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AGREEMENT AND PLAN OF MERGER
DATED AS OF THE 18TH DAY OF APRIL, 1999
AS AMENDED AND RESTATED
AS OF JULY 30, 1999
BY AND AMONG
CITIZENS BANKING CORPORATION
CITIZENS ACQUISITION, INC.
AND
F & M BANCORPORATION, INC.
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TABLE OF CONTENTS
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ARTICLE I. THE MERGER.............................................................................2
SECTION 1.1. Structure of the Merger..........................................................2
SECTION 1.2. Effect on Capital Stock..........................................................3
SECTION 1.3. Exchange of Certificates.........................................................4
SECTION 1.4. Alternative Structure............................................................6
SECTION 1.5. Options..........................................................................6
SECTION 1.6. Tax and Accounting Consequences..................................................7
ARTICLE II. CONDUCT PENDING THE MERGER............................................................7
SECTION 2.1. Conduct of the Company's Business Prior to the Effective Time....................7
SECTION 2.2. Forbearance by the Company.......................................................8
SECTION 2.3. Cooperation.....................................................................11
SECTION 2.4. Conduct of Parent's Business Prior to the Effective Time........................11
SECTION 2.5. Cooperation of Parent...........................................................11
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................................12
SECTION 3.1. Recitals True...................................................................12
SECTION 3.2. Capital Stock...................................................................12
SECTION 3.3. Due Organization................................................................12
SECTION 3.4. Authority.......................................................................12
SECTION 3.5. Subsidiaries; Significant Investments...........................................12
SECTION 3.6. Shareholder Approvals...........................................................13
SECTION 3.7. No Violations...................................................................13
SECTION 3.8. Consents and Approvals..........................................................13
SECTION 3.9. Company Reports.................................................................14
SECTION 3.10. Absence of Undisclosed Liabilities and Certain Changes or Events................15
SECTION 3.11. Taxes...........................................................................15
SECTION 3.12. Absence of Claims...............................................................15
SECTION 3.13. Absence of Regulatory Actions...................................................15
SECTION 3.14. Agreements......................................................................16
SECTION 3.15. Labor Matters...................................................................16
SECTION 3.16. Employee Benefit Plans..........................................................17
SECTION 3.17. Properties......................................................................18
SECTION 3.18. Knowledge as to Conditions......................................................19
SECTION 3.19. Compliance with Laws............................................................19
SECTION 3.20. Fees............................................................................19
SECTION 3.21. Environmental Matters...........................................................19
(i)
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SECTION 3.22. Allowance..................................................................................22
SECTION 3.23. Antitakeover Provisions Inapplicable.......................................................22
SECTION 3.24. Material Interests of Certain Persons......................................................23
SECTION 3.25. Insurance..................................................................................23
SECTION 3.26. Investment Securities......................................................................23
SECTION 3.27. Pooling of Interests.......................................................................23
SECTION 3.28. Derivatives................................................................................23
SECTION 3.29. Registration Obligations...................................................................24
SECTION 3.30. Books and Records..........................................................................24
SECTION 3.31. Corporate Documents........................................................................24
SECTION 3.32. Company Action.............................................................................24
SECTION 3.33. Indemnification............................................................................24
SECTION 3.34. Fair Lending; Community Reinvestment Act...................................................24
SECTION 3.35. Other Activities of the Company and its Subsidiaries.......................................24
SECTION 3.36. Year 2000..................................................................................25
SECTION 3.37. No Omission of Material Fact...............................................................25
SECTION 3.38. Conduct of Business........................................................................26
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PARENT...........................................................26
SECTION 4.1. Recitals True..............................................................................26
SECTION 4.2. Capital Stock..............................................................................26
SECTION 4.3. Due Organization...........................................................................26
SECTION 4.4. Authority..................................................................................26
SECTION 4.5. Subsidiaries; Significant Investments......................................................26
SECTION 4.6. Shareholder Approvals......................................................................27
SECTION 4.7. No Violations..............................................................................27
SECTION 4.8. Consents and Approvals.....................................................................28
SECTION 4.9. Parent Reports.............................................................................28
SECTION 4.10. Absence of Undisclosed Liabilities and Certain Changes or Events...........................29
SECTION 4.11. Taxes......................................................................................29
SECTION 4.12. Absence of Claims..........................................................................29
SECTION 4.13. Absence of Regulatory Actions..............................................................29
SECTION 4.14. Agreements.................................................................................29
SECTION 4.15. Labor Matters..............................................................................30
SECTION 4.16. Employee Benefit Plans.....................................................................30
SECTION 4.17. Properties.................................................................................31
SECTION 4.18. Knowledge as to Conditions.................................................................32
SECTION 4.19. Compliance with Laws.......................................................................32
SECTION 4.20. Fees.......................................................................................32
SECTION 4.21. Environmental Matters......................................................................32
(ii)
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SECTION 4.22. Allowance..................................................................................34
SECTION 4.23. Material Interests of Certain Persons......................................................34
SECTION 4.24. Insurance..................................................................................35
SECTION 4.25. Investment Securities......................................................................35
SECTION 4.26. Pooling of Interests.......................................................................35
SECTION 4.27. Derivatives................................................................................35
SECTION 4.28. Registration Obligations...................................................................35
SECTION 4.29. Books and Records..........................................................................35
SECTION 4.30. Corporate Documents........................................................................36
SECTION 4.31. Parent Action..............................................................................36
SECTION 4.32. Fair Lending; Community Reinvestment Act...................................................36
SECTION 4.33. Other Activities of Parent and its Subsidiaries............................................36
SECTION 4.34. Year 2000..................................................................................37
SECTION 4.35. No Omission of Material Fact...............................................................37
SECTION 4.36. Conduct of Business........................................................................37
ARTICLE V. ADDITIONAL AGREEMENTS...............................................................................37
SECTION 5.1. Acquisition Proposals......................................................................38
SECTION 5.2. Certain Policies of the Company............................................................38
SECTION 5.3. Access and Information.....................................................................38
SECTION 5.4. Certain Filings, Consents and Arrangements.................................................39
SECTION 5.5. Antitakeover Statutes......................................................................39
SECTION 5.6. Directors' and Officers' Indemnification...................................................39
SECTION 5.7. Additional Agreements......................................................................40
SECTION 5.8. Publicity..................................................................................40
SECTION 5.9. Regulatory Matters.........................................................................40
SECTION 5.10. Shareholders' Meeting......................................................................41
SECTION 5.11. Affiliates; Publication of Combined Financial Results......................................42
SECTION 5.12. Authorization, Reservation and Listing.....................................................42
SECTION 5.13. Notification of Certain Matters............................................................42
SECTION 5.14. Board of Directors and Executive Committee of Parent.......................................43
SECTION 5.15. Benefit Plans..............................................................................43
SECTION 5.16. Employment Arrangements....................................................................44
ARTICLE VI. CONDITIONS TO CONSUMMATION.........................................................................44
SECTION 6.1. Conditions to All Parties' Obligations.....................................................44
SECTION 6.2. Conditions to the Obligations of Parent and Merger Sub.....................................45
SECTION 6.3. Conditions to the Obligation of the Company................................................46
(iii)
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ARTICLE VII. TERMINATION...................................................46
SECTION 7.1. Termination............................................46
SECTION 7.2. Effect of Termination..................................47
ARTICLE VIII. EFFECTIVE DATE AND EFFECTIVE TIME............................47
SECTION 8.1. Effective Date and Effective Time......................47
ARTICLE IX. OTHER MATTERS..................................................48
SECTION 9.1. Certain Definitions; Interpretation....................48
SECTION 9.2. Survival...............................................48
SECTION 9.3. Waiver.................................................49
SECTION 9.4. Counterparts...........................................49
SECTION 9.5. Governing Law..........................................49
SECTION 9.6. WAIVER OF JURY TRIAL...................................49
SECTION 9.7. Expenses...............................................49
SECTION 9.8. Notices................................................49
SECTION 9.9. Entire Agreement; Etc..................................50
SECTION 9.10. Assignment.............................................50
ANNEX 1
Stock Option Agreement
ANNEX 2
Affiliate Letter
(iv)
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AGREEMENT AND PLAN OF MERGER, dated as of the 18th day of April, 1999, as
amended and restated as of July 30, 1999 (this "Plan"), by and among Citizens
Banking Corporation ("Parent"), Citizens Acquisition, Inc., a wholly-owned
subsidiary of Parent ("Merger Sub"), and F & M Bancorporation, Inc. (the
"Company").
RECITALS:
A. Amendment and Restatement. Parent and the Company are parties to that
certain Agreement and Plan of Merger dated as of the 18th day of April 1999 (the
"Original Plan") pursuant to which the Company would merge with and into Parent.
Parent and the Company desire to amend and restate the Original Plan in
accordance with Sections 1.4 and 9.3 of the Original Plan to provide for the
merger of Merger Sub with and into the Company with the Company as the surviving
corporation.
B. Parent. Parent is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Michigan, with its principal
executive offices located in Flint, Michigan. As of the date hereof, Parent has
100,000,000 authorized shares of common stock, without par value, of which no
more than 27,617,275 shares were outstanding as of the date hereof, 5,000,000
authorized shares of preferred stock, without par value, none of which were
outstanding as of the date hereof, and has no other class of capital stock
authorized. Parent is a bank holding company duly registered with the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board") under the
Bank Holding Company Act of 1956, as amended (the "BHC Act").
C. Merger Sub. Merger Sub is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Wisconsin, with its
principal executive offices located in Flint, Michigan. As of the date hereof,
Merger Sub has 9,000 authorized shares of common stock, par value $0.01 per
share, of which 100 shares were outstanding and no other class of capital stock
authorized. All the outstanding shares of the capital stock of Merger Sub are
owned directly by Parent. The number of shares of Merger Sub outstanding is not
subject to change prior to the Effective Time.
D. The Company. The Company is a corporation duly incorporated, validly
existing and in active status under the laws of the State of Wisconsin, with its
principal executive offices located in Kaukauna, Wisconsin. As of the date
hereof, the Company has 50,000,000 authorized shares of common stock, par value
$1.00 per share ("Company Common Stock"), of which no more than 15,567,381
shares were outstanding as of the date hereof, and has no other class of capital
stock authorized. The Company is a bank holding company duly registered with the
Federal Reserve Board under the BHC Act.
E. Options, Etc. Neither the Company nor any of its subsidiaries has any
shares of its capital stock reserved for issuance, any outstanding option, call
or commitment relating to shares of
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its capital stock or any outstanding securities, obligations or agreements
convertible into or exchangeable for, or giving any person any right (including,
without limitation, preemptive rights) to subscribe for or acquire from it, any
shares of its capital stock, except as set forth in the Company Reports (as
defined in Section 3.9) or in the Company Disclosure Letter (as defined in
Article III).
F. Parent Options, Etc. Neither Parent nor any of its subsidiaries has
any shares of its capital stock reserved for issuance, any outstanding option,
call or commitment relating to shares of its capital stock or any outstanding
securities, obligations or agreements convertible into or exchangeable for, or
giving any person any right (including, without limitation, preemptive rights)
to subscribe for or acquire from it, any shares of its capital stock, except as
set forth in the Parent Reports (as defined in Section 4.9).
G. Stock Option Agreement. As a condition and inducement to Parent's
willingness to enter into this Plan, the Company is entering into a Stock Option
Agreement dated as of the date hereof in the form of Annex 1 hereto (the "Stock
Option Agreement") with Parent pursuant to which the Company has granted to
Parent an option to purchase shares of Company Common Stock.
H. Tax-Free Reorganization. The parties hereto intend that the Merger
provided for herein shall qualify as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"),
and the rules and regulations promulgated thereunder, and this Plan is intended
to be and is adopted as a plan of reorganization within the meaning of Section
368 of the Code.
I. Board Approvals. The respective Boards of Directors of Parent, Merger
Sub, and the Company have duly approved this Plan and have duly authorized its
execution and delivery.
In consideration of their mutual promises and obligations hereunder, the
parties hereto adopt and make this Plan and prescribe the terms and conditions
hereof and the manner and basis of carrying it into effect, which shall be as
follows:
ARTICLE I. THE MERGER
SECTION 1.1. Structure of the Merger. On the Effective Date (as defined
in Section 8.1):
(a) Effect of the Merger. The Merger Sub will merge (the "Merger") with
and into the Company, with the Company being the surviving corporation (the
"Surviving Corporation"), pursuant to the provisions of, and with the effect
provided in the Wisconsin Business Corporation Law (the "WBCL"). The separate
corporate existence of the Company shall thereupon cease. The Surviving
Corporation shall continue to be governed by the WBCL and its separate corporate
existence with all of its rights, privileges, immunities, powers and franchises
shall continue
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unaffected by the Merger. The Merger shall have the effects set forth in
Subchapter XI of Chapter 180 of the WBCL.
(b) Articles of Incorporation and By-laws. The articles of incorporation
and by-laws of the Surviving Corporation shall be the articles of incorporation
and by-laws of Merger Sub immediately prior to the Effective Time (as defined in
Section 8.1).
(c) Directors and Officers. The Board of Directors of Merger Sub
immediately prior to the Effective Time shall be the initial Board of Directors
of the Surviving Corporation and the officers of Merger Sub immediately prior to
the Effective Time shall be the initial officers of the Surviving Corporation.
SECTION 1.2. Effect on Capital Stock. At the Effective Time (as defined
in Section 8.1), automatically and without any action on the part of any holder
of any of the following securities:
(a) Conversion of Outstanding Shares. Each share (a "Share") of Company
Common Stock issued and outstanding at the Effective Time (other than shares
held directly or indirectly by Parent, other than shares held in a fiduciary or
agency capacity or in satisfaction of a debt previously contracted), shall be
converted, subject to Section 1.2(c), into the right to receive 1.303 shares
(the "Exchange Ratio") of validly issued, fully paid and nonassessable shares
("Parent Shares") of the common stock, without par value, of Parent (the "Parent
Common Stock"). Each share of Parent Common Stock issued and outstanding at the
Effective Time shall remain issued and outstanding. The aggregate number of
Parent Shares that shall be issued in the Merger, subject to Section 1.2(b),
shall be referred to herein as the "Stock Amount."
(b) Cancellation. Each Share held directly or indirectly by Parent, other
than Shares held in a fiduciary or agency capacity or in satisfaction of a debt
previously contracted, and Shares held as treasury stock of the Company, shall
be canceled and retired and shall cease to exist, and no exchange or payment
shall be made with respect thereto.
(c) Adjustments to Exchange Ratio. The Exchange Ratio and Stock Amount
shall be equitably adjusted to reflect fully the effect of any reclassification,
stock split, reverse split, stock dividend (including any dividend or
distribution of securities convertible into Parent Common Stock or Company
Common Stock), reorganization or other like change with respect to Parent Common
Stock or Company Common Stock, as applicable, occurring after the date hereof
and prior to the Effective Date.
(d) Fractional Shares. No certificates or script representing less than
one Parent Share shall be issued upon the surrender for exchange of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding Shares (the "Certificates"). In lieu of any such
fractional share, each holder of Shares who would otherwise have been entitled
to a fraction of a Parent Share upon surrender of Certificates for exchange
shall be paid, upon such surrender, cash (without interest) determined by
multiplying (i) the per share closing price on The Nasdaq Stock
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Market of Parent Common Stock on the date of the Effective Time by (ii) the
fractional interest of Parent Common Stock to which such holder would otherwise
be entitled. As soon as practicable after determining the amount of cash, if
any, to be paid to former holders of Company Common Stock with respect to any
fractional shares of Parent Common Stock, the Exchange Agent (as defined below)
shall promptly pay such amounts to such holders in accordance with this Article
I.
(e) Capital Stock of Merger Sub. Each share of common stock of Merger Sub
issued and outstanding immediately prior to the Effective Time shall be
converted into one share of the validly issued, fully paid and nonassessable
(except as provided in Wis. Stats. Section 180.0622(2)(b), as judicially
interpreted) common stock of the Surviving Corporation, such shares shall
thereafter constitute all of the issued and outstanding shares of capital stock
of the Surviving Corporation.
SECTION 1.3. Exchange of Certificates.
(a) Exchange Agent. Parent shall supply, or shall cause to be supplied, to
or for the account of ▇▇▇▇▇▇ Trust and Savings Bank, or such other bank (which
may be a subsidiary of Parent) or trust company as shall be designated by Parent
and reasonably satisfactory to the Company (the "Exchange Agent"), in trust for
the benefit of the holders of Company Common Stock, for exchange in accordance
with this Section 1.3, through the Exchange Agent, certificates evidencing the
Parent Shares issuable pursuant to Section 1.2 in exchange for outstanding
Shares.
