EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
DATED AS OF
JULY 15, 2003
BY AND BETWEEN
GLB BANCORP, INC.
AND
SKY FINANCIAL GROUP, INC.
TABLE OF CONTENTS
PAGE
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ARTICLE I Certain Definitions....................................................................... 1
1.01 Certain Definitions........................................................................... 1
ARTICLE II The Merger................................................................................ 6
2.01 The Parent Merger............................................................................. 6
2.02 The Subsidiary Merger......................................................................... 6
2.03 Effectiveness of the Parent Merger............................................................ 6
2.04 Effective Date and Effective Time............................................................. 7
ARTICLE III Consideration; Exchange Procedures........................................................ 7
3.01 Merger Consideration.......................................................................... 7
3.02 Rights as Shareholders; Stock Transfers....................................................... 7
3.03 Fractional Shares............................................................................. 7
3.04 Exchange Procedures........................................................................... 8
3.05 Anti-Dilution Provisions...................................................................... 9
3.06 Options....................................................................................... 9
ARTICLE IV Actions Pending Acquisition............................................................... 9
4.01 Forbearances of GLB........................................................................... 9
4.02 Forbearances of Sky........................................................................... 11
ARTICLE V Representations and Warranties............................................................ 12
5.01 Disclosure Schedules.......................................................................... 12
5.02 Standard...................................................................................... 13
5.03 Representations and Warranties of GLB......................................................... 13
5.04 Representations and Warranties of Sky......................................................... 24
ARTICLE VI Covenants................................................................................. 29
6.01 Reasonable Best Efforts....................................................................... 29
6.02 Shareholder Approval.......................................................................... 29
6.03 Registration Statement........................................................................ 30
6.04 Press Releases................................................................................ 31
6.05 Access; Confidentiality....................................................................... 31
6.06 Acquisition Proposals......................................................................... 32
6.07 Affiliate Agreements.......................................................................... 32
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TABLE OF CONTENTS
(continued)
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6.08 Takeover Laws................................................................................. 32
6.09 Certain Policies.............................................................................. 32
6.10 NASDAQ Listing or Notification................................................................ 33
6.11 Regulatory Applications....................................................................... 33
6.12 Indemnification............................................................................... 33
6.13 Opportunity of Employment; Employee Benefits.................................................. 34
6.14 Notification of Certain Matters............................................................... 35
6.15 Dividend Coordination......................................................................... 35
6.16 Tax Treatment................................................................................. 35
6.17 No Breaches of Representations and Warranties................................................. 35
6.18 Consents...................................................................................... 35
6.19 Insurance Coverage............................................................................ 35
6.20 Correction of Information..................................................................... 35
6.21 Supplemental Assurances....................................................................... 36
6.22 Regulatory Matters............................................................................ 36
6.23 Regional Board Representation................................................................. 36
ARTICLE VII Conditions to Consummation of the Merger.................................................. 36
7.01 Conditions to Each Party's Obligation to Effect the Merger.................................... 36
7.02 Conditions to Obligation of GLB............................................................... 37
7.03 Conditions to Obligation of Sky............................................................... 38
ARTICLE VIII Termination............................................................................... 39
8.01 Termination................................................................................... 39
8.02 Effect of Termination and Abandonment; Enforcement of Agreement............................... 42
8.03 Termination Fee............................................................................... 42
8.04 Force Majeure................................................................................. 42
ARTICLE IX Miscellaneous............................................................................. 43
9.01 Survival...................................................................................... 43
9.02 Waiver; Amendment............................................................................. 43
9.03 Counterparts.................................................................................. 43
9.04 Governing Law................................................................................. 43
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TABLE OF CONTENTS
(continued)
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9.05 Expenses...................................................................................... 43
9.06 Notices....................................................................................... 43
9.07 Entire Understanding; No Third Party Beneficiaries............................................ 44
9.08 Interpretation; Effect........................................................................ 44
9.09 Waiver of Jury Trial.......................................................................... 44
Exhibit A Form of GLB Affiliate Agreement
Exhibit B Peer Group Commercial Financial Institutions for Index pursuant to Section 8.01(e)
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This AGREEMENT AND PLAN OF MERGER, dated as of July 15, 2003 (this
"Agreement"), is by and between GLB Bancorp, Inc. ("GLB") and Sky Financial
Group, Inc. ("Sky").
RECITALS
A. GLB. GLB is a bank holding company and an Ohio corporation,
having its principal place of business in Mentor, Ohio.
B. Sky. Sky is a financial holding company and an Ohio
corporation, having its principal place of business in Bowling Green, Ohio.
C. Intentions of the Parties. It is the intention of the parties
to this Agreement that the business combinations contemplated hereby be treated
as a "reorganization" under Section 368(a) of the Internal Revenue Code of 1986,
as amended.
D. Board Action. The respective Boards of Directors of each of
Sky and GLB have determined that it is in the best interests of their respective
companies and their shareholders to consummate the strategic business
combinations provided for herein.
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual covenants, representations, warranties and agreements contained herein,
intending to be legally bound hereby, the parties agree as follows:
ARTICLE I
Certain Definitions
1.01 Certain Definitions. The following terms are used in this
Agreement with the meanings set forth below:
"Acquisition Proposal" means any tender or exchange offer, proposal for
a merger, consolidation or other business combination involving GLB or any of
its Subsidiaries, or any proposal or offer to acquire in any manner a
substantial equity interest in, or a substantial portion of the assets or
deposits of, GLB or any of its Subsidiaries, other than the transactions
contemplated by this Agreement.
"Agreement" means this Agreement, as amended or modified from time to
time in accordance with Section 9.02.
"Agreement to Merge" has the meaning set forth in Section 2.02.
"Bank" means Great Lakes Bank, an Ohio banking corporation that is a
wholly-owned subsidiary of GLB.
"Code" means the Internal Revenue Code of 1986, as amended.
"Compensation and Benefit Plans" has the meaning set forth in Section
5.03(m)(i).
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"Consultants" has the meaning set forth in Section 5.03(m)(i).
"Directors" has the meaning set forth in Section 5.03(m)(i).
"Disclosure Schedule" has the meaning set forth in Section 5.01.
"Effective Date" means the date on which the Effective Time occurs, as
provided for in Section 2.04.
"Effective Time" means the effective time of the Merger, as provided
for in Section 2.04.
"Employees" has the meaning set forth in Section 5.03(m)(i). All
references herein to "employees of GLB" or "GLB employees" shall be deemed to
mean employees of Bank.
"Environmental Laws" means all applicable local, state and federal
environmental, health and safety laws and regulations, including, without
limitation, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the Clean Water Act, the
Federal Clean Air Act, and the Occupational Safety and Health Act, each as
amended, regulations promulgated thereunder, and state counterparts.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" has the meaning set forth in Section 5.03(m)(iii).
"ERISA Affiliate Plan" has the meaning set forth in Section
5.03(m)(iii).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
"Exchange Agent" has the meaning set forth in Section 3.04.
"Exchange Fund" has the meaning set forth in Section 3.04.
"Exchange Ratio" has the meaning set forth in Section 3.01.
"Fairness Opinion" has the meaning set forth in Section 7.03(g).
"FDIA" has the meaning set forth in Section 5.03(cc).
"FDIC" means the Federal Deposit Insurance Corporation.
"Fill Offer" has the meaning set forth in Section 8.01(e).
"Fill Option" has the meaning set forth in Section 8.01(e).
"FRB" shall mean the Federal Reserve Board.
"GAAP" shall mean generally accepted accounting principles as adopted
for U.S. accounting principles, practices and methods.
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"GLB" has the meaning set forth in the preamble to this Agreement.
"GLB Affiliate" has the meaning set forth in Section 6.07.
"GLB Articles" means the Amended and Restated Articles of
Incorporation, as amended, of GLB.
"GLB Board" means the Board of Directors of GLB.
"GLB Code" means the Code of Regulations of GLB.
"GLB Financial Statements" has the meaning set forth in Section
5.03(q)(i).
"GLB Meeting" has the meaning set forth in Section 6.02.
"GLB Off Balance Sheet Transaction" has the meaning set forth in
Section 5.03(u).
"GLB SEC Documents" has the meaning set forth in Section 5.03(g).
"GLB Shares" means the common stock, without par value, of GLB.
"GLB Stock Option" has the meaning set forth in Section 3.06.
"GLB Stock Plan" means the option plan and agreements of GLB and its
Subsidiaries pursuant to which rights to purchase GLB Shares are outstanding
immediately prior to the Effective Time pursuant to the 1998 Stock Option and
Incentive Plan of GLB.
"Governmental Authority" means any court, administrative agency or
commission or other federal, state or local governmental authority or
instrumentality.
"Indemnified Party" has the meaning set forth in Section 6.12(a).
"Information" has the meaning set forth in Section 6.22.
"IRS" has the meaning set forth in Section 5.03(m)(ii).
The term "knowledge" means, with respect to a party hereto, actual
knowledge of any officer of that party with the title of not less than a senior
vice president, or that party's in-house counsel, if any, or any director of
either party owning greater than ten percent (10%) of such party's outstanding
common shares.
"Lien" means any charge, mortgage, pledge, security interest,
restriction, claim, lien, or encumbrance.
"Material Adverse Effect" means, with respect to Sky or GLB, any effect
that (i) is material and adverse to the financial position, results of
operations or business of Sky and its Subsidiaries taken as a whole, or GLB and
its Subsidiaries taken as a whole, respectively, or (ii) would materially impair
the ability of either Sky or GLB to perform its obligations under this Agreement
or otherwise materially threaten or materially impede the consummation of the
Merger and the other transactions contemplated by this Agreement; provided,
however, that
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Material Adverse Effect shall not be deemed to include the impact of (a) changes
in banking and similar laws of general applicability or interpretations thereof
by courts or governmental authorities or other changes affecting depository
institutions generally, including changes in general economic conditions and
changes in prevailing interest and deposit rates, (b) any modifications or
changes to valuation policies and practices in connection with the Merger or
restructuring charges taken in connection with the Merger, in each case in
accordance with GAAP (c) changes resulting from expenses (such as legal,
accounting and investment bankers' fees) incurred in connection with this
Agreement or the transactions contemplated herein, and (d) actions or omissions
of a party that have been waived in accordance with Section 9.02 hereof.
"Merger" collectively refers to the Parent Merger and the Subsidiary
Merger, as set forth in Section 2.01 and Section 2.02, respectively.
"Merger Consideration" has the meaning set forth in Section 2.01.
"NASD" means The National Association of Securities Dealers.
"NASDAQ" means The NASDAQ Stock Market, Inc.'s National Market System.
"New Certificates" has the meaning set forth in Section 3.04.
"ODFI" means the Ohio Department of Commerce, Division of Financial
Institutions.
"OGCL" means the Ohio General Corporation Law.
"Old Certificates" has the meaning set forth in Section 3.04.
"OSS" means the Office of the Secretary of State of the State of Ohio.
"Parent Merger" has the meaning set forth in Section 2.01.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" has the meaning set forth in Section 5.03(m)(ii).
"Person" means any individual, bank, corporation, partnership,
association, joint-stock company, business trust or unincorporated organization.
"Previously Disclosed" by a party shall mean information set forth in
its Disclosure Schedule. Disclosure of any information, agreement, or other item
in a party's Disclosure Schedule referenced by a particular Section in this
Agreement shall, should the existence of such information, agreement, or other
item or its contents be relevant to any other Section, be deemed to be disclosed
with respect to that Section whether or not an explicit cross-reference appears
in the Disclosure Schedule.
"Proxy Statement/Prospectus" has the meaning set forth in Section
6.03(a).
"Proxy Statement" has the meaning set forth in Section 6.03(a).
"Registration Statement" has the meaning set forth in Section 6.03(a).
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"Regulatory Authority" shall mean any federal or state governmental
agency or authority charged with the supervision or regulation of financial
institutions (or their holding companies) or issuers of securities or engaged in
the issuance of deposits (including, without limitation, the ODFI, FRB and the
FDIC) or the supervision or regulation of it or any of its subsidiaries.
"Rights" means, with respect to any Person, securities or obligations
convertible into or exercisable or exchangeable for, or giving any person any
right to subscribe for or acquire, or any options, calls or commitments relating
to, or any stock appreciation right or other instrument the value of which is
determined in whole or in part by reference to the market price or value of,
shares of capital stock of such person.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"Sky Articles" means the Amended and Restated Articles of Incorporation
of Sky, as amended.
"Sky Bank" means Sky Bank, an Ohio banking corporation that is a
wholly-owned subsidiary of Sky.
"Sky Board" means the Board of Directors of Sky.
"Sky Code" means the Amended and Restated Code of Regulations of Sky.
"Sky Common Shares" means the common stock, without par value, of Sky.
"Sky's Financial Statements" has the meaning set forth in Section
5.04(l)(i).
"Sky Off Balance Sheet Transaction" has the meaning set forth in
Section 5.04(q).
"Sky Preferred Shares" means the serial preferred stock, par value
$10.00 per share, of Sky.
"Sky SEC Documents" has the meaning set forth in Section 5.04(g)(i).
"Sky Shares" means the Sky Common Shares and Sky Preferred Shares.
"Subsidiary" and "Significant Subsidiary" have the meanings ascribed to
them in Rule 1-02 of Regulation S-X of the SEC.
"Subsidiary Merger" has the meaning set forth in Section 2.02.
"Surviving Corporation" has the meaning set forth in Section 2.01.
"Takeover Laws" has the meaning set forth in Section 5.03(o).
"Tax" and "Taxes" means all federal, state, local or foreign taxes,
charges, fees, levies or other assessments, however denominated, including,
without limitation, all net income, gross
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income, gains, gross receipts, sales, use, ad valorem, goods and services,
capital, production, transfer, franchise, windfall profits, license,
withholding, payroll, employment, disability, employer health, excise,
estimated, severance, stamp, occupation, property, environmental, unemployment
or other taxes, custom duties, fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts imposed by any taxing authority whether arising before, on or
after the Effective Date.
"Tax Returns" means any return, amended return or other report
(including elections, declarations, disclosures, schedules, estimates and
information returns) required to be filed with respect to any Tax.
"Treasury Stock" shall mean GLB Shares held by GLB or any of its
Subsidiaries or by Sky or any of its Subsidiaries, in each case other than in a
fiduciary capacity or as a result of debts previously contracted in good faith.
