Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
Dated as of
October 13, 2004
By and Among
FIRST DEFIANCE FINANCIAL CORP.,
FIRST FEDERAL BANK OF THE MIDWEST,
FIRST FEDERAL INTERIM BANK
And
THE GENOA SAVINGS AND LOAN COMPANY
TABLE OF CONTENTS
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ARTICLE ONE - THE MERGER.......................................................................................1
1.01 Merger of Interim and Genoa......................................................................1
1.02 Name of Surviving Corporation....................................................................1
1.03 Purpose for Formation of Surviving Corporation...................................................2
1.04 Capital of Surviving Corporation.................................................................2
1.05 Articles of Incorporation of Surviving Corporation...............................................2
1.06 Bylaws of Surviving Corporation..................................................................2
1.07 Principal Place of Business of Surviving Corporation.............................................2
1.08 Number and Names of Directors of Surviving Corporation...........................................2
1.09 Officers of Interim to become Officers of Surviving Corporation..................................2
1.10 Closing..........................................................................................2
ARTICLE TWO - CONVERSION AND CANCELLATION OF SHARES IN
THE MERGER.....................................................................................................3
2.01 Conversion and Cancellation of Shares in the Merger..............................................3
2.02 Share Certificates in the Merger.................................................................4
2.03 Compliance with Section 2.02.....................................................................5
2.04 Payment in Satisfaction of Rights................................................................5
2.06 Dissenting Shares................................................................................5
2.07 Separate Existence...............................................................................5
2.08 Property.........................................................................................5
2.09 Creditor's Rights................................................................................6
2.10 Treatment of Genoa Options.......................................................................6
ARTICLE THREE - THE BANK MERGER................................................................................6
3.01 Merger of First Federal and Genoa................................................................6
ARTICLE FOUR - REPRESENTATIONS AND WARRANTIES OF GENOA.........................................................7
4.01 Organization and Standing........................................................................7
4.02 Qualification....................................................................................7
4.03 Authority........................................................................................7
4.04 Governing Documents..............................................................................8
4.05 No Conflicts.....................................................................................8
4.06 Consents.........................................................................................8
4.07 Authorized Capital...............................................................................8
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4.08 Financial Statements; Thrift Financial Report....................................................9
4.09 Conduct of Businesses............................................................................9
4.10 Properties......................................................................................11
4.11 Allowance for Loan Losses.......................................................................12
4.12 Investments.....................................................................................13
4.13 Reports and Records.............................................................................13
4.14 Taxes...........................................................................................13
4.15 Material Contracts..............................................................................14
4.16 Insurance.......................................................................................15
4.17 Actions and Suits...............................................................................15
4.18 Permits and Licenses............................................................................15
4.19 Employee Benefit Plans; ERISA...................................................................15
4.20 Environmental Protection........................................................................17
4.21 Employment Matters..............................................................................18
4.22 Untrue Statements and Omissions.................................................................18
4.23 Proxy Materials.................................................................................18
4.24 Brokers.........................................................................................19
4.25 Stock Ownership.................................................................................19
ARTICLE FIVE - REPRESENTATIONS AND WARRANTIES OF FDEF AND FIRST FEDERAL.......................................19
5.01 Corporate Status................................................................................19
5.02 Corporate Proceedings...........................................................................20
5.03 Capitalization of FDEF..........................................................................20
5.04 Authorized and Effective Agreement..............................................................20
5.05 No Conflict.....................................................................................21
5.06 SEC Filings.....................................................................................21
5.07 Governmental and Third-Party Proceedings........................................................21
5.08 Absence of Changes..............................................................................22
5.09 Regulatory Matters..............................................................................22
5.10 Ownership of Genoa Shares.......................................................................22
ARTICLE SIX - COVENANTS.......................................................................................22
6.01 Conduct of Businesses...........................................................................22
6.02 Acquisition Proposals...........................................................................25
6.03 Accounting Policies.............................................................................25
6.04 Voting Agreement................................................................................25
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ARTICLE SEVEN - FURTHER AGREEMENTS............................................................................26
7.01 Applications for Approval of Merger.............................................................26
7.02 Special Meeting of Shareholders.................................................................26
7.03 Access..........................................................................................26
7.04 Confidentiality.................................................................................26
7.05 Press Releases..................................................................................26
7.06 Costs, Expenses and Fees........................................................................27
7.07 Reasonable Efforts..............................................................................27
7.08 Notification of Events..........................................................................27
7.09 Indemnification.................................................................................27
7.10 Employees of Genoa..............................................................................28
7.11 Formation of Interim............................................................................28
ARTICLE EIGHT - CLOSING MATTERS...............................................................................28
8.01 Conditions to Obligations of FDEF, First Federal, Interim and Genoa.............................28
8.02 Conditions to Obligations of FDEF, First Federal and Interim....................................29
8.03 Conditions to Obligations of Genoa..............................................................31
ARTICLE NINE - TERMINATION....................................................................................32
9.01 Termination.....................................................................................32
9.02 Written Notice of Termination...................................................................32
9.03 Effect of Termination...........................................................................32
9.04 Amendment.......................................................................................33
9.05 Waiver..........................................................................................33
ARTICLE TEN - MISCELLANEOUS...................................................................................33
10.01 Survival of Representations and Warranties......................................................33
10.02 Notices.........................................................................................33
10.03 Entire Agreement................................................................................34
10.04 Execution in Counterparts.......................................................................34
10.05 Headings........................................................................................34
10.06 Structure of Combination........................................................................35
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GLOSSARY OF DEFINED TERMS
The following terms, when used in this Agreement, have the meanings
ascribed to them in the corresponding Sections of this Agreement listed below:
"Acquisition Transactions" -- Section 6.02
"Agreement" -- Preamble
"Bank Merger" -- Section 3.01
"Base Equity" -- Section 2.01(e)
"Certificate" -- Section 2.02(a)
"Certificates" -- Section 2.02(a)
"Closing Equity" -- Section 2.01(e)
"Closing" -- Section 1.10(a)
"Code" -- Section 4.14
"Collateral Property" -- Section 4.20(b)(ii)
"ComBanc Agreement" -- Section 5.03
"Continuing Employees" -- Section 7.10
"Contracts" -- Section 4.15(a)
"Dissenting Shares" -- Section 2.06
"Effective Time" -- Section 1.10(b)
"Environmental Laws" -- Section 4.20(b)(iii)
"ERISA" -- Section 4.19(b)
"FBR" -- Section 4.24
"FDEF Filed SEC Documents" -- Section 5.08(a)
"FDEF Stock Option Plans" -- Section 5.03
"FDEF Stock Options" -- Section 5.03
"FDEF" -- Preamble
"FDIC" -- Section 4.01
"First Federal" -- Preamble
"Formal Agreement" -- Section 4.17
"GAAP" -- Section 2.01(e)
"Genoa Disclosure Schedule" -- Section 2.10
"Genoa Financial Statements" -- Section 4.08(a)
"Genoa Option Plan" -- Section 2.10
"Genoa Options" -- Section 2.01(b)
"Genoa Property" -- Section 4.20(b)(i)
"Genoa TFRs" -- Section 4.08(a)
"Genoa" -- Preamble
"Hazardous Substances" -- Section 4.20(b)(iv)
"HOLA" -- Section 5.01(a)
"Interim" -- Preamble
"Investments" -- Section 4.12(a)
"IRS" -- Section 4.14
"IRS" -- Section 4.19(b)
"Leased Personal Property" -- Section 4.10(f)
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"Leased Real Property" -- Section 4.10(e)
"Loan Assets" -- Section 4.10(b)
"Loan Documentation" -- Section 4.10(b)
"Loan Sale Contracts" -- Section 4.10(g)
"Merger" -- Preamble
"MRP" -- Section 5.03
"Nasdaq" -- Section 5.07
"ODFI" -- Section 1.10(b)
"Option Payment" -- Section 2.10
"ORC" -- Preamble
"OTS" -- Section 4.01
"Parcel" -- Section 4.10(c)
"Per Share Consideration" -- Section 2.01(b)
"Per Share Reduction" -- Section 2.01(e)(i)
"Personal Property Leases" -- Section 4.10(f)
"Personal Property" -- Section 4.10
"Plans" -- Section 4.19(a)
"Proxy Statement" -- Section 4.23
"Real Properties" -- Section 4.10 (c)
"Real Property Leases" -- Section 4.10(e)
"Surviving Corporation" -- Section 1.01
"Tax Returns" -- Section 4.14
"Tax" -- Section 4.14
"Taxes" -- Section 4.14
"Updated Genoa Disclosure Schedule" -- Section 7.08
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "Agreement"), made and entered into
this 13th day of October, 2004, by and among First Defiance Financial Corp., an
Ohio corporation ("FDEF"); First Federal Bank of the Midwest, a federal savings
bank ("First Federal"); The Genoa Savings and Loan Company, a savings and loan
association incorporated under the laws of Ohio ("Genoa") and First Federal
Interim Bank, an interim savings and loan association to be incorporated under
the laws of the State of Ohio ("Interim"), which shall become a party upon its
formation.
WITNESSETH:
WHEREAS, the Boards of Directors of FDEF, First Federal and Genoa believe
that it is in the best interests of each of them and their shareholders for
Interim to merge with and into Genoa ( the "Merger");
WHEREAS, as a result of the Merger and in accordance with the terms of
this Agreement, Interim will cease to have a separate corporate existence, FDEF
will acquire all of the issued and outstanding shares of Genoa as the surviving
corporation and shareholders of Genoa will receive from FDEF, in exchange for
each common share of Genoa, $30.22 in cash, subject to adjustment as provided
herein; and
WHEREAS, promptly following the Merger, Genoa, as the surviving
corporation in the Merger, will merge with and into First Federal;
WHEREAS, FDEF will, following the execution of this Agreement, cause the
formation of Interim as an Ohio State chartered savings and loan association
pursuant to the provisions of 1159.091 of the Ohio Revised Code (the "ORC") and
will own Interim as a wholly owned subsidiary on the Closing Date; and
NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the parties hereto, each intending to be
legally bound, hereby agree as follows:
ARTICLE ONE
THE MERGER
Section 1.01. Merger of Interim and Genoa. In accordance with the terms
and subject to the conditions of this Agreement and Chapters 1151 and 1701 of
the ORC, Interim shall merge with and into Genoa at the Effective Time
(hereinafter defined); Genoa shall be the continuing, surviving and resulting
corporation in the Merger (the "Surviving Corporation"); Genoa shall continue to
exist as a savings and loan association incorporated under Ohio law; and Genoa
shall be the only one of Genoa and Interim to continue its separate corporate
existence after the Effective Time.
Section 1.02. Name. The name of the Surviving Corporation in the Merger of
Interim with and into Genoa shall be "Genoa Savings and Loan Company."
Section 1.03. Purpose. The purposes for which the Surviving Corporation
shall be formed shall be identical to the purposes for which Genoa was formed.
Section 1.04. Capital. The capital of the Surviving Corporation shall
consist of 359,647 common shares, $1.00 par value per share.
Section 1.05. Articles. The Articles of Incorporation of Genoa, as
amended, shall be the Articles of Incorporation of the Surviving Corporation
until amended in accordance with law.
Section 1.06. Constitution. The Constitution of Genoa, as amended, shall
be the Constitution of the Surviving Corporation.
Section 1.07. Address. At and after the Effective Time and until changed
in accordance with law, the principal place of business of the Surviving
Corporation shall be ▇▇▇▇▇ ▇. ▇▇. ▇▇. ▇▇, ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
Section 1.08. Directors. At and after the Effective Time and until changed
in accordance with law, the number of directors of the Surviving Corporation
shall be five, the names and residence addresses of whom are as follows:
NAMES RESIDENCE ADDRESS
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▇▇▇▇▇▇▇ ▇. Small ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Section 1.09. Officers. At and after the Effective Time and until changed
in accordance with law, each individual who is an officer of Interim immediately
prior to the Effective Time shall be an officer of the Surviving Corporation
holding the same office as held with Interim immediately prior to the Effective
Time.
Section 1.10. Closing. (a) The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at a time and on a date selected
by FDEF after the satisfaction or waiver of the last of the conditions set forth
in Article Eight of this Agreement to be satisfied or waived.
(b) On the day of the Closing, Interim and Genoa shall cause a
Certificate of Merger in respect of the Merger to be filed by the Superintendent
of the Division of Financial
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Institutions of the Ohio Department of Commerce (the "ODFI") in the Office of
the Ohio Secretary of State in accordance with Chapters 1151 and 1701 of the
ORC. The Merger shall become effective at 11:59 p.m. on the date of such filing
(the "Effective Time").
ARTICLE TWO
CONVERSION AND CANCELLATION OF
SHARES IN THE MERGER
Section 2.01. Conversion and Cancellation of Shares in the Merger. At the
Effective Time and as a result of the Merger, automatically and without further
act of FDEF, First Federal, Interim, Genoa, or the holders of Interim or Genoa
shares, the following shall occur:
(a) All of the outstanding common shares of Genoa as the Surviving
Corporation shall be owned by FDEF.
(b) Each certificate for Genoa common shares held by the
shareholders of Genoa immediately prior to the Merger and
formerly representing ownership of such Genoa common shares,
shall be cancelled and extinguished and, in substitution and
exchange therefor, the holders thereof shall be entitled,
subject to adjustment as provided in Section 2.01(e) hereof
and upon compliance with Section 2.02 of this Agreement, to
receive from FDEF $30.22 in cash (the "Per Share
Consideration"); and each option to acquire Genoa common
shares (the "Genoa Options") shall be cancelled and converted
into the right to receive cash as set forth in Section 2.10
herein.
