EXHIBIT 10.2
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AGREEMENT AND PLAN OF MERGER
by and among
L & B FINANCIAL, INC.,
a Texas corporation,
and
JEFFERSON SAVINGS BANCORP, INC.,
a Delaware corporation,
and
JEFFERSON SAVINGS ACQUISITIONCO, INC.
a Missouri corporation
Dated September 25, 1996
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TABLE OF CONTENTS
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Page
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ARTICLE ONE - TERMS OF THE MERGER & CLOSING................................ 1
Section 1.01. The Merger............................................. 1
Section 1.02. Merging Corporation.................................... 1
Section 1.03. Surviving Corporation.................................. 1
Section 1.04. Effect of the Merger................................... 1
Section 1.05. Basic Merger Consideration; Conversion of Shares....... 1
Section 1.06. The Closing............................................ 4
Section 1.07. Closing Date........................................... 4
Section 1.08. Exchange Procedures; Surrender of Certificates......... 4
Section 1.09. Actions At Closing..................................... 5
ARTICLE TWO - REPRESENTATIONS OF L & B..................................... 7
Section 2.01. Organization and Capital Stock......................... 7
Section 2.02. Authorizations; No Defaults............................ 8
Section 2.03. Subsidiaries; Partnerships; Joint Ventures............. 9
Section 2.04. Financial Information.................................. 9
Section 2.05. Absence of Changes..................................... 9
Section 2.06. Regulatory Enforcement Matters......................... 10
Section 2.07. Tax Matters............................................ 10
Section 2.08. Litigation............................................. 10
Section 2.09. Employment Agreements.................................. 10
Section 2.10. Reports................................................ 10
Section 2.11. Investment Portfolio................................... 11
Section 2.12. Loan Portfolio......................................... 11
Section 2.13. Employee Matters and ERISA............................. 11
Section 2.14. Title to Properties; Insurance......................... 12
Section 2.15. Environmental Matters.................................. 13
Section 2.16. Compliance with Law.................................... 13
Section 2.17. Undisclosed Liabilities................................ 14
Section 2.18. Brokerage.............................................. 14
Section 2.19. Statements True and Correct............................ 14
ARTICLE THREE - REPRESENTATIONS OF JEFFERSON AND ACQUISITIONCO............. 14
Section 3.01. Organization and Capital Stock......................... 14
Section 3.02. Authorizations; No Defaults............................ 15
Section 3.03. Subsidiaries........................................... 15
Section 3.04. Financial Information.................................. 16
Section 3.05. Absence of Changes..................................... 16
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Section 3.06. Litigation............................................. 16
Section 3.07. Reports................................................ 16
Section 3.08. Compliance With Law.................................... 16
Section 3.09. Statements True and Correct............................ 16
Section 3.10. Brokerage.............................................. 17
Section 3.11. Regulatory Enforcement Matters......................... 17
Section 3.12. Tax Matters............................................ 17
Section 3.13. Undisclosed Liabilities................................ 17
Section 3.14. Current Public Information............................. 17
ARTICLE FOUR - AGREEMENTS OF L & B......................................... 18
Section 4.01. Business in Ordinary Course............................ 18
Section 4.02. Breaches............................................... 21
Section 4.03. Submission to Shareholders............................. 21
Section 4.04. Consents to Contracts and Leases....................... 21
Section 4.05. Merger Expenses and Related Matters.................... 21
Section 4.06. Conforming Accounting and Reserve Policies............. 22
Section 4.07. Consummation of Agreement.............................. 22
Section 4.08. Environmental Reports.................................. 22
Section 4.09. Restriction on Resales................................. 23
Section 4.10. Access to Information.................................. 23
Section 4.11. Subsidiary Merger...................................... 24
Section 4.12. Termination of Deferred Compensation Agreements........ 24
Section 4.13. Main Office Parking Lot and Mt. ▇▇▇▇▇▇ ▇▇▇▇▇▇.......... 24
ARTICLE FIVE - AGREEMENTS OF JEFFERSON AND ACQUISITIONCO................... 24
Section 5.01. Regulatory Approvals and Registration Statement........ 24
Section 5.02. Breaches............................................... 25
Section 5.03. Consummation of Agreement.............................. 25
Section 5.04. Employee Benefits...................................... 25
Section 5.05. Directors and Officers' Liability Insurance and
Indemnification....................................... 26
Section 5.06. Access to Information.................................. 27
ARTICLE SIX - CONDITIONS PRECEDENT TO THE MERGER........................... 27
Section 6.01. Conditions to Jefferson's and AcquisitionCo'
Obligations........................................... 27
Section 6.02. Conditions to L & B's Obligations...................... 28
ARTICLE SEVEN - TERMINATION OR ABANDONMENT................................. 29
Section 7.01. Mutual Agreement....................................... 29
Section 7.02. Material Breach........................................ 29
Section 7.03. Environmental Reports.................................. 30
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Section 7.04. Failure of Conditions.................................. 30
Section 7.05. Regulatory Approval Denial............................. 30
Section 7.06. Shareholder Approval Denial............................ 30
Section 7.07. Regulatory Enforcement Matters......................... 30
Section 7.08. Share Component Fluctuation............................ 30
Section 7.09. Other Termination...................................... 30
Section 7.10. Termination Fee........................................ 31
ARTICLE EIGHT - GENERAL.................................................... 32
Section 8.01. Confidential Information............................... 32
Section 8.02. Return of Documents.................................... 32
Section 8.03. Publicity.............................................. 32
Section 8.04. Notices................................................ 32
Section 8.05. Liabilities............................................ 33
Section 8.06. Expenses............................................... 33
Section 8.07. Nonsurvival of Representations, Warranties and
Agreements............................................ 34
Section 8.08. Entire Agreement....................................... 34
Section 8.09. Headings and Captions.................................. 34
Section 8.10. Waiver, Amendment or Modification...................... 34
Section 8.11. Rules of Construction.................................. 34
Section 8.12. Counterparts........................................... 34
Section 8.13. Successors and Assigns................................. 34
Section 8.14. Governing Law; Assignment.............................. 34
Section 8.15. Employment Agreement................................... 35
Section 8.16. Time................................................... 35
Section 8.17. Status of Employee Benefit Plans....................... 35
EXHIBIT 1.09(a)(x) - L & B's Legal Opinion Matters
EXHIBIT 1.09(b)(vi) - Jefferson's Legal Opinion Matters
EXHIBIT 4.09 - Affiliates Agreements
EXHIBIT 8.01 - Confidentiality Agreement
EXHIBIT 8.15 - Form of C. ▇▇▇▇▇ ▇▇▇▇ Employment Agreement
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AGREEMENT AND PLAN OF MERGER
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This is an AGREEMENT AND PLAN OF MERGER (this "Agreement") made September 25,
1996, by and among L & B FINANCIAL, INC., a Texas corporation ("L & B"),
JEFFERSON SAVINGS BANCORP, INC., a Delaware corporation ("Jefferson"), and
JEFFERSON SAVINGS ACQUISITIONCO, INC., a Missouri corporation and wholly owned
subsidiary of Jefferson ("AcquisitionCo").
In consideration of the premises and the mutual terms and provisions set
forth in this Agreement, the parties hereto agree as follows.
ARTICLE ONE
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TERMS OF THE MERGER & CLOSING
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SECTION 1.01. THE MERGER. Pursuant to the terms and provisions of this
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Agreement, the General and Business Corporation Law of Missouri (the "Missouri
Corporate Law") and the Texas Business Corporation Act (the "Texas Corporate
Law") (together, the "Corporate Law"), L & B shall merge with and into
AcquisitionCo (the "Merger").
SECTION 1.02. MERGING CORPORATION. L & B shall be the merging corporation
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under the Merger and the corporate identity and existence of L & B, separate and
apart from AcquisitionCo, shall cease upon consummation of the Merger.
SECTION 1.03. SURVIVING CORPORATION. AcquisitionCo shall be the surviving
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corporation in the Merger. No changes in the articles of incorporation or
bylaws of AcquisitionCo shall be effected by the Merger. The directors and
officers of AcquisitionCo shall continue to serve in such capacities as the
directors and officers of the surviving corporation.
SECTION 1.04. EFFECT OF THE MERGER. The Merger shall have all of the
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effects provided by this Agreement and the Corporate Law.
SECTION 1.05. BASIC MERGER CONSIDERATION; CONVERSION OF SHARES.
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(a) At the Effective Time (as defined in Section 1.07 hereof), the shares of
common stock, par value $0.01 per share, of L & B (the "L & B Common") issued
and outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holders thereof, be converted
into the right to receive a combination, in the proportion described in Section
1.05(b) hereof, of cash and common stock, par value $0.01 per share, of
Jefferson (the "Jefferson Common") having an aggregate value equal to the sum of
(A) plus (B), where (A) is the product of (i) $18.50 multiplied by (ii) the
number of Issued and Outstanding L & B Shares (as hereinafter defined) as of the
Effective Time, and (B) is an amount equal to (i) L & B's consolidated earnings
for the period commencing April 1, 1996 and extending through and including the
last day of the calendar month next preceding the calendar month in which the
Effective Time occurs (the "Earnings Period"), less (ii) the aggregate amount of
any cash dividends paid and/or declared on the L & B Common during the Earnings
Period (such aggregate amount of cash and Jefferson Common to be received in
connection with the Merger is hereinafter referred to as
the "Basic Merger Consideration"). L & B's consolidated earnings during the
Earnings Period shall be determined initially by the accounting firm of
Oakerson, Arnold, ▇▇▇▇▇▇ & Co. in accordance with generally accepted accounting
principles ("GAAP"), consistently applied, which determination of such
consolidated earnings shall be subject to verification by KPMG Peat Marwick LLP,
or such other accounting firm as Jefferson shall designate. As used herein,
"Issued and Outstanding L & B Shares" shall mean the number of shares of L & B
Common issued and outstanding immediately prior to the Effective Time, other
than shares of L & B Common held for the Sulphur Springs Loan and Building
Association Recognition and Retention Plan and Trust Agreement (the "L & B
Retention Plan"). Each share of Issued and Outstanding L & B Shares, other than
shares any holders of which have duly exercised their dissenters' rights under
the Texas Corporate Law, shall, by virtue of the Merger and without any action
on the part of the holders thereof, be converted into the right to receive the
quotient of (A) divided by (B), where (A) equals the Basic Merger Consideration
and (B) equals the number of Issued and Outstanding L & B Shares (such quotient
is hereinafter defined as the "Per Share Basic Merger Consideration").
(b) One half of the aggregate value of the Basic Merger Consideration shall
be payable in cash (the "Cash Component") and one half of the aggregate value of
the Basic Merger Consideration shall be payable in shares of Jefferson Common
(the "Stock Component"). The number of shares of Jefferson Common constituting
the Stock Component shall equal the quotient of (A) divided by (B), where (A)
equals one-half of the aggregate value of the Basic Merger Consideration and (B)
equals the average per share closing price of Jefferson Common, as reported on
The Nasdaq Stock Market's National Market, ("Nasdaq") for the 20 business days
immediately preceding the 5th calendar day prior to the Effective Time, but
which such average shall not be more than $33.60 per share and not less than
$20.00 per share (the "Jefferson Average Price"). No fractional shares of
Jefferson Common shall be issued in connection with the Merger and, in lieu
thereof, holders of shares of L & B Common who would otherwise be entitled to a
fractional share interest in Jefferson Common (after taking into account all
shares of L & B Common held by such holder) shall be paid an amount in cash
equal to the product of such fractional share interest and the closing price of
a share of Jefferson Common on the Nasdaq on the business day immediately
preceding the date on which the Effective Time occurs. Notwithstanding the
foregoing, the number of whole shares of Jefferson Common to be issued pursuant
to this Section 1.05, including shares of Jefferson Common issued pursuant to
subsections (c) and (d) of this Section 1.05, will be increased, as necessary,
and the amount of cash payable to such persons will be decreased, as necessary,
such that the aggregate value of such shares of Jefferson Common, determined as
of the Closing Date, will be not less than 50% of the aggregate consideration
paid pursuant to this Section 1.05.
(c) At the Effective Time, each person who would otherwise have been entitled
to receive, but for the Merger, shares of L & B Common by reason of awards that
have been or would have been made as of February 28, 1997 under the L & B
Retention Plan shall be entitled to receive, in addition to the Per Share Basic
Merger Consideration for shares of L & B Common held by such person and any
amounts payable to such person pursuant to subsection (d) of this Section 1.05,
if any, an amount equal to the product of (A) multiplied by (B), where (A) is
the number of shares of L & B Common to which such person is or would have been
entitled as of February 28, 1997 under or by reason of the L & B Retention Plan,
without regard to whether or not such shares have been awarded or earned, and
(B) is an amount equal to the Per Share Basic Merger Consideration; provided,
however, that, assuming a Per Share Basic Merger Consideration of $18.80, the
aggregate amount payable under this Section 1.05(c) shall not exceed $667,400.
The amount payable to each person pursuant to this Section 1.05(c) shall be paid
one-half in
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cash and one-half in shares of Jefferson Common in the same manner that the
Basic Merger Consideration is payable pursuant to Section 1.05(b).
(d) At the Effective Time, each person for whom options to purchase shares of
L & B Common have been or would have been granted as of February 28, 1997 under
the Sulphur Springs Loan and Building Association 1995 Stock Option Plan adopted
by L & B (the "Option Plan"), shall be entitled to receive, in addition to the
Per Share Basic Merger Consideration for shares of L & B Common held by such
person and any amounts payable to such person pursuant to subsection (c) of this
Section 1.05, if any, an amount equal to the product of (A) multiplied by (B),
where (A) is the number of shares of L & B Common issuable upon the exercise of
unexercised stock options which have been or would have been granted to such
person as of February 28, 1997 (such options being identified in Section 2.13(c)
of the Disclosure Schedule), under the Option Plan, without regard to whether
such options have been granted or have become vested or exercisable, and (B) is
the difference obtained by subtracting (i) the per share exercise price for such
option(s) from (ii) an amount equal to the Per Share Basic Merger Consideration;
provided, however, that, assuming a Per Share Basic Merger Consideration of
$18.80, the aggregate amount payable under this Section 1.05(d) shall not exceed
$1,270,000. For purposes of this Agreement, the exercise price for options
which would have been granted in 1997 shall be deemed to be $10.50. The amount
payable to each person under this Section 1.05(d) shall be paid one-half in cash
and one-half in shares of Jefferson Common in the same manner that the Basic
Merger Consideration is payable pursuant to Section 1.05(b).
(e) Upon the Effective Time, all of the shares of L & B Common, by virtue of
the Merger and without any action on the part of the holders thereof, shall no
longer be outstanding and shall be canceled and retired and shall cease to
exist, and each holder of any certificate or certificates which immediately
prior to the Effective Time represented outstanding shares of L & B Common (the
"Certificate" or "Certificates") shall thereafter cease to have any rights with
respect to such shares, except (i) the right of such holders to receive, without
interest, the Per Share Basic Merger Consideration upon the surrender of such
Certificate or Certificates in accordance with Section 1.08 hereof, or (ii) the
right provided under Section 1.05(i), as applicable.