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Parent will instruct the Exchange Agent to mail to each holder
of record of Certificates (i) 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 Parent and the Company
may reasonably specify), and (ii) instructions to effect the surrender of the
Certificates in exchange for the certificates evidencing Parent Shares. Upon
surrender of a Certificate for cancellation to the Exchange Agent together with
such letter of transmittal, duly executed, and such other customary documents as
may be required pursuant to such instructions, the holder of such Certificate
shall be entitled to receive in exchange therefor (A) certificates evidencing
that number of whole Parent Shares which such holder has the right to receive in
accordance with the Exchange Ratio in respect of the Shares formerly evidenced
by such Certificate, (B) any dividends or other distributions to which such
holder is entitled pursuant to Section 1.3(c), and (C) cash in respect of
fractional shares as provided in Section 1.2(e) (the Parent Shares, dividends,
distributions and cash being, collectively, the "Merger Consideration"), and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Shares which is not registered in the transfer records
of the Company as of the Effective Time, the Merger Consideration may be issued
and paid in accordance with this Article I to a transferee if the Certificate
evidencing such Shares is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer pursuant to this Section
1.3 and by evidence that any applicable stock transfer taxes have been paid.
Until so surrendered, each outstanding Certificate that, prior to the Effective
Time, represented Shares of Company Common Stock will be deemed from and after
the Effective Time, for all corporate purposes, other
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than the payment of dividends and subject to Section 1.2(e), to evidence the
ownership of the number of full Parent Shares into which such shares of Company
Common Stock shall have been so converted. Parent Shares issued in the Merger
shall be issued as of and deemed to be outstanding as of the Effective Time.
Parent shall cause all such Parent Shares issued in accordance with the Merger
to be duly authorized, validly issued, fully paid and nonassessable.
(c) Distributions With Respect to Unexchanged Parent Shares. No dividends
or other distributions declared or made after the Effective Time with respect to
Parent Shares with a record date after the Effective Time shall be paid to the
holder of any unsurrendered Certificate with respect to the Parent Shares they
are entitled to receive until the holder of such Certificate shall surrender
such Certificate. Subject to applicable law, following surrender of any such
Certificate, there shall be paid to the record holder of the certificates
representing whole Parent Shares issued in exchange therefor, without interest,
(i) at the time of such surrender, the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to such whole Parent shares and (ii) at the appropriate payment date,
the amount of dividend or other distributions with a record date after the
Effective Time and a payment date subsequent to such surrender.
(d) Transfers of Ownership. If any certificate for Parent Shares is to be
issued in a name other than that which the Certificate surrendered in exchange
therefor is registered, it will be a condition to the issuance thereof that the
Certificate so surrendered will be properly endorsed and otherwise in proper
form for transfer and that the person requesting such exchange will have paid to
Parent or any agent designated by it any transfer or other taxes required by
reason of the issuance of a Certificate for Parent Shares in any name other than
that of the registered holder of the certificate surrendered, or have
established to the satisfaction of Parent or any agent designated by it that
such tax has been paid or is not payable.
(e) Withholding Rights. Parent or the Exchange Agent shall be entitled to
deduct and withhold from the Merger Consideration otherwise payable pursuant to
this Plan to any holder of Company Common Stock such amounts as Parent or the
Exchange Agent is required to deduct and withhold with respect to the making of
such payment under the Code, or any provision of state, local or foreign tax
law. To the extent that amounts are so withheld by Parent or the Exchange Agent,
such withheld amounts shall be treated for all purposes of this Plan as having
been paid to the holder of the Shares in respect of which such deduction and
withholding was made by Parent or the Exchange Agent.
(f) No Further Ownership Rights in Company Common Stock. The Merger
Consideration delivered upon the surrender for exchange of Shares in accordance
with the terms hereof shall be deemed to have been issued in full satisfaction
of all rights pertaining to such Shares. From and after the Effective Time,
there shall be no transfers on the stock transfer records of the Company of any
shares of Company Common Stock that were outstanding immediately prior to the
Effective Time. If after the Effective Time Certificates are presented to the
Surviving Corporation, they shall be canceled and exchanged for the Merger
Consideration deliverable in respect thereof pursuant to this Plan in accordance
with the procedures set forth in this Section 1.3.
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(g) Unclaimed Merger Consideration. Any portion of the aggregate Merger
Consideration or the proceeds of any investments thereof that remains unclaimed
by the shareholders of the Company for six months after the Effective Time shall
be repaid by the Exchange Agent to Parent. Any shareholder of the Company who
has not theretofore complied with this Section 1.3 shall thereafter be entitled
to look only to Parent for payment of the Merger Consideration deliverable in
respect of each share of Company Common Stock held by such stockholder without
any interest thereon. If outstanding certificates for shares of Company Common
Stock are not surrendered or the payment for them is not claimed prior to the
date on which such payments would otherwise escheat to or become the property of
any governmental unit or agency, the unclaimed items shall, to the extent
permitted by abandoned property and any other applicable law, become the
property of Parent (and to the extent not in its possession shall be paid over
to Parent), free and clear of all claims or interest of any person previously
entitled to such claims. Notwithstanding the foregoing, none of Parent, the
Surviving Corporation, the Exchange Agent or any other person shall be liable to
any former holder of Company Common Stock for any amount delivered to a public
official pursuant to applicable abandoned property, escheat or similar laws.
(h) Lost, Stolen or Destroyed Certificates. In the event 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 the Exchange Agent, the posting by such person of
a bond in such amount as the Exchange Agent may direct as indemnity against any
claim that may be made against it with respect to such Certificate, the Exchange
Agent will issue in exchange for such lost, stolen or destroyed Certificate the
shares of Parent Common Stock and any cash in lieu of fractional shares
deliverable in exchange therefor pursuant to this Agreement.
SECTION 1.4. Alternative Structure. Notwithstanding anything in this Plan
to the contrary, Parent may specify that, before or after the Merger, any of its
direct or indirect subsidiaries and the Company and any of its direct or
indirect subsidiaries shall enter into transactions other than those described
in Article I hereof in order to effect the purposes of this Plan or to
facilitate the consolidation of the Company's subsidiaries, and Parent and the
Company shall take all action necessary and appropriate to effect, or cause to
be effected, such transactions; provided, however, that no such specification
shall materially and adversely effect the timing of the consummation of the
transactions contemplated herein, the tax effect or economic benefits of the
Merger to the holders of Company Common Stock or the "pooling of interests"
accounting treatment of the transaction.
SECTION 1.5. Options. (a) At the Effective Time, each option granted by
the Company to purchase shares of Company Common Stock under (i) the Company's
1993 Incentive Stock Option Plan, (ii) the Company's 1993 Stock Option Plan for
Non-Employee Directors and (iii) any other stock option plan or arrangement of
the Company (collectively, the "Company Option Plans") which is outstanding and
unexercised immediately prior thereto shall cease to represent a right to
acquire shares of Company Common Stock and shall be converted automatically into
an option to purchase shares of Parent Common Stock in an amount and at an
exercise price determined as provided below, and otherwise subject to the terms
of the Company Option Plans pursuant to which such options have been issued and
the agreements evidencing grants thereunder:
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(i) The number of shares of Parent Common Stock to be subject to the new
option shall be equal to the product of the number of shares of
Company Common Stock subject to the original option and the Exchange
Ratio; provided that any fractional shares of Parent Common Stock
resulting from such multiplication shall be rounded to the nearest
whole share; and
(ii) The exercise price per share of Parent Common Stock under the new
option shall be equal to the exercise price per share of Company
Common Stock under the original option divided by the Exchange Ratio,
provided that such exercise price shall be rounded down to the nearest
whole cent.
(b) The adjustment provided herein with respect to any options which are
"incentive stock options" (as defined in Section 422 of the Code) shall be and
is intended to be effected in a manner which is consistent with Section 424(a)
of the Code. The duration and other terms of the new option shall be the same as
the original option except that all references to the Company shall be deemed to
be references to Parent.
(c) Parent agrees to file with Securities and Exchange Commission (the
"SEC") as soon as reasonably practicable after the Effective Time a registration
statement on Form S-8 or other appropriate form under the Securities Act of 1933
(together with the rules and regulations thereunder, the "Securities Act") to
register Parent Common Stock issuable upon exercise of options under the Company
Option Plans and use its reasonable efforts to cause such registration statement
to remain effective until the exercise or expiration of such options.
SECTION 1.6. Tax and Accounting Consequences. It is intended by the
parties hereto that the Merger shall (i) constitute a reorganization within the
meaning of Section 368 of the Code and (ii) qualify for accounting treatment as
a pooling of interests. The parties hereto hereby adopt this Plan as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
United States Treasury Regulations.
ARTICLE II. CONDUCT PENDING THE MERGER
SECTION 2.1. Conduct of the Company's Business Prior to the Effective
Time. Except as expressly provided in this Plan, during the period from the date
of this Plan to the Effective Time, the Company shall, and shall cause each of
its subsidiaries to, (i) conduct its business in the usual, regular and ordinary
course of business consistent with past practice, (ii) use its best efforts to
maintain and preserve intact its business organization, properties, leases,
employees and advantageous business relationships and retain the services of its
officers and key employees, (iii) use its best efforts to consummate the
Agreement of Merger and Reorganization, dated as of July 21, 1998, by and
between the Company, CBE, Inc., and F & M Merger Corporation, as amended on
November 30, 1998 (the "CBE Merger Agreement"), (iv) take no action which would
adversely
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affect or delay the ability of the Company, Parent or any subsidiary thereof to
obtain any necessary approvals, consents or waivers of any governmental
authority required for the transactions contemplated hereby or to perform its
covenants and agreements on a timely basis under this Plan and (v) take no
action that is reasonably likely to have a Material Adverse Effect (as defined
in Section 9.1 hereof) on the Company.
SECTION 2.2. Forbearance by the Company. During the period from the date
of this Plan to the Effective Time, the Company shall not, and shall not permit
any of its subsidiaries, without the prior written consent of Parent, to:
(a) other than in the ordinary course of business consistent with past
practice, make any loan or advance or incur any indebtedness for borrowed money,
assume, guarantee, endorse or otherwise as an accommodation become responsible
for the obligations of any other person;
(b) (i) adjust, split, combine or reclassify any capital stock;
(ii) make, declare or pay any dividend or make any other distribution
on, or directly or indirectly redeem, purchase or otherwise
acquire, any shares of its capital stock or any securities or
obligations convertible into or exchangeable for any shares of
its capital stock, except for regular quarterly cash dividends
both (i) at a rate per share of Company Common Stock not in
excess of $0.25 per share and (ii) having record dates and
payment dates consistent with past practice, provided, however,
that the Company may not declare regular quarterly cash
dividends after receipt of all regulatory approvals necessary
for consummation (excluding any applicable waiting periods) of
the Merger to the extent that the Company's shareholders would,
after giving effect to the Merger, be eligible to receive a
dividend from Parent for the same quarter for which the Company
did not declare a dividend as a result of this subsection
2.2(b)(ii), and, except for reductions in income resulting
directly from adjustments specifically made at Parent's request,
may not declare any regular quarterly cash dividends in any
quarter if with respect to such quarter the amount of the
dividend exceeds the amount of net income for such quarter;
(iii) grant any stock appreciation rights or grant, sell or issue to
any individual, corporation or other person any right or option
to acquire any shares of its capital stock or securities
evidencing a right to convert into or acquire, any shares of its
capital stock; or
(iv) issue any additional shares of capital stock except (A) pursuant
to the exercise of Company options outstanding as of the date
hereof and on the terms in effect on the date hereof, or (B)
shares issuable pursuant to the CBE Merger Agreement.
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(c) other than in the ordinary course of business consistent with past
practice and pursuant to policies currently in effect, sell, transfer, mortgage,
encumber or otherwise dispose of any of its properties, leases or assets to any
person, or cancel, release or assign any indebtedness of any such person, except
pursuant to contracts or agreements in force as of the date of this Plan which
have been previously provided to Parent;
(d) make any capital expenditures, other than capital expenditures for
data processing conversions pursuant to contracts or agreements in force as of
the date of this Plan which have been previously provided to Parent and capital
expenditures made in the ordinary course of business consistent with past
practice in amounts not exceeding $50,000, individually or $500,000 in the
aggregate;
(e) increase in any manner the compensation or fringe benefits of any of
its employees or directors, or create or institute, or make any payments
pursuant to, any severance plan or package, or pay any pension or retirement
allowance not required by any existing plan or agreement to any such employees
or directors, or become a party to, amend or commit itself to or fund or
otherwise establish any trust or account related to any Employee Plan (as
defined in Section 3.15), with or for the benefit of any employee, other than
general increases in compensation in the ordinary course of business consistent
with past practice not in excess of 5% in any 12-month period, or any amendment
required by applicable law (provided that any such amendment shall provide the
least increase to cost permitted under such applicable law), or voluntarily
accelerate the vesting of any stock options or other compensation or benefit;
(f) (i) other than in the ordinary course of business consistent with
past practice in individual amounts not to exceed $100,000 or
$400,000 in the aggregate or in securities transactions as
provided in (f)(ii) below, make any investment either by
contributions to capital, property transfers, or purchase of any
property or assets of any person, provided that the Company shall
make no acquisition of business operations, other than with
respect to the CBE Merger Agreement, without Parent's prior
consent; or
(ii) other than purchases of direct obligations of the United States
of America with a remaining maturity at the time of purchase of 3
years or less, purchase or acquire securities of any type;
provided, however, that, in the case of investment securities,
the Company may purchase (or permit any subsidiary of the Company
to purchase) investment securities if, within two business days
after the Company requests in writing (which notice shall
describe in detail the investment securities to be purchased and
the price thereof) that Parent consent to the making of any such
purchase, Parent has approved such request in writing or has not
responded in writing to such request;
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(g) enter into or terminate any contract or agreement, or make any change
in any of its leases or contracts, other than with respect to those involving
aggregate payments of less than, or the provision of goods or services with a
market value of less than, $50,000;
(h) settle any claim, action or proceeding involving any liability of the
Company or any of its subsidiaries for money damages in excess of $100,000 or
material restrictions upon the operations of the Company or any of its
subsidiaries;
(i) except in the ordinary course of business and in amounts less than
$250,000, waive or release any material right or collateral or cancel or
compromise any extension of credit or other debt or claim;
(j) make, renegotiate, renew, increase, extend or purchase any loan, lease
(credit equivalent), advance, credit enhancement or other extension of credit,
or make any commitment in respect of any of the foregoing, except (i) unsecured
loans, advances or commitments in amounts less than $250,000 made in the
ordinary course of business consistent with past practice and made in conformity
with all applicable policies and procedures, (ii) secured loans, advances or
commitments in an amount less than $5,000,000 made in the ordinary course of
business consistent with past practice and made in conformity with all
applicable policies and procedures and (iii) loans or advances as to which the
Company has a legally binding obligation to make such loan or advance as of the
date hereof and a description of which has been provided by the Company in
writing to Parent prior to the execution of this Plan;
(k) except as contemplated by Section 5.2, change its fiscal year or its
method of accounting as in effect at December 31, 1998, except as required by
changes in generally accepted accounting principles as concurred in by the
Company's independent auditors;
(l) knowingly take any action that would prevent or impede the Merger from
qualifying (i) for "pooling of interests" accounting treatment or (ii) as a
reorganization within the meaning of Section 368 of the Code; provided, however,
that nothing contained herein shall limit the ability of Parent to exercise its
rights under the Stock Option Agreement;
(m) enter into any new activities or lines of business, or cease to
conduct any activities or lines of business that it conducts on the date hereof,
or conduct any business activity not consistent with past practice;
(n) amend its articles of incorporation or its by-laws;
(o) amend or otherwise modify the CBE Merger Agreement; or
(p) agree to, or make any commitment to, take any of the actions
prohibited by this Section 2.2 or any action which would make any of the
representations or warranties of the Company
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contained in this Plan incorrect or prevent the Company from performing or cause
the Company not to perform its covenants hereunder.
SECTION 2.3. Cooperation. The Company shall, and the Company shall cause
each of its subsidiaries to, cooperate with Parent in completing the
transactions contemplated hereby including, as set forth in Section 1.4, with
respect to any merger or consolidation of the Company's subsidiaries with
Parent's subsidiaries which the Parent may request and the taking of actions and
giving of notices related thereto and providing such notices as may be required
to terminate those contracts identified by Parent prior to the Effective Time,
which terminations shall be effective on the Effective Date and conditioned upon
the consummation of the Merger. Neither the Company nor any of its subsidiaries
shall take, cause to be taken or agree or make any commitment to take any
action: (i) that would cause any of the representations or warranties of it that
are set forth in Article III hereof not to be true and correct, or (ii) that is
inconsistent with or prohibited by Section 2.1 or Section 2.2.
SECTION 2.4. Conduct of Parent's Business Prior to the Effective Time.