(c) The issued and outstanding common shares of Interim before the
Effective Time shall be cancelled.
(d) The issued and outstanding common shares of First Federal and
FDEF before the Effective Time shall remain issued and
outstanding after the Effective Time and shall be unaffected
by the Merger.
(e) For purposes of this Section 2.01, the term "Closing Equity"
shall mean Genoa's shareholders' equity as calculated in
accordance with United States generally accepted accounting
principles ("GAAP") on the Closing Date, exclusive of (i)
termination expenses for data processing contracts and
employment contracts or change of control agreements and
investment banking, legal and accounting expenses recognized
by Genoa in connection with the Merger, (ii) reserves,
accruals and charges taken or established by Genoa at the
request of FDEF in accordance with Section 6.03 of this
Agreement, (iii) net unrealized gains or losses on Genoa's
securities portfolio, and (iv) any accounting changes
requested by FDEF pursuant to Section 6.03 hereof (the "Equity
Adjustments"). The term
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"Base Equity" shall mean $7,000,000 exclusive of the Equity
Adjustments. If the Closing Equity is less than the Base
Equity, the Per Share Consideration to be paid for the Genoa
common shares shall be decreased as provided below.
(i) The Per Share Consideration will be decreased
by the difference between (x) the Base Equity and the
Closing Equity, divided by (y) the number of Genoa
common shares outstanding on the Closing Date (the "Per
Share Reduction").
(ii) Notwithstanding the adjustment provided for
in Section 2.01(e)(i), in the event the Closing occurs
after January 31, 2005, the Base Equity, for purposes of
calculating the Per Share Reduction, shall be reduced by
$2,500 per day for each day after the later of (x)
January 31, 2005 or (y) that date on which the Merger
could have been consummated as a result of the
satisfaction of all conditions precedent to Closing as
set forth in Article Eight hereof, including receipt of
all necessary regulatory approvals and expiration of any
regulatory waiting period.
Section 2.02. Share Certificates in the Merger. (a) Within seven (7)
business days after the Effective Time, FDEF shall mail to each holder of record
of Genoa common shares a form letter of transmittal and instructions for use in
effecting the surrender for exchange of the certificates evidencing the Genoa
common shares cancelled and extinguished as a result of the Merger (hereinafter
referred to, collectively, as the "Certificates" and, individually, as a
"Certificate"). Upon surrender of a Certificate for cancellation, together with
such letter of transmittal, duly executed, the holder of such Certificate shall
be entitled to receive in exchange therefor the Per Share Consideration for each
share evidenced by such Certificate in accordance with the provisions of this
Agreement, and the Certificate so surrendered shall thereafter be cancelled
forthwith.
(b) In the event that any holder of Genoa common shares cancelled
and extinguished in accordance with this Agreement is unable to deliver the
Certificate which evidences such shares of the holder, FDEF, in the absence of
actual notice that any shares theretofore evidenced by any such Certificate have
been acquired by a bona fide purchaser, shall deliver to such holder the amount
to which such holder is entitled in accordance with the provisions of this
Agreement upon the presentation of all of the following:
(i) Evidence to the reasonable satisfaction of FDEF that any
such Certificate has been lost, wrongfully taken or
destroyed;
(ii) Such security or indemnity as may be reasonably
requested by FDEF to indemnify and hold FDEF harmless;
and
(iii) Evidence to the reasonable satisfaction of FDEF that
such person is the owner of the shares theretofore
represented by each Certificate
4
claimed by such person to be lost, wrongfully taken or
destroyed and that such person is the person who would
be entitled to present each such Certificate for
exchange pursuant to this Agreement.
(c) In the event that the payment of the Per Share Consideration in
accordance with this Agreement is to be made to a person other than the person
in whose name the Certificate surrendered is registered, the Certificate so
surrendered shall be properly endorsed or otherwise in proper form for transfer
and the person requesting such payment shall pay any transfer or other taxes
required by reason of the payment to a person other than the registered holder
of the Certificate surrendered or establish to the satisfaction of FDEF that
such tax has been paid or is not applicable. Until surrendered in accordance
with the provisions of this Section 2.02, each Certificate shall represent for
all purposes the right to receive the cash as determined pursuant to this
Agreement.
(d) The certificate evidencing the issued and outstanding common
shares of Interim before the Effective Time shall evidence the issued and
outstanding common shares of the Surviving Corporation after the Effective Time.
Section 2.03. Compliance with Section 2.02. No payment shall be made by
FDEF to any former holder of Genoa common shares in accordance with this
Agreement until such holder shall have complied with Section 2.02 of this
Agreement.
Section 2.04. Payment in Satisfaction of Rights. All payments made upon
the surrender of Certificates pursuant to this Article Two shall be deemed to
have been made in full satisfaction of all rights pertaining to the shares
evidenced by such Certificates.
Section 2.05. No Further Registration of Transfer. After the Effective
Time, there shall be no further registration of transfer of Genoa common shares
on the stock transfer books of Genoa. In the event that, after the Effective
Time, Certificates evidencing such shares are presented for transfer, they shall
be cancelled and exchanged as provided in this Article Two.
Section 2.06. Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, the Genoa common shares which are outstanding
immediately before the Effective Time and which are held by shareholders who
shall not have voted such shares in favor of this Agreement, who shall have
delivered to FDEF or Genoa a written demand for appraisal of such shares in the
manner provided in Section 1701.85 of the ORC and who shall have otherwise
complied fully with all of the requirements of Section 1701.85 of the ORC shall
not be converted into or be exchangeable for the right to receive the
consideration provided in this Agreement; provided, however, that (i) each of
such shares (the "Dissenting Shares") shall nevertheless be cancelled and
extinguished in accordance with this Agreement; (ii) the holder of Dissenting
Shares, upon full compliance with the requirements of Section 1701.85 of the
ORC, shall be entitled to payment of the fair cash value of such shares in
accordance with the provisions of Section 1701.85 of the ORC; and (iii) in the
event (I) any holder of Dissenting Shares shall subsequently withdraw such
holder's demand for appraisal of such shares within sixty days after the
Effective Time or shall fail to establish such holder's entitlement to appraisal
rights in accordance with Section 1701.85 of the ORC or (II) any holder of
Dissenting Shares has not filed
5
a petition demanding a determination of the value of such shares within the
period provided in Section 1701.85 of the ORC, such holder shall forfeit the
right to appraisal of such shares and each of such shares shall thereupon be
deemed to have been converted into and to have become exchangeable for the right
to receive the Per Share Consideration.
Section 2.07. Separate Existence. At and after the Effective Time, the
separate existence of Interim shall cease; provided, however, that whenever a
conveyance, assignment, transfer, deed or other instrument or act is necessary
to vest property or rights in the Surviving Corporation, the officers of Interim
and Genoa shall execute, acknowledge and deliver such instruments and do such
acts.
Section 2.08. Property. At and after the Effective Time, all of the assets
and property of every kind and character, real, personal and mixed, tangible and
intangible, choses in action, rights and credits owned by Interim and Genoa at
the Effective Time, or which would inure to any of them, shall immediately, by
operation of law and without any conveyance or transfer and without any further
act or deed, be vested in and become the property of the Surviving Corporation,
which shall have, hold and enjoy the same in its own right as fully and to the
same extent as the same were possessed, held and enjoyed by Interim and Genoa
before the Effective Time. The Surviving Corporation shall be deemed to be and
shall be a continuation of the entity and identity of Genoa. All of the rights
and obligations of Interim or Genoa shall not revert or in any way be impaired
by reason of the Merger. Any claim existing, or action or proceeding pending, by
or against either Interim or Genoa, may be prosecuted to judgment with right of
appeal as if the Merger had not taken place or the Surviving Corporation may be
substituted in its place.
Section 2.09. Creditor's Rights. At and after the Effective Time, all the
rights of creditors of each of Interim and Genoa shall be preserved unimpaired,
and all liens upon the property of Interim and Genoa shall be preserved
unimpaired on only the property affected by any such lien immediately before the
Effective Time.
Section 2.10. Treatment of Genoa Options. Section 2.10 of the schedule
delivered by Genoa to FDEF on the date hereof (the "Genoa Disclosure Schedule")
sets forth all of the outstanding Genoa Options as of the date hereof. At the
Effective Time, and pursuant to the terms of the Genoa Savings 1995 Stock Option
and Incentive Plan (the "Genoa Option Plan"), each Genoa Option that is
unexercised and outstanding, whether or not then exercisable, immediately prior
thereto shall, by reason of the Merger, be cancelled and converted into the
right to receive in cash an amount (subject to required tax withholdings) equal
to (i) the excess of (A) the Per Share Consideration over (B) the exercise price
per share of each such Genoa Option multiplied by (ii) the number of shares of
Genoa common stock subject to the Genoa Option (the "Option Payment"). FDEF
shall make the Option Payment at the Effective Time and Genoa shall give written
notice to each holder of a then outstanding Genoa Option that such holder will
receive the payment described herein in exchange for such holder's outstanding
Genoa Options and Genoa shall obtain the written acknowledgment of each such
holder of the receipt of such notice. Prior to receipt of the Option Payment,
each holder of a Genoa Option shall execute a cancellation agreement in the form
attached hereto as Exhibit A.
6
ARTICLE THREE
THE BANK MERGER
Section 3.01. Merger of First Federal and Genoa. Genoa shall cooperate
with FDEF to effect, immediately after the Merger, the merger of Genoa with and
into First Federal pursuant to the provisions of Chapters 1151 and 1701 of the
ORC (the "Bank Merger"). In meeting its obligations hereunder, Genoa's Board of
Directors shall adopt such resolutions and execute such agreements as FDEF shall
reasonably request in order to effect the Bank Merger, provided that, the Bank
Merger shall be subject to and become effective only after the Merger.
ARTICLE FOUR
REPRESENTATIONS AND WARRANTIES OF GENOA
Genoa represents and warrants to FDEF and First Federal that each of the
following is true and accurate in all material respects:
Section 4.01. Organization and Standing. Genoa is a savings and loan
association, duly organized, validly existing and in good standing under the
laws of Ohio and has the corporate power and authority to own or hold under
lease all of its properties and assets and to conduct its business and
operations as presently conducted. As an Ohio savings and loan association,
Genoa is regulated by the ODFI and the Office of Thrift Supervision (the "OTS").
The savings accounts and deposits of Genoa are insured up to applicable limits
by the Federal Deposit Insurance Corporation (the "FDIC"). Except as set forth
in Section 4.01 of the Genoa Disclosure Schedule, Genoa is in compliance in all
material respects with all applicable local, state or federal laws and
regulations, including, without limitation, the regulations of the ODFI, the OTS
and the FDIC.
Section 4.02. Qualification. Genoa is not qualified to do business in any
other jurisdiction other than Ohio and is not required to be qualified to do
business in any other jurisdiction except where the failure to be so qualified
individually or in the aggregate would not reasonably be expected to have a
material adverse effect on Genoa.
Section 4.03. Authority. (a) Subject to the approval and adoption of this
Agreement by the Genoa shareholders and by the OTS and the ODFI, (i) Genoa has
all of the requisite corporate power and authority to enter into this Agreement
and to perform all of its obligations hereunder; (ii) the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action by Genoa; and (iii)
this Agreement is the valid and binding agreement of Genoa, enforceable against
Genoa in accordance with its terms, (I) subject to applicable bankruptcy,
insolvency, reorganization and moratorium laws and other laws of general
applicability affecting the enforcement of creditors' rights generally and the
effect of rules of law governing specific performance, injunctive relief and
other equitable remedies on the enforceability of such documents and (II) except
to the extent such enforceability may be limited by laws relating to safety and
soundness of insured depository
7
institutions as set forth in 12 U.S.C. ss.1818(b) or by the appointment of a
conservator by the FDIC. This Agreement has been duly executed and delivered by
Genoa.
(b) The Articles of Incorporation and the Constitution of Genoa and
the applicable provisions of the ORC require the approval of this Agreement and
the transactions contemplated hereby, including the Merger, by the affirmative
vote of the holders of a majority of the outstanding common shares of Genoa. No
other law or regulation requires any other vote of the holders of Genoa shares
in respect of this Agreement or the transactions contemplated hereby.
Section 4.04. Governing Documents. Genoa has made available to FDEF true
and accurate copies of its Articles of Incorporation, Bylaws and Constitution
and has granted FDEF access to all records of all meetings and other corporate
actions by the shareholders, Board of Directors and committees of the Board of
Directors of Genoa, except for the records and actions related to the process
leading to this Agreement. The minute books of Genoa contain, in all material
respects, complete and accurate records of all meetings and other corporate
actions of the Genoa shareholders, Board of Directors and committees of the
Board of Directors.
Section 4.05. No Conflicts. Except as set forth in Section 4.05 of the
Genoa Disclosure Schedule, the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, including the Merger
(subject to the adoption of this Agreement and the approval of the Merger and
the transactions contemplated hereby, by the Genoa shareholders, the OTS and the
ODFI), will not (a) conflict with or violate any provision of or result in the
breach of any provision of the Articles of Incorporation or Bylaws of Genoa; (b)
conflict with or violate any provision of or result in the breach or the
acceleration of or entitle any party to accelerate (whether upon or after the
giving of notice or lapse of time or both) any obligation under, or otherwise
materially affect the terms of, any mortgage, lien, lease, agreement, license,
instrument, order, arbitration award, judgment or decree to which Genoa is a
party or by which Genoa or its property or assets is bound; (c) require the
consent of any party to any agreement or commitment to which Genoa is a party or
by which Genoa or its property or assets is bound, the failure to obtain which
could, individually or in the aggregate with all the other failures to obtain
required consents, have a material adverse effect on the business, operations,
condition (financial or otherwise) or prospects of Genoa; (d) result in the
creation or imposition of any lien, charge, pledge, security interest or other
encumbrance upon any property or assets of Genoa or give rise to any meritorious
cause of action against Genoa; or (e) violate or conflict with any applicable
law, ordinance, rule or regulation, including, without limitation, the rules and
regulations of the FDIC, the OTS and the ODFI.