(f) At the Effective Time, each share of L & B Common, if any, held in the
treasury of L & B or by any direct or indirect subsidiary of L & B (other than
shares held in trust accounts for the benefit of others or in other fiduciary,
nominee or similar capacities) immediately prior to the Effective Time shall be
canceled and retired and shall cease to exist.
(g) Each share of common stock, par value $1.00 per share, of AcquisitionCo
("AcquisitionCo Common") outstanding immediately prior to the Effective Time
shall remain outstanding and shall be unaffected by the Merger.
(h) If, between the date hereof and the Effective Time, a share of Jefferson
Common shall be changed into a different number of shares of Jefferson Common or
a different class of shares by reason of reclassification, recapitalization,
splitup, exchange of shares or readjustment, or if a stock dividend thereon
shall be declared with a record date within such period, then the number of
shares of Jefferson Common constituting the Stock Component of the Basic Merger
Consideration into which a share of L & B Common will be converted pursuant to
this Section 1.05, and the number of shares of Jefferson Common payable under
subsections (c) and (d) of this Section 1.05, will be appropriately and
proportionately
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adjusted so that each shareholder of L & B, and each person entitled to payment
under subsections (c) and (d) of this Section 1.05, shall be entitled to receive
such fraction of a share or such number of shares of Jefferson Common as such
shareholder and such person would have received pursuant to such
reclassification, recapitalization, splitup, exchange of shares or readjustment
or as a result of such stock dividend had the record date therefor been
immediately following the Effective Time of the Merger.
(i) If holders of L & B Common dissent from this Agreement and the Merger in
accordance with the Texas Corporate Law, any issued and outstanding shares of L
& B Common held by any dissenting holder shall not be converted as described in
this Section 1.05 but from and after the Effective Time shall represent only the
right to receive such consideration as may be determined to be due to such
dissenting holder pursuant to the Texas Corporate Law; provided, however, that
each share of L & B Common outstanding immediately prior to the Effective Time
and held by a dissenting holder who shall, after the Effective Time, either
withdraw his or her demand for appraisal or lose his or her right to dissent
shall have only such rights as are provided under the Texas Corporate Law.
SECTION 1.06. THE CLOSING. The closing of the Merger (the "Closing")
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shall take place at the main offices of Jefferson, or at such other location as
the parties may agree, at 10:00 A.M. Central Time on the Closing Date described
in Section 1.07 of this Agreement.
SECTION 1.07. CLOSING DATE. The Closing shall take place on the first
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business day of the month following the month during which each of the
conditions in Sections 6.01 and 6.02 hereof is satisfied or waived by the
appropriate party, or as soon thereafter as practicable, or on such other date
after such satisfaction or waiver as Jefferson and L & B may agree (the "Closing
Date"). The Merger shall be effective upon the filing of Articles of Merger
with the Secretary of State of the State of Missouri and the Secretary of State
of the State of Texas (the "Effective Time"), which the parties shall use their
best efforts to cause to occur on the Closing Date.
SECTION 1.08. EXCHANGE PROCEDURES; SURRENDER OF CERTIFICATES.
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(a) Boatmen's Trust Company, St. Louis, Missouri, shall act as Exchange Agent
in the Merger (the "Exchange Agent"). At or prior to the Closing, Jefferson
shall deliver, or cause to be delivered, to the Exchange Agent (i) cash in an
amount sufficient for payment of the Cash Component plus the amounts payable in
cash under subsections (c) and (d) of Sections 1.05 and (ii) certificates for
Jefferson Common sufficient for payment of the Stock Component plus the amounts
payable in shares of Jefferson Common under subsections (c) and (d) of Section
1.05. Cash and certificates delivered by Jefferson to the Exchange Agent shall
be held in trust for payment and delivery in accordance with this Section 1.08.
(b) As soon as reasonably practicable after the Effective Time, the Exchange
Agent shall mail or cause to be delivered (as the Exchange Agent may determine)
to each record holder of any Certificate or Certificates whose shares were
converted into the right to receive the Per Share Basic Merger Consideration, a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon proper delivery
of the Certificates to the Exchange Agent and shall be in such form and have
such other provisions as Jefferson may reasonably specify) (each such letter,
the "Merger Letter of Transmittal") and instructions for use in effecting the
surrender of the Certificates in exchange for the Per Share Basic Merger
Consideration. Upon surrender to the Exchange Agent of a Certificate, together
with a Merger Letter of Transmittal duly executed and any other documents
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as may be required by the Exchange Agent, the holder of such Certificate shall
be entitled to receive in exchange therefor solely the Per Share Basic Merger
Consideration. No interest on the Per Share Basic Merger Consideration issuable
upon the surrender of the Certificates shall be paid or accrued for the benefit
of holders of Certificates. If the Per Share Basic Merger Consideration is to be
issued to a person other than a person in whose name a surrendered Certificate
is registered, it shall be a condition of issuance that the surrendered
Certificate shall be properly endorsed or otherwise in proper form for transfer
and that the person requesting such issuance shall pay to the Exchange Agent any
required transfer or other taxes or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not applicable.
(c) At any time following six months after the Effective Time, Jefferson
shall be entitled to terminate the Exchange Agent relationship, and thereafter
holders of Certificates shall be entitled to look only to Jefferson (subject to
abandoned property, escheat or other similar laws) with respect to the Per Share
Basic Merger Consideration issuable upon surrender of their Certificates.
(d) No dividends that are otherwise payable on shares of Jefferson Common
constituting the Stock Component of the Basic Merger Consideration shall be paid
to persons entitled to receive such shares of Jefferson Common until such
persons surrender their Certificates. Upon such surrender, there shall be paid
to the person in whose name the shares of Jefferson Common shall be issued any
dividends which may have become payable with respect to such shares of Jefferson
Common (without interest and less the amount of taxes, if any, which may have
been imposed thereon), between the Effective Time and the time of such
surrender.
(e) If any Certificate shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming such Certificate to
be lost, stolen or destroyed and, if required by Jefferson, the posting by such
person of a bond in such amount as Jefferson may determine is reasonably
necessary as indemnity against any claim that may be made against it with
respect to such Certificate, the Exchange Agent shall issue in exchange for such
lost, stolen or destroyed Certificate, the Per Share Basic Merger Consideration
deliverable in respect thereof pursuant to this Agreement.
(f) Promptly after the Effective Time, Jefferson shall deliver to the
Exchange Agent written instructions, dated as of the Closing Date and approved
by L & B, directing the Exchange Agent to mail or deliver (as the Exchange Agent
may determine) to the persons shown on such instructions the cash and shares of
Jefferson Common to which they are, respectively, entitled to receive pursuant
to subsections (c) and (d) of Section 1.05 of this Agreement.
SECTION 1.09. ACTIONS AT CLOSING.
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(a) At the Closing, L & B shall deliver or cause to be delivered to Jefferson
and AcquisitionCo:
(i) a certified copy of the articles of incorporation of L & B and a
certified copy of the articles of incorporation, charter or articles of
association of each direct and indirect subsidiary of L & B, including Loan &
Building State Savings Bank (formerly Sulphur Springs Loan and Building
Association), a Texas savings bank and wholly owned subsidiary of L & B (the
"Savings Bank");
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(ii) a Certificate or Certificates signed by an appropriate officer of
L & B stating that (A) each of the representations and warranties contained
in Article Two hereof is true and correct in all material respects at the
time of the Closing with the same force and effect as if such representations
and warranties had been made at Closing (except as may otherwise be
specifically identified in such Certificate or Certificates), (B) all of the
conditions set forth in Sections 6.01(b) and 6.01(d) (but, with respect to
the latter section, only to approvals which L & B and/or its subsidiaries are
required by law to obtain) have been satisfied or waived as provided therein
and (C) this Agreement has been approved by the requisite vote of L & B
shareholders in accordance with the Texas Corporate Law and L & B's articles
of incorporation and bylaws;
(iii) a certified copy of the resolutions of L & B's Board of
Directors and shareholders, as required for valid approval of the execution
of this Agreement and the consummation of the Merger and any other
transactions contemplated hereby;
(iv) a certified list of the shareholders of L & B dated as of the
Closing Date;
(v) a certified list of the persons participating or entitled to
participate in the L & B Retention Plan, the Option Plan and the Sulphur
Springs Loan and Building Association Employee Stock Ownership Plan (the
"ESOP"), dated as of the Closing Date, setting forth the respective
allocations, grants and/or awards thereunder, as the case may be, of each
such person;
(vi) a certified list of dissenting holders of L & B Common, if any,
dated as of the Closing Date;
(vii) a Certificate of the Texas Secretary of State, dated a recent
date, stating that L & B is in existence;
(viii) a Certificate of the Texas Comptroller of Public Accounts, dated
a recent date, stating that L & B is in good standing;
(ix) Certificates issued by the T.S.L.D., dated a recent date, as to
the good standing and/or existence of the Savings Bank, and issued by the
F.D.I.C., dated a recent date, as to the insured status of the deposits of
the Savings Bank;
(x) a legal opinion of counsel for L & B, in form reasonably acceptable
to Jefferson's counsel, opining with respect to the matters listed on Exhibit
1.09(a)(x) attached hereto;
(xi) an original copy of the employment agreement between Jefferson and
C. ▇▇▇▇▇ ▇▇▇▇, substantially in the form of Exhibit 8.15 attached hereto,
duly executed by C. ▇▇▇▇▇ ▇▇▇▇; and
(xii) resignations of present trustees or other fiduciaries under the
Employee Plans identified in Section 2.13(c) of the Disclosure Schedule.
(b) At the Closing, Jefferson and/or AcquisitionCo, as the case may be, shall
deliver or cause to be delivered to L & B:
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(i) a Certificate or Certificates signed by an appropriate officer of
Jefferson and AcquisitionCo, as the case may be, stating that (A) each of the
representations and warranties contained in Article Three hereof made by
Jefferson and/or AcquisitionCo, as the case may be, is true and correct in
all material respects at the time of the Closing with the same force and
effect as if such representations and warranties had been made by the
respective party at Closing, and (B) all of the conditions set forth in
Sections 6.02(b) and 6.02(d) (but only with respect to approvals other than
by L & B's shareholders) have been satisfied or waived as provided therein;
(ii) a certified copy of the resolutions of Jefferson's Board of
Directors authorizing the execution of this Agreement and the consummation of
the transactions contemplated hereby;
(iii) a certified copy of the resolutions of AcquisitionCo's Board of
Directors and sole shareholder, as required for valid approval of the
execution of this Agreement and the consummation of the transactions
contemplated hereby;
(iv) Certificate of the Delaware Secretary of State, dated a recent
date, stating that Jefferson is in good standing;
(v) Certificate of the Missouri Secretary of State, dated a recent
date, stating that AcquisitionCo is in good standing;
(vi) a legal opinion of counsel for Jefferson, in form reasonably
acceptable to L & B's counsel, opining with respect to the matters listed on
Exhibit 1.09(b)(vi) attached hereto;
(vii) an original copy of the employment agreement between Jefferson
and C. ▇▇▇▇▇ ▇▇▇▇, substantially in the form of Exhibit 8.15 attached hereto,
duly executed on behalf of Jefferson;
(viii) evidence acknowledging receipt by the Exchange Agent of the cash
and certificates for Jefferson Common delivered by Jefferson to the Exchange
Agent pursuant to Section 1.08 hereof; and
(ix) appropriate appointments or designations of successor trustees or
other fiduciaries under the Employee Plans identified in Section 2.13(c) of
the Disclosure Schedule, together with the written acceptance of appointment
or designation executed by each such successor trustee or other fiduciary so
appointed or designated.
ARTICLE TWO
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REPRESENTATIONS OF L & B
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L & B hereby makes the following representations and warranties:
SECTION 2.01. ORGANIZATION AND CAPITAL STOCK.
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(a) L & B is a corporation duly organized, validly existing and in good
standing under the laws of the State of Texas with full corporate power and
authority to own all of its properties and assets, to incur all of its
liabilities and to carry on its business as presently conducted. L & B is a
savings and loan holding company registered with the Office of Thrift
Supervision (the "O.T.S.") under the Home Owners' Loan Act.
(b) The authorized capital stock of L & B consists of (i) 25,000,000 shares
of L & B Common, of which, as of the date hereof, 1,584,125 shares are issued
and outstanding and 83,375 shares are held as treasury stock, and (ii) 5,000,000
shares of preferred stock, no par value per share, of which, as of the date
hereof, no shares have been issued. All of the issued and outstanding shares of
L & B Common are duly and validly issued and outstanding and are fully paid and
non-assessable. None of the outstanding shares of L & B Common has been issued
in violation of any preemptive rights of the current or past shareholders of L &
B. As of the date hereof, L & B has reserved 166,750 shares of L & B Common for
issuance under the Option Plan, had outstanding employee stock options
representing the right to acquire 150,498 shares of L & B Common pursuant to the
Option Plan, and options to acquire an additional 4,015 shares of L & B Common
may be granted from the date hereof through February 28, 1997. As of the date
hereof, 40,000 shares of L & B Common are owned by the trust created under the L
& B Retention Plan and are held by such trust for awards under the L & B
Retention Plan, 34,350 of such shares of L & B Common have been awarded and
allocated to participants pursuant to the L & B Retention Plan and awards for an
additional 1,150 shares of L & B Common may be made and allocated to
participants from the date hereof through February 28, 1997. As of the date
hereof, 100,050 shares of L & B Common have been acquired and are held by the
ESOP, of which (i) 14,723.800 shares have been allocated to ESOP participants,
(ii) 7,138.345 shares have been released from the lien placed on such shares
pursuant to that Pledge Agreement, dated January 22, 1996, between L & B and the
ESOP (the "Pledge Agreement") and are available for allocation to ESOP
participants, and (iii) 78,187.855 shares remain unreleased under the Pledge
Agreement.
(c) Except as set forth in subsection 2.01(b) above, there are no shares of
capital stock or other equity securities of L & B issued or outstanding and
there are no outstanding options, warrants, rights to subscribe for, calls, or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of L & B Common or other capital
stock of L & B or contracts, commitments, understandings or arrangements by
which L & B is or may be obligated to issue additional shares of its capital
stock or options, warrants or rights to purchase or acquire any additional
shares of its capital stock. Except as disclosed in Section 2.01 of that
certain confidential writing delivered by L & B to Jefferson and AcquisitionCo
and executed by each of L & B, Jefferson and AcquisitionCo concurrently with the
delivery and execution of this Agreement (the "Disclosure Schedule"), each
Certificate representing shares of L & B Common issued by L & B in replacement
of any Certificate theretofore issued by it which was claimed by the record
holder thereof to have been lost, stolen or destroyed was issued by L & B only
upon receipt of an affidavit of lost stock certificate and indemnity agreement
of such shareholder indemnifying L & B against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such
Certificate or the issuance of such replacement Certificate.
