mbfi_042510.htm
Filed Pursuant to
R-6424(b)(5)
Registration No.
333-156332
CALCULATION
OF REGISTRATION FEE
Title
of Each Class of
Securities
to be
Registered
|
|
Amount
to be
Registered
|
|
Proposed
Maximum
Offering
Price
Per
Share
|
|
Proposed
Maximum
Aggregate
Offering
Price
|
|
Amount
of
Registration
Fee
|
|
Common
Stock, par value $0.01 per share
|
|
2,000,000
|
|
$
|
20.16
|
(1)
|
$
|
40,320,000
|
(1)
|
$
|
2,875
|
|
|
(1) Estimated
solely for the purpose of calculating the registration fee payable with
respect to an additional 2,000,000 shares issuable under the MB Financial,
Inc. Dividend Reinvestment and Stock Purchase Plan. Such fee
has been calculated pursuant to Rules 457(c) and (r) under the Securities
Act, at the rate of $71.30 per million, based upon $20.16 per share, which
is the average of the high and low sales prices of the Registrant’s common
stock on the NASDAQ Stock Market on February 23,
2010.
|
PROSPECTUS
SUPPLEMENT NO. 3
(To
Prospectus Dated December 19, 2008)
DIVIDEND
REINVESTMENT AND STOCK PURCHASE PLAN
6,000,000
Shares
Common
Stock, Par Value $0.01 Per Share
This
prospectus supplement relates to shares of common stock that we may offer and
sell from time to time according to the terms of the MB Financial, Inc. Dividend
Reinvestment and Stock Purchase Plan (the “Plan”). Participants
should retain this prospectus supplement and the accompanying prospectus for
future reference.
On
February 17, 2010, our Board of Directors increased the number of shares of
common stock that we may offer and sell pursuant to the Plan from 4,000,000 to
6,000,000. This prospectus supplement and the accompanying prospectus
supersede in their entirety the prospectus supplements dated July 29, 2009 and
March 4, 2009 and the prospectuses accompanying those prospectus
supplements.
The Plan
provides participants with a convenient and economical means of purchasing
shares of our common stock by reinvesting cash dividends paid on our common
stock and by making additional optional cash purchases. In addition, new
investors may make their initial investment in our common stock under the
Plan. The minimum purchase for both initial and subsequent
optional cash purchases is $50. The maximum limit for both initial and
optional cash purchases is $10,000 per month, unless we grant a waiver of this
amount. This prospectus supplement describes and constitutes the
Plan.
Shares of
common stock will be (i) purchased on the open market or
(ii) purchased directly from us from authorized but unissued shares or from
treasury shares.
We have
appointed The Bank of New York Mellon (the “Plan Administrator”) to serve as the
administrator of the Plan, with certain administrative support provided by its
affiliate, BNY Mellon Shareowner Services. You may enroll in the Plan through
the Plan Administrator’s website (www.bnymellon.com/shareowner) by clicking on
Investor Service Direct ®, or
by calling 1-866-241-9990 toll free and responding to the appropriate prompts.
You may also enroll in the Plan by completing an enrollment form and returning
it to the Plan Administrator.
Investing
in our common stock involves certain risks. Please refer to “Risk Factors” on page S-3 of this prospectus
supplement.
Our
common stock is listed on the NASDAQ Global Select Market under the symbol
“MBFI.”
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus supplement or the accompanying prospectus. Any
representation to the contrary is a criminal offense.
The
shares offered are our equity securities and are not savings accounts, deposits,
or other obligations of any bank subsidiary of ours and are not insured by the
Federal Deposit Insurance Corporation, the Deposit Insurance Fund, or any other
governmental agency.
The date
of this prospectus supplement is February 25, 2010
TABLE
OF CONTENTS
ABOUT
THIS
DOCUMENT...................................................................................................................................................................................................................................S-1
WHERE YOU
CAN FIND MORE
INFORMATION............................................................................................................................................................................................S-1
FORWARD-LOOKING
STATEMENTS...............................................................................................................................................................................................................S-2
RISK
FACTORS.......................................................................................................................................................................................................................................................S-3
MB
FINANCIAL, INC.
............................................................................................................................................................................................................................................S-3
USE OF
PROCEEDS.................................................................................................................................................................................................................................................S-3
DESCRIPTION
OF OUR DIVIDEND REINVESTMENT AND STOCK PURCHASE
PLAN.........................................................................................................................S-4
NOTE
ABOUT FINANCIAL
INTERMEDIARIES.............................................................................................................................................................................................S-17
LEGAL
MATTERS.................................................................................................................................................................................................................................................S-17
EXPERTS.................................................................................................................................................................................................................................................................S-17
ABOUT
THIS DOCUMENT
This
document is in two parts. The first part is this prospectus supplement, which
describes the Plan and also adds to and updates information contained in the
accompanying prospectus and the documents incorporated by reference in this
prospectus supplement and the accompanying prospectus. The second part is the
accompanying prospectus, which gives more general information, some of which
does not apply to the Plan. If the description of the information relevant to
the Plan varies between this prospectus supplement and the accompanying
prospectus, you should rely on the information in this prospectus
supplement.
You
should rely only on the information contained or incorporated by reference in
this prospectus supplement and in the accompanying prospectus. We have not
authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on
it. You should assume that the information appearing in this prospectus
supplement and the accompanying prospectus is accurate only as of the dates on
their respective covers. Our business, financial condition, results of
operations and prospects may have changed since that date.
For
purposes of this prospectus supplement and the accompanying prospectus, unless
the context indicates otherwise, all references to the “Company,” “MB
Financial,” “we,” “us” or “our” refer to MB Financial, Inc. including, as
appropriate, its consolidated subsidiaries.
WHERE
YOU CAN FIND MORE INFORMATION
We file
annual, quarterly and current reports, proxy statements and other information
with the Securities and Exchange Commission (the “SEC”). You may read and copy
any document we file at the SEC’s public reference room at
100 F Street, N.E., Washington, D.C. 20549. Please call the SEC
at 1-800-SEC-0330 for further information on its public reference room. In
addition, our SEC filings are available to the public at the SEC’s web site at
http://www.sec.gov.
The SEC
allows us to “incorporate by reference” into this prospectus supplement the
information in documents we file with it. This means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be a part of this
prospectus supplement and should be read with the same care. When we update the
information contained in documents that have been incorporated by reference by
making future filings with the SEC the information incorporated by reference in
this prospectus supplement is considered to be automatically updated and
superseded. In other words, in the case of a conflict or inconsistency between
information contained in this prospectus supplement and information incorporated
by reference into this prospectus supplement, you should rely on the information
contained in the document that was filed later. We incorporate by reference the
documents listed below and any documents we file with the SEC after the date of
this prospectus supplement under Section 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”) and before the date that
the offering of securities by means of this prospectus supplement is completed
(other than, in each case, documents or information deemed to have been
furnished and not filed in accordance with SEC rules):
·
|
our
Annual Report on Form 10-K for the year ended December 31, 2008
(File No. 000-24566-01);
|
·
|
our
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2009, June
30, 2009 and September 30, 2009 (File No.
000-24566-01);
|
·
|
our
Current Reports on Form 8-K filed on January 14, 2009, March 2, 2009,
April 28, 2009, July 28, 2009, August 11, 2009, September 8, 2009,
September 14, 2009 (two reports), September 16, 2009, September 17, 2009,
September 18, 2009, October 5, 2009, December 7, 2009 (two reports) and
February 8, 2010 (other than the information furnished pursuant to Item
7.01 of the Form 8-Ks filed on September 8, 2009, September 14, 2009 and
December 7, 2009) (File No.
000-24566-01);
|
·
|
the
portions of the Definitive Proxy Statement on Schedule 14A filed on March
5, 2009 incorporated by reference into our Annual Report on Form 10-K for
the year ended December 31, 2008;
and
|
·
|
the
description of our common stock, par value $0.01 per share, contained
in our Registration Statement on Form 8-A filed on October 9, 2001,
and all amendments or reports filed for the purpose of updating such
description .
|
You may
request a copy of these filings (other than an exhibit to a filing unless that
exhibit is specifically incorporated by reference into that filing) at no cost,
by writing or calling us at the following address:
MB
Financial, Inc.
6111 N.
River Road
Rosemont,
Illinois 60018
(847) 653-1992
Attention:
Doria L. Koros, Vice President and Secretary
FORWARD-LOOKING STATEMENTS
When used
in this prospectus supplement, the accompanying prospectus or any document
incorporated herein by reference, the words or phrases “believe,” “will,”
“should,” “will likely result,” “are expected to,” “will continue,” “is
anticipated,” “estimate,” “project,” “plans,” or similar expressions are
intended to identify “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. You are cautioned
not to place undue reliance on any forward-looking statements, which speak only
as of the date made. These statements may relate to our future
financial performance, strategic plans or objectives, revenues or earnings
projections, or other financial items. By their nature, these
statements are subject to numerous uncertainties that could cause actual results
to differ materially from those anticipated in the statements
Important
factors that could cause actual results to differ materially from the results
anticipated or projected include, but are not limited to, the following (1)
expected cost savings, synergies and other benefits from our merger and
acquisition activities might not be realized within the anticipated time frames
or at all, and costs or difficulties relating to integration matters, including
but not limited to customer and employee retention, might be greater than
expected; (2) the credit risks of lending activities, including changes in the
level and direction of loan delinquencies and write-offs and changes in
estimates of the adequacy of the allowance for loan losses, which could
necessitate additional provisions for loan losses, resulting both from loans we
originate and loans we acquire from other financial institutions; (3) results of
examinations by the Office of Comptroller of Currency and other regulatory
authorities, including the possibility that any such regulatory authority may,
among other things, require us to increase our allowance for loan losses or
write-down assets; (4) competitive pressures among depository institutions; (5)
interest rate movements and their impact on customer behavior and net interest
margin; (6) the impact of repricing and competitors’ pricing initiatives on loan
and deposit products; (7) fluctuations in real estate values; (8) the ability to
adapt successfully to technological changes to meet customers' needs and
developments in the market place; (9) our ability to realize the residual values
of our direct finance, leveraged, and operating leases; (10) our ability to
access cost-effective funding; (11) changes in financial markets; (12) changes
in economic conditions in general and in the Chicago metropolitan area in
particular; (13) the costs, effects and outcomes of litigation; (14) new
legislation or regulatory changes, including but not limited to changes in
federal and/or state tax laws or interpretations thereof by taxing authorities,
changes in laws, rules or regulations applicable to companies that have
participated in the TARP Capital Purchase Program of the U.S. Department of the
Treasury and other governmental initiatives affecting the financial services
industry; (15) changes in accounting principles, policies or guidelines; (16)
our future acquisitions of other depository institutions or lines of business;
and (17) future goodwill impairment due to changes in our business, changes in
market conditions or other factors.
We do not
undertake any obligation to update any forward-looking statement to reflect
circumstances or events that occur after the date on which the forward-looking
statement is made.
There are
risks and uncertainties involved with an investment in shares of our common
stock. See the “Risk Factors” section
of our annual reports on Form 10-K and quarterly reports on Form 10-Q, which we
file with the SEC and incorporate by reference into this prospectus supplement
and the accompanying prospectus, for a discussion of the factors that you should
consider in connection with an investment in shares of our common
stock.
MB
FINANCIAL, INC.
MB
Financial, Inc., a Maryland corporation, is a financial holding company and is
registered as a bank holding company under the Bank Holding Company Act of 1956,
as amended. Our primary market is the Chicago metropolitan area, in
which we operate 89 banking offices through our bank subsidiary, MB Financial
Bank, N.A. MB Financial Bank also has one banking office in the city of
Philadelphia, Pennsylvania. Through MB Financial Bank, we offer a
broad range of financial services. We concentrate on serving
middle-market businesses, leasing companies, and their respective owners. We
also serve small businesses and consumers who live or work near our banking
offices. Our
primary lines of business consist of commercial banking, retail banking and
wealth management. As of December 31, 2009, we had total assets of $10.9
billion, total deposits of $8.7 billion and stockholders’ equity of $1.3
billion.
To the
extent that shares of common stock used to fund the Plan are purchased on the
open market, there will be no proceeds to us from the purchase of those shares.
The net proceeds to us from the sale of newly issued shares of common stock
issued under the Plan will be used for general corporate purposes. The precise
amounts and timing of the application of net proceeds will depend upon our
funding requirements and the availability of other funds.
DESCRIPTION
OF OUR DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The
following questions and answers explain and constitute the Plan.
PURPOSE
1.
|
What
is the purpose of the Plan?
|
The
purpose of the Plan is to provide both our existing stockholders and new
investors with a simple, convenient, and economical means of purchasing shares
of our common stock, including through new cash payments and the reinvestment of
dividends on shares held in your Plan account. The Plan also provides us with an
economical and flexible mechanism to raise equity capital through sales of our
common stock.
The Plan
is designed for long-term investors who wish to invest and build their share
ownership over time. The Plan is not intended to provide holders of shares of
common stock with a mechanism for generating assured short-term profits through
rapid turnover of shares acquired at a discount. The Plan’s intended purpose
precludes any person, organization or other entity from establishing a series of
related accounts for conducting arbitrage operations and/or exceeding the
optional monthly cash investment limit. We accordingly reserve the right to
modify, suspend or terminate participation by a stockholder who is using the
Plan for purposes inconsistent with its intended purpose.
ADVANTAGES
AND DISADVANTAGES
2.
|
What
are the advantages of participation in the
Plan?
|
·
|
You
do not need to be a current stockholder, nor do you need to have a broker,
to buy our common stock through the
Plan.
|
·
|
You
can start investing with a relatively small amount of money, or with a
single larger investment—whichever you
prefer.
|
·
|
You
may send a check to the Plan Administrator or arrange for funds to be
deducted from your savings or checking
account.
|
·
|
Dividends
and optional cash purchases can be fully invested in additional shares of
our common stock because the Plan permits fractional shares to be credited
to your account. Dividends on fractional shares may also be reinvested in
additional shares.
|
·
|
If
you are already a stockholder, you can consolidate all your holdings of
our common stock into a single account. You can deposit your stock
certificates into your Plan account or, if you hold shares with a broker,
you can transfer those shares into your own name and deposit them into
your Plan account.
|
·
|
The
Plan offers you flexibility when you decide to sell your shares. You may
request the sale of some or all of your shares through the Plan
Administrator at any time. Or, if you prefer to have complete control over
the timing and price at which you sell, you may withdraw your shares from
the Plan, at no cost to you, and sell them through a broker of your
choice.
|
3.
|
What
are the disadvantages of participation in the
Plan?
|
·
|
Because
the prices at which shares are purchased are determined as of specified
dates or as of dates otherwise beyond your control, you may lose some
advantages otherwise available to you in being able to select the timing
of your investments. For example, because the price charged to you for
shares purchased on the open market is the average price paid by the Plan
Administrator to obtain shares for all participants who acquire shares
through the Plan on the same day, you may pay a higher price for shares
purchased under the Plan than for shares purchased on the investment date
outside of the Plan.
|
·
|
We
will not pay interest on funds we hold pending
investment.
|
·
|
Sales
of shares for participants are irrevocable and will be made at market
prices at the time of sale. You will not be able to control the timing of
such sales or to place “limit orders” specifying the prices at which you
are willing to sell your shares.
|
·
|
To
sell your shares through a broker of your choice, you must first arrange
to obtain a physical stock certificate from the Plan Administrator and
have the certificate delivered to you, or ask the Plan Administrator to
transfer shares held for you in the Plan directly to your broker. The Plan
Administrator will promptly process your instructions, but you should
leave ample time for preparation and receipt of your stock certificate if
you decide to go that route.
|
·
|
Shares
held in the Plan by the Plan Administrator are not covered by the customer
protection provisions of the Securities Investor Protection Act of 1970
relating to customers of failed securities broker-dealer firms and are not
insured by the Federal Deposit Insurance Corporation or any other
governmental agency.
|
ADMINISTRATION
4.
|
Who
administers the Plan for
participants?
|
The Plan
is administered by The Bank of New York Mellon, an entity independent of, and
not affiliated with, MB Financial. The Plan Administrator, along with its
affiliate, BNY Mellon Shareowner Services, maintains records, prepares, and
sends account statements to participants, and performs other duties related to
the Plan.
PARTICIPATION
5.
|
Who
is eligible to participate in the
Plan?
|
Any
person or legal entity is eligible to participate in the Plan. You do not have
to be a current stockholder, nor do you have to reside or be located in the U.S.
or be a U.S. citizen. However, you must become a stockholder of record in order
to participate in the dividend reinvestment component of the Plan. In all cases,
optional cash purchases of shares through the plan must be made in U.S. currency
drawn on a U.S. bank. In addition, before investing in our common stock, each
participant who resides or is located outside the U.S. is responsible for
reviewing the laws of his or her country of residence or other applicable laws
to determine if there are any restrictions on his or her ability to invest
through the Plan.