Section 4.06. Consents. No consent, approval, order or authorization of,
or registration, declaration or filing with, any governmental authority is
required by Genoa in connection with the execution and delivery of this
Agreement by Genoa or the consummation by Genoa of the transactions contemplated
hereby, including the Merger, except for filings, authorizations, consents or
approvals required by the OTS and the ODFI.
Section 4.07. Authorized Capital. (a) The authorized capital of Genoa
consists of 2,000,000 common shares, $1.00 par value per share, 359,647 of which
are issued and
8
outstanding and held of record by approximately 350 shareholders. All of the
outstanding common shares of Genoa are duly authorized, validly issued, fully
paid and nonassessable; were issued in full compliance with all applicable laws
and regulations; and were not issued in violation of the preemptive right of any
shareholder of Genoa. Genoa has no outstanding class of capital stock other than
such common shares. Except for 14,500 options outstanding under the Genoa Option
Plan as described in Section 2.10 of the Genoa Disclosure Schedule, there are no
outstanding subscription rights, options, conversion rights, warrants or other
agreements or commitments or benefit plans of any nature whatsoever (either firm
or conditional) obligating Genoa (i) to issue, deliver or sell, cause to be
issued, delivered or sold, or restricting Genoa from selling any additional
Genoa shares, or (ii) to grant, extend or enter into any such agreement or
commitment.
Section 4.08. Financial Statements; Thrift Financial Report. (a) Genoa has
delivered to FDEF copies of its audited financial statements consisting of
statements of financial condition as of December 31, 2003, 2002 and 2001, and
the related statements of earnings, shareholders' equity and cash flows for the
three years then ended, including the related notes and the reports thereon of
BKD, LLP, (collectively, all of such audited financial statements are referred
to as the "Genoa Financial Statements"). The Genoa Financial Statements have
been, and all Genoa Financial Statements prepared by or for Genoa hereafter will
be, prepared in accordance with GAAP, applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and present
fairly, in all material respects, the financial condition, earnings and cash
flows of Genoa as of and for the periods then ended.
(b) Genoa has delivered to FDEF copies of the unaudited Thrift
Financial Reports of Genoa as of March 31, 2004 and June 30, ▇▇▇▇ (▇▇▇ "▇▇▇▇▇
TFRs"), as filed with the OTS, each of which was timely filed with the OTS. As
of their respective dates of filing, such Genoa TFRs (including all financial
statements or schedules included or incorporated by reference therein) complied
in all material respects with the applicable laws and regulations then in
effect.
(c) Except as disclosed in the Genoa Financial Statements, the Genoa
TFRs and Section 4.08(c) of the Genoa Disclosure Schedule, as of June 30, 2004,
Genoa had no liabilities or obligations material to the business condition
(financial or otherwise) of Genoa, whether accrued, absolute, contingent or
otherwise, and whether due or to become due.
(d) The Genoa TFRs did not, as of the dates thereof, contain any
untrue statement of a material fact or omit to state any material fact necessary
to make the information contained therein, in light of the circumstances under
which they were made, not misleading.
Section 4.09. Conduct of Businesses. Except as set forth in Section 4.09
of the Genoa Disclosure Schedule, (a) since December 31, 2003, Genoa has
conducted its businesses only in the ordinary and usual course, (b) except as
reflected in any of the Genoa TFRs, there have been no material adverse changes
in the financial condition, assets, liabilities, obligations, properties,
business or prospects of Genoa and, (c) except as set forth in any of the Genoa
TFRs and Section 4.09 of the Genoa Disclosure Schedule, Genoa has not:
9
(a) Authorized the creation or issuance of, issued, sold or
disposed of, or created any obligation to issue, sell or
dispose of, any stock, notes, bonds or other securities or any
obligation convertible into or exchangeable for, any shares of
its capital stock;
(b) Declared, set aside, paid or made any dividend or other
distributions on its capital stock or directly or indirectly
redeemed, purchased or acquired any shares or entered into any
agreement in respect of the foregoing;
(c) Effected any stock split, recapitalization, combination,
exchange of shares, readjustment or other reclassification;
(d) Amended its Articles of Incorporation or Bylaws;
(e) Purchased, sold, assigned or transferred any material tangible
asset or any material patent, trademark, trade name,
copyright, license, franchise, design or other intangible
asset or property;
(f) Mortgaged, pledged or granted or suffered to exist any lien or
other encumbrance or charge on any assets or properties,
tangible or intangible, except for liens for taxes not yet due
and payable and such other liens, encumbrances or charges
which do not materially adversely affect its financial
position;
(g) Waived any rights of material value or cancelled any material
debts or claims;
(h) Incurred any material obligation or liability (absolute or
contingent), including, without limitation, any tax liability,
or paid any material liability or obligation (absolute or
contingent) other than liabilities and obligations incurred in
the ordinary course of business;
(i) Experienced any material change in the amount or general
composition of its deposit liabilities or its loan portfolio;
(j) Entered into or amended any employment contract or change of
control agreement with any of its officers or employees,
increased the compensation payable to any officer, director or
employee, or become obligated to increase any such
compensation, adopted or amended in any material respect any
employee benefit plans, severance plan or collective
bargaining agreement or made any awards or distributions under
any employee benefit plans not consistent with past practice
or custom;
(k) Incurred any damage, destruction or similar loss, not covered
by insurance, materially affecting its businesses or
properties;
10
(l) Acquired any stock or other equity interest in any
corporation, partnership, trust, joint venture or other
entity;
(m) Made any (I) material investment (except investments made in
the ordinary course of business) or (II) material capital
expenditure or commitment for any material addition to
property, plant or equipment;
(n) Agreed, whether in writing or otherwise, to take any action
described in this Section 4.09.
Section 4.10. Properties. (a) A description of all furniture, fixtures and
equipment and fixed assets owned by Genoa is set forth in Section 4.10(a) of the
Genoa Disclosure Schedule. Genoa owns and has good title to all fixed assets and
other assets indicated in the Genoa Financial Statements (the "Personal
Property") free and clear of any mortgage, lien, pledge, charge, claim,
conditional sales or other agreement, lease, right or encumbrance, except (i) as
set forth in Section 4.10(a) of the Genoa Disclosure Schedule, (ii) to the
extent stated or reserved against in the Genoa Financial Statements and (iii)
such other exceptions which are not material in character or amount and do not
materially detract from the value of or interfere with the use of the properties
or assets subject thereto or affected thereby.
(b) Except as set forth in Section 4.10(b) of the Genoa Disclosure
Schedule, the documentation ("Loan Documentation") governing or relating to the
loan and credit-related assets (the "Loan Assets") included within the loan
portfolio of Genoa is legally sufficient in all material respects for the
purposes intended thereby and creates enforceable rights in favor of Genoa in
accordance with the terms of such Loan Documentation, subject to applicable
bankruptcy, insolvency, reorganization and moratorium laws and other laws of
general applicability affecting the enforcement of creditors' rights generally,
and the effect of rules of law governing specific performance, injunctive relief
and other equitable remedies on the enforceability of such documents. Except as
set forth in Section 4.10(b) of the Genoa Disclosure Schedule, to the best
knowledge of Genoa, the Loan Documentation is in compliance with, and each of
the loans included within the loan portfolio of Genoa has been processed, closed
and administered in conformance with, all applicable federal consumer protection
statutes and regulations, including without limitation, the Truth in Lending
Act, the Equal Credit Opportunity Act and the Real Estate Settlement Procedures
Act. Except as set forth in Section 4.10(b) of the Genoa Disclosure Schedule, to
the best knowledge of Genoa, no debtor under any of the Loan Documentation has
asserted any claim or defense with respect to the subject matter thereof.
(c) A description of each parcel of real property owned by Genoa is
set forth in Section 4.10(c) of the Genoa Disclosure Schedule (hereinafter
referred to individually as a "Parcel" and collectively as the "Real
Properties"). Genoa is the owner of each Parcel in fee simple and has good and
marketable title to each such Parcel, free and clear of any liens, claims,
charges, encumbrances or security interests of any kind, except (i) as set forth
in Section 4.10(c) of the Genoa Disclosure Schedule, (ii) liens for real estate
taxes and assessments not yet delinquent and (iii) utility, access and other
easements, rights of way, restrictions and exceptions, none of which impair the
Real Properties for the use and business being conducted thereon.
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(d) Except as set forth in Section 4.10(d) of the Genoa Disclosure
Schedule, no party leasing any of the Real Properties from Genoa is in material
default with respect to any of its obligations (including payment obligations)
under the governing lease. Genoa has not received notification from any
governmental entity within the two year period immediately preceding the date
hereof of contemplated improvements to the Real Properties or surrounding area
or community by public authority, the costs of which are to be assessed as
special taxes against the Real Properties in the future.
(e) A description of all real property leased by Genoa is set forth
in Section 4.10(e) of the Genoa Disclosure Schedule (the "Leased Real
Property"). True and correct copies of all leases in respect of the Leased Real
Property (the "Real Property Leases") and all attachments, amendments and
addendums thereto have been delivered to FDEF. Except as set forth in Section
4.10(e) of the Genoa Disclosure Schedule, the Real Property Leases create, in
accordance with their terms, valid, binding and assignable leasehold interests
of Genoa in all of the Leased Real Property, free and clear of all liens,
claims, charges, encumbrances or security interests of any kind. Genoa has
complied in all material respects with all of the provisions of the Real
Property Leases required on its part to be complied with and is not in default
with respect to any of its obligations (including payment obligations) under any
of the Real Property Leases.
(f) A description of all personal property leased by Genoa is set
forth in Section 4.10(f) of the Genoa Disclosure Schedule (the "Leased Personal
Property"). True and correct copies of the leases in respect of the Leased
Personal Property (the "Personal Property Leases") and all attachments,
amendments and addendums thereto have been delivered to FDEF. Except as set
forth in Section 4.10(f) of the Genoa Disclosure Schedule, the Personal Property
Leases create, in accordance with their terms, valid, binding and assignable
leasehold interests of Genoa in all of the Leased Personal Property, free and
clear of all liens, claims, charges, encumbrances or security interests of any
kind. Genoa has complied in all material respects with all of the provisions
under the Personal Property Leases required on its part to be complied with and
is not in default with respect to any of its obligations (including payment
obligations) under any of the Personal Property Leases.
(g) Section 4.10(g) of the Genoa Disclosure Schedule contains a
complete list of all contracts (the "Loan Sale Contracts") pursuant to which
Genoa has sold loans with recourse to third party investors at any time within
the last forty-eight (48) months. Except as otherwise set forth in Section
4.10(g) of the Genoa Disclosure Schedule, (i) no purchaser under any Loan Sale
Contract has requested, or notified Genoa that it may be requesting, that Genoa
repurchase any loan pursuant to the terms of the Loan Sale Contract and (ii) no
facts are known to Genoa that would require Genoa to repurchase any loans
previously sold under any Loan Sale Contract.
Section 4.11. Allowance for Loan Losses. Except as set forth in Section
4.11 of the Genoa Disclosure Schedule, there is no loan which was made by Genoa
and which is reflected as an asset of Genoa in the Genoa Financial Statements
that (i) is sixty (60) days or more delinquent or (ii) has been classified by
examiners (regulatory or internal) as "Substandard," "Doubtful" or "Loss." The
allowance for loan losses reflected in the Genoa TFR as of June 30, 2004, was
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determined in accordance with GAAP and, in the opinion of management of Genoa,
was adequate in all material respects to provide for reasonably anticipated
losses on outstanding loans, net of recoveries.
Section 4.12. Investments. (a) Section 4.12(a) of the Genoa Disclosure
Schedule contains (i) a true, accurate and complete list of all investments,
other than investments in the Loan Assets and Real Properties, owned by Genoa
(the "Investments") as of the date hereof, the name of the registered holder
thereof, the location of the certificates therefor or other evidence thereof and
any stock powers or other authority for transfer granted with respect thereto
and (ii) a true, accurate and complete list of the names of each depository in
which Genoa has an account or safe deposit box and the names of all persons
authorized to draw thereon or to have access thereto. Except as set forth in
Section 4.12(a) of the Genoa Disclosure Schedule, the Investments, other than
any such Investments disposed of in the ordinary course of business prior to the
date hereof, are owned by Genoa, free and clear of all liens, pledges, claims,
security interests, encumbrances, charges or restrictions of any kind and may be
freely disposed of by Genoa at any time. Genoa is not a party to and has no
interest in any repurchase agreement, reverse repurchase agreement,
collateralized mortgage obligation or any other derivative security.
(b) Except as set forth on Genoa Disclosure Schedule 4.12(b), Genoa
does not own of record or beneficially the outstanding shares of, or any equity
interest in, any corporation or other business entity.
(c) All of the Investments are carried on the books of Genoa at
their fair market value as determined by a qualified third party.