SECTION 2.02. AUTHORIZATIONS; NO DEFAULTS. L & B's Board of Directors has,
------------ ---------------------------
by all appropriate action, approved this Agreement, the Merger and any other
transactions contemplated hereby and autho rized the execution hereof on its
behalf by its duly authorized officers and, subject to the approval of this
8
Agreement by the shareholders of L & B and to receipt of all required regulatory
approvals, the performance by L & B of its obligations hereunder. Except as set
forth in Section 2.02 of the Disclosure Schedule, nothing in the articles of
incorporation or bylaws of L & B, as amended, or any other agreement,
instrument, decree, proceeding, law or regulation (except as specifically
referred to in or contemplated by this Agreement) by or to which it or any of
its subsidiaries are bound or subject would prohibit or inhibit L & B from
consummating this Agreement, the Merger or any other transactions contemplated
hereby on the terms and conditions herein contained. This Agreement has been
duly and validly executed and delivered by L & B and constitutes a legal, valid
and binding obligation of L & B, enforceable against L & B in accordance with
its terms (except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium or other laws
affecting creditor's rights generally or the rights of creditors of savings
institutions, the accounts of which savings institutions are insured by the
Savings Association Insurance Fund of the F.D.I.C., or laws relating to the
safety and soundness of insured financial institutions and by judicial
discretion in applying principles of equity). L & B and its subsidiaries are
neither in default under nor in violation of any provision of their respective
articles of incorporation or association, charters, bylaws, or any promissory
note, indenture or any evidence of indebtedness or security therefor, lease,
contract, purchase or other commitment or any other agreement which is material
to L & B and its subsidiaries taken as a whole.
SECTION 2.03. SUBSIDIARIES; PARTNERSHIPS; JOINT VENTURES. Each of L & B's
------------ ------------------------------------------
direct and indirect subsidiaries, including the Savings Bank (collectively, the
"subsidiaries"), the name and jurisdiction of incorporation or organization of
each of which is set forth in Section 2.03 of the Disclosure Schedule, are duly
organized, validly existing and in good standing under the laws of the
jurisdiction of their incorporation or organization and have the corporate or
other power to own their respective properties and assets, to incur their
respective liabilities and to carry on their respective business as presently
con ducted. The number of issued and outstanding shares of capital stock of
each such subsidiary, including the Savings Bank, is set forth in Section 2.03
of the Disclosure Schedule, all of which shares (except as may be otherwise
there expressly disclosed) are owned by L & B or L & B's subsidiaries, as the
case may be and as therein disclosed, free and clear of all liens, encumbrances,
rights of first refusal, options or other restrictions of any nature whatsoever,
except as otherwise may be expressly disclosed in Section 2.03 of the Disclosure
Schedule. There are no options, warrants or rights outstanding to acquire any
capital stock of any of L & B's subsidiaries and no person or entity has any
other right to purchase or acquire any unissued shares of stock of any of L &
B's subsidiaries, nor does any such subsidiary have any obligation of any nature
with respect to its unissued shares of stock. Except as may be disclosed in
Section 2.03 of the Disclosure Schedule, neither L & B nor any of L & B's
subsidiaries is a party to any partnership or joint venture or owns an equity
interest in any other business or enterprise.
SECTION 2.04. FINANCIAL INFORMATION. The audited consolidated balance
------------ ---------------------
sheets of L & B (which shall include balance sheet information for Sulphur
Springs Loan and Building Association for periods before the formation of L & B)
as of June 30, 1995 and 1994 and the related consolidated income statements and
statements of changes in shareholders' equity and cash flows for the three (3)
years ended June 30, 1995, together with the notes thereto, and the unaudited
balance sheets of L & B as of December 31, 1995 and related unaudited income
statements and statements of changes in shareholders' equity and cash flows for
the nine (9) months then ended, and the year-end and quarterly Reports of
Condition and Report of Income of the Savings Bank for 1995 and March 31, 1996,
respectively, as currently on file with the Federal Deposit Insurance
Corporation (the "F.D.I.C.") and the O.T.S. (together, the "L & B Financial
Statements"), have been prepared in accordance with GAAP applied on a consistent
basis throughout the
9
periods presented (except as may be disclosed therein and except for regulatory
reporting differences required by the Savings Bank's reports), and fairly
present in all material respects the financial position and the results of
operations, changes in shareholders' equity and cash flows of the entities
therein described as of the dates and for the periods indicated (subject, in the
case of interim financial statements, to normal recurring year-end adjustments,
none of which will be material).
SECTION 2.05. ABSENCE OF CHANGES. Since June 30, 1995, there has not been
------------ ------------------
any material adverse change in the financial condition, the results of
operations or the business or prospects of L & B or any of its subsidiaries, nor
have there been any events or transactions having such a material adverse effect
which should be disclosed in order to make the L & B Financial Statements not
misleading. Since the date of the most recent T.S.L.D. and F.D.I.C. examination
report regarding the Savings Bank, there has been no material adverse change in
the financial condition, the results of operations or the business or prospects
of the Savings Bank. Notwithstanding the foregoing, any actions taken or
changes made by L & B or any of its subsidiaries, including the Savings Bank,
pursuant to Section 4.05 hereof shall not, individually or in the aggregate, be
deemed to be a material adverse change in the financial condition, the results
of operations or the business or prospects of L & B and its subsidiaries taken
as a whole.
SECTION 2.06. REGULATORY ENFORCEMENT MATTERS. Except as may be disclosed
------------ ------------------------------
in Section 2.06 of the Disclosure Schedule, neither L & B nor any of its
subsidiaries is subject to, and has not received any notice or advice that any
of them may become subject to, any order, agreement, memorandum of understanding
or other regulatory enforcement action or proceeding with or by any federal or
state agency charged with the supervision or regulation of thrifts or thrift
holding companies or engaged in the insurance of bank or thrift deposits or any
other governmental agency having supervisory or regulatory authority with
respect to L & B or any of its subsidiaries.
SECTION 2.07. TAX MATTERS. Except as may be disclosed in Section 2.07 of
------------ -----------
the Disclosure Schedule, L & B and its subsidiaries have filed all federal,
state and local tax returns due in respect of any of their businesses or
properties in a timely fashion and have paid or made provision, as reflected on
the L & B Financial Statements, for all amounts due shown on such returns. All
such returns fairly reflect the information required to be presented therein.
All provisions for accrued but unpaid taxes contained in the L & B Financial
Statements were made in accordance with GAAP applied on a consistent basis and
in the aggregate do not materially fail to provide for potential tax
liabilities.
SECTION 2.08. LITIGATION. Except as may be disclosed in Section 2.08 of
------------ ----------
the Disclosure Schedule, there is no litigation, claim or other proceeding
pending or, to the knowledge of L & B, threatened, against L & B or any of its
subsidiaries, or of which the property of L & B or any of its subsidiaries is or
would be subject.
SECTION 2.09. EMPLOYMENT AGREEMENTS. Except as may be disclosed in Section
------------ ---------------------
2.09 of the Disclosure Schedule, neither L & B nor any of its subsidiaries is a
party to or bound by any contract for the employment, retention or engagement,
or with respect to the severance, of any officer, employee, agent, consultant or
other person or entity which, by its terms, is not terminable by L & B or such
subsidiary on thirty (30) days written notice or less without the payment of any
amount by reason of such termination. A true, accurate and complete copy of
each such agreement and any and all amendments or supplements thereto is
included as an exhibit to Section 2.09 of the Disclosure Schedule.
10
SECTION 2.10. REPORTS. Except as may be disclosed in Section 2.10 of the
------------ -------
Disclosure Schedule, L & B and each of its subsidiaries has filed all reports
and statements, together with any amendments required to be made with respect
thereto, that they were required to file with (i) the O.T.S., (ii) the F.D.I.C.,
(iii) any and all applicable state securities, banking or thrift authorities,
including the Texas Savings and Loan Department (the "T.S.L.D."), and (iv) any
other governmental authority with jurisdiction over L & B or any of its
subsidiaries. As of their respective dates, each of such reports and documents,
including any financial statements, exhibits and schedules thereto, complied in
all material respects with the relevant statutes, rules and regulations enforced
or promulgated by the regulatory authority with which they were filed, and did
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
SECTION 2.11. INVESTMENT PORTFOLIO. Except as may be disclosed in Section
------------ --------------------
2.11 of the Disclosure Schedule, all United States Treasury securities,
obligations of other United States Government agencies and corporations,
obligations of States and political subdivisions of the United States and other
investment securities held by L & B, as reflected in the latest balance sheet of
L & B included in the L & B Financial Statements, are carried in the aggregate
at no more than cost adjusted for amortization of premiums and accretion of
discounts, except as otherwise required by FASB 115.
SECTION 2.12. LOAN PORTFOLIO. Except as may be disclosed in Section 2.12
------------ --------------
of the Disclosure Schedule, (i) all loans and discounts shown on the L & B
Financial Statements or which were entered into after the date of the most
recent balance sheet included in the L & B Financial Statements, were and will
be made in all material respects for good, valuable and adequate consideration
in the ordinary course of the business of L & B and its subsidiaries, in
accordance in all material respects with sound banking practices, and are not
subject to any material known defenses, setoffs or counterclaims, including
without limitation any such as are afforded by usury or truth in lending laws,
except as may be provided by bankruptcy, insolvency or similar laws or by
general principles of equity; (ii) the notes or other evidences of indebtedness
evidencing such loans and all forms of pledges, mortgages and other collateral
documents and security agreements are and will be, in all material respects, to
the knowledge of L & B, enforceable, valid, true and genuine and what they
purport to be; and (iii) L & B and its subsidiaries have complied and will prior
to the Closing Date comply with all laws and regulations relating to such loans
or, to the extent there has not been such compliance, such failure to comply
will not materially interfere with the collection of any such loan.
SECTION 2.13. EMPLOYEE MATTERS AND ERISA.
------------ --------------------------
(a) Except as may be disclosed in Section 2.13(a) of the Disclosure Schedule,
neither L & B nor any of its subsidiaries has entered into any collective
bargaining agreement with any labor organization with respect to any group of
employees of L & B or any of its subsidiaries and to the knowledge of L & B
there is no present effort nor existing proposal to attempt to unionize any
group of employees of L & B or any of its subsidiaries.
(b) Except as may be disclosed in Section 2.13(b) of the Disclosure Schedule,
(i) L & B and its subsidiaries are and have been in material compliance with all
applicable laws respecting employment and employment practices, terms and
conditions of employment and wages and hours, including, without limitation, any
such laws respecting employment discrimination and occupational safety and
health
11
requirements, and neither L & B nor any of its subsidiaries is engaged in
any unfair labor practice; (ii) there is no unfair labor practice complaint
against L & B or any of its subsidiaries pending or, to the knowledge of L & B,
threatened before the National Labor Relations Board; (iii) there is no labor
dispute, strike, slowdown or stoppage actually pending or, to the knowledge of L
& B, threatened against or directly affecting L & B or any of its subsidiaries;
and (iv) neither L & B nor any of its subsidiaries has experienced any material
work stoppage or other material labor difficulty during the past five years.
(c) Except as may be disclosed in Section 2.13(c) of the Disclosure Schedule,
neither L & B nor any of its subsidiaries maintains, contributes to or
participates in or has any liability under any employee benefit plans, as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or any nonqualified employee benefit plans or deferred
compensation, bonus, stock or incentive plans, or other employee benefit or
fringe benefit programs for the benefit of former or current employees of L & B
or of its subsidiaries (the "Employee Plans"). No present or former employee of
L & B or any of its subsidiaries has been or is expected to be charged with
breaching and has not breached a fiduciary duty under any of the Employee Plans.
Neither L & B nor any of its subsidiaries participates in, nor has it in the
past five years participated in, nor has it any present or future obligation or
liability under, any multiemployer plan (as defined at Section 3(37) of ERISA).
Except as may be separately disclosed in Section 2.13(c) of the Disclosure
Schedule, neither L & B nor any of its subsidiaries maintains, contributes to,
or participates in, any plan that provides health, major medical, disability or
life insurance benefits to former employees of L & B or any of its subsidiaries.
(d) Except as may be disclosed in Section 2.13(d) of the Disclosure Schedule,
(i) neither L & B nor any of its subsidiaries maintains, nor have any of them
maintained for the past ten years, any Employee Plans subject to Title IV of
ERISA or Section 412 of the Internal Revenue Code of 1986, as amended (the
"Code"); (ii) no reportable event (as defined in Section 4043 of ERISA) has
occurred with respect to any Employee Plans as to which a notice would be
required to be filed with the Pension Benefit Guaranty Corporation; (iii) no
claim is pending, and neither L & B nor any of its subsidiaries has received
notice of any threatened or imminent claim with respect to any Employee Plan
(other than a routine claim for benefits for which plan administrative review
procedures have not been exhausted) for which L & B or any of its subsidiaries
would be liable after June 30, 1996, except as are reflected on the L & B
Financial Statements; (iv) after June 30, 1996, L & B and its subsidiaries have
no liability for excise taxes under Sections 4971, 4975, 4976, 4977, 4979 or
4980B of the Code or for a fine under Section 502 of ERISA with respect to any
Employee Plan; and (v) all Employee Plans have in all material respects been
operated, administered and maintained in accordance with the terms thereof and
in compliance with the requirements of all applicable laws, including, without
limitation, ERISA and the Code.
(e) Except as may be disclosed in Section 2.13(e) of the Disclosure Schedule,
each benefit plan maintained by L & B and/or its subsidiaries for the benefit of
their respective directors, officers and employees (including, but not limited
to, defined contribution or savings plans and deferred compensation plans) is,
to the extent required under Section 412 of the Code or Section 302 of ERISA,
fully funded, except for any amounts withheld from the compensation of any
employee pursuant to a salary reduction agreement or other contribution
agreement under a plan, including but not limited to a plan intended to be
qualified under Section 401(k) or Section 125 of the Code, which are not yet
required actually to be contributed or otherwise applied to such plan pursuant
to Section 3 of ERISA and Section 2510.3-102(a) of the Regulations issued by the
Secretary of Labor. Except with respect to the vested rights of participants
12
in any such plan, or as may be disclosed in Section 2.13(e) of the Disclosure
Schedule, the assets of each such plan are unencumbered.
SECTION 2.14. TITLE TO PROPERTIES; INSURANCE. Except as may be disclosed
------------ ------------------------------
in Section 2.14 of the Disclosure Schedule, (i) L & B and its subsidiaries have
good, indefeasible and insurable title, free and clear of all liens, charges and
encumbrances (except taxes which are a lien but not yet due and liens, charges
or encumbrances reflected in the L & B Financial Statements and easements,
rights-of-way, and other restrictions which are not adversely material to the
use of the property by L & B or its subsidiary and further excepting in the case
of Other Real Estate Owned ("O.R.E.O."), as such real estate is internally
classified on the books of L & B or its subsidiaries, rights of redemption under
applicable law) to all of their real properties; (ii) all leasehold interests
for real property and any material personal property used by L & B and its
subsidiaries in their respective businesses are held pursuant to lease
agreements which are valid and enforceable in accordance with their terms; (iii)
all such properties comply in all material respects with all applicable private
agreements, zoning requirements and other governmental laws and regulations
relating thereto and there are no condemnation proceedings pending or, to the
knowledge of L & B, threatened with respect to such properties; (iv) L & B and
its subsidiaries have valid title or other ownership or license rights under
licenses to all material intangible personal or intellectual property used by L
& B or its subsidiaries in their respective businesses, free and clear of any
claim, defense or right of any other person or entity which is material to such
property, subject only to rights of the licensors pursuant to applicable license
agreements, which rights do not materially adversely interfere with the use of
such property; and (v) all material real properties owned, held or operated by L
& B or its subsidiaries are insured by the title insurers listed on Section 2.14
of the Disclosure Schedule, and all material properties owned by L & B or its
subsidiaries are insured, in such amounts and against fire and other risks
insured against by extended coverage and public liability insurance, as is
customary with financial institutions of similar size.