6.
|
How
can I participate in the Plan?
|
Eligible
stockholders as well as new investors can enroll either by going to the Plan
Administrator’s web site, using their automated voice response system, or
requesting and returning an enrollment form by mail. Please refer to Question 33
for the Plan Administrator’s web site, phone numbers, and addresses.
DIVIDEND
REINVESTMENT
7.
|
How
does the reinvestment process work?
|
As a
participant in the Plan, you may elect to reinvest all, part, or none of the
dividends paid on your MB Financial common stock, and your preference should be
indicated on the enrollment form. If you complete and return an enrollment form
without selecting one of these three options, all of your dividends will
be automatically reinvested in shares of MB Financial common stock.
·
|
Full dividend
reinvestment: If you select this option, all of the cash dividends
paid on the shares you enroll in the Plan will automatically be reinvested
to purchase additional shares of MB Financial common
stock.
|
·
|
Partial dividend
reinvestment: If you select this option, a portion of your cash
dividends will be paid to you in cash, and the remaining portion of your
dividends will be automatically reinvested to purchase additional shares
of MB Financial common stock. If you choose partial reinvestment, you must
specify on the enrollment form the number of whole shares on which you
wish to continue to receive cash dividends by check or to have directly
deposited into your designated checking or savings account, as further
described below. The remaining dividends will be automatically
reinvested.
|
·
|
No dividend
reinvestment: If you select this option, all of your dividends will
be paid to you in cash. You may choose to have your cash dividends
directly deposited into your designated checking or savings account or
sent to you by check.
|
To
arrange to have your dividends directly deposited into your designated bank
account, you must complete the appropriate section on the enrollment form. You
may request an enrollment form by calling the Plan Administrator at
1-866-241-9990, or you may authorize the direct deposit of dividends when you
enroll in the Plan online, or access your account online at
www.bnymellon.com/shareowner.
8.
|
When
will the reinvestment of my dividends
begin?
|
Typically,
we pay a quarterly cash dividend near the end of February, May, August and
November to stockholders of record as of the applicable record date, which is
usually about two weeks prior to the dividend payment date. The reinvestment of
your dividends will begin with the first quarterly cash dividend that we pay
following your enrollment, but only if your enrollment is received by the record
date for that dividend. If your enrollment is received between a record date and
a payable date, the reinvestment of your dividends will commence with the
dividend payment in the following quarter.
The
payment of dividends on our common stock is at the discretion of our board of
directors. There is no guarantee that we will pay dividends in the future. The
timing and amount of future dividends, if any, will depend on earnings, cash
requirements, our financial condition, applicable government regulations and
other factors deemed relevant by our board. In addition, we are
currently subject to restrictions on our ability to pay cash dividends on our
common stock as a result of our issuance of preferred stock to the United States
Department of the Treasury (the “U.S. Treasury”) pursuant to the U.S. Treasury’s
Troubled Asset Relief Program Capital Purchase Program. The
securities purchase agreement between us and the U.S. Treasury provides that
prior to the earlier of (i) December 5, 2011 and (ii) the date on which all of
the shares of the preferred stock we issued to the U.S. Treasury have been
redeemed by us or transferred by the U.S. Treasury to third parties, we may not
increase the quarterly cash dividend on our common stock above $0.18 per share
without the consent of the U.S. Treasury (we currently pay a quarterly cash
dividend of $0.01 per share). In addition, under the terms of the
preferred stock we issued to the U.S. Treasury, we may not pay dividends on our
common stock if we are not current in our dividend payments on the preferred
stock.
9.
|
Can
I deposit stock certificates for safekeeping with the Plan
Administrator?
|
You may
deposit any or all of your MB Financial stock certificates with the Plan
Administrator for safekeeping. This added feature relieves you of the worry
associated with the possibility of loss, theft, or destruction of the
certificates. This service is provided to Plan participants without charge.
INITIAL
AND OPTIONAL CASH PURCHASES
10.
|
When
and how can I make initial or optional cash
purchases?
|
New
investors may make an initial cash purchase when enrolling in the Plan by
enclosing a check with their enrollment form, or by authorizing an automatic
debit from a designated bank account when enrolling online at the Plan
Administrator’s website. In both cases, the minimum initial cash purchase amount
is $50.
As a Plan
participant, you may also make optional cash purchases of our common stock. The
minimum cash purchase accepted per transaction is $50, and you may make
purchases up to a maximum of $10,000 per month unless we grant you a waiver of
this amount. The purchase, less the appropriate service fee as set forth in the
schedule in Question 12, will be applied toward the purchase of shares for your
account as promptly as practicable, usually within five (5) business days
upon receipt of funds by the Plan Administrator.
Your cash
purchases may be commingled by the Plan Administrator with dividends and with
other participants’ cash purchases for the purpose of buying shares of common
stock. You cannot specify the prices or timing of purchases, nor can you make
any other limitations on the purchase of shares other than those specified under
these terms and conditions. No interest will be paid on optional cash purchases
pending investment.
If you
choose to submit a check, be sure to use the contribution form that appears on
your Plan statement, and mail it to the address specified on the form.
Alternatively, if you wish to make regular monthly purchases, you may authorize
automatic deductions from your bank account. This feature enables you to make
ongoing investments in an amount that is comfortable for you, without having to
write a check. You also may authorize individual debits from your bank
account. In addition, if you are an employee of MB Financial or any
of its subsidiaries, you may make initial or optional cash purchases under the
Plan through payroll deduction of after-tax
dollars.
11.
|
Am
I obligated to make cash purchases if I enroll in the
Plan?
|
No. Cash
purchases are entirely voluntary. You may supplement the reinvestment of your
dividends with optional cash purchases as often as you like, or not at all. Or
you may buy shares with optional cash purchases and choose not to reinvest any
or all of your dividends.
FEES
12.
|
What
fees may I incur by participating in the
Plan?
|
The costs
and fees associated with the Plan, including enrollment costs, administrative
service fees and/or trading fees, are set forth below:
Initial
Investment Fee
|
$15.00
(one-time charge, per account, for first-time (new) investors
only)
|
|
|
Optional
Cash Investments
|
|
|
|
By
Check
|
$5.00
per investment plus
$0.06
per share purchased (if market)
(Includes
trading fees and commissions)
|
|
|
By
EFT debit
|
$2.00
per investment plus
$0.06
per share purchased (if market)
(Includes
trading fees and commissions)
|
|
|
By
payroll deduction
(MB
Financial employees only)
|
$1.60
per transaction plus
$0.06
per share purchased (if market)
(Includes
trading fees and commissions)
|
|
|
Reinvestment
of Dividends
|
|
|
|
Transaction
Fee
|
5%
of the dividend payment up to a maximum of $3.00
$0.06
per share purchased (if market)
(Includes
trading fees and commissions)
|
|
|
Sale
of Shares
|
|
|
|
Transaction
Fee
|
$15.00
per transaction plus
$0.12
per share sold
(Includes
trading fees and commissions)
|
|
|
Deposit
of Certificates
|
No
Charge
|
|
|
Certificate
Withdrawal
|
No
Charge
|
|
|
Book-to-Book
Transfers
|
No
Charge
|
|
|
Return
of Investment Check or EFT
|
$35.00
|
The
fees are subject to change at any time. This is considered part of the “Terms
and Conditions” of the Plan.
PURCHASE
OF SHARES
13.
|
What
is the source of the common stock that may be purchased through the
Plan?
|
At our
discretion, share purchases will be made on the open market or directly from MB
Financial. Shares purchased from MB Financial may come from our authorized but
unissued shares or from our treasury shares. Share purchases on the open market
may be made on any stock exchange where our common stock is traded or through
negotiated transactions, on such terms as the Plan Administrator determines.
Neither we nor you will have any authority to direct the date, time, or price at
which shares may be purchased by the Plan Administrator.
14.
|
How
will shares be purchased under the
Plan?
|
·
|
Upon
receipt of your funds, the Plan Administrator will invest initial and
additional cash purchases as promptly as practicable, normally within five
(5) business days.
|
·
|
Shares
will be posted to your account in whole and fractional shares, computed to
four decimal places. A confirmation of your transaction will be sent by
e-mail or via a paper statement to the Internet or postal address you give
us when you enroll in the Plan.
|
·
|
In
the unlikely event that, due to unusual market conditions, the Plan
Administrator is unable to invest the funds within thirty-five
(35) calendar days, the Plan Administrator will return the funds to
you by check. No interest will be paid on funds held by the Plan
Administrator pending investment.
|
·
|
For
automatic monthly purchases, the amounts you have authorized will be
withdrawn from your bank account on the 25th
day of each month, or on the next succeeding business day if the 25th
falls on a weekend or holiday. The funds will be credited to
your Plan account and normally invested within five (5) business days
after receipt by the Plan
Administrator.
|
·
|
The
Plan Administrator will use your cash to purchase as many full and
fractional shares as possible.
|
15.
|
How
will the price for my shares be
determined?
|
For
shares purchased on the open market, the purchase price will be the average
price that the Plan Administrator pays to obtain shares for all participants who
acquire shares through the Plan on the same day. For shares purchased directly
from MB Financial, the purchase price will be 100% of the volume-weighted
average price of our common stock, as reported on the NASDAQ Stock Market, on
the investment date, less any discount that we may decide to offer.
16.
|
Will
shares be offered to Plan participants at a
discount?
|
We will
establish a waiver discount only for shares that are purchased directly from us
pursuant to a waiver request. For each pricing period, we may establish a
discount from the market price applicable to optional cash purchases and initial
investments made pursuant to a request for waiver (please see Question 17). This
waiver discount, if any, will range from 0% to 5% of the purchase price and may
vary for each pricing period. The waiver discount, if any, will be established
at our sole discretion after a review of current market conditions, the level of
participation in the Plan, the attractiveness of obtaining additional funds
through the sale of our common shares as compared to other sources of funds, and
our need for additional funds. You may obtain information regarding the maximum
waiver discount, if any, by contacting the Plan Administrator at
(201) 680-5300 or waivers@bnymellon.com. Setting a waiver discount for a
particular pricing period will not affect the setting of a waiver discount for
any subsequent pricing period. The waiver discount, if any, will apply only to
optional cash purchases and initial investments in excess of $10,000. The waiver
discount, if any, will apply to the entire optional cash purchase or initial
investment made pursuant to a waiver and not just the portion in excess of
$10,000.
17.
|
May
I invest more than the Plan maximum of $10,000 per account per
month?
|
Yes, if
you request a waiver of this limit and we grant your waiver request. Upon
receipt of a written waiver form from an investor, we will consider waiving the
maximum investment limit. Grants of waiver requests will be made in our sole
discretion based on a variety of factors, which may include: our current and
projected capital needs, prevailing market prices of our common stock and other
securities, and general economic and market conditions.
Shares
purchased in excess of the Plan maximum investment amount will be priced as
follows:
·
|
Investments
for which a waiver has been granted will be made subject to a “pricing
period,” which will generally consist of one (1) to fifteen
(15) separate days during which trading of our common stock is
reported on the NASDAQ Stock Market (or such other exchange or quotation
system on which our common stock is then listed or quoted). Each of these
separate days will be an “investment date,” and an equal proportion of the
investment amount will be invested on each trading day during such pricing
period, subject to the qualifications listed below. The purchase price for
shares acquired on a particular investment date will be equal to 100%
(subject to change as provided below) of the volume-weighted average price
(less any applicable discount), rounded to four decimal places, of our
common stock as reported by the NASDAQ Stock Market only (or such other
exchange or quotation system on which our common stock is then listed or
quoted), obtained from Bloomberg, LP (unless such
service is unavailable, in which case we will designate another service to
be utilized) for the trading hours from 9:30 a.m. to 4:00 p.m., Eastern
Time, including the official market close, for that investment date. Funds
for such investments must be received by the Plan Administrator not later
than the business day before the first day of the pricing
period.
|
·
|
We
may establish a minimum, or “threshold,” price for any pricing period that
the volume-weighted average price, rounded to four decimal places, of our
common stock must equal or exceed during each trading day of the pricing
period for investments made pursuant to a waiver
request.
|
·
|
If
we decide to establish a threshold price for a particular pricing period,
the threshold price for any investments made pursuant to a request for
waiver will be a stated dollar amount that the volume-weighted average
price, rounded to four decimal places, of our common stock, as reported by
the NASDAQ Stock Market (or such other exchange or quotation system on
which our common stock is then listed or quoted) for each trading day in
the relevant pricing period, must equal or exceed. If the threshold price
is not satisfied for a trading day in the pricing period, then that
trading day and the trading prices for that day will be excluded from the
pricing period.
|
·
|
We
will only establish a threshold price if shares will be purchased directly
from us in connection with the relevant pricing period (please see first
bullet above). If we have established a threshold price with respect to
the relevant pricing period, then we will exclude from the pricing period
any trading day that the volume-weighted average price is less than the
threshold price and refund that day’s proportional investment amount. For
example, if the threshold price is not met for two (2) of the trading
days in a ten-day pricing period, then we will return 20% of the funds you
submitted in connection with your waiver request, without interest, unless
we have activated the pricing period extension feature for the pricing
period, as described below.
|
·
|
Neither
we nor the Plan Administrator are required to notify you that a threshold
price has been established for any pricing
period.
|
·
|
We
may elect to activate for any particular pricing period a pricing period
extension feature which will provide that the initial pricing period be
extended by the number of days that the threshold price is not satisfied,
subject to a maximum of five (5) trading days. If we elect to
activate the pricing period extension feature and the threshold price is
satisfied for any additional day that has been added to the initial
pricing period, that day will be included as one of the trading days for
the pricing period instead of the day on which the threshold price was not
met. For example, if the determined pricing period is ten (10) days,
and the threshold price is not satisfied for three (3) out of those
ten (10) days in the initial pricing period, and we had previously
announced in the bid-waiver form that the pricing period extension feature
was activated, then the pricing period will be automatically extended, and
if the threshold price is satisfied on the next three (3) trading
days (or a subset thereof), then those three (3) days (or subset
thereof) will become investment dates in lieu of the three (3) days
on which the threshold price was not met. As a result, because there were
ten (10) trading days during the initial and extended pricing period
on which the threshold price was satisfied, all of the funds that you
include with your request for waiver will be
invested.
|
·
|
Newly
issued shares purchased pursuant to a request for waiver will be posted to
participants’ accounts within three (3) business days following the
end of the applicable pricing period, or, if we elect to activate the
continuous settlement feature, within three (3) business days of each
separate investment date beginning on the first investment date in the
relevant pricing period and ending on the final investment date in the
relevant pricing period, with an equal amount being invested on each day,
subject to the qualifications set forth above. During any month when we
are proposing to grant requests for waiver for one or more investments, we
may elect to activate the continuous settlement feature for such
investments by announcing in the bid-waiver form that we will be doing so.
The purchase price of shares acquired on each investment date will be
equal to the volume-weighted average price obtained from Bloomberg, LP
(unless such service is unavailable, in which case we will designate
another service to be utilized before the beginning of the pricing
period), rounded to four decimal places, for the trading hours from 9:30
a.m. to 4:00 p.m., Eastern Time, including the official market close, for
each of the investment dates during the pricing period, assuming the
threshold price is met on that day, less any discount that we may decide
to offer. For each pricing period (assuming the threshold price is met on
each trading day of that pricing period), we would have a separate
settlement of each investment dates’ purchases, each based on the
volume-weighted average price for the trading day relating to each of the
investment dates during the pricing
period.
|
·
|
Waiver
request forms and information regarding the establishment of a threshold
price, if any, may be obtained by contacting the Plan Administrator at
(201) 680-5300 or
waivers@bnymellon.com.
|
18.
|
How
can I sell the shares of common stock that are held in my Plan
account?
|
You may
request that the Plan Administrator sell some or all of the shares held in your
Plan account. The Plan Administrator will aggregate all shares for which
requests to sell were received and will sell the whole shares on the open market
through a registered broker-dealer selected at its sole discretion. In such
event, you will receive proceeds based on the average sale price of all shares
sold, less a transaction fee of $15.00, plus a trading fee of $0.12 per share.
The Plan Administrator will deduct these amounts from the cash proceeds paid to
you. Shares being sold for you may be aggregated with those of other Plan
participants who have requested sales. If you opt to sell all of the shares held
for you in the Plan, your participation in the Plan will be automatically
terminated.
Alternatively,
you may choose to sell your shares through a broker-dealer of your choice, in
which case you will have to request that the Plan Administrator either
(a) electronically transfer your shares to your stockbroker, or
(b) issue the shares in certificate form for delivery to your stockbroker
before settlement of the sale.
The Plan
Administrator may determine the price for the fractional shares either by
(a) selling shares on the open market through a registered broker-dealer,
or (b) using the current price of our common stock on the NASDAQ Stock
Market (or such other exchange or quotation system on which our common stock is
then listed or quoted), or as quoted by a registered broker-dealer on the date
of the request.