Section 4.13. Reports and Records. Genoa has filed all reports, including
the Genoa TFRs, required to be filed by it under various rules and regulations
of the OTS, the ODFI and the FDIC. All such reports complied in all material
respects with applicable requirements of law and regulations in effect at the
time of filing such reports and contained in all material respects the
information required to be stated therein. None of such reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
Section 4.14. Taxes. Except as set forth in Section 4.14 of the Genoa
Disclosure Schedule, Genoa has timely filed all returns, statements, reports and
forms (including, without limitation, elections, declarations, disclosures,
schedules, estimates and information returns) (collectively, the "Tax Returns")
with respect to all federal, state, local and foreign income, gross income,
gross receipts, gains, premium, sales, use, ad valorem, transfer, franchise,
profits, withholding, payroll, employment, excise, severance, stamp, occupancy,
license, lease, environmental, customs, duties, property, windfall profits and
all other taxes (including, without limitation, any interest, penalties or
additions to tax with respect thereto, individually a "Tax," and collectively,
"Taxes") required to be filed with the appropriate tax authority. Such Tax
Returns were true, correct and complete in all material respects at the time
they were filed. Genoa has paid and discharged all Taxes due (whether reflected
on such Tax Returns or otherwise), other than such Taxes that are adequately
reserved as shown on the Genoa Financial
13
Statements or the Genoa TFRs (excluding any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) or have
arisen in the ordinary course of business since June 30, 2004. Except as set
forth in Section 4.14 of the Genoa Disclosure Schedule, neither the Internal
Revenue Service (the "IRS") nor any other taxing agency or authority, domestic
or foreign, has asserted, is now asserting or, to the knowledge of Genoa, is
threatening to assert against Genoa any deficiency or claim for additional
Taxes. There are no unexpired waivers by Genoa of any statute of limitations
with respect to Taxes. No extension of time within which to file any Tax Return
(for a period with respect to which the statute of limitations has not expired)
has been filed, or has been requested or granted. The accruals and reserves for
Taxes reflected in the Genoa Financial Statements and the Genoa TFRs (excluding
any reserve for deferred Taxes established to reflect timing differences between
book and Tax income) are adequate for the periods covered. Genoa has withheld or
collected and paid over to the appropriate governmental authorities or are
properly holding for such payment all Taxes required by law to be withheld or
collected. There are no liens for Taxes upon the assets of Genoa, other than
liens for current Taxes not yet due and payable. Genoa has not agreed to make,
nor is it required to make, any adjustment under Section 481(a) of the Internal
Revenue Code of 1986, as amended (the "Code"). Except as set forth in Section
4.14 of the Genoa Disclosure Schedule, Genoa is not a party to any agreement,
contract, arrangement or plan that has resulted, or could result, individually
or in the aggregate, in the payment of "excess parachute payments" within the
meaning of Section 280G of the Code. Genoa has never been a member of an
affiliated group of corporations, within the meaning of Section 1504 of the
Code, other than an affiliated group of which Genoa is or was the common parent
corporation. Genoa does not have any liability for the Taxes of any other person
or entity under Treasury Department Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign law), as a transferee or successor, by
contract or otherwise. None of the assets of Genoa is property which Genoa is
required to treat as being owned by any other person pursuant to the so-called
"safe harbor lease" provisions of former Section 168(f)(8) of the Code. None of
the assets of Genoa directly or indirectly secures any debt the interest on
which is tax-exempt under Section 103(a) of the Code. None of the assets of
Genoa is "tax-exempt use property" within the meaning of Section 168(h) of the
Code. Genoa is not, and has not been, a United States real property holding
corporation (as defined in Section 897(c)(2) of the Code) during the applicable
period specified in Section 897(c)(1)(A)(ii) of the Code. No Tax is required to
be withheld pursuant to Section 1445 of the Code as a result of the transactions
contemplated by this Agreement. Genoa is not a party to any joint venture,
partnership or other entity, agreement or contract that could be treated as a
partnership for federal income tax purposes. Genoa has not made, nor is it bound
by, any election under Section 197 of the Code. Genoa has disclosed on its
federal income Tax Returns all positions taken therein that could give rise to a
substantial understatement of federal income tax within the meaning of Section
6662 of the Code.
Section 4.15. Material Contracts. (a) Except as set forth in Section
4.15(a) of the Genoa Disclosure Schedule, Genoa is not a party to or bound by
any written or oral (i) contract or commitment for capital expenditures in
excess of $5,000 for any one project or $10,000 in the aggregate; (ii) contract
or commitment made in the ordinary course of business for the purchase of
materials or supplies or for the performance of services involving payments to
or by Genoa of an amount exceeding $5,000 or extending for more than six (6)
months from the date hereof;
14
except for any agreement that may be terminated without penalty upon not more
than 30 days prior notice; (iii) contract or option for the purchase of any
property, real or personal; (iv) letter of credit or indemnity calling for
payment, upon the conditions stated therein, of more than $10,000; (v) guarantee
agreement; (vi) instrument granting any person other than a director, officer or
employee of Genoa, authority to transact business on behalf of Genoa; (vii)
contracts or commitments relating to outstanding loans and/or commitments to
make loans (including unfunded commitments and lines of credit) to any one
person (together with "affiliates" of that person) in excess of $150,000 in the
aggregate; (viii) employment, management, consulting, deferred compensation,
severance or other similar contract with any director, officer or employee of
Genoa; (ix) note, debenture or loan agreement pursuant to which Genoa has
incurred indebtedness; (x) loan participation agreement; (xi) loan servicing
agreement; (xii) contract or commitment relating to a real estate development
project consisting of the development of more than one single family dwelling;
(xiii) commitment to make any acquisition, development or construction loan
other than for single-family property intended to become the principal residence
of the borrower; (xiv) commitment or agreement to do any of the foregoing; or
(xv) other contract, agreement or commitment made outside the ordinary course of
business (contracts set forth in Section 4.15 of the Genoa Disclosure Schedule
are hereinafter collectively referred to as the "Contracts"). Genoa previously
delivered to FDEF (i) all of the Contracts and (ii) all form lending agreements
and deposit forms used by Genoa in the ordinary course of business.
(b) Genoa is not in material default under any of the Contracts and
no claim of such default by any party has been made or is now threatened. To the
knowledge of Genoa, there does not exist any event which, with notice or the
passing of time or both, would constitute a material default under, or would
excuse performance by any party thereto from, any Contract to which Genoa is a
party.
Section 4.16. Insurance. Genoa has delivered to FDEF copies of all
policies of insurance currently maintained by Genoa. Section 4.16 of the Genoa
Disclosure Schedule contains a listing of all such insurance policies. All
material properties and operations of Genoa are adequately insured for its
benefit. The performance by the officers and employees of Genoa of their duties
is bonded in such amounts and against such risks as are usually insured against
or bonded by entities similarly situated, under valid and enforceable policies
of insurance or bonds issued by insurers or bonding companies of recognized
responsibility, financial or otherwise.
Section 4.17. Actions and Suits. Except for the supervisory agreement
entered into by and among Genoa, the OTS and the ODFI as of June 5, 2003 (the
"Formal Agreement") and except as set forth in Section 4.17 of the Genoa
Disclosure Schedule, there are no actions, suits or proceedings or
investigations pending or, to the knowledge of Genoa, threatened against or
affecting the business, operations or financial condition of Genoa in any court
or before any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, and management of Genoa
has no knowledge of any basis for any such action, suit, proceeding or
investigation. Except as set forth in Section 4.17 of the Genoa Disclosure
Schedule, Genoa is not in default in respect of any judgment, order, writ,
injunction or decree of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality.
15
Section 4.18. Permits and Licenses. Genoa has all material permits,
licenses, orders and approvals of all federal, state or local governmental or
regulatory bodies required for Genoa to conduct its business as presently
conducted, and all such material permits, licenses, orders and approvals are in
full force and effect, without the threat of suspension or cancellation. None of
such permits, licenses, orders or approvals will be adversely affected by the
consummation of the transactions contemplated by this Agreement.
Section 4.19. Employee Benefit Plans; ERISA. (a) Section 4.19 of the Genoa
Disclosure Schedule contains a true and complete list of all qualified pension
or profit-sharing plans, deferred compensation, consulting, bonus, group
insurance plans or agreements and all other incentive, welfare or employee
benefit plans or agreements maintained for the benefit of employees or former
employees of Genoa (hereinafter collectively referred to as the "Plans"). Copies
of such Plans, together with copies of (i) the most recent actuarial and
financial reports prepared with respect to any Plans which provide benefits by
means other than through insurance contracts, (ii) the most recent annual
reports filed with any governmental agency, (iii) any summary plan description
or other summaries of Plan benefits and (iv) all rulings and determination
letters and any open requests for rulings or letters that pertain to any
qualified plan, have been delivered to FDEF.
(b) Each Plan which constitutes an "employee pension plan," as
defined in Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and, except as set forth in Section 4.19 of the Genoa
Disclosure Schedule, any such employee pension plan which is intended to be
qualified under the provisions of Section 401(a) of the Code, is covered by a
current determination letter from the Internal Revenue Service (the "IRS") and
is and has been administered in material compliance with its governing documents
and the applicable provisions of ERISA and is and has been administered in
material compliance with the applicable provisions of the Code.
(c) Each Plan which constitutes an "employee welfare benefit plan,"
as defined in Section 3(1) of ERISA, is and has been administered in material
compliance with its governing documents and the applicable provisions of ERISA
and the Code, and each Plan which constitutes a "group health plan," as defined
in Section 5000(b)(1) of the Code, is and has been administered in material
compliance with the continuation of coverage provisions contained in Section
4980B of the Code.
(d) Each Plan which is not an "employee benefit plan," as defined in
Section 3(3) of ERISA, is and has been administered in material compliance with
its governing documents and with any and all state or federal laws applicable to
such Plan.
(e) Genoa does not maintain any "employee pension plan" ( as defined
above) which is subject to the provisions of Title IV of ERISA.
(f) Genoa does not maintain any Plan which provides post-retirement
medical, dental or life insurance benefits to any former employee or directors
of Genoa and is not obligated to provide any such benefit to any current
employee or director upon his or her retirement.
16
(g) Genoa has never been obligated to make contributions to any
"multiemployer plan" as defined in Section 3(37) of ERISA.
(h) Neither Genoa, nor any Plan maintained by Genoa, nor any
fiduciary of any such Plan, has incurred any material liability to any Plan
participant (other than routine claims for benefits), the Pension Benefit
Guaranty Corporation, the United States Department of Labor or to the IRS with
respect to a Plan.
(i) No prohibited transaction (which shall mean any transaction
prohibited by Section 406 of ERISA and not exempt under Section 408 of ERISA)
has occurred with respect to any "employee benefit plan" (as defined above)
maintained by Genoa (i) which would result in the imposition, directly or
indirectly, of an excise tax under Section 4975 of the Code or a penalty under
Section 502 of ERISA or (ii) the correction of which would have a material
adverse effect on the financial condition, results of operations or business of
Genoa.
Section 4.20. Environmental Protection. (a) Except as set forth in Section
4.20 of the Genoa Disclosure Schedule, to the best knowledge of Genoa: (i) each
of Genoa, the Genoa Property (hereinafter defined) and, without having made an
independent investigation thereof, the Collateral Property (hereinafter defined)
is, and has been at all times, in full compliance with all applicable
Environmental Laws (hereinafter defined); (ii) no investigations, inquiries,
orders, hearings, actions or other proceedings by or before any court or
governmental agency have been issued, are pending or threatened against Genoa or
in connection with the Genoa Property or the Collateral Property; (iii) no
claims have been made or threatened at any time against Genoa or in connection
with the Genoa Property or the Collateral Property relating to actual or alleged
violation of any Environmental Law or relating to damage, contribution, cost
recovery, compensation, loss or injury resulting from any Hazardous Substance
(hereinafter defined) and no past or present actions, activities, conditions,
events or incidents, including, without limitation, the release, emission,
discharge or disposal of, or exposure to, any Hazardous Substance have occurred
that could reasonably form the basis of any such claims against Genoa or in
connection with the Genoa Property or the Collateral Property; (iv) no Hazardous
Substances have been integrated into any Genoa Property or Collateral Property
or any component thereof in violation of Environmental Laws, or which will in
the future require remediation during renovation or demolition, or in such
quantities and manner as may or do pose a threat to human health; (v) no portion
of any Genoa Property or Collateral Property is located within 2000 feet of (I)
a release of Hazardous Substances which has been reported or is required to be
reported under any Environmental Law or (II) the location of any site used, in
the past or presently, for the disposal of any Hazardous Substances; (vi)
neither the Genoa Property nor the Collateral Property has been used for the
storage, disposal or treatment of Hazardous Substances, has been contaminated by
Hazardous Substances, or has been used for the storage or use of any underground
or aboveground storage tanks; and (vii) all permits, registrations and other
authorizations necessary for Genoa, the Genoa Property and the Collateral
Property to operate in full compliance with all Environmental Laws are currently
in force and are identified in Section 4.20 of the Genoa Disclosure Schedule.
(b) As used in this Section 4.20:
17
(i) "Genoa Property" means all real and personal property
now or previously owned, leased, occupied or managed by
Genoa or any person or entity whose liability for any
matter has or may have been related or assumed by Genoa
either contractually or by operation of law.
(ii) "Collateral Property" means all real and personal
property in which Genoa holds a security interest in
connection with a loan or loan participation.
(iii) "Environmental Laws" means all federal, state, local and
other laws, regulations, rules, standards, ordinances,
orders, decrees, and judgments relating to pollution,
the environment, occupational health and safety, or the
protection of human health, all as may be from time to
time amended.