ARTICLE II
The Merger
2.01 The Parent Merger. At the Effective Time, (i) GLB shall be
merged with and into Sky (the "Parent Merger"), and (ii) the separate corporate
existence of GLB shall cease and Sky shall survive and continue to exist as an
Ohio corporation (Sky, as the surviving corporation in the Parent Merger,
sometimes being referred to herein as the "Surviving Corporation"). The Sky
Articles, as in effect immediately prior to the Effective Time, shall be the
Articles of Incorporation of the Surviving Corporation, and the Sky Code, as in
effect immediately prior to the Effective Time, shall be the Code of Regulations
of the Surviving Corporation. Sky may at any time prior to the Effective Time
change the method of effecting the Merger (including, without limitation, the
provisions of this Article II) if and to the extent it deems such change to be
necessary, appropriate or desirable; provided, however, that no such change
shall (i) alter or change the amount or kind of consideration to be issued to
holders of GLB Shares as provided for in Article III of this Agreement (subject
to adjustment as provided in Sections 3.05 and 8.01(e)) (the "Merger
Consideration"), (ii) adversely affect the tax treatment of GLB's shareholders
as a result of receiving the Merger Consideration, or (iii) materially impede or
delay consummation of the transactions contemplated by this Agreement.
2.02 The Subsidiary Merger. At the time determined by Sky and
specified by Sky Bank in its Certificate of Merger filed with the OSS (which
shall not be earlier than the Effective Time), Bank shall merge with and into
Sky Bank (the "Subsidiary Merger") pursuant to an agreement to merge (the
"Agreement to Merge") to be executed by Bank and Sky Bank and filed with the
OSS, as required. Upon consummation of the Subsidiary Merger, the separate
corporate existence of Bank shall cease and Sky Bank shall survive and continue
to exist as a state banking corporation. (The Parent Merger and the Subsidiary
Merger shall sometimes collectively be referred to as the "Merger".)
2.03 Effectiveness of the Parent Merger. Subject to the
satisfaction or waiver of the conditions set forth in Article VII, the Parent
Merger shall become effective upon the occurrence of the filing in the office of
the OSS of a certificate of merger in accordance with Section 1701.81 of the
OGCL, or such later date and time as may be set forth in such filing.
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2.04 Effective Date and Effective Time. Subject to the satisfaction
or waiver of the conditions set forth in Article VII, the parties shall cause
the effective date of the Parent Merger (the "Effective Date") to occur (i)
within five business days after the last of the conditions set forth in Article
VII shall have been satisfied or waived in accordance with the terms of this
Agreement; provided, however, that no such election shall cause the Effective
Date to fall after the date specified in Section 8.01(c) hereof or after the
date or dates on which any Regulatory Authority approval or any extension
thereof expires, or (ii) on such other date to which the parties may agree in
writing. The time on the Effective Date when the Parent Merger shall become
effective is referred to as the "Effective Time."
ARTICLE III
Consideration; Exchange Procedures
3.01 Merger Consideration. Subject to the provisions of this
Agreement, at the Effective Time, automatically by virtue of the Parent Merger
and without any action on the part of any Person:
(a) Outstanding GLB Shares. Each GLB Share, excluding
Treasury Stock and Dissenting Shares, issued and outstanding
immediately prior to the Effective Time shall become and be converted
into .74 of a Sky Common Share (the "Exchange Ratio"). The Exchange
Ratio shall be subject to adjustment as set forth in Sections 3.05,
8.01(b) and 8.01(e).
(b) Treasury Shares. Each GLB Share held as Treasury
Stock and each GLB Share held by Sky immediately prior to the Effective
Time shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
(c) Dissenting Shares. Dissenting Shares shall not be
exchanged for Sky Common Shares but rather shall be entitled to the
rights set forth in Sections 1701.84 and 1701.85 of the OGCL.
Notwithstanding any other provision of this Agreement, any Dissenting
Shares shall not, after the Effective Time, be entitled to vote for any
purpose or receive any dividends or other distributions (except
dividends or other distributions payable to shareholders of record of
GLB at a date which is prior to the Effective Date) and shall be
entitled only to such rights as are afforded in respect of Dissenting
Shares pursuant to the OGCL.
(d) Outstanding Sky Common Shares. Each Sky Common Share
issued and outstanding immediately prior to the Effective Time shall
remain issued and outstanding and unaffected by the Merger.
3.02 Rights as Shareholders; Stock Transfers. At the Effective
Time, holders of GLB Shares shall cease to be, and shall have no rights as,
shareholders of GLB, other than to receive any dividend or other distribution
with respect to such GLB Shares with a record date occurring prior to the
Effective Time and the consideration provided under this Article III, and the
appraisal rights in the case of Dissenting Shares. After the Effective Time,
there shall be no transfers on the stock transfer books of GLB or the Surviving
Corporation of any GLB Shares.
3.03 Fractional Shares. Notwithstanding any other provision hereof,
no fractional Sky Common Shares and no certificates or scrip therefor, or other
evidence of ownership thereof, will
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be issued in the Merger; instead, Sky shall pay to each holder of GLB Shares who
would otherwise be entitled to a fractional Sky Common Shares (after taking into
account all Old Certificates delivered by such holder) an amount in cash
(without interest) determined by multiplying such fractional Sky Common Share to
which the holder would be entitled by the average closing price of Sky Common
Shares (as reported by the NASDAQ, as reported in The Wall Street Journal or, if
not reported therein, in another authoritative source) for the ten (10) trading
days immediately preceding the Effective Date.
3.04 Exchange Procedures.
(a) At or prior to the Effective Time, Sky shall deposit,
or shall cause to be deposited, with The Bank of New York (in such
capacity, the "Exchange Agent"), for the benefit of the holders of
certificates formerly representing GLB Shares ("Old Certificates"), for
exchange in accordance with this Article III, certificates representing
the Sky Common Shares ("New Certificates") and an estimated amount of
cash (such cash and New Certificates, together with any dividends or
distributions having a record date occurring on or after the Effective
Date with respect thereto (without any interest on any such cash,
dividends or distributions), being hereinafter referred to as the
"Exchange Fund") to be paid pursuant to this Article III in exchange
for outstanding GLB Shares.
(b) As promptly as practicable after the Effective Date,
Sky shall cause the New Certificates into which shares of a
shareholder's GLB Shares are converted on the Effective Date and/or any
check in respect of any fractional share interests or dividends or
distributions which such person shall be entitled to receive to be
delivered to such shareholder upon delivery to the Exchange Agent of
Old Certificates representing such GLB Shares (or an indemnity
affidavit reasonably satisfactory to Sky and the Exchange Agent, if any
of such certificates are lost, stolen or destroyed) owned by such
shareholder together with a duly completed and executed letter of
transmittal. No interest will be paid on any such cash to be paid in
lieu of fractional share interests or in respect of dividends or
distributions that any such person shall be entitled to receive
pursuant to this Article III upon such delivery.
(c) Notwithstanding the foregoing, neither the Exchange
Agent, if any, nor any party hereto shall be liable to any former
holder of GLB Shares for any amount properly delivered to a public
official pursuant to applicable abandoned property, escheat or similar
laws.
(d) No dividends or other distributions with respect to
Sky Common Shares with a record date occurring on or after the
Effective Date shall be paid to the holder of any unsurrendered Old
Certificate representing GLB Shares converted in the Merger into the
right to receive such Sky Common Shares until the holder thereof shall
be entitled to receive New Certificates in exchange therefor in
accordance with the procedures set forth in this Section 3.04. After
becoming so entitled in accordance with this Section 3.04, the record
holder thereof also shall be entitled to receive any such dividends or
other distributions, without any interest thereon, which theretofor had
become payable with respect to Sky Common Shares such holder had the
right to receive upon surrender of the Old Certificates.
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(e) Any portion of the Exchange Fund that remains
unclaimed by the shareholders of GLB for six months after the Effective
Time shall be paid to Sky. Any shareholders of GLB who have not
theretofore complied with this Article III shall thereafter look only
to Sky for payment of the Sky Common Shares, cash in lieu of any
fractional shares and unpaid dividends and distributions on Sky Common
Shares deliverable in respect of each GLB Share such shareholder holds
as determined pursuant to this Agreement, in each case, without any
interest thereon.
3.05 Anti-Dilution Provisions. In the event Sky changes (or
establishes a record date for changing) the number of Sky Common Shares issued
and outstanding between the date hereof and the Effective Date as a result of a
stock split, stock dividend, recapitalization, reclassification, split up,
combination, exchange of shares, readjustment or similar transaction with
respect to the outstanding Sky Common Shares and the record date therefor shall
be prior to the Effective Date, the Exchange Ratio shall be proportionately
adjusted.
3.06 Options. There are currently outstanding options to purchase
66,987 GLB Shares under the GLB Stock Plan (each, an "GLB Stock Option"). Each
GLB Stock Option that is outstanding and unexercised immediately prior to the
Effective Time, whether or not then vested and exercisable, shall be terminated
immediately prior to the Effective Time and each grantee thereof shall be
entitled to receive, in lieu of each GLB Share that would otherwise have been
issuable upon exercise thereof, an amount in cash computed by multiplying (a)
the excess, if any, of (i) the average closing price of Sky Common Shares for
the ten (10) trading days immediately preceding the third business day prior to
the Effective Date multiplied by the Exchange Ratio over (ii) the exercise price
of such GLB Stock Option by (b) the number of GLB Shares subject to the GLB
Stock Option. GLB shall use its reasonable best efforts to take or cause to be
taken all action necessary to obtain a written consent from each holder of an
GLB Stock Option to permit such termination effective at the Effective Date.
ARTICLE IV
Actions Pending Acquisition
4.01 Forbearances of GLB. From the date hereof until the Effective
Time, except as expressly contemplated by this Agreement and/or disclosed on
GLB's Disclosure Schedule, without the prior written consent of Sky, which
consent shall not be unreasonably withheld, GLB will not, and will cause each of
its Subsidiaries not to:
(a) Ordinary Course. Conduct the business of GLB and its
Subsidiaries other than in the ordinary and usual course or fail to use
reasonable efforts to preserve intact their business organizations and
assets and maintain their rights, franchises and existing relations
with customers, suppliers, employees and business associates, or
voluntarily take any action which, at the time taken, is reasonably
likely to have a Material Adverse Effect.
(b) Capital Stock. Other than pursuant to Rights
Previously Disclosed and outstanding on the date hereof, (i) issue,
sell or otherwise permit to become outstanding, or authorize the
creation of, any additional GLB Shares or any Rights, (ii) enter into
any
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agreement with respect to the foregoing, or (iii) permit any additional
GLB Shares to become subject to new grants of employee or director
stock options, other Rights or similar stock-based employee rights.
(c) Dividends, Etc. (i) Make, declare, pay or set aside
for payment any dividend, other than (A) quarterly cash dividends on
GLB Shares in an amount not to exceed the per share amount declared and
paid in its most recent quarterly cash dividend, with record and
payment dates consistent with past practice, and (B) dividends from
wholly owned Subsidiaries to GLB, or (ii) directly or indirectly
adjust, split, combine, redeem, reclassify, purchase or otherwise
acquire, any shares of its capital stock.
(d) Compensation; Employment Agreements; Etc. Enter into
or amend or renew any employment, consulting, severance or similar
agreements or arrangements with any director, officer or employee of
GLB or its Subsidiaries, or grant any salary or wage increase or
increase any employee benefit (including incentive or bonus payments),
except (i) for normal individual increases in compensation to employees
in the ordinary course of business consistent with past practice, (ii)
for other changes that are required by applicable law, and (iii) to
satisfy Previously Disclosed contractual obligations existing as of the
date hereof.
(e) Benefit Plans. Enter into, establish, adopt or amend
(except (i) as may be required by applicable law, (ii) to satisfy
Previously Disclosed contractual obligations existing as of the date
hereof or (iii) the regular annual renewal of insurance contracts) any
pension, retirement, stock option, stock purchase, savings, profit
sharing, deferred compensation, consulting, bonus, group insurance or
other employee benefit, incentive or welfare contract, plan or
arrangement, or any trust agreement (or similar arrangement) related
thereto, in respect of any director, officer or employee of GLB or its
Subsidiaries, or take any action to accelerate the vesting or
exercisability of stock options, restricted stock or other compensation
or benefits payable thereunder.
(f) Dispositions. Except as described in GLB's Disclosure
Schedule, sell, transfer, mortgage, encumber or otherwise dispose of or
discontinue any of its assets, deposits, business or properties except
in the ordinary course of business.
(g) Acquisitions. Acquire (other than by way of
foreclosures or acquisitions of control in a bona fide fiduciary
capacity or in satisfaction of debts previously contracted in good
faith, in each case in the ordinary and usual course of business
consistent with past practice) all or any portion of, the assets,
business, deposits or properties of any other entity or acquire
mortgage servicing rights except in connection with existing
correspondent lending relationships in the ordinary course of business
consistent with past practice.
(h) Governing Documents. Amend the GLB Articles, GLB Code
or the Articles of Incorporation or Code of Regulations (or similar
governing documents) of any of GLB's Subsidiaries.
(i) Accounting Methods. Implement or adopt any change in
its accounting principles, practices or methods, other than as may be
required by GAAP.
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(j) Contracts. Except in the ordinary course of business
consistent with past practice, enter into or terminate any material
contract (as defined in Section 5.03(k)) or amend or modify in any
material respect any of its existing material contracts.
(k) Claims. Except in the ordinary course of business
consistent with past practice, settle any claim, action or proceeding,
except for any claim, action or proceeding that does not involve
precedent for other material claims, actions or proceedings and that
involve solely money damages in an amount, individually or in the
aggregate for all such settlements, that is immaterial to GLB and its
Subsidiaries, taken as a whole.
(l) Adverse Actions. (a) Take any action while knowing
that such action would, or is reasonably likely to, prevent or impede
the Merger from qualifying as a reorganization within the meaning of
Section 368(a) of the Code; or (b) knowingly take any action that is
intended or is reasonably likely to result in (i) any of its
representations and warranties set forth in this Agreement being or
becoming untrue in any material respect at any time at or prior to the
Effective Time, (ii) any of the conditions to the Merger set forth in
Article VII not being satisfied or (iii) a material violation of any
provision of this Agreement except, in each case, as may be required by
applicable law or regulation.
(m) Risk Management. Except pursuant to applicable law or
regulation, (i) implement or adopt any material change in its interest
rate risk management and other risk management policies, procedures or
practices; (ii) fail to follow in any material respect its existing
policies or practices with respect to managing its exposure to interest
rate and other risk; or (iii) fail to use commercially reasonable means
to avoid any material increase in its aggregate exposure to interest
rate risk.
(n) Extensions of Credit; Indebtedness. Extend credit or
incur any indebtedness for borrowed money in an amount in excess of
$700,000.
(o) Related Party Transactions. Enter into any related
party transaction that is not in compliance with Regulation O
promulgated by the FRB, including, but not limited to, any such
transactions involving any director or officer of GLB, any nominee for
election as director of GLB, any security holder of GLB, and any member
of the immediate family of any of the foregoing persons living in the
same household as such person.
(p) Commitments. Agree or commit to do any of the
foregoing.