Except as expressly provided in this Plan, during the period from the date of
this Plan to the Effective Time, Parent shall, and shall cause each of its
subsidiaries to, (i) conduct its business in the usual, regular and ordinary
course of business consistent with past practice, (ii) take no action outside of
the ordinary course of business (mergers and acquisitions by Parent shall be
deemed to be in the ordinary course of its business) which would adversely
affect or delay the ability of the Company, Parent or any subsidiary thereof to
obtain any necessary approvals, consents or waivers of any governmental
authority required for the transactions contemplated hereby or to perform its
covenants and agreements on a timely basis under this Plan, (iii) take no action
that is reasonably likely to have a Material Adverse Effect on Parent, and (iv)
enter into any agreement that would result in a change in control of Parent
without the prior written consent of the Company, provided however that such
consent shall not be required if Parent's Board of Directors determines, upon
receipt of a written opinion of its outside counsel, that such requirement would
result in a breach of its fiduciary duties to the shareholders of Parent. For
purposes of this Section 2.4, change in control shall mean the occurrence of any
of the following events: (A) the acquisition of ownership by a person, firm or
corporation, or a group acting in concert, of fifty-one percent, or more, of the
outstanding Parent Common Stock, (B) a sale of all or substantially all of the
assets of the Parent to any person, firm or corporation, or (C) a merger or
similar transaction between Parent and another entity if shareholders of Parent
do not own a majority of the voting stock of the corporation surviving the
transaction and a majority in value of the total outstanding stock of such
surviving corporation after the transaction. Parent shall not knowingly take
any action that would prevent or impede the Merger from qualifying for "pooling
of interests" accounting treatment or as a reorganization within the meaning of
Section 368 of the Code; provided, however, that nothing contained herein shall
limit the ability of Parent to exercise its rights under the Stock Option
Agreement.
SECTION 2.5. Cooperation of Parent. Parent shall, and Parent shall cause
each of its subsidiaries to, cooperate with the Company in completing the
transactions contemplated hereby and shall not take, cause to be taken or agree
to make any commitment to take any action (i) that is
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reasonably likely to have a Material Adverse Effect on Parent, or (ii) that is
inconsistent with or prohibited by Section 2.4.
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent, that, except as specifically
disclosed in a letter (the "Company Disclosure Letter") of the Company delivered
to Parent prior to the execution of this Plan (and making specific reference to
the Section of this Plan for which an exception is taken):
SECTION 3.1. Recitals True. The facts set forth in the Recitals of this
Plan with respect to the Company are true and correct.
SECTION 3.2. Capital Stock. All outstanding shares of capital stock of
the Company and its subsidiaries have been duly authorized and validly issued,
are fully paid and non-assessable, except as provided in Wis. Stats. Section
180.0622(2)(b), as judicially interpreted, in the case of Wisconsin - organized
corporations and banks, and Wis. Stats. Section 220.07 in the case of Wisconsin
state banks, and are not subject to any preemptive rights.
SECTION 3.3. Due Organization. Each subsidiary of the Company is a
corporation or banking organization duly incorporated, validly existing and in
good standing or active status under the laws of the state of its incorporation.
Each of the Company's subsidiaries which is a bank is a member of the Bank
Insurance Fund ("BIF") of the Federal Deposit Insurance Corporation (the "FDIC")
and all of its deposits are subject to assessment by the BIF.
SECTION 3.4. Authority. Each of the Company and its subsidiaries has the
power and authority, and is duly qualified in all jurisdictions (except for such
qualifications the absence of which, in the aggregate, would not have a Material
Adverse Effect on Company) where such qualification is required, to carry on its
business as it is now being conducted and to own all its properties and assets,
and it has all federal, state, local, and foreign governmental authorizations
necessary for it to own or lease its properties and assets and to carry on its
business as it is now being conducted.
SECTION 3.5. Subsidiaries; Significant Investments. The only subsidiaries
of the Company are set forth in the Company Disclosure Letter. All of the shares
of capital stock of each subsidiary of the Company are owned directly and of
record by the Company or a wholly-owned subsidiary of the Company, in each such
case free and clear of all liens, claims, encumbrances and restrictions on
transfer ("Liens") and there are no options or similar rights with respect to
any such capital stock. Neither the Company nor any of its subsidiaries
maintains a liquidation or similar type of account. None of the Company or any
of such subsidiaries owns any equity securities, any
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security convertible or exchangeable into an equity security or any rights to
acquire any equity security except those of its subsidiaries as listed in the
Company Disclosure Letter.
SECTION 3.6. Shareholder Approvals.
(a) Subject to the receipt of required shareholder approval of this Plan,
this Plan and the transactions contemplated herein have been duly authorized by
all necessary corporate action of the Company. In addition, the Company has
received the written opinion of ▇▇▇▇▇ Financial, Inc. to the effect that the
Merger Consideration to be received by the shareholders of the Company is fair
to such shareholders from a financial point of view and has provided a true and
complete copy of such opinion to Parent. Subject to receipt of (i) such
shareholder approval and (ii) the required approvals, consents or waivers of
governmental authorities referred to in Section 6.1(b), this Plan is a valid and
binding agreement of the Company enforceable against it in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors, rights and to general equity principles.
(b) The affirmative vote of a majority of the outstanding shares of
Company Common Stock entitled to vote on this Plan is the only shareholder vote
required for approval of the Plan and consummation of the Merger and the other
transactions contemplated hereby.
SECTION 3.7. No Violations. The execution, delivery and performance of this
Plan by the Company do not, and the consummation of the transactions
contemplated hereby by the Company and each of its subsidiaries will not,
constitute (a) a breach or violation of, or a default under, any law, rule or
regulation or any judgment, decree, order, governmental permit or license, or
agreement, indenture or instrument of the Company or any subsidiary of the
Company or to which the Company or any of its subsidiaries (or any of their
respective properties) is subject, or enable any person to enjoin the Merger or
the other transactions contemplated hereby, (b) a breach or violation of, or a
default under, the articles of incorporation or by-laws or similar
organizational documents of the Company or any subsidiary of the Company or (c)
a breach or violation of, or a default under (or an event which with due notice
or lapse of time or both would constitute a default under), or result in the
termination of, accelerate the performance required by, or result in the
creation of any lien, pledge, security interest, charge or other encumbrance
upon any of the properties or assets of the Company or any subsidiary of the
Company under, any of the terms, conditions or provisions of any note, bond,
indenture, deed of trust, loan agreement or other agreement, instrument or
obligation to which the Company or any subsidiary of the Company is a party, or
to which any of their respective properties or assets may be bound or affected,
except for such breaches, violations, defaults, rights of termination or
acceleration or liens or encumbrances referred to in clause (c) that would not
individually or in the aggregate have a Material Adverse Effect on the Company.
SECTION 3.8. Consents and Approvals. Except for (a) the filing of
applications and notices, as applicable, with the Federal Reserve Board under
the BHC Act and approval of such applications and notices, (b) the filing of any
required applications or notices with any state or
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foreign agencies and approval of such applications and notices (the "State
Approvals"), (c) the filing with the SEC of a joint proxy statement in
definitive form relating to the meetings of the Company's and Parent's
shareholders (the "Company Meeting" and "Parent Meeting," respectively) to be
held in connection with this Plan and the transactions contemplated hereby (the
"Joint Proxy Statement") and the registration statement on Form S-4 (the "S-4")
in which the Joint Proxy Statement will be included as a prospectus, (d) the
filing of the Certificate of Merger with the Wisconsin Department of Financial
Institutions pursuant to the WBCL, (e) such filings and approvals as are
required to be made or obtained under the securities or "Blue Sky" laws of
various states in connection with the issuance of the shares of Parent Common
Stock pursuant to this Plan, and (f) the approval of this Plan by the requisite
vote of the shareholders of the Company, no consents or approvals of or filings
or registrations with any court, administrative agency or commission or other
governmental authority or instrumentality (each a "Governmental Entity") or with
any third party are necessary in connection with (i) the execution and delivery
by the Company of this Plan and (ii) the consummation by the Company of the
Merger and the other transactions contemplated hereby.
SECTION 3.9. Company Reports.
(a) As of their respective dates, neither the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1998, nor any other document
filed by the Company subsequent to December 31, 1998 under Section 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Securities
Exchange Act"), each in the form (including exhibits) filed with the SEC
(collectively, the "Company Reports"), contained or will contain any untrue
statement of a material fact or omitted or will omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading and the
Company Reports complied in all material respects with the requirements of the
Securities Exchange Act. Each of the consolidated balance sheets contained or
incorporated by reference in the Company Reports (including in each case any
related notes and schedules) fairly presented in all material respects the
financial position of the entity or entities to which it relates as of its date
and each of the consolidated statements of income, consolidated statements of
stockholders' equity and consolidated statements of cash flows, contained or
incorporated by reference in the Company Reports (including in each case any
related notes and schedules), fairly presented in all material respects the
results of operations, stockholders' equity and cash flows, as the case may be,
of the entity or entities to which it relates for the periods set forth therein
(subject, in the case of unaudited interim statements, to normal year-end audit
adjustments that are not material in amount or effect), in each case in
accordance with generally accepted accounting principles consistently applied
during the periods involved, except as may be noted therein.
(b) The Company and each of its subsidiaries have each timely filed all
reports, registrations and statements, together with any amendments required to
be made with respect thereto, that they were required to file since December 31,
1995 with (i) the SEC, (ii) the Federal Reserve Board, (iii) the FDIC, (iv) the
BIF, (vi) any state banking or insurance commission or other regulatory
authority (each, a "State Regulator") (such entities collectively, the
"Regulatory
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Agencies"), and (vii) the National Association of Securities Dealers, Inc. and
any other self-regulatory organization (an "SRO"), and all other material
reports and statements required to be filed by them since December 31, 1995,
including, without limitation, any report or statement required to be filed
pursuant to the laws, rules or regulations of the United States, the Regulatory
Agencies or any SRO, and have paid all fees and assessments due and payable in
connection therewith.
SECTION 3.10. Absence of Undisclosed Liabilities and Certain Changes or
Events. Since December 31, 1998, the Company and its subsidiaries have conducted
their business only in the ordinary course of business consistent with past
practice and have not incurred any material liability, except in the ordinary
course of their business consistent with past practice. Since December 31, 1998,
there has not been any change in the condition (financial or other), properties,
business, results of operations or prospects of the Company or its subsidiaries
which, individually or in the aggregate, has had, or is reasonably likely to
have, a Material Adverse Effect on the Company.
SECTION 3.11. Taxes. All federal, state, local, and foreign tax returns
required to be filed by or on behalf of the Company or any of its subsidiaries
have been timely filed or requests for extensions have been timely filed and any
such extension shall have been granted and not have expired, and all such filed
returns are complete and accurate in all respects. All taxes shown on such
returns have been paid in full or adequate provision has been made for any such
taxes on the Company's balance sheet (in accordance with generally accepted
accounting principles). There is no audit examination, deficiency, or refund
litigation with respect to any taxes of the Company or any of its subsidiaries
that could result in a determination. All taxes, interest, additions, and
penalties due with respect to completed and settled examinations or concluded
litigation relating to it have been paid in full or adequate provision has been
made for any such taxes on the Company's balance sheet (in accordance with
generally accepted accounting principles). The Company has not executed an
extension or waiver of any statute of limitations on the assessment or
collection of any material tax due that is currently in effect.
SECTION 3.12. Absence of Claims. As of the date hereof, no litigation,
proceeding or controversy before any court or governmental agency is pending,
and there is no pending claim, action or proceeding against the Company or any
of its subsidiaries, and, to the best of the Company's knowledge after
reasonable inquiry, no such litigation, proceeding, controversy, claim or action
has been threatened or is contemplated, which, in any case, is reasonably
likely, individually or in the aggregate, to have a Material Adverse Effect on
the Company or to hinder or delay consummation of the transactions contemplated
hereby.
SECTION 3.13. Absence of Regulatory Actions. Neither the Company nor any
of its subsidiaries is a party to any cease and desist order, written agreement
or memorandum of understanding with, or a party to any commitment letter or
similar undertaking to, or is subject to any order or directive by, or is a
recipient of any extraordinary supervisory letter from, or has adopted any board
resolutions at the request of, federal or state governmental authorities charged
with the supervision or regulation of depository institutions or depository
institution holding companies or engaged in the insurance of bank and/or savings
and loan deposits ("Government
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Regulators") nor has it been advised by any Government Regulator that it is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, directive, written agreement, memorandum
of understanding, extraordinary supervisory letter, commitment letter, board
resolutions or similar undertaking.
SECTION 3.14. Agreements.
(a) Except for this Plan and arrangements made in the ordinary course of
business, the Company and its subsidiaries are not bound by any material
contract (as defined in Item 601(b)(10) of Regulation S-K) to be performed after
the date hereof that has not been filed with or incorporated by reference in the
Company Reports filed prior to the date of this Plan. Except as disclosed in the
Company Reports filed prior to the date of this Plan, neither the Company nor
any of its subsidiaries is a party to an oral or written (i) consulting
agreement (other than data processing, software programming and licensing
contracts entered into in the ordinary course of business) not terminable on 30
days, or less notice involving the payment of more than $100,000 per annum, in
the case of any such agreement with an individual, or $200,000 per annum, in the
case of any other such agreement, (ii) agreement with any executive officer or
other key employee of the Company or any of its subsidiaries the benefits of
which are contingent, or the terms of which are materially altered, upon the
occurrence of a transaction involving the Company or any of its subsidiaries of
the nature contemplated by this Plan and which provides for the payment of in
excess of $100,000, (iii) agreement with respect to any executive officer of the
Company or any of its subsidiaries providing any term of employment or
compensation guarantee extending for a period longer than one year and for the
payment of in excess of $100,000 per annum, (iv) agreement or plan, including
any stock option plan, stock appreciation rights plan, restricted stock plan or
stock purchase plan, any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Plan or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Plan, or (v) agreement containing covenants that limit the
ability of the Company or any of its subsidiaries to compete in any line of
business or with any person, or that involve any restriction on the geographic
area in which, or method by which, the Company (including any successor thereof)
or any of its subsidiaries may carry on its business (other than as may be
required by law or any regulatory agency).
(b) Neither the Company nor any of its subsidiaries is in default under or
in violation of any provision of any note, bond, indenture, mortgage, deed of
trust, loan agreement or other agreement to which it is a party or by which it
is bound or to which any of its respective properties or assets is subject.
SECTION 3.15. Labor Matters. Neither the Company nor any of its
subsidiaries is a party to, or is bound by, any collective bargaining agreement,
contract, or other agreement or understanding with a labor union or labor
organization, nor is the Company or any of its subsidiaries the subject of any
proceeding asserting that it has committed an unfair labor practice or seeking
to compel it or any such subsidiary to bargain with any labor organization as to
wages and conditions
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of employment, nor is there any strike, other labor dispute or organizational
effort involving the Company or any of its subsidiaries pending or threatened.
SECTION 3.16. Employee Benefit Plans. The Company Disclosure Letter
contains a complete and correct list of the names and current annual salary or
director fees, as applicable, bonus, commission and perquisite arrangements,
written or unwritten, for each director and officer of the Company and each of
its subsidiaries, including those whose compensation was paid in whole or in
part by persons or entities other than the Company or any of its subsidiaries.