19.
|
If
I request the sale of the shares held in my Plan account, when will they
be sold?
|
If you
request the sale of shares that are held for you in the Plan, the Plan
Administrator will use its best efforts to sell your shares on the open market
within five (5) business days after receipt of your sale instructions, or
as soon as otherwise practicable. A check in payment of the net proceeds will be
mailed to you as soon as practicable after the sale has taken
place.
There can
be no assurances with respect to the Plan Administrator’s ability to sell your
shares and no assurances as to the prices or timing of such sales, or the terms
under which such sales may be transacted. Neither we nor the Plan Administrator
has any obligation under the Plan, and assume no responsibility, to purchase
whole shares credited to your Plan account if such shares cannot be sold by the
Plan Administrator.
DIVIDENDS
20.
|
How
will I be credited with the dividends paid on the shares I have enrolled
in the Plan and/or that are being held in my Plan
account?
|
The Plan
Administrator will receive the cash dividends (less the amount of any taxes
withheld) paid by us on all whole and fractional shares that are enrolled and/or
held in the Plan at the dividend record date, and will credit such dividends to
your Plan account on the payable date. The dividends received by the Plan
Administrator will automatically be reinvested in shares of our common
stock.
21.
|
What
if I decide that I would like to receive in cash some of the dividends
paid on the shares enrolled or held in the Plan, rather than having them
reinvested?
|
The Plan
permits the partial reinvestment of dividends. Please see Question 7.
REPORTS
TO PARTICIPANTS
22.
|
What
reports will I receive as a participant in the
Plan?
|
As soon
as practicable after each transaction, you will receive a statement with
information about your Plan account, including amounts invested, the purchase
and/or sales prices, and the number of shares purchased and/or sold. This
statement will provide a record of purchases and sales transacted on your behalf
under the Plan and you should retain it for income tax purposes. As a
stockholder, you also will receive various communications, including our annual
report to stockholders, notices of stockholder meetings, proxy statements, and
information for income tax reporting.
ISSUANCE
AND DEPOSIT OF STOCK CERTIFICATES
23.
|
Will
certificates be issued to me for shares of common stock purchased through
the Plan?
|
Certificates
for shares of common stock that are purchased through the Plan will not be
issued to you, unless you request that the Plan Administrator do so. All shares
will be issued to the Plan Administrator or its nominee(s) as agent, and
credited to your Plan account in book entry form. The number of shares credited
to your Plan account will appear on your account statements. This convenient
process protects against loss, theft, or destruction of stock certificates, and
reduces our costs.
Shares
credited to your Plan account may not be assigned or pledged in any way. If you
wish to assign or pledge the whole shares credited to your account, you must
request that certificates for those shares be issued to you in your
name.
Upon
receipt of your request, the Plan Administrator will issue you a certificate for
any number of whole shares credited to your Plan account. Certificates for
fractional shares will not be issued under any circumstances.
The name
on your Plan account will be identical to the name that appears on the
certificate(s) underlying the shares you have enrolled in the Plan and/or that
are held for you in the Plan in book entry form. Certificates for whole shares
issued to you from the Plan will be registered in the same manner.
24.
|
How
can I arrange for my stock certificate(s) to be held in safekeeping by the
Plan Administrator?
|
If you
wish to submit your stock certificate(s) to the Plan Administrator for
safekeeping, you should mail them (unendorsed) by registered mail, with a note
requesting that they be credited to your Plan account.
If the
current market value of the shares represented by the certificate(s) you are
mailing to the Plan Administrator exceeds $3,000, you should insure the
certificate(s) for 1% of the current market value, as this is the amount you
will be charged for surety protection should your certificate(s) be lost in the
mail.
TERMINATION
OF PLAN PARTICIPATION
25.
|
How
do I terminate my participation in the
Plan?
|
Participation
in the Plan is entirely voluntary. You may terminate your participation at any
time by providing notice and instructions to the Plan Administrator. Upon
receipt, the Plan Administrator, in accordance with your instructions, will
either (a) discontinue the reinvestment of the dividends paid on the shares
enrolled and/or held in your Plan account, but continue to hold those shares in
book form on your behalf; (b) issue a certificate for the whole shares
credited to your Plan account and issue a cash payment for any cash in lieu of a
fractional share; or (c) sell the whole shares credited to your Plan
account and issue a cash payment for the proceeds plus any cash in lieu of a
fractional share, less associated trading fees of $0.12 per share and the $15.00
transaction fee.
TAX
INFORMATION
26.
|
What
are the federal income tax consequences of participation in the
Plan?
|
Certain
federal income tax considerations of participation in the Plan are briefly
summarized below. This summary is for general information only and does not
constitute tax advice. The information in this section is based on the Internal
Revenue Code of 1986, as amended, or the Code, Treasury Regulations thereunder,
current administrative interpretations and practices of the Internal Revenue
Service, or the Service, and court decisions, all as of the date of this
prospectus supplement. Future legislation, Treasury Regulations, administrative
interpretations and practices or court decisions could significantly change the
current law or adversely affect existing interpretations of current law. Any
change could apply retroactively to transactions preceding the date of the
change.
The tax
consequences for participants who do not reside in the United States will vary
from jurisdiction to jurisdiction. In the case of a foreign shareholder whose
distributions are subject to United States income tax withholding, the amount of
the tax to be withheld will be deducted from the amount of the distribution and
the balance will be reinvested. You are urged to consult your
personal tax advisor to determine the particular tax consequences that may
result from your participation in the Plan.
Tax Consequences of Dividend
Reinvestment. In the case of shares of common stock purchased
by the Plan Administrator from us, you will be treated, for federal income tax
purposes, as having received a distribution equal to the fair market value, as
of the investment date, of the shares of common stock purchased with your
reinvested dividends. This amount includes the discount, if any, on reinvestment
provided for by the Plan. The fair market value should generally equal the
average of the daily high and low sale prices of our shares of common stock, as
reported by the NASDAQ Stock Market (or such other exchange or quotation system
on which our common stock is then listed or quoted) for the investment
date.
In the
case of shares (including any fractional share) purchased in market transactions
or in negotiated transactions with third parties, you will be treated as having
received a distribution equal to the amount of cash dividends used to make those
purchases, plus the amount of any brokerage fees paid by us in connection with
those purchases.
The
distributions described above will constitute taxable dividend income to you to
the extent of our current and accumulated earnings and profits allocable to the
distributions. Any distributions in excess of our current and
accumulated earnings and profits will constitute a return of capital that will
reduce the basis of your shares of common stock by the amount of the excess
distribution, but not below zero. To the extent that excess distributions exceed
the tax basis in your shares and provided that you have held your shares as
capital assets, you will recognize capital gain, which will be taxable as
long-term capital gain if you have held your shares for more than one
year.
Generally,
under current federal income tax law, taxable dividend income is taxed as net
capital gain (i.e., generally at the same rates as long-term capital
gains). Some exceptions apply to this rule. This tax treatment is
scheduled to end for taxable dividend income paid after 2010. Under
present law, after 2010, taxable dividend income will be taxed at the same rates
that apply to other ordinary income. As of the date of this
prospectus supplement, no legislation has been enacted that would change how
dividend income will be taxed under federal income tax law after
2010.
The tax
basis of your shares of stock purchased with reinvested dividends will generally
equal the total amount of distributions you are treated as having received, as
described above. Your holding period in shares of common stock (including
fractional shares) acquired pursuant to the Plan will generally begin on the day
after the shares are credited to your account.
Tax Consequences of Optional Cash
Payments. Participants who choose
to purchase additional shares by electing optional cash payments, and who have
also elected to have their dividends reinvested, will be treated as having
received a distribution equal to the excess, if any, of the fair market value on
the investment date of the shares of common stock purchased over the amount of
the cash payment made by the participant. The fair market value should generally
equal the average of the daily high and low sale prices of our shares of common
stock, as reported by the NASDAQ Stock Market (or such other exchange or
quotation system on which our common stock is then listed or quoted) for the
investment date. Any such distributions will be subject to tax in accordance
with the rules described above under “—Tax Consequences of Dividend
Reinvestment.” The tax treatment of participants who purchase shares
by electing optional cash purchases or as an initial cash investment, but who
have not elected to have their dividends reinvested, is not entirely clear under
existing law. However, the Service has indicated in certain private letter
rulings, that such individuals will not be treated as having received a taxable
distribution with respect to any discount in purchase price offered pursuant to
the Plan. Private letter rulings are not binding on the Service and cannot be
relied upon by any taxpayer other than those to whom the ruling is addressed.
Nevertheless, such rulings often reflect the current thinking of the Service.
Therefore, the tax treatment of a purchase of shares under the Plan with an
initial cash investment or an optional cash investment may differ depending on
whether you are participating in the dividend reinvestment feature of the
Plan.
The tax
treatment of reinvested taxable dividend income paid in connection with optional
cash payments is the same as described above under “—Tax Consequences of
Dividend Reinvestment.”
The tax
basis of shares of common stock acquired by optional cash payments or as an
initial investment will generally equal the total amount of distribution you are
treated as having received, as described above, plus the amount of the cash
payment. Your holding period in such shares (including fractional shares)
generally begins on the day after the applicable dividend payment date in the
case of shares purchased from us and on the day after the shares are credited to
your account in the case of shares purchased in market
transactions.
Tax Consequences of
Dispositions. You may realize gain or
loss when shares of common stock are sold or exchanged, whether the sale or
exchange is made at your request upon withdrawal from the Plan or takes place
after withdrawal from or termination of the Plan and, in the case of a
fractional share, when you receive a cash payment for a fraction of a share of
common stock credited to your account. Assuming that shares have been held as
capital assets, such gain or loss will be capital in nature. The amount of the
capital gain or loss will be the difference between the amount that you receive
for the shares of common stock (including fractional shares) and your tax basis
in such shares or fraction thereof. Capital gains of individuals derived with
respect to capital assets held for more than one year are generally eligible for
reduced rates of taxation. The deductibility of capital losses is subject to
annual limitations. Unused capital losses generally may be carried
over to future tax years.
Backup Withholding and Information
Reporting. Under
certain circumstances described below, we, or the Plan Administrator may be
required to deduct “backup withholding” on distributions paid to a shareholder,
regardless of whether those distributions are reinvested. Similarly, the Plan
Administrator may be required to deduct backup withholding from all proceeds of
sales of common shares held in a Plan account. A participant will be subject to
backup withholding if (1) the participant has failed to properly furnish us
and the Plan Administrator with the participant’s taxpayer identification
number; (2) the Service notifies us or the Plan Administrator that the
identification number furnished by the participant is incorrect; (3) the
Service notifies us or the Plan Administrator that backup withholding should be
commenced because the participant has failed to report properly distributions
paid to the participant; or (4) when required to do so, the participant has
failed to certify, under penalties of perjury, that the participant is not
subject to backup withholding.
Backup
withholding amounts will be withheld from dividends before those dividends are
reinvested under the Plan. Therefore, only this reduced amount will be
reinvested in Plan shares. Withheld amounts will generally constitute a tax
payment credited on such participant’s federal income tax return.
The Plan
Administrator will report to you the amount of any dividends credited to your
account as well as any brokerage trading fees or other related charges paid by
us on your behalf. This information will also be furnished to the Service to the
extent required by law.
27.
|
What
happens if I decide to sell or transfer all of the certificated shares
enrolled in the Plan but not the shares that are held in my Plan
account?
|
If you
sell or transfer all of the certificated shares enrolled in the Plan, but
continue to hold shares in your Plan account, the cash dividends on the shares
held in your Plan account will continue to be reinvested, unless you instruct
the Plan Administrator to terminate your participation in the Plan.
28.
|
If
MB Financial issues additional shares of common stock in connection with a
stock dividend or a stock split, how will I receive the additional
shares?
|
Any
shares representing stock dividends or stock splits that we distribute on shares
of our common stock that you have enrolled in the Plan and/or that are being
held in your Plan account will be credited to your Plan account.
29.
|
How
will I be able to vote the shares held in my Plan
account?
|
The
shares credited to your Plan account will be automatically added to the shares
covered by the proxy provided to you with respect to your certificated and book
entry form shares of common stock, and may be voted by you pursuant to such
proxy.
30.
|
What
are the responsibilities of MB Financial and of the Plan Administrator
under the Plan?
|
Except as
described below, the Plan Administrator has no responsibility with respect to
the preparation or the contents of this Plan. Neither we nor the Plan
Administrator or its nominee(s), in administering the Plan, will be liable for
any act done in good faith, or for any good faith omission to act, including,
without limitation, any claims of liability arising out of: (a) failure to
terminate a participant’s account upon the participant’s death or adjudicated
incompetence; (b) the prices and times at which shares of common stock are
purchased or sold for the participant’s account or the terms under which such
purchases or sales are made; or (c) fluctuations in the market value of our
common stock. Neither we nor the Plan Administrator can assure you of a profit,
or protect you against a loss, from the shares purchased or sold through the
Plan. An investment in our common stock is subject to significant market
fluctuations, as are all equity investments. We cannot control purchases by the
Plan Administrator under the Plan and cannot assure you that dividends on our
common stock will not be reduced or eliminated in the future.
31.
|
Who
interprets the Plan?
|
MB
Financial and the Plan Administrator reserve the right to interpret the Plan, as
they deem necessary or desirable. Any such interpretation will be final. The
Plan, and any related Plan documentation and Plan accounts, will be governed by,
and construed in accordance with, the laws of the State of New
York.
32.
|
May
the Plan be changed or
discontinued?
|
While we
currently expect to offer a dividend reinvestment and stock purchase plan
indefinitely, we reserve the right to suspend, modify, or terminate the Plan at
any time. You will receive notification of any such suspension, material
modification, or termination. We and the Plan Administrator also reserve the
right to change any administrative procedures of the Plan (including fees and
expenses) at any time without notice to you, and any such changes shall not be
deemed material modifications to the Plan.
33.
|
Who
do I contact if I have questions about the
Plan?
|
The Plan
Administrator will answer any questions you have about buying or selling our
common stock through the Plan or about any other Plan services. You may contact
the Plan Administrator in the following ways:
·
|
Internet. You can
enroll, obtain information, change the number of shares on which your
dividends are to be paid in cash, and perform certain transactions on your
account online via Investor ServiceDirect ®
(ISD). New investors will need to establish a Personal Identification
Number (PIN) when setting up their account. Existing stockholders
will need to use the Investor Identification Number (IID) which can be
found in a bolded box on your check stub, statement, or advice to
establish your PIN. In order to access your account through ISD, you will
be required to complete an account activation process. This one-time
authentication process will be used to validate your identity in addition
to your IID and self-assigned PIN.
|
·
|
To
access Investor ServiceDirect®,
please visit the BNY Mellon Shareowner Services website at:
www.bnymellon.com/shareowner/isd.
|
·
|
Written Inquiries. You
may make an e-mail inquiry by following the instructions on the Investor
ServiceDirect website. Please address all other correspondence concerning
the Plan to the Plan Administrator at the following
address:
|
Bank of
New York Mellon
c/o BNY
Mellon Shareowner Services
P.O. Box
358035
Pittsburgh,
PA 15252-8035
Be sure
to include your name, address, daytime phone number, IID, and a reference to MB
Financial, Inc. on all correspondence.
·
|
Telephone Inquiries. The
Plan Administrator may be reached directly by
dialing:
|
1-866-241-9990
(dedicated number in the United States and Canada)
1-800-231-5469
(for the hearing impaired) (TDD)
1-201-680-6578
(outside of the United States and Canada)
An
automated voice response system is available 24 hours a day, 7 days a week.
Customer Service Representatives are available from 9:00 a.m. to 7:00 p.m.,
Eastern Time, Monday through Friday (except holidays).
NOTE
ABOUT FINANCIAL INTERMEDIARIES
We may
grant requests for waiver of the Plan’s maximum monthly investment limit to
financial intermediaries, including brokers and dealers, and other participants
in the future. Grants of such waiver requests will be made in our sole
discretion based on a variety of factors, which may include: our current and
projected capital needs, the alternatives available to us to meet those needs,
prevailing market prices for our common stock, general economic and market
conditions, expected aberration in the price or trading volume of our common
stock, the potential disruption of our common stock price that may be caused by
a financial intermediary, the number of shares of common stock held by the
participant seeking a waiver, the past actions of a participant under the Plan,
the aggregate amount of investments for which such waivers have been submitted,
and the administrative constraints associated with granting such waivers. If
waiver requests are granted, a portion of the shares available for issuance
under the Plan will be purchased by participants (including brokers or dealers)
who, in connection with any resales of such shares, may be deemed to be
underwriters within the meaning of the Securities Act of 1933, as amended (the
“Securities Act”). Financial intermediaries may purchase a significant portion
of the shares of common stock issued under the Plan. We do not have any formal
or informal understanding with any such organizations and, therefore, the extent
of such financial intermediaries’ participation under the Plan cannot be
estimated as this time. Participants that are financial intermediaries that
acquire shares of our common stock under the Plan with a view to distribution of
such shares or that offer or sell shares in connection with the Plan may be
deemed underwriters within the meaning of the Securities Act and may be
participating in a distribution of securities that would require compliance with
Regulation M under the Exchange Act. We will not extend to any such
person any rights or privileges other than those to which such person would be
entitled as a participant, nor will we enter into any agreement with any such
person regarding the resale or distribution by any such person of the shares of
our common stock so purchased. We may, however, accept optional cash payments
and initial investments made pursuant to requests for waiver by such
persons.