4.02 Forbearances of Sky. From the date hereof until the Effective
Time, except as expressly contemplated by this Agreement, without the prior
written consent of GLB, which consent will not be unreasonably withheld, Sky
will not, and will cause each of its Subsidiaries not to:
(a) Ordinary Course. Conduct the business of Sky and its
Subsidiaries other than in the ordinary and usual course or fail to use
reasonable efforts to preserve intact their business organizations and
assets (other than as previously discussed with GLB) and maintain their
rights, franchises and existing relations with customers, suppliers,
11
employees and business associates, or voluntarily take any action that,
at the time taken, is reasonably likely to have a Material Adverse
Effect.
(b) Preservation. Fail to use reasonable efforts to
preserve intact in any material respect their business organizations
and assets and maintain their rights, franchises and existing relations
with customers, suppliers, employees and business associates.
(c) Accounting Methods. Implement or adopt any change in
its accounting principles, practices or methods, other than as may be
required by GAAP.
(d) Adverse Actions. (a) Take any action while knowing
that such action would, or is reasonably likely to, prevent or impede
the Merger from qualifying as a reorganization within the meaning of
Section 368(a) of the Code; or (b) knowingly take any action that is
intended or is reasonably likely to result in (i) any of its
representations and warranties set forth in this Agreement being or
becoming untrue in any material respect at any time at or prior to the
Effective Time, (ii) any of the conditions to the Merger set forth in
Article VII not being satisfied or (iii) a material violation of any
provision of this Agreement except, in each case, as may be required by
applicable law or regulation.
(e) Risk Management. Except pursuant to applicable law or
regulation, (i) fail to follow its existing policies or practices with
respect to managing its exposure to interest rate and other risk, or
(ii) fail to use commercially reasonable means to avoid any material
increase in its aggregate exposure to interest rate risk.
(f) Commitments. Agree or commit to do any of the
foregoing.
ARTICLE V
Representations and Warranties
5.01 Disclosure Schedules. On or prior to the date hereof, Sky has
delivered to GLB a schedule and GLB has delivered to Sky a schedule
(respectively, its "Disclosure Schedule") setting forth, among other things,
items, the disclosure of which are necessary or appropriate either in response
to an express disclosure requirement contained in a provision hereof or as an
exception to one or more representations or warranties contained in Section 5.03
or 5.04 or to one or more of its respective covenants contained in Article IV
and Article VI; provided, however, that (a) no such item is required to be set
forth in a Disclosure Schedule as an exception to a representation or warranty
if its absence would not be reasonably likely to result in the related
representation or warranty being deemed untrue or incorrect under the standard
established by Section 5.02, and (b) the mere inclusion of an item in a
Disclosure Schedule as an exception to a representation or warranty shall not be
deemed an admission by a party that such item represents a material exception or
fact, event or circumstance or that such item is reasonably likely to have or
result in a Material Adverse Effect on the party making the representation.
GLB's representations, warranties and covenants contained in this Agreement
shall not be deemed to be untrue, incorrect or to have been breached as a result
of effects on GLB arising solely from actions taken in compliance with a written
request of Sky.
12
5.02 Standard. No representation or warranty of GLB or Sky
contained in Section 5.03 or 5.04 shall be deemed untrue or incorrect, and no
party hereto shall be deemed to have breached a representation or warranty, as a
consequence of the existence of any fact, event or circumstance unless such
fact, circumstance or event, individually or taken together with all other
facts, events or circumstances inconsistent with any representation or warranty
contained in Section 5.03 or 5.04 has had, or is reasonably likely to have, a
Material Adverse Effect.
5.03 Representations and Warranties of GLB. Subject to Sections
5.01 and 5.02 and except as Previously Disclosed, GLB hereby represents and
warrants to Sky:
(a) Organization, Standing and Authority. GLB is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Ohio and any foreign jurisdictions where its
ownership or leasing of property or assets or the conduct of its
business requires it to be so qualified. GLB is registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended.
Bank is a state banking corporation that is duly organized, validly
existing and in good standing under the laws of the State of Ohio. Bank
is duly qualified to do business and is in good standing in the State
of Ohio and any foreign jurisdictions where its ownership or leasing of
property or assets or the conduct of its business requires it to be so
qualified.
(b) Capital Structure of GLB. The authorized capital
stock of GLB consists solely of 12,000,000 shares, of which 10,000,000
shares are GLB Shares, of which 2,347,925 are outstanding as of the
date hereof, and 2,000,000 shares of preferred stock, of which none
were outstanding as of the date hereof. As of the date hereof, no
shares of Treasury Stock were held by GLB or otherwise owned by GLB or
its Subsidiaries. The outstanding GLB Shares have been duly authorized,
are validly issued and outstanding, fully paid and nonassessable, and
are not subject to any preemptive rights (and were not issued in
violation of any preemptive rights). As of the date hereof, (i) there
were no GLB Shares authorized and reserved for issuance, (ii) GLB did
not have any Rights issued or outstanding with respect to GLB Shares,
and (iii) GLB did not have any commitment to authorize, issue or sell
any GLB Shares or Rights, except pursuant to this Agreement and the GLB
Stock Plan. The number of GLB Shares that are issuable and reserved for
issuance upon exercise of GLB Stock Options as of the date hereof is
set forth in Section 3.06.
(c) Subsidiaries.
(i) (A) GLB has Previously Disclosed a list of
all of its Subsidiaries together with the jurisdiction of
organization of each such Subsidiary, (B) GLB owns, directly
or indirectly, all the issued and outstanding equity
securities of each of its Subsidiaries, (C) no equity
securities of any of its Subsidiaries are or may become
required to be issued (other than to it or its wholly-owned
Subsidiaries) by reason of any Right or otherwise, (D) there
are no contracts, commitments, understandings or arrangements
by which any of such Subsidiaries is or may be bound to sell
or otherwise transfer any equity securities of any such
Subsidiaries (other than to it or its wholly-owned
Subsidiaries), (E) there are no contracts, commitments,
understandings, or arrangements relating to its rights to vote
or to dispose of such securities and (F) all the equity
securities of each
13
Subsidiary held by GLB or its Subsidiaries are fully paid and
nonassessable (except pursuant to 12 U.S.C. Section 55) and
are owned by GLB or its Subsidiaries free and clear of any
Liens.
(ii) Except as Previously Disclosed, GLB does not
own beneficially, directly or indirectly, any equity
securities or similar interests of any Person, or any interest
in a partnership or joint venture of any kind, other than its
Subsidiaries.
(iii) Each of GLB's Subsidiaries has been duly
organized and is validly existing in good standing under the
laws of the jurisdiction of its organization, and is duly
qualified to do business and in good standing in the
jurisdictions where its ownership or leasing of property or
the conduct of its business requires it to be so qualified.
(d) Corporate Power; Authorized and Effective Agreement.
Each of GLB and its Subsidiaries has full corporate power and authority
to carry on its business as it is now being conducted and to own all
its properties and assets. GLB has the corporate power and authority to
execute, deliver and perform its obligations under this Agreement and
to consummate the transactions contemplated hereby. Bank has the
corporate power and authority to consummate the Subsidiary Merger and
the Agreement to Merge in accordance with the terms of this Agreement.
(e) Corporate Authority. Subject to receipt of the
requisite adoption of this Agreement by the holders of a majority of
the outstanding GLB Shares entitled to vote thereon (which is the only
shareholder vote required thereon), this Agreement and the transactions
contemplated hereby have been authorized by all necessary corporate
action of GLB and the GLB Board prior to the date hereof. The Agreement
to Merge, when executed by Bank, shall have been approved by the Board
of Directors of Bank and by the GLB Board, as the sole shareholder of
Bank. This Agreement is a valid and legally binding obligation of GLB,
enforceable in accordance with its terms (except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by general
equity principles).
(f) Regulatory Filings; No Defaults.
(i) No consents or approvals of, or filings or
registrations with, any Governmental Authority or with any
third party are required to be made or obtained by GLB or any
of its Subsidiaries in connection with the execution, delivery
or performance by GLB of this Agreement or to consummate the
Merger except for (A) filings of applications, notices and the
Agreement to Merge, as applicable, with Regulatory Authorities
(including the consents or non-objections of such Regulatory
Authorities), (B) filings with the SEC and state securities
authorities, and (C) the filing of the certificate of merger
with the OSS pursuant to the OGCL. As of the date hereof, GLB
has no knowledge of any reason why the approvals set forth in
Section 7.01(b) will not be received without the imposition of
a condition, restriction or requirement of the type described
in Section 7.01(b).
14
(ii) Subject to receipt of the regulatory and
shareholder approvals referred to above and expiration of
related regulatory waiting periods, and required filings under
federal and state securities laws, the execution, delivery and
performance of this Agreement and the consummation of the
transactions contemplated hereby do not and will not (A)
constitute a breach or violation of, or a default under, or
give rise to any Lien, any acceleration of remedies or any
right of termination under, any law, rule or regulation or any
judgment, decree, order, governmental permit or license, or
agreement, indenture or instrument of GLB or of any of its
Subsidiaries or to which GLB or any of its Subsidiaries or
properties is subject or bound, (B) constitute a breach or
violation of, or a default under, the GLB Articles or the GLB
Code, or (C) require any consent or approval under any such
law, rule, regulation, judgment, decree, order, governmental
permit or license, agreement, indenture or instrument.
(g) Financial Reports and SEC Documents; Material Adverse
Effect. (i) GLB's Annual Reports on Form 10-K for the fiscal years
ended December 31, 2002 and 2001 and all other reports, registration
statements, definitive proxy statements or information statements filed
or to be filed by it or any of its Subsidiaries subsequent to December
31, 2001 under the Securities Act, or under Section 13, 14, or 15(d) of
the Exchange Act, in the form filed or to be filed (collectively, "GLB
SEC Documents") with the SEC, as of the date filed, (A) complied or
will comply in all material respects with the applicable requirements
under the Securities Act or the Exchange Act, as the case may be, and
(B) did not and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; and each of the
consolidated balance sheets contained in or incorporated by reference
into any such SEC Document (including the related notes and schedules
thereto) fairly presents, or will fairly present, the consolidated
financial position of GLB and its Subsidiaries as of its date, and each
of the consolidated statements of income, changes in shareholders'
equity, and cash flows in such GLB SEC Documents (including any related
notes and schedules thereto) fairly presents, or will fairly present,
the consolidated results of operations, changes in shareholders' equity
and cash flows, as the case may be, of GLB and its Subsidiaries for the
periods to which they relate, in each case in accordance with GAAP
consistently applied during the periods involved, except in each case
as may be noted therein, subject to normal year-end audit adjustments
and the absence of footnotes in the case of unaudited statements.
(i) Except as Previously Disclosed, since
December 31, 2001, GLB and its Subsidiaries have not incurred
any material liability not disclosed in the GLB SEC Documents.
(ii) Since December 31, 2001, except as disclosed
in the GLB SEC Documents or as Previously Disclosed, (A) GLB
and its Subsidiaries have conducted their respective
businesses in the ordinary and usual course consistent with
past practice (excluding matters related to this Agreement and
the transactions contemplated hereby) and (B) no event has
occurred or circumstance arisen that, individually or taken
together with all other facts, circumstances and
15
events (described in any paragraph of Section 5.03 or
otherwise), is reasonably likely to have a Material Adverse
Effect with respect to GLB.
(h) Litigation. Except as Previously Disclosed, no
material litigation, claim or other proceeding before any court or
governmental agency is pending against GLB or any of its Subsidiaries
and, to GLB's knowledge, no such litigation, claim or other proceeding
has been threatened.
(i) Regulatory Matters.
(i) Except as Previously Disclosed, neither GLB
nor any of its Subsidiaries or properties is a party to or is
subject to any order, decree, agreement, memorandum of
understanding or similar arrangement with, or a commitment
letter or similar submission to, or extraordinary supervisory
letter from any Regulatory Authorities.
(ii) Neither it nor any of its Subsidiaries 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, decree, agreement, memorandum of understanding,
commitment letter, supervisory letter or similar submission.
(j) Compliance with Laws. Each of GLB and its
Subsidiaries:
(i) is in compliance with all applicable
federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders or decrees applicable
thereto or to the employees conducting such businesses,
including, without limitation, the Equal Credit Opportunity
Act, the Fair Housing Act, the Community Reinvestment Act, the
Home Mortgage Disclosure Act and all other applicable fair
lending laws and other laws relating to discriminatory
business practices;
(ii) has all permits, licenses, authorizations,
orders and approvals of, and has made all filings,
applications and registrations with, all Regulatory
Authorities and Governmental Authorities that are required in
order to permit them to own or lease their properties and to
conduct their businesses as presently conducted; all such
permits, licenses, certificates of authority, orders and
approvals are in full force and effect and, to GLB's
knowledge, no suspension or cancellation of any of them is
threatened; and
(iii) has received, since December 31, 2001, no
notification or communication from any Regulatory Authority or
Governmental Authority (A) asserting that GLB or any of its
Subsidiaries is not in compliance with any of the statutes,
regulations, or ordinances that such Regulatory Authority or
Governmental Authority enforces or (B) threatening to revoke
any license, franchise, permit, or governmental authorization
(nor, to GLB's knowledge, do any grounds for any of the
foregoing exist).
16
(k) Material Contracts; Defaults. Except for this
Agreement and those agreements and other documents filed as exhibits to
the GLB SEC Documents, or except as Previously Disclosed, neither it
nor any of its Subsidiaries is a party to, bound by or subject to any
agreement, contract, arrangement, commitment or understanding (whether
written or oral) (i) that is a "material contract" within the meaning
of Item 601(b)(10) of the SEC's Regulation S-K or (ii) that restricts
or limits in any way the conduct of business by it or any of its
Subsidiaries (including without limitation a non-compete or similar
provision). Neither it nor any of its Subsidiaries is in default under
any contract, agreement, commitment, arrangement, lease, insurance
policy or other instrument to which it is a party, by which its
respective assets, business, or operations may be bound or affected in
any way, or under which it or its respective assets, business, or
operations receive benefits, and there has not occurred any event that,
with the lapse of time or the giving of notice or both, would
constitute such a default.
(l) No Brokers. Except for fees payable to its financial
advisor in connection with the Fairness Opinion, no action has been
taken by GLB that would give rise to any valid claim against any party
hereto for a brokerage commission, finder's fee or other like payment
with respect to the transactions contemplated by this Agreement.
(m) Employee Benefit Plans.
(i) Section 5.03(m)(i) of GLB's Disclosure
Schedule contains a complete and accurate list of all existing
bonus, incentive, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership,
stock bonus, stock purchase, restricted stock, stock option,
severance, welfare and fringe benefit plans, employment or
severance agreements and all similar practices, policies and
arrangements maintained or contributed to by GLB or any of its
Subsidiaries and in which any employee or former employee (the
"Employees"), consultant or former consultant (the
"Consultants") or director or former director (the
"Directors") of GLB or any of its Subsidiaries participates or
to which any such Employees, Consultants or Directors are a
party (the "Compensation and Benefit Plans"). Neither GLB nor
any of its Subsidiaries has any commitment to create any
additional Compensation and Benefit Plan or to modify or
change any existing Compensation and Benefit Plan, except as
otherwise contemplated by Section 4.01(e) of this Agreement.
