Stock
Market (or any other exchange on which our securities may be listed) that listed
companies must have a majority of independent directors.
Upon the
termination of the right of the holders of Series A Preferred Stock and Voting
Parity Stock to vote for Preferred Stock Directors, as described above, the
Preferred Stock Directors will immediately cease to be qualified as directors,
their term of office shall terminate immediately and the number of authorized
directors of the Company will be reduced by the number of Preferred Stock
Directors that the holders of Series A Preferred Stock and Voting Parity Stock
had been entitled to elect. The holders of a majority of shares of
Series A Preferred Stock and Voting Parity Stock, voting as a class, may remove
any Preferred Stock Director, with or without cause, and the holders of a
majority of the shares of Series A Preferred Stock and Voting Parity Stock,
voting as a class, may fill any vacancy created by the removal of a Preferred
Stock Director. If the office of a Preferred Stock Director becomes
vacant for any other reason, the remaining Preferred Stock Director may choose a
successor to fill such vacancy for the remainder of the unexpired
term.
Other Voting
Rights. So long as any shares of Series A Preferred Stock are
outstanding, in addition to any other vote or consent of shareholders required
by law or by our articles of incorporation, the vote or consent of the holders
of at least 66-2/3% of the shares of Series A Preferred Stock at the time
outstanding, voting separately as a single class, given in person or by proxy,
either in writing without a meeting or by vote at any meeting called for the
purpose, shall be necessary for effecting or validating:
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any
amendment or alteration of our articles of incorporation or the articles
of amendment that created the Series A Preferred Stock, to authorize or
create or increase the authorized amount of, or any issuance of, any
shares of, or any securities convertible into or exchangeable or
exercisable for shares of, any class or series of capital stock ranking
senior to the Series A Preferred Stock with respect to payment of
dividends and/or distribution of assets on our liquidation, dissolution or
winding up,
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any
amendment, alteration or repeal of any provision of our articles of
incorporation or the articles of amendment that created the Series A
Preferred Stock, so as to adversely affect the rights, preferences,
privileges or voting powers of the Series A Preferred Stock,
or
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any
consummation of a binding share exchange or reclassification involving the
Series A Preferred Stock or a merger or consolidation of the Company with
another entity, unless the shares of Series A Preferred Stock remain
outstanding following any such transaction or, if the Company is not the
surviving entity, are converted into or exchanged for preference
securities and such remaining outstanding shares of Series A Preferred
Stock or preference securities that have rights, references, privileges
and voting powers that are not materially less favorable than the rights,
preferences, privileges or voting powers of the Series A Preferred Stock,
taken as a whole.
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The
creation and issuance, or increase in the authorized or issued amount of any
other series of preferred stock ranking equally with and/or junior to the Series
A Preferred Stock will not be deemed to adversely affect the rights,
preferences, privileges or voting powers of, and shall not require the vote or
consent of, the holders of the Series A Preferred Stock.
Holders
of the Series A Preferred Stock are entitled to one vote for each share on any
matter on which such holders are entitled to vote.
The
foregoing voting provisions will not apply if, at or prior to the time when the
vote or consent would otherwise be required, all outstanding shares of Series A
Preferred Stock have been redeemed or called for redemption upon proper notice
and sufficient funds have been set aside by us for the benefit of the holders of
Series A Preferred Stock to effect the redemption.
The
following is a brief description of the terms of the Warrant. This
summary does not purport to be complete in all respects. This description is
subject to is and qualified in its entirety by reference to the Warrant, copies
of which have been filed with the SEC as Exhibit 4.2 to our Current Report on
Form 8-K filed on January 13, 2009 and are also available upon request from
us.
Shares
of Common Stock Subject to the Warrant.
The
Warrant is initially exercisable for 223,992 shares of our common stock. If we
complete one or more qualified equity offerings on or prior to December 31, 2009
that result in our receipt of aggregate gross proceeds of not less than
$30,000,000, which is equal to 100% of the aggregate liquidation preference of
the Series A Preferred Stock, the number of shares of common stock underlying
the Warrant then held by the Treasury will be reduced by 50% to 111,996 shares.
The number of shares subject to the Warrant are subject to the further
adjustments described below under the heading “—Adjustments to the
Warrant.”
Exercise of the Warrant.