SECTION 2.15. ENVIRONMENTAL MATTERS. (a) As used in this Agreement,
------------ ---------------------
"Environmental Laws" means all local, state and federal environmental, health
and safety laws and regulations in all jurisdictions in which L & B and its
subsidiaries have done business or owned, leased or operated property,
including, without limitation, the Federal Resource Conservation and Recovery
Act, the Federal Comprehensive Environmental Response, Compensation and
Liability Act, the Federal Clean Water Act, the Federal Clean Air Act, and the
Federal Occupational Safety and Health Act.
(b) Except as may be disclosed in Section 2.15(b) of the Disclosure Schedule,
neither the conduct nor operation of L & B and its subsidiaries nor, to the
knowledge of L & B, any condition of any property presently or previously owned,
leased or operated by any of them violates or violated Environmental Laws in any
respect material to the business of L & B and its subsidiaries and no condition
has existed or event has occurred with respect to any of them or any such
property that, with notice or the passage of time, or both, would constitute a
violation material to the business of L & B and its subsidiaries of
Environmental Laws or obligate (or potentially obligate) L & B or its
subsidiaries to remedy, stabilize, neutralize or otherwise alter the
environmental condition of any such property where the aggregate cost of such
actions would be material to L & B and its subsidiaries. Except as may be
disclosed in Section 2.15(b) of the Disclosure Schedule, neither L & B nor any
of its subsidiaries has received any notice from any person or entity that L & B
or its subsidiaries or the operation or condition of any property ever owned,
leased or operated by any of them are or were in violation of any Environmental
Laws or that any of them are
13
responsible (or potentially responsible) for remedying, or the cleanup of, any
pollutants, contaminants, or hazardous or toxic wastes, substances or materials
at, on or beneath any such property.
(c) Except as may be disclosed in Section 2.15(c) of the Disclosure Schedule,
neither L & B nor any of its subsidiaries has received notice or has knowledge
that any property in which any of them has a security interest, lien or other
encumbrance violates or violated Environmental Laws in any material respects.
SECTION 2.16. COMPLIANCE WITH LAW. L & B and its subsidiaries have all
------------ -------------------
licenses, franchises, permits and other governmental authorizations that are
legally required to enable them to conduct their respective businesses in all
material respects and are in compliance in all material respects with all
applicable laws and regulations.
SECTION 2.17. UNDISCLOSED LIABILITIES. L & B and its subsidiaries do not
------------ -----------------------
have any material liability, whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due (and there
is no past or present fact, situation, circumstance, condition or other basis
for any present or future action, suit or proceeding, hearing, charge,
complaint, claim or demand against L & B or its subsidiaries giving rise to any
such liability), except (i) for liabilities set forth in the L & B Financial
Statements, and (ii) as may be disclosed in Section 2.17 of the Disclosure
Schedule.
SECTION 2.18. BROKERAGE. Except as may be disclosed in Section 2.18 of the
------------ ---------
Disclosure Schedule, there are no existing claims or agreements for brokerage
commissions, finders' fees, or similar compensation in connection with the
transactions contemplated by this Agreement payable by L & B or its
subsidiaries.
SECTION 2.19. STATEMENTS TRUE AND CORRECT. None of the information
------------ ---------------------------
supplied or to be supplied by L & B or its subsidiaries for inclusion in (i) the
Registration Statement (as defined in Section 4.07 hereof), (ii) the Proxy
Statement/Prospectus (as defined in Section 4.03 hereof) and (iii) any other
documents to be filed with the Securities and Exchange Commission (the "S.E.C.")
or any other securities, banking, thrift or other regulatory authority in
connection with the transactions contemplated hereby, will, at the respective
times such documents are filed, and, in the case of the Registration Statement,
when it becomes effective, and, with respect to the Proxy Statement/Prospectus,
when first mailed to the shareholders of L & B, be false or misleading with
respect to any material fact, or omit to state any material fact necessary in
order to make the statements therein not misleading, or, in the case of the
Proxy Statement/Prospectus or any amendment thereof or supplement thereto, at
the time of the Stockholders' Meeting (as defined in Section 4.03), be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to correct any statement in any earlier communication with respect to
the solicitation of any proxy for the Stockholders' Meeting. All documents that
L & B is responsible for filing with the S.E.C. or any other regulatory
authority in connection with the transactions contemplated hereby will comply as
to form in all material respects with the provisions of applicable law and the
applicable rules and regulations thereunder.
14
ARTICLE THREE
-------------
REPRESENTATIONS OF JEFFERSON AND ACQUISITIONCO
----------------------------------------------
Jefferson and AcquisitionCo, as applicable, hereby make the following
representations and warranties:
SECTION 3.01. ORGANIZATION AND CAPITAL STOCK.
------------- ------------------------------
(a) Jefferson is a corporation duly incorporated, validly existing, and in
good standing under the laws of the State of Delaware with full corporate power
and authority to own all of its properties and assets, to incur all of its
liabilities and carry on its business as presently conducted. AcquisitionCo is
a corporation duly incorporated, validly existing, and in good standing under
the laws of the State of Missouri with full corporate power and authority to
carry on its business as it is now being conducted.
(b) The authorized capital stock of Jefferson consists of (i) 20,000,000
shares of Jefferson Common, of which, as of June 30, 1996, 4,181,563 shares were
issued and outstanding. All of the issued and outstanding shares of Jefferson
Common are duly and validly issued and outstanding and are fully paid and non-
assessable. None of the outstanding shares of Jefferson Common has been issued
in violation of any preemptive rights of the current or past shareholders of
Jefferson. Jefferson has available for issuance, from treasury or otherwise, a
sufficient number of authorized shares of Jefferson Common to pay the Basic
Merger Consideration and the amounts payable in shares of Jefferson Common
pursuant to subsections (c) and (d) of Section 1.05.
(c) The authorized capital stock of AcquisitionCo consists of thirty thousand
(30,000) shares of AcquisitionCo Common, of which as of the date hereof, 1,000
shares of AcquisitionCo Common are issued and outstanding, fully paid and non-
assessable and owned by Jefferson.
(d) The shares of Jefferson Common that are to be issued to the shareholders
of L & B pursuant to the Merger have been duly authorized and, when so issued in
accordance with the terms of this Agreement, will be validly issued and
outstanding, fully paid and nonassessable, with no personal liability attaching
to the ownership thereof.
SECTION 3.02. AUTHORIZATIONS; NO DEFAULTS. The Board of Directors of each
------------ ---------------------------
of Jefferson and AcquisitionCo have, by all appropriate action and as required
by applicable law, approved this Agreement, the Merger and the other
transactions contemplated hereby and authorized the execution hereof on their
behalf by their respective duly authorized officers and the performance by such
entities of their respective obligations hereunder. Nothing in the articles of
incorporation or bylaws of Jefferson or AcquisitionCo, as amended, or any other
agreement, instrument, decree, proceeding, law or regulation (except as
specifically referred to in or contemplated by this Agreement) by or to which
either of them or any of their subsidiaries are bound or subject would prohibit
or inhibit Jefferson or AcquisitionCo from entering into and consummating this
Agreement, the Merger or any other transactions contemplated hereby, on the
terms and conditions herein contained. This Agreement has been duly and validly
executed and delivered by Jefferson and AcquisitionCo and constitutes a legal,
valid and binding obligation of Jefferson and AcquisitionCo, enforceable against
Jefferson and AcquisitionCo in accordance with its terms (except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, conservatorship,
15
moratorium or other laws affecting creditors' rights generally or the rights of
creditors of savings institutions, the accounts of which savings institutions
are insured by the Savings Association Insurance Fund of the F.D.I.C. or laws
relating to the safety and soundness of insured financial institutions and by
judicial discretion in applying principles of equity), and no other corporate
acts or proceedings are required to be taken by Jefferson or AcquisitionCo to
authorize the execution, delivery and performance of this Agreement. Except for
the requisite approval of the O.T.S. and the T.S.L.D., no notice to, filing
with, authorization by, or consent or approval of, any federal or state
regulatory authority is necessary for the execution and delivery of this
Agreement or consummation of the Merger by Jefferson or AcquisitionCo. Jefferson
and AcquisitionCo are not in default under or in violation of any provision of
their respective articles of incorporation, bylaws or any promissory note,
indenture or any evidence of indebtedness or security therefor, lease, contract,
purchase or other commitment or any other agreement which is material to
Jefferson or AcquisitionCo, as applicable.
SECTION 3.03. SUBSIDIARIES. Each of Jefferson's significant subsidiaries
------------ ------------
(as such term is defined under S.E.C. regulations) and AcquisitionCo is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the corporate power to own its
respective properties and assets, to incur its respective liabilities and to
carry on its respective business as now being conducted.
SECTION 3.04. FINANCIAL INFORMATION. The consolidated balance sheets of
------------ ---------------------
Jefferson and its subsidiaries as of December 31, 1995 and 1994 and related
consolidated statements of income, changes in stockholders' equity and cash
flows for the three (3) years ended December 31, 1995, together with the notes
thereto, included in Jefferson's Annual Report on Form 10-K for the year ended
December 31, 1995, and the unaudited consolidated balance sheet of Jefferson and
its subsidiaries as of March 31, 1996 and the related unaudited consolidated
income statement for the three (3) months then ended included in Jefferson's
Quarterly Report on Form 10-Q for the quarter then ended, as currently on file
with the S.E.C. (together, the "Jefferson Financial Statements"), have been
prepared in accordance with GAAP applied on a consistent basis (except as
disclosed therein) and fairly present the consolidated financial position and
the consolidated results of operations, changes in stockholders' equity and cash
flows of Jefferson and its consolidated subsidiaries as of the dates and for the
periods indicated (subject, in the case of interim financial statements, to
normal recurring year-end adjustments, none of which will be material, and the
absence of footnotes).
SECTION 3.05. ABSENCE OF CHANGES. Since December 31, 1995, there has not
------------ ------------------
been any material adverse change in the financial condition, the results of
operations or the business or prospects of Jefferson and its subsidiaries taken
as a whole, nor have there been any events or transactions having such a
material adverse effect which should be disclosed in order to make the Jefferson
Financial Statements not misleading.
SECTION 3.06. LITIGATION. There is no litigation, claim or other
------------ ----------
proceeding pending or, to the knowledge of Jefferson, threatened, against
Jefferson or any of its subsidiaries, or of which the property of Jefferson or
any of its subsidiaries is or would be subject which, if adversely determined,
would have a material adverse affect on the business of Jefferson and its
subsidiaries taken as a whole.
SECTION 3.07. REPORTS. Each of Jefferson and its significant subsidiaries
------------ -------
has filed all reports and statements, together with any amendments required to
be made with respect thereto, that it was required to file with (i) the S.E.C.,
(ii) the O.T.S., (iii) the F.D.I.C., (iv) any state securities, banking or
thrift
16
authorities having jurisdiction over Jefferson or any of its significant
subsidiaries, (v) Nasdaq and (vi) any other governmental authority with
jurisdiction over Jefferson or any of its significant subsidiaries. As of their
respective dates, each of such reports and documents, as amended, including the
financial statements, exhibits and schedules thereto, complied in all material
respects with the relevant statutes, rules and regulations enforced or
promulgated by the regulatory authority with which they were filed, and did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
SECTION 3.08. COMPLIANCE WITH LAW. Jefferson and its significant
------------ -------------------
subsidiaries have all licenses, franchises, permits and other governmental
authorizations that are legally required to enable them to conduct their
respective businesses in all material respects and are in compliance in all
material respects with all applicable laws and regulations.
SECTION 3.09. STATEMENTS TRUE AND CORRECT. None of the information
------------ ---------------------------
supplied or to be supplied by Jefferson or AcquisitionCo for inclusion in (i)
the Registration Statement (as defined in Section 4.07 hereof), (ii) the Proxy
Statement/Prospectus (as defined in Section 4.03 hereof) and (iii) any document
to be filed with the S.E.C., or any thrift or other regulatory authority in
connection with the transactions contemplated hereby, will, at the respective
times such documents are filed, and, in the case of the Registration Statement,
when it becomes effective, and, with respect to the Proxy Statement/Prospectus,
when first mailed to the shareholders of L & B, be false or misleading with
respect to any material fact, or omit to state any material fact necessary in
order to make the statements therein not misleading, or, in the case of the
Proxy Statement/Prospectus or any amendment thereof or supplement thereto, at
the time of the Stockholders' Meeting, be false or misleading with respect to
any material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the Stockholders' Meeting. All documents that Jefferson or
AcquisitionCo is responsible for filing with the S.E.C., the O.T.S. or any other
regulatory authority in connection with the transactions contemplated hereby
will comply as to form in all material respects with the provisions of
applicable law and any rules and regulations thereunder.
SECTION 3.10. BROKERAGE. There are no existing claims or agreements for
------------ ---------
brokerage commissions, finders' fees, or similar compensation in connection with
the transactions contemplated by this Agreement payable by Jefferson or
AcquisitionCo.
17
SECTION 3.11. REGULATORY ENFORCEMENT MATTERS. Neither Jefferson nor
------------ ------------------------------
AcquisitionCo, nor any of Jefferson's other subsidiaries, is subject to, and
none of them have received any notice or advice that any may become subject to,
any order, agreement, memorandum of understanding or other regulatory
enforcement action or proceeding with or by any federal or state agency charged
with the supervision or regulation of thrifts or thrift holding companies or
engaged in the insurance of thrift deposits or any other governmental agency
having supervisory or regulatory authority with respect to Jefferson or
AcquisitionCo or any of Jefferson's other subsidiaries.
SECTION 3.12. TAX MATTERS. Jefferson and AcquisitionCo have filed all
------------ -----------
federal, state and material local tax returns due in respect of their respective
business or properties in a timely fashion and have paid or made provision for
all amounts due as shown on such returns. All such returns fairly reflect the
information required to be presented therein. All provisions for accrued but
unpaid taxes contained in the Jefferson Financial Statements were made in
accordance with GAAP applied on a consistent basis and in the aggregate do not
materially fail to provide for potential tax liabilities.
SECTION 3.13. UNDISCLOSED LIABILITIES. Jefferson and AcquisitionCo have no
------------ -----------------------
material liability, whether known or unknown, asserted or unasserted, absolute
or contingent, accrued or unaccrued, liquidated or unliquidated, and whether due
or to become due (and there is no past or present fact, situation, circumstance,
condition or other basis for any present or future action, suit or proceeding,
hearing, charge, complaint, claim or demand against Jefferson or AcquisitionCo
giving rise to any such liability), except for liabilities set forth in the
Jefferson Financial Statements.