(ii) Each Compensation and Benefit Plan has been
operated and administered in all material respects in
accordance with its terms and with applicable law, including,
but not limited to, ERISA, the Code, the Securities Act, the
Exchange Act, the Age Discrimination in Employment Act, or any
regulations or rules promulgated thereunder, and all filings,
disclosures and notices required by ERISA, the Code, the
Securities Act, the Exchange Act, the Age Discrimination in
Employment Act and any other applicable law have been timely
made. Each Compensation and Benefit Plan that is an "employee
pension benefit plan" within the meaning of Section 3(2) of
ERISA (a "Pension Plan") and that is intended to be qualified
under Section 401(a) of the Code has received a favorable
determination letter (including a determination that the
related trust under such Compensation and Benefit Plan is
exempt from tax under
17
Section 501(a) of the Code) from the Internal Revenue Service
("IRS"), and GLB is not aware of any circumstances likely to
result in revocation of any such favorable determination
letter. There is no material pending or, to the knowledge of
GLB, threatened legal action, suit or claim relating to the
Compensation and Benefit Plans other than routine claims for
benefits thereunder. Neither GLB nor any of its Subsidiaries
has engaged in a transaction, or omitted to take any action,
with respect to any Compensation and Benefit Plan that would
reasonably be expected to subject GLB or any of its
Subsidiaries to a tax or penalty imposed by either Section
4975 of the Code or Section 502 of ERISA, assuming for
purposes of Section 4975 of the Code that the taxable period
of any such transaction expired as of the date hereof.
(iii) No liability (other than for payment of
premiums to the PBGC that have been made or will be made on a
timely basis) under Title IV of ERISA has been or is expected
to be incurred by GLB or any of its Subsidiaries with respect
to any ongoing, frozen or terminated "single-employer plan,"
within the meaning of Section 4001(a)(15) of ERISA, currently
or formerly maintained by any of them, or any single-employer
plan of any entity (an "ERISA Affiliate") that is considered
one employer with GLB under Section 4001(a)(14) of ERISA or
Section 414(b) or (c) of the Code (an "ERISA Affiliate Plan").
None of GLB, any of its Subsidiaries nor any ERISA Affiliate
has contributed, or has been obligated to contribute, to a
multiemployer plan under Subtitle E of Title IV of ERISA at
any time since September 26, 1980. No notice of a "reportable
event", within the meaning of Section 4043 of ERISA for which
the 30-day reporting requirement has not been waived, has been
required to be filed for any Compensation and Benefit Plan or
by any ERISA Affiliate Plan within the 12-month period ending
on the date hereof, and no such notice will be required to be
filed as a result of the transactions contemplated by this
Agreement. The PBGC has not instituted proceedings to
terminate any Pension Plan or ERISA Affiliate Plan and, to
GLB's knowledge, no condition exists that presents a material
risk that such proceedings will be instituted. To the
knowledge of GLB, there is no pending investigation or
enforcement action by the PBGC, the Department of Labor or IRS
or any other governmental agency with respect to any
Compensation and Benefit Plan. Under each Pension Plan and
ERISA Affiliate Plan that is a "defined benefit plan" within
the meaning of ERISA Section 3(35), as of the date of the most
recent actuarial valuation performed prior to the date of this
Agreement, the actuarially determined present value of all
"benefit liabilities", within the meaning of Section
4001(a)(16) of ERISA (as determined on the basis of the
actuarial assumptions contained in such actuarial valuation of
such Pension Plan or ERISA Affiliate Plan), did not exceed the
then current value of the assets of such Pension Plan or ERISA
Affiliate Plan and since such date there has been neither an
adverse change in the financial condition of such Pension Plan
or ERISA Affiliate Plan nor any amendment or other change to
such Pension Plan or ERISA Affiliate Plan that would increase
the amount of benefits thereunder that reasonably could be
expected to change such result.
(iv) All contributions required to be made under
the terms of any Compensation and Benefit Plan or ERISA
Affiliate Plan have been timely made
18
in cash or have been reflected on GLB's Financial Statements
(as defined in Section 5.03(q)(i) below) as of December 31,
2002. Neither any Pension Plan nor any ERISA Affiliate Plan
has an "accumulated funding deficiency" (whether or not
waived) within the meaning of Section 412 of the Code or
Section 302 of ERISA and all required payments to the PBGC
with respect to each Pension Plan or ERISA Affiliate Plan have
been made on or before their due dates. None of GLB, any of
its Subsidiaries nor any ERISA Affiliate (x) has provided, or
would reasonably be expected to be required to provide,
security to any Pension Plan or to any ERISA Affiliate Plan
pursuant to Section 401(a)(29) of the Code, and (y) has taken
any action, or omitted to take any action, that has resulted,
or would reasonably be expected to result, in the imposition
of a lien under Section 412(n) of the Code or pursuant to
ERISA.
(v) Neither GLB nor any of its Subsidiaries has
any obligations to provide retiree health and life insurance
or other retiree death benefits under any Compensation and
Benefit Plan, other than benefits mandated by Section 4980B of
the Code. There has been no communication to Employees by GLB
or any of its Subsidiaries that would reasonably be expected
to promise or guarantee such Employees retiree health or life
insurance or other retiree death benefits on a permanent
basis.
(vi) GLB and its Subsidiaries do not maintain any
Compensation and Benefit Plans covering foreign Employees.
(vii) With respect to each Compensation and
Benefit Plan, if applicable, GLB has provided or made
available to Sky, true and complete copies of existing: (A)
Compensation and Benefit Plan documents and amendments
thereto; (B) trust instruments and insurance contracts; (C)
two most recent Forms 5500 filed with the IRS; (D) most recent
actuarial report and financial statement; (E) the most recent
summary plan description; (F) forms filed with the PBGC within
the past year (other than for premium payments); (G) most
recent determination letter issued by the IRS; (H) any Form
5310 or Form 5330 filed within the past year with the IRS; and
(I) most recent nondiscrimination tests performed under ERISA
and the Code (including 401(k) and 401(m) tests).
(viii) Except as disclosed on Section 5.03(m)(viii)
of GLB's Disclosure Schedule, the consummation of the
transactions contemplated by this Agreement would not,
directly or indirectly (including, without limitation, as a
result of any termination of employment prior to or following
the Effective Time) reasonably be expected to (A) entitle any
Employee, Consultant or Director to any payment (including
severance pay or similar compensation) or any increase in
compensation, (B) result in the vesting or acceleration of any
benefits under any Compensation and Benefit Plan or (C) result
in any material increase in benefits payable under any
Compensation and Benefit Plan.
(ix) Neither GLB nor any of its Subsidiaries
maintains any compensation plans, programs or arrangements the
payments under which would
19
not reasonably be expected to be deductible as a result of the
limitations under Section 162(m) of the Code and the
regulations issued thereunder.
(x) Except as disclosed on Section 5.03(m)(x) of
GLB's Disclosure Schedule, as a result, directly or
indirectly, of the transactions contemplated by this Agreement
(including, without limitation, as a result of any termination
of employment prior to or following the Effective Time), none
of Sky, GLB or the Surviving Corporation, or any of their
respective Subsidiaries will be obligated to make a payment
that would be characterized as an "excess parachute payment"
to an individual who is a "disqualified individual" (as such
terms are defined in Section 280G of the Code) of GLB on a
consolidated basis, without regard to whether such payment is
reasonable compensation for personal services performed or to
be performed in the future.
(n) Labor Matters. Neither GLB nor any of its
Subsidiaries is a party to or is bound by any collective bargaining
agreement, contract or other agreement or understanding with a labor
union or labor organization, nor is GLB or any of its Subsidiaries the
subject of a proceeding asserting that it or any such Subsidiary has
committed an unfair labor practice (within the meaning of the National
Labor Relations Act) or seeking to compel GLB or any such Subsidiary to
bargain with any labor organization as to wages or conditions of
employment, nor is there any strike or other labor dispute involving it
or any of its Subsidiaries pending or, to GLB's knowledge, threatened,
nor does GLB have any knowledge of any activity involving its or any of
its Subsidiaries' employees seeking to certify a collective bargaining
unit or engaging in other organizational activity.
(o) Takeover Laws. GLB has taken all action required to
be taken by it in order to exempt this Agreement and the transactions
contemplated hereby from, and this Agreement and the transactions
contemplated hereby are exempt from, the requirements of any
"moratorium," "control share," "fair price," "affiliate transaction,"
"business combination" or other anti-takeover laws and regulations of
any state (collectively, "Takeover Laws") applicable to it.
(p) Environmental Matters. To GLB's knowledge, neither
the conduct nor operation of GLB or its Subsidiaries nor any condition
of any property presently or previously owned, leased or operated by
any of them (including, without limitation, in a fiduciary or agency
capacity), or on which any of them holds a Lien, violates or violated
Environmental Laws and to GLB's knowledge, no condition has existed or
event has occurred with respect to any of them or any such property
that, with notice or the passage of time, or both, is reasonably likely
to result in liability under Environmental Laws. To GLB's knowledge,
neither GLB nor any of its Subsidiaries has received any notice from
any person or entity that GLB or its Subsidiaries or the operation or
condition of any property ever owned, leased, operated, or held as
collateral or in a fiduciary capacity by any of them are or were in
violation of or otherwise are alleged to have liability under any
Environmental Law, including, but not limited to, responsibility (or
potential responsibility) for the cleanup or other remediation of any
pollutants, contaminants, or hazardous or toxic wastes, substances or
materials at, on, beneath, or originating from any such property.
20
(q) Tax Matters.
(i) All Tax Returns that are required to be
filed by or with respect to GLB and its Subsidiaries have been
duly filed, (ii) all Taxes shown to be due on the Tax Returns
referred to in clause (i) have been paid in full, (iii) except
as Previously Disclosed, the Tax Returns referred to in clause
(i) have been examined by the IRS or the appropriate state,
local or foreign taxing authority or the period for assessment
of the Taxes in respect of which such Tax Returns were
required to be filed has expired, (iv) all deficiencies
asserted or assessments made as a result of such examinations
have been paid in full, (v) no issues that have been raised by
the relevant taxing authority in connection with the
examination of any of the Tax Returns referred to in clause
(i) are currently pending, and (vi) no waivers of statutes of
limitation have been given by or requested with respect to any
Taxes of GLB or its Subsidiaries. GLB has made or will make
available to Sky true and correct copies of the United States
federal income Tax Returns filed by GLB and its Subsidiaries
for each of the three most recent fiscal years ended on or
before December 31, 2002. Neither GLB nor any of its
Subsidiaries has any liability with respect to income,
franchise or similar Taxes that accrued on or before the end
of the most recent period covered by the GLB SEC Documents
filed prior to the date hereof in excess of the amounts
accrued with respect thereto that are reflected in the
financial statements (including any related notes and
schedules thereto) included in the GLB SEC Documents filed on
or prior to the date hereof ("GLB's Financial Statements"). As
of the date hereof, neither GLB nor any of its Subsidiaries
has any reason to believe that any conditions exist that might
prevent or impede the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the
Code.
(i) No Tax is required to be withheld pursuant
to Section 1445 of the Code as a result of the transactions
contemplated by this Agreement.
(r) Risk Management Instruments. All material interest
rate swaps, caps, floors, option agreements, futures and forward
contracts and other similar risk management arrangements, whether
entered into for GLB's own account, or for the account of one or more
of GLB's Subsidiaries or their customers (all of which are listed on
GLB's Disclosure Schedule), were entered into (i) in accordance with
prudent business practices and all applicable laws, rules, regulations
and regulatory policies and (ii) with counterparties believed to be
financially responsible at the time; and each of them constitutes the
valid and legally binding obligation of GLB or one of its Subsidiaries,
enforceable in accordance with its terms (except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by general
equity principles), and is in full force and effect. Neither GLB nor
its Subsidiaries, nor to GLB's knowledge any other party thereto, is in
breach of any of its obligations under any such agreement or
arrangement.
(s) Books and Records. The books and records of GLB and
its Subsidiaries have been fully, properly and accurately maintained in
all material respects, have been maintained in accordance with sound
business practices and the requirements of
21
Section 13(b)(2) of the Exchange Act, and there are no material
inaccuracies or discrepancies of any kind contained or reflected
therein and they fairly reflect the substance of events and
transactions included therein.
(t) Insurance. GLB's Disclosure Schedule sets forth all
of the insurance policies, binders, or bonds maintained by GLB or its
Subsidiaries. GLB and its Subsidiaries are insured with reputable
insurers against such risks and in such amounts as the management of
GLB reasonably has determined to be prudent in accordance with industry
practices. All such insurance policies are in full force and effect;
GLB and its Subsidiaries are not in material default thereunder; and
all claims thereunder have been filed in due and timely fashion.
(u) GLB Off Balance Sheet Transactions. Section 5.03(u)
of GLB's Disclosure Schedule sets forth a true and complete list of all
affiliated GLB entities, including without limitation all special
purpose entities, limited purpose entities and qualified special
purpose entities, in which GLB or any of its Subsidiaries or any
officer or director of GLB or any of its Subsidiaries has an economic
or management interest. Section 5.03(u) of GLB's Disclosure Schedule
also sets forth a true and complete list of all transactions,
arrangements, and other relationships between or among any such GLB
affiliated entity, on the one hand, and GLB, any of its Subsidiaries,
and any officer or director of GLB or any of its Subsidiaries, on the
other hand, that are not reflected in the consolidated financial
statements of GLB (each, a "GLB Off Balance Sheet Transaction"), along
with the following information with respect to each such GLB Off
Balance Sheet Transaction: (i) the business purpose, activities, and
economic substance; (ii) the key terms and conditions; (iii) the
potential risk to GLB or any of its Subsidiaries; (iv) the amount of
any guarantee, line of credit, standby letter of credit or commitment,
or any other type of arrangement, that could require GLB or any of its
Subsidiaries to fund any obligations under any such transaction; and
(v) any other information that could have a Material Adverse Effect on
GLB or any of its Subsidiaries.
(v) Disclosure. The representations and warranties
contained in this Section 5.03 do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements and information contained in this Section 5.03 not
misleading.
(w) Material Adverse Change. GLB has not, on a
consolidated basis, suffered a change in its business, financial
condition or results of operations since December 31, 2001, except as
disclosed in the GLB SEC Documents or as Previously Disclosed, that has
had a Material Adverse Effect on GLB.