(iv) "Hazardous Substances" means any and all substances or
materials which are classified or considered to be
hazardous or toxic to human health or the environment
under any applicable Environmental Laws and shall
include, without limitation, any "hazardous substances"
as defined in Section 101(14) of CERCLA (42 USC Section
9601(14)) or regulations promulgated thereunder, any
"toxic and hazardous substances" as defined in 29 CFR
Part 1910, petroleum and its byproducts, asbestos,
polychlorinated biphenyls, nuclear fuel or materials,
lead and lead-containing substances, and
urea-formaldehyde.
Section 4.21. Employment Matters. Genoa is in compliance with all federal,
state or other applicable laws respecting employment and employment practices,
terms and conditions of employment and wages and hours, including, but not
limited to, Title VII of the Civil Rights Act of 1964 (as amended by the Equal
Employment Opportunity Act of 1972), the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1967, the Employee Retirement Income
Security Act, 29 U.S.C. ss.1001 et seq., 42 U.S.C. ss.1981, the Older Workers
Benefit Protection Act, the Americans with Disabilities Act, Ohio Revised Code
Sections 4112.01 et seq., and the Fair Labor Standards Act; and has not and is
not engaged in any unfair labor practice, except where such failure to comply
would not have, or such practice would not have, a material adverse effect on
the financial condition, results of operations, business or prospects of Genoa.
No unfair labor practice complaint against Genoa is pending before any
governmental agency or court and there is no labor strike, dispute, slowdown or
stoppage actually pending or, to the knowledge of Genoa, threatened against or
involving Genoa. No representation question exists in respect of the employees
of Genoa and no labor grievance which might have a material adverse effect upon
Genoa or the conduct of its businesses is pending or, to the knowledge of Genoa,
threatened. No arbitration proceeding arising out of or under any collective
bargaining agreement is pending and no claim therefore has been asserted against
Genoa. No collective bargaining agreement is currently being negotiated by
Genoa.
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Section 4.22. Untrue Statements and Omissions. The certificates,
statements and other information furnished to FDEF in writing by or on behalf of
Genoa in connection with the transactions contemplated hereby, including, but
not limited to, disclosures and information set forth in the Genoa Disclosure
Schedule, do not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Section 4.23. Proxy Materials. None of the information relating to Genoa
included in any proxy statement which is to be mailed to the shareholders of
Genoa in connection with any meeting of shareholders convened in accordance with
Section 7.02 of this Agreement (the "Proxy Statement") will, at the time the
Proxy Statement is mailed or at the time of the meeting of shareholders to which
the Proxy Statement relates, be false or misleading with respect to any material
fact, or omit to state any material fact necessary in order to make the
statements therein not false or misleading, or at the time of the meeting of
shareholders to which the Proxy Statement relates, necessary to correct any
statement which has become false or misleading. The legal responsibility for the
contents of the Proxy Statement (other than information supplied by FDEF, First
Federal or Interim concerning FDEF, First Federal or Interim) shall be and
remain with Genoa.
Section 4.24. Brokers. All negotiations relating to this Agreement and the
transactions contemplated hereby have been carried on without the intervention
of any person, other than ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc. ("FBR"), acting
on behalf of Genoa in such manner as to give rise to any valid claim against
Genoa for any broker's or finder's fee or similar compensation. A true and
complete copy of the agreement between Genoa and FBR is included in Section 4.24
of the Genoa Disclosure Schedule.
Section 4.25. Stock Ownership. Neither Genoa nor any of its "affiliates"
or "associates", as the terms "affiliates" and "associates" are defined in
ss.1704.01(C)(1) of the ORC, are "beneficial owners", as the term "beneficial
owners" is defined in ss.1704.01(C)(4) of the ORC, of any of the outstanding
shares of any class of shares of FDEF.
ARTICLE FIVE
REPRESENTATIONS AND WARRANTIES OF FDEF AND First Federal
FDEF (for itself and on behalf of Interim, to be formed) and First Federal
represent and warrant to Genoa that each of the following is true and accurate
in all material respects:
5.01. Corporate Status. (a) FDEF is an Ohio corporation and a
unitary savings and loan holding company registered under the Home Owners' Loan
Act, as amended (the "HOLA"). FDEF is duly organized, validly existing and in
good standing under the laws of the State of Ohio and has the full corporate
power and authority to own its property, to carry on its business as presently
conducted and to enter into and, subject to the required obtaining of
appropriate approvals of the OTS and ODFI, perform its obligations under this
Agreement and consummate the transactions contemplated by this Agreement, and is
duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or
19
the ownership, leasing or operation of its properties makes such qualification
or licensing necessary, other than where the failure to be so organized,
existing, qualified or licensed or in good standing individually or in the
aggregate could not reasonably be expected to have a material adverse effect on
FDEF.
(b) First Federal is a federal savings bank and is regulated by the
OTS and the FDIC. First Federal is duly organized, validly existing and in good
standing under the laws of the United States and has the full corporate power
and authority to own its property and to carry on its business as presently
conducted. First Federal is not qualified to do business in any other
jurisdiction or required to be qualified to do business in any other
jurisdiction except where the failure to be so organized, existing, qualified or
licensed or in good standing individually or in the aggregate could not
reasonably be expected to have a material adverse effect on First Federal.
(c) Interim, when formed, will be a savings and loan association,
duly organized, validly existing, and in good standing under the laws of the
State of Ohio.
5.02. Corporate Proceedings. All corporate proceedings of FDEF,
First Federal and Interim necessary to authorize the execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated by this Agreement, have been, or in the case of Interim, will be
prior to the Effective Time, duly and validly taken. This Agreement has been
duly executed and delivered by each of FDEF and First Federal, and will be duly
executed and delivered by Interim prior to the Effective Time. No vote of FDEF's
shareholders is required to be obtained in connection with the consummation of
the transactions contemplated hereby.
5.03. Capitalization of FDEF. As of the date of this Agreement, the
authorized capital stock of FDEF consists only of (i) 25,000,000 shares of
common stock, par value $.01 per share, of which 6,285,817 shares are issued and
outstanding, 4,695,285 shares are held in treasury, and (ii) 5,000,000 preferred
shares, par value $.01 per share, none of which are outstanding. The outstanding
common shares of FDEF have been duly authorized and are validly issued, fully
paid and non-assessable, and were not issued in violation of the preemptive
rights of any person. As of the date of this Agreement, 658,943 FDEF Shares are
reserved for issuance upon the exercise of outstanding stock options (the "FDEF
Stock Options") granted under FDEF's stock option plans (the "FDEF Stock Option
Plans") and 9,253 FDEF Shares are available for future grants of stock options
under the FDEF Stock Option Plans. As of the date of this Agreement, except for
the FDEF Stock Options, unvested common shares of FDEF that have been awarded
under the 1996 Management Recognition Plan and Trust ("MRP"), and the shares
issuable to shareholders of ComBanc, Inc. pursuant to an agreement and plan of
merger dated as of August 4, 2004 by and among FDEF, First Federal, ComBanc,
Inc. and The Commercial Bank (the "ComBanc Agreement"), FDEF has no other
commitment or obligation to issue, deliver or sell any FDEF Shares. As of the
date of this Agreement, there are no bonds, debentures, notes or other
indebtedness of FDEF, and no securities or other instruments or obligations of
FDEF, the value of which is in any way based upon or derived from any capital or
voting stock of FDEF, having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
shareholders of FDEF may vote. Except as set forth above, as of the date of this
Agreement, there are no material contracts of any kind to which FDEF is a party
or by which FDEF is bound obligating FDEF to issue, deliver or
20
sell, or cause to be issued, delivered or sold, additional shares of capital
stock of, or other equity or voting interests in, or securities convertible
into, or exchangeable or exercisable for, shares of capital stock of, or other
equity or voting interests in, FDEF or obligating FDEF to issue, grant, extend
or enter into any such security, option, warrant, call, right or contract. As of
the date of this Agreement, there are no outstanding material contractual
obligations of FDEF to repurchase, redeem or otherwise acquire any shares of
capital stock of, or other equity or voting interests in, FDEF.
5.04. Authorized and Effective Agreement. This Agreement has been,
or in the case of Interim, will be prior to the Effective Time, duly executed
and delivered by each of FDEF, First Federal and Interim and assuming the due
authorization, execution and delivery by Genoa, constitutes the legal, valid and
binding obligation of each of FDEF, First Federal and Interim, enforceable
against them in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
other similar laws relating to or affecting the enforcement of creditors' rights
generally, by general equitable principles (regardless of whether enforceability
is considered in a proceeding in equity or at law) and by an implied covenant of
good faith and fair dealing. Each of FDEF, First Federal and Interim has the
right, power, authority and capacity to execute and deliver this Agreement and,
subject to the obtaining of appropriate approvals by the OTS and ODFI and the
expiration of applicable regulatory waiting periods, and required filings under
federal and state securities laws, to perform its obligations under this
Agreement.
5.05. No Conflict. Subject to the receipt of the required approvals
of Governmental and Regulatory Authorities and the expiration of applicable
regulatory waiting periods, the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, by
FDEF, First Federal and Interim do not and will not (a) conflict with, or result
in a violation of, or result in the breach of or a default (or which with notice
or lapse of time would result in a default) under, any provision of: (i) any
federal, state or local law, regulation, ordinance, order, rule or
administrative ruling of any Governmental Authority applicable to FDEF or any of
its properties; (ii) the articles of incorporation or code of regulations of
FDEF or the charter or bylaws of First Federal or the articles of incorporation
or constitution of Interim; (iii) any material agreement, indenture or
instrument to which FDEF or First Federal is a party or by which either entity
or their respective properties or assets may be bound; or (iv) any order,
judgment, writ, injunction or decree of any court, arbitration panel or any
Governmental Authority applicable to FDEF, First Federal or Interim other than,
in the case of clauses (i), (iii) and (iv) any such conflicts, violations,
breaches or defaults that individually or in the aggregate would not reasonably
be expected to have a material effect on FDEF on a consolidated basis; (b)
result in the creation or acceleration of any security interest, mortgage,
option, claim, lien, charge or encumbrance upon or interest in any property of
FDEF or First Federal, other than such security interests, mortgage, options,
claims, liens, charges or encumbrances that individually or in the aggregate
would not reasonably be expected to have a material adverse effect on FDEF on a
consolidated basis; or (c) violate the terms or conditions of, or result in the
cancellation, modification, revocation or suspension of, any material license,
approval, certificate, permit or authorization held by FDEF other than such
violations, cancellations, modifications, revocations or suspensions that
individually or in the aggregate would not reasonably be expected to have a
material effect on FDEF on a consolidated basis.
21
5.06. SEC Filings. FDEF has filed all reports and proxy materials
required to be filed by it with the SEC pursuant to the Exchange Act. All such
filings, at the time of filing, complied in all material respects as to form and
included all exhibits required to be filed under the applicable rules of the
SEC. None of such documents, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
5.07. Governmental and Third-Party Proceedings. No consent,
approval, authorization of, or registration, declaration or filing with, any
court, Governmental or Regulatory Authority or any other third party is required
to be made or obtained by FDEF, First Federal or Interim in connection with the
execution, delivery or performance by FDEF or First Federal of this Agreement or
the consummation by FDEF of the transactions contemplated hereby, except for (a)
filings of applications or notices, as applicable, with and the approval of
certain federal and state banking authorities, (b) the filing of the appropriate
certificate of merger with the Secretary of the State of Ohio pursuant to the
Chapters 1151 and 1701 of the ORC, (c) any filings required under the rules and
regulations of The Nasdaq Stock Market, Inc. ("Nasdaq"), and (d) such other
consents, approvals, orders, authorizations, registrations, declarations and
filings, except for such consents, approvals orders, authorizations,
registrations, declarations and filings, the failure of which to be obtained or
made individually or in the aggregate would not reasonably be expected to have a
material effect on FDEF on a consolidated basis.
5.08. Absence of Changes. Except (a) as set forth in filings made by
FDEF with the Securities and Exchange Commission (the "FDEF Filed SEC
Documents"), (b) as otherwise publicly disclosed in press releases issued by
FDEF, or (c) in the ordinary course of business consistent with past practice,
since December 31, 2003, there has not been any material adverse change in the
business, operations, assets or financial condition of FDEF and First Federal
taken as a whole, and, to the knowledge of FDEF and First Federal, no fact or
condition exists that FDEF or First Federal believes will cause such a material
adverse change in the future.
5.09. Regulatory Matters. None of FDEF, First Federal or the
respective properties of FDEF and First Federal is a party to or subject to any
order, judgment, decree, agreement, memorandum of understanding or similar
arrangement with, or a commitment letter or similar submission to, or
supervisory letter from, any Regulatory Authorities. Neither FDEF nor First
Federal has been advised by any Regulatory Authority that such Regulatory
Authority is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, judgment, decree,
agreement, memorandum of understanding, commitment letter, supervisory letter or
similar submission. First Federal received a rating of "satisfactory" or better
in each of its two most recent CRA examinations.
5.10. Ownership of Genoa Shares. Neither FDEF nor First Federal, nor
to the knowledge of FDEF, any of its affiliates or associates (as such terms are
defined under the Exchange Act), (a) beneficially owns, directly or indirectly
or (b) is a party to any agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of, any Genoa Shares.