The Company Disclosure Letter also contains a complete list of all pension,
retirement, stock option, stock purchase, stock ownership, savings, stock
appreciation right, profit sharing, deferred compensation, consulting, bonus,
group insurance, severance and other benefit plans, contracts, agreements,
arrangements, including, but not limited to, "employee benefit plans", as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), incentive and welfare policies, contracts, plans and
arrangements and all trust agreements related thereto in respect to any present
or former directors, officers, or other employees of the Company or any of its
subsidiaries (hereinafter referred to collectively as the "Employee Plans"). (i)
All of the Employee Plans comply in all material respects with all applicable
requirements of ERISA, the Code and other applicable laws; neither the Company
nor any of its subsidiaries has engaged in a "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) with respect to any
Employee Plan which could subject the Company or any subsidiary to a material
tax or penalty under Section 4975 of the Code or Section 502(i) of ERISA; and
all contributions required to be made under the terms of any Employee Plan have
been timely made or have been reflected on the Company's balance sheet (ii) no
liability to the Pension Benefit Guaranty Corporation (the "PBGC") has been or
is expected by the Company or any of its subsidiaries to be incurred with
respect to any Employee Plan which is subject to Title IV of ERISA (a "Pension
Plan"), or with respect to any "single employer plan" (as defined in Section
4001(a)(15) of ERISA) currently or formerly maintained by the Company or any
entity (an "ERISA Affiliate") which is considered one employer with the Company
under Section 4001 of ERISA or Section 414 of the Code (an "ERISA Affiliate
Plan"); and no proceedings have been instituted to terminate any Pension Plan or
ERISA Affiliate Plan and no condition exists that presents a material risk of
the institution of such proceedings; (iii) no Pension Plan or ERISA Affiliate
Plan had an "accumulated funding deficiency" (as defined in Section 302 of ERISA
(whether or not waived)) as of the last day of the end of the most recent plan
year ending prior to the date hereof; the fair market value of the assets of
each Pension Plan and ERISA Affiliate Plan exceeds the present value of the
"benefit liabilities" (as defined in Section 4001(a)(16) of ERISA) under such
Pension Plan or ERISA Affiliate Plan as of the end of the most recent plan year
with respect to the respective Pension Plan or ERISA Affiliate Plan ending prior
to the date hereof, calculated on the basis of the actuarial assumptions used in
the most recent actuarial valuation for such Pension Plan or ERISA Affiliate
Plan prior to the date hereof, and there has been no material change in the
financial condition of any such Pension Plan or ERISA Affiliate Plan since the
last day of the most recent plan year; and no notice of a "reportable event" (as
defined in Section 4043 of ERISA) for which the 30-day reporting requirement has
not been waived has been required to be filed for any Pension Plan or ERISA
Affiliate Plan within the 12-month period ending on the date hereof; (iv)
neither the Company nor any subsidiary of the Company has provided or is
required
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to provide, security to any Pension Plan or to any ERISA Affiliate Plan pursuant
to section 401(a)(29) of the Code; (v) neither the Company, its subsidiaries,
nor any ERISA Affiliate has contributed to any "multiemployer plan", as defined
in Section 3(37) of ERISA, on or after September 26, 1980; (vi) each Employee
Plan of the Company or any of its subsidiaries which is an "employee pension
benefit plan" (as defined in Section 3(2) of ERISA) has received a favorable
determination letter from the Internal Revenue Service deeming such plan (a
"Qualified Plan") to be qualified under Section 401(a) of the Code; and neither
the Company nor its subsidiaries are aware of any circumstances likely to result
in revocation of any such favorable determination letter; (vii) each Qualified
Plan which is an "employee stock ownership plan" (as defined in Section
4975(e)(7) of the Code) has satisfied all of the applicable requirements of
Sections 409 and 4975(e)(7) of the Code and the regulations thereunder; all
Employee Plans covering foreign participants comply in all material respects
with applicable local law, and there are no material unfunded liabilities with
respect to any Employee Plan which covers foreign employees; (viii) there is no
pending or threatened litigation, administrative action or proceeding relating
to any Employee Plan; (ix) there has been no announcement or commitment by the
Company or any subsidiary of the Company to create an additional Employee Plan,
or to amend an Employee Plan except for amendments required by applicable law
which do not increase the cost of such Employee Plan; and the Company and its
subsidiaries do not have any obligations for retiree health and life benefits
under any Employee Plan except as set forth in the Company Disclosure Letter,
and there are no such Employee Plans that cannot be amended or terminated
without incurring any liability thereunder; (x) with respect to the Company or
any of its subsidiaries, except as specifically identified in the Company
Disclosure Letter, the execution and delivery of this Plan and the consummation
of the transactions contemplated hereby will not result in any payment or series
of payments by the Company or any subsidiary of the Company to any person which
is an "excess parachute payment" (as defined in Section 280G of the Code) under
any Employee Plan, increase or secure (by way of a trust or other vehicle) any
benefits payable under any Employee Plan, or accelerate the time of payment or
vesting of any such benefit, and (xi) with respect to each Employee Plan, the
Company has supplied to Parent a true and correct copy, if applicable, of (A)
the two most recent annual reports on the applicable form of the Form 5500
series filed with the Internal Revenue Service (the "IRS",), (B) such Employee
Plan, including amendments thereto, (C) each trust agreement and insurance
contract relating to such Employee Plan, including amendments thereto, (D) the
most recent summary plan description for such Employee Plan, including
amendments thereto, if the Employee Plan is subject to Title I of ERISA, (E) the
most recent actuarial report or valuation if such Employee Plan is a Pension
Plan, (F) the most recent determination letter issued by the IRS if such
Employee Plan is a Qualified Plan and (G) the most recent financial statements
and auditor's report.
SECTION 3.17. Properties. Except as disclosed in the Company Reports filed
prior to the date hereof, the Company and its subsidiaries (a) have good, clear
and marketable title to all the properties and assets which are material to the
Company's business on a consolidated basis and are reflected in the latest
audited statement of condition included in the Company Reports as being owned by
the Company and its subsidiaries or acquired after the date thereof (except
properties sold or otherwise disposed of since the date thereof), free and clear
of all Liens except (i) statutory Liens
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securing payments not yet due, (ii) Liens on assets of subsidiaries of the
Company incurred in the ordinary course of their business and (iii) such
imperfections or irregularities of title or Liens as do not affect the use of
the properties or assets subject thereto or affected thereby or otherwise
materially impair business operations at such properties, in either case in such
a manner as to have a Material Adverse Effect on the Company, and (b) are
collectively the lessee of all leasehold estates which are material to the
Company's business on a consolidated basis and are reflected in the latest
audited financial statements included in the Company Reports or acquired after
the date thereof (except for leases that have expired by their terms or as to
which the Company has agreed to terminate or convey since the date thereof) and
is in possession of the properties purported to be leased thereunder, and each
such lease is valid without default thereunder by the lessee or, to the
Company's knowledge, the lessor, other than defaults that would not have a
Material Adverse Effect on the Company. Each of the Company and each of its
subsidiaries enjoys peaceful and undisturbed possession of all such leases. To
the knowledge of the Company, all of the Company's and its subsidiaries, owned
buildings, structures and equipment have been well maintained and are in good
and serviceable condition, normal wear and tear excepted.
SECTION 3.18. Knowledge as to Conditions. As of the date hereof, the
Company knows of no reason why the approvals, consents and waivers of
governmental authorities referred to in Section 6.1(b) should not be obtained
without the imposition of any condition of the type referred to in the provisos
thereto.
SECTION 3.19. Compliance with Laws. Since December 31, 1995, the Company
and each of its subsidiaries have complied in all material respects with all
applicable laws. The Company and each of its subsidiaries has all permits,
licenses, certificates of authority, orders and approvals of, and has made all
filings, applications and registrations with, federal, state, local and foreign
governmental or regulatory bodies that are required in order to permit it to
carry on its business as it is presently conducted; all such permits, licenses,
certificates of authority, orders and approvals are in full force and effect,
and, to the best knowledge of the Company, no suspension or cancellation of any
of them is threatened.
SECTION 3.20. Fees. Other than financial advisory services performed for
the Company by ▇▇▇▇▇ Financial, Inc., neither the Company nor any of its
subsidiaries, nor any of their respective officers, directors, employees or
agents, has employed any broker or finder or incurred any liability for any
financial advisory fees, brokerage fees, commissions, or finder's fees, and no
broker or finder has acted directly or indirectly for the Company or any
subsidiary of the Company, in connection with the Plan or the transactions
contemplated hereby.
SECTION 3.21. Environmental Matters. To the knowledge of the Company:
(a) Except as will not, individually or in the aggregate, have a
Material Adverse Effect on the Company, with respect to the
Company and each of its subsidiaries:
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(i) Each of the Company and its subsidiaries, the
Participation Facilities, and the Loan Properties (each as
defined below) are, and have been, in substantial
compliance with all Environmental Laws (as defined below);
(ii) There is no suit, claim, action, demand, executive or
administrative order, directive, investigation or
proceeding pending or threatened, before any court,
governmental agency or board or other forum against it or
any of its subsidiaries or any Participation Facility (A)
for alleged noncompliance (including by any predecessor)
with, or liability under, any Environmental Law or (B)
relating to the presence of or release into the
environment of any Hazardous Material (as defined below)
or oil, whether or not occurring at or on a site owned,
leased or operated by it or any of its subsidiaries or any
Participation Facility;
(iii) There is no suit, claim, action, demand, executive or
administrative order, directive, investigation or
proceeding pending or threatened, before any court,
governmental agency or board or other forum relating to or
against any Loan Property (or the Company or any of its
subsidiaries in respect of such Loan Property) (A)
relating to alleged noncompliance (including by any
predecessor) with, or liability under, any Environmental
Law or (B) relating to the presence of or release into the
environment of any Hazardous Material or oil whether or
not occurring at or on a site owned, leased or operated by
a Loan Property;
(iv) There is no reasonable basis for any suit, claim, action,
demand, executive or administrative order, directive or
proceeding of a type described in Section 3.21(a)(ii) or
(iii);
(v) The properties currently or formerly owned or operated by
the Company or any of its subsidiaries (including, without
limitation, soil, groundwater or surface water on, under
or adjacent to the properties, and buildings thereon) do
not contain any Hazardous Material (as defined below)
other than as permitted under applicable Environmental Law
(provided, however, that with respect to properties
formerly owned or operated by the Company or any of its
subsidiaries, such representation is limited to the period
the Company or any such subsidiary owned or operated such
properties);
(vi) None of it or any of its subsidiaries has received any
notice, demand letter, executive or administrative order,
directive or request for
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information from any Federal, state, local or foreign
governmental entity or any third party indicating that it
may be in violation of, or liable under, any Environmental
Law;
(vii) There are no underground storage tanks on, in or under any
properties or Participation Facility and no underground
storage tanks have been closed or removed from any
properties or Participation Facility which are or have
been in the ownership of it or any of its subsidiaries;
(viii) During the period of (A) its or any of its subsidiaries,
ownership or operation of any of their respective current
properties, (B) its or any of its subsidiaries,
participation in the management of any Participation
Facility, or (C) its or any of its subsidiaries, holding
of a security interest in a Loan Property, there has been
no contamination by or release of Hazardous Material or
oil in, on, under or affecting such properties. Prior to
the period of (x) its or any of its subsidiaries'
ownership or operation of any of their respective current
properties, (y) its or any of its subsidiaries,
participation in the management of any Participation
Facility, or (z) its or any of its subsidiaries, holding
of a security interest in a Loan Property, there was no
contamination by or release of Hazardous Material or oil
in, on, under or affecting any such property,
Participation Facility or Loan Property; and
(ix) None of it or its subsidiaries participates in the
management of a Loan Property or Participation Facility to
an extent that it would be deemed an "owner or operator"
as defined in 42 U.S.C. ss. 9601 or any similar
Environmental Law.
(b) The following definitions apply for purposes of this Section 3.21:
(i) "Loan Property" means any property in which the applicable party (or a
subsidiary of it) holds a security interest, and, where required by the context,
includes the owner or operator of such property, but only with respect to such
property; (ii) "Participation Facility" means any facility in which the
applicable party (or a subsidiary of it) participates in the management
(including all property held as trustee or in any other fiduciary or agency
capacity) and, where required by the context, includes the owner or operator of
such property; (iii) "Environmental Law" means (A) any federal, state or local
law, statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, legal doctrine, order, directive, executive or administrative
order, judgment, decree, injunction, requirement or agreement with any
governmental entity, (x) relating to the protection, preservation or restoration
of the environment (which includes, without limitation, air, water vapor,
surface water, groundwater, drinking water supply, structures, soil, surface
land, subsurface land, plant and animal life or any other natural resource), or
to human health or safety, or (y) the exposure to, or the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release
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or disposal of, Hazardous Materials, in each case as amended and as now in
effect, including all current Environmental Laws. The term Environmental Law
includes, without limitation, the federal Comprehensive Environmental Response
Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act, the federal Water Pollution Control Act of 1972, the
federal Clean Air Act, the federal Clean Water Act, the federal Resource
Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste
Amendments thereto), the federal Solid Waste Disposal and the federal Toxic
Substances Control Act, the Federal insecticide, Fungicide and Rodenticide Act,
the Federal occupational Safety and Health Act of 1970, the Federal Hazardous
Materials Transportation Act, or any so called "Superfund" or "Superlien" law,
each as amended and as now or hereafter in effect, and (B) any common law or
equitable doctrine (including, without limitation, injunctive relief and tort
doctrines such as negligence, nuisance, trespass and strict liability) that may
impose liability or obligations for injuries or damages due to, or threatened as
a result of, the presence of or exposure to any Hazardous Material; and (iv)
"Hazardous Material" means any substance in any concentration which is or could
be detrimental to human health or safety or to the environment, currently or
hereafter listed, defined, designated or classified as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, under any Environmental Law,
whether by type or by quantity, including any substance containing any such
substance as a component. Hazardous Material includes, without limitation, any
toxic waste, pollutant, contaminant, hazardous substance, toxic substance,
hazardous waste, special waste, industrial substance, oil or petroleum or any
derivative or by-product thereof, radon, radioactive material, asbestos,
asbestos-containing material, urea formaldehyde foam insulation, lead and
polychlorinated biphenyl.
SECTION 3.22. Allowance. The allowance for possible loan losses shown on
the Company's audited balance sheet as of December 31, 1998, was, and the
allowance for possible loan losses shown on the balance sheets in Reports for
periods ending after the date of this Plan will be, adequate, as of the date
thereof, under generally accepted accounting principles applicable to banks and
bank holding companies. The Company has disclosed to Parent in writing prior to
the execution hereof and has set forth in the Company Disclosure Letter all
loans, leases, advances, credit enhance ments, other extensions of credit,
commitments and interest-bearing assets of the Company and its subsidiaries,
involving amounts in excess of $100,000, that have been classified as "Other
Loans Specially Mentioned", "Special Mention", "Substandard", "Doubtful",
"Loss", "Classified", "Criticized", "Credit Risk Assets", "Concerned Loans" or
words of similar import and the aggregate amount thereunder of each such
category or type. The Other Real Estate Owned included in any non-performing
assets of the Company or any of its subsidiaries is carried net of reserves at
the lower of cost or market value based on current independent appraisals.
SECTION 3.23. Antitakeover Provisions Inapplicable. The Company has taken
all actions required to exempt this Plan and the Merger and any amendment or
revision thereto, the Stock Option Agreement and any amendment or revision
thereof and the transactions contemplated hereby and thereby from any state
antitakeover laws, including without limitation, Sections 180.1140-1144,
180.1130-1133, and 180.1150.
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SECTION 3.24. Material Interests of Certain Persons. Except as disclosed
in the Company's Proxy Statement for its 1999 Annual Meeting of Stockholders or
to the extent such information is not required to be disclosed therein, no
officer or director of the Company, or any "associate" (as such term is defined
in Rule 12b-2 under the Securities Exchange Act) of any such officer or
director, has any material interest in any material contract or property (real
or personal), tangible or intangible, used in or pertaining to the business of
the Company or any of its subsidiaries.
SECTION 3.25. Insurance. The Company and its subsidiaries are presently
insured, and since December 31, 1995, have been insured, for reasonable amounts
with financially sound and reputable insurance companies, against such risks as
companies engaged in a similar business would, in accordance with good business
practice, customarily be insured. All of the insurance policies and bonds
maintained by the Company and its subsidiaries are in full force and effect, the
Company and its subsidiaries are not in default thereunder and all material
claims thereunder have been filed in due and timely fashion. Since December 31,
1995, no claim by the Company or any of its subsidiaries on or in respect of an
insurance policy or bond has been declined or refused by the relevant insurer or
insurers. In the best judgment of the Company's management, such insurance
coverage is adequate and will be available in the future under terms and
conditions substantially similar to those in effect on the date hereof. Between
the date hereof and the Effective Time, the Company and its subsidiaries will
maintain the levels of insurance coverage in effect on the date hereof and will
submit all potential claims existing prior to the Effective Time to its
insurance carrier on or before the Effective Time. The Company Disclosure Letter
lists all insurance policies maintained by or for the benefit of the Company, of
its subsidiaries or its directors, officers, employees or agents, specifying the
(i) type of policy and a brief description thereof, (ii) policy limits and (iii)
self insurance amounts.
SECTION 3.26. Investment Securities. Except for pledges to the Federal
Home Loan Bank in the ordinary course of business consistent with past practice
and except for pledges to secure public and trust deposits and reverse
repurchase agreements entered into in arm's-length transactions pursuant to
normal commercial terms and conditions and other pledges required by law, none
of the investments reflected in the consolidated balance sheet of the Company
included in the Company's Report on Form 10-K for the year ended December 31,
1998, and none of the material investments made by it or any of its subsidiaries
since December 31, 1998, is subject to any restriction (contractual, statutory
or otherwise) that would materially impair the ability of the entity holding
such investment freely to dispose of such investment at any time.
SECTION 3.27. Pooling of Interests. Each of the Company's acquisitions
during the two years preceding the date of this Plan which were accounted for as
"pooling of interests" qualify as "pooling of interests" for accounting
purposes. As of the date of this Plan, the Company has no reason to believe that
the Merger will not qualify as a "pooling of interests" for accounting purposes.
SECTION 3.28. Derivatives. Neither the Company nor any of its subsidiaries
is currently a party to any interest rate swap, cap, floor, option agreement,
other interest rate risk management arrangement or agreement or derivative-type
security or derivative arrangement or agreement.