The
initial exercise price applicable to the Warrant is $20.09 per share of common
stock for which the Warrant may be exercised. The Warrant may be exercised at
any time on or before January 9, 2019 by surrender of the Warrant and a
completed notice of exercise attached as an annex to the Warrant and the payment
of the exercise price for the shares of common stock for which the Warrant is
being exercised. The exercise price may be paid either by the withholding by the
Company of such number of shares of common stock issuable upon exercise of the
Warrant equal to the value of the aggregate exercise price of the Warrant
determined by reference to the market price of our common stock on the trading
day on which the Warrant is exercised or, if agreed to by us and the
warrantholder, by the payment of cash equal to the aggregate exercise price. The
exercise price applicable to the Warrant is subject to the further adjustments
described below under the heading “—Adjustments to the
Warrant.”
The
Warrant may be partially exercised. The holder of the Warrant is
entitled to receive, within three business days of partial exercise, a new
substantially identical Warrant for the unexercised shares.
Upon
exercise of the Warrant, certificates for the shares of common stock issuable
upon exercise will be issued to the warrantholder. We will not issue fractional
shares upon any exercise of the Warrant. Instead, the warrantholder will be
entitled to a cash payment equal to the market price of our common
stock on
the last day preceding the exercise of the Warrant (less the pro-rated exercise
price of the Warrant) for any fractional shares that would have otherwise been
issuable upon exercise of the Warrant. We will at all times reserve the
aggregate number of shares of our common stock for which the Warrant may be
exercised.
Liquidation.
Under the American Recovery and
Reinvestment Act of 2009, when we redeem the shares of Series A Preferred Stock
we sold to the Treasury on January 9, 2009, the Treasury is required to
liquidate the Warrant at the current market price.
Rights
as a Shareholder.
The
warrantholder shall have no rights or privileges that the holders of our common
stock have, including any voting rights, until the Warrant has been exercised,
and then only with respect to shares of common stock issued in connection with
such exercise.
Transferability.
The
Treasury may not transfer a portion of the Warrant with respect to more than
111,996 shares of common stock until the earlier of the date on which the
Company has received aggregate gross proceeds from a qualified equity offering
of at least $30,000,000 and December 31, 2009. The Warrant, and all rights under
the Warrant, are otherwise transferable.
Adjustments
to the Warrant.
Adjustments in Connection with Stock
Splits, Subdivisions, Reclassifications and Combinations. The number of
shares for which the Warrant may be exercised and the exercise price applicable
to the Warrant will be proportionately adjusted in the event we pay stock
dividends or make distributions of our common stock, subdivide, combine or
reclassify outstanding shares of our common stock.
Anti-dilution Adjustment.
Until the earlier of January 9, 2012 and the date the Treasury no longer holds
the Warrant (and other than in certain permitted transactions described below),
if we issue any shares of common stock (or securities convertible or exercisable
into common stock) for less than 90% of the market price of the common stock on
the last trading day prior to pricing such shares, then the number of shares of
common stock into which the Warrant is exercisable and the exercise price will
be adjusted. Permitted transactions include issuances:
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as
consideration for or to fund the acquisition of businesses and/or related
assets,
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in
connection with employee benefit plans and compensation related
arrangements in the ordinary course and consistent with past practice
approved by our board of directors,
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in
connection with public or broadly marketed offerings and sales of common
stock or convertible securities for cash conducted by us or our affiliates
pursuant to registration under the Securities Act or Rule 144A thereunder
on a basis consistent with capital-raising transactions by comparable
financial institutions (but do not include other private transactions),
and
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in
connection with the exercise of preemptive rights on terms existing as of
January 9, 2012.
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Other
Distributions. If we declare any dividends or distributions
other than our historical, ordinary cash dividends, the exercise price of the
Warrant will be adjusted to reflect such distribution.
Certain
Repurchases. If we effect a pro rata repurchase of common
stock both the number of shares issuable upon exercise of the Warrant and the
exercise price will be adjusted.
Business
Combinations. In the event of a merger, consolidation or
similar transaction involving the Company and requiring shareholder approval,
the warrantholder’s right to receive shares of our common stock upon exercise of
the Warrant will be converted into the right to exercise the Warrant for the
consideration that would have been payable to the warrantholder with respect to
the shares of common stock for which the Warrant may be exercised, as if the
Warrant had been exercised prior to such merger, consolidation or similar
transaction.