22
ARTICLE SIX
COVENANTS
Section 6.01. Conduct of Businesses. From the date of this Agreement until
the Effective Time, Genoa:
(a) Except with the prior written consent of FDEF, will conduct
its business only in the ordinary course, in accordance with
past practices and policies and in compliance with all
applicable statutes, rules and regulations;
(b) Except with the prior written consent of FDEF, will not:
(i) Authorize the creation or issuance of, issue, sell or
dispose of, or create any obligation to issue, sell or
dispose of, any stock, notes, bonds or other
securities of which Genoa is the issuer or any
obligations convertible into or exchangeable for, any
shares of its capital stock;
(ii) Declare, set aside, pay or make any dividend or other
distribution on capital stock, or directly or
indirectly redeem, purchase or otherwise acquire any
shares or enter into any agreement in respect to the
foregoing;
(iii) Effect any stock split, recapitalization, combination,
exchange of shares, readjustment or other
reclassification;
(iv) Amend its Articles of Incorporation or Bylaws;
(v) Purchase, sell, assign or transfer any material
tangible asset or any material patent, trademark,
trade name, copyright, license, franchise, design or
other intangible assets or property having a value of
greater than $5,000;
(vi) Mortgage, pledge or grant or suffer to exist any lien
or other encumbrance or charge on any assets or
properties, tangible or intangible, except for liens
for taxes not yet delinquent and such other liens,
encumbrances or charges which do not materially or
adversely affect its financial position;
(vii) Waive any rights of material value or cancel any
material debts or claims;
(viii) Incur any material obligation or liability (absolute
or contingent), including, without limitation, any tax
liability, or pay any material liability or obligation
(absolute or contingent), other than liabilities and
obligations incurred in the ordinary course of
business;
23
(ix) Cause any material adverse change in the amount or
general composition of its deposit liabilities or its
loan portfolio, take any action that violates the
terms and conditions of the Formal Agreement, or make
or agree to make any loan: (A) that violates the terms
and conditions of the Formal Agreement, or (B) that
exceeds One Hundred Thousand Dollars ($100,000) except
for loans sold without recourse to a third party when
made;
(x) Enter into or amend any employment contract with any
of its officers other than change of control
agreements with two of its officers as described on
Section 4.09 of the Genoa Disclosure Schedule,
increase the compensation payable to any officer or
director or any relative of any such officer or
director other than compensation increases for
officers in the ordinary course and consistent with
past practices in an amount not to exceed 3% of such
officer's current salary, or be obligated to increase
any such compensation, adopt or amend in any material
respect any employee benefit plans, severance plan or
collective bargaining agreement or make awards or
distributions under any employee benefit plans;
(xi) Acquire any stock or other equity interest in any
corporation, partnership, trust, joint venture or
other entity;
(xii) Make any (I) material investment (except in the
ordinary course of business) or (II) material capital
expenditure or commitment for any material addition to
property, plant, or equipment;
(xiii) Increase or decrease the rate of interest paid on time
deposits or certificates of deposits, except in a
manner and pursuant to policies consistent with past
practices in relation to rates prevailing in the
relevant Genoa market;
(xiv) Decrease the rate of interest offered on new loans by
Genoa, except in a manner and pursuant to policies
consistent with past practices in relation to rates
prevailing in the relevant Genoa market or establish
any new lending programs or make any changes in its
policies concerning which persons may approve loans;
(xv) Implement or adopt any change in its accounting
principles, practices or methods, other than as may be
required by GAAP;
(xvi) Enter into any securities transactions or purchase or
otherwise acquire any investment security other than
U.S. Government and U.S. agency obligations; or
24
(xvii) Foreclose upon or otherwise take title to or
possession or control of any real property without
first obtaining a Phase I environmental report thereon
which indicates that the property is free of
pollutants, contaminants or hazardous or toxic waste
materials including asbestos and petroleum products;
provided, however, that Genoa shall not be required to
obtain such a report with respect to single-family,
non-agriculture residential property of one acre or
less to be foreclosed upon unless it has reason to
believe such property may contain any such pollutants,
contaminants, waste materials including asbestos or
petroleum products;
(xviii) Purchase or otherwise acquire any interest in a loan
held by a third party; or
(xix) Agree, whether in writing or otherwise, to take any
action described in this Section 6.01(b).
(c) Shall use its best efforts to maintain and keep its properties
and facilities in their present condition and working order, ordinary wear and
tear excepted.
(d) Shall perform all of its obligations under all agreements
relating to or affecting its properties, rights and businesses.
(e) Shall use its best efforts to maintain and preserve its business
organization intact, to retain present key employees and to maintain the
respective relationships of customers, suppliers and others having business
relationships with Genoa.
(f) Shall maintain insurance coverage with reputable insurers, which
in respect of amounts, premiums, types and risks insured, were maintained by
Genoa as of the date hereof, and upon the renewal or termination of such
insurance, Genoa will use its best efforts to renew or replace such insurance
coverage with reputable insurers, in respect of the amounts, premiums, types and
risks insured or maintained by it as of the date hereof.
Section 6.02. Acquisition Proposals. Genoa shall not, and shall cause the
officers, directors, employees and other agents of Genoa not to, directly or
indirectly, take any action to solicit, initiate, engage or negotiate any
proposals or offers from any person or entity, other than FDEF and its
affiliates, or discuss or negotiate with any such person or entity, other than
FDEF and its affiliates, any acquisition or purchase of all or a material amount
of the assets of, any equity securities of, or any merger, consolidation or
business combination with, Genoa (hereinafter collectively referred to as
"Acquisition Transactions"); provided, however, that nothing contained in this
Section 6.02 shall prohibit Genoa from furnishing information to, or entering
into discussions or negotiations with, any person or entity which makes an
unsolicited proposal of an Acquisition Transaction if and to the extent that (a)
the Board of Directors of Genoa, after consultation with and based upon the
written advice of counsel, determines in good faith that such action is required
to fulfill its fiduciary duties to the shareholders of Genoa under applicable
law and (b) before furnishing such information to, or entering into discussions
or
25
negotiations with, such person or entity, Genoa provides immediate written
notice to FDEF of such action.
Section 6.03. Accounting Policies. Within 10 days prior to the Effective
Time, provided that all regulatory and shareholder approvals have been received,
and at the request of FDEF, Genoa shall promptly establish and take such
reserves and accruals to conform the loan, accrual and reserve policies of Genoa
to First Federal's policies; shall promptly establish and take such accruals,
reserves and charges in order to implement such policies in respect of excess
facilities and equipment capacity, severance costs, litigation matters,
write-off or write-down of various assets and other appropriate accounting
adjustments; and shall promptly recognize for financial accounting purposes such
expenses of the Merger and restructuring charges related to or to be incurred in
connection with the Merger, to the extent permitted by law and consistent with
GAAP. Notwithstanding the foregoing, neither FDEF nor First Federal shall be
entitled to advance any claim that a material adverse change in the business of
Genoa under Section 8.02(c) has occurred based upon any changes affecting Genoa
requested pursuant to this Section 6.03 nor to include any decrease in the value
of the shareholder's equity of Genoa resulting from changes requested pursuant
to this Section 6.03 for purposes of Sections 2.01(e) or 8.02(e).
Section 6.04. Voting Agreement. Concurrently with the execution and
delivery of this Agreement, and as a condition and material inducement to FDEF's
willingness to enter into this Agreement, each of the directors and executive
officers of Genoa shall enter into a Voting Agreement in the form attached
hereto as Exhibit B. If any person shall become a director or executive officer
of Genoa after the date of this Agreement and until the Effective Time, Genoa
shall cause each such person to execute a Voting Agreement.
ARTICLE SEVEN
FURTHER AGREEMENTS
Section 7.01. Application For Approval of Merger. Within twenty one (21)
days after the date of this Agreement, FDEF and Genoa shall submit to the OTS,
the ODFI and any other necessary regulatory agencies such documents as are
required by the OTS, the ODFI and any other such agency to be filed in
connection with or related to the Merger. FDEF shall be responsible for the
preparation of all such necessary regulatory applications, provided that Genoa
shall provide within five business days of a written request from FDEF any
information required from Genoa to enable FDEF to complete such regulatory
applications.
Section 7.02. Special Meeting of Shareholders. Promptly after the filing
of all necessary regulatory applications pursuant to Section 7.01, Genoa shall
take all steps necessary to duly call and give notice of a meeting of its
shareholders for the purpose of voting upon the Agreement and the transactions
contemplated hereby, including the Merger. Genoa shall use its reasonable
efforts to hold such meetings as soon as practicable after the filing of all
such regulatory applications. The Board of Directors of Genoa shall (i)
recommend to the shareholders in the Proxy Statement the adoption of this
Agreement unless it has a fiduciary duty to recommend another Acquisition
Proposal in accordance with Section 6.02, and (ii) use their
26
best efforts to obtain the necessary approvals by the shareholders of this
Agreement, any amendments hereto, and the transactions contemplated hereby,
including the Merger.
Section 7.03. Access. Until the Effective Time, Genoa shall afford to FDEF
and its officers and representatives (including, without limitation, counsel,
financial advisers and independent accountants), reasonable access to Genoa's
properties, personnel, books, records and affairs. Each party shall furnish the
other party with such additional financial and operating data and other
information as to its businesses and properties as may be reasonably requested.
Such access shall include, but shall not be limited to, (i) permitting
verification, by audit or otherwise, of any representation or warranty made
hereunder; (ii) authorizing release of any information (including the work
papers) of such independent auditors and financial consultants; (iii) consistent
with applicable regulations or procedures, furnishing regular and special
examination reports since the date of this Agreement to the Effective Time; and
(iv) delivering copies of all documents or reports or correspondence filed and
any correspondence with any federal regulatory or supervisory agency from the
date of this Agreement until the Effective Time.
Section 7.04. Confidentiality. Genoa, FDEF and First Federal shall hold
confidential any information obtained hereunder which is not otherwise known to
the public or ascertainable from public information and all non-public documents
(including copies thereof) obtained hereunder by either party from the other
party shall be returned to such party upon the request of such party in the
event of a termination of this Agreement pursuant to Article Nine.
Section 7.05. Press Releases. FDEF and Genoa shall consult with each other
before issuing any press release or otherwise making any public statements with
respect to the Merger and shall not issue any such press release or make any
such public statement without obtaining the prior consent of the other party,
except as may be required by law or by obligations pursuant to any listing
agreement that FDEF has with Nasdaq.
Section 7.06. Costs, Expenses and Fees. (a) Subject to paragraph (b) of
this Section 7.06, whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement, the Proxy Statement and the
transactions contemplated hereby shall be paid by the party incurring such costs
and expenses.
(b) In the event that this Agreement is terminated due to Genoa
receiving a proposal for an Acquisition Transaction after the date hereof and
prior to June 30, 2005, and thereafter Genoa accepts in any manner such proposal
for an Acquisition Transaction at any time before December 31, 2005, Genoa shall
pay to FDEF a fee of $440,000 in immediately available federal funds.
Section 7.07. Reasonable Efforts. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use all reasonable efforts
to take, or cause to be taken, all action, and to do or cause to be done all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
27
Section 7.08. Notification of Events. At all times from the date of this
Agreement until the Effective Time, each party shall promptly notify the other
in writing of any adverse business conditions threatening its normal business
operations or of the occurrence of any event or the failure of any event to
occur which might result in a breach of or a failure to comply with any
representation, warranty, covenant, condition or agreement contained in this
Agreement or of the commencement of any action, suit, proceeding, or
investigation against it. Should any fact or condition require any change in the
Genoa Disclosure Schedule, Genoa will promptly deliver to FDEF a supplement to
the Genoa Disclosure Schedule specifying such change ("Updated Genoa Disclosure
Schedule"); provided, however, that the disclosure of such change in the Updated
Genoa Disclosure Schedule shall not be deemed to constitute a cure of any breach
of any representation or warranty made pursuant to this Agreement unless
consented to in writing by FDEF.
Section 7.09. Indemnification. (a) For a period of three (3) years after
the Effective Time, FDEF shall indemnify persons who served as directors and
officers of Genoa on or before the Effective Time to the fullest extent
permitted under the Articles of Incorporation, as amended, and Code of
Regulations, as amended of FDEF and applicable provisions of Ohio law. As a
condition to receiving such indemnification, the party claiming indemnification
shall assign to FDEF, by separate writing, all right, title and interest in and
to the proceeds of the claiming party's applicable insurance coverage, if any,
including insurance maintained or provided by Genoa or FDEF, to the extent of
such indemnity. No person shall be entitled to such indemnification who shall
(i) fail to cooperate in the defense and investigation of any claims as to which
indemnification may be made, (ii) make, or who shall be a general partner,
executive officer, director, trustee, beneficiary or person in control of any
partnership, corporation, trust or other enterprise that shall make, any claim
against Genoa, FDEF or First Federal or any shareholder, director, officer,
employee, or agent of any thereof, in any action, suit or proceeding arising out
of or in connection with this Agreement, the transactions contemplated hereby or
the conduct of the business of FDEF, First Federal or Genoa or (iii) fail to
deliver such notices as may be required under any applicable directors and
officers liability insurance policy to preserve any possible claims of which the
claiming party is aware. FDEF, at its expense, shall purchase "tail coverage"
for Genoa's current policy of director and officer liability insurance, at a
cost not to exceed 125% of the current annual premium, providing for an
extension of such coverage for a period of three (3) years.
Section 7.10. Employees of Genoa. (a) All employees of Genoa who are
offered employment and become employees of First Federal (the "Continuing
Employees") after the Effective Time will be eligible to participate in First
Federal's employee benefit and welfare plans, with credit for years of service,
for purposes of eligibility and vesting (but not for the purpose of accrual of
benefits or the allocation of employer contributions) with Genoa. Continuing
Employees will retain accrued or unused sick leave and vacation benefits to the
extent such benefits are consistent with First Federal's relevant policies.