(x) Absence of Undisclosed Liabilities. Except as
Previously Disclosed, neither GLB nor any of its Subsidiaries has any
liability (contingent or otherwise) that is material to GLB on a
consolidated basis, or that, when combined with all liabilities as to
similar matters, would be material to GLB on a consolidated basis,
except as disclosed in GLB's Financial Statements.
(y) Properties. GLB and its Subsidiaries have good and
marketable title, free and clear of all liens, encumbrances, charges,
defaults or equitable interests to all of the
22
properties and assets, real and personal, reflected on GLB's Financial
Statements as being owned by GLB as of December 31, 2001 or acquired
after such date, except (i) statutory liens for amounts not yet due and
payable, (ii) pledges to secure deposits and borrowings and other liens
incurred in the ordinary course of banking business, (iii) such
imperfections of title, easements, encumbrances, liens, charges,
defaults or equitable interests, if any, as do not affect the use of
properties or assets subject thereto or affected thereby or otherwise
materially impair business operations at such properties, (iv)
dispositions and encumbrances in the ordinary course of business, and
(v) liens on properties acquired in foreclosure or on account of debts
previously contracted. All leases pursuant to which GLB or any of its
Subsidiaries, as lessee, leases real or personal property (except for
leases that have expired by their terms or that GLB or any such
Subsidiary has agreed to terminate since the date hereof) are valid
without default thereunder by the lessee or, to GLB's knowledge, the
lessor.
(z) Loans. Each loan reflected as an asset in GLB's
Financial Statements and each balance sheet date subsequent thereto,
other than loans the unpaid balance of which does not exceed $250,000
in the aggregate, (i) is evidenced by notes, agreements or other
evidences of indebtedness that are true, genuine and what they purport
to be, (ii) to the extent secured, has been secured by valid liens and
security interests that have been perfected, and (iii) is the legal,
valid and binding obligation of the obligor named therein, enforceable
in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyance and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles.
Except as Previously Disclosed, as of December 31, 2001, Bank is not a
party to a loan, including any loan guaranty, with any director,
executive officer or 5% shareholder of GLB or any of its Subsidiaries
or any person, corporation or enterprise controlling, controlled by or
under common control with any of the foregoing. All loans and
extensions of credit that have been made by Bank and that are subject
either to Section 22(g) or (h) of the Federal Reserve Act, as amended,
comply therewith.
(aa) Allowance for Loan Losses. The allowance for loan
losses reflected on GLB's Financial Statements, as of their respective
dates, is adequate in all material respects under the requirements of
GAAP to provide for reasonably anticipated losses on outstanding loans.
(bb) Repurchase Agreements. With respect to all agreements
pursuant to which GLB or any of its Subsidiaries has purchased
securities subject to an agreement to resell, if any, GLB or such
Subsidiary, as the case may be, has a valid, perfected first lien or
security interest in or evidence of ownership in book entry form of the
government securities or other collateral securing the repurchase
agreement, and the value of such collateral equals or exceeds the
amount of the debt secured thereby.
(cc) Deposit Insurance. The deposits of Bank are insured
by the FDIC in accordance with The Federal Deposit Insurance Act
("FDIA"), and Bank has paid all assessments and filed all reports
required by the FDIA.
(dd) Related Party Transactions. Except as Previously
Disclosed, neither GLB nor any of its Subsidiaries has entered into any
related party transaction including, but
23
not limited to, transactions involving any director or officer of GLB,
any nominee for election as director of GLB, any security holder of
GLB, and any member of the immediate family of any of the foregoing
persons.
(ee) Board Approval. The GLB Board has approved, for
purposes of Chapter 1704 of the Ohio Interested Shareholder
Transactions Law, this Agreement and that certain voting agreement by
and among Sky and certain GLB shareholders dated as of the date hereof.
5.04 Representations and Warranties of Sky. Subject to Sections
5.01 and 5.02 and except as Previously Disclosed in a paragraph of its
Disclosure Schedule corresponding to the relevant paragraph below, Sky hereby
represents and warrants to GLB as follows:
(a) Organization, Standing and Authority. Sky is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Ohio. Sky is duly qualified to do business and
is in good standing in the State of Ohio and any foreign jurisdictions
where its ownership or leasing of property or assets or the conduct of
its business requires it to be so qualified. Sky is registered as a
financial holding company under the Bank Holding Company Act of 1956,
as amended. Sky Bank is a state banking association duly organized,
validly existing and in good standing under the laws of the State of
Ohio. Sky Bank is duly qualified to do business and is in good standing
in the State of Ohio and any foreign jurisdictions where its ownership
or leasing of property or assets or the conduct of its business
requires it to be so qualified.
(b) Sky Shares.
(i) The authorized capital stock of Sky consists
of 160,000,000 shares, of which (A) 150,000,000 shares are Sky
Common Shares, without par value, of which 90,074,615 shares
are outstanding as of the date hereof, and (B) 10,000,000
shares are Sky Preferred Shares, par value $10.00 per share,
of which no shares were outstanding as of the date hereof. As
of the date hereof, except as Previously Disclosed, Sky does
not have any Rights issued or outstanding with respect to Sky
Common Shares and Sky does not have any commitment to
authorize, issue or sell any Sky Common Shares or Rights,
except pursuant to this Agreement. The outstanding Sky Common
Shares have been duly authorized and are validly issued and
outstanding, fully paid and nonassessable, and subject to no
preemptive rights (and were not issued in violation of any
preemptive rights).
(ii) The Sky Common Shares to be issued in
exchange for GLB Shares in the Merger, when issued in
accordance with the terms of this Agreement, will be duly
authorized, validly issued, fully paid and nonassessable and
subject to no preemptive rights. As of the date hereof, there
are, and as of the Effective Time there will be, sufficient
authorized and unissued Sky Common Shares to enable Sky to
issue the Merger Consideration at the Effective Time in
connection with the Parent Merger.
(c) Subsidiaries. Sky has Previously Disclosed a list of
all its Subsidiaries together with the jurisdiction or organization of
each Subsidiary. Each of Sky's
24
Subsidiaries has been duly organized and is validly existing in good
standing under the laws of the jurisdiction of its organization, and is
duly qualified to do business and is in good standing in the
jurisdictions where its ownership or leasing of property or the conduct
of its business requires it to be so qualified and, except as
Previously Disclosed, it owns, directly or indirectly, all the issued
and outstanding equity securities of each of its Significant
Subsidiaries.
(d) Corporate Power. Each of Sky and its Subsidiaries has
the corporate power and authority to carry on its business as it is now
being conducted and to own all its properties and assets; and Sky has
the corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby.
(e) Corporate Authority; Authorized and Effective
Agreement. This Agreement and the transactions contemplated hereby have
been authorized by all necessary corporate action of Sky and the Sky
Board prior to the date hereof and no shareholder approval is required
on the part of Sky. The Agreement to Merge, when executed by Sky Bank,
shall have been approved by the Board of Directors of Sky Bank and by
the Sky Board, as the sole shareholder of Sky Bank. This Agreement is a
valid and legally binding agreement of Sky, enforceable in accordance
with its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
and similar laws of general applicability relating to or affecting
creditors rights or by general equity principles).
(f) Regulatory Approvals; No Defaults.
(i) No consents or approvals of, or filings or
registrations with, any Governmental Authority or with any
third party are required to be made or obtained by Sky or any
of its Subsidiaries in connection with the execution, delivery
or performance by Sky of this Agreement or to consummate the
Merger except for (A) the filing of applications, notices or
the Agreement to Merge, as applicable, with the Regulatory
Authorities; (B) the filing and declaration of effectiveness
of the Registration Statement; (C) the filing of the
certificate of merger with the OSS pursuant to the OGCL; (D)
such filings as are required to be made or approvals as are
required to be obtained under the securities or "Blue Sky"
laws of various states in connection with the issuance of Sky
Common Shares in the Merger; and (E) receipt of the approvals
set forth in Section 7.01(b). As of the date hereof, Sky has
no knowledge of any reason why the approvals set forth in
Section 7.01(b) will not be received without the imposition of
a condition, restriction or requirement of the type described
in Section 7.01(b).
(ii) Subject to the satisfaction of the
requirements referred to in the preceding paragraph and
expiration of the related waiting periods, and required
filings under federal and state securities laws, the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby do not
and will not (A) constitute a breach or violation of, or a
default under, or give rise to any Lien, any acceleration of
remedies or any right of termination under, any law, rule or
regulation or any judgment, decree, order,
25
governmental permit or license, or agreement, indenture or
instrument of Sky or of any of its Subsidiaries or to which
Sky or any of its Subsidiaries or properties is subject or
bound, (B) constitute a breach or violation of, or a default
under, the Articles of Incorporation or Code of Regulations
(or similar governing documents) of Sky or any of its
Subsidiaries, or (C) require any consent or approval under any
such law, rule, regulation, judgment, decree, order,
governmental permit or license, agreement, indenture or
instrument.
(g) Financial Reports and SEC Documents; Material Adverse
Effect.
(i) Sky's Annual Report on Form 10-K for the
fiscal year ended December 31, 2002 and 2001, and all other
reports, registration statements, definitive proxy statements
or information statements filed or to be filed by it or any of
its Subsidiaries with the SEC subsequent to December 31, 2001
under the Securities Act, or under Section 13, 14 or 15(d) of
the Exchange Act, in the form filed or to be filed
(collectively, "Sky SEC Documents") as of the date filed, (A)
complied or will comply in all material respects with the
applicable requirements under the Securities Act or the
Exchange Act, as the case may be, and (B) did not and will not
contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and
each of the balance sheets or statements of condition
contained in or incorporated by reference into any such Sky
SEC Document (including the related notes and schedules
thereto) fairly presents, or will fairly present, the
financial position of Sky and its Subsidiaries as of its date,
and each of the statements of income or results of operations
and changes in shareholders' equity and cash flows or
equivalent statements in such Sky SEC Documents (including any
related notes and schedules thereto) fairly presents, or will
fairly present, the results of operations, changes in
shareholders' equity and cash flows, as the case may be, of
Sky and its Subsidiaries for the periods to which they relate,
in each case in accordance with GAAP consistently applied
during the periods involved, except in each case as may be
noted therein, subject to normal year-end audit adjustments
and the absence of footnotes in the case of unaudited
statements.
(ii) Since December 31, 2001, no event has
occurred or circumstance arisen that, individually or taken
together with all other facts, circumstances and events
(described in any paragraph of Section 5.04 or otherwise), is
reasonably likely to have a Material Adverse Effect with
respect to Sky, except as disclosed in the Sky SEC Documents.
(h) Litigation; Regulatory Action.
(i) Except as Previously Disclosed, no material
litigation, claim or other proceeding before any court or
governmental agency is pending against Sky or any of its
Subsidiaries and, to the best of Sky's knowledge, no such
litigation, claim or other proceeding has been threatened.
26
(ii) Except as Previously Disclosed, neither Sky
nor any of its Subsidiaries or properties is a party to or is
subject to any order, decree, agreement, memorandum of
understanding or similar arrangement with, or a commitment
letter or similar submission to, or extraordinary supervisory
letter from a Regulatory Authority, nor has Sky or any of its
Subsidiaries been advised by a Regulatory Authority that such
agency is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any
such order, decree, agreement, memorandum of understanding,
commitment letter, supervisory letter or similar submission.
(i) Compliance with Laws. Each of Sky and its
Subsidiaries:
(i) is in material compliance with all
applicable federal, state, local and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees
applicable thereto or to the employees conducting such
businesses, including, without limitation, the Equal Credit
Opportunity Act, the Fair Housing Act, the Community
Reinvestment Act, the Home Mortgage Disclosure Act and all
other applicable fair lending laws and other laws relating to
discriminatory business practices;
(ii) has all material permits, licenses,
authorizations, orders and approvals of, and has made all
material filings, applications and registrations with, all
Regulatory Authorities and Governmental Authorities that are
required in order to permit them to conduct their businesses
substantially as presently conducted; all such permits,
licenses, certificates of authority, orders and approvals are
in full force and effect and, to the best of its knowledge, no
suspension or cancellation of any of them is threatened; and
(iii) has received, since December 31, 2001, no
notification or communication from any Regulatory Authority or
Governmental Authority (A) asserting that Sky or any of its
Subsidiaries is not in material compliance with any of the
statutes, regulations, or ordinances that such Regulatory
Authority or Governmental Authority enforces or (B)
threatening to revoke any license, franchise, permit, or
governmental authorization (nor, to Sky's knowledge, do any
grounds for any of the foregoing exist).
(j) Brokerage and Finder's Fees. Sky has not employed any
broker, finder, or agent, or agreed to pay or incurred any brokerage
fee, finder's fee, commission or other similar form of compensation in
connection with this Agreement or the transactions contemplated hereby.
(k) Takeover Laws. Sky has taken all action required to
be taken by it in order to exempt this Agreement and the transactions
contemplated hereby from, and this Agreement and the transactions
contemplated hereby are exempt from, the requirements of any Takeover
Laws applicable to Sky.
(l) Tax Matters. (i) All Tax Returns that are required to
be filed by or with respect to Sky and its Subsidiaries have been duly
filed, (ii) all Taxes shown to be due on
27
the Tax Returns referred to in clause (i) have been paid in full as
required, (iii) except as Previously Disclosed, the Tax Returns
referred to in clause (i) have been examined by the IRS or the
appropriate state, local or foreign taxing authority or the period for
assessment of the Taxes in respect of which such Tax Returns were
required to be filed has expired (iv) except as Previously Disclosed,
all deficiencies asserted or assessments made as a result of such
examinations have been paid in full, (v) no issues that have been
raised by the relevant taxing authority in connection with the
examination of any of the Tax Returns referred to in clause (i) are
currently pending, and (vi) except as Previously Disclosed, no waivers
of statutes of limitation have been given by or requested with respect
to any Taxes of Sky or its Subsidiaries. Neither Sky nor any of its
Subsidiaries has any liability with respect to income, franchise or
similar Taxes that accrued on or before the end of the most recent
period covered by the Sky SEC Documents filed prior to the date hereof
in excess of the amounts accrued with respect thereto that are
reflected in the financial statements included in the Sky SEC Documents
filed on or prior to the date hereof ("Sky's Financial Statements"). As
of the date hereof, Sky has no reason to believe that any conditions
exist that might prevent or impede the Merger from qualifying as a
reorganization with the meaning of Section 368(a) of the Code.
(m) Books and Records. The books and records of Sky and
its Subsidiaries have been fully, properly and accurately maintained in
all material respects, have been maintained in accordance with sound
business practices and the requirements of Section 13(b)(2) of the
Exchange Act, and there are no material inaccuracies or discrepancies
of any kind contained or reflected therein, and they fairly present the
substance of events and transactions included therein.
(n) Disclosure. The representations and warranties
contained in this Section 5.04 do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements and information contained in this Section 5.04 not
misleading.