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SECTION 3.29. Registration Obligations. Neither the Company nor any of its
subsidiaries is under any obligation, contingent or otherwise, to register any
of its securities under the Securities Act.
SECTION 3.30. Books and Records. The books and records of the Company and
its subsidiaries have been, and are being, maintained in accordance with
applicable legal and accounting requirements and reflect in all material
respects the substance of events and transactions that should be included
therein.
SECTION 3.31. Corporate Documents. The Company has delivered to Parent
true and complete copies of (i) its articles of incorporation and by-laws and
(ii) the charter and by-laws of each subsidiary of the Company. The Company has
delivered to Parent copies of the charter of each subsidiary of the Company
which in each instance is accurate and complete in all material respects.
SECTION 3.32. Company Action. The Board of Directors of the Company has
adopted resolutions recommending that this Plan be approved by the shareholders
of the Company and directing that this Plan be submitted for consideration by
the Company's shareholders at the Company Meeting.
SECTION 3.33. Indemnification. Neither the Company nor any subsidiary of
the Company is a party to any indemnification agreement with any of its present
or future directors, officers, employees, agents or other persons who serve or
served in any other capacity with any other enterprise at the request of the
Company or a subsidiary of the Company (a "Covered Person"), and to the best
knowledge of the Company, there are no claims for which any Covered Person would
be entitled to indemnification under Section 5.6 if such provisions were deemed
to be in effect.
SECTION 3.34. Fair Lending; Community Reinvestment Act. As of the date
hereof, with the exception of routine investigation of consumer complaints,
neither the Company nor any of its subsidiaries has been advised that it is or
may be in violation of the Equal Credit Opportunity Act or the Fair Housing Act
or any similar federal or state statute. Each of the Company's subsidiaries
received a CRA rating of "satisfactory" or "outstanding" in its most recent CRA
examination.
SECTION 3.35. Other Activities of the Company and its Subsidiaries.
(a) Neither of the Company nor any of its subsidiaries that is not a
bank, a bank operating subsidiary or a bank service corporation, directly
or indirectly, engages in any activity prohibited by the Federal Reserve
Board. Without limiting the generality of the foregoing, any equity
investment of the Company and each subsidiary that is not a bank, a bank
operating subsidiary or a bank service corporation, is not prohibited by
the Federal Reserve Board.
(b) To the Company's knowledge, each of its subsidiaries which is a
bank that performs trust or other fiduciary activities (a "Company Bank
Subsidiary") and each
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subsidiary which is a trust company (a "Company Trust Subsidiary")
currently performs all personal trust, corporate trust and other fiduciary
activities ("Trust Activities") with requisite authority under applicable
law of Governmental Entities and in accordance in all material respects
with the agreed-upon terms of the agreements and instruments governing such
Trust Activities, sound fiduciary principles and applicable law and
regulation (specifically including, but not limited to, Section 9 of Title
12 of the Code of Federal Regulations); there is no investigation or
inquiry by any Governmental Entity pending, or to the knowledge of the
Company, threatened, against or affecting the Company, or any Significant
Subsidiary thereof relating to the compliance by the Company or any such
Significant Subsidiary (as such term is defined in Rule 1-02(w) of
Regulation S-X of the SEC) with sound fiduciary principles and applicable
regulations; and except where any such failure would not have a Material
Adverse Effect on the Company, each employee of a Company Bank Subsidiary
or a Company Trust Subsidiary, as applicable, had the authority to act in
the capacity in which he or she acted with respect to Trust Activities, in
each case, in which such employee held himself or herself out as a
representative of a Company Bank Subsidiary or a Company Trust Subsidiary,
as applicable; and each Company Bank Subsidiary and each Company Trust
Subsidiary has established policies and procedures for the purpose of
complying with applicable laws of Governmental Entities relating to Trust
Activities, has followed such policies and procedures in all material
respects and has performed appropriate internal audit reviews of, and has
engaged independent accountants to perform audits of, Trust Activities,
which audits in the case of any Company Bank Subsidiary since January 1,
1996, and in the case of any Company Trust Subsidiary since January 1, 1998
have disclosed no material violations of applicable laws of Governmental
Entities or such policies and procedures.
SECTION 3.36. Year 2000. None of the Company or any of the Company's
subsidiaries has received, or reasonably expects to receive, a "Year 2000
Deficiency Notification Letter" (as such term is employed in the Federal
Reserve's Supervision and Regulation Letter No. SR 98-3(SUP), dated March 4,
1998). The Company has disclosed to Parent a complete and accurate copy of the
Company's plan, including an estimate of the anticipated associated costs, for
addressing the issues ("Year 2000 Issues") set forth in the statement of the
Federal Financial Institutions Examination Council, dated May 5, 1997, entitled
"Year 2000 Project Management Awareness," and December 1997, entitled "Safety
and Soundness Guidelines Concerning the Year 2000 Business Risk," as such issues
affect the Company and its subsidiaries. Between the date of this Agreement and
the Effective Time, the Company shall use commercially practicable efforts to
implement such plan.
SECTION 3.37. No Omission of Material Fact. No representation or warranty
by the Company in this Plan or under any documents, instruments, certificates or
schedules delivered or to be delivered pursuant hereto or in connection with the
transactions contemplated hereby contains any untrue statement of material fact,
or omits to state a material fact necessary to make the statements or facts
contained herein or therein not misleading. None of the information regarding
the Company or any of its subsidiaries or the transactions contemplated hereby
supplied or to be supplied by the Company or any of its subsidiaries for
inclusion in any documents or filings to be filed with any regulatory authority
in connection with the transactions contemplated hereby will
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contain any untrue statement of material fact, or omit to state a material fact
necessary to make the statements or facts contained therein not misleading.
SECTION 3.38. Conduct of Business. Since December 31, 1998, except as
contemplated by this Plan, neither the Company nor any of its subsidiaries has
taken any action which would have violated Section 2.1 or Section 2.2 had such
Sections been in effect since December 31, 1998. The Company has not purchased
or caused to be purchased any Company Common Stock since April 1, 1997.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company that, except as specifically
disclosed in a letter (the "Parent Disclosure Letter") of Parent delivered to
the Company prior to the execution of this Plan (and making specific references
to the section of this Plan for which an exception is taken):
SECTION 4.1. Recitals True. The facts set forth in the Recitals of this
Plan with respect to Parent and Merger Sub are true and correct.
SECTION 4.2. Capital Stock. All outstanding shares of capital stock of
Parent and its subsidiaries have been and all Parent Shares to be issued in the
Merger will be duly authorized and validly issued, are fully paid and
nonassessable and are not subject to any preemptive rights. Each share of Parent
Common Stock to be issued in the Merger will have attached thereto one right to
purchase one-half of 1/100th of a share of Series A Preferred Stock of Parent at
a price of $75 per 1/100th of a share.
SECTION 4.3. Due Organization. Each subsidiary of Parent is a corporation
or banking organization duly incorporated, validly existing and in good standing
under the laws of the state of its incorporation. Each of the Parent's
subsidiaries which is a bank is a member of the Bank Insurance Fund ("BIF") of
the Federal Deposit Insurance Corporation (the "FDIC") and all of its deposits
are subject to assessment by the BIF.
SECTION 4.4. Authority. Each of Parent and its subsidiaries has the power
and authority, and is duly qualified in all jurisdictions (except for such
qualifications the absence of which, in the aggregate, the would not have a
Material Adverse Effect on Parent) where such qualification is required, to
carry on its business as it is now being conducted and to own all its properties
and assets, and it has all federal, state, local, and foreign governmental
authorizations necessary for it to own or lease its properties and assets and to
carry on its business as it is now being conducted.
SECTION 4.5. Subsidiaries; Significant Investments. The only subsidiaries
of Parent are set forth in the Disclosure Letter. All of the shares of capital
stock of each subsidiary of Parent are owned directly and of record by Parent or
a wholly-owned subsidiary of Parent, in each such case
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free and clear of all Liens and there are no options or similar rights with
respect to any such capital stock. Neither Parent nor any of its subsidiaries
maintains a liquidation or similar type of account. None of Parent or any of
such subsidiaries owns any equity securities, any security convertible or
exchangeable into an equity security or any rights to acquire any equity
security except those of its subsidiaries as listed in the Parent Disclosure
Letter.
SECTION 4.6. Shareholder Approvals.
(a) Subject to the receipt of required shareholder approval of this Plan,
this Plan and the transactions contemplated herein have been duly authorized by
all necessary corporate action of Parent. In addition, Parent has received the
written opinion of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. to the effect that the Merger
is fair to the shareholders of Parent from a financial point of view and has
provided a true and complete copy of such opinion to the Company. Subject to
receipt of (i) such shareholder approval and (ii) the required approvals,
consents or waivers of governmental authorities referred to in Section 6.1(b),
this Plan is a valid and binding agreement of Parent and Merger Sub enforceable
against each in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors, rights
and to general equity principles.
(b) The affirmative vote of a majority of the outstanding shares of Parent
Common Stock entitled to vote on this Plan and the vote of the sole shareholder
of Merger Sub are the only shareholder vote required for approval of the Plan
and consummation of the Merger and the other transactions contemplated hereby.
SECTION 4.7. No Violations. The execution, delivery and performance of
this Plan by Parent and Merger Sub do not, and the consummation of the
transactions contemplated hereby by Parent and each of its subsidiaries will
not, constitute (i) a breach or violation of, or a default under, any law, rule
or regulation or any judgment, decree, order, governmental permit or license, or
agreement, indenture or instrument of Parent or any subsidiary of Parent or to
which Parent or any of its subsidiaries (or any of their respective properties)
is subject, or enable any person to enjoin the Merger or the other transactions
contemplated hereby, (ii) a breach or violation of, or a default under, the
articles of incorporation or by-laws or similar organizational documents of
Parent or any subsidiary of Parent or (iii) a breach or violation of, or a
default under (or an event which with due notice or lapse of time or both would
constitute a default under), or result in the termination of, accelerate the
performance required by, or result in the creation of any lien, pledge, security
interest, charge or other encumbrance upon any of the properties or assets of
Parent or any subsidiary of Parent under, any of the terms, conditions or
provisions of any note, bond, indenture, deed of trust, loan agreement or other
agreement, instrument or obligation to which Parent or any subsidiary of Parent
is a party, or to which any of their respective properties or assets may be
bound or affected, except for such breaches, violations, defaults, rights of
termination or acceleration or liens or encumbrances referred to in clause (iii)
that would not individually or in the aggregate have a Material Adverse Effect
on Parent.
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SECTION 4.8. Consents and Approvals. Except for (a) the filing of
applications and notices, as applicable, with the Federal Reserve Board under
the BHC Act and approval of such applications and notices, (b) any State
Approvals, (c) the filing with the SEC of the Joint Proxy Statement and the S-4
in which the Joint Proxy Statement will be included as a prospectus, (d) the
filing of the Certificate of Merger with the Wisconsin Department of Financial
Institutions pursuant to the WBCL, (e) such filings and approvals as are
required to be made or obtained under the securities or "Blue Sky" laws of
various states in connection with the issuance of the shares of Parent Common
Stock pursuant to this Plan, and (f) the approval of this Plan by the requisite
vote of the shareholders of the Company and the Parent, no consents or approvals
of or filings or registrations with any Governmental Entities or with any third
party are necessary in connection with (i) the execution and delivery by Parent
and Merger Sub of this Plan and (ii) the consummation by Parent and Merger Sub
of the Merger and the other transactions contemplated hereby.
SECTION 4.9. Parent Reports.
(a) As of their respective dates, neither Parent's Annual Report on Form
10-K for the fiscal year ended December 31, 1998, nor any other document filed
by Parent subsequent to December 31, 1998 under Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act, each in the form (including exhibits)
filed with the SEC (collectively, the "Parent Reports"), contained or will
contain any untrue statement of a material fact or omitted or will omit to state
a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading and the Parent Reports complied in all material respects
with the requirements of the Securities Exchange Act. Each of the consolidated
balance sheets contained or incorporated by reference in the Parent Reports
(including in each case any related notes and schedules) fairly presented in all
material respects the financial position of the entity or entities to which it
relates as of its date and each of the consolidated statements of income,
consolidated statements of stockholders' equity and consolidated statements of
cash flows, contained or incorporated by reference in the Parent Reports
(including in each case any related notes and schedules), fairly presented in
all material respects the results of operations, stockholders' equity and cash
flows, as the case may be, of the entity or entities to which it relates for the
periods set forth therein (subject, in the case of unaudited interim statements,
to normal year-end audit adjustments that are not material in amount or effect),
in each case in accordance with generally accepted accounting principles
consistently applied during the periods involved, except as may be noted
therein.
(b) Parent and each of its subsidiaries have each timely filed all
reports, registrations and statements, together with any amendments required to
be made with respect thereto, that they were required to file since December 31,
1995 with (i) the Regulatory Agencies, and (ii) any SRO, and all other material
reports and statements required to be filed by them since December 31, 1995,
including, without limitation, any report or statement required to be filed
pursuant to the laws, rules or regulations of the United States, the Regulatory
Agencies or any SRO, and have paid all fees and assessments due and payable in
connection therewith.
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SECTION 4.10. Absence of Undisclosed Liabilities and Certain Changes or
Events. Since December 31, 1998, Parent and its subsidiaries have conducted
their business only in the ordinary course of business consistent with past
practice and have not incurred any material liability, except in the ordinary
course of their business consistent with past practice. Since December 31, 1998,
there has not been any change in the condition (financial or other), properties,
business, results of operations or prospects of Parent or its subsidiaries
which, individually or in the aggregate, has had, or is reasonably likely to
have, a Material Adverse Effect on Parent.
SECTION 4.11. Taxes. All federal, state, local, and foreign tax returns
required to be filed by or on behalf of Parent or any of its subsidiaries have
been timely filed or requests for extensions have been timely filed and any such
extension shall have been granted and not have expired, and all such filed
returns are complete and accurate in all respects. All taxes shown on such
returns have been paid in full or adequate provision has been made for any such
taxes on Parent's balance sheet (in accordance with generally accepted
accounting principles). There is no audit examination, deficiency, or refund
litigation with respect to any taxes of Parent or any of its subsidiaries that
could result in a determination. All taxes, interest, additions, and penalties
due with respect to completed and settled examinations or concluded litigation
relating to it have been paid in full or adequate provision has been made for
any such taxes on Parent's balance sheet (in accordance with generally accepted
accounting principles). Parent has not executed an extension or waiver of any
statute of limitations on the assessment or collection of any material tax due
that is currently in effect.
SECTION 4.12. Absence of Claims. As of the date hereof, no litigation,
proceeding or controversy before any court or governmental agency is pending,
and there is no pending claim, action or proceeding against Parent or any of its
subsidiaries, and, to the best of Parent's knowledge after reasonable inquiry,
no such litigation, proceeding, controversy, claim or action has been threatened
or is contemplated, which, in any case, is reasonably likely, individually or in
the aggregate, to have a Material Adverse Effect on Parent or to hinder or delay
consummation of the transactions contemplated hereby.
SECTION 4.13. Absence of Regulatory Actions. Neither Parent nor any of its
subsidiaries is a party to any cease and desist order, written agreement or
memorandum of understanding with, or a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a recipient of
any extraordinary supervisory letter from, or has adopted any board resolutions
at the request of Government Regulators nor has it been advised by any
Government Regulator that it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such order,
directive, written agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter, board resolutions or similar undertaking.
SECTION 4.14. Agreements.
(a) Except for this Plan and arrangements made in the ordinary course of
business, Parent and its subsidiaries are not bound by any material contract (as
defined in Item 601(b)(10) of
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Regulation S-K) to be performed after the date hereof that has not been filed
with or incorporated by reference in the Parent Reports filed prior to the date
of this Plan.
(b) Neither Parent nor any of its subsidiaries is in default under or in
violation of any provision of any note, bond, indenture, mortgage, deed of
trust, loan agreement or other agreement to which it is a party or by which it
is bound or to which any of its respective properties or assets is subject.
SECTION 4.15. Labor Matters. Neither Parent nor any of its subsidiaries is
a party to, or is bound by, any collective bargaining agreement, contract, or
other agreement or understanding with a labor union or labor organization, nor
is Parent or any of its subsidiaries the subject of any proceeding asserting
that it has committed an unfair labor practice or seeking to compel it or any
such subsidiary to bargain with any labor organization as to wages and
conditions of employment, nor is there any strike, other labor dispute or
organizational effort involving Parent or any of its subsidiaries pending or
threatened.