(b) Any employee of Genoa immediately prior to the Effective Time
who is not covered by a written severance or employment agreement with Genoa who
First Federal elects not to employ after the Effective Time or who First Federal
terminates within 12 months after the Effective Time, unless such termination is
for cause, and who, in each instance, signs
28
and delivers a termination and release agreement in the form attached hereto as
Exhibit C, shall receive: (i) a severance payment equal to the product of one
week of the employee's then current base salary multiplied by the number of
years of service as an employee of Genoa; provided, however, that the maximum
severance payment shall not exceed 26 weeks of such employee's base salary and
shall not be less than 4 weeks of any such severed employee's salary; and (ii)
payment for vacation that is unused and accrued consistent with the terms of
Genoa's vacation policy in effect on the date of this Agreement.
(c) FDEF acknowledges that Section 4.09 of the Genoa Disclosure
Schedule contains a description of: (i) change of control agreements entered
into with two officers of Genoa, and (ii) a letter agreement dated August 18,
2003 between Genoa and ▇▇▇ ▇▇▇▇, the current President of Genoa. FDEF agrees
that it will fulfill the obligations of Genoa under such agreements.
Section 7.11. Formation of Interim. Prior to the Effective Time, FDEF and
First Federal shall take all steps necessary to complete the formation of
Interim as an Ohio state chartered savings and loan association pursuant to the
provisions of ORC 1159.091, to cause this Agreement to be approved by the
directors and sole shareholder of Interim and to cause Interim to execute and
deliver this Agreement to Genoa.
ARTICLE EIGHT
CLOSING MATTERS
Section 8.01. Conditions to Obligations of FDEF, First Federal, Interim
and Genoa. Notwithstanding any other provision of this Agreement, the
obligations of FDEF, First Federal, Interim and Genoa to effect the Merger shall
be subject to the fulfillment of each of the following conditions:
(a) This Agreement shall have been validly adopted by the
affirmative vote of the holders of at least the number of
outstanding Genoa shares required under Ohio law and the Genoa
Articles of Incorporation and Constitution to adopt such
agreements;
(b) All permits, approvals, consents, authorizations, exemptions
or waivers of any federal or state governmental body or agency
necessary or appropriate for consummation of the Merger shall
have been obtained and all applicable waiting periods shall
have expired;
(c) All waivers, consents and approval of every person, in
addition to those required under subsections (a) and (b) of
this Section 8.01, necessary or appropriate for the
consummation of the Merger shall have been obtained;
(d) Genoa shall have received a written opinion of FBR dated the
date of the Proxy Statement, to the effect that the Per Share
Consideration be paid to
29
Genoa shareholders in accordance with Section 2.01(a) of this
Agreement is fair to the holders of the Genoa common shares
from a financial point of view as of such date;
(e) There shall not be in effect any order or decision of a court
of competent jurisdiction which prevents or materially delays
the consummation of the Merger; and
(f) There shall not be in effect any federal or state law, rule or
regulation which prevents or materially delays consummation of
the Merger.
Section 8.02. Conditions to Obligations of FDEF, First Federal and
Interim. In addition to the conditions contained in Section 8.01 of this
Agreement, the obligations of FDEF, First Federal and Interim to effect the
Merger shall also be subject to the fulfillment of each of the following
conditions:
(a) The representations and warranties of Genoa contained in
Article Four of this Agreement shall be true in all material
respects at and as of the date hereof and at and as of the
Effective Time as if made at and as of such time;
(b) Genoa shall have duly performed and complied in all material
respects with all agreements, covenants and conditions
required by this Agreement to be performed or complied with by
it before or at the Effective Time;
(c) There shall not have been a material adverse change in the
financial condition, assets, liabilities, obligations,
properties, business or prospects of Genoa after the date of
this Agreement, it being understood and agreed that losses of
less than $75,000 per month after the date hereof shall not
constitute a "material adverse change in the financial
condition of Genoa";
(d) Genoa shall not have incurred any damage, destruction or
similar loss, not covered by insurance, materially affecting
its businesses or properties;
(e) The shareholders' equity of Genoa at the Effective Time and as
calculated in accordance with GAAP, applied on a consistent
basis, shall not be less than $6,000,000, exclusive of the
Equity Adjustments.
(f) The holders of not more than 10% of the Genoa common shares
shall have delivered a written demand for appraisal of such
shares in the manner provided in Section 2.06 of this
Agreement;
(g) Genoa shall have delivered to FDEF a certificate dated the
Effective Time and signed by the President and Treasurer of
Genoa to the effect set forth in subsections (a), (b), (c),
(d), and (e) of this Section 8.02;
30
(h) Genoa shall have obtained all consents, authorizations or
approvals of, or exemptions or waivers by, any federal or
state governmental body or agency required to be obtained by
it in connection with the Merger or the taking of any action
contemplated hereby;
(i) There shall not be any action or proceeding commenced by or
before any court or governmental agency or authority in the
United States, or threatened by any governmental agency or
authority in the United States, that challenges or seeks to
prevent or delay the consummation of the Merger or seeks to
impose material limitations on the ability of FDEF or First
Federal to exercise full rights of ownership of the assets or
business of Genoa;
(j) There shall not have been proposed, nor shall there be in
effect, any federal or state law, rule, regulation, order or
statement of policy, or any condition to any regulatory
approval of the transactions contemplated hereby that, in the
reasonable judgment of FDEF, would: (i) prevent or delay the
consummation of the Merger or interfere with the reasonable
operation of the business of Genoa, (ii) materially adversely
affect the ability of FDEF or First Federal to enjoy the
economic or other benefits of the Merger; or (iii) impose any
material adverse condition, limitation or requirement on FDEF
or First Federal in connection with the Merger;
(k) Genoa shall have obtained all consents to, or authorizations
or approvals of, the transactions contemplated by this
Agreement of any party to any contract, obligation, lease or
other agreement to which Genoa is a party and which requires
such consent, authorization or approval; and
Section 8.03. Conditions to Obligations of Genoa. In addition to the
conditions contained in Section 8.01 of this Agreement, the obligation of Genoa
to effect the Merger shall also be subject to the fulfillment of each of the
following conditions:
(a) The representations and warranties of FDEF and First Federal
contained in Article Five of this Agreement shall be true in
all material respects at and as of the date hereof and as of
the Effective Time as if made at and as of such time, except
to the extent that such representations and warranties are
made as of a specific date;
(b) FDEF and First Federal shall have duly performed and complied
in all material respects with all agreements, covenants and
conditions required by this Agreement to be performed or
complied with by them before or at the Effective Time;
(c) FDEF and First Federal shall have delivered to Genoa a
certificate dated the Effective Time and signed by the Chief
Executive Officer and Chief
31
Financial Officer of FDEF, First Federal and Interim to the
effect set forth in subsections (a) and (b) of this Section
8.03;
(d) FDEF shall have obtained all consents, authorizations or
approvals of, or exemptions or waivers by any federal or state
governmental body or agency required to be obtained by it in
connection with the Merger or the taking of any action
contemplated thereby;
(e) There shall not be any action or proceeding commenced by or
before any court or governmental agency or authority in the
United States, or threatened by any governmental agency or
authority in the United States, that challenges or seeks to
prevent or delay the consummation of the Merger; and
(f) FDEF and First Federal shall have delivered to Genoa a
counterpart of this Agreement duly executed by Interim.
ARTICLE NINE
TERMINATION
Section 9.01. Termination. This Agreement may be terminated:
(a) At any time prior to the Effective Time, whether before or
after approval by the shareholders of Genoa:
(i) By mutual consent of the Boards of Directors of Genoa
and FDEF; or
(ii) By the Board of Directors of Genoa or FDEF if:
(A) The Merger shall not have been consummated on or
before April 30, 2005; or
(B) Any event occurs which, in the reasonable opinion
of either Board, would preclude satisfaction of
any of the conditions set forth in Section 8.01 of
this Agreement; or
(iii) By the Board of Directors of FDEF if any event occurs
which, in the reasonable opinion of such Board, would
preclude compliance with any of the conditions set forth
in Section 8.02 of this Agreement; or
(iv) By the Board of Directors of Genoa if any event occurs
which, in the reasonable opinion of such Board, would
preclude compliance with any of the conditions set forth
in Section 8.03 of this Agreement; or
32
(b) No later than sixty (60) days after the date of this
Agreement, by the Board of Directors of FDEF in the event that
the results of any environmental assessment of the Real
Properties reveal the presence of any Hazardous Substance or
condition which is not in compliance with Environmental Laws
and which will require the expenditure of more than $50,000 to
remediate.
Section 9.02. Written Notice of Termination. In order to terminate this
Agreement pursuant to Section 9.01 of this Agreement, the party so acting shall
give written notice of such termination to the other party. This Agreement shall
terminate on the date such notice is given.
Section 9.03. Effect of Termination. In the event of the termination of
this Agreement, the provisions of this Agreement shall become void and have no
effect; provided, however, that (a) the provisions set forth in Sections 7.04,
7.05 and 7.06 of this Agreement shall survive such termination and shall remain
in full force and effect and (b) a termination of this Agreement shall not
affect the liability of any party for an uncured and material breach of any term
or condition of this Agreement.
Section 9.04. Amendment. This Agreement may only be amended by the
unanimous consent of FDEF, First Federal and Genoa by action taken by their
respective Boards of Directors, at any time before or after approval of this
Agreement by the shareholders of Genoa, but after such approval no amendment
shall be made which materially and adversely affects the rights of such
shareholders without the further approval of such shareholders. This Agreement
may not be amended except by an instrument in writing signed on behalf of each
of the parties hereto.
Section 9.05. Waiver. Any term or provision of this Agreement (other than
the requirement for shareholder approval) may be waived in writing at any time
by the party which is, or whose shareholders are, entitled to the benefits
thereof.
ARTICLE TEN
MISCELLANEOUS
Section 10.01. Survival of Representations and Warranties. All
representations, warranties and covenants in this Agreement shall expire on, and
be terminated and extinguished at, the Effective Time, other than covenants
which by their terms are to survive or be performed after the Effective Time;
provided, however, that no such representations, warranties or covenants shall
be deemed to be terminated or extinguished so as to deprive FDEF or First
Federal (or any director, officer or controlling person thereof) of any defense
in law or equity which otherwise would be available against the claims of any
person, including, without limitation, any shareholder or former shareholder of
either FDEF or Genoa.
Section 10.02. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally, delivered
by Federal Express or other overnight carrier guaranteeing next day delivery and
confirmation of receipt, or mailed by
33
registered or certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
If addressed to FDEF, First Federal or Interim:
First Defiance Financial Corp.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. Small, Chairman, President and Chief
Executive Officer
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇, Loop & ▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
If addressed to Genoa:
Genoa Savings and Loan Company
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: H. ▇▇▇ ▇▇▇▇, ▇▇., President and Chief
Executive Officer
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Vorys, ▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇ LLP
Suite 2000, Atrium Two
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Section 10.03. Entire Agreement. This Agreement (including the exhibits,
documents and instruments referred to herein or therein) (a) constitutes the
entire agreement and supersedes all other prior agreements and understandings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof; (b) is not intended to and shall not confer any rights or
remedies hereunder upon any person other than FDEF, First Federal, Interim or
Genoa; (c) shall not be assigned by operation of law or otherwise; and (d) shall
be governed in all respects, including validity, interpretation and effect, by
the laws of the State of Ohio.
34
Section 10.04. Execution In Counterparts. This Agreement may be executed
in two or more counterparts which together shall constitute a single Agreement.
Section 10.05. Headings. The headings of articles and sections herein are
for convenience of reference only, do not constitute a part of this Agreement
and shall not be deemed to limit or affect any of the provisions hereof.
Section 10.06. Structure of Combination. FDEF and First Federal may at any
time change the method of effecting the mergers described in this Agreement if
and to the extent FDEF deems such change to be desirable; provided, however,
that no such change shall (i) alter or change the amount of the Per Share
Consideration described in Section 2.01 of this Agreement; (ii) be likely to
materially delay or jeopardize receipt of any required regulatory approvals or
materially delay the satisfaction of any conditions to the closing of the
Merger; or (iii) adversely affect the tax treatment of Genoa shareholders as a
result of receiving the Per Share Consideration. Genoa shall, if requested by
FDEF, enter into one or more amendments to this Agreement in order to effect any
such change.
[signatures follow on next page]
35
IN WITNESS WHEREOF, FDEF, First Federal, Interim and Genoa have caused
this Agreement to be signed by their respective duly authorized officers on the
date first above written.
ATTEST: FIRST DEFIANCE FINANCIAL CORP.
/s/ ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. Small
---------------------- ----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Small
--------------------------------------------
Title: Chairman, President and Chief
Executive Officer
ATTEST: FIRST FEDERAL BANK OF THE MIDWEST
/s/ ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. Small
---------------------- ----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Small
--------------------------------------------
Title: Chairman
-------------------------------------------
ATTEST: FIRST FEDERAL INTERIM BANK
By:
---------------------- ----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
ATTEST: GENOA SAVINGS AND LOAN COMPANY
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ H. ▇▇▇ ▇▇▇▇, ▇▇.
---------------------- ----------------------------------------------
Name: H. ▇▇▇ ▇▇▇▇, ▇▇.