From time
to time, financial intermediaries, including brokers and dealers, may engage in
positioning transactions in order to benefit from the discount from the market
price, if any, of common stock acquired under the Plan. Such transactions may
cause fluctuations in the trading volume of our common stock. Financial
intermediaries that engage in positioning transactions may be deemed to be
underwriters within the meaning of the Securities Act. We have no
arrangements or understandings, formal or informal, with any person relating to
the sale of shares of our common stock to be received under the
Plan. The Plan is intended for the benefit of our current and
prospective investors and not for individuals or investors who engage in
transactions that may cause aberrations in the price or trading volume of our
common stock.
We reserve
the right to modify, suspend or terminate participation in the Plan by otherwise
eligible persons to eliminate practices that are inconsistent with the purposes
of the Plan.
LEGAL
MATTERS
The
legality of the issuance of the shares of common stock offered hereby has been
passed upon for us by Silver, Freedman & Taff, L.L.P., Washington, D.C.
EXPERTS
Our
consolidated financial statements as of December 31, 2008 and 2007, and for
each of the years in the three-year period ended December 31, 2008, and
management’s assessment of the effectiveness of internal control over financial
reporting as of December 31, 2008 have been incorporated by reference herein in
reliance upon the reports of McGladrey & Pullen LLP, independent registered
public accounting firm, incorporated by reference herein, and upon the authority
of said firm as experts in accounting and auditing.
PROSPECTUS
MB
FINANCIAL, INC.
Common
Stock
Preferred
Stock
Depositary
Shares
Warrants
Purchase
Contracts
Units
The
securities listed above may be offered and sold by us and/or may be offered and
sold, from time to time, by one or more selling securityholders referred to in
this prospectus or identified by us in the future. To the extent not
described in this prospectus, we will provide the specific terms of these
securities in supplements to this prospectus. You should read this prospectus
and the applicable prospectus supplement carefully before you invest in the
securities described in the applicable prospectus supplement.
This
prospectus may not be used to sell securities unless accompanied by the
applicable prospectus supplement.
Our
common stock is listed on the NASDAQ Global Select Market under the symbol
“MBFI.”
You
should refer to the risk factors included in our periodic reports, the
applicable prospectus supplement and other information that we file with the
Securities and Exchange Commission and carefully consider that information
before buying our securities. See “Risk Factors” on
page 4.
These
securities will be our equity securities or our unsecured obligations and will
not be savings accounts, deposits or other obligations of any bank or non-bank
subsidiary of ours and are not insured by the Federal Deposit Insurance
Corporation or any other governmental agency.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined that this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.
This
prospectus is dated December 19, 2008
TABLE
OF CONTENTS
ABOUT THIS
PROSPECTUS......................................................................................................................................................................................................................................ii
WHERE YOU CAN FIND MORE
INFORMATION.................................................................................................................................................................................................ii
FORWARD-LOOKING
STATEMENTS...................................................................................................................................................................................................................iii
PROSPECTUS
SUMMARY..........................................................................................................................................................................................................................................1
RISK
FACTORS.............................................................................................................................................................................................................................................................3
USE OF
PROCEEDS.......................................................................................................................................................................................................................................................3
RATIO OF EARNINGS TO FIXED
CHARGES..........................................................................................................................................................................................................3
DESCRIPTION OF CAPITAL
STOCK........................................................................................................................................................................................................................3
DESCRIPTION OF SERIES A PREFERRED
STOCK...............................................................................................................................................................................................10
DESCRIPTION OF DEPOSITARY
SHARES............................................................................................................................................................................................................15
DESCRIPTION OF
WARRANTS-GENERAL..........................................................................................................................................................................................................18
DESCRIPTION OF TREASURY
WARRANT..........................................................................................................................................................................................................20
DESCRIPTION OF PURCHASE
CONTRACTS.......................................................................................................................................................................................................21
DESCRIPTION OF
UNITS..........................................................................................................................................................................................................................................22
SELLING
SECURITYHOLDERS.................................................................................................................................................................................................................................23
PLAN OF
DISTRIBUTION.........................................................................................................................................................................................................................................24
LEGAL
MATTERS.......................................................................................................................................................................................................................................................26
EXPERTS.......................................................................................................................................................................................................................................................................26
Unless
otherwise mentioned or unless the context requires otherwise, all references in
this prospectus to “MB Financial,” “we,” “us,” “our,” or similar references mean
MB Financial, Inc. and its subsidiaries on a consolidated basis.
This
prospectus is a part of a registration statement that we filed with the
Securities and Exchange Commission (“SEC”) using a “shelf” registration process.
Under this shelf registration statement, we may offer and sell any combination
of the securities identified in this prospectus in one or more
offerings. Each time we offer and sell securities, we will provide a
prospectus supplement and, if applicable, a pricing supplement containing
specific information about the terms of the securities being offered. That
prospectus supplement may include a discussion of any risk factors or other
special considerations that apply to those securities. In addition,
under this shelf registration process, selling securityholders may, from time to
time, offer and 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.
If there
is any inconsistency between the information in this prospectus (including the
information incorporated by reference therein) and any prospectus supplement or
pricing supplement, you should rely on the information in that prospectus
supplement or pricing supplement. You should read both this prospectus and any
prospectus supplement and pricing supplement together with additional
information described under the heading “Where You Can Find More
Information.”
The
registration statement containing this prospectus, including exhibits to the
registration statement, provides additional information about us and the
securities offered under this prospectus. The registration statement can be read
at the SEC web site or at the SEC offices mentioned under the heading “Where You
Can Find More Information.”
WHERE
YOU CAN FIND MORE INFORMATION
We file
annual, quarterly and current reports, proxy statements and other information
with the SEC. You may read and copy any document we file at the SEC’s public
reference room at 100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on its public
reference room. In addition, our SEC filings are available to the public at the
SEC’s web site at http://www.sec.gov.
The SEC
allows us to “incorporate by reference” into this prospectus the information in
documents we file with it. This means that we can disclose important information
to you by referring you to those documents. The information incorporated by
reference is considered to be a part of this prospectus and should be read with
the same care. When we update the information contained in documents that have
been incorporated by reference by making future filings with the SEC the
information incorporated by reference in this prospectus is considered to be
automatically updated and superseded. In other words, in the case of a conflict
or inconsistency between information contained in this prospectus and
information incorporated by reference into this prospectus, you should rely on
the information contained in the document that was filed later. We incorporate
by reference the documents listed below and any documents we file with the SEC
after the date of this prospectus under Section 13(a), 13(c), 14, or 15(d)
of the Securities Exchange Act of 1934 (the “Exchange Act”) and before the date
that the offering of securities by means of this prospectus is completed (other
than, in each case, documents or information deemed to have been furnished and
not filed in accordance with SEC rules):
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our
Annual Report on Form 10-K for the year ended December 31, 2007
(File No. 000-24566-01);
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our
Quarterly Reports on Form 10-Q for the quarterly periods ended March 31,
2008, June 30, 2008 and September 30, 2008 (File
No. 000-24566-01)
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our
Current Reports on Form 8-K filed on January 14, 2008, February 25,
2008, July 28, 2008 and December 8, 2008 (File No. 000-24566-01);
and
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the
description of our common stock, par value $0.01 per share, contained
in our Registration Statement on Form 8-A filed on October 9, 2001,
and all amendments or reports filed for the purpose of updating such
description.
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You may
request a copy of these filings (other than an exhibit to a filing unless that
exhibit is specifically incorporated by reference into that filing) at no cost,
by writing or calling us at the following address:
MB
Financial, Inc.
6111 N.
River Road
Rosemont,
Illinois 60018
(847) 653-1992
Attention:
Doria L. Koros, Vice President and Secretary
You
should rely only on the information incorporated by reference or presented in
this prospectus or the applicable prospectus supplement or pricing supplement.
Neither we, nor any selling securityholders, underwriters, dealers or agents,
have authorized anyone else to provide you with different information. We and
the selling securityholders may only use this prospectus to sell securities if
it is accompanied by a prospectus supplement. These securities are
only being offered in jurisdictions where the offer is permitted. You should not
assume that the information in this prospectus or the applicable prospectus
supplement or pricing supplement is accurate as of any date other than the dates
on the front of those documents.
FORWARD-LOOKING
STATEMENTS
When used
in this prospectus, any prospectus supplement or any document incorporated
herein by reference, the words or phrases “believe,” “will,” “should,” “will
likely result,” “are expected to,” “will continue,” “is anticipated,”
“estimate,” “project,” “plans,” or similar expressions are intended to identify
“forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. You are cautioned not to place undue
reliance on any forward-looking statements, which speak only as of the date
made. These statements may relate to our future financial
performance, strategic plans or objectives, revenues or earnings projections, or
other financial items. By their nature, these statements are subject
to numerous uncertainties that could cause actual results to differ materially
from those anticipated in the statements
Important
factors that could cause actual results to differ materially from the results
anticipated or projected include, but are not limited to, the following (1)
expected cost savings and synergies from our merger and acquisition activities
might not be realized within the expected time frames; (2) the credit risks of
lending activities, including changes in the level and direction of loan
delinquencies and write-offs and changes in estimates of the adequacy of the
allowance for loan losses; (3) competitive pressures among depository
institutions; (4) interest rate movements and their impact on customer behavior
and net interest margin; (5) the impact of repricing and competitors' pricing
initiatives on loan and deposit products; (6) fluctuations in real estate
values; (7) the ability to adapt successfully to technological changes to meet
customers' needs and developments in the market place; (8) our ability to
realize the residual values of our direct finance, leveraged, and operating
leases; (9) our ability to access cost-effective funding; (10) changes in
financial markets; (11) changes in economic conditions in general and in the
Chicago metropolitan area in particular; (12) the costs, effects and outcomes of
litigation; (13) new legislation or regulatory changes, including but not
limited to changes in federal and/or state tax laws or interpretations thereof
by taxing authorities and other governmental initiatives affecting the financial
services industry; (14) changes in accounting principles, policies or
guidelines; and (15) our future acquisitions of other depository institutions or
lines of business.
We do not
undertake any obligation to update any forward-looking statement to reflect
circumstances or events that occur after the date on which the forward-looking
statement is made.
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PROSPECTUS
SUMMARY
This
summary highlights selected information about us and a general description
of the securities that may be offered by this prospectus. This summary is
not complete and does not contain all of the information that may be
important to you. For a more complete understanding of us and the terms of
the securities we will offer, you should read carefully this entire
prospectus, including the “Risk Factors” section, the applicable
prospectus supplement for the securities and the other documents we refer
to and incorporate by reference. In particular, we incorporate important
business and financial information into this prospectus by
reference.
MB
Financial, Inc.
MB
Financial, Inc., a Maryland corporation, is a financial holding company
and is registered as a bank holding company under the Bank Holding Company
Act of 1956, as amended. Our primary market is the Chicago
metropolitan area, in which we operate over 70 banking offices through our
bank subsidiary, MB Financial Bank, N.A. MB Financial Bank also
has one banking office in the city of Philadelphia,
Pennsylvania. Through MB Financial Bank, we offer a broad range
of financial services, primarily to small and middle market businesses and
individuals in the markets that we serve. Our primary lines of
business consist of commercial banking, retail banking and wealth
management. As of September 30, 2008, we had total assets
of $8.4 billion, deposits of $6.4 billion, stockholders’ equity of $886.9
million, an asset management and trust department with approximately $3.5
billion in assets under management, including approximately $611.5 million
that represents our own investment accounts under management.
Securities
That May Be Offered
We
and the selling securityholders may use this prospectus to offer common
stock, preferred stock, depositary shares, warrants, purchase contracts or
units in one or more offerings. A prospectus supplement, which
we will provide for each such offering, will describe the amounts, prices
and detailed terms of the securities, to the extent not described in this
prospectus, and may describe risks associated with an investment in the
securities in addition to those described in the “Risk Factors” section of
this prospectus and the documents incorporated by
reference. Terms used in this prospectus will have the meanings
described in this prospectus unless otherwise specified.
We
and the selling securityholders may sell the securities to or through
underwriters, dealers or agents or directly to purchasers. We, as well as
any agents acting on our behalf, reserve the sole right to accept or to
reject in whole or in part any proposed purchase of our securities. Each
prospectus supplement will set forth the names of any underwriters,
dealers or agents involved in the sale of our securities described in that
prospectus supplement and any applicable fee, commission or discount
arrangements with them. The common stock, preferred stock,
depositary shares and warrants that may be sold by selling securityholders
include, but are not limited to, our securities described below under
“—Securities Relating to TARP Capital Purchase Program.”
Common
Stock
We
and the selling securityholders may sell shares of our common stock, par
value $0.01 per share. In a prospectus supplement, we will describe the
aggregate number of shares offered and the offering price or prices of the
shares.
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Preferred
Stock; Depositary Shares
We
and the selling securityholders may sell shares of our preferred stock in
one or more series. In a prospectus supplement, to the extent
not described in this prospectus, we will describe the specific
designation, the aggregate number of shares offered, the dividend rate or
manner of calculating the dividend rate, the dividend periods or manner of
calculating the dividend periods, the ranking of the shares of the series
with respect to dividends, liquidation and dissolution, the stated value
of the shares of the series, the voting rights of the shares of the
series, if any, whether and on what terms the shares of the series will be
convertible or exchangeable, whether and on what terms we can redeem the
shares of the series, whether we will offer depositary shares representing
shares of the series and if so, the fraction or multiple of a share of
preferred stock represented by each depositary share, whether we will list
the preferred stock or depositary shares on a securities exchange and any
other specific terms of the series of preferred stock.
Warrants
We
and the selling securityholders may sell warrants to purchase shares of
preferred stock or shares of our common stock. In a prospectus supplement,
to the extent not described in this prospectus, we will inform you of the
exercise price and other specific terms of the warrants, including whether
our or your obligations, if any, under any warrants may be satisfied by
delivering or purchasing the underlying securities or their cash
value.
Purchase
Contracts
We
may issue purchase contracts, including purchase contracts issued as part
of a unit with one or more other securities, for the purchase or sale of:
our preferred stock, depositary shares or common stock; securities of an
entity not affiliated with us, a basket of those securities, an index or
indices of those securities or any combination of the foregoing;
currencies; or commodities. The price per share of common stock, preferred
stock or depositary shares, or the price of the other securities,
currencies or commodities that are the subject of the contract, as
applicable, may be fixed at the time the purchase contracts are issued or
may be determined by reference to a specific formula contained in the
purchase contracts. We may issue purchase contracts in such amounts and in
as many distinct series as we wish.
Units
We
may sell any combination of one or more of the other securities described
in this prospectus, together as units. In a prospectus supplement, we will
describe the particular combination of securities constituting any units
and any other specific terms of the units.
Securities
Relating to TARP Capital Purchase Program
On
December 5, 2008, pursuant to the Troubled Asset Relief Program Capital
Purchase Program of the United States Department of the Treasury
(“Treasury”), we sold to Treasury 196,000 shares of our Fixed Rate
Cumulative Perpetual Preferred Stock, Series A (the “Series A Preferred
Stock”), liquidation preference amount $1,000 per share, for an aggregate
purchase price of $196.0 million, and concurrently issued to Treasury a
ten-year warrant to purchase up to 1,012,048 shares of our common stock at
an exercise price of $29.05 per share (the “Treasury
Warrant”). In accordance with the terms of the Treasury
Warrant, the number of shares of our common stock underlying the Treasury
Warrant was subsequently reduced by 50%, to 506,024 shares, as a result of
our having received aggregate gross proceeds of at least $196.0 million
from “Qualified Equity Offerings” we completed. See
“Description of Treasury Warrant.” The issuance of
the Series A Preferred Stock and the Treasury Warrant were completed in a
private placement to Treasury exempt from the registration requirements of
the Securities Act of 1933.
We
were required under the terms of the related securities purchase agreement
between us and Treasury to register for resale the shares of the Series A
Preferred Stock, the Treasury Warrant and the shares of our common stock
underlying the Treasury Warrant (the “Treasury Warrant
Shares”). This required registration includes depositary
shares, representing fractional interests in the Series A Preferred Stock
(“Series A Depositary Shares”), in the event Treasury requests that we
deposit the Series A Preferred Stock held by Treasury with a depositary
under a depositary arrangement entered into in accordance with the
securities purchase agreement. The shares of our preferred
stock, depositary shares, warrants and shares of our common stock covered
by this prospectus include the Series A Preferred Stock or any Series A
Depositary Shares, the Treasury Warrant and the Treasury Warrant Shares,
which may be resold pursuant to this prospectus by Treasury or any person
to which Treasury has transferred its registration rights in accordance
with the securities purchase agreement between us and
Treasury. See “Selling Securityholders.” The
securities purchase agreement between us and Treasury was attached as
Exhibit 10.1 to our Current Report on Form 8-K filed on December 8, 2008
and incorporated into this prospectus by reference. See “Where
You Can Find More Information.”