SECTION 3.14. CURRENT PUBLIC INFORMATION. For purposes of determining
----------- --------------------------
compliance with the provisions of Rule 145 of the Securities Act of 1933, as
amended (the Securities Act"), for each person who may be deemed an "affiliate"
of L & B within the meaning of such term as used in Rule 145, Jefferson meets
the requirements of Rule 144(c) under the Securities Act.
18
ARTICLE FOUR
------------
AGREEMENTS OF L & B
-------------------
SECTION 4.01. BUSINESS IN ORDINARY COURSE.
------------ ---------------------------
(a) L & B shall not declare and/or pay any dividend or make any other
distribution to shareholders, whether in cash, stock or other property, after
the date of this Agreement and prior to the Effective Time or the earlier
termination hereof, except that L & B may, upon prior written notice to
Jefferson, declare and/or pay regular quarterly cash dividends on the L & B
Common in such amounts and at such times as are consistent with L & B's
historical practices.
(b) L & B shall, and shall cause each of its subsidiaries to, continue to
carry on after the date hereof their respective businesses and the discharge or
incurrence of obligations and liabilities, only in the usual, regular and
ordinary course of business, as heretofore conducted, and by way of
amplification and not limitation, L & B shall not, and shall cause each of its
subsidiaries not to, after the date of this Agreement, without the prior written
consent of Jefferson:
(i) make any changes in the authorized capital stock of L & B or any of
its subsidiaries; or
(ii) except as contemplated by any written agreements in existence on
June 25, 1996, (1) issue or sell any shares of L & B Common or other capital
stock of L & B or its subsidiaries, (2) grant or issue any options, warrants,
or other rights to subscribe for or purchase shares of L & B Common or any
other capital stock of L & B or its subsidiaries, (3) grant any awards to
acquire shares of L & B Common under or pursuant to the L & B Retention Plan;
(4) issue or sell any securities convertible into or exchangeable for any
capital stock of L & B or its subsidiaries; or
(iii) directly or indirectly redeem, purchase or otherwise acquire any
L & B Common or any other capital stock of L & B or its subsidiaries;
provided, however, that L & B shall transfer into treasury 4,500 shares of L
& B Common from the 40,000 shares of L & B Common presently owned by the L &
B Retention Plan trust and held for award under the L & B Retention Plan; or
(iv) effect a reclassification, recapitalization, splitup, exchange of
shares, readjustment or other similar change in or to any capital stock of L
& B or its subsidiaries or otherwise reorganize or recapitalize; or
(v) change its charter or articles of incorporation or association, as
the case may be, or bylaws; or
(vi) except as contemplated by written agreements in existence on June
25, 1996, grant any increase (other than ordinary and normal increases
consistent with past practices) in the compensation payable or to become
payable to directors, officers or salaried employees, grant any stock options
or, except as required by law, adopt or make any change in any bonus,
insurance, pension, or other Employee Plan, agreement, payment or arrangement
made to, for or with any of such directors, officers or employees; or
19
(vii) borrow or agree to borrow any amount of funds, or directly or
indirectly guarantee or agree to guarantee any obligations of others, except
for borrowings in the ordinary course of business from the Federal Home Loan
Bank of Dallas and sales of mortgage loans into the secondary market made in
the ordinary course of business and with recourse or obligation to
repurchase; or
(viii) except for loans made pursuant to commitments outstanding on
June 30, 1996, make or commit to make any new loan or letter of credit or any
new or additional discretionary advance under any existing line of credit, in
principal amounts in excess of $500,000 or that would increase the aggregate
credit outstanding to any one borrower (or group of affiliated borrowers) to
more than $500,000 (excluding for this purpose any accrued interest or
overdrafts), without the prior written consent of Jefferson, acting through
its Chief Credit Officer or such other designee as Jefferson may specify in a
written notice to L & B; or
(ix) purchase or otherwise acquire any investment security for its own
account having an average remaining life to maturity greater than five years
or any asset-backed securities other than those issued or guaranteed by the
Government National Mortgage Association, the Federal National Mortgage
Association or the Federal Home Loan Mortgage Corporation (and L & B and its
subsidiaries shall consult and confer with Jefferson with respect to all
securities transactions, even in circumstances where approval is not required
hereunder); or
(x) increase or decrease the rate of interest paid on time deposits, or
on certificates of deposit, except in a manner and pursuant to policies
consistent with past practices; or
(xi) enter into any agreement, contract or commitment out of the
ordinary course of business or having a term in excess of three (3) months
other than letters of credit, loan agreements, deposit agreements, and other
lending, credit and deposit agreements and documents made in the ordinary
course of business; or
(xii) except in the ordinary course of business, place on any of its
assets or properties any mortgage, pledge, lien, charge, or other
encumbrance, except to secure borrowings permitted under paragraph (vii) of
this Section 4.01(b); or
(xiii) except in the ordinary course of business, cancel or accelerate
any material indebtedness owing to L & B or its subsidiaries or any claims
which L & B or its subsidiaries may possess or waive any material rights with
respect thereto; or
(xiv) sell or otherwise dispose of any real property or any tangible or
intangible personal property having a value on the books of L & B or its
subsidiary in excess of $25,000 other than properties acquired in foreclosure
or otherwise in the ordinary collection of indebtedness to L & B and its
subsidiaries, except that, upon receipt of the agreements contemplated by
Section 4.12 hereof, L & B may transfer, or cause to be transferred, to C.
▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, respectively, life insurance policies
owned by L & B or a subsidiary thereof under which C. ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ are, respectively, the insured; or
20
(xv) foreclose upon or otherwise take title to or possession or control
of any real property without first obtaining a phase one environmental report
thereon which does not reflect the need for further environmental assessment;
provided, however, that L & B and its subsidiaries shall not be required to
obtain such a report with respect to single family, non-agricultural
residential property of one acre or less to be foreclosed upon unless it has
reason to believe that such property might contain any such waste materials
or otherwise might be contaminated; or
(xvi) commit any act or fail to do any act which will cause a breach of
any agreement, contract or commitment and which will have a material adverse
effect on L & B's and/or its subsidiaries' business, financial condition, or
earnings; or
(xvii) violate any law, statute, rule, governmental regulation, or
order, which violation might have a material adverse effect on L & B's and/or
its subsidiaries' business, financial condition, or earnings; or
(xviii) purchase any real or personal property or make any other
capital expenditure where the amount paid or committed therefor is in excess
of $50,000; or
(xix) prepay any outstanding principal amount under any loan agreement
relative to the ESOP or make any interim allocations of additional shares of
L & B Common to participants under the ESOP, other than an annual allocation
as may be required under the terms of the ESOP; or
(xx) amend, modify or supplement any Employee Plans (including, but not
limited to, the ESOP) or distribute to employees of L & B and its
subsidiaries any revised summary plan descriptions or supplements to summary
plan descriptions relative to any of the Employee Plans.
(c) L & B and its subsidiaries shall not, without the prior written consent
of Jefferson, engage in any transaction or take any action that would render
untrue in any material respect any of the representations and warranties of L &
B contained in Article Two hereof, if such representations and warranties were
given as of the date of such transaction or action.
(d) L & B shall promptly notify Jefferson in writing of the occurrence of any
matter or event known to and directly involving L & B or any of its
subsidiaries, which would not include any changes in conditions that affect the
banking or thrift industry generally, that is materially adverse to the
business, operations, properties, assets, or condition (financial or otherwise)
of L & B and its subsidiaries taken as a whole.
(e) L & B shall (i) not, directly or indirectly, through any of its
directors, officers, employees, agents, affiliates or other representatives,
solicit, initiate or encourage any inquiries or proposals with respect to, or
without prior written notice to Jefferson, participate in or encourage any
negotiations leading to any offers or proposals concerning the possible sale or
other disposition of all or substantially all of the assets or capital stock of
L & B or any of its subsidiaries to, or merger of consolidation of L & B or any
of its subsidiaries with, any other person, (ii) not disclose any information
not customarily disclosed to any person or provide access to its properties,
books or records or otherwise assist or encourage any person in connection with
any of the foregoing, and (iii) give Jefferson prompt (which for this purpose
shall mean
21
within 24 hours) written notice of any such inquiries, offers or proposals,
including the name of the other party or parties and the substance of any
inquiry, offer or proposal.
SECTION 4.02. BREACHES. L & B shall, in the event it has knowledge of the
------------ --------
occurrence, or impending or threatened occurrence, of any event or condition
which would cause or constitute a failure of any condition precedent to any
party's obligation to effect the Merger or a breach (or would have caused or
constituted a breach had such event occurred or been known prior to the date
hereof) of any of its representations or agreements contained or referred to
herein, give prompt written notice thereof to Jefferson and use its best efforts
to prevent or promptly remedy the same.
SECTION 4.03. SUBMISSION TO SHAREHOLDERS. L & B shall cause to be duly
------------ --------------------------
called and held, on a date mutually selected by Jefferson and L & B, a meeting
of the shareholders of L & B (the "Stockholders' Meeting") for submission of
this Agreement and the Merger for approval of such share holders as required by
the Texas Corporate Law. In connection with the Stockholders' Meeting, (i) L &
B shall cooperate and assist Jefferson in preparing and filing a Proxy
Statement/Prospectus (the "Proxy Statement/Prospectus") with the S.E.C., the
O.T.S. and the T.S.L.D., if required, and upon receipt of any required approval
or clearance from any such regulatory agency, L & B shall mail such Proxy
Statement/Prospectus to its shareholders, (ii) L & B shall furnish Jefferson all
information concerning L & B and its subsidiaries that Jefferson may reasonably
request in connection with such Proxy Statement/Prospectus, and (iii) the Board
of Directors of L & B shall (subject to compliance with its fiduciary duties as
advised by counsel) recommend to its shareholders the approval of this Agreement
and the Merger and use its best efforts to obtain such shareholder approval.
SECTION 4.04. CONSENTS TO CONTRACTS AND LEASES. L & B shall use its best
------------ --------------------------------
efforts to obtain all necessary consents with respect to all interests of L & B
and its subsidiaries in any material leases, licenses, contracts, instruments
and rights which require the consent of another person for their transfer or
assumption pursuant to the Merger, if any.
SECTION 4.05. MERGER EXPENSES AND RELATED MATTERS.
------------ -----------------------------------
(a) L & B and Jefferson shall consult and cooperate with each other with
respect to determining, as specified in a written notice from Jefferson to L &
B, based upon such consultation and as hereinafter provided, the amount and the
timing for recognizing for financial accounting purposes the expenses of the
Merger and the restructuring charges related to or to be incurred in connection
with the Merger.
(b) From and after the date of this Agreement to the Effective Time, L & B
shall, to the extent required under Section 412 of the Code or Section 302 of
ERISA, maintain and keep all of its benefit plans (including, but not limited
to, defined contribution plans and deferred compensation plans) fully funded,
and shall, to the extent any such benefit plan may not be fully funded, make
such contributions as are necessary to fully fund any such unfunded benefit
plan; provided, however, that L & B or any of its subsidiaries which has
withheld amounts from the compensation of any employee pursuant to a salary
reduction agreement or other contribution agreement under a plan, including but
not limited to a plan intended to be qualified under Section 401(k) or Section
125 of the Code, shall not be required to actually contribute or otherwise apply
such amounts to such plan prior to the date otherwise required pursuant to
Section 3 of ERISA and Section 2510.3-102(a) of the Regulations issued by the
Secretary of Labor.
22
SECTION 4.06. CONFORMING ACCOUNTING AND RESERVE POLICIES.
------------ ------------------------------------------
(a) At the request of Jefferson, L & B shall, prior to the Closing Date,
establish and take such reserves and accruals as Jefferson shall request so as
to conform L & B's loan, accrual, reserve and other accounting policies to
Jefferson's policies, establish and take such accruals, reserves and charges in
order to implement such policies in respect of excess facilities and equipment
capacity, severance costs, litigation matters, write-off or write-down of
various assets and other appropriate accounting adjustments, and recognize for
financial accounting purposes such expenses of the Merger and restructuring
charges related to or to be incurred in connection with the Merger, in each case
at such times as are mutually agreeable to Jefferson and L & B; provided,
however, that L & B shall not be required to take any such action that is not
consistent with GAAP.
(b) No accrual or other adjustment made by L & B pursuant to the provisions
of this Section 4.06 shall constitute an acknowledgment by L & B or create any
implication, for any purpose, that such accrual or adjustment was necessary for
any purpose other than to comply with the provisions of this Section 4.06.
(c) The calculation of L & B's consolidated earnings during the Earnings
Period for the purpose of determining the Basic Merger Consideration shall be
unaffected by any accrual or adjustment made by L & B at the request of
Jefferson pursuant to this Section 4.06.
SECTION 4.07. CONSUMMATION OF AGREEMENT. L & B shall use its best efforts
------------ -------------------------
to perform and fulfill all conditions and obligations on its part to be
performed or fulfilled under this Agreement, to effect the Merger in accordance
with the terms and provisions hereof and to obtain all necessary approvals and
consents on its part to be obtained pursuant to this Agreement. L & B shall
furnish to Jefferson in a timely manner all information, data and documents in
the possession of L & B or its subsidiaries requested by Jefferson as may be
required to obtain any necessary regulatory or other approvals of the Merger or
to file with the S.E.C. a registration statement on Form S-4 (the "Registration
Statement") relating to the shares of Jefferson Common to be issued to the
shareholders of L & B pursuant to the Merger and this Agreement and shall
otherwise cooperate fully with Jefferson to carry out the purpose and intent of
this Agreement.
SECTION 4.08. ENVIRONMENTAL REPORTS. L & B shall provide to Jefferson, as
------------ ---------------------
soon as reasonably practical, but not later than forty-five (45) days after the
date hereof, a report ("Phase I Report") of a phase one environmental site
assessment ("Phase I ESA") on all real property owned, leased or operated by L &
B or its subsidiaries as of the date hereof (other than space in retail and
similar establishments leased or operated by L & B for automatic teller
machines) and within ten (10) days after the acquisition or lease of any real
property acquired, leased or operated by L & B or its subsidiaries after the
date hereof (other than space in retail and similar establishments leased or
operated by L & B for automatic teller machines), except as otherwise provided
in Section 4.01(b)(xv). If required by the Phase I ESA in Jefferson's
reasonable opinion, and upon written request from Jefferson to L & B within
fifteen (15) business days of Jefferson receipt of such Phase I Reports, L & B
shall provide to Jefferson as soon as reasonably practicable a report ("Phase II
Report") of a phase two investigation on properties requiring such additional
study. Jefferson shall have fifteen (15) business days from the receipt of any
Phase II Report to notify L & B of any objection to the contents of such report.
Should the cost to L & B and/or any of its subsidiaries of taking all remedial
and corrective actions and measures (i) required by applicable law, or (ii)
recommended or suggested by any such Phase I Report or Phase II Report, or (iii)
prudent in light of
23
serious life, health or safety concerns (the "Remediation Cost"), in the
aggregate, exceed the sum of One Hundred Thousand Dollars ($100,000) as
reasonably estimated by an environmental expert retained for such purpose by
Jefferson and reasonably acceptable to L & B, or if the Remediation Cost cannot
be so reasonably estimated by such expert to be less than of $100,000, with any
reasonable degree of certainty, then Jefferson shall have the right pursuant to
Section 7.03 hereof, for a period of ten (10) business days following receipt of
such estimate or indication that the Remediation Cost cannot be so reasonably
estimated, to terminate this Agreement by giving written notice thereof to L &
B.