The
following is a brief description of our common stock that may be resold by the
selling securityholders. This summary does not purport to be complete in all
respects. This description is subject to and qualified in its entirety by
reference to our articles of incorporation, as amended, a copy of which has been
filed with the SEC and is also available upon request from us.
We have
9,608,000 shares of authorized common stock, $0.125 par value per
share. As of February 6, 2009, 7,357,362 shares of our common stock
were issued and outstanding, plus an additional 372,376 shares of our common
stock were reserved for issuance under existing stock options held by employees,
our employee stock purchase plan and the Warrant we issued to the Treasury on
January 9, 2009.
Voting
Rights.
Subject
to the rights of any series of preferred stock outstanding or that we may issue,
our common stock has the exclusive right to vote in the election of directors
and on all other matters in which shareholders are generally entitled to vote.
The common stock is entitled to one vote per share on matters that holders of
our common stock are entitled to vote.
Except
with respect to certain special matters that are required by statute to be
submitted to shareholders for a greater number of affirmative votes as
identified below, any act of our shareholders requires that more votes be cast
for than against the matter at a meeting at which a quorum is
present. Subject to special votes required below in specific
instances, the affirmative vote of a majority of all the outstanding shares
entitled to vote is required to approve actions specified by statute such as
mergers, share exchanges, certain sales of assets, and amendments of the
articles of incorporation, among other things.
Our
directors are elected by a plurality of votes cast by the shares entitled to
vote in the election at a meeting at which a quorum is present. Holders of our
voting common stock are entitled to cast, in person or by proxy, one vote per
share for each director to be elected and for other matters submitted to the
shareholders for a vote.
Dividend
Rights.
Holders
of our common stock are entitled to dividends when, as, and if declared by our
board of directors out of funds legally available for the payment of
dividends. The Kentucky Business Corporation Act prohibits the board
of directors from declaring a dividend if as a result of such
dividend:
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we
would not be able to pay our debts as they become due in the usual course
of business, or
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our
total assets would be less than the sum of our total liabilities plus the
amount that would be needed, if we were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon dissolution of
shareholders whose preferential rights are superior to those receiving the
distribution.
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Liquidation
and Dissolution.
In the
event of the liquidation, dissolution and winding up of the Company, the holders
of our common stock are entitled to receive ratably all of the assets of the
Company available for distribution after satisfaction of all liabilities of the
Company, subject to the rights of the holders of any shares of the Company’s
preferred stock that may be issued and outstanding from time to
time.
Other
Rights.
Holders
of our common stock have no preemptive rights. There are no
conversion rights or redemption or sinking fund provisions applicable to shares
of our common stock.
No
Shareholder Liability.
No holder
of our common stock will be personally liable for our debts.
Transfer
Agent.
American
Stock Transfer & Trust Company is the registrar and transfer agent for our
common stock.
Bylaws
and Kentucky Law
Anti-takeover
Provisions.
Our
articles of incorporation and bylaws contain provisions designed to assure
continuity of management and to discourage sudden changes in control of our
board of directors by a party seeking control of the Company.
Omission of Cumulative
Voting. The omission of cumulative voting from our articles of
incorporation may be considered anti-takeover in nature. Cumulative
voting entitles each shareholder to as many votes as equal the number of shares
owned by him or her multiplied by the number of directors to be
elected. A shareholder may cast all these votes for one candidate or
distribute them among any two or more candidates. Cumulative voting
is optional under the Kentucky Business Corporation Act and, by their omission
from our articles of incorporation, we have not elected to permit cumulative
voting.
Classification of Board of
Directors. Our articles of incorporation provide for the
division of our board of directors into three classes, as nearly equal as
possible. Each class of directors is elected for a term of three
years. As a result, only one class of directors is elected at each
annual meeting of the shareholders. Any vacancy on the board may be
filled by a majority vote of the remaining directors. Directors
elected in this manner to fill a vacancy will serve the unexpired portion of the
vacated term.
This
classification provision extends the time required to change control of the
board and tends to discourage any unauthorized takeover bids for the
Company. Under this classification provision, it may require at least
two annual meetings for even a majority of the shareholders to make a change in
control of our board.