--------------------------------------------
Title: President and Chief Executive Officer
-------------------------------------------
36
EXHIBIT A
OPTION CANCELLATION AGREEMENT
EXHIBIT A
Option Cancellation Agreement
The undersigned holder of Genoa Options (as defined in the Agreement and
Plan of Merger by and among First Defiance Financial Corp., First Federal Bank
of the Midwest, First Federal Interim Bank and The Genoa Savings and Loan
Company dated October 13, 2004 (the "Merger Agreement")) does hereby agree to
the cancellation of such Genoa Options in consideration for the payment set
forth pursuant to 2.10 of the Merger Agreement.
Signed: _______________________________
________________________-Optionee
Acknowledged by: ___________________________________________
On behalf of First Defiance Financial Corp.
EXHIBIT B
VOTING AGREEMENT
EXHIBIT B
Voting Agreement
----------------
THIS VOTING AGREEMENT (this "Agreement") is entered into as of this 13th
day of October, 2004, between the undersigned Stockholder (the "Stockholder") of
The Genoa Savings and Loan Company, an Ohio savings and loan association
("Genoa") and First Defiance Financial Corp., an Ohio corporation ("FDEF").
RECITALS
A. The Stockholder owns or has the power to vote, other than in a
fiduciary capacity, ___________ common shares, $1.00 par value, of Genoa
(together with all other shares of Genoa that the Stockholder may subsequently
acquire or obtain the power to vote, other than in a fiduciary capacity, the
"Shares").
B. Genoa has entered into an Agreement and Plan of Merger by and among
FDEF, First Federal Bank of the Midwest, First Federal Interim Bank and Genoa of
even date herewith (the "Merger Agreement").
C. Under the terms of the Merger Agreement, Genoa has agreed to call a
meeting of its stockholders for the purpose of voting upon the adoption of the
Merger Agreement (together with any adjournments thereof, the "Genoa Meeting").
D. The parties to the Merger Agreement have made it a condition to their
entering into the Merger Agreement that certain stockholders of Genoa, including
the Stockholder, agree to vote their shares of Genoa in favor of the adoption of
the Merger Agreement.
AGREEMENT
---------
Accordingly, the parties hereto agree as follows:
1. Agreement to Vote. The Stockholder agrees, subject to Section 2 below,
to vote the Shares as follows:
(a) in favor of the adoption of the Merger Agreement;
(b) against the approval of any proposal relating to a competing
merger or business combination involving an acquisition of Genoa or the purchase
of all or a substantial portion of the assets of Genoa by any person or entity
other than FDEF or an affiliate of FDEF; and
(c) against any other transaction which is inconsistent with the
obligations of Genoa under the Merger Agreement.
2. Limitation on Voting Power. It is expressly understood and acknowledged
that nothing contained herein is intended to restrict the Stockholder from
voting on any matter, or otherwise from acting, in the Stockholder's capacity as
a director or officer of Genoa with respect to any matter, including but not
limited to, the management or operation of Genoa.
3. Termination. This Agreement shall terminate on the earlier of (a) the
date on which the Merger Agreement is terminated in accordance with Article Nine
of the Merger Agreement, (b) the date on which the merger contemplated by the
Merger Agreement is consummated, or (c) the death of the Stockholder.
4. Representations, Warranties, and Additional Covenants of the
Stockholder. The Stockholder hereby represents and warrants to FDEF that (a) the
Stockholder has the capacity and all necessary power and authority to vote the
Shares and (b) this Agreement constitutes a legal, valid, and binding obligation
of the Stockholder, enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency, or similar laws affecting enforcement of
creditors rights generally. The Stockholder further agrees that, during the term
of this Agreement, the Stockholder will not, without the prior written consent
of FDEF, which consent shall not be unreasonably withheld, sell, pledge, or
otherwise voluntarily dispose of any of the Shares which are owned by the
Stockholder or take any other voluntary action which would have the effect of
removing the Stockholder's power to vote the Shares or which would be
inconsistent with this Agreement. Notwithstanding the foregoing, the Stockholder
may transfer all or a portion of the Shares to an immediate family member, but
only if the transferee executes an identical Voting Agreement.
5. Specific Performance. The undersigned hereby acknowledges that damages
would be an inadequate remedy for any breach of the provisions of this Agreement
and agrees that the obligations of the Stockholder shall be specifically
enforceable and that FDEF shall be entitled to injunctive or other equitable
relief upon such a breach by the Stockholder. The Stockholder further agrees to
waive any bond in connection with obtaining any such injunctive or equitable
relief. This provision is without prejudice to any other rights that FDEF may
have against the Stockholder for any failure to perform his obligations under
this Agreement.
6. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Ohio without regard to any of its
conflict of laws principles.
7. Capitalized Terms. Capitalized terms used herein without definition
shall have the meanings attributed to such terms in the Merger Agreement.
IN WITNESS WHEREOF, the undersigned have executed or caused to be executed
this Agreement as of the day and year first above written.
STOCKHOLDER FIRST DEFIANCE FINANCIAL CORP.
_______________________________ By: _______________________________
Print Name:____________________ Title: _____________________________
EXHIBIT C
FORM OF TERMINATION AND RELEASE AGREEMENT
EXHIBIT C
SEPARATION AGREEMENT AND
GENERAL RELEASE OF ALL CLAIMS
[Form for Employees 40 and over]
In consideration of the mutual covenants contained herein, the sufficiency of
which are hereby acknowledged, _________________________ ("you") and First
Defiance Financial Corp., including its officers, directors and predecessor,
Genoa Savings and Loan Association and affiliates (collectively, "FDEF") agree
as follows:
Your job assignments are eliminated as of ________, 2004. As a severance
package, you are being offered _____________________________. This payment will
not be treated as compensation under any retirement plan or employee benefit
plan. If I am re-hired by FDEF before the end of the period used to compute this
lump sum severance pay, I agree to re-pay a pro-rata share of the severance pay.
If you choose this, your written acceptance of this Agreement must be returned
to _____________ no later than 8:00 a.m. on _______________, 2004. If you
observe these conditions and sign this Agreement, the terms and conditions
hereof become effective seven days after you sign this Agreement because you
have a right to revoke your consent during the seven-day period after signing.
You are advised to consult with personal counsel of your choice before acting on
this Agreement.
If you choose this, you also agree to fully cooperate with FDEF and its
customers through the date that your job will be eliminated as described above.
If you fail to cooperate to FDEF's satisfaction as reasonably determined by
FDEF, you will be deemed to have voluntarily resigned your position, and the
waiver and releases in favor of FDEF in this Agreement shall remain in full
force and effect.
As additional consideration for receipt of the severance package, you, on your
behalf and on behalf of your heirs, executors, successors, and assigns hereby
release FDEF, as well as all of its officers, directors, executives, managers
and employees, from any and all debts, claims, demands, rights, actions, causes
of action, suits, or damages, whatsoever and of every kind of nature, whether
known or unknown (collectively the "Claims"), against FDEF and the others
released herein, which relate to or arose from your separation from FDEF as
contemplated herein except to the extent such Claims cannot under applicable law
be released. You also covenant not to ▇▇▇ or file or cause to be filed in any
complaint with any federal, state or local agency or in any court against FDEF,
or the others released herein, regarding any matter related to your separation
from employment with FDEF, including but not limited to any Claims which you may
have under Federal Law or any similar Ohio law, with respect to such separation,
except to the extent such Claims cannot under applicable law be released.
Specific Waiver of Age Discrimination Claims; Review and Cancellation. In
exchange for the amounts paid to you by us under this Agreement, you
specifically waive any claims which you have or may have against us under
the
Age Discrimination in Employment Act of 1967, the Older Workers Benefit
Protection Act or any other similar law. But, you do not waive any rights
or claims that may arise after the date of this Agreement. You will have
up to 21 days to review this Agreement and to decide whether to accept it.
You will also have a period of 7 days after signing this Agreement to
cancel this Agreement, and this Agreement will not become effective until
this time period has passed. We will not make any payments to you or
provide any benefits to you under this Agreement before the time periods
described above have passed.
Specific Waiver of 21 Day Review Period. You acknowledge that, before
signing this Agreement, you were given a period of at least three (3) days
in which to consider the provisions contained in it and the releases
provided by you. You waive any right you might have to additional time
beyond this consideration period. You further acknowledge that: (1) you
took advantage of this period, which you consider reasonable, to review
the terms and benefits of this Agreement before signing it; (2) you
carefully read this Agreement; (3) you fully understand it; (4) you have
entered into it knowingly and voluntarily; (5) you are receiving valuable
consideration in exchange for your execution of this Agreement and
providing the releases contained herein that you would not otherwise be
entitled to receive; and (6) FDEF has encouraged you to discuss this
Agreement with your attorney (at your own expense) before signing it, and
you have not only reviewed the terms and benefits of this Agreement but
also the waiver of any additional time to consider it. You further
acknowledge that the purpose of this paragraph and "Specific Waiver of 21
Day Review Period" is to make clear that you voluntarily waive your right
to have 21 days to review this Agreement. You have discussed this fact
with your lawyer and understand that the law provides you a right to have
21 days to review any proposed waiver of your rights under various age
discrimination laws.
You agree that apart from your discussions with your personal counsel and your
immediate family, whom you will ask not to divulge the terms of this Agreement,
you will not disclose, publicize or discuss either the terms of this Agreement
or your employment with and termination from FDEF with anyone within or outside
of FDEF unless required by subpoena or any other legal compulsion, and you will
give immediate notice to FDEF of the receipt of any subpoena or other legal
document which might call upon you to disclose either any of the contents of
this Agreement or your employment with and termination from FDEF.
You represent and warrant that you have returned to FDEF the original and any
copies of all keys, FDEF identification cards, charge cards, equipment, papers,
reports, memorandum or other items of FDEF property on __________, 200__. You
acknowledge that FDEF has returned to you all items of your personal property.
You and FDEF recognize and agree that nothing in this Agreement constitutes an
admission of liability or wrongdoing by you or by FDEF or any of the others
released herein.
____________________________
Signed this ___ day of ____________, 200___.
Witnessed and accepted:
Accepted and agreed to: THE FIRST DEFIANCE FINANCIAL CORP.
______________________________
(NAME) BY: ________________________________
DATE: ______________________________
Effective Date: _______, 200__ Effective Date: ___________, 200__
You are encouraged to have this Agreement reviewed by an attorney of your
choice. By signing this Agreement, you acknowledge that you have had enough time
to have an attorney review this Agreement, and that you have either done so or
you have decided not to have an attorney review this Agreement.
SEPARATION AGREEMENT AND
GENERAL RELEASE OF ALL CLAIMS
[Form for Employees under 40]
In consideration of the mutual covenants contained herein, the sufficiency of
which are hereby acknowledged, ("you") and First Defiance Financial Corp.,
including its officers, directors and predecessor, Genoa Savings and Loan
Association and affiliates, (collectively, "FDEF") agree as follows:
Your job assignments are eliminated as of ________, 200__. As a severance
package, you are being offered _________________________________. This payment
will not be treated as compensation under any retirement plan or employee
benefit plan. If I am re-hired by FDEF before the end of the period used to
compute this lump sum severance pay, I agree to re-pay a pro-rata share of the
severance pay.
If you choose this, your written acceptance of this Agreement must be returned
to _____________ no later than 8:00 a.m. on , 200__.
If you choose this, you also agree to fully cooperate with FDEF and its
customers through the date that your job will be eliminated as described above.
If you fail to cooperate to FDEF's satisfaction as reasonably determined by
FDEF, you will be deemed to have voluntarily resigned your position, and the
waiver and releases in favor of FDEF in this Agreement shall remain in full
force and effect.
As additional consideration for receipt of the severance package, you, on your
behalf and on behalf of your heirs, executors, successors, and assigns hereby
release FDEF, as well as all of its officers, directors, executives, managers
and employees, from any and all debts, claims, demands, rights, actions, causes
of action, suits, or damages, whatsoever and of every kind of nature, whether
known or unknown (collectively the "Claims"), against FDEF and the others
released herein, which relate to or arose from your separation from FDEF as
contemplated herein except to the extent such Claims cannot under applicable law
be released. You also covenant not to ▇▇▇ or file or cause to be filed in any
complaint with any federal, state or local agency or in any court against FDEF,
or the others released herein, regarding any matter related to your separation
from employment with FDEF, including but not limited to any Claims which you may
have under Federal Law or any similar Ohio law, with respect to such separation,
except to the extent such Claims cannot under applicable law be released.
You agree that apart from your discussions with your personal counsel and your
immediate family, whom you will ask not to divulge the terms of this Agreement,
you will not disclose, publicize or discuss either the terms of this Agreement
or your employment with and termination from FDEF with anyone within or outside
of FDEF unless required by subpoena or any other legal compulsion, and you will
give immediate notice to FDEF of the receipt of any subpoena or other legal
document which might call upon you to disclose either any of the contents of
this Agreement or your employment with and termination from FDEF.
You represent and warrant that you have returned to FDEF the original and any
copies of all keys, FDEF identification cards, charge cards, equipment, papers,
reports, memorandum or other
items of FDEF property on __________, 200__. You acknowledge that FDEF has
returned to you all items of your personal property.
You and FDEF recognize and agree that nothing in this Agreement constitutes an
admission of liability or wrongdoing by you or by FDEF or any of the others
released herein.
Signed this ___ day of ____________, 200___.
Witnessed and accepted:
Accepted and agreed to:
FIRST DEFIANCE FINANCIAL CORP.
__________________________________
(NAME) BY: ______________________________
DATE: ____________________________
Effective Date: __________, 200__ Effective Date: ___________, 200__