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RISK
FACTORS
An
investment in our securities involves significant risks. You should carefully
consider the risks and uncertainties and the risk factors set forth in the
documents and reports filed with the SEC that are incorporated by reference into
this prospectus, as well as any risks described in any applicable prospectus
supplement, before you make an investment decision regarding our securities.
Additional risks and uncertainties not presently known to us or that we
currently deem immaterial may also affect our business operations.
USE
OF PROCEEDS
We intend
to use the net proceeds we receive from the sales of the securities offered by
this prospectus as set forth in the applicable prospectus supplement.
We will not receive the
proceeds from any sales by selling securityholders.
RATIO
OF EARNINGS TO FIXED CHARGES
Our
historical consolidated ratios of earnings to fixed charges for the periods
indicated, both including and excluding interest on deposits, are set forth in
the table below. During all periods presented below, we had no shares
of preferred stock outstanding. The ratio of earnings to fixed
charges is computed by dividing (i) income from continuing operations
before income taxes and fixed charges by (ii) total fixed charges. For
purposes of computing these ratios, fixed charges excluding interest on deposits
represents interest expense on short-term and long-term borrowings and junior
subordinated notes and an estimate of the interest component of rental expense
and fixed charges including interest on deposits represents interest on deposits
plus interest expense on short-term and long-term borrowings and junior
subordinated notes and an estimate of the interest component of rental
expense.
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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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2.07
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2.42
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2.97
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3.89
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6.34
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6.68
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Including
interest on deposits
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1.25
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1.35
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1.48
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1.82
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2.29
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2.16
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DESCRIPTION
OF CAPITAL STOCK
Our
authorized capital stock consists of:
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70,000,000
shares of common stock, par value $.01 per share;
and
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1,000,000
shares of preferred stock, par value $.01 per
share.
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Our
charter authorizes our Board of Directors to classify or reclassify any unissued
shares of capital stock from time to time into one or more classes or series of
stock by setting or changing in one or more respects the preferences, conversion
or other rights, voting powers, restrictions, limitations as to dividends,
qualifications or terms and conditions of redemption of such
shares. Our charter provides by its terms that it may be amended by
action of our Board of Directors without a stockholder vote to change the number
of shares of authorized capital stock. As of December 12, 2008, there
were 35,008,257 shares of our common stock issued and outstanding and 196,000
shares of our preferred stock issued and outstanding, all of which consisted of
our Series A Preferred Stock.
In this
section we describe certain features and rights of our capital stock. The
summary does not purport to be exhaustive and is qualified in its entirety by
reference to our charter and bylaws and to applicable Maryland law.
Common
Stock
General. Except as described
below under “—Anti-takeover
Effects –Voting Limitation,” each holder of our common stock is entitled
to one vote for each share on all matters to be voted upon by the common
stockholders. There are no cumulative voting rights. Subject to preferences to
which holders of the Series A Preferred Stock and any other shares of preferred
or other stock then outstanding may be entitled, holders of our common stock
will be entitled to receive ratably any dividends that may be declared from time
to time by our Board of Directors out of funds legally available for that
purpose. In the event of our liquidation, dissolution or winding up,
holders of our common stock will be entitled to share in our assets remaining
after the payment or provision for payment of our debts and other liabilities,
and the satisfaction of the liquidation preferences of the holders of the Series
A Preferred Stock and any other series of our preferred or other stock then
outstanding. Holders of our common stock have no preemptive or
conversion rights or other subscription rights. There are no
redemption or sinking fund provisions that apply to our common
stock. The rights, preferences and privileges of the holders of
common stock are subject to, and may be adversely affected by, the rights of the
holders of our Series A Preferred Stock (see “Description of Series A Preferred
Stock”) and the shares of any other series of preferred or other stock that we
may issue in the future.
Restrictions on Dividends and
Repurchases Under Agreement with Treasury. The securities
purchase agreement between us and Treasury provides that prior to the earlier of
(i) December 5, 2011 and (ii) the date on which all of the shares of the Series
A Preferred Stock have been redeemed by us or transferred by Treasury to third
parties, we may not, without the consent of Treasury, (a) increase the cash
dividend on our common stock (we currently pay a quarterly dividend on our
common stock of $0.18 per share) or (b) subject to limited exceptions, redeem,
repurchase or otherwise acquire shares of our common stock or preferred stock,
other than the Series A Preferred Stock, or trust preferred
securities.
Preferred
Stock-General
The
following summary contains a description of the general terms of the preferred
stock that we may issue, other than the Series A Preferred Stock, the terms of
which are described under “Description of Series A Preferred
Stock.” The specific terms of any series of preferred stock will be
described in the prospectus supplement relating to that series of preferred
stock. The terms of any series of preferred stock may differ from the terms
described below. Certain provisions of the preferred stock described below and
in any prospectus supplement are not complete. You should refer to the articles
supplementary with respect to the establishment of a series of preferred stock
which will be filed with the SEC in connection with the offering of such series
of preferred stock.
Overview. We are
currently authorized under our charter to issue up to 1,000,000 shares of
preferred stock, par value $0.01, in one or more series. Our Board of
Directors may issue at any time, and from time to time, shares of preferred
stock with such voting and other powers, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions, as are stated and expressed in the Board resolution providing
for the issuance. Therefore, without stockholder approval (except as
provided under the terms of the Series A Preferred Stock (see “Description of
Series A Preferred Stock”) or as may be required by the rules of The NASDAQ
Stock Market or any other exchange or market on which our securities may then be
listed or quoted), our Board of Directors can authorize the issuance of
preferred stock with voting, dividend, liquidation and conversion and other
rights that could dilute the voting power or other rights or adversely affect
the market value of the common stock and may assist management in impeding any
unfriendly takeover or attempted change in control. See
“—Anti-Takeover Effects – Authorized Shares.”
The
preferred stock has the terms described below unless otherwise provided in the
prospectus supplement relating to a particular series of the preferred stock or,
in the case of the Series A Preferred Stock, as described under “Description of
Series A Preferred Stock.” You should read the prospectus supplement relating to
the particular series of the preferred stock being offered for specific terms,
including:
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the
designation of the series of preferred stock and the number of shares
offered;
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the
amount of liquidation preference per share, if
any;
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the
price at which the preferred stock will be
issued;
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the
dividend rate, or method of calculation, the dates on which dividends will
be payable, whether dividends will be cumulative or noncumulative and, if
cumulative, the dates from which dividends will commence to
cumulate;
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any
listing of the preferred stock being offered on any securities exchange or
other securities market;
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any
redemption or sinking fund
provisions;
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any
conversion provisions;
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whether
interests in the preferred stock being offered will be represented by
depositary shares; and
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any
other specific terms of the preferred stock being
offered.
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Upon our
receipt of the full specified purchase price, the preferred stock will, when
issued, be fully paid and nonassessable. Unless otherwise specified in the
prospectus supplement, each series of preferred stock will rank equally as to
dividends and liquidation rights in all respects with each other series of
preferred stock. The rights of holders of shares of each series of preferred
stock will be subordinate to those of our general creditors.
Rank. Any series
of the preferred stock will, with respect to the priority of the payment of
dividends and the priority of payments upon our liquidation, winding up and
dissolution, rank:
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senior
to our common stock and all classes and series of other stock issued by us
the terms of which specifically provide that such other stock will rank
junior to the preferred stock (referred to as the “junior
securities”);
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equally
with all other classes and series of stock issued by us the terms of which
specifically provide that such stock will rank equally with the preferred
stock (referred to as the “parity securities”);
and
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junior
to all other classes and series of stock issued by us the terms of which
specifically provide that such stock will rank senior to the preferred
stock.
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Dividends. Holders
of the preferred stock of each series will be entitled to receive, when, as and
if declared by our Board of Directors, cash dividends at such rates and on such
dates described, if any, in the applicable prospectus supplement. Different
series of preferred stock may be entitled to dividends at different rates or
based on different methods of calculation. The dividend rate may be fixed or
variable or both. Dividends will be payable to the holders of record as they
appear on our stock books on record dates fixed by our Board of Directors, as
specified in the applicable prospectus supplement.
Dividends
on any series of the preferred stock may be cumulative or noncumulative, as
described in the applicable prospectus supplement. If our Board of Directors
does not declare a dividend payable on a dividend payment date on any series of
noncumulative preferred stock, then the holders of that noncumulative preferred
stock will have no right to receive a dividend for that dividend payment date,
and we will have no obligation to pay the dividend accrued for that period,
whether or not dividends on that series are declared payable on any future
dividend payment dates. Dividends on any series of cumulative preferred stock
will accrue from the date we initially issue shares of such series or such other
date specified in the applicable prospectus supplement.
No full
dividends may be declared or paid or funds set apart for the payment of any
dividends on any parity securities unless dividends have been paid or set apart
for payment on the preferred stock. If full dividends are not paid, the
preferred stock will share dividends pro rata with the parity securities. No
dividends may be declared or paid or funds set apart for the payment of
dividends on any junior securities unless full cumulative dividends for all
dividend periods terminating on or prior to the date of the declaration or
payment will have been paid or declared and a sum sufficient for the payment set
apart for payment on the preferred stock.
Rights Upon
Liquidation. If we dissolve, liquidate or wind up our affairs,
either voluntarily or involuntarily, the holders of each series of preferred
stock will be entitled to receive, before any payment or distribution of assets
is made to holders of junior securities, liquidating distributions in the amount
described in the applicable prospectus supplement relating to that series of the
preferred stock, plus an amount equal to accrued and unpaid dividends and, if
the series of the preferred stock is cumulative, for all dividend periods prior
to that point in time. If the amounts payable with respect to the preferred
stock of any series and any other parity securities are not paid in full, the
holders of the preferred stock of that series and of the parity securities will
share proportionately in the distribution of our assets in proportion to the
full liquidation preferences to which they are entitled. After the holders of
preferred stock and the parity securities are paid in full, they will have no
right or claim to any of our remaining assets.
Because
we are a holding company, our rights and the rights of our creditors and of our
stockholders, including the holders of any shares of preferred stock then
outstanding, to participate in the assets of any subsidiary upon the
subsidiary’s liquidation or recapitalization will be subject to the prior claims
of the subsidiary’s creditors except to the extent that we may ourselves be a
creditor with recognized claims against the subsidiary.
Redemption. We may
provide that a series of the preferred stock may be redeemable, in whole or in
part, at our option or at the option of the holder of the stock. In
addition, a series of preferred stock may be subject to mandatory redemption
pursuant to a sinking fund or otherwise. The redemption provisions that may
apply to a series of preferred stock, including the redemption dates and the
redemption prices for that series, will be described in the prospectus
supplement.
In the
event of partial redemptions of preferred stock, whether by mandatory or
optional redemption, our Board of Directors will determine the method for
selecting the shares to be redeemed, which may be by lot or pro rata or by any
other method determined by our Board of Directors to be equitable.
On or
after a redemption date, unless we default in the payment of the redemption
price, dividends will cease to accrue on shares of preferred stock called for
redemption. In addition, all rights of holders of the shares will terminate
except for the right to receive the redemption price.
Unless
otherwise specified in the applicable prospectus supplement for any series of
preferred stock, if any dividends on any other series of preferred stock ranking
equally as to payment of dividends and liquidation rights with such series of
preferred stock are in arrears, no shares of any such series of preferred stock
may be redeemed, whether by mandatory or optional redemption, unless all shares
of preferred stock are redeemed, and we will not purchase any shares of such
series of preferred stock. This requirement, however, will not prevent us from
acquiring such shares pursuant to a purchase or exchange offer made on the same
terms to holders of all such shares outstanding.
Voting
Rights. Unless otherwise described in the applicable
prospectus supplement, holders of the preferred stock will have no voting rights
except as otherwise required by law or in our charter.
Series
A Preferred Stock
For a
description of the terms of the Series A Preferred Stock, see “Description of
Series A Preferred Stock.”
Anti-takeover
Effects
The
provisions of our charter and bylaws summarized in the following paragraphs may
have anti-takeover effects and could delay, defer, or prevent a tender offer or
takeover attempt that a stockholder might consider to be in such stockholder’s
best interest, including those attempts that might result in a premium over the
market price for the shares held by stockholders, and may make removal of the
incumbent management and directors more difficult.
Authorized
Shares. Our charter authorizes the issuance of 70,000,000
shares of common stock and 1,000,000 shares of preferred stock. Our
charter authorizes our Board of Directors to classify or reclassify any unissued
shares of capital stock from time to time into one or more classes or series of
stock by setting or changing in one or more respects the preferences, conversion
or other rights, voting powers, restrictions, limitations as to dividends,
qualifications or terms and conditions of redemption of such
shares. We are authorized under our charter to issue additional
shares of capital stock, up to the amount authorized, generally without
stockholder approval. In addition, our charter provides by its terms
that it may be amended by our Board of Directors, without a stockholder vote, to
change the number of shares of capital stock authorized. The unissued
shares of stock the Board is authorized to issue provide our Board with as much
flexibility as possible to effect financings, acquisitions and other
transactions. However, these additional authorized shares may also be
used by the Board of Directors, consistent with its fiduciary duties, to deter
future attempts to gain control of us. The Board of Directors also
has sole authority to determine the terms of any one or more series of preferred
or other stock, including voting rights, conversion rates, and liquidation
preferences. As a result of the ability to fix voting rights for a
series of preferred or other stock, the Board has the power, to the extent
consistent with its fiduciary duties, to issue a series of preferred or other
stock to persons friendly to the incumbent management and directors in order to
attempt to block a tender offer, merger or other unsolicited transaction by
which a third party seeks to acquire control of us.
Voting
Limitation. Our charter generally prohibits any
stockholder that beneficially owns more than 14.9% of the outstanding shares of
our common stock from voting shares in excess of this limit. This
provision would limit the voting power of a beneficial owner of more than 14.9%
of the outstanding shares of our common stock in a proxy contest or on other
matters on which such person is entitled to vote.
The
Maryland General Corporation Law contains a control share acquisition statute
which, in general terms, provides that where a stockholder acquires issued and
outstanding shares of a corporation’s voting stock (referred to as control
shares) within one of several specified ranges (one-tenth or more but less than
one-third, one-third or more but less than a majority, or a majority or more),
approval by stockholders of the control share acquisition must be obtained
before the acquiring stockholder may vote the control shares. The required
stockholder vote is two-thirds of all votes entitled to be cast, excluding
“interested shares,” defined as shares held by the acquiring person, officers of
the corporation and employees who are also directors of the corporation. A
corporation may, however, opt-out of the control share statute through a charter
or bylaw provision, which we have done pursuant to our bylaws. Accordingly, the
Maryland control share acquisition statute does not apply to acquisitions of
shares of our common stock. Though not anticipated, we could decide to become
subject to the Maryland control share acquisition statute by amending our bylaws
to eliminate the opt-out provision. See “—Amendment of Charter and
Bylaws.”
Board of
Directors. Except with respect to any directors who may be
elected by the holders of any class or series of preferred or other stock, our
Board of Directors is divided into three classes, each of which contains
approximately one-third of the members of the Board. The members of
each class are elected for a term of three years, with the terms of office of
all members of one class expiring each year so that approximately one-third of
the total number of directors is elected each year. The
classification of directors, together with the provisions in our charter
described below that limit the ability of stockholders to remove directors and
that permit only the remaining directors to fill any vacancies on the Board of
Directors, have the effect of making it more difficult for stockholders to
change the composition of the Board of Directors. As a result, at least two
annual meetings of stockholders will be required for the stockholders to change
a majority of the directors, whether or not a change in the Board of Directors
would be beneficial and whether or not a majority of stockholders believe that
such a change would be desirable. Our charter provides that
stockholders may not cumulate their votes in the election of
directors.
Our
charter provides that we will have the number of directors fixed from time to
time by our Board of Directors by a vote of a majority of the
Board. MB Financial, Inc. currently has ten directors. Our
charter and bylaws provide that, subject to the rights of the holders of any
series of preferred or other stock then outstanding, vacancies in the Board of
Directors may be filled by a majority vote of the directors then in office,
though less than a quorum, and any director so chosen shall hold office for the
remainder of the full term of the class of directors in which the vacancy
occurred. Our charter further provides that, subject to the rights of
the holders of any series of preferred or other stock then outstanding,
directors may be removed from office only for cause and only by the vote of the
holders of a majority of the voting power of the outstanding shares of capital
stock entitled to vote generally in the election of directors, voting together
as a single class.