(o) Material Adverse Change. Sky has not, on a
consolidated basis, suffered a change in its business, financial
condition or results of operations since December 31, 2001 that has had
a Material Adverse Effect on Sky, except as described in the Sky SEC
Documents.
(p) Deposit Insurance. The deposits of Sky Bank are
insured by the FDIC in accordance with the FDIA, and Sky Bank has paid
all assessments and filed all reports required by the FDIA.
(q) Sky Off Balance Sheet Transactions. Section 5.04(q)
of Sky's Disclosure Schedule sets forth a true and complete list of all
affiliated Sky entities, including without limitation all special
purpose entities, limited purpose entities and qualified special
purpose entities, in which Sky or any of its Subsidiaries or any
officer or director of Sky or any of its Subsidiaries has an economic
or management interest. Section 5.04(q) of Sky's Disclosure Schedule
also sets forth a true and complete list of all transactions,
arrangements, and other relationships between or among any such Sky
affiliated entity, on the one hand, and Sky, any of its Subsidiaries
and any officer or director of Sky or any of its Subsidiaries, on the
other hand, that are not reflected in the consolidated financial
28
statements of Sky (each, a "Sky Off Balance Sheet Transaction"), along
with the following information with respect to each such Sky Off
Balance Sheet Transaction: (i) the business purpose, activities, and
economic substance; (ii) the key terms and conditions; (iii) the
potential risk to Sky or any of its Subsidiaries; (iv) the amount of
any guarantee, line of credit, standby letter of credit or commitment,
or any other type of arrangement, that could require Sky or any of its
Subsidiaries to fund any obligations under any such transaction; and
(v) any other information that could have a Material Adverse Effect on
Sky or any of its Subsidiaries.
(r) Risk Management Instruments. All material interest
rate swaps, caps, floors, option agreements, futures and forward
contracts and other similar risk management arrangements, whether
entered into for Sky's own account, or for the account of one or more
of Sky's Subsidiaries (or any entity acquired by Sky) or their
customers, were entered into (i) in accordance with prudent business
practices and all applicable laws, rules, regulations and regulatory
policies and (ii) with counterparties believed to be financially
responsible at the time; and each of them constitutes the valid and
legally binding obligation of Sky or one of its Subsidiaries,
enforceable in accordance with its terms (except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by general
equity principles), and is in full force and effect. Neither Sky nor
its Subsidiaries, nor to Sky's knowledge any other party thereto, is in
breach of any of its obligations under any such agreement or
arrangement.
(s) Allowance for Loan Losses. The allowance for loan
losses reflected on Sky's Financial Statements, as of their respective
dates, is adequate in all material respects under the requirements of
GAAP to provide for reasonably anticipated losses on outstanding loans.
ARTICLE VI
Covenants
6.01 Reasonable Best Efforts. Subject to the terms and conditions
of this Agreement, each of GLB and Sky agrees to use its reasonable best efforts
in good faith to take, or cause to be taken, all actions, and to do, or cause to
be done, all things necessary, proper or desirable, or advisable under
applicable laws, so as to permit consummation of the Merger as promptly as
practicable and otherwise to enable consummation of the transactions
contemplated hereby and shall cooperate fully with the other party hereto to
that end.
6.02 Shareholder Approval. GLB agrees to take, in accordance with
applicable law and the GLB Articles and GLB Code, all action necessary to
convene an appropriate meeting of its shareholders to consider and vote upon the
adoption of this Agreement and any other matters required to be approved or
adopted by GLB's shareholders for consummation of the Merger (including any
adjournment or postponement, the "GLB Meeting"), as promptly as practicable
after the Registration Statement is declared effective. The GLB Board shall
recommend that GLB's shareholders adopt this Agreement at the GLB Meeting unless
the GLB Board, after consultation with independent legal counsel, determines in
good faith that it would constitute, or
29
could reasonably be expected to constitute, a breach of its fiduciary duties
under applicable Ohio law and GLB's Articles.
6.03 Registration Statement.
(a) Sky agrees to prepare pursuant to all applicable
laws, rules and regulations a registration statement on Form S-4 (the
"Registration Statement") to be filed by Sky with the SEC in connection
with the issuance of Sky Common Shares in the Merger (including the
proxy statement and prospectus and other proxy solicitation materials
of GLB constituting a part thereof (the "Proxy Statement") and all
related documents). GLB agrees to cooperate, and to cause its
Subsidiaries to cooperate, with Sky, its counsel and its accountants,
in preparation of the Registration Statement and the Proxy Statement;
and provided that GLB and its Subsidiaries have cooperated as required
above, Sky agrees to file the Proxy Statement and the Registration
Statement (together, the "Proxy Statement/Prospectus") with the SEC as
promptly as reasonably practicable. Each of GLB and Sky agrees to use
all reasonable efforts to cause the Proxy Statement/Prospectus to be
declared effective under the Securities Act as promptly as reasonably
practicable after filing thereof. Sky also agrees to use all reasonable
efforts to obtain, prior to the effective date of the Registration
Statement, all necessary state securities law or "Blue Sky" permits and
approvals required to carry out the transactions contemplated by this
Agreement. GLB agrees to furnish to Sky all information concerning GLB,
its Subsidiaries, officers, directors and shareholders as may be
reasonably requested in connection with the foregoing.
(b) Each of GLB and Sky agrees, as to itself and its
Subsidiaries, that none of the information supplied or to be supplied
by it for inclusion or incorporation by reference in (i) the
Registration Statement will, at the time the Registration Statement and
each amendment or supplement thereto, if any, becomes effective under
the Securities Act, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (ii) the
Proxy Statement and any amendment or supplement thereto will, at the
date of mailing to the GLB shareholders and at the time of the GLB
Meeting, as the case may be, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading or any
statement that, in the light of the circumstances under which such
statement is made, will be false or misleading with respect to any
material fact, or that will omit to state any material fact necessary
in order to make the statements therein not false or misleading or
necessary to correct any statement in any earlier statement in the
Proxy Statement or any amendment or supplement thereto. Each of GLB and
Sky further agrees that if it shall become aware prior to the Effective
Date of any information furnished by it that would cause any of the
statements in the Proxy Statement to be false or misleading with
respect to any material fact, or to omit to state any material fact
necessary to make the statements therein not false or misleading, to
promptly inform the other party thereof and to take the necessary steps
to correct the Proxy Statement.
(c) Sky agrees to advise GLB, promptly after Sky receives
notice thereof, of the time when the Registration Statement has become
effective or any supplement or amendment has been filed, of the
issuance of any stop order or the suspension of the
30
qualification of Sky Shares for offering or sale in any jurisdiction,
of the initiation or threat of any proceeding for any such purpose, or
of any request by the SEC for the amendment or supplement of the
Registration Statement or for additional information.
6.04 Press Releases. Each of GLB and Sky agrees that it will not,
without the prior approval of the other party, issue any press release or
written statement for general circulation relating to the transactions
contemplated hereby, except as otherwise required by applicable law or
regulation or NASDAQ rules (in which event it shall give the other party such
concurrent or advance notice thereof as is reasonably possible).
6.05 Access; Confidentiality.
(a) Each party shall, upon reasonable notice and subject
to applicable laws relating to the exchange of information, afford the
other party and its officers, employees, counsel, accountants and other
authorized representatives, such access during normal business hours
throughout the period prior to the Effective Time to the books, records
(including, without limitation, tax returns and work papers of
independent auditors), properties, personnel and to such other
information as such party may reasonably request and, during such
period, it shall furnish promptly to the other party (i) a copy of each
material report, schedule and other document filed by it pursuant to
federal or state securities or banking laws, and (ii) all other
information concerning its business, properties and personnel as the
other party may reasonably request.
(b) Each of GLB and Sky agrees that it will not, and will
cause its representatives not to, use any information obtained pursuant
to this Section 6.05 (as well as any other information obtained prior
to the date hereof in connection with the entering into of this
Agreement) for any purpose unrelated to the consummation of the
transactions contemplated by this Agreement. Except for the use of
information in connection with the Registration Statement described in
Section 6.03 hereof and any other governmental filings required in
order to complete the transactions contemplated by this Agreement, all
information (collectively, the "Information") received by each of GLB
and Sky, pursuant to the terms of this Agreement shall be kept in
strictest confidence; provided that, subsequent to the filing of the
Registration Statement with the SEC, this Section 6.05 shall not apply
to information included in the Registration Statement or to be included
in the Proxy Statement/Prospectus to be sent to the shareholders of GLB
and Sky under Section 6.03. Subject to the requirements of law, each
party will keep confidential, and will cause its representatives to
keep confidential, all Information and documents obtained (as well as
any other Information obtained prior to the date hereof in connection
with the entering into of this Agreement) unless such Information (i)
was already known to such party, (ii) becomes available to such party
from other sources not known by such party to be bound by a
confidentiality obligation, (iii) is disclosed with the prior written
approval of the party to which such information pertains or (iv) is or
becomes readily ascertainable from published information or trade
sources. In the event that this Agreement is terminated or the
transactions contemplated by this Agreement shall otherwise fail to be
consummated, each party shall promptly cause all copies of documents or
extracts thereof containing Information and data as to another party
hereto to be returned to the party that furnished the same. No
investigation by either party of the business and affairs of the other
shall affect or be deemed to modify
31
or waive any representation, warranty, covenant or agreement in this
Agreement, or the conditions to either party's obligation to consummate
the transactions contemplated by this Agreement.
(c) During the period from the date of this Agreement to
the Effective Time, (i) GLB shall promptly furnish Sky with copies of
all monthly and other interim financial statements produced in the
ordinary course of business as the same shall become available, and
(ii) Sky shall promptly furnish GLB with copies of all monthly
financial statements produced in the ordinary course of business as the
same shall become available.
6.06 Acquisition Proposals. GLB agrees that it shall not, and shall
cause its Subsidiaries and its and its Subsidiaries' officers, directors,
agents, advisors and affiliates not to, solicit or encourage inquiries or
proposals with respect to, or engage in any negotiations concerning, or provide
any confidential information to, or have any discussions with, any person
relating to, any Acquisition Proposal, except to the extent that the GLB Board,
after consultation with independent legal counsel, determines in good faith that
the failure to take such action would constitute, or could reasonably be
expected to constitute, a breach of its fiduciary duties under applicable Ohio
law and GLB's Articles. It shall immediately cease and cause to be terminated
any activities, discussions or negotiations conducted prior to the date of this
Agreement with any parties other than Sky with respect to any of the foregoing
and shall use its reasonable best efforts to enforce any confidentiality or
similar agreement relating to an Acquisition Proposal. GLB shall promptly advise
Sky following the receipt by GLB of any Acquisition Proposal and the substance
thereof (including the identity of the person making such Acquisition Proposal),
and advise Sky of any material developments with respect to such Acquisition
Proposal promptly upon the occurrence thereof.
6.07 Affiliate Agreements. Not later than the 15th day prior to the
mailing of the Proxy Statement, GLB shall deliver to Sky a schedule of each
person that, to the best of its knowledge, is or is reasonably likely to be, as
of the date of the GLB Meeting, deemed to be an "affiliate" of GLB (each, a "GLB
Affiliate") as that term is used in Rule 145 under the Securities Act. GLB shall
cause each person who may be deemed to be a GLB Affiliate to execute and deliver
to GLB on or before the date of mailing of the Proxy Statement an agreement in
the form attached hereto as Exhibit B.
6.08 Takeover Laws. No party hereto shall take any action that
would cause the transactions contemplated by this Agreement to be subject to
requirements imposed by any Takeover Law and each of them shall take all
necessary steps within its control to exempt (or ensure the continued exemption
of) the transactions contemplated by this Agreement from, or if necessary
challenge the validity or applicability of, any applicable Takeover Law, as now
or hereafter in effect.
6.09 Certain Policies. Prior to the Effective Date, GLB shall,
consistent with GAAP and on a basis mutually satisfactory to it and Sky, modify
and change its loan, litigation and real estate valuation policies and practices
(including loan classifications and levels of reserves) as well as other
management and operating policies and practices so as to be applied on a basis
that is consistent with that of Sky. GLB's representations, warranties and
covenants contained in this
32
Agreement shall not be deemed to be untrue or breached in any respect for any
purpose as a consequence of any modifications or changes undertaken solely on
account of this Section 6.09.
6.10 NASDAQ Listing or Notification. As required by NASDAQ, Sky
shall file a NASDAQ Notification Form for Listing of Additional Shares and/or
Change in the Number of Shares Outstanding, with respect to the shares of Sky
Common Shares to be issued to the holders of GLB Shares in the Merger.
6.11 Regulatory Applications.
(a) Sky and GLB and their respective Subsidiaries shall
cooperate and use their respective reasonable best efforts to prepare,
within 45 days of the execution of this Agreement, all documentation
and requests for regulatory approval, to timely effect all filings and
to obtain all permits, consents, approvals and authorizations of all
third parties and Governmental Authorities and Regulatory Authorities
necessary to consummate the transactions contemplated by this
Agreement. Each of Sky and GLB shall have the right to review in
advance, and to the extent practicable each will consult with the
other, in each case subject to applicable laws relating to the exchange
of information, with respect to, and shall be provided in advance so as
to reasonably exercise its right to review in advance, all material
written information submitted to any third party or any Governmental
Authority or Regulatory Authority in connection with the transactions
contemplated by this Agreement. In exercising the foregoing right, each
of the parties hereto agrees to act reasonably and as promptly as
practicable. Each party hereto agrees that it will consult with the
other party hereto with respect to the obtaining of all material
permits, consents, approvals and authorizations of all third parties
and Governmental Authorities or Regulatory Authorities necessary or
advisable to consummate the transactions contemplated by this Agreement
and each party will keep the other party apprised of the status of
material matters relating to completion of the transactions
contemplated hereby.
(b) Each party agrees, upon request, to furnish the other
party with all information concerning itself, its Subsidiaries,
directors, officers and shareholders and such other matters as may be
reasonably necessary or advisable in connection with any filing, notice
or application made by or on behalf of such other party or any of its
Subsidiaries to any third party, Governmental Authority or Regulatory
Authority.
6.12 Indemnification.
(a) Following the Effective Date, Sky shall indemnify,
defend and hold harmless the present and former directors, officers and
employees of GLB and its Subsidiaries (each, an "Indemnified Party")
against all costs or expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages or liabilities incurred in
connection with any claim, action, suit, proceeding or investigation,
whether civil, criminal, administrative or investigative, arising out
of actions or omissions occurring at or prior to the Effective Time
(including, without limitation, the transactions contemplated by this
Agreement) to the fullest extent that GLB is permitted to indemnify
(and advance expenses to) its directors, officers, and employees under
the laws of the State of Ohio, the GLB Articles or the GLB Code as in
effect on the date hereof;
33
provided that any determination required to be made with respect to
whether an officer's, director's or employee's conduct complies with
the standards set forth under Ohio law, the GLB Articles or the GLB
Code shall be made by independent counsel (which shall not be counsel
that provides material services to Sky) selected by Sky and reasonably
acceptable to such officer, director or employee.