SECTION 4.16. Employee Benefit Plans. Parent's Disclosure Letter contains
a complete and correct list of the names of each director and officer of Parent
and each of its subsidiaries. Parent's Disclosure Letter also contains a
complete list of all Parent's pension, retirement, stock option, stock purchase,
stock ownership, savings, stock appreciation right, profit sharing, deferred
compensation, consulting, bonus, group insurance, severance and other benefit
plans, contracts, agreements, arrangements, including, but not limited to,
"employee benefit plans", as defined under ERISA, incentive and welfare
policies, contracts, plans and arrangements and all trust agreements related
thereto in respect to any present directors, officers, or other employees of
Parent or any of its subsidiaries (hereinafter referred to collectively as the
"Parent Employee Plans"). (i) All of Parent's Employee Plans comply in all
material respects with all applicable requirements of ERISA, the Code and other
applicable laws; neither Parent nor any of its subsidiaries has engaged in a
"prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code) with respect to any Parent Employee Plan which could subject Parent or
any subsidiary to a material tax or penalty under Section 4975 of the Code or
Section 502(i) of ERISA; and all contributions required to be made under the
terms of any Parent Employee Plan have been timely made or have been reflected
on Parent's balance sheet (ii) no liability to the PBGC has been or is expected
by Parent or any of its subsidiaries to be incurred with respect to any Parent
Employee Plan which is subject to Title IV of ERISA (a "Parent Pension Plan"),
or with respect to any "single employer plan" (as defined in Section 4001(a)(15)
of ERISA) currently or formerly maintained by Parent or any entity (an "ERISA
Affiliate") which is considered one employer with Parent under Section 4001 of
ERISA or Section 414 of the Code (an "ERISA Affiliate Plan"); and no proceedings
have been instituted to terminate any Parent Pension Plan or ERISA Affiliate
Plan and no condition exists that presents a material risk of the institution of
such proceedings; (iii) no Parent Pension Plan or ERISA Affiliate Plan had an
"accumulated funding deficiency" (as defined in Section 302 of ERISA (whether or
not waived)) as of the last day of the end of the most recent plan year ending
prior to the date hereof; the fair market value of the assets of each Parent
Pension Plan and ERISA Affiliate Plan exceeds the present value of the "benefit
liabilities" (as defined in Section 4001(a)(16) of ERISA) under such
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Parent Pension Plan or ERISA Affiliate Plan as of the end of the most recent
plan year with respect to the respective Parent Pension Plan or ERISA Affiliate
Plan ending prior to the date hereof, calculated on the basis of the actuarial
assumptions used in the most recent actuarial valuation for such Parent Pension
Plan or ERISA Affiliate Plan prior to the date hereof, and there has been no
material change in the financial condition of any such Parent Pension Plan or
ERISA Affiliate Plan since the last day of the most recent plan year; and no
notice of a "reportable event" (as defined in Section 4043 of ERISA) for which
the 30-day reporting requirement has not been waived has been required to be
filed for any Parent Pension Plan or ERISA Affiliate Plan within the 12-month
period ending on the date hereof; (iv) neither Parent nor any subsidiary of
Parent has provided or is required to provide, security to any Parent Pension
Plan or to any ERISA Affiliate Plan pursuant to section 401(a)(29) of the Code;
(v) neither Parent, its subsidiaries, nor any ERISA Affiliate has contributed to
any "multiemployer plan", as defined in Section 3(37) of ERISA, on or after
September 26, 1980; (vi) each Parent Employee Plan of Parent or any of its
subsidiaries which is an "employee pension benefit plan" (as defined in Section
3(2) of ERISA) has received a favorable determination letter from the Internal
Revenue Service deeming such plan (a "Qualified Parent Plan") to be qualified
under Section 401(a) of the Code; and neither Parent nor its subsidiaries are
aware of any circumstances likely to result in revocation of any such favorable
determination letter; (vii) each Qualified Parent Plan which is an "employee
stock ownership plan" (as defined in Section 4975(e)(7) of the Code) has
satisfied all of the applicable requirements of Sections 409 and 4975(e)(7) of
the Code and the regulations thereunder; all Parent Employee Plans covering
foreign participants comply in all material respects with applicable local law,
and there are no material unfunded liabilities with respect to any Parent
Employee Plan which covers foreign employees; (viii) there is no pending or
threatened litigation, administrative action or proceeding relating to any
Parent Employee Plan; (ix) there has been no announcement or commitment by
Parent or any subsidiary of Parent to create an additional Parent Employee Plan,
or to amend an Parent Employee Plan except for amendments required by applicable
law which do not increase the cost of such Parent Employee Plan; and Parent and
its subsidiaries do not have any obligations for retiree health and life
benefits under any Parent Employee Plan which would have a Material Adverse
Effect on Parent.
SECTION 4.17. Properties. Except as disclosed in the Parent Reports filed
prior to the date hereof, Parent and its subsidiaries (a) have good, clear and
marketable title to all the properties and assets which are material to Parent's
business on a consolidated basis and are reflected in the latest audited
statement of condition included in the Parent Reports as being owned by Parent
and its subsidiaries or acquired after the date thereof (except properties sold
or otherwise disposed of since the date thereof), free and clear of all Liens
except (i) statutory Liens securing payments not yet due, (ii) Liens on assets
of subsidiaries of Parent incurred in the ordinary course of their business and
(iii) such imperfections or irregularities of title or Liens as do not affect
the use of the properties or assets subject thereto or affected thereby or
otherwise materially impair business operations at such properties, in either
case in such a manner as to have a Material Adverse Effect on Parent, and (b)
are collectively the lessee of all leasehold estates which are material to
Parent's business on a consolidated basis and are reflected in the latest
audited financial statements included in the Parent Reports or acquired after
the date thereof (except for leases that have expired by their terms or as to
which Parent has agreed to terminate or convey since the date thereof) and is in
possession of the
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properties purported to be leased thereunder, and each such lease is valid
without default thereunder by the lessee or, to Parent's knowledge, the lessor,
other than defaults that would not have a Material Adverse Effect on Parent.
Each of Parent and each of its subsidiaries enjoys peaceful and undisturbed
possession of all such leases. To the knowledge of Parent, all of Parent's and
its subsidiaries, owned buildings, structures and equipment have been well
maintained and are in good and serviceable condition, normal wear and tear
excepted.
SECTION 4.18. Knowledge as to Conditions. As of the date hereof, Parent
knows of no reason why the approvals, consents and waivers of governmental
authorities referred to in Section 6.1(b) should not be obtained without the
imposition of any condition of the type referred to in the provisos thereto.
SECTION 4.19. Compliance with Laws. Since December 31, 1995, Parent and
each of its subsidiaries have complied in all material respects with all
applicable laws. Parent and each of its subsidiaries has all permits, licenses,
certificates of authority, orders and approvals of, and has made all filings,
applications and registrations with, federal, state, local and foreign
governmental or regulatory bodies that are required in order to permit it to
carry on its business as it is presently conducted; all such permits, licenses,
certificates of authority, orders and approvals are in full force and effect,
and, to the best knowledge of Parent, no suspension or cancellation of any of
them is threatened.
SECTION 4.20. Fees. Other than financial advisory services performed for
Parent by ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc., neither Parent nor any of its
subsidiaries, nor any of their respective officers, directors, employees or
agents, has employed any broker or finder or incurred any liability for any
financial advisory fees, brokerage fees, commissions, or finder's fees, and no
broker or finder has acted directly or indirectly for Parent or any subsidiary
of Parent, in connection with the Plan or the transactions contemplated hereby.
SECTION 4.21. Environmental Matters. To the knowledge of Parent:
(a) Except as will not, individually or in the aggregate, have a
Material Adverse Effect on Parent, with respect to Parent and
each of its subsidiaries:
(i) Each of Parent and its subsidiaries, the Participation
Facilities, and the Loan Properties (each as defined
below) are, and have been, in substantial compliance with
all Environmental Laws (as defined below);
(ii) There is no suit, claim, action, demand, executive or
administrative order, directive, investigation or
proceeding pending or threatened, before any court,
governmental agency or board or other forum against it or
any of its subsidiaries or any Participation Facility (A)
for alleged noncompliance (including by any predecessor)
with, or
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liability under, any Environmental Law or (B) relating to
the presence of or release into the environment of any
Hazardous Material (as defined below) or oil, whether or
not occurring at or on a site owned, leased or operated by
it or any of its subsidiaries or any Participation
Facility;
(iii) There is no suit, claim, action, demand, executive or
administrative order, directive, investigation or
proceeding pending or threatened, before any court,
governmental agency or board or other forum relating to or
against any Loan Property (or Parent or any of its
subsidiaries in respect of such Loan Property) (A)
relating to alleged noncompliance (including by any
predecessor) with, or liability under, any Environmental
Law or (B) relating to the presence of or release into the
environment of any Hazardous Material or oil whether or
not occurring at or on a site owned, leased or operated by
a Loan Property;
(iv) There is no reasonable basis for any suit, claim, action,
demand, executive or administrative order, directive or
proceeding of a type described in Section 3.21(a)(ii) or
(iii);
(v) The properties currently or formerly owned or operated by
Parent or any of its subsidiaries (including, without
limitation, soil, groundwater or surface water on, under
or adjacent to the properties, and buildings thereon) do
not contain any Hazardous Material (as defined below)
other than as permitted under applicable Environmental
Law (provided, however, that with respect to properties
formerly owned or operated by Parent or any of its
subsidiaries, such representation is limited to the period
Parent or any such subsidiary owned or operated such
properties);
(vi) None of it or any of its subsidiaries has received any
notice, demand letter, executive or administrative order,
directive or request for information from any Federal,
state, local or foreign governmental entity or any third
party indicating that it may be in violation of, or liable
under, any Environmental Law;
(vii) There are no underground storage tanks on, in or under any
properties or Participation Facility and no underground
storage tanks have been closed or removed from any
properties or Participation Facility which are or have
been in the ownership of it or any of its subsidiaries;
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(viii) During the period of (A) its or any of its subsidiaries,
ownership or operation of any of their respective current
properties, (B) its or any of its subsidiaries,
participation in the management of any Participation
Facility, or (C) its or any of its subsidiaries, holding
of a security interest in a Loan Property, there has been
no contamination by or release of Hazardous Material or
oil in, on, under or affecting such properties. Prior to
the period of (x) its or any of its subsidiaries'
ownership or operation of any of their respective current
properties, (y) its or any of its subsidiaries,
participation in the management of any Participation
Facility, or (z) its or any of its subsidiaries, holding
of a security interest in a Loan Property, there was no
contamination by or release of Hazardous Material or oil
in, on, under or affecting any such property,
Participation Facility or Loan Property; and
(ix) None of it or its subsidiaries participates in the
management of a Loan Property or Participation Facility to
an extent that it would be deemed an "owner or operator"
as defined in 42 U.S.C. ss. 9601 or any similar
Environmental Law.
(b) The following definitions apply for purposes of this Section 4.21:
"Loan Property," "Participation Facility," "Environmental Law," and "Hazardous
Material" each have the meaning set forth in Section 3.21(b).
SECTION 4.22. Allowance. The allowance for possible loan losses shown on
Parent's audited balance sheet as of December 31, 1998 was, and the allowance
for possible loan losses shown on the balance sheets in the Parent Reports for
periods ending after the date of this Plan will be, adequate, as of the date
thereof, under generally accepted accounting principles applicable to banks and
bank holding companies. Parent has disclosed to the Company in writing prior to
the execution hereof and has set forth in the Parent Disclosure Letter all
loans, leases, advances, credit enhancements, other extensions of credit,
commitments and interest-bearing assets of Parent and its subsidiaries that have
been classified as "Other Loans Specially Mentioned", "Special Mention",
"Substandard", "Doubtful", "Loss", "Classified", "Criticized", "Credit Risk
Assets", "Concerned Loans" or words of similar import and the aggregate amount
thereunder of each such category or type. The Other Real Estate Owned included
in any non-performing assets of Parent or any of its subsidiaries is carried net
of reserves at the lower of cost or market value based on current independent
appraisals.
SECTION 4.23. Material Interests of Certain Persons. Except as disclosed
in Parent's Proxy Statement for its 1999 Annual Meeting of Stockholders or to
the extent such information is not required to be disclosed therein, no officer
or director of Parent, or any "associate" (as such term is defined in Rule 12b-2
under the Securities Exchange Act) of any such officer or director, has any
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material interest in any material contract or property (real or personal),
tangible or intangible, used in or pertaining to the business of Parent or any
of its subsidiaries.
SECTION 4.24. Insurance. Parent and its subsidiaries are presently
insured, and since December 31, 1995, have been insured, for reasonable amounts
with financially sound and reputable insurance companies, against such risks as
companies engaged in a similar business would, in accordance with good business
practice, customarily be insured. All of the insurance policies and bonds
maintained by Parent and its subsidiaries are in full force and effect, Parent
and its subsidiaries are not in default thereunder and all material claims
thereunder have been filed in due and timely fashion. Since December 31, 1995,
no claim by Parent or any of its subsidiaries on or in respect of an insurance
policy or bond has been declined or refused by the relevant insurer or insurers.
In the best judgment of Parent's management, such insurance coverage is adequate
and will be available in the future under terms and conditions substantially
similar to those in effect on the date hereof. Between the date hereof and the
Effective Time, Parent and its subsidiaries will maintain the levels of
insurance coverage in effect on the date hereof. The Parent Disclosure Letter
lists all insurance policies maintained by or for the benefit of Parent, of its
subsidiaries or its directors, officers, employees or agents, specifying the (i)
type of policy and a brief description thereof, (ii) policy limits and (iii)
self insurance amounts.
SECTION 4.25. Investment Securities. Except for pledges to secure public
and trust deposits and reverse repurchase agreements entered into in
arm's-length transactions pursuant to normal commercial terms and conditions and
other pledges required by law, none of the investments reflected in the
consolidated balance sheet of Parent included in Parent's Report on Form 10-K
for the year ended December 31, 1998, and none of the material investments made
by it or any of its subsidiaries since December 31, 1998, is subject to any
restriction (contractual, statutory or otherwise) that would materially impair
the ability of the entity holding such investment freely to dispose of such
investment at any time.
SECTION 4.26. Pooling of Interests. Each of Parent's acquisitions during
the two years preceding the date of this Plan which were accounted for as
"pooling of interests" qualify as "pooling of interests" for accounting
purposes. As of the date of this Plan, Parent has no reason to believe that the
Merger will not qualify as a "pooling of interests" for accounting purposes.
SECTION 4.27. Derivatives. Neither Parent nor any of its subsidiaries is
currently a party to any interest rate swap, cap, floor, option agreement, other
interest rate risk management arrangement or agreement or derivative-type
security or derivative arrangement or agreement.
SECTION 4.28. Registration Obligations. Except as contemplated by the
terms of this Plan, neither Parent nor any of its subsidiaries is under any
obligation, contingent or otherwise, to register any of its securities under the
Securities Act.
SECTION 4.29. Books and Records. The books and records of Parent and its
subsidiaries have been, and are being, maintained in accordance with applicable
legal and accounting
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requirements and reflect in all material respects the substance of events and
transactions that should be included therein.
SECTION 4.30. Corporate Documents. Parent has delivered to the Company
true and complete copies of (i) its articles of incorporation and by-laws and
(ii) the charter and by-laws of each subsidiary of Parent.
SECTION 4.31. Parent Action. The Board of Directors of Parent has adopted
resolutions recommending that this Plan be approved by the shareholders of
Parent and directing that this Plan be submitted for consideration by Parent's
shareholders at the Parent Meeting.
SECTION 4.32. Fair Lending; Community Reinvestment Act. As of the date
hereof, with the exception of routine investigation of consumer complaints,
neither Parent nor any of its subsidiaries has been advised that it is or may be
in violation of the Equal Credit Opportunity Act or the Fair Housing Act or any
similar federal or state statute. Each of Parent's subsidiaries received a CRA
rating of "satisfactory" or "outstanding" in its most recent CRA examination.
SECTION 4.33. Other Activities of Parent and its Subsidiaries.
(a) Neither of Parent nor any of its subsidiaries that is not a bank,
a bank operating subsidiary or a bank service corporation, directly or
indirectly, engages in any activity prohibited by the Federal Reserve
Board. Without limiting the generality of the foregoing, any equity
investment of Parent and each subsidiary that is not a bank, a bank
operating subsidiary or a bank service corporation, is not prohibited by
the Federal Reserve Board.