The
foregoing description of our Board of Directors does not apply with respect to
directors that may be elected by the holders of the Series A Preferred Stock in
the event we do not pay dividends on the Series A Preferred Stock for six or
more dividend periods. See “Description of Series A Preferred
Stock—Voting Rights.”
Special Meetings of
Stockholders. Our bylaws provide that special meetings of
stockholders may be called by our Board of Directors by vote of a majority of
the whole Board (meaning the total number of directors we would have if there
were no vacancies on the Board). Our bylaws also provide that a
special meeting of stockholders shall be called by on the written request of
stockholders entitled to cast at least a majority of all votes entitled to be
cast at the meeting.
Action by Stockholders Without A
Meeting. Our bylaws provide that, except as described in the
following sentence, any action required or permitted to be taken at a meeting of
stockholders may instead be taken without a meeting if a unanimous written
consent which sets forth the action is signed by each stockholder entitled to
vote on the matter. The bylaws also provide that, unless our charter provides
otherwise, the holders of any class of our stock, other than common stock, that
is entitled to vote generally in the election of directors may act by written
consent without a meeting if the consent is signed by the holders entitled to
cast the minimum number of votes that would be necessary to approve the action
at a meeting of stockholders.
Business Combinations With Certain
Persons. Our charter
provides that certain business combinations (for example, mergers, share
exchanges, significant asset sales and significant stock issuances) involving
“interested stockholders” of MB Financial, Inc. require, in addition to any vote
required by law, the approval of the holders of a majority of the voting power
of the outstanding shares of stock entitled to vote generally in the election of
directors that is not beneficially owned by the interested stockholder in
question, voting together as a single class, unless either (i) a majority
of the disinterested directors have approved the business combination or
(ii) certain fair price and procedure requirements are satisfied. An
“interested stockholder” generally means a person who is a greater than 14.9%
stockholder of MB Financial, Inc. or who is an affiliate of MB Financial, Inc.
and at any time within the past two years was a greater than 14.9% stockholder
of MB Financial, Inc.
The
Maryland General Corporation Law contains a business combination statute that
prohibits a business combination between a corporation and an interested
stockholder (one who beneficially owns 10% or more of the voting power) for a
period of five years after the interested stockholder first becomes an
interested stockholder, unless the transaction has been approved by the board of
directors before the interested stockholder became an interested stockholder or
the corporation has exempted itself from the statute pursuant to a charter
provision. After the five-year period has elapsed, a corporation subject to the
statute may not consummate a business combination with an interested stockholder
unless (i) the transaction has been recommended by the board of directors
and (ii) the transaction has been approved by (a) 80% of the
outstanding shares entitled to be cast and (b) two-thirds of the votes
entitled to be cast other than shares owned by the interested stockholder. This
approval requirement need not be met if certain fair price and terms criteria
have been satisfied. We have opted-out of the Maryland business
combination statute through a provision in our charter.
Prevention of
Greenmail. Our charter generally prohibits us from acquiring
any of our own equity securities from a beneficial owner of 5% or more of our
voting stock unless: (i) the acquisition is approved by the holders of a
majority of our voting stock not owned by the seller, voting together as a
single class; (ii) the acquisition is made as part of a tender or exchange
offer by us or a subsidiary of ours to purchase securities of the same class on
the same terms to all holders of such securities; (iii) the acquisition is
pursuant to an open market purchase program approved by a majority of our Board
of Directors, including a majority of the disinterested directors; or
(iv) the acquisition is at or below the market price of our common stock
and is approved by a majority of our Board of Directors, including a majority of
the disinterested directors.
Amendment of Charter and
Bylaws. Our charter generally may be amended upon
approval by the Board of Directors and the holders of a majority of the
outstanding shares of our common stock. Our charter provides by its terms
that it may be amended by our Board of Directors, without a stockholder vote, to
change the number of shares of capital stock authorized for
issuance.
Our
bylaws may be amended either by the Board of Directors, by a vote of a majority
of the whole Board, or by our stockholders, by the vote of the holders of a
majority of the voting power of the outstanding shares of capital stock entitled
to vote generally in the election of directors, voting together as a single
class.
Advance Notice
Provisions. Our bylaws provide that we must receive
written notice of any stockholder proposal for business at an annual meeting of
stockholders not less than 90 days or more than 120 days before the
anniversary of the preceding year’s annual meeting. If the date of the current
year annual meeting is advanced by more than 20 days or delayed by more
than 60 days from the anniversary date of the preceding year’s annual
meeting, notice of the proposal must be received by MB Financial no earlier than
the close of business on the 120th day prior to the date of the annual meeting
and no later than the close of business on the later of the 90th day prior to
the annual meeting or the 10th day following the day on which notice of the
meeting is mailed or public disclosure of the meeting date is first made,
whichever occurs first.
Our
bylaws also provide that we must receive written notice of any stockholder
director nomination for a meeting of stockholders not less than 90 days or
more than 120 days before the date of the meeting. If, however, less than
100 days’ notice or prior public disclosure of the date of the meeting is
given or made to stockholders, notice of the nomination must be received by the
secretary no later than the tenth day following the day on which notice of the
meeting is mailed or public disclosure of the meeting date is first made,
whichever occurs first.
Transfer
Agent
The
transfer agent and registrar for our common stock is Mellon Investors Services,
LLC.
DESCRIPTION
OF SERIES A PREFERRED STOCK
This
section summarizes specific terms and provisions of the Series A Preferred
Stock. The description of the Series A Preferred Stock contained in
this section is qualified in its entirety by the actual terms of the Series A
Preferred Stock, as are stated in the articles supplementary to our charter, a
copy of which was attached as Exhibit 3.1 to our Current Report on Form 8-K
filed on December 8, 2008 and incorporated by reference into this
prospectus. See “Where You Can Find More Information.”
General
The
Series A Preferred Stock constitutes a single series of our preferred stock,
consisting of 196,000 shares, par value $0.01 per share, having a liquidation
preference amount of $1,000 per share. The Series A Preferred Stock
has no maturity date. We issued the shares of Series A Preferred
Stock to Treasury on December 5, 2008 in connection with the TARP Capital
Purchase Program for a purchase price of $196.0 million. Pursuant to
the securities purchase agreement between us and Treasury, we have agreed, if
requested by Treasury, to enter into a depositary arrangement pursuant to which
the shares of Series A Preferred Stock may be deposited and depositary shares,
each representing a fraction of a share of Series A Preferred Stock as specified
by Treasury, may be issued. See “Description of Depositary
Shares—Series A Depositary Shares.”
Dividends
Rate. Dividends on the Series
A Preferred Stock are payable quarterly in arrears, when, as and if authorized
and declared by our Board of Directors out of legally available funds, on a
cumulative basis on the $1,000 per share liquidation preference amount plus the
amount of accrued and unpaid dividends for any prior dividend periods, at a rate
of (i) 5% per annum, from the original issuance date to but excluding the first
day of the first dividend period commencing after the fifth anniversary of the
original issuance date (i.e., 5% per annum from December 5, 2008 to but
excluding February 15, 2014), and (ii) 9% per annum, from and after the first
day of the first dividend period commencing after the fifth anniversary of the
original issuance date (i.e., 9% per annum on and after February 15,
2014). Dividends are payable quarterly in arrears on February
15, May 15, August 15 and November 15 of each year,
commencing on February 15, 2009. Each dividend will be payable to
holders of record as they appear on our stock register on the applicable record
date, which will be the 15th
calendar day immediately preceding the related dividend payment date (whether or
not a business day), or such other record date determined by our Board of
Directors that is not more than 60 nor less than ten days prior to the related
dividend payment date. Each period from and including a dividend
payment date (or the date of the issuance of the Series A Preferred Stock) to
but excluding the following dividend payment date is referred to as a “dividend
period.” Dividends payable for each dividend period are computed on
the basis of a 360-day year consisting of twelve 30-day months. If a
scheduled dividend payment date falls on a day that is not a business day, the
dividend will be paid on the next business day as if it were paid on the
scheduled dividend payment date, and no interest or other additional amount will
accrue on the dividend.
Dividends
on the Series A Preferred Stock will be cumulative. If for any reason
our Board of Directors does not declare a dividend on the Series A Preferred
Stock for a particular dividend period, or if the Board of Directors declares
less than a full dividend, we will remain obligated to pay the unpaid portion of
the dividend for that period and the unpaid dividend will compound on each
subsequent dividend date (meaning that dividends for future dividend periods
will accrue on any unpaid dividend amounts for prior dividend
periods).
We are
not obligated to pay holders of the Series A Preferred Stock any dividend in
excess of the dividends on the Series A Preferred Stock that are payable as
described above. There is no sinking fund with respect to dividends
on the Series A Preferred Stock.
Priority of
Dividends. So long as the Series A Preferred Stock remains
outstanding, we may not declare or pay a dividend or other distribution on our
common stock or any other shares of Junior Stock (other than dividends payable
solely in common stock) or Parity Stock (other than dividends paid on a pro rata
basis with the Series A Preferred Stock), and we generally may not directly or
indirectly purchase, redeem or otherwise acquire any shares of common stock,
Junior Stock or Parity Stock unless all accrued and unpaid dividends on the
Series A Preferred Stock for all past dividend periods are paid in
full.
“Junior
Stock” means our common stock and any other class or series of our stock the
terms of which expressly provide that it ranks junior to the Series A Preferred
Stock as to dividend rights and/or as to rights on liquidation, dissolution or
winding up of MB Financial, Inc. We currently have no outstanding
class or series of stock constituting Junior Stock other than our common
stock.
“Parity
Stock” means any class or series of our stock, other than the Series A Preferred
Stock, the terms of which do not expressly provide that such class or series
will rank senior or junior to the Series A Preferred Stock as to dividend rights
and/or as to rights on liquidation, dissolution or winding up of MB Financial,
Inc., in each case without regard to whether dividends accrue cumulatively or
non-cumulatively. We currently have no outstanding class or series of
stock constituting Parity Stock.
Liquidation
Rights
In the
event of any voluntary or involuntary liquidation, dissolution or winding up of
our affairs, holders of the Series A Preferred Stock will be entitled to receive
for each share of Series A Preferred Stock, out of our assets or proceeds
available for distribution to our stockholders, subject to any rights of our
creditors, before any distribution of assets or proceeds is made to or set aside
for the holders of our common stock and any other class or series of our stock
ranking junior to the Series A Preferred Stock, payment of an amount equal to
the sum of (i) the $1,000 liquidation preference amount per share and (ii) the
amount of any accrued and unpaid dividends on the Series A Preferred Stock
(including dividends accrued on unpaid dividends). To the extent the
assets or proceeds available for distribution to stockholders are not sufficient
to fully pay the liquidation payments owing to the holders of the Series A
Preferred Stock and the holders of any other class or series of our stock
ranking equally with the Series A Preferred Stock, the holders of the Series A
Preferred Stock and such other stock will share ratably in the
distribution.
For
purposes of the liquidation rights of the Series A Preferred Stock, neither a
merger or consolidation of us with another entity nor a sale, lease or exchange
of all or substantially all of our assets will constitute a liquidation,
dissolution or winding up of our affairs.
Redemption
and Repurchases
Subject
to the prior approval of the Federal Reserve, the Series A Preferred Stock is
redeemable at our option in whole or in part at a redemption price equal to 100%
of the liquidation preference amount of $1,000 per share plus any accrued and
unpaid dividends (including dividends accrued on unpaid dividends) to but
excluding the date of redemption, provided that any declared but unpaid dividend
payable on a redemption date that occurs subsequent to the record date for the
dividend will be payable to the holder of record of the redeemed shares on the
dividend record date, and provided further that the Series A Preferred Stock may
be redeemed prior to the first dividend payment date falling after the third
anniversary of the original issuance date (i.e., prior to February 15, 2012)
only if (i) we have, or our successor following a business combination with
another entity which also participated in the TARP Capital Purchase Program has,
raised aggregate gross proceeds in one or more Qualified Equity Offerings of at
least the Minimum Amount and (ii) the aggregate redemption price of the Series A
Preferred Stock does not exceed the aggregate net proceeds from such Qualified
Equity Offerings by us and any successor. The “Minimum Amount” means
$49.0 million plus, in the event we are succeeded in a business combination by
another entity which also participated in the TARP Capital Purchase Program, 25%
of the aggregate liquidation preference amount of the preferred stock issued by
that entity to Treasury. A “Qualified Equity Offering” is defined as
the sale for cash by MB Financial, Inc. (or its successor) of preferred stock or
common stock that qualifies as Tier 1 capital under applicable regulatory
capital guidelines.
To
exercise the redemption right described above, we must give notice of the
redemption to the holders of record of the Series A Preferred Stock by first
class mail, not less than 30 days and not more than 60 days before the date of
redemption. Each notice of redemption given to a holder of Series A
Preferred Stock must state: (i) the redemption date; (ii) the number of shares
of Series A Preferred Stock to be redeemed and, if less than all the shares held
by such holder are to be redeemed, the number of such shares to be redeemed from
such holder; (iii) the redemption price; and (iv) the place or places where
certificates for such shares are to be surrendered for payment of the redemption
price. In the case of a partial redemption of the 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 determines to be fair and
equitable.
The
securities purchase agreement between us and Treasury provides
that so long as Treasury continues to
own any shares of Series A Preferred Stock, we may not repurchase any shares of
Series A Preferred Stock from any other holder of such shares unless we offer to
repurchase a ratable portion of the shares of Series A Preferred Stock then held
by the Treasury on the same terms and conditions.
Subsequent
to our issuance of the Series A Preferred Stock, legislation was enacted
that provides that subject to consulting with the appropriate federal banking
agency (the Federal Reserve Board in our case), Treasury must permit repayment
of funds provided under the TARP Capital Purchase Program without regard to
whether the institution which received the funds has replaced the funds from any
other source.
Shares of
Series A Preferred Stock that we redeem, repurchase or otherwise acquire will
revert to authorized but unissued shares of preferred stock, which may then be
reissued by us as any series of preferred stock other than the Series A
Preferred Stock.
No
Conversion Rights
Holders
of the Series A Preferred Stock have no right to exchange or convert their
shares into common stock or any other securities.
Voting
Rights
The
holders of the Series A Preferred Stock do not have voting rights other than
those described below, except to the extent specifically required by Maryland
law.
Whenever
dividends have not been paid on the Series A Preferred Stock for six or more
quarterly dividend periods, whether or not consecutive, the authorized number of
directors of MB Financial, Inc. will automatically increase by two and the
holders of the Series A Preferred Stock will have the right, with the holders of
shares of any other classes or series of Voting Parity Stock outstanding at the
time, voting together as a class, to elect two directors (the “Preferred
Directors”) to fill such newly created directorships at our next annual meeting
of stockholders (or at a special meeting called for that purpose prior to the
next annual meeting) and at each subsequent annual meeting of stockholders until
all accrued and unpaid dividends for all past dividend periods on all
outstanding shares of Series A Preferred Stock have been paid in full at which
time this right will terminate with respect to the Series A Preferred Stock,
subject to revesting in the event of each and every subsequent default by us in
the payment of dividends on the Series A Preferred Stock.
No person
may be elected as Preferred Director who would cause us to violate any corporate
governance requirements of the NASDAQ Stock Market or any other securities
exchange or other trading facility on which our securities may then be listed or
traded that listed or traded companies must have a majority of independent
directors. Upon any termination of the right of the holders of the Series A
Preferred Stock and Voting Parity Stock as a class to vote for directors as
described above, the Preferred Directors will cease to be qualified as
directors, the terms of office of all Preferred Directors then in office will
terminate immediately and the authorized number of directors will be reduced by
the number of Preferred Directors which had been elected by the holders of the
Series A Preferred Stock and the Voting Parity Stock. Any Preferred Director may
be removed at any time, with or without cause, and any vacancy created by such a
removal may be filled, only by the affirmative vote of the holders a majority of
the outstanding shares of Series A Preferred Stock voting separately as a class
together with the holders of shares of Voting Parity Stock, to the extent the
voting rights of such holders described above are then exercisable. If the
office of any Preferred Director becomes vacant for any reason other than
removal from office, the remaining Preferred Director may choose a successor who
will hold office for the unexpired term of the office in which the vacancy
occurred.
The term
“Voting Parity Stock” means with regard to any matter as to which the holders of
the Series A Preferred Stock are entitled to vote, any series of Parity Stock
(as defined under “—Dividends-Priority of Dividends”) upon which voting rights
similar to those of the Series A Preferred Stock have been conferred and are
exercisable with respect to such matter. We currently have no
outstanding shares of Voting Parity Stock.