(b) For a period of three (3) years from the Effective
Time, Sky shall procure directors' and officers' liability insurance
that serves to reimburse the present and former officers and directors
of GLB or any of its Subsidiaries (determined as of the Effective Time)
(as opposed to GLB) with respect to claims against such directors and
officers arising from facts or events that occurred before the
Effective Time, providing coverage at least as favorable as coverage
contained in GLB's current directors' and officers' liability coverage.
(c) Any Indemnified Party wishing to claim
indemnification under Section 6.12(a), upon learning of any claim,
action, suit, proceeding or investigation described above, shall
promptly notify Sky thereof; provided that the failure so to notify
shall not affect the obligations of Sky under Section 6.12(a) unless
and to the extent that Sky is actually prejudiced as a result of such
failure.
(d) If Sky or any of its successors or assigns shall
consolidate with or merge into any other entity and shall not be the
continuing or surviving entity of such consolidation or merger or shall
transfer all or substantially all of its assets to any entity, then and
in each case, proper provision shall be made so that the successors and
assigns of Sky shall assume the obligations set forth in this Section
6.12.
6.13 Opportunity of Employment; Employee Benefits.
(a) Sky will make a good faith effort to provide the
existing employees of GLB with the opportunity to continue as employees
on the Effective Date, subject, however, to the right of Sky and its
Subsidiaries, and the Bank, to terminate any such employees (i) for
cause; or (ii) pursuant to procedures set forth in the Sky Workforce
Redesign Process previously disclosed to GLB; or (iii) pursuant to the
implementation of Sky's regional banking template; or (iv) to eliminate
the redundancy of employment positions. Prior to the Effective Time,
pursuant to and in accordance with specific directions from Sky, GLB
agrees to issue, and cause the Bank to issue, Worker Adjustment and
Retraining Act notices (so-called WARN notices) to employees of GLB and
the Bank who Sky determines will not be employed on or after the
Effective Time pursuant to the employment termination provisions of the
foregoing sentence; provided, however, that any such WARN notices shall
be (aa) for employment terminations on or after the Effective Time, and
(bb) given to affected employees at least sixty (60) days in advance of
their termination dates. It is understood and agreed that nothing in
this Section 6.13 or elsewhere in this Agreement shall be deemed to be
a contract of employment or be construed to give said employees any
rights other than as employees at will under applicable law and said
employees shall not be deemed to be third-party beneficiaries of this
provision. Sky will honor GLB's change of control agreements with
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇ ▇▇▇▇▇▇▇▇ that are identified in GLB's
Disclosure Schedule; provided, however, that Sky agrees that ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇.'s change of
34
control agreement shall be amended prior to the Effective Time to
define "Good Reason" as any reason specified by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
within nine (9) months following the change of control. Each existing
GLB employee (except ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇ ▇▇▇▇▇▇▇▇) who is
not employed with Sky or one of its Subsidiaries (which shall include
the Bank commencing on the Effective Date) for at least the first whole
year following the Effective Date shall be payable by Sky in accordance
with Sky's standard severance policy for employees, with credit for
years of GLB service (including years of service with GLB's
predecessors, including any entities merged into GLB or Bank with
respect to which service no prior severance payments were made to such
employees) and reduced by any amounts payable to such employees under
GLB's severance compensation program; and Sky also shall pay each such
terminated employee for all unused vacation time as of the date of
termination of employment, up to maximum of one year's vacation time.
(b) From and after the Effective Time, GLB employees
shall continue to participate in the GLB employee benefit plans in
effect at the Effective Time unless and until Sky, in its sole
discretion, shall determine that GLB employees shall, subject to
applicable eligibility requirements, participate in employee benefit
plans of Sky and that all or some of the GLB plans shall be terminated
or merged into certain employee benefit plans of Sky. GLB employees
continuing to be employed by Sky shall receive credit for service at
GLB for eligibility and vesting purposes under Sky's employee benefit
plans (but not for benefit calculation purposes), except as otherwise
required by law or regulation. Any employees terminated by Sky shall be
entitled to elect so-called "COBRA" in accordance with, and subject to,
the provisions of Code Section 4980B(f). Each GLB employee shall be
credited with years of GLB service (including years of service with
GLB's predecessors, to the same extent that GLB credited such service,
including any entities merged into GLB or Bank) for purposes of
eligibility and vesting in the employee benefit plans of Sky, and shall
not be subject to any exclusion or penalty for pre-existing conditions
that were covered under GLB's welfare plans immediately prior to the
Effective Date, or to any waiting period relating to such coverage. If,
after the Effective Date, Sky adopts a new plan or program for its
employees or executives, then to the extent its employees or executives
receive past service credits for any reason, Sky shall credit
similarly-situated employees and executives of GLB with equivalent
credit for service with GLB or its predecessors (including any entities
merged into GLB or Bank), to the same extent that GLB credited service
with its predecessors.
(c) The covenants of this Section 6.13 shall survive the
Merger.
6.14 Notification of Certain Matters. Each of GLB and Sky shall
give prompt notice to the other of any fact, event or circumstance known to it
that (i) is reasonably likely, individually or taken together with all other
facts, events and circumstances known to it, to result in any Material Adverse
Effect with respect to it or (ii) would cause or constitute a material breach of
any of its representations, warranties, covenants or agreements contained
herein.
6.15 Dividend Coordination. It is agreed by the parties hereto that
they will cooperate to assure that as a result of the Parent Merger, during any
applicable period, there shall not be a payment of both a Sky and an GLB
dividend for GLB shareholders.
35
6.16 Tax Treatment. Each of Sky and GLB agrees not to take any
actions subsequent to the date of this Agreement that would adversely affect the
ability of GLB and its shareholders to characterize the Merger as a tax-free
reorganization under Section 368(a) of the Code, and each of Sky and GLB agrees
to take such action as may be reasonably required, if such action may be
reasonably taken to reverse the impact of any past actions which would adversely
impact the ability for the Merger to be characterized as a tax-free
reorganization under Section 368(a) of the Code.
6.17 No Breaches of Representations and Warranties. Between the
date of this Agreement and the Effective Time, without the written consent of
the other party, each of Sky and GLB will not do any act or suffer any omission
of any nature whatsoever that would cause any of the representations or
warranties made in Article V of this Agreement to become untrue or incorrect in
any material respect.
6.18 Consents. Each of Sky and GLB shall use its best efforts to
obtain any required consents to the transactions contemplated by this Agreement.
6.19 Insurance Coverage. GLB shall cause the policies of insurance
listed in the Disclosure Schedule to remain in effect between the date of this
Agreement and the Effective Date.
6.20 Correction of Information. Each of Sky and GLB shall promptly
correct and supplement any information furnished under this Agreement so that
such information shall be correct and complete in all material respects at all
times, and shall include all facts necessary to make such information correct
and complete in all material respects at all times; provided that no such
corrections or supplementations by either party shall be deemed to either (i)
amend any of the representations or warranties contained herein by, or the
Disclosure Schedule of, that party or (ii) impair the right of either party to
declare the other party to be in breach of any of its representations or
warranties for purposes of Section 8.01(b) of this Agreement.
6.21 Supplemental Assurances.
(a) On the date the Registration Statement becomes
effective and on the Effective Date, GLB shall deliver to Sky a
certificate signed by its principal executive officer and its principal
financial officer to the effect, to such officers' knowledge, that the
information contained in the Registration Statement relating to the
business and financial condition and affairs of GLB, does not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading.
(b) On the date the Registration Statement becomes
effective and on the Effective Date, Sky shall deliver to GLB a
certificate signed by its chief executive officer and its chief
financial officer to the effect, to such officers' knowledge, that the
Registration Statement (other than the information contained therein
relating to the business and financial condition and affairs of GLB)
does not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading.
36
6.22 Regulatory Matters. Sky, GLB and each of their Subsidiaries
shall cooperate and each of them agrees to use its reasonable best efforts to
remediate any order, decree, agreement, memorandum of understanding or similar
agreement by GLB or any of its Subsidiaries with, or a commitment letter, board
resolution or similar submission by GLB or any of its Subsidiaries to, or
supervisory letter from any Regulatory Authority to GLB or any of its
Subsidiaries, to the satisfaction of such Regulatory Authority.
6.23 Regional Board Representation. Sky shall select one
representative from GLB to serve on Sky's Regional Board of the Greater
Cleveland Region, subject to the approval of the GLB Board.
ARTICLE VII
Conditions to Consummation of the Merger
7.01 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligation of each of Sky and GLB to consummate the Merger is
subject to the fulfillment or written waiver by Sky and GLB prior to the
Effective Time of each of the following conditions:
(a) Shareholder Approval. This Agreement shall have been
duly adopted by the requisite vote of GLB's shareholders.
(b) Regulatory Approvals. All regulatory approvals
required to consummate the transactions contemplated hereby shall have
been obtained and shall remain in full force and effect and all
statutory waiting periods in respect thereof shall have expired and no
such approvals shall contain (i) any conditions, restrictions or
requirements that the Sky Board reasonably determines would either
before or after the Effective Time have or will have a Material Adverse
Effect on Sky and its Subsidiaries taken as a whole after giving effect
to the consummation of the Merger, or (ii) any conditions, restrictions
or requirements that are not customary and usual for approvals of such
type and that the Sky Board reasonably determines would either before
or after the Effective Date be unduly burdensome.
(c) No Injunction. No Regulatory Authority or
Governmental Authority of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
judgment, decree, injunction or other order (whether temporary,
preliminary or permanent) that is in effect and prohibits consummation
of the transactions contemplated by this Agreement.
(d) Registration Statement. The Registration Statement
shall have become effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
initiated or threatened by the SEC.
(e) Blue Sky Approvals. All permits and other
authorizations under state securities laws necessary to consummate the
transactions contemplated hereby and to issue the Sky Common Shares to
be issued in the Merger shall have been received and be in full force
and effect.
37
7.02 Conditions to Obligation of GLB. The obligation of GLB to
consummate the Merger is also subject to the fulfillment or written waiver by
GLB prior to the Effective Time of each of the following conditions:
(a) Representations and Warranties. The representations
and warranties of Sky set forth in this Agreement shall be true and
correct, subject to Section 5.02, as of the date of this Agreement and
as of the Effective Date as though made on and as of the Effective Date
(except that representations and warranties that by their terms speak
as of the date of this Agreement or some other date shall be true and
correct as of such date), and GLB shall have received a certificate,
dated the Effective Date, signed on behalf of Sky by the Chief
Executive Officer and the Chief Financial Officer of Sky to such
effect.
(b) Performance of Obligations of Sky. Sky shall have
performed in all material respects all obligations required to be
performed by them under this Agreement at or prior to the Effective
Time, and GLB shall have received a certificate, dated the Effective
Date, signed on behalf of Sky by the Chief Executive Officer and the
Chief Financial Officer of Sky to such effect.
(c) Tax Opinion. GLB shall have received an opinion of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.L.L., dated the Effective Date, to the
effect that, on the basis of facts, representations and assumptions set
forth in such opinion, (i) the Merger constitutes a "reorganization"
within the meaning of Section 368(a) of the Code and (ii) no gain or
loss will be recognized by shareholders of GLB who receive Sky Common
Shares in exchange for GLB Shares, other than the gain or loss to be
recognized as to cash received in lieu of fractional share interests.
In rendering its opinion, such counsel may require and rely upon
representations contained in letters from GLB and Sky.
(d) Opinion of Sky's Counsel. GLB shall have received an
opinion of Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., counsel to Sky, dated the
Effective Date, to the effect that, on the basis of the facts,
representations and assumptions set forth in the opinion, (i) Sky is a
corporation duly organized and in good standing under the laws of the
State of Ohio, (ii) this Agreement has been duly executed by Sky and
constitutes the binding obligation of Sky, enforceable in accordance
with its terms against Sky, except as the same may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, 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 and Section 8(b)(6)(D) of the FDIA, (iii) that
the Sky Common Shares to be issued as part of the Merger Consideration,
when issued, shall be duly authorized, fully paid and non-assessable,
and (iv) that, assuming approval of GLB's shareholders, upon the filing
of the Certificate of Merger with the OSS, the Parent Merger shall
become effective.
7.03 Conditions to Obligation of Sky. The obligation of Sky to
consummate the Merger is also subject to the fulfillment or written waiver by
Sky prior to the Effective Time of each of the following conditions:
38
(a) Representations and Warranties. The representations
and warranties of GLB set forth in this Agreement shall be true and
correct, subject to Section 5.02, as of the date of this Agreement and
as of the Effective Date as though made on and as of the Effective Date
(except that representations and warranties that by their terms speak
as of the date of this Agreement or some other date shall be true and
correct as of such date), and Sky shall have received a certificate,
dated the Effective Date, signed on behalf of GLB by the Chief
Executive Officer and the Chief Financial Officer of GLB to such
effect.
(b) Performance of Obligations of GLB. GLB shall have
performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Effective Time,
and Sky shall have received a certificate, dated the Effective Date,
signed on behalf of GLB by the Chief Executive Officer and the Chief
Financial Officer of GLB to such effect.
(c) Opinion of GLB's Counsel. Sky shall have received an
opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.L.L., counsel to GLB, dated the
Effective Date, to the effect that, on the basis of the facts,
representations and assumptions set forth in the opinion, (i) GLB is a
corporation duly organized and in good standing under the laws of Ohio,
(ii) this Agreement has been duly executed by GLB and constitutes
binding obligations on GLB, enforceable in accordance with its terms
against GLB, except as the same may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium, 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 and Section 8(b)(6)(D) of the FDIA and (iii) that, assuming
approval of GLB's shareholders, upon the filing of the Certificate of
Merger with the OSS, the Parent Merger shall become effective.
(d) Affiliate Agreements. Sky shall have received the
agreements referred to in Section 6.07 from each GLB Affiliate.
(e) Tax Opinion. Sky shall have received an opinion of
Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., dated the Effective Date, in form and
in substance reasonably acceptable to it, to the effect that, on the
basis of the facts, representations and assumptions set forth in such
opinion, (i) the Merger constitutes a "reorganization" within the
meaning of Section 368(a) of the Code. In rendering its opinion, such
counsel may require and rely upon representations contained in letters
from GLB and Sky.
(f) Director's and Officer's Liability Insurance. Sky
shall have purchased the director's and officer's liability insurance
required by Section 6.12(b) of this Agreement.
(g) Fairness Opinion. The GLB Board shall have received
the written opinion of a financial advisor satisfactory to the GLB
Board to the effect that as of the date thereof the consideration to be
received by the holders of GLB Shares in the Merger is fair to the
holders of GLB Shares from a financial point of view (the "Fairness
Opinion").