(b) To Parent's knowledge, each of its subsidiaries which is a bank
(a "Parent Bank Subsidiary") currently performs all personal trust,
corporate trust and other fiduciary activities "Trust Activities") with
requisite authority under applicable law of Governmental Entities and in
accordance in all material respects with the agreed-upon terms of the
agreements and instruments governing such Trust Activities, sound fiduciary
principles and applicable law and regulation (specifically including, but
not limited to, Section 9 of Title 12 of the Code of Federal Regulations);
there is no investigation or inquiry by any Governmental Entity pending, or
to the knowledge of Parent, threatened, against or affecting Parent, or any
Significant Subsidiary thereof relating to the compliance by Parent or any
such Significant Subsidiary (as such term is defined in Rule 1-02(w) of
Regulation S-X of the SEC) with sound fiduciary principles and applicable
regulations; and except where any such failure would not have a Material
Adverse Effect on Parent, each employee of a Parent Bank Subsidiary had the
authority to act in the capacity in which he or she acted with respect to
Trust Activities, in each case, in which such employee held himself or
herself out as a representative of a Parent Bank Subsidiary; and each
Parent Bank Subsidiary has established policies and procedures for the
purpose of complying with applicable laws of Governmental Entities relating
to Trust Activities, has followed such policies and procedures in all
material
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respects and has performed appropriate internal audit reviews of, and has
engaged independent accountants to perform audits of, Trust Activities,
which audits since January 1, 1996 have disclosed no material violations of
applicable laws of Governmental Entities or such policies and procedures.
SECTION 4.34. Year 2000. None of Parent or any of Parent's subsidiaries
has received, or reasonably expects to receive, a "Year 2000 Deficiency
Notification Letter" (as such term is employed in the Federal Reserve's
Supervision and Regulation Letter No. SR 98-3(SUP), dated March 4, 1998). Parent
has disclosed to the Company a complete and accurate copy of Parent's plan,
including an estimate of the anticipated associated costs, for addressing the
issues ("Year 2000 Issues") set forth in the statement of the Federal Financial
Institutions Examination Council, dated May 5, 1997, entitled "Year 2000 Project
Management Awareness," and December 1997, entitled "Safety and Soundness
Guidelines Concerning the Year 2000 Business Risk," as such issues affect Parent
and its Subsidiaries. Between the date of this Agreement and the Effective Time,
Parent shall use commercially practicable efforts to implement such plan.
SECTION 4.35. No Omission of Material Fact. No representation or warranty
by Parent in this Plan or under any documents, instruments, certificates or
schedules delivered or to be delivered pursuant hereto or in connection with the
transactions contemplated hereby contains any untrue statement of material fact,
or omits to state a material fact necessary to make the statements or facts
contained herein or therein not misleading. None of the information regarding
Parent or any of its subsidiaries or the transactions contemplated hereby
supplied or to be supplied by the Parent or any of its subsidiaries for
inclusion in any documents or filings to be filed with any regulatory authority
in connection with the transactions contemplated hereby will contain any untrue
statement of material fact, or omit to state a material fact necessary to make
the statements or facts contained therein not misleading.
SECTION 4.36. Conduct of Business. Since December 31, 1998, except as
contemplated by this Plan, neither Parent nor any of its subsidiaries has taken
any action which would have violated Section 2.4 had such Section been in effect
since December 31, 1998. Parent has not purchased any Parent Common Stock since
April 1, 1997.
ARTICLE V. ADDITIONAL AGREEMENTS
SECTION 5.1. Acquisition Proposals. The Company agrees that neither it
nor any of its subsidiaries nor any of the respective officers and directors of
the Company or its subsidiaries shall, and the Company shall direct and use its
best efforts to cause its employees, agents and representatives (including,
without limitation, any investment banker, attorney or accountant retained by it
or any of its subsidiaries) not to, initiate, solicit or encourage, directly or
indirectly, any inquiries or the making of any proposal or offer (including,
without limitation, any proposal or offer to shareholders of the Company) with
respect to a merger, consolidation or similar transaction involving, or any
purchase of all or any significant portion of the assets or any equity
securities of,
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the Company or any of its subsidiaries (any such proposal or offer being
hereinafter referred to as an "Acquisition Proposal") or, unless, at any time
prior to the adoption of this Agreement by the holders of Company Common Stock,
the Company's Board of Directors determines, upon receipt of a written opinion
of its outside legal counsel, that it is required to take the following action
in order to fulfill their fiduciary duties to the Company's shareholders under
the WBCL, engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any person relating to an
Acquisition Proposal, or otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal. The Company will immediately cease and cause
to be terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing and enforce
any confidentiality agreements to which it or any of its subsidiaries is a
party. The Company will take the necessary steps to inform the appropriate
individuals or entities referred to in the first sentence hereof of the
obligations undertaken in this Section 5.1. The Company will notify (describing
the relevant facts) Parent immediately if any such inquiries or proposals are
received by, any such information is requested from, or any such negotiations or
discussions are sought to be initiated or continued with, the Company.
SECTION 5.2. Certain Policies of the Company. At the request of Parent,
the Company shall modify and change its loan, litigation and real estate
valuation policies and practices (including loan classifications and levels of
reserves) after the date on which all required regulatory approvals are received
and all shareholder approvals are received and prior to the Effective Time so as
to be consistent on a mutually satisfactory basis with those of Parent and
generally accepted accounting principles. Neither the Company's representations,
warranties and covenants contained in this Plan shall be deemed to be untrue or
breached in any respect for any purpose nor shall the Exchange Ratio be modified
as a consequence of any modifications or changes undertaken solely on account of
this Section 5.2 nor shall the conditions set forth in Section 5.13 of this Plan
be deemed to have occurred by virtue thereof.
SECTION 5.3. Access and Information. Upon reasonable notice, each of the
Company and Parent shall (and shall cause its subsidiaries to) afford to the
other party and its representatives (including, without limitation, directors,
officers and employees of the other party and its affiliates, and counsel,
accountants and other advisors retained by the other party and its affiliates)
such access (including, without limitation, for the purpose of conducting
supplemental due diligence reviews) during normal business hours throughout the
period prior to the Effective Time to the books, records (including, without
limitation, loan and credit files, tax returns and work papers of independent
auditors), properties, personnel and to such other information as such party may
reasonably request; provided, however, that no investigation pursuant to this
Section 5.3 shall affect or be deemed to modify any representation or warranty
made herein. The Company and Parent will not, and each will cause its
representatives not to, use any information obtained pursuant to this Section
5.3 for any purpose unrelated to the consummation of the transactions
contemplated by this Plan. Subject to the requirements of law, the Company and
Parent will keep confidential, and will cause its representatives to keep
confidential, all information and documents obtained pursuant to this Section
5.3 unless such information (i) was already known to the Company or Parent, as
the case may be, or an affiliate of the Company or Parent, (ii) becomes
available to the Company or Parent, as the
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case may be, or an affiliate of the Company or Parent from other sources not
known by such party to be bound by a confidentiality agreement, (iii) is
disclosed with the prior written approval of the Company or Parent, as the case
may be, or (iv) is or becomes readily ascertainable from published information
or trade sources. In the event that this Plan is terminated or the transactions
contemplated by this Plan shall otherwise fail to be consummated, each party
shall promptly cause all copies of documents or extracts thereof containing
information and data as to another party hereto (or an affiliate of any party
hereto) to be returned to the party which furnished the same. The provisions of
the Confidentiality Agreements dated April 5, 1999 and December 23, 1998 shall
survive to the extent such terms are not inconsistent with this Section 5.3.
SECTION 5.4. Certain Filings, Consents and Arrangements. Parent and the
Company shall, and Parent and the Company shall cause their respective
subsidiaries to, (a) as soon as practicable make any filings and applications
required to be filed in order to obtain all approvals, consents and waivers of
governmental authorities necessary or appropriate for the consummation of the
transactions contemplated hereby, (b) cooperate with one another (i) in promptly
determining what filings are required to be made or approvals, consents or
waivers are required to be obtained under any relevant federal, state or foreign
law or regulation and (ii) in promptly making any such filings, furnishing
information required in connection therewith and seeking timely to obtain any
such approvals, consents or waivers and (c) deliver to the other copies of the
publicly available portions of all such filings and applications promptly after
they are filed.
SECTION 5.5. Antitakeover Statutes. The Company shall take all actions
necessary (i) to exempt the Company and the Plan from the requirements of any
state antitakeover law by action of its Board of Directors or otherwise and
(ii), upon the request of Parent, to assist in any challenge by Parent to the
applicability to the Merger of any state antitakeover law.
SECTION 5.6. Directors' and Officers' Indemnification.
(a) From and after the Effective Time through the sixth anniversary of the
Effective Date, Parent agrees to indemnify and hold harmless each present and
former director and officer of the Company and its subsidiaries determined as of
the Effective Time (the "Indemnified Parties"), against any costs or expenses
(including reasonable attorneys, fees), judgments, fines, losses, claims,
damages or liabilities (collectively, "Costs") incurred in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of matters existing or occurring at
or prior to the Effective Time, whether asserted or claimed prior to, at or
after the Effective Time, to the extent to which such Indemnified Parties were
entitled under the WBCL and the Company's articles of incorporation or by-laws
in effect on the date hereof, and Parent shall also advance expenses as incurred
to the extent permitted under the WBCL and the Company's articles of
incorporation and by-laws.
(b) Any Indemnified Party wishing to claim indemnification under Section
5.6(a), upon learning of any such claim, action, suit, proceeding or
investigation, shall as promptly as possible notify Parent thereof, but the
failure to so notify shall not relieve Parent of any liability it may have
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to such Indemnified Party if such failure does not materially prejudice the
Indemnifying Party. In the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time), (i) Parent
shall have the right to assume the defense thereof and Parent shall not be
liable to such Indemnified Parties for any legal expenses of other counsel or
any other expenses subsequently incurred by such Indemnified Parties in
connection with the defense thereof, except that if Parent elects not to assume
such defense or counsel for the Indemnified Parties advises that there are
issues which raise conflicts of interest between Parent and the Indemnified
Parties, the Indemnified Parties may retain counsel satisfactory to them, and
Parent shall pay the reasonable fees and expenses of one such counsel for the
Indemnified Parties in any jurisdiction unless the use of one counsel for such
Indemnified Parties would present such counsel with a conflict of interest, (ii)
the Indemnified Parties will cooperate in the defense of any such matter and
(iii) Parent shall not be liable for any settlement effected without its prior
written consent; and provided, further, that Parent shall not have any
obligation hereunder to any Indemnified Party when and if a court of competent
jurisdiction shall ultimately determine, and such determination shall have
become final and nonappealable, that the indemnification of such Indemnified
Party in the manner contemplated hereby is not permitted or is prohibited by
applicable law.
(c) Parent shall maintain in effect the current pre-paid directors' and
officers' liability insurance policy of the Company until August 1, 2001, unless
Parent and the Company agree to substitute an alternative policy or policies
therefor.
SECTION 5.7. Additional Agreements. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use its reasonable efforts
to take promptly, or cause to be taken promptly, all actions and to do promptly,
or cause to be done promptly, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Plan as soon as practicable, including using
efforts to obtain all necessary actions or non-actions, extensions, waivers,
consents and approvals from all applicable governmental entities, effecting all
necessary registrations, applications and filings (including, without
limitation, filings under any applicable state securities laws) and obtaining
any required contractual consents and regulatory approvals.
SECTION 5.8. Publicity. The initial press release announcing this Plan
shall be a joint press release and thereafter the Company and Parent shall
consult with each other in issuing any press releases or otherwise making public
statements with respect to the other or the transactions contemplated hereby and
in making any filings with any governmental entity or with any national
securities exchange with respect thereto.
SECTION 5.9. Regulatory Matters.
(a) Parent and the Company shall promptly prepare and file with the SEC
the Joint Proxy Statement and Parent shall promptly prepare and file with the
SEC the S-4, in which the Joint Proxy Statement will be included as a
prospectus. Each of the Company and Parent shall use all reasonable efforts to
have the S-4 declared effective under the Securities Act as promptly as
practicable after
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such filing, and the Company and Parent shall thereafter mail or deliver the
Joint Proxy Statement to their respective shareholders. Parent shall also use
all reasonable efforts to obtain all necessary state securities law or "Blue
Sky" permits and approvals required to carry out the transactions contemplated
by this Plan, and the Company shall furnish all information concerning the
Company and the holders of the Company Common Stock as may be reasonably
requested in connection with any such action.
(b) The parties hereto shall cooperate with each other and use their best
efforts to promptly prepare and file all necessary documentation, to effect all
applications, notices, petitions and filings, to obtain as promptly as
practicable all permits, consents, approvals and authorizations of all third
parties and Governmental Entities which are necessary or advisable to consummate
the transactions contemplated by this Plan (including, without limitation, the
Merger), and to comply with the terms and conditions of all such permits,
consents, approvals and authorizations of all such Governmental Entities. The
Company and Parent shall have the right to review in advance, and, to the extent
practicable, each will consult the other on, in each case subject to applicable
laws relating to the exchange of information, all the information relating to
Parent or the Company, as the case may be, and any of their respective
subsidiaries, which appear in any filing made with, or written materials
submitted to, any third party or any Governmental Entity in connection with the
transactions contemplated by this Plan. In exercising the foregoing right, each
of the parties hereto shall act reasonably and as promptly as practicable. The
parties hereto agree that they will consult with each other with respect to the
obtaining of all permits, consents, approvals and authorizations of all third
parties and Governmental Entities necessary or advisable to consummate the
transactions contemplated by this Plan and each party will keep the other
apprised of the status of matters relating to completion of the transactions
contemplated herein.
(c) The Company and Parent shall, upon request, furnish each other with
all information concerning themselves, their subsidiaries, directors, officers
and shareholders and such other matters as may be reasonably necessary or
advisable in connection with the Joint Proxy Statement, the S-4 or any other
statement, filing, notice or application made by or on behalf of the Company,
Parent or any of their respective subsidiaries to any Governmental Entity in
connection with the Merger and the other transactions contemplated by this Plan.
(d) The Company and Parent shall promptly advise each other upon receiving
any communication from any Governmental Entity whose consent or approval is
required for consummation of the transactions contemplated by this Plan which
causes such party to believe that there is a reasonable likelihood that any
regulatory approval will not be obtained or that the receipt of any such
approval will be materially delayed.
SECTION 5.10. Shareholders' Meeting. Each of Parent and Company shall take
all action necessary, in accordance with applicable law and its articles of
incorporation and by-laws, to convene a meeting of its shareholders as promptly
as practicable for the purpose of approving the issuance of Parent Shares
pursuant to this Plan, in the case of Parent, and approving this Plan, in the
case of the Company. The Board of Directors of the Company and Parent shall
recommend that this
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Plan be approved by each of the shareholders of the Company and Parent, as
applicable; provided, however, that the Board of Directors of either the Company
or Parent may withdraw its recommendation and make no recommendation with
respect to the Plan, if either board determines, upon receipt of a written
opinion of its outside counsel, that it is required to do so in order to fulfill
its respective fiduciary duties to its shareholders under either the Michigan
Business Corporation Act (the "MBCA") or the WBCL, as applicable.
Notwithstanding the preceding sentence, neither the Company nor Parent shall in
any way be relieved of its obligation to convene a meeting of its shareholders
as promptly as practicable for the purpose of approving this Plan or approving
the issuance of Parent Shares pursuant to this Plan, as applicable.
SECTION 5.11. Affiliates; Publication of Combined Financial Results.
(a) Each of the Company and Parent shall use its best efforts to cause
each director, executive officer and other person who is an "affiliate" (for
purposes of Rule 145 under the Securities Act and for purposes of qualifying the
Merger for "pooling of interests" accounting treatment) of such party to deliver
to the other party hereto, as soon as practicable after the date of this Plan,
and prior to the date of the shareholders meetings called by the Company and
Parent to approve this Plan, a written agreement, in the form of Annex 2 hereto,
providing that such person will not sell, pledge, transfer or otherwise dispose
of any shares of the Company Common Stock or Parent Common Stock held by such
"affiliate" and, in the case of the "affiliates" of the Company, the shares of
Parent Common Stock to be received by such "affiliate" in the Merger, except in
compliance with the applicable provisions of the Securities Act and the rules
and regulations thereunder and during the period commencing 30 days prior to the
Merger and ending at the time of the publication of financial results covering
at least 30 days of combined operations of the Company and Parent.
(b) Parent shall use its best efforts to publish as promptly as reasonably
practical but in no event later than 90 days after the end of the first month
after the Effective Time in which there are at least 30 days of post-Merger
combined operations (which month may be the month in which the Effective Time
occurs), combined sales and net income figures as contemplated by and in
accordance with the terms of SEC Accounting Series Release No. 135.
SECTION 5.12. Authorization, Reservation and Listing. By appropriate
resolution, a certified copy of which shall be provided to the Company, the
Board of Directors of Parent shall, prior to the Effective Time, authorize and
reserve the required number of shares of Parent Common Stock to be issued
pursuant to the Plan of Merger. Parent shall cause the shares of Parent Common
Stock to be issued in the Merger to be approved for listing on The Nasdaq Stock
Market, subject to official notice of issuance, prior to the Effective Time.
SECTION 5.13. Notification of Certain Matters.