Special Approval Requirements for
Certain Business Combinations. Our articles of incorporation require a
vote of eighty percent (80%) or more of the shares of our common stock to change
the number of directors, approve a business combination, or remove a director
without cause. A “business combination”
includes any of the following involving us or any of our
subsidiaries:
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a
merger or consolidation with a related person,
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the
sale, lease, exchange, transfer or other disposition of all or a
substantial part of our or a subsidiary’s assets to a related
person,
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the
sale, lease, exchange, transfer or other disposition of all or a
substantial part of the assets of a related person to us or any
subsidiary,
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the
issuance of securities to a related person,
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a
recapitalization that would increase the voting power of a related person,
or
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our
dissolution or liquidation when we have a related
person.
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A “related person” is
one who either owns ten percent (10%) or more of our capital stock or controls,
is controlled by, or is under common control of a person who controls ten
percent (10%) or more of our capital stock.
However,
a vote of eighty percent (80%) is not required for the approval of a change in
the number of directors or a business combination if such transaction is
approved by a majority of “continuing directors”. “Continuing directors”
means each Farmers Capital director that:
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is
a director at the time the board votes with respect to the business
combination, and |
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meets
one of the following
criteria:
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was
a director on March 1, 1986,
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was
a director immediately before any 10% or greater shareholder involved in
the business combination became a 10% shareholder,
or
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is
designated a continuing director by a majority of the then continuing
directors within 90 days after he or she is first elected to the
board.
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As a
Kentucky corporation, we are or could be subject to certain restrictions on
business combinations under Kentucky law, including, but not limited to,
combinations with interested shareholders.
The requirement of a supermajority vote
of shareholders to approve certain business transactions may discourage a change
in control of Farmers Capital by allowing a minority of our shareholders to
prevent a transaction favored by the majority of our
shareholders. The primary purpose of the supermajority vote
requirement is to encourage negotiations with our existing management by groups
or corporations interested in acquiring control of Farmers Capital and to reduce
the danger of a forced merger or sale of assets.
Vote Required to Amend Certain
Provisions. The Kentucky Business Corporation Act provides
that a corporation’s charter may be amended by the directors in certain limited
circumstances or by the shareholders by a majority of votes entitled to be cast
on an amendment, subject to any condition the board of directors may place on
its submission of the amendment to the shareholders. In addition, if
we have a related person at the time of an amendment and our continuing
directors do not approve the amendment, our articles of incorporation require a
vote of eighty percent (80%) or more of the shares of common stock to amend,
alter or repeal the provisions of the articles of incorporation governing our
authorized shares of common stock, number of directors, certain business
combinations (i.e., a merger or consolidation, a sale or lease of all or a
substantial part of our assets, or a dissolution or liquidation), or the removal
of directors. Additionally, amendments to the provisions of our
articles of incorporation limiting director liability require approval of eighty
percent (80%) or more of the shares of our common stock.
Our board
of directors may adopt, amend or repeal our bylaws by a majority vote of the
entire board of directors. The bylaws may also be amended or repealed
by our shareholders.
In
addition, our articles of incorporation authorize the issuance of up to
1,000,000 shares of preferred stock. The rights and preferences for
any series of preferred stock may be set by our board of directors, in its sole
discretion and without shareholder approval, and the rights and preferences of
any such preferred stock may be superior to those of the common stock and thus
may adversely affect the rights of holders of the common stock.
The
overall effect of the articles of incorporation and bylaw provisions described
above may be to deter a future tender offer or other takeover attempt that some
shareholders might view to be in their best interests as the offer might include
a premium over the market price of our capital stock at that time. In
addition, these provisions may have the effect of assisting our current
management in retaining its position and place it in a better position to resist
changes which some shareholders may want to make if dissatisfied with the
conduct of our business.
Removal
of Directors.
Under our
articles of incorporation, a director may be removed without cause, but only on
the affirmative vote of the holders of at least 80% of the outstanding shares of
common stock then entitled to vote on the election of directors.
Director
Liability and Limitations on Director Liability.
A
director’s liability to us or our shareholders is limited to the greatest extent
permitted by law. No director is personally liable to us or our
shareholders for monetary damages for a breach of his or her duties as a
director except for liability:
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for
any transaction in which the director’s personal financial interest is in
conflict with the financial interest of the Company or its
shareholders;
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acts
or omissions not taken in good faith or which involve intentional
misconduct or a knowing violation of the
law;
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actions
creating personal liability for unlawful distributions as set forth in
Section 271B.8-330 of the Kentucky Business Corporation Act;
or
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transactions
from which the director derived an improper personal
benefit.
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Shareholders
may still seek equitable relief, such as injunction, against an action of a
director that is inappropriate.