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ARTICLE VIII
Termination
8.01 Termination. This Agreement may be terminated, and the
Acquisition may be abandoned:
(a) Mutual Consent. At any time prior to the Effective
Time, by the mutual consent of Sky and GLB, if the Board of Directors
of each so determines by vote of a majority of the members of its
entire Board.
(b) Breach. At any time prior to the Effective Time, by
Sky or GLB, if its Board of Directors so determines by vote of a
majority of the members of its entire Board, in the event of either:
(i) a breach by the other party of any representation or warranty
contained herein (subject to the standard set forth in Section 5.02),
which breach cannot be or has not been cured within 30 days after the
giving of written notice to the breaching party of such breach; or (ii)
a breach by the other party of any of the covenants or agreements
contained herein, which breach cannot be or has not been cured within
30 days after the giving of written notice to the breaching party of
such breach, provided that such breach (whether under (i) or (ii))
would be reasonably likely, individually or in the aggregate with other
breaches, to result in a Material Adverse Effect. In the event of a
breach by GLB of any representation, warranty, covenant or agreement
contained herein, which breach cannot be or has not been cured within
30 days after giving written notice to GLB of such breach pursuant to
this Section 8.01(b), Sky, at its option, in lieu of terminating this
Agreement pursuant to this Section 8.01(b), may agree to an adjustment
of the Exchange Ratio by an amount that is mutually acceptable to the
Sky Board and the GLB Board.
(c) Delay. At any time prior to the Effective Time, by
Sky or GLB, if its Board of Directors so determines by vote of a
majority of the members of its entire Board, in the event that the
Merger is not consummated by March 31, 2004, except to the extent that
the failure of the Merger then to be consummated arises out of or
results from the knowing action or inaction of the party seeking to
terminate pursuant to this Section 8.01(c).
(d) No Approval. By GLB or Sky, if its Board of Directors
so determines by a vote of a majority of the members of its entire
Board, in the event (i) the approval of any Governmental Authority or
any of the Regulatory Authorities required for consummation of the
Merger and the other transactions contemplated by this Agreement shall
have been denied by final nonappealable action of such Governmental
Authority or Regulatory Authority; (ii) the GLB shareholders fail to
adopt this Agreement at the GLB Meeting; or (iii) as of the Effective
Date, any of the closing conditions have not been met as required by
Article VII hereof.
(e) Sky Common Shares. By GLB, in the event that:
(i) the Average NMS Closing Price (as defined
below) of Sky Common Shares is less than $17.80; and
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(ii) (A) the number obtained by dividing the
Average NMS Closing Price of Sky Common Shares by $22.25 is
less than (B) the number obtained by dividing the Final Index
Price (as defined below) by the Initial Index Price (as
defined below) and then multiplying the quotient in this
clause (ii)(B) by .80.
For purposes of this Section 8.01(e), the following terms have
the meanings indicated below:
"Average NMS Closing Price" shall mean the arithmetic
mean of the NMS Closing Prices for the ten trading days immediately
preceding the fifth trading day prior to the receipt of final federal
regulatory approval of the Merger.
"Final Index Price" means the sum of the Final Prices
for each company comprising the Index Group multiplied by the
appropriate weight.
"Final Price," with respect to any company belonging
to the Index Group, means the arithmetic mean of the daily closing
sales prices of a share of common stock of such company, as reported on
the consolidated transaction reporting system for the market or
exchange on which such common stock is principally traded, for the same
ten trading days used in calculating the Average NMS Closing Price of
Sky Common Shares (i.e., the valuation date).
"Index Group" means the 25 financial institution
holding companies listed on Exhibit B attached hereto, the common stock
of all of which shall be publicly traded and as to which there shall
not have been a publicly announced proposal at any time during the
period beginning on the date of the Agreement and ending on the
valuation date for any such company to be acquired. In the event that
the common stock of any such company ceases to be publicly traded or a
proposal to acquire any such company is announced at any time during
the period beginning on the date of this Agreement and ending on the
valuation date, such company will be removed from the Index Group, and
the weights attributed to the remaining companies will be adjusted
proportionately for purposes of determining the Final Index Price and
the Initial Index Price. The 25 financial institution holding companies
and the weights attributed to them are listed on Exhibit B attached
hereto.
"Initial Index Price" means the sum of each per share
closing price of the common stock of each company comprising the Index
Group multiplied by the applicable weighting, as such prices are
reported on the consolidated transactions reporting system for the
market or exchange on which such common stock is principally traded, on
the trading day immediately preceding the public announcement of the
Agreement.
"NMS Closing Price" shall mean the price per share of
the last sale of Sky Common Shares reported on the NASDAQ National
Market System at the close of the trading day by the NASD.
Prior to GLB exercising its right of termination under this
Section 8.01(e), in the event that both of the conditions specified in
Sections 8.01(e)(i) and (ii) are met, Sky may, at its option (the "Fill
Option"), for a period of ten business days commencing on the date the
parties determine the conditions have been met, offer to distribute to
GLB's
41
shareholders, in connection with the Merger Consideration, the number
of shares of Sky Common Shares necessary for the Exchange Ratio to
equal $17.80 divided by the Average NMS Closing Price of Sky Common
Shares (the "Fill Offer"). Thereafter, for a period of ten business
days, GLB shall have the opportunity to accept or reject the Fill
Offer. If GLB elects to accept the Fill Offer, GLB shall provide
written notice of its acceptance to Sky, whereupon no termination shall
have occurred pursuant to this Section 8.01(e) and this Agreement shall
remain in effect in accordance with its terms, except that the Merger
Consideration shall have been so adjusted and any references in this
Agreement to "Merger Consideration" and "Exchange Ratio" shall
thereafter be deemed to refer to the Merger Consideration and Exchange
Ratio after giving to any adjustment made pursuant to this Section
8.01(e). If GLB rejects the Fill Offer, GLB may terminate this
Agreement in accordance with the provisions hereof. In the event Sky
determines not to exercise the Fill Option, it will so advise GLB in
writing, and thereafter, for a period of three business days GLB may
exercise its right to terminate this Agreement pursuant to this Section
8.01(e).
If Sky or any company belonging to the Index Group declares or
effects a stock dividend, reclassification, recapitalization, split-up,
combination, exchange of shares or similar transaction between the date
of the Agreement and the valuation date, the prices for the common
stock of such company will be appropriately adjusted.
(f) Other Transactions. By GLB or by Sky, in the event
that GLB receives an Acquisition Proposal pursuant to Section 6.06
hereof and enters into an agreement with respect to such Acquisition
Proposal, subject however, to the payment by GLB of the termination fee
specified in Section 8.03 hereof.
(g) Fairness Opinion. By July 30, 2003, GLB shall provide
written notice to Sky of its receipt of the Fairness Opinion. If such
notice is not provided by GLB to Sky by such date, then Sky shall have
the right to terminate this Agreement through August 20, 2003. If GLB
is unable, after employing its best efforts, to obtain the Fairness
Opinion by August 15, 2003, then GLB shall have the right to terminate
this Agreement through August 20, 2003.
8.02 Effect of Termination and Abandonment; Enforcement of
Agreement. In the event of termination of this Agreement and the abandonment of
the Merger pursuant to this Article VIII, no party to this Agreement shall have
any liability or further obligation to any other party hereunder except (i) as
set forth in Sections 8.03 and 9.01; and (ii) that termination will not relieve
a breaching party from liability for any willful breach of this Agreement giving
rise to such termination. Notwithstanding anything contained herein to the
contrary, the parties hereto agree that irreparable damage will occur in the
event that a party breaches any of its obligations, duties, covenants and
agreements contained herein. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches or threatened
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they are
entitled by law or in equity.
8.03 Termination Fee. GLB shall pay to Sky a termination fee in the
amount of $1,250,000 if:
42
(a) (x) this Agreement is terminated by Sky pursuant to
Section 8.01(b)(ii) or by Sky or GLB pursuant to Section 8.01(d)(ii) or
Section 8.01(f); (y) after the date hereof and prior to any such
termination, an Acquisition Proposal (including an Acquisition Proposal
from a party that has previously made an Acquisition Proposal to GLB)
with respect to GLB was commenced, publicly proposed or publicly
disclosed; and (z) within 18 months after such termination, GLB shall
have entered into an agreement relating to an Acquisition Proposal or
any Acquisition Proposal shall have been consummated; or
(b) after receiving an Acquisition Proposal, the GLB
Board does not take action within the time period set forth in Section
8.01(c) to convene the GLB Meeting and recommend that GLB shareholders
adopt this Agreement; and within 18 months after such receipt, GLB
shall have entered into an agreement relating to an Acquisition
Proposal or any Acquisition Proposal shall have been consummated.
Upon payment of the fee described in this Section 8.03, GLB
shall have no further liability to Sky at law or in equity with respect
to such termination under Section 8.01(b)(ii) or 8.01(d)(ii), or with
respect to this Agreement.
8.04 Force Majeure. Notwithstanding anything to the contrary in
this Agreement, in the event this Agreement is terminated as a result of a
failure of a condition, which failure is due to a natural disaster or other act
of God, or an act of war or terrorism, and provided no party has failed to
observe the material obligations of such party under this Agreement, no party
shall be obligated to pay to the other party to this Agreement any fees or
expenses or otherwise be liable hereunder.
ARTICLE IX
Miscellaneous
9.01 Survival. No representations, warranties, agreements and
covenants contained in this Agreement shall survive the Effective Time (other
than Sections 6.05(b), 6.12, 6.13, 6.16 and this Article IX which shall survive
the Effective Time) or the termination of this Agreement if this Agreement is
terminated prior to the Effective Time (other than Sections 6.03(b), 6.04,
6.05(b), 8.02, and this Article IX which shall survive such termination).
9.02 Waiver; Amendment. Prior to the Effective Time, any provision
of this Agreement may be (i) waived by the party benefited by the provision, or
(ii) amended or modified at any time, by an agreement in writing between the
parties hereto executed in the same manner as this Agreement, except that after
the GLB Meeting, this Agreement may not be amended if it would violate Section
1701.78(G) of the OGCL or the federal securities laws.
9.03 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
9.04 Governing Law. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Ohio applicable to
contracts made and to be performed
43
entirely within such State (except to the extent that mandatory provisions of
federal law are applicable).
9.05 Expenses. Each party hereto will bear all expenses incurred by
it in connection with this Agreement and the transactions contemplated hereby,
except that printing and mailing expenses shall be shared equally between GLB
and Sky. All fees to be paid to Regulatory Authorities and the SEC in connection
with the transactions contemplated by this Agreement shall be borne by Sky.
9.06 Notices. All notices, requests and other communications
hereunder to a party shall be in writing and shall be deemed given if personally
delivered, telecopied (with confirmation) or mailed by registered or certified
mail (return receipt requested) to such party at its address set forth below or
such other address as such party may specify by notice to the parties hereto.
If to GLB, to:
GLB Bancorp, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., President and CEO
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.L.L.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Sky, to:
Sky Financial Group, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: M. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
44
9.07 Entire Understanding; No Third Party Beneficiaries. This
Agreement and all schedules and exhibits attached hereto, together with that
certain voting agreement by and among Sky and certain GLB shareholders (an
executed copy of which has been delivered to Sky prior to the execution of this
Agreement), represent the entire understanding of the parties hereto with
reference to the transactions contemplated hereby and thereby and this Agreement
supersedes any and all other oral or written agreements heretofore made (other
than any such separate agreement). Except for Sections 3.01, 6.12 and 6.13
hereof, nothing in this Agreement, whether express or implied, is intended to
confer upon any person, other than the parties hereto or their respective
successors, any rights, remedies, obligations or liabilities under or by reason
of this Agreement.
9.08 Interpretation; Effect. When a reference is made in this
Agreement to Sections, Exhibits or Schedules, such reference shall be to a
Section of, or Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and are not part of this Agreement. Whenever the
words "include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation."
9.09 Waiver of Jury Trial. Each of the parties hereto hereby
irrevocably waives any and all right to trial by jury in any legal proceeding
arising out of or related to this Agreement or the transactions contemplated
hereby.
[Signature Page Follows]
45
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
GLB BANCORP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: President and CEO
SKY FINANCIAL GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman, President and CEO
S-1
EXHIBIT A
FORM OF GLB AFFILIATE AGREEMENT
_____________, 2003
Sky Financial Group, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I have been advised that as of the date hereof I may be deemed to be an
"affiliate" of GLB Bancorp, Inc. ("GLB"), as that term is defined for purposes
of Paragraphs (c) and (d) of Rule 145 of the Rules and Regulations (the "Rules
and Regulations") of the Securities and Exchange Commission (the "Commission")
promulgated under the Securities Act of 1933, as amended (the "Act").
Pursuant to the terms of the Agreement and Plan of Merger by and
between Sky Financial Group, Inc. ("Sky") and GLB dated as of July 15, 2003 (the
"Merger Agreement"), providing for the merger of GLB with and into Sky (the
"Merger"), and as a result of the Merger, I may receive Sky common shares ("Sky
Common Shares") in exchange for GLB common shares ("GLB Common Shares") owned by
me at the Effective Time (as defined and determined pursuant to the Merger
Agreement). This letter is being delivered pursuant to Section 6.07 of the
Merger Agreement. I represent and warrant to Sky that in such event:
A. I will not sell, assign or transfer the Sky Common Shares that
I receive as aforesaid in violation of the Act or the Rules and Regulations.
B. I have carefully read this letter and the Merger Agreement and
have discussed their requirements and other applicable limitations upon my
ability to sell, transfer or otherwise dispose of the Sky Common Shares, to the
extent I feel necessary, with my counsel or counsel for GLB. I understand that
Sky is relying on the representations I am making in this letter and I hereby
agree to hold harmless and indemnify Sky and its officers and directors from and
against any losses, claims, damages, expenses (including reasonable attorneys'
fees), or liabilities ("Losses") to which Sky or any officer or director of Sky
may become subject under the Act or otherwise as a result of the untruth,
breach, or failure of such representations.
C. I have been advised that the issuance of the Sky Financial
Common Shares issued to me pursuant to the Merger will have been registered with
the Commission under the Act on a Registration Statement on Form S-4. However, I
have also been advised that since I may be deemed to be an affiliate under the
Rules and Regulations at the time the Merger was submitted for a vote of the
shareholders of GLB, that the Sky Common Shares must be held by me
A-1
indefinitely unless (i) my subsequent distribution of Sky Common Shares has been
registered under the Act; (ii) a sale of the Sky Common Shares is made in
conformity with the volume and other applicable limitations of a transaction
permitted by Rule 145 promulgated by the Commission under the Act and as to
which Sky has received satisfactory evidence of the compliance and conformity
with said Rule, or (iii) a transaction in which, in the opinion of Squire,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P. (or other counsel reasonably acceptable to Sky) or in