In
addition to any other vote or consent required by Maryland law or by our
charter, the vote or consent of the holders of at least 66 2/3% of the
outstanding shares of Series A Preferred Stock, voting as a separate class, is
required in order to do the following:
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|
amend
our charter or the articles supplementary for 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 stock
ranking senior to the Series A Preferred Stock with respect to the payment
of dividends and/or the distribution of assets on any liquidation,
dissolution or winding up of MB Financial, Inc.;
or
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·
|
amend
our charter or the articles supplementary for the Series A Preferred Stock
in a way that materially and adversely affect the rights, preferences,
privileges or voting powers of the Series A Preferred Stock;
or
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·
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consummate
a binding share exchange or reclassification involving the Series A
Preferred Stock or a merger or consolidation of MB Financial, Inc. with
another entity, unless (i) the shares of Series A Preferred Stock
remain outstanding or, in the case of a merger or consolidation in which
MB Financial, Inc. is not the surviving or resulting entity, are converted
into or exchanged for preference securities of the surviving or resulting
entity or its ultimate parent, and (ii) the shares of Series A
Preferred Stock remaining outstanding or such preference securities, have
such rights, preferences, privileges, voting powers, limitations and
restrictions, taken as a whole, as are not materially less favorable than
the rights, preferences, privileges, voting powers, limitations and
restrictions of the Series A Preferred Stock prior to consummation of the
transaction, taken as a whole;
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provided, however, that
(1) any increase in the amount of our authorized but unissued shares of
preferred stock, and (2) the creation and issuance, or an increase in the
authorized or issued amount, of any other series of preferred stock, or any
securities convertible into or exchangeable or exercisable for any other series
of preferred stock, ranking equally with and/or junior to the Series A Preferred
Stock with respect to the payment of dividends, whether such dividends are
cumulative or non-cumulative and the distribution of assets upon our
liquidation, dissolution or winding up, will not be deemed to materially and
adversely affect the rights, preferences, privileges or voting powers of the
Series A Preferred Stock and will not require the vote or consent of the holders
of the Series A Preferred Stock.
To the
extent holders of the Series A Preferred Stock are entitled to vote, holders of
shares of the Series A Preferred Stock will be entitled to one vote for each
share then held.
The
voting provisions described above will not apply if, at or prior to the time
when the vote or consent of the holders of the Series A Preferred Stock would
otherwise be required, all outstanding shares of the Series A Preferred Stock
have been redeemed by us 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.
DESCRIPTION
OF DEPOSITARY SHARES
We or the
selling securityholders may offer depositary shares, which will be evidenced by
depositary receipts, representing fractional interests in shares of preferred
stock of any series. In connection with the issuance of any depositary shares,
we will enter into a deposit agreement with a depositary, which will be named in
the applicable prospectus supplement. The following briefly summarizes the
anticipated material provisions of the deposit agreement and of the depositary
shares and depositary receipts, other than pricing and related terms disclosed
for a particular issuance in an accompanying prospectus supplement and except as
may be provided otherwise under the terms of any depositary arrangement entered
into for the Series A Preferred Stock. See “—Series A Depositary
Shares.” This description is subject to, and qualified in its
entirety by reference to, all provisions of the applicable deposit agreement,
depositary shares and depositary receipts. You should read the particular terms
of any depositary shares and any depositary receipts that we offer and any
deposit agreement relating to a particular series of preferred stock described
in more detail in a prospectus supplement. The prospectus supplement will also
state whether any of the generalized provisions summarized below do not apply to
the depositary shares or depositary receipts being offered.
General
We may,
at our option, elect to offer fractional shares of preferred stock, rather than
full shares of preferred stock. In such event, we will issue receipts for
depositary shares, each of which will represent a fraction of a share of a
particular series of preferred stock.
The
shares of any series of preferred stock represented by depositary shares will be
deposited under a deposit agreement between us and a bank or trust company or an
affiliate of a bank or trust company we select and that has its
principal office in the United States and a combined capital and surplus of at
least $50,000,000, as preferred stock depositary. Each owner of a depositary
share will be entitled to all the rights and preferences of the underlying
preferred stock, including any dividend, voting, redemption, conversion and
liquidation rights described in the particular prospectus supplement, in
proportion to the applicable fraction of a share of preferred stock represented
by such depositary share.
The
depositary shares will be evidenced by depositary receipts issued pursuant to
the deposit agreement. Depositary receipts will be distributed to those persons
purchasing the fractional shares of preferred stock in accordance with the terms
of the applicable prospectus supplement.
Dividends
and Other Distributions
The
preferred stock depositary will distribute all cash dividends or other cash
distributions received in respect of the deposited preferred stock to the record
holders of depositary shares relating to the preferred stock in proportion to
the number of depositary shares owned by the holders.
In the
case of a distribution other than in cash, the preferred stock depositary will
distribute any property received by it other than cash to the record holders of
depositary shares entitled to receive it. If the preferred stock depositary
determines that it is not feasible to make such a distribution, it may, with our
approval, sell the property and distribute the net proceeds from the sale to the
holders of the depositary shares.
The
amounts distributed in any such distribution, whether in cash or otherwise, will
be reduced by any amount required to be withheld by us or the preferred stock
depositary on account of taxes.
Redemption,
Conversion and Exchange of Preferred Stock
If a
series of preferred stock represented by depositary shares is to be redeemed,
the depositary shares will be redeemed from the proceeds received by the
preferred stock depositary resulting from the redemption, in whole or in part,
of that series of preferred stock. The depositary shares will be redeemed by the
preferred stock depositary at a price per depositary share equal to the
applicable fraction of the redemption price per share payable in respect of the
shares of preferred stock redeemed.
Whenever
we redeem shares of preferred stock held by the preferred stock depositary, the
preferred stock depositary will redeem as of the same date the number of
depositary shares representing shares of preferred stock redeemed. If fewer than
all the depositary shares are to be redeemed, the depositary shares to be
redeemed will be selected by the preferred stock depositary by lot or ratably or
by any other equitable method, in each case as we may determine.
If a
series of preferred stock represented by depositary shares is to be converted or
exchanged, the holder of depositary receipts representing the shares of
preferred stock being converted or exchanged will have the right or obligation
to convert or exchange the depositary shares evidenced by the depositary
receipts.
After the
redemption, conversion or exchange date, the depositary shares called for
redemption, conversion or exchange will no longer be outstanding. When the
depositary shares are no longer outstanding, all rights of the holders will end,
except the right to receive money, securities or other property payable upon
redemption, conversion or exchange.
Voting
Deposited Preferred Stock
Upon
receipt of notice of any meeting at which the holders of any series of deposited
preferred stock are entitled to vote, the preferred stock depositary will mail
the information contained in the notice of meeting to the record holders of the
depositary receipts evidencing the depositary shares relating to that series of
preferred stock. Each record holder of the depositary receipts on the record
date will be entitled to instruct the preferred stock depositary to vote the
amount of the preferred stock represented by the holder's depositary shares. The
preferred stock depositary will try, if practical, to vote the amount of such
series of preferred stock represented by such depositary shares in accordance
with such instructions.
We will
agree to take all reasonable actions that the preferred stock depositary
determines are necessary to enable the preferred stock depositary to vote as
instructed. The preferred stock depositary will abstain from voting shares of
any series of preferred stock held by it for which it does not receive specific
instructions from the holders of depositary shares representing those preferred
shares.
Amendment
and Termination of Deposit Agreement
The form
of depositary receipt evidencing the depositary shares and any provision of the
applicable deposit agreement may at any time be amended by agreement between us
and the preferred stock depositary. However, any amendment that materially and
adversely alters any existing right of the holders of depositary receipts will
not be effective unless the amendment has been approved by the holders of
depositary receipts representing at least a majority of the depositary shares
then outstanding. Every holder of an outstanding depositary receipt at the time
any such amendment becomes effective will be deemed, by continuing to hold the
depositary receipt, to consent and agree to the amendment and to be bound by the
applicable deposit agreement, as amended.
We may
direct the preferred stock depositary to terminate the applicable deposit
agreement at any time by mailing notice of termination to the record holders of
the depositary receipts then outstanding at least 30 days prior to the date
fixed for termination. Upon termination, the preferred stock depositary will
deliver to each holder of depositary receipts, upon surrender of those receipts,
such number of whole shares of the series of preferred stock represented by the
depositary shares together with cash in lieu of any fractional shares, to the
extent we have deposited cash for payment in lieu of fractional shares with the
preferred stock depositary. In addition, the deposit agreement will
automatically terminate if:
·
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all
of the shares of the preferred stock deposited with the preferred stock
depositary have been withdrawn, redeemed, converted or exchanged;
or
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·
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there
has been a final distribution in respect of the deposited preferred stock
in connection with our liquidation, dissolution or winding
up.
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Charges
of Preferred Stock Depositary; Taxes and Other Governmental Charges
We will
pay all transfer and other taxes and governmental charges arising solely from
the existence of the depositary arrangements. We also will pay charges of the
preferred stock depositary in connection with the initial deposit of preferred
stock and any redemption of preferred stock. Holders of depositary receipts will
pay other transfer and other taxes and governmental charges and such other
charges, including a fee for the withdrawal of shares of preferred stock upon
surrender of depositary receipts, as are expressly provided in the deposit
agreement to be for their accounts.
Prospective
purchasers of depositary shares should be aware that special tax, accounting and
other issues may be applicable to instruments such as depositary
shares.
Resignation
and Removal of Depositary
The
preferred stock depositary may resign at any time by delivering to us notice of
its intent to do so, and we may at any time remove the preferred stock
depositary, any such resignation or removal to take effect upon the appointment
of a successor preferred stock depositary and its acceptance of such
appointment. The successor preferred stock depositary must be appointed within
90 days after delivery of the notice of resignation or removal and must be a
bank or trust company, or an affiliate of a bank or trust company, having its
principal office in the United States and having a combined capital and surplus
of at least $50,000,000.
Miscellaneous
The
preferred stock depositary will forward all reports and communications from us
which are delivered to the preferred stock depositary and which we are required
to furnish to the holders of the deposited preferred stock.
Neither
we nor the preferred stock depositary will be liable if we are or the preferred
stock depositary is prevented or delayed by law or any circumstances beyond our
or its control in performing our or its obligations under the applicable deposit
agreement. Our obligations and the obligations of the preferred stock depositary
under the applicable deposit agreement will be limited to performance in good
faith of the duties under the deposit agreement and we and the preferred stock
depositary will not be obligated to prosecute or defend any legal proceeding in
respect of any depositary shares, depositary receipts or shares of preferred
stock unless satisfactory indemnity is furnished. We and the preferred stock
depositary may rely upon written advice of counsel or accountants, or upon
information provided by holders of depositary receipts or other persons believed
to be competent and on documents believed to be genuine.
Series
A Depositary Shares
Pursuant
to the securities purchase agreement between us and Treasury, we have agreed, if
requested by Treasury, to enter into a depositary arrangement pursuant to which
the shares of Series A Preferred Stock may be deposited and depositary shares,
each representing a fraction of a share of Series A Preferred Stock as specified
by Treasury, may be issued (sometimes referred to in this prospectus as the
“Series A Depositary Shares”). The Shares of Series A Preferred Stock
would be held by a depositary reasonably acceptable to Treasury. The
fractional amount per share of Series A Preferred Stock and the specific terms
of the depositary arrangement would be described in a prospectus
supplement. The actual terms of any such depositary arrangement for
the Series A Preferred Stock would be set forth in a deposit agreement to which
we would be a party, which would be attached as an exhibit to a filing by us
that would be incorporated by reference into this
prospectus. See “Where You Can Find More
Information.”
DESCRIPTION OF WARRANTS-GENERAL
We may
issue warrants for the purchase shares of common stock or preferred stock or
depositary shares. Warrants may be issued independently or together
with any shares of common stock or preferred stock or depositary shares offered
by any prospectus supplement and may be attached to or separate from the shares
of common stock or preferred stock or depositary shares. The warrants will be
issued under warrant agreements to be entered into between us and a bank or
trust company, as warrant agent, as is named in the prospectus supplement
relating to the particular issue of warrants. The warrant agent will act solely
as our agent in connection with the warrants and will not assume any obligation
or relationship of agency or trust for or with any holders of warrants or
beneficial owners of warrants.
The
following outlines the some of the anticipated general terms and conditions of
the warrants. Further terms of the warrants and the applicable
warrant agreement will be stated in the applicable prospectus supplement. The
following description and any description of the warrants in a prospectus
supplement is subject to and qualified in its entirety by reference to the terms
and provisions of the applicable warrant agreement.
While the
warrants covered by this prospectus include the warrant we issued to Treasury as
part of the TARP Capital Purchase Program, the description in this section is
not applicable to that warrant. For a description of the warrant we
issued to Treasury, see “Description of Treasury Warrant.”
General
If
warrants are offered, the prospectus supplement will describe the terms of the
warrants, including the following:
·
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the
number of shares purchasable upon exercise of any common stock warrants
and the price at which such shares of common stock may be purchased upon
such exercise;
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·
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the
designation, number of shares and terms of the preferred stock purchasable
upon exercise of any preferred stock warrants and the price at which such
shares of preferred stock may be purchased upon such
exercise;
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·
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if
applicable, the date on and after which the warrants and the related
common stock or preferred stock will be separately
transferable;
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·
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the
date on which the right to exercise the warrants shall commence and the
date on which such right shall
expire;
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·
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whether
the warrants will be issued in registered or bearer form;
and
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·
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any
other terms of the warrants.
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If in
registered form, warrants may be presented for registration of transfer, and may
be exercised at the corporate trust office of the warrant agent or any other
office indicated in the prospectus supplement. Before the exercise of their
warrants, holders of warrants will not have any of the rights of holders of the
securities purchasable upon such exercise.
Exercise
of Warrants
Each
warrant will entitle the holder to purchase such number of shares of common
stock or preferred stock or depositary shares at such exercise price as shall in
each case be set forth in, or can be calculated according to information
contained in, the prospectus supplement relating to the warrant. Warrants may be
exercised at such times as are set forth in the prospectus supplement relating
to such warrants. After the close of business on the expiration date of the
warrants, or such later date to which such expiration date may be extended by
us, unexercised warrants will become void.
Subject
to any restrictions and additional requirements that may be set forth in the
prospectus supplement, warrants may be exercised by delivery to the warrant
agent of the certificate evidencing such warrants properly completed and duly
executed and of payment as provided in the prospectus supplement of the amount
required to purchase the shares of common stock or preferred stock or depositary
shares purchasable upon such exercise. The exercise price will be the price
applicable on the date of payment in full, as set forth in the prospectus
supplement relating to the warrants. Upon receipt of such payment and the
certificate representing the warrants to be exercised, properly completed and
duly executed at the corporate trust office of the warrant agent or any other
office indicated in the prospectus supplement, we will, as soon as practicable,
issue and deliver the shares of common stock or preferred stock or depositary
shares purchasable upon such exercise. If fewer than all of the warrants
represented by such certificate are exercised, a new certificate will be issued
for the remaining amount of warrants.
Additional
Provisions
The
exercise price payable and the number of shares of common stock or preferred
stock purchasable upon the exercise of each warrant will be subject to
adjustment in certain events, including:
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the
issuance of the stock dividend to holders of common stock or preferred
stock, respectively;
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·
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a
combination, subdivision or reclassification of common stock or preferred
stock, respectively; or
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·
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any
other event described in the applicable prospectus
supplement.
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No
fractional shares will be issued upon exercise of warrants, but we will pay the
cash value of any fractional shares otherwise issuable. In case of
any consolidation, merger, or sale or conveyance of the property of MB
Financial, Inc. as an entirety or substantially as an entirety, the holder of
each outstanding warrant will have the right upon the exercise thereof to the
kind and amount of shares of stock and other securities and property, including
cash, receivable by a holder of the number of shares of common stock or
preferred stock into which such stock warrants were exercisable immediately
prior thereto.
DESCRIPTION
OF TREASURY WARRANT
This
section summarizes specific terms and provisions of the warrant we issued to
Treasury on December 5, 2008 concurrent with our sale to Treasury of 196,000
shares of Series A Preferred Stock pursuant to the TARP Capital Purchase Program
(the “Treasury Warrant”). The description of the Treasury Warrant contained in
this section is qualified in its entirety by the actual terms of the Treasury
Warrant, a copy of which was attached as Exhibit 4.1 to our Current Report on
Form 8-K filed on December 8, 2008 and incorporated by reference into this
prospectus. See “Where You Can Find More Information.”
General
The
Treasury Warrant initially gave the holder the right to purchase up
to 1,012,048 shares of our common stock at an exercise price of $29.05 per
share. The Treasury Warrant expires on December 5,
2018. The exercise price may be paid (i) by having us withhold from
the shares of common stock that would otherwise be issued to the Treasury
Warrant holder upon exercise, a number of shares of common stock having a market
value equal to the aggregate exercise price or (ii) if both we and the Treasury
Warrant holder consent, in cash.