(a) Each party shall give prompt notice to the others of: (i) any notice
of, or other communication relating to, a default or event that, with notice or
lapse of time or both, would
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become a default, received by it or any of its subsidiaries subsequent to the
date of this Plan and prior to the Effective Time, under any contract material
to the financial condition, properties, businesses or results of its operations,
to which it or any subsidiary is a party or is subject; and (ii) any Material
Adverse Effect or the occurrence of any event which, so far as reasonably can be
foreseen at the time of its occurrence, is reasonably likely to result in any
such Material Adverse Effect. Each of the Company and Parent shall give prompt
notice to the other party of any notice or other communication from any third
party alleging that the consent of such third party is or may be required in
connection with the transactions contemplated by this Plan.
(b) Subject to any notice previously provided under Section 5.13(a) above,
from and after the due date hereof to the Effective Time and at and as of the
Effective Time, the Company and Parent shall supplement or amend any of its
representations and warranties which apply to the period after the date hereof
by delivering monthly updates to the Company Disclosure Letter or the Parent
Disclosure Letter, as applicable ("Disclosure Letter Updates") to the other
party with respect to any matter hereafter arising which, in its good faith
judgment, would render any such representation or warranty after the date of
this Plan materially inaccurate or incomplete as a result of such matter
arising. The Disclosure Letter Updates shall be provided on or before the 25th
day of each calendar month commencing the first full calendar month after the
date of this Agreement. Within twenty (20) days after receipt of any Disclosure
Letter Update (or if cure is promptly commenced, but is not effected within
thirty (30) days after receipt of any Disclosure Letter Update (the "Cure
Period")), Parent or the Company, as the case may be, may exercise its right to
terminate this Plan pursuant to Section 7.1(f) hereof, if the information in
such Disclosure Letter Update together with the information in any or all of the
Disclosure Letter Updates previously provided, indicates that a Material Adverse
Effect with respect to the Company or Parent, as applicable, has occurred or is
reasonably likely to occur which either has not or cannot be cured within the
Cure Period, or which does not result primarily from changes in the general
level of interest rates.
SECTION 5.14. Board of Directors and Executive Committee of Parent. Parent
will take such action as may be necessary so that the number of directors of
Parent shall be increased by three subsequent to the Effective Time. Three
individuals designated by the Board of Directors of the Company within thirty
(30) days prior to the Effective Time and acceptable to Parent in accordance
with the policies of Parent with respect to the service of directors shall be
added to the Board of Directors of Parent subsequent to the Effective Time. Such
individuals shall hold office for the terms which shall coincide with the
remaining terms of the classes to which they are added. Parent also will take
such action as may be necessary so that one individual designated by the Board
of Directors of the Company within thirty (30) days prior to the Effective Time
and acceptable to Parent in accordance with the policies of Parent with respect
to the service of directors shall be added as a rotating member of the Executive
Committee of the Board of Directors of Parent subsequent to the Effective Time.
SECTION 5.15. Benefit Plans. For purposes of crediting periods of service
for eligibility and vesting, but not for benefit accrual purposes, under the
Parent's Amended and Restated Section 401(k) Plan (the "Parent 401(k) Plan), and
for purposes of crediting periods of service for eligibility
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for other employee benefits provided to employees of Parent, employees of the
Company who otherwise would be eligible to participate in such plans and benefit
programs after the Effective Time shall be given credit for service with the
Company prior to the Effective Time. For purposes of crediting periods of
service for eligibility and vesting, but not for benefit accrual purposes, under
Parent's qualified defined benefit pension plan (the "Parent Retirement Plan"),
employees of the Company who become participants in the Parent Retirement Plan
after the Effective Time shall be given credit for service with the Company
prior to the Effective Time.
SECTION 5.16. Employment Arrangements. Parent agrees to cause to be
honored, in accordance with their existing terms, all employment agreements and
severance plans of the Company in effect as of the date hereof.
ARTICLE VI. CONDITIONS TO CONSUMMATION
SECTION 6.1. Conditions to All Parties' Obligations. The respective
obligations of Parent and the Company to effect the Merger shall be subject to
the satisfaction or waiver prior to the Effective Time of the following
conditions:
(a) The Plan and the transactions contemplated hereby shall have been
approved by the requisite vote of the shareholders of the Company and Parent in
accordance with their respective articles of incorporation and applicable law.
(b) Parent, the Company and each of their respective subsidiaries shall
have procured, if required in the opinion of counsel for Parent, the approvals,
consents or waivers with respect to the Plan and the transactions contemplated
hereby by (i) the appropriate State Regulators, and (ii) the Federal Reserve
Board, and all applicable statutory waiting periods shall have expired; and the
parties shall have procured all other regulatory approvals, consents or waivers
of governmental authorities or other persons that, in the opinion of counsel for
Parent, are necessary or appropriate for the consummation of the transactions
contemplated by the Plan; provided, however, that no approval, consent or waiver
referred to in this Section 6.1(b) shall be deemed to have been received if it
shall include any condition or requirement that, individually or in the
aggregate, (i) would result in a Material Adverse Effect on Parent, (ii) imposes
any requirement upon Parent, the Company or their respective subsidiaries to (x)
dispose of any asset which is material to Parent or the Company, (y) materially
restrict or curtail the current business operations or activities of Parent or
the Company or (z) raise an amount of capital, the issuance and sale of which,
in the absence of the Merger and the other transactions contemplated by this
Plan, would in Parent's judgment be materially burdensome in light of Parent's
capital raising policies or (iii) would reduce the benefits of the transactions
contemplated by the Plan to Parent in so significant a manner that Parent, in
its judgment, would not have entered into this Plan had such condition or
requirement been known at the date hereof.
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(c) The S-4 shall have become effective under the Securities Act and no
stop order suspending the effectiveness of the S-4 shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the SEC.
(d) Parent and the Company shall each have received a letter from their
respective independent accountants addressed to Parent or the Company, as the
case may be, to the effect that the Merger will qualify for "pooling of
interests" accounting treatment.
(e) All other requirements prescribed by law which are necessary to the
consummation of the transactions contemplated by this Plan shall have been
satisfied.
(f) No party hereto shall be subject to any order, decree or injunction of
a court or agency of competent jurisdiction which enjoins or prohibits the
consummation of the Merger or any other transaction contemplated by this Plan,
and no litigation or proceeding shall be pending against Parent or the Company
or any of their subsidiaries brought by any governmental agency seeking to
prevent consummation of the transactions contemplated hereby.
(g) No statute, rule, regulation, order, injunction or decree shall have
been enacted, entered, promulgated, interpreted, applied or enforced by any
governmental authority which prohibits, restricts or makes illegal consummation
of the Merger or any other transaction contemplated by this Plan.
SECTION 6.2. Conditions to the Obligations of Parent and Merger Sub. The
obligations of Parent and Merger Sub to effect the Merger shall be subject to
the satisfaction or waiver prior to the Effective Time of the following
additional conditions:
(a) Each of the representations and warranties of the Company contained in
this Plan shall have been true on the date hereof and shall be true in all
material respects on the Effective Date as if made on such date (or on the date
when made in the case of any representation or warranty which specifically
relates to an earlier date); the Company shall have performed, in all material
respects, each of its covenants and agreements contained in this Plan; and
Parent shall have received a certificate signed by the Chief Executive Officer
and the Chief Financial Officer of the Company, dated the Effective Date, to the
foregoing effect.
(b) Parent shall have received a written opinion, dated the Effective
Date, from McCarty, Curry, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇, LLP, counsel to the Company,
in form and substance satisfactory to Parent.
(c) Parent shall have received a written opinion from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC,
in form and substance satisfactory to Parent, to the effect that the Merger will
constitute a reorganization within the meaning of Section 368 of the Code.
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SECTION 6.3. Conditions to the Obligation of the Company. The obligation
of the Company to effect the Merger shall be subject to the satisfaction or
waiver prior to the Effective Time of the following additional conditions:
(a) Each of the representations and warranties of Parent contained in this
Plan shall have been true on the date hereof and shall be true in all material
respects on the Effective Date as if made on such date (or on the date when made
in the case of any representation or warranty which specifically relates to an
earlier date); Parent shall have performed, in all material respects, each of
its covenants and agreements contained in this Plan; and the Company shall have
received certificates signed by the Chief Financial Officer of Parent, dated the
Effective Date, to the foregoing effect.
(b) The Company shall have received a written opinion, dated the Effective
Date, from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC, counsel to Parent in form and substance
satisfactory to the Company.
(c) The Company shall have received a written opinion from either McCarty,
Curry, ▇▇▇▇▇▇▇, Peeters & ▇▇▇▇, LLP or ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP in form and substance
satisfactory to the Company, to the effect that the Merger will constitute a
reorganization within the meaning of Section 368 of the Code.
ARTICLE VII. TERMINATION
SECTION 7.1. Termination. This Plan may be terminated, and the Merger
abandoned, prior to the Effective Date, either before or after its approval by
the shareholders of the Company or Parent;
(a) by mutual consent of the Boards of Directors of Parent and the
Company; or
(b) by either Parent or the Company, if any of the conditions to such
party's obligation to consummate the transactions contemplated in this Plan
shall have become impossible to satisfy if, but only if, such party has used its
best efforts and acted in good faith in attempting to satisfy all such
conditions and if such party is not then in breach or default in any material
respect of this Plan; or
(c) by the Board of Directors of Parent if (i) there has been a material
breach or default by the Company of any representation or warranty or in the
observance of its convenants and agreements contained in this Plan of which
notice has been given in writing by Parent and which has not been cured within
thirty (30) business days of receipt of such notice; or (ii) the Effective Time
has not occurred prior to December 31, 1999, without fault on the part of
Parent, or (iii) a public announcement with respect to an Acquisition Proposal
shall have been made by any person other than Parent or an affiliate of Parent
and the Board of Directors of the Company shall have (A) failed
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to publicly reject or oppose such Acquisition Proposal within ten (10) days of
the public announcement of such proposal, plan or intention or (B) shall have
modified, amended or withdrawn its recommended approval of this Plan and the
Merger to the Company's shareholders; or
(d) by the Board of Directors of the Company if (i) there has been a
material breach or default by Parent of any representation or warranty or in the
observance of its covenants and agreements contained in this Plan of which
notice has been given in writing by the Company and which has not been cured
within thirty (30) business days of receipt of such notice; or (ii) the
Effective Time has not occurred prior to December 31, 1999 without fault on the
part of the Company; or
(e) by the Board of Directors of either Parent or the Company (i) if any
shareholder approval of the Company required for consummation of the Merger
shall not have been obtained by reason of the failure to obtain the required
vote at a duly held meeting of shareholders or at any adjournment or
postponement thereof; or (ii) if any shareholder approval of Parent required for
consummation of the Merger shall not have been obtained by reason of the failure
to obtain the required vote at a duly held meeting of shareholders or at any
adjournment or postponement thereof or (iii) if any Regulatory Agency has denied
approval for the Merger and, if such denial is appealable, neither Parent nor
the Company has filed a petition seeking review of such order of denial or taken
other similar action under applicable law, within thirty (30) days after the
issuance or entry by the governmental agency of such order of denial; or
(f) by Parent or the Company pursuant to Section 5.13(b).
(g) by Parent, at its sole discretion, at any time (i) within 45 days of
the date of this Agreement, if Parent is not satisfied with its due diligence
review of the quality of the Company's loan portfolio, or (ii) if any
representation or warranty of the Company contained in Section 3.21 is untrue,
without respect to the knowledge of the Company.
SECTION 7.2. Effect of Termination. In the event of the termination of
this Plan as provided in Section 7.1, written notice thereof shall forthwith be
given to the other party or parties specifying the provision hereof pursuant to
which such termination is made, and this Plan shall forthwith become null and
void, and there shall be no liability on the part of Parent, Merger Sub, or the
Company or any of their officers or directors, except (i) for fraud or willful
and material breach of this Plan and (ii) Sections 5.3, 7.2, 9.2, 9.6 and 9.7
hereof shall survive any termination of this Plan.
ARTICLE VIII. EFFECTIVE DATE AND EFFECTIVE TIME
SECTION 8.1. Effective Date and Effective Time. On such date as Parent
selects, which shall be within 30 days after the last to occur of the expiration
of all applicable waiting periods in
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connection with approvals of governmental authorities occurs and the receipt of
all approvals of governmental authorities and all conditions to the consummation
of the Merger are satisfied or waived, or on such earlier or later date as may
be agreed in writing by the parties, a certificate of merger shall be executed
in accordance with all appropriate legal requirements and shall be filed as
required by law, and the Merger provided for herein shall become effective upon
such filing or on such date and at such time as may be specified in such
certificate of merger. The date and time of such filing or such later effective
date is herein called the "Effective Date". The "Effective Time" of the Merger
shall be the time of such filing or as set forth in such certificate of merger.
ARTICLE IX. OTHER MATTERS
SECTION 9.1. Certain Definitions; Interpretation. As used in this Plan,
the following terms shall have the meanings indicated:
"material" means material with respect to the entity in question and its
respective subsidiaries, taken as a whole.
"Material Adverse Effect", with respect to a person, means any condition,
event, change or occurrence that is reasonably likely to have a material
adverse effect upon (A) the condition (financial or other), properties,
assets, business, results of operations or prospects of such person and
its subsidiaries, taken as a whole, or (B) the ability of such person to
perform its obligations under, and to consummate the transactions
contemplated by, this Plan.
"person" includes an individual, corporation, partnership, association,
trust or unincorporated organization.
"subsidiary", with respect to a person, means any other person controlled
by such person.
When a reference is made in this Plan to Sections or Annexes, such reference
shall be to a Section of, or Annex to, this Plan unless otherwise indicated. The
table of contents and headings contained in this Plan are for ease of reference
only and shall not affect the meaning or interpretation of this Plan. Whenever
the words "include", "includes", or "including" are used in this Plan, they
shall be deemed followed by the words "without limitation". Any singular term in
this Plan shall be deemed to include the plural, and any plural term the
singular.
SECTION 9.2. Survival. Only those agreements and covenants of the parties
that are by their terms applicable in whole or in part after the Effective Time,
including the Stock Option Agreement, shall survive the Effective Time. All
other representations, warranties, agreements and covenants shall be deemed to
be conditions of the Plan and shall not survive the Effective Time.
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SECTION 9.3. Waiver. Prior to the Effective Time, any provision of this
Plan may be: (i) waived by the party benefitted by the provision; or (ii)
amended or modified at any time (including the structure of the transaction) by
an agreement in writing between the parties hereto, except that, after the vote
by the shareholders of the Company, no amendment may be made that would
contravene the applicable sections of the MBCA and the WBCL.
SECTION 9.4. Counterparts. This Plan may be executed and delivered in
counterparts each of which shall be deemed to constitute an original, but all of
which together shall constitute one and the same instrument.
SECTION 9.5. Governing Law. This Plan shall be governed by, and
interpreted in accordance with, the laws of the State of Michigan.
SECTION 9.6. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS PLAN OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 9.7. Expenses. Each party hereto will bear all expenses incurred
by it in connection with this Plan and the transactions contemplated hereby;
provided, however, that Parent and the Company shall share equally all fees and
expenses, other than accountants', attorneys' and filing fees, incurred in
connection with the printing and filing of the S-4 and the Joint Proxy Statement
(including any preliminary materials related thereto and any amendments or
supplements thereof).
SECTION 9.8. Notices. All notices, requests, acknowledgments and other
communications hereunder to a party shall be in writing and shall be deemed to
have been duly given when delivered by hand, telecopy, telegram, telex or
facsimile (confirmed in writing) to such party at its address set forth below or
such other address as such party may specify by notice to the other party
hereto.
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If to the Company, to:
F & M Bancorporation, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
With copies to:
McCarty, Curry, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇, LLP
▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
and
▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to Parent or Merger Sub, to:
Citizens Banking Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
With copies to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇., Esq.
SECTION 9.9. Entire Agreement; Etc. This Plan and the Stock Option
Agreement represents the entire understanding of the parties hereto with
reference to the transactions
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contemplated hereby and supersedes any and all other oral or written agreements
heretofore made. All terms and provisions of the Plan shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns. Except as to Sections 1.5, 5.6 and 5.15 (which may only be enforced
by any person who is not a party to this Plan after the Effective Time), nothing
in this Plan is intended to confer upon any other person any rights or remedies
of any nature whatsoever under or by reason of this Plan.
SECTION 9.10. Assignment. This Plan may not be assigned by any party
hereto without the written consent of the other parties, except that Parent and
Merger Sub may assign all or any of their rights hereunder to any of their
subsidiaries provided that no such assignment shall relieve the assigning party
of its obligations hereunder.
[this space intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Plan to be executed
by their duly authorized officers as of the day and year first above written.
CITIZENS BANKING CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman, President and Chief
Executive Officer
CITIZENS ACQUISITION, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Secretary
F & M BANCORPORATION, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board
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