SECTION 4.09. RESTRICTION ON RESALES. L & B shall obtain and deliver to
------------ ----------------------
Jefferson, at least thirty-one days prior to the Closing Date, the signed
agreement, in the form of Exhibit 4.08 hereto, of each person who may reasonably
be deemed an "affiliate" of L & B within the meaning of such term as used in
Rule 145 under the Securities Act regarding compliance with the provisions of
such Rule 145.
SECTION 4.10. ACCESS TO INFORMATION. L & B shall permit Jefferson and
------------ ---------------------
AcquisitionCo, and their respective accountants, attorneys or other
representatives, reasonable access, at all reasonable times during normal
business hours and in a manner which will avoid undue disruption or interference
with the normal operations of L & B and its subsidiaries and subject to certain
laws and practices regarding confidentiality and privilege, to the properties of
L & B and its subsidiaries and shall disclose and make available to Jefferson
and AcquisitionCo, and their respective accountants, attorneys or other
representatives, all corporate, business and accounting books, documents, papers
and records relating to the assets, stock, ownership, properties, operations,
obligations and liabilities of L & B and its subsidiaries, including, but not
limited to, all books of account (including the general ledger), tax records,
minute books of directors' and shareholders' meetings, organizational documents,
material contracts and agreements, loan files, filings with any regulatory
authority, accountants' workpapers (if available and subject to the respective
independent accountants' consent), litigation files (but only to the extent that
such review would not result in a material waiver of the attorney-client or
attorney work product privileges under the rules or evidence), plans affecting
employees, reports of examination by regulatory authorities and related
correspondence, internal audit reports and reviews and related work papers,
internal loan review reports, and any other business activities or prospects in
which Jefferson or AcquisitionCo may have a reasonable and legitimate interest
in furtherance of the transactions contemplated by this Agreement. In addition,
Jefferson and AcquisitionCo, and their respective accountants, attorneys or
other representatives, at all reasonable times during normal business hours and
in a manner which will avoid undue disruption or interference with the normal
operations of L & B and its subsidiaries, may make such accounting, financial
and operating inspections, reviews and analyses with respect to auditors'
reports and such other financial statements concerning L & B and its
subsidiaries, and perform such other tests or reviews as Jefferson or
AcquisitionCo may reasonably request. L & B shall deliver to Jefferson within
ten (10) business days after the date hereof a true, accurate and complete copy
of each written plan or program disclosed in Section 2.13(c) of the Disclosure
Schedule and, with respect to each such plan or program, all (i) amendments or
supplements thereto, (ii) summary plan descriptions, (iii) lists of all current
participants and all participants with benefit entitlements, (iv) contracts
relating to plan documents, (v) actuarial valuations for any defined benefit
plan, (vi) valuations for any plan as of the most recent date, (vii)
determination letters from the Internal Revenue Service, (viii) the most recent
annual report filed with the Internal Revenue Service, (ix) registration
statements on Form S-8 and prospectuses, and (x) trust agreements. Jefferson
will hold any such information which is nonpublic in confidence in accordance
with the provisions of Section 8.01 hereof. Furthermore, Jefferson and
AcquisitionCo, and their respective accountants, attorneys or other
representatives, shall be permitted to contact and consult with the
24
accounting firm or personnel responsible for preparing the L & B Financial
Statements or any other audited financial information concerning L & B or its
subsidiaries.
SECTION 4.11. SUBSIDIARY MERGER. Upon the request of Jefferson, L & B
------------ -----------------
shall cause the Savings Bank to enter into a merger agreement with First Federal
Savings Bank of North Texas, a federal savings bank and wholly owned subsidiary
of Jefferson, and take all other actions and cooperate with Jefferson in order
to prepare for and cause such merger (the "Subsidiary Merger") to be effected.
Such subsidiary merger agreement shall provide, in addition to customary terms
for mergers of subsidiaries in transactions such as this: (i) for consummation
of such Subsidiary Merger at a time on or after the Effective Time, as may be
selected by Jefferson; and (ii) that the obligations of the Savings Bank
thereunder are conditioned on the prior or simultaneous consummation of the
Merger pursuant to this Agreement.
SECTION 4.12. TERMINATION OF DEFERRED COMPENSATION AGREEMENTS. L & B shall
------------ -----------------------------------------------
obtain and deliver to Jefferson prior to the Closing Date, the signed agreements
of each of Messrs C. ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ regarding termination of
the Deferred Compensation Agreements, each dated November 17, 1987, between
Sulphur Springs Loan and Building Association and each such person, (which such
termination shall be effective on at the Effective Time) and the release of all
liabilities and obligations thereunder.
SECTION 4.13. MAIN OFFICE PARKING LOT AND MT. ▇▇▇▇▇▇ ▇▇▇▇▇▇.
------------ ---------------------------------------------
(a) L & B shall obtain, on terms reasonably satisfactory to L & B, and
deliver to Jefferson prior to the Closing Date a copy of a lease agreement,
satisfactory to Jefferson, or satisfactory evidence of ownership with respect to
that certain parking lot (including all improvements thereon) located
immediately adjacent to the Savings Bank's home office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇.
(b) L & B shall deliver to Jefferson prior to the Closing Date a copy of a
lease, on terms satisfactory to Jefferson, with respect to the Savings Bank's
branch office located at ▇▇▇ ▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇.
ARTICLE FIVE
------------
AGREEMENTS OF JEFFERSON AND ACQUISITIONCO
-----------------------------------------
SECTION 5.01. REGULATORY APPROVALS AND REGISTRATION STATEMENT. Jefferson
------------ -----------------------------------------------
shall file, or cause to be filed, all regulatory applications required in order
to consummate the Merger, including but not limited to the necessary
applications for the prior approval of the O.T.S. and the T.S.L.D. Jefferson
shall file or cause to be filed with the S.E.C. the Registration Statement on
Form S-4 relating to the shares of Jefferson Common to be issued to the
shareholders of L & B pursuant to this Agreement, including shares to be issued
pursuant to subsections (c) and (d) of Section 1.05, and shall use its best
efforts to cause the Registration Statement to become effective. Jefferson
shall also cause the shares of Jefferson Common issued pursuant to this
Agreement to be qualified for trading on the Nasdaq National Market. Jefferson
shall keep L & B reasonably informed as to the status of such applications and
filings and make available to L & B, prior to making all such applications and
filings and upon reasonable request by L & B from time to time, copies of such
applications and any supplementally filed materials and promptly make available
25
to L & B copies of any comment letters and any other materials received by
Jefferson in connection therewith, and L & B shall be permitted to participate
in the processing of each application and responses thereto. At the time the
Registration Statement becomes effective, the Registration Statement shall
comply in all material respects with the provisions of the Securities Act and
the published rules and regulations thereunder, and shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not false or
misleading, and at the time of mailing thereof to the shareholders of L & B, at
the time of the Stockholders' Meeting and at the Effective Time the Proxy
Statement/Prospectus included as part of the Registration Statement, as amended
or supplemented by any amendment or supplement, shall not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not false or misleading. Jefferson shall timely
file or caused to be timely filed all documents required to obtain all necessary
permits and approvals from state securities agencies or authorities, if any,
required to carry out the transactions contemplated by this Agreement, shall pay
all expenses incident thereto and shall use its best efforts to obtain such
permits and approvals on a timely basis. Jefferson shall promptly and properly
prepare and file or cause to be properly prepared and filed any other filings
required under the Securities Exchange Act of 1934 (the "Exchange Act") relating
to the Merger and the transactions contemplated herein.
SECTION 5.02. BREACHES. Jefferson shall, in the event it has knowledge of
------------ --------
the occurrence, or impending or threatened occurrence, of any event or condition
which would cause or constitute a breach (or would have caused or constituted a
breach had such event occurred or been known prior to the date hereof) of any of
its representations or agreements contained or referred to herein, give prompt
written notice thereof to L & B and use its best efforts to prevent or promptly
remedy the same.
SECTION 5.03. CONSUMMATION OF AGREEMENT. Jefferson and AcquisitionCo
------------ -------------------------
shall use their respective best efforts to perform and fulfill all conditions
and obligations on their part to be performed or fulfilled under this Agreement,
to effect the Merger in accordance with the terms and conditions of this
Agreement, and to obtain all necessary approvals and consents on their
respective parts to be obtained pursuant to this Agreement.
SECTION 5.04. EMPLOYEE BENEFITS. Jefferson shall, with respect to each
------------ -----------------
person who remains an employee of L & B or its subsidiaries following the
Closing Date (each a "Continued Employee"), provide the benefits described in
this Section 5.04. Subject to the right of subsequent amendment, modification
or termination in Jefferson's sole discretion, each Continued Employee shall be
entitled, as a new employee of a subsidiary of Jefferson, to participate in such
employee benefit plans, as defined in Section 3(3) of ERISA, or any non-
qualified employee benefit plans or deferred compensation, stock option, bonus
or incentive plans, or other employee benefit or fringe benefit programs that
may be in effect generally for employees of all of Jefferson subsidiaries (the
"Jefferson Plans"), if and as a Continued Employee shall be eligible and, if
required, selected for participation therein under the terms thereof and
otherwise shall not be participating in a similar plan which is maintained by L
& B after the Effective Time. L & B employees shall participate therein on the
same basis as similarly situated employees of other Jefferson subsidiaries.
Jefferson shall cause each such Continued Employee to be eligible to participate
immediately in the group health plan or plans of Jefferson or the subsidiary
which will employ each such Continued Employee, without the application of any
pre-existing condition exclusion or limitation which would otherwise apply with
respect to such Continued Employee or his or her dependents provided that such
Continued Employee is not, as of the Closing Date, subject to any such exclusion
or limitation with respect to any similar group health plan or plans maintained
by L & B or its subsidiaries. Subject only to the foregoing, all such
26
participation shall be subject to the terms of such plans as may be in effect
from time to time and this Section 5.04 is not intended to give Continued
Employees any rights or privileges superior to those of other employees of
Jefferson subsidiaries. Jefferson may terminate or modify all Employee Plans and
Jefferson's obligation under this Section 5.04 shall not be deemed or construed
so as to provide duplication of similar benefits but, subject to that
qualification, Jefferson shall, for purposes of vesting and any age or period of
service requirements for commencement of participation with respect to any
Jefferson Plans in which Continued Employees may participate, credit each
Continued Employee with his or her term of service with L & B and its
subsidiaries.
SECTION 5.05. DIRECTORS' AND OFFICERS' LIABILITY INSURANCE AND
------------ ------------------------------------------------
INDEMNIFICATION.
---------------
(a) Following the Effective Time, Jefferson shall provide the present and
former directors and officers of L & B and its subsidiaries, regardless of
whether or not such persons are employed or serve thereafter, with the same
directors' and officers' liability insurance coverage that Jefferson provides to
directors and officers of its other thrift subsidiaries generally, and, in
addition, for a period of three years following the Effective Time, Jefferson
shall use its best efforts to continue L & B's directors' and officers'
liability insurance coverage with respect to actions occurring prior to the
Effective Time to the extent that such coverage is obtainable for an aggregate
premium not to exceed the annual premium presently being paid by L & B. If the
premium for such insurance coverage would exceed such maximum amount, Jefferson
shall use its best efforts to procure such level of insurance as can be obtained
for a premium equal to such maximum amount.
(b) For a period of six years after the Effective Time, Jefferson and
AcquisitionCo (the survivor of the Merger) shall jointly and severally
indemnify, defend and hold harmless the present and former officers, directors,
employees and agents of L & B and its subsidiaries, including persons who have
served as fiduciaries of Employee Plans, at the Effective Time (each, an
"Indemnified Party"), regardless of whether or not such persons are employed or
serve thereafter, against all losses, expenses, claims, damages or liabilities
arising out of actions or omissions occurring on or prior to the Effective Time
to the full extent then permitted by the Corporate Law and by L & B's articles
of incorporation or bylaws and the articles of association or bylaws of L & B's
subsidiaries as in effect on the date hereof, including provisions relating to
advancement of expenses incurred in the defense of any action or suit.
(c) If after the Effective Time AcquisitionCo or any of its successors or
assigns (i) shall consolidate with or merge with and into any other corporation
or entity and shall not be the continuing or surviving corporation or entity, or
(ii) shall transfer all or substantially all of its properties and assets to any
individual, corporation or other entity, then and in each such case, proper
provision shall be made so that the successors and assigns of AcquisitionCo
shall assume any remaining obligations set forth in this Section 5.05. If
AcquisitionCo shall liquidate, dissolve or otherwise wind up its business, then
Jefferson shall indemnify, defend and hold harmless each Indemnified Party to
the same extent and on the same terms that AcquisitionCo was so obligated
pursuant to this Section 5.05.
(d) The provisions of this Section 5.05 are intended to be for the benefit
of, and shall be enforceable by, each of the individuals referred to in
subsections (a) and (b) of this Section 5.05 and their respective heirs and
personal representatives.
27
SECTION 5.06. ACCESS TO INFORMATION. Jefferson shall permit L & B and its
------------ ---------------------
accountants, attorneys or other representatives, reasonable access, at all
reasonable times during normal business hours and in a manner which will avoid
undue disruption or interference with the normal operations or Jefferson or its
subsidiaries and subject to certain laws and practices regarding confidentiality
and privilege, to the properties of Jefferson and its significant subsidiaries
and shall disclose and make available to L & B and its accountants, attorneys or
other representatives, all corporate, business and accounting books, documents,
papers and records relating to the assets, stock, ownership, properties,
operations, obligations and liabilities of Jefferson and its significant
subsidiaries, including, but not limited to, all books of account (including the
general ledger), tax records, minute books of directors' and shareholders'
meetings, organizational documents, material contracts and agreements, loan
files, filings with any regulatory authority, accountants' workpapers (if
available and subject to the respective independent accountants' consent),
litigation files (but only to the extent that such review would not result in a
material waiver of the attorney-client or attorney work product privileges under
the rules of evidence), plans affecting employees, reports of examination by
regulatory authorities and related correspondence, internal audit reports and
reviews and related work papers, internal loan review reports, and any other
business activities or prospects in which L & B may have a reasonable and
legitimate interest in furtherance of the transactions contemplated by this
Agreement. In addition, L & B and its accountants, attorneys or other
representatives, at all reasonable times during normal business hours and in a
manner which will avoid undue disruption or interference with the normal
operations of Jefferson and its significant subsidiaries, may make such
accounting, financial and operating inspections, reviews and analyses with
respect to auditors' reports and such other financial statements concerning
Jefferson and/or its significant subsidiaries, and perform such other tests as L
& B may reasonably request. L & B and its accountants, attorneys or other
representatives shall be permitted to contact and consult with the accounting
firm or personnel responsible for preparing the Jefferson Financial Statements
or any other audited financial information concerning Jefferson or its
significant subsidiaries.
SECTION 5.07. NOTICE OF CERTAIN EVENTS. Jefferson shall promptly notify L &
------------ ------------------------
B in writing of the occurrence of any matter or event known to and directly
involving Jefferson or any of its subsidiaries, which would not include any
changes in conditions that affect the banking or thrift industry generally, that
is materially adverse to the business, operations, properties, assets, or
condition (financial or otherwise) of Jefferson and its subsidiaries taken as a
whole.
ARTICLE SIX
-----------
CONDITIONS PRECEDENT TO THE MERGER
----------------------------------
SECTION 6.01. CONDITIONS TO JEFFERSON'S AND ACQUISITIONCO'S OBLIGATIONS.
------------ ---------------------------------------------------------
Jefferson's and AcquisitionCo's obligations to effect the Merger shall be
subject to the satisfaction (or waiver by Jefferson) prior to or on the Closing
Date of the following conditions:
(a) Except for changes specifically referred to in this Agreement, the
representations and warranties made by L & B in this Agreement shall be true in
all material respects on and as of the Closing Date with the same effect as
though such representations and warranties had been made or given on and as of
the Closing Date;
28
(b) L & B shall have performed and complied in all material respects with all
of its obligations and agreements required to be performed on or prior to the
Closing Date under this Agreement;
(c) No temporary restraining order, preliminary or permanent injunction or
other order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Merger shall be in
effect, nor shall any proceeding by any bank or thrift regulatory authority or
other person seeking any of the foregoing be pending. There shall not be any
action taken, or any statute, rule, regulation or order enacted, entered,
enforced or applicable to the Merger which makes the consummation of the Merger
illegal;
(d) All necessary regulatory approvals, consents, authorizations and other
approvals required by law for consummation of the Merger shall have been
obtained and all waiting periods required by law shall have expired;
(e) Jefferson shall have received the environmental reports required by
Section 4.08 hereof, and shall not have elected, pursuant to Section 7.03
hereof, to terminate and cancel this Agreement;
(f) Jefferson shall have received all documents required to be received from
L & B on or prior to the Closing Date, all in form and substance reasonably
satisfactory to Jefferson;
(g) The Registration Statement shall be effective under the Securities Act
and no stop orders suspending the effectiveness of the Registration Statement
shall be in effect or proceedings for such purpose pending before or threatened
by the S.E.C.; and
(h) Jefferson shall have received an opinion of its counsel, addressed to the
board of directors of each of Jefferson and L & B, to the effect that, for
federal income purposes, the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Code and that, accordingly, for federal tax
purposes (i) gain will be realized by each holder of shares of L & B Common who
receives both Jefferson Common and cash in exchange for his or her L & B Common
and will be recognized, but not in excess of the amount of cash received, (ii)
the aggregate tax basis of Jefferson Common received by a shareholder of L & B
will be the same as the aggregate basis of the L & B Common surrendered in
exchange therefor decreased by the amount of cash received by the shareholder
and increased by the amount, if any, treated as a dividend and the amount, if
any, of gain recognized by the shareholder in the exchange, and (iii) the
holding period of Jefferson Common to be received by each L & B shareholder will
include, in each instance, the period in which the shareholder held the L & B
Common surrendered in exchange therefor provided that the L & B Common is held
as a capital asset on the date of exchange.
SECTION 6.02. CONDITIONS TO L & B'S OBLIGATIONS. L & B's obligation to
------------ ---------------------------------
effect the Merger shall be subject to the satisfaction (or waiver by L & B)
prior to or on the Closing Date of the following conditions:
(a) Except for changes specifically required by this Agreement, the
representations and warranties made by Jefferson and AcquisitionCo in this
Agreement shall be true in all material respects on and as of the Closing Date
with the same effect as though such representations and warranties had been made
or given on the Closing Date;
29
(b) Jefferson and AcquisitionCo shall have performed and complied in all
material respects with all of their obligations and agreements hereunder
required to be performed on or prior to the Closing Date under this Agreement;
(c) No temporary restraining order, preliminary or permanent injunction or
other order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Merger shall be in
effect, nor shall any proceeding by any bank or thrift regulatory authority or
other governmental agency seeking any of the foregoing be pending. There shall
not be any action taken, or any statute, rule, regulation or order enacted,
entered, enforced or applicable to the Merger which makes the consummation of
the Merger illegal;
(d) All necessary regulatory approvals, consents, authorizations and other
approvals, including the requisite approval of this Agreement and the Merger by
the shareholders of L & B, required by law for consummation of the Merger shall
have been obtained and all waiting periods required by law shall have expired;
(e) L & B shall have received all documents required to be received from
Jefferson on or prior to the Closing Date, all in form and substance reasonably
satisfactory to L & B;
(f) L & B shall have received a fairness opinion from its financial advisor
for disclosure to L & B's shareholders in the Proxy Statement/Prospectus, which
fairness opinion has not been withdrawn prior to the Closing Date, to the effect
that the Merger contemplated hereby is fair to the L & B shareholders from a
financial perspective;
(g) The Registration Statement shall be effective under the Securities Act
and no stop orders suspending the effectiveness of the Registration Statement
shall be in effect or proceedings for such purpose pending before or threatened
by the S.E.C.; and
(h) L & B shall have received a copy of the opinion delivered pursuant to
Section 6.01(h) hereto.
ARTICLE SEVEN
-------------
TERMINATION OR ABANDONMENT
--------------------------
SECTION 7.01. MUTUAL AGREEMENT. This Agreement may be terminated by the
------------ ----------------
mutual written agreement of the parties at any time prior to the Closing Date,
regardless of whether approval of this Agreement and the Merger by the
shareholders of L & B shall have been previously obtained.
SECTION 7.02. MATERIAL BREACH. In the event that there is a material
------------ ---------------
breach in any of the representations and warranties or agreements of Jefferson
or L & B, which breach is not cured within thirty (30) days after notice to cure
such breach is given to the breaching party by a non-breaching party, then the
non-breaching party making such cure demand, regardless of whether approval of
this Agreement and the Merger by the shareholders of L & B shall have been
previously obtained, may terminate and cancel this Agreement by providing
written notice of such action to the other party hereto.
30
SECTION 7.03. ENVIRONMENTAL REPORTS. Jefferson may terminate this
------------ ---------------------
Agreement to the extent provided by Section 4.08 and this Section 7.03 by giving
written notice of such action to L & B.
SECTION 7.04. FAILURE OF CONDITIONS. In the event that any of the
------------ ---------------------
conditions to the obligations of any party are not satisfied or waived on or
prior to the Closing Date, and if any applicable cure period provided in Section
7.02 hereof has lapsed, then the affected party may, regardless of whether
approval of this Agreement and the Merger by the shareholders of L & B shall
have been previously obtained, terminate and cancel this Agreement by delivery
of written notice of such action to the other parties.
SECTION 7.05. REGULATORY APPROVAL DENIAL. If any regulatory application
------------ --------------------------
filed pursuant to Section 5.01 hereof should be finally denied or disapproved by
the respective regulatory authority or if any such regulatory application should
not be finally approved within nine (9) months from the date hereof, then this
Agreement thereupon shall be deemed terminated and canceled; provided, however,
that a request for additional information or undertaking by Jefferson or
AcquisitionCo, as a condition for approval, shall not be deemed to be a denial
or disapproval so long as Jefferson or AcquisitionCo diligently provides the
requested information or undertaking. In the event an application is denied
pending an appeal, petition for review, or similar such act on the part of
Jefferson or AcquisitionCo (hereinafter referred to as the "appeal") then the
application will be deemed denied unless Jefferson or AcquisitionCo prepares and
timely files such appeal and continues the appellate process for purposes of
obtaining the necessary approval.
SECTION 7.06. SHAREHOLDER APPROVAL DENIAL. If this Agreement, the Merger
------------ ---------------------------
and any other transactions contemplated hereby are not approved by the requisite
vote of the shareholders of L & B, then any party may terminate this Agreement
by giving written notice of such action to the other parties.
SECTION 7.07. REGULATORY ENFORCEMENT MATTERS. In the event that L & B or
------------ ------------------------------
any of its subsidiaries shall become a party or subject to any new or amended
written agreement, memorandum of understanding, cease and desist order,
imposition of civil money penalties or other regulatory enforcement action or
proceeding with any federal or state agency charged with the supervision or
regulation of thrifts or thrift holding companies after the date of this
Agreement, then Jefferson or AcquisitionCo may terminate this Agreement.
SECTION 7.08. SHARE COMPONENT FLUCTUATION. If the Jefferson Average Price
------------ ---------------------------
is greater than $33.60 per share or less than $20.00 per share, then this
Agreement may be terminated by any party by giving written notice of such action
to the other parties.
SECTION 7.09. OTHER TERMINATION. If the Closing does not occur within
------------ -----------------
thirty (30) days after the expiration of nine (9) months from the date hereof,
then this Agreement may be terminated by any party by giving written notice of
such action to the other parties, provided that such failure of the Closing to
occur is not the result of the terminating party's default in the performance of
a material obligation or covenant under this Agreement.
31
SECTION 7.10. TERMINATION FEE.
------------ ---------------
(a) Jefferson shall pay to L & B the sum of Two Hundred Fifty Thousand
Dollars ($250,000.00) as an agreed upon termination fee and as liquidated
damages, in lieu of all remedies at law or in equity and in full satisfaction of
all obligations or liabilities of Jefferson and AcquisitionCo hereunder, upon
the termination of this Agreement by L & B as the result of a material breach of
this Agreement by Jefferson and/or AcquisitionCo which breach has not been cured
by Jefferson and/or AcquisitionCo within thirty (30) days after notice to cure
such breach is given to Jefferson by L & B.
(b) L & B shall pay to Jefferson the sum of Two Hundred Fifty Thousand
Dollars ($250,000.00) as an agreed upon termination fee and as liquidated
damages, in lieu of all remedies at law or in equity and in full satisfaction of
all obligations or liabilities of L & B hereunder, upon the (i) termination of
this Agreement by Jefferson or AcquisitionCo as the result of a material breach
of this Agreement by L & B which breach has not been cured by L & B within
thirty (30) days after notice to cure such breach is given to L & B by Jefferson
or AcquisitionCo (including, without limitation, the execution of an agreement
between L & B or any subsidiary and any third party which is itself a breach of
this Agreement), or (ii) the failure of the L & B shareholders to approve this
Agreement, the Merger and/or any other transactions contemplated hereby at the
Stockholders' Meeting (other than as a result of a material breach of this
Agreement by Jefferson or AcquisitionCo), AND, in either case, the occurrence of
one or more of the following events (a "Triggering Event") within a period of
twenty-four (24) months thereafter:
(i) any person or group of persons (other than Jefferson and/or its
affiliates) shall acquire, or have the right to acquire, more than fifty
percent (50%) of the outstanding shares of L & B Common;
(ii) the expiration date of a tender or exchange offer by any person or
group of persons (other than Jefferson and/or its affiliates) to purchase or
acquire securities of L & B or any of its subsidiaries if upon consummation
of such offer, such person or group of persons would own, control or have the
right to acquire more than fifty percent (50%) of the outstanding shares of L
& B Common or other capital stock of L & B or any of its subsidiaries; or
(iii) the entry by L & B or any of its subsidiaries into a binding
agreement or other understanding with a person or group of persons (other than
Jefferson and/or its affiliates) for such person or group of persons to acquire,
merge or consolidate with L & B or any of its subsidiaries, or to purchase or
acquire L & B or any of its subsidiaries, or all or substantially all of the
assets of L & B or any of its subsidiaries, or more than fifty percent (50%) of
the outstanding shares of L & B Common or other capital stock of L & B or any of
its subsidiaries.
For purposes of this Section 7.10(b), "person" and "group of persons" shall have
the meanings conferred thereon by Section 13(d) of the Exchange Act.
(c) L & B shall notify Jefferson promptly in writing upon its becoming aware
of the occurrence of any Triggering Event.
32
ARTICLE EIGHT
-------------
GENERAL
-------
SECTION 8.01. CONFIDENTIAL INFORMATION. The parties acknowledge the
------------ ------------------------
confidential and proprietary nature of the "Protected Information" (as herein
described) that has heretofore been exchanged and that will be received from
other parties hereunder and/or their subsidiaries and agree to hold and keep,
and to instruct their respective agents, representatives, shareholders,
affiliates, employees and consultants to hold and keep, such information
confidential in accordance with the terms of that certain Confidentiality
Agreement dated June 25, 1996 among Jefferson, L & B and the Savings Bank, a
copy of which is attached hereto as Exhibit 8.01 and made a part hereof (the
"Confidentiality Agreement"). Such Protected Information will include, in
addition to any information defined as protected pursuant to Section 1(b) of the
Confidentiality Agreement, any and all financial, technical, commercial,
marketing, customer or other information concerning the business, operations and
affairs of a party or any subsidiary that may be provided to the other,
irrespective of the form of the communications, by such party's employees or
agents. Such Protected Information shall not include information that is or
becomes generally available to the public other than as a result of a disclosure
by a party or its representatives in violation of this Agreement. The parties
agree that the Protected Information will be used solely for the purposes
contemplated by this Agreement and that such Protected Information will not be
disclosed to any person other than employees and agents of a party who are
directly involved in evaluating the transaction. The Protected Information
shall not be used in any way detrimental to a party, including use directly or
indirectly in the conduct of the other party's business or any business or
enterprise in which such party may have an interest, now or in the future, and
whether or not now in competition with such other party.
SECTION 8.02. RETURN OF DOCUMENTS. Upon termination of this Agreement
------------ -------------------
without the Merger becoming effective, each party (i) shall deliver to the other
all originals and copies or other derivatives of all Protected Information made
available to such party (ii) will not retain any copies, extracts or other
reproductions or derivatives in whole or in part of such Protected Information,
and (iii) will destroy all memoranda, notes and other writings prepared by
either party based on the Protected Information.
SECTION 8.03. PUBLICITY. Jefferson, AcquisitionCo and L & B shall
------------ ---------
cooperate with each other in the development and distribution of, and mutually
agree upon the form and content of, all news releases and other public
disclosures concerning this Agreement and the Merger and shall not issue any
news release or make any other public disclosure without the prior consent of
the other party, unless such is required by law upon the written advice of
counsel or is in response to published newspaper or other mass media reports
regarding the transaction contemplated hereby, in which such latter event the
parties shall consult with each other regarding such responsive public
disclosure.
SECTION 8.04. NOTICES. Any notice or other communication shall be in
------------ -------
writing and shall be deemed to have been given or made on the date of delivery,
in the case of hand delivery, or three (3) business days after deposit in the
United States Registered Mail, postage prepaid, or upon receipt if transmitted
by facsimile telecopy or any other means, addressed (in any case) as follows:
33
(a) if to Jefferson or AcquisitionCo:
Jefferson Savings Bancorp, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇, Rice & ▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
(b) if to L & B:
L & B Financial, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. C. ▇▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Shannon, Gracey, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
1600 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party may from time to time designate by notice
to the others.
SECTION 8.05. LIABILITIES. In the event that this Agreement is
------------ -----------
terminated pursuant to the provisions of Article Seven hereof, except as
provided in Section 7.10 of this Agreement, no party hereto shall have any
liability to any other party for costs, expenses, damages or otherwise;
provided, however, that, notwithstanding the foregoing, in the event that this
Agreement is terminated pursuant to Section 7.02 hereof on account of a willful
breach of any of the representations and warranties set forth herein or a
willful breach of any of the agreements set forth herein, then the non-breaching
party shall be entitled to recover appropriate damages from the breaching party.
34
SECTION 8.06. EXPENSES. Each of the parties to this Agreement shall bear
------------ --------
their respective costs, fees and expenses incurred in connection with this
Agreement, the Merger and any other transactions contemplated hereby. Fees and
expense reimbursement paid and payable by L & B to its financial advisor for
services rendered in connection with the transaction contemplated by this
Agreement shall not be charged against L & B's consolidated earnings during the
Earnings Period for purposes of determining the Basic Merger Consideration,
except to the extent, if any, that the aggregate amount of such fees and
reimbursement exceeds $100,000.
SECTION 8.07. NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
------------ ---------------------------------------------------------
Except for, and as provided in this Section 8.07, no representation, warranty or
agreement contained in this Agreement shall survive the Effective Time or the
earlier termination of this Agreement. The agreements set forth in Sections
1.03, 1.04, 1.05(d), 1.08, 4.11, 5.04 and 5.05 shall survive the Effective Time
and the agreements set forth in Sections 7.10, 8.01, 8.02, 8.03, 8.05 and 8.06
hereof shall survive the Effective Time or the earlier termination of this
Agreement.
SECTION 8.08. ENTIRE AGREEMENT. This Agreement, including the Exhibits
------------ ----------------
and Schedules attached hereto, constitute the entire agreement between the
parties and supersedes and cancels any and all prior discussions, negotiations,
undertakings, agreements in principle and other agreements between the parties
relating to the subject matter hereof.
SECTION 8.09. HEADINGS AND CAPTIONS. The captions of Articles and
------------ ---------------------
Sections hereof are for convenience only and shall not control or affect the
meaning or construction of any of the provisions of this Agreement.
SECTION 8.10. WAIVER, AMENDMENT OR MODIFICATION. The conditions of this
------------ ---------------------------------
Agreement that may be waived may only be waived by notice to the other party
waiving such condition. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. This Agreement may be amended or modified
by the parties hereto, at any time before or after approval of the Agreement by
the shareholders of L & B; provided, however, that after any such approval no
such amendment or modification shall alter the amount or change the form of the
Basic Merger Consideration contemplated by this Agreement to be received by
shareholders of L & B or alter or change any of the terms of this Agreement if
such alteration or change would adversely affect the holders of L & B Common.
This Agreement shall not be amended or modified except by a written document
duly executed by the parties hereto.
SECTION 8.11. RULES OF CONSTRUCTION. Unless the context otherwise
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requires: (a) a term has the meaning assigned to it; (b) an accounting term not
otherwise defined has the meaning assigned to it in accordance with GAAP; (c)
"or" is not exclusive; and (d) words in the singular may include the plural and
in the plural include the singular.
SECTION 8.12. COUNTERPARTS. This Agreement may be executed in two or
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more counterparts, each of which shall be deemed an original and all of which
shall be deemed one and the same instrument.
SECTION 8.13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
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upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Except as expressly provided for herein, there shall be
no third party beneficiaries hereof.
35
SECTION 8.14. GOVERNING LAW; ASSIGNMENT. This Agreement shall be
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governed by the laws (other than the conflict of laws rule) of the State of
Texas, except to the extent that applicable federal and other state laws and
regulations must govern aspects of the Merger procedures and shareholder rights
related thereto. This Agreement may not be assigned by any of the parties
hereto.
SECTION 8.15. EMPLOYMENT AGREEMENT. Effective on the Closing Date,
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Jefferson and C. ▇▇▇▇▇ ▇▇▇▇ shall enter into an employment agreement in
substantially the form of Exhibit 8.15 attached hereto.
SECTION 8.16. TIME. Time is of the essence in connection with this
------------ ----
Agreement.
SECTION 8.17. STATUS OF EMPLOYEE BENEFIT PLANS. Nothing in this Agreement
------------ --------------------------------
shall be construed to be an amendment to the ESOP, the Sulphur Springs Loan &
Building Association 401(k) Plan & Trust, or any other "employee benefit plan,"
as defined in Section 3(3) of ERISA, maintained by L & B or any of its
subsidiaries (as used in this Section 8.17, a "benefit plan"), nor shall this
Agreement or any provision hereof be considered or construed to be the
establishment of any benefit plan or create any rights under ERISA in favor of
any person. In the event of any conflict between any provision of this
Agreement and any benefit plan maintained by L & B or any of its subsidiaries,
the terms of such benefit plan shall prevail.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
36
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
L & B FINANCIAL, INC.
By: /s/ C. ▇▇▇▇▇ ▇▇▇▇
--------------------------------------------------
C. ▇▇▇▇▇ ▇▇▇▇, President and Chief Executive
Officer
JEFFERSON SAVINGS BANCORP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman of the Board and
President
JEFFERSON SAVINGS ACQUISITIONCO, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
37
EXHIBIT 1.09(a)(x)
------------------
L & B'S LEGAL OPINION MATTERS
The due incorporation, valid existence and good standing of L & B under the
laws of the State of Texas, its power and authority to own and operate its
properties and to carry on its business as now conducted, and its power and
authority to enter into the Agreement, to merge with AcquisitionCo in accordance
with the terms of the Agreement and to consummate the transactions contemplated
by the Agreement.
1. The due incorporation or organization, valid existence and good standing
of each of the subsidiaries of L & B listed in Section 2.03 of the Disclosure
Schedule, their power and authority to own and operate their properties, the
possession of all licenses, permits and authorizations necessary to carry on
their respective businesses as now conducted.
2. With respect to L & B, (i) the number of authorized, issued and
outstanding shares of capital stock of L & B on the Closing Date, (ii) the
nonexistence of any violation of the preemptive or subscription rights of any
person, (iii) the number of outstanding Stock Options, warrants, or other rights
to acquire, or securities convertible into, any equity security of L & B, (iv)
the nonexistence of any obligation, contingent or otherwise, to reacquire any
shares of capital stock of L & B, and (v) the nonexistence of any outstanding
stock appreciation, phantom stock or similar rights to receive shares of capital
stock or benefits derived from the value of underlying shares, except as
disclosed in the Agreement.
3. With respect to L & B's subsidiaries, (i) the number of authorized,
issued and outstanding shares of capital stock on the Closing Date and the
ownership of all issued shares by L & B, (ii) the nonexistence of any violation
of the preemptive or subscription rights of any person, (iii) the nonexistence
of any outstanding options, warrants, or other rights to acquire, or securities
convertible into, any equity securities of such subsidiary, (iv) the
nonexistence of any obligation, contingent or otherwise, to reacquire any shares
of capital stock of such subsidiary, and (v) the nonexistence of any outstanding
stock appreciation, phantom stock or similar rights to receive shares of capital
stock or benefits derived from the value of underlying shares.
4. The due and proper performance of all corporate acts and other
proceedings necessary or required to be taken by L & B to authorize the
execution, delivery and performance of the Agreement, the due execution and
delivery of the Agreement by L & B, and the Agreement as a valid and binding
obligation of L & B, enforceable against L & B in accordance with its terms
(subject to the provisions of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the enforceability of
creditors' rights generally from time to time in effect, and equitable
principles relating to the granting of specific performance and other equitable
remedies as a matter of judicial discretion).
5. The execution of the Agreement by L & B, and the consummation of the
Merger and the other transactions contemplated therein, do not violate or cause
a default under L & B's articles of incorporation or bylaws, or any statute,
regulation or rule or any judgment, order or decree against or any material
agreement known to counsel binding upon L & B or its subsidiaries.
38
6. Except for the regulatory approvals and registrations to be obtained or
accomplished by Jefferson, the receipt of all required consents, approvals
(including the requisite approval of the shareholders of L & B), orders or
authorizations of, or registrations, declarations or filings with or notices to,
any court, administrative agency or commission or other governmental authority
or instrumentality, domestic or foreign, or any other person or group of persons
or entity required to be obtained or made by L & B or its subsidiaries in
connection with the respective execution and delivery of the Agreement or the
consummation of the transactions contemplated therein.
8. If requested by Jefferson pursuant to Section 4.11 of the Agreement, the
due and proper performance of all corporate acts and other proceedings necessary
or required to be taken by the Savings Bank to authorize the execution, delivery
and performance of the Agreement to Merge with First Federal Savings Bank of
North Texas, and the Agreement to Merge as a valid and binding obligation of the
Savings Bank, enforceable against the Savings Bank in accordance with its terms
(subject to the provisions of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the enforceability of
creditors' rights generally from time to time in effect, and equitable
principles relating to the granting of specific performance and other equitable
remedies as a matter of judicial discretion).
9. The nonexistence, to the knowledge of counsel, of any material actions,
suits, proceedings, orders, investigations or claims pending or threatened
against or affecting L & B or its subsidiaries which, if adversely determined,
would have a material adverse effect upon their respective properties or assets
or the transactions contemplated by the Agreement.
2
EXHIBIT 1.09(b)(vi)
-------------------
JEFFERSON'S LEGAL OPINION MATTERS
The due incorporation, valid existence and good standing of Jefferson
and AcquisitionCo under the laws of the State of Delaware and the State of
Missouri, respectively, and their respective power and authority to enter into
the Agreement and to consummate the transactions contemplated thereby.
1. The due and proper performance of all corporate acts and other
proceedings required to be taken by each of Jefferson and AcquisitionCo to
authorize the execution, delivery and performance of the Agreement, the due
execution and delivery of the Agreement by Jefferson and AcquisitionCo, and the
Agreement as a valid and binding obligation of Jefferson and AcquisitionCo,
enforceable against each of Jefferson and AcquisitionCo in accordance with its
terms (subject to the provisions of bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforceability of creditors' rights
generally from time to time in effect, and equitable principles relating to the
granting of specific performance and other equitable remedies as a matter of
judicial discretion).
2. The due authorization and, when issued to the shareholders of L & B in
accordance with the terms of the Agreement, the valid issuance of the shares of
Jefferson Common to be issued pursuant to the Merger, such shares being fully
paid and nonassessable, with no personal liability attaching to the ownership
thereof.
3. The execution and delivery of the Agreement by Jefferson and
AcquisitionCo and the consummation of the transactions contemplated therein, as
neither conflicting with, in breach of or in default under, resulting in the
acceleration of, creating in any party the right to accelerate, terminate,
modify or cancel, or violate, any provision of Jefferson's and AcquisitionCo's
certificate or articles of incorporation or bylaws, or any statute, regulation,
rule, judgment, order or decree binding upon Jefferson and AcquisitionCo which
would be materially adverse to the business of Jefferson and its subsidiaries
taken as a whole.
4. Except for regulatory approvals to be obtained by L & B or the Savings
Bank, the receipt of all required consents, approvals, orders or authorizations
of, or registrations, declarations or filings with or without notices to, any
court, administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, or any other person or entity required to
be obtained or made by or with respect to Jefferson or AcquisitionCo in
connection with the execution and delivery of the Agreement or the consummation
of the transactions contemplated by the Agreement.
EXHIBIT 4.09
------------
___________________, 1996
Jefferson Savings Bancorp, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Agreement and Plan of Merger, dated as of September 25, 1996 (the
"Merger Agreement"), by and among L & B Financial, Inc. ("L & B"),
Jefferson Savings Bancorp, Inc. ("Jefferson"), and Jefferson Savings
Acquisition Co. ("AcquisitionCo")
Gentlemen:
I have been advised that I may be deemed to be an affiliate of L & B, as that
term is defined for purposes of paragraphs (c) and (d) of Rule 145 ("Rule 145")
of the Rules and Regulations of the Securities and Exchange Commission (the
"Commission") promulgated under the Securities Act of 1933, as amended (the
"Securities Act").
Pursuant to the terms and conditions of the Merger Agreement, each share of
common stock of L & B owned by me as of the effective time of the merger
contemplated by the Merger Agreement (the "Merger") may be converted into the
right to receive a combination of shares of common stock of Jefferson (the
"Jefferson Shares") and cash. This letter is delivered to Jefferson pursuant to
Section 4.09 of the Merger Agreement.
I represent and warrant to Jefferson and agree that:
1. I shall not make any sale, transfer or other disposition of the
Jefferson Shares I receive pursuant to the Merger in violation of the
Securities Act or the Rules and Regulations of the Commission promulgated
thereunder.
2. I understand that the issuance of the Jefferson Shares to me
pursuant to the Merger will be registered with the Commission under the
Securities Act. I also understand that because I may be deemed an "affiliate"
of L & B and because any distributions by me of the Jefferson Shares will not
be registered under the Securities Act, such Jefferson Shares must be held by
me unless (i) the sale, transfer or other distribution has been registered
under the Securities Act, (ii) the sale, transfer or other distribution of
such Jefferson Shares is made in accordance with the provisions of Rule 145,
or (iii) in the opinion of counsel acceptable to Jefferson some other
exemption from registration under the Securities Act is available with
respect to any such proposed distribution, sale, transfer or other
disposition of such Jefferson Shares.
A. I understand and agree that:
Jefferson Savings Bancorp, Inc.
___________________, 1996
Page 2
1. Stop transfer instructions will be issued with respect to the
Jefferson Shares and there will be placed on the certificates representing
such Jefferson Shares, or any certificate delivered in substitution therefor,
a legend stating in substance:
"The shares represented by this Certificate were issued in a
transaction to which Rule 145 under the Securities Act of 1933, as
amended, applied. The shares represented by this certificate may be
transferred only in accordance with the terms of a letter agreement
dated _________________, 1996, by the registered holder in favor of
Jefferson Savings Bancorp, Inc., a copy of which agreement is on file
at the principal offices of Jefferson Savings Bancorp, Inc."
2. Unless the transfer by me of Jefferson Shares is a sale made in
compliance with the provisions of Rule 145(d) or made pursuant to an
effective registration statement under the Securities Act, Jefferson reserves
the right to place the following legend on the Certificates issued to my
transferee:
"The shares represented by this Certificate have not been registered
under the Securities Act of 1933, as amended, and were acquired from a
person who received such shares in a transaction to which Rule 145
under the Securities Act of 1933, as amended, applied. The shares have
not been acquired by the holder with a view to, or for resale in
connection with, any distribution thereof within the meaning of the
Securities Act of 1933, as amended, and may not be sold or otherwise
transferred unless the shares have been registered under the Securities
Act of 1933, as amended, or an exemption from registration is
available."
I understand and agree that the legends set forth in paragraphs 1 and 2 above
shall be removed by delivery of substitute Certificates without any legend if I
deliver to Jefferson a copy of a letter from the staff of the Commission, or an
opinion of counsel in form and substance satisfactory to Jefferson, to the
effect that no such legend is required for the purpose of the Securities Act.
I have carefully read this letter and the Merger Agreement and understand the
requirements of each and the limitations imposed upon the distribution, sale,
transfer or other disposition of Jefferson Shares by me.
Very truly yours,
EXHIBIT 8.01
------------
CONFIDENTIALITY AGREEMENT
EXHIBIT 8.15
------------
FORM OF C. ▇▇▇▇▇ ▇▇▇▇ EMPLOYMENT AGREEMENT