Section
271B.8-300 of the Kentucky Business Corporation Act provides that
a director of a Kentucky corporation must discharge his duties as a director in
good faith, on an informed basis, and in a manner he honestly believes to be in
the best interests of the corporation. To discharge his duties on an informed
basis, a director must make inquiry into the business and affairs of the
corporation, or into a particular action to be taken or decision to be made,
with the care an ordinary prudent person in a like position would exercise under
similar circumstances. In addition to the limitations on director
liability for monetary damages explained above, any action taken as a director,
or any failure to take any action as a director, will not be the basis for
monetary damages or injunctive relief unless:
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the
director has breached or failed to perform his duties as a director in
good faith, on an informed basis and in a manner he honestly believes to
be in the best interests of the corporation,
and
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in
the case of an action for monetary damages, the breach or failure to
perform constitutes willful misconduct or wanton or reckless disregard for
the best interests of the corporation and its
shareholders.
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A person
bringing an action for monetary damages for breach of duty has the burden of
proving by clear and convincing evidence the above provisions, and the burden of
proving that the breach or failure to perform was the legal cause of the damages
suffered by the corporation.
Indemnification
Indemnification
of corporate directors and officers is governed by Sections 271B.8-500 through
271B.8-580 of the Kentucky Business Corporation Act. Under that Act,
we may indemnify a person against judgments, fines, amounts paid in settlement
and reasonable expenses (included attorneys’ fees) actually and necessarily
incurred by him or her in connection with any threatened or pending suit or
proceeding or any appeal thereof (other than an action by us or in our right),
if:
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he
or she is or was our director or officer or is or was serving at our
request as a director or officer, employee or agent of another corporation
of any type or kind, domestic or
foreign,
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if
such director or officer acted in good faith for a purpose which he or she
reasonably believed to be in the best interest of the corporation,
and
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in
criminal actions or proceedings only, such director or officer had no
reasonable cause to believe that his or her conduct was
unlawful.
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Generally,
our bylaws require us to indemnify our directors and officers to the extent
permitted by Kentucky law.
As
permitted by Kentucky law, we maintain liability insurance on behalf of the
directors and officers for claims asserted against them or incurred by them in
their capacity or arising out of their status as director or
officer.
The
selling securityholders and their successors, including their transferees, may
sell the securities directly to purchasers or through underwriters,
broker-dealers or agents, who may receive compensation in the form of discounts,
concessions or commissions from the selling securityholders or the purchasers of
the securities. These discounts, concessions or commissions as to any
particular underwriter, broker-dealer or agent may be in excess of those
customary in the types of transactions involved.
The
securities may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at varying prices determined at
the time of sale or at negotiated prices. These sales may be effected
in transactions, which may involve crosses or block transactions, by one or more
of the following methods:
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on
any national securities exchange or quotation service on which the Series
A Preferred Stock or the common stock may be listed or quoted at the time
of sale, including, as of the date of this prospectus, the NASDAQ Global
Select Market in the case of the common
stock;
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in
the over-the-counter market;
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in
transactions otherwise than on these exchanges or services or in the
over-the-counter market; or
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through
the writing of options, whether the options are listed on an options
exchange or otherwise.
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In
addition, any securities that qualify for sale pursuant to Rule 144 under the
Securities Act may be sold under Rule 144 rather than pursuant to this
prospectus.
In
connection with the sale of the securities or otherwise, the selling
securityholders may enter into hedging transactions with broker-dealers, which
may in turn engage in short sales of the common stock issuable upon exercise of
the Warrant in the course of hedging the positions they assume. The selling
securityholders may also sell short the common stock issuable upon exercise of
the Warrant and deliver common stock to close out short positions, or loan or
pledge the Series A Preferred Stock or the common stock issuable upon exercise
of the Warrant to broker-dealers that in turn may sell these
securities.
The
aggregate proceeds to the selling securityholders from the sale of the
securities will be the purchase price of the securities less discounts and
commissions, if any.
In
effecting sales, broker-dealers or agents engaged by the selling securityholders
may arrange for other broker-dealers to participate. Broker-dealers or agents
may receive commissions, discounts or concessions from the selling
securityholders in amounts to be negotiated immediately prior to the
sale.
In
offering the securities covered by this prospectus, the selling securityholders
and any broker-dealers who execute sales for the selling securityholders may be
deemed to be “underwriters” within the meaning of Section 2(a)(11) of the
Securities Act in connection with such sales. Any profits realized by the
selling securityholders and the compensation of any broker-dealer may be deemed
to be underwriting discounts and commissions. Selling securityholders who are
“underwriters” within the meaning of Section 2(a)(11) of the Securities Act will
be subject to the prospectus delivery requirements of the Securities Act and may
be subject to certain statutory and regulatory liabilities, including
liabilities imposed pursuant to Sections 11, 12 and 17 of the Securities Act and
Rule 10b-5 under the Exchange Act.
In order
to comply with the securities laws of certain states, if applicable, the
securities must be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the securities may
not be sold unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
The
anti-manipulation rules of Regulation M under the Exchange Act may apply to
sales of securities pursuant to this prospectus and to the activities of the
selling securityholders. In addition, we will make copies of this prospectus
available to the selling securityholders for the purpose of satisfying the
prospectus
delivery requirements of the Securities Act, which may include delivery through
the facilities of the NASDAQ Global Select Market pursuant to Rule 153 under the
Securities Act.
At the
time a particular offer of securities is made, if required, a prospectus
supplement will set forth the number and type of securities being offered and
the terms of the offering, including the name of any underwriter, dealer or
agent, the purchase price paid by any underwriter, any discount, commission and
other item constituting compensation, any discount, commission or concession
allowed or reallowed or paid to any dealer, and the proposed selling price to
the public.
Neither
the Series A Preferred Stock nor the Warrant is listed on an exchange. Unless
requested by the Treasury, we do not intend to list the Series A Preferred Stock
on any exchange. We do not intend to list the Warrant on any exchange. No
assurance can be given as to the liquidity of the trading market, if any, for
the Series A Preferred Stock.
We have
agreed to indemnify the selling securityholders against certain liabilities,
including certain liabilities under the Securities Act. We have also agreed,
among other things, to bear substantially all expenses (other than underwriting
discounts and selling commissions) in connection with the registration and sale
of the securities covered by this prospectus.
On
January 9, 2009, we issued the securities covered by this prospectus to the
United States Department of the Treasury, which is the Treasury under this
prospectus, in a transaction exempt from the registration requirements of the
Securities Act. The Treasury, or its successors, including
transferees, may from time to time offer and sell, pursuant to this prospectus
or a supplement to this prospectus, any or all of the securities they own. The
securities to be offered under this prospectus for the account of the selling
securityholders are:
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·
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30,000
shares of Series A Preferred Stock, representing beneficial ownership of
100% of the shares of Series A Preferred Stock outstanding on the date of
this prospectus;
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·
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a
Warrant to purchase 223,992 shares of our common stock, representing
beneficial ownership of approximately 3.04% of our outstanding common
stock as of February 6, 2009; and
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223,992
shares of our common stock issuable upon exercise of the Warrant, which
shares, if issued, would represent ownership of approximately 3.04% of our
outstanding common stock as of February 6,
2009.
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For
purposes of this prospectus, we have assumed that, after completion of the
offering covered by this prospectus, none of the securities covered by this
prospectus will be held by the selling securityholders.
Beneficial
ownership is determined in accordance with the rules of the SEC and includes
voting or investment power with respect to the securities. To our knowledge, the
Treasury has sole voting and investment power with respect to the
securities.
We do not
know when or in what amounts the selling securityholders may offer the
securities for sale. The selling securityholders might not sell any or all of
the securities offered by this prospectus. Because the selling securityholders
may offer all or some of the securities pursuant to this offering, and because
currently no sale of any of the securities is subject to any agreements,
arrangements or understandings, we cannot estimate the number of the securities
that will be held by the selling securityholders after completion of the
offering.
Other
than with respect to the acquisition of the securities, the Treasury has not had
a material relationship with us.
Information
about the selling securityholders may change over time and changed information
will be set forth in supplements to this prospectus if and when
necessary.
The
validity of the Series A Preferred Stock, the Warrant and the common stock
offered hereby will be passed upon for us by Stoll Keenon Ogden PLLC, Lexington,
Kentucky.
Crowe
Horwath LLP (formerly known as Crowe Chizek and Company LLC), independent
registered public accounting firm, has audited our consolidated financial
statements included in our Annual Report on Form 10-K for the year ended
December 31, 2007, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in this registration
statement. Our consolidated financial statements are incorporated by
reference in reliance on Crowe Horwath LLP’s report, given on their authority as
experts in accounting and auditing.
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