Reduction
in Number of Shares
The terms
of the Treasury Warrant provided that if we (or any successor to us by a
business combination) completed one or more Qualified Equity Offerings (as
defined under “Description of Series A Preferred Stock-Redemption and
Repurchases”) prior to December 31, 2009 resulting in aggregate gross proceeds
of at least $196.0 million (plus the aggregate liquidation preference amount of
any preferred stock issued to Treasury by a successor to us), the number of
shares of common stock underlying the Treasury Warrant then held by Treasury
would be reduced by 50%. In accordance with this
provision, the number of shares of common stock underlying the Treasury Warrant
has been reduced to 506,024 shares as a result of our having received aggregate
gross proceeds of at least $196.0 million from Qualified Equity Offerings we
completed. The number of shares subject to the Treasury Warrant are
subject to further adjustment as described below under “—Other
Adjustments.”
Transferability
The
Treasury Warrant is not subject to any restrictions on transfer.
Voting
of Treasury Warrant Shares
Treasury
has agreed that it will not vote any of the shares of common stock that it
acquires upon exercise of the Treasury Warrant. This does not apply
to any other person who acquires any portion of the Treasury Warrant, or the
shares of common stock underlying the Treasury Warrant, from
Treasury. Our charter provides, however, that any person who
beneficially owns shares of our common stock in excess of 14.9% of the
outstanding shares may not vote the excess shares. See “Description
of Capital Stock—Anti-Takeover Effects-Voting Limitation.”
Other
Adjustments
The
exercise price of the Treasury Warrant and the number of shares underlying the
Treasury Warrant automatically adjust upon the following events:
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any stock split, stock dividend,
subdivision, reclassification or combination of our common
stock;
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·
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until the earlier of (i) the date
on which Treasury no longer holds any portion of the Treasury Warrant and
(ii) December 5, 2011, issuance of our common stock (or securities
convertible into our common stock) for consideration (or having a
conversion price per share) less than 90% of then
current market value, except for issuances in connection with benefit
plans, business
acquisitions and public or other broadly marketed
offerings;
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·
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a
pro rata repurchase by us of our common stock;
or
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·
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a determination by our Board of
Directors to make an adjustment to the anti-dilution provisions as
are reasonably
necessary, in the good faith opinion of the Board, to protect the purchase
rights of the Treasury Warrant holders.
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In
addition, if we declare any dividends or distributions on our common stock other
than our historical, ordinary cash dividends, dividends paid in our common stock
and other dividends or distributions covered by the first bullet point above,
the exercise price of the Treasury Warrant will be adjusted to reflect such
distribution.
In the
event of any merger, consolidation, or other business combination to which we
are a party, the right of the holder of the Treasury Warrant to receive shares
of our common stock upon exercise of the warrant will be converted into the
right to exercise the warrant to acquire the number of shares of stock or other
securities or property (including cash) which the common stock issuable upon
exercise of the warrant immediately prior to such business combination would
have been entitled to receive upon consummation of the business
combination. For purposes of the provision described in the preceding
sentence, if the holders of our common stock have the right to elect the amount
or type of consideration to be received by them in the business combination,
then the consideration that the holder of the Treasury Warrant will be entitled
to receive upon exercise will be the amount and type of consideration received
by a majority of the holders of the common stock who affirmatively make an
election.
No
Rights as Stockholders
The
warrant does not entitle its holder to any of the rights of a stockholder of MB
Financial, Inc. prior to exercise.
DESCRIPTION
OF PURCHASE CONTRACTS
We may
issue purchase contracts, including purchase contracts issued as part of a unit
with one or more other securities, for the purchase or sale of:
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preferred
stock, depositary shares or common
stock;
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·
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securities
of an entity not affiliated with us, a basket of those securities, an
index or indices of those securities or any combination of the
foregoing;
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The price
per share of our common stock, preferred stock or depositary shares, or the
price of the other securities, currencies or commodities that are the subject of
the contract, as applicable, may be fixed at the time the purchase contracts are
issued or may be determined by reference to a specific formula contained in the
purchase contracts. We may issue purchase contracts in such amounts and in as
many distinct series as we wish.
The
applicable prospectus supplement may contain, where applicable, the following
information about the purchase contracts issued under it:
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whether
the purchase contracts obligate the holder to purchase or sell, or both
purchase and sell, our common stock, preferred stock or depositary shares,
or other securities, currencies or commodities, as applicable, and the
nature and amount of each of those securities, or method of determining
those amounts;
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·
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whether
the purchase contracts are to be prepaid or
not;
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·
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whether
the purchase contracts are to be settled by delivery, or by reference or
linkage to the value, performance or level of our common stock or
preferred stock;
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any
acceleration, cancellation, termination or other provisions relating to
the settlement of the purchase
contracts;
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·
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whether
the purchase contracts will be issued in fully registered or global
form.
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The
applicable prospectus supplement will describe the terms of any purchase
contracts. The preceding description and any description of purchase contracts
in the applicable prospectus supplement does not purport to be complete and is
subject to and is qualified in its entirety by reference to the purchase
contract agreement and, if applicable, collateral arrangements and depositary
arrangements relating to such purchase contracts.
DESCRIPTION
OF UNITS
Units
will consist of any combination of one or more of the other types of securities
described in this prospectus. The applicable prospectus supplement or
supplements will also describe:
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the
designation and the terms of the units and of any combination of the
securities constituting the units, including whether and under what
circumstances those securities may be held or traded
separately;
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·
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any
additional terms of the agreement governing the
units;
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·
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any
additional provisions for the issuance, payment, settlement, transfer or
exchange of the units or of the securities constituting the units;
and
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whether
the units will be issued in fully registered
form.
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The terms
and conditions described under “Description of Warrants-General” and
“Description of Capital Stock” will apply to each unit that includes such
securities and to the securities included in each unit, unless otherwise
specified in the applicable prospectus supplement.
We will
issue the units under one or more unit agreements to be entered into between us
and a unit agent. We may issue units in one or more series, which will be
described in the applicable prospectus supplement.
SELLING
SECURITYHOLDERS
On
December 5, 2008, pursuant to the TARP Capital Purchase Program, we sold to
Treasury 196,000 shares of our Series A Preferred Stock, for an aggregate
purchase price of $196.0 million, and concurrently issued to Treasury the
Treasury Warrant, a ten-year warrant to purchase up to 1,012,048 shares of our
common stock (subsequently reduced to 506,024 shares) at an exercise price of
$29.05 per share, subject to adjustment as described under “Description of
Treasury Warrant.” The issuance of the Series A Preferred Stock and
the Treasury Warrant were completed in a private placement to Treasury exempt
from the registration requirements of the Securities Act of 1933.
We were
required under the terms of the related securities purchase agreement between us
and Treasury to register for resale the shares of the Series A Preferred Stock,
the Treasury Warrant and the shares of our common stock underlying the Treasury
Warrant (sometimes referred to in this prospectus as the “Treasury Warrant
Shares”). This required registration includes depositary shares,
representing fractional interests in the Series A Preferred Stock (sometimes
referred to in this prospectus as the “Series A Depositary Shares”), in the
event Treasury requests that we deposit the Series A Preferred Stock held by
Treasury with a depositary under a depositary arrangement entered into in
accordance with the securities purchase agreement. The shares of our
preferred stock, depositary shares, warrants and shares of our common stock
covered by this prospectus include the Series A Preferred Stock or any Series A
Depositary Shares, the Treasury Warrant and the Treasury Warrant Shares, which
may be resold pursuant to this prospectus by Treasury or any person to which
Treasury has transferred its registration rights in accordance with the
securities purchase agreement between us and Treasury (a “Treasury
Transferee”). The Series A Preferred Stock, Series A Depositary
Shares, Treasury Warrant and Treasury Warrant Shares are collectively referred
to below as the “TARP Securities.”
The
selling securityholders may include (i) with respect to the TARP Securities,
Treasury and any Treasury Transferee holding TARP Securities and (ii) with
respect to any other securities covered by this prospectus, such other persons
as we may identify in the future as selling securityholders in the applicable
prospectus supplement. Treasury is required to notify us in writing
of any transfer of its registration rights within ten days after the transfer,
including the name and address of the Treasury Transferee(s) and the number and
type of securities with respect to which the registration rights have been
assigned. As of the date of this prospectus, Treasury has not
notified us of any such transfer. We therefore believe that Treasury
currently holds record and beneficial ownership of 100% of the outstanding
shares of Series A Preferred Stock and the entire amount of the Treasury Warrant
(none of which has been exercised).
Accordingly, the securities to be
offered under this prospectus for the account of Treasury and any Treasury
Transferees as selling securityholders are:
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196,000
shares of Series A Preferred Stock, representing 100% of the shares of
Series A Preferred Stock outstanding on the date of this prospectus, or,
in the event Treasury requests that we deposit the shares of Series A
Preferred Stock with a depositary in accordance with the securities
purchase agreement between us and Treasury, Series A Depositary Shares
evidencing fractional share interests in such shares of Series A Preferred
Stock;
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·
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the
Treasury Warrant, constituting a ten-year warrant, initially to purchase
1,012,048 shares of our common stock but subsequently reduced to 506,024
shares, at an exercise price of $29.05 per share, subject to further
adjustment as described under “Description of Treasury Warrant”;
and
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·
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the shares
of our common stock issuable upon exercise of the Treasury Warrant
.
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For
purposes of this prospectus, we have assumed that, after completion of a resale
offering of TARP Securities covered by this prospectus, none of the TARP
Securities will be held by Treasury or any Treasury Transferee.
We do not
know when or in what amounts the selling securityholders may offer the
securities covered by this prospectus for sale. The selling
securityholders might not sell any of the securities covered by this prospectus.
Because, to our knowledge, no sale of any of the securities covered by this
prospectus is currently subject to any agreements, arrangements or
understandings with a selling securityholder, we cannot estimate the number of
the securities that will be held by the selling securityholders after completion
of any resale offering utilizing this prospectus.
The only
potential selling securityholder whose identity we are currently aware of is
Treasury. Other than with respect to Treasury’s acquisition of the
Series A Preferred Stock and the Treasury Warrant from us, 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.
We may
sell the securities being offered by this prospectus and the applicable
prospectus supplement:
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to
the public through underwriters;
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directly
to purchasers.
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The
distribution of the securities may be effected from time to time in one or more
transactions:
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at
a fixed price, or prices, which may be changed from time to
time;
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·
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at
market prices prevailing at the time of
sale;
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at
prices related to such prevailing market prices;
or
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The
applicable prospectus supplement will describe the method of distribution of the
securities and any applicable restrictions, as well as the terms of the
offering, including the following:
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the
name of the agent or the name or names of any
underwriters;
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·
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the
public offering or purchase price;
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any
discounts and commissions to be allowed or paid to the agent or
underwriters;
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·
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all
other items constituting underwriting
compensation;
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any
discounts and commissions to be allowed or paid to dealers;
and
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·
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any
exchanges on which the securities will be
listed.
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Only the
agents or underwriters named in the prospectus supplement are agents or
underwriters in connection with the securities being offered.
Under
agreements that we may enter into, underwriters, dealers or agents who
participate in the distribution of securities by use of this prospectus and the
applicable prospectus supplement may be entitled to indemnification from us
against some types of liabilities, including liabilities under the Securities
Act of 1933, or to contribution from us with respect to payments which they may
be required to make with respect to such liabilities, as well as reimbursement
for some types of expenses. Agents and underwriters may be customers
of, engage in transactions with, or perform services for us in the ordinary
course of business.
Underwriters,
dealers or agents participating in a distribution of securities by use of this
prospectus and the applicable prospectus supplement may be deemed to be
underwriters, and any discounts and commissions received by them and any profit
realized by them on resale of the offered securities, whether received from us
or from purchasers of offered securities for whom they act as agent, may be
deemed to be underwriting discounts and commissions under the Securities Act of
1933.
We may
use this prospectus to solicit offers to purchase securities directly. Except as
set forth in the applicable prospectus supplement, none of our directors,
officers, or employees nor those of our bank subsidiary will solicit or receive
a commission in connection with these direct sales. Those persons may respond to
inquiries by potential purchasers and perform ministerial and clerical work in
connection with direct sales.
We may
also enter into derivative transactions with third parties, or sell securities
not covered by this prospectus to third parties in privately negotiated
transactions. In connection with such a transaction, the third parties may sell
securities covered by and pursuant to this prospectus and an applicable
prospectus supplement, including short sale transactions. In that
event, the third party may use securities borrowed from us or others to settle
such sales and may use securities received from us to close out any related
short positions. We may also loan or pledge securities covered by this
prospectus to third parties, who may sell the loaned securities or, in an event
of default in the case of a pledge, sell the pledged securities pursuant to this
prospectus and the applicable prospectus supplement.
In
connection with an offering of securities, underwriters may purchase and sell
the securities covered by this prospectus in the open market. These transactions
may include over-allotment and stabilizing transactions and purchases to cover
short positions created by underwriters with respect to the offering.
Stabilizing transactions consist of certain bids or purchases for preventing or
retarding a decline in the market price of the securities; short positions
created by underwriters involve the sale by underwriters of a greater number of
securities than they are required to purchase from us in the offering.
Underwriters also may impose a penalty bid, by which selling concessions allowed
to broker-dealers in respect of the securities sold in the offering may be
reclaimed by underwriters if such securities are repurchased by underwriters in
stabilizing or covering transactions. These activities may stabilize, maintain,
or otherwise affect the market price of the securities, which may be higher than
the price that might otherwise prevail in the open market; these activities, if
commenced, may be discontinued without notice at any time.
The
securities covered by this prospectus may also be sold from time to time by our
securityholders. The selling securityholders and their successors, including
their transferees, may sell their 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. In the case of sales by selling
securityholders, we will not receive any of the proceeds from the sale by them
of the securities. Unless otherwise described in an applicable prospectus
supplement, the description herein of sales by us regarding underwriters,
dealers and agents will apply similarly to sales by selling securityholders
through underwriters, dealers and agents. We will name the underwriters, dealers
or agents acting for the selling securityholders in a prospectus supplement and
provide the principal terms of the agreement between the selling securityholders
and the underwriters, dealers or agents.
In
addition, any securities that qualify for sale pursuant to Rule 144 under
the Securities Act of 1933 may be sold by selling securityholders under
Rule 144 rather than pursuant to this prospectus.
In order
to comply with the securities laws of some states, if applicable, the securities
may be sold in those jurisdictions only through registered or licensed brokers
or dealers. In offering the securities covered by this prospectus, the selling
securityholders and any underwriters, broker-dealers or agents that participate
in the sale of those securities may be “underwriters” within the meaning of
Section 2(a)(11) of the Securities Act of 1933. Any discounts, commissions,
concessions or profit they earn on any resale of the shares may be underwriting
discounts or commissions under the Securities Act of 1933. Any selling
securityholder who is an “underwriter” within the meaning of
Section 2(a)(11) of the Securities Act of 1933 will be subject to the
prospectus delivery requirements of the Securities Act of 1933. The selling
securityholders will be obligated to comply with the provisions of the Exchange
Act and its rules relating to stock manipulation, particularly Regulation
M.
Pursuant
to the securities purchase agreement between us and Treasury, we will pay
substantially all expenses of the registration of the TARP Securities covered by
this prospectus, including, without limitation, SEC filing fees and expenses of
compliance with state securities or “blue sky” laws; provided, however, that a selling
securityholder with respect to such securities will pay all underwriting
discounts and selling commissions, if any. We will indemnify the selling
securityholders with respect to the TARP Securities against liabilities,
including some liabilities under the Securities Act of 1933, in accordance with
the securities purchase agreement between us and Treasury, or such selling
securityholders will be entitled to contribution. We may enter into
similar indemnification arrangements with selling securityholders with respect
to securities other than the TARP Securities. We have agreed under
the securities purchase agreement between us and Treasury to cause such of our
directors and senior executive officers to execute customary lock-up agreements
in such form and for such time period up to 90 days as may be requested by a
managing underwriter with respect to an underwritten offering of TARP Securities
covered by this prospectus. We may enter into similar lock-up
arrangements with respect to securities other than the TARP Securities, whether
in connection with an offering by us or by selling securityholders.
We do not
intend to apply for listing of the Series A Preferred Stock on any securities
exchange or for inclusion of the Series A Preferred Stock in any automated
quotation system unless requested by Treasury. No assurance can be
given as to the liquidity of the trading market, if any, for the Series A
Preferred Stock.
Unless
otherwise indicated in the applicable prospectus supplement, certain legal
matters will be passed upon for us by our counsel, Silver, Freedman & Taff,
L.L.P., Washington, D.C.
Any
underwriters will be represented by their own legal counsel.
EXPERTS
Our
consolidated financial statements as of December 31, 2007 and 2006, and for
each of the years in the three-year period ended December 31, 2007, and
management’s assessment of the effectiveness of internal control over financial
reporting as of December 31, 2007 have been incorporated by reference herein in
reliance upon the reports of McGladrey & Pullen LLP, independent registered
public accounting firm, incorporated by reference herein, and upon the authority
of said firm as experts in accounting and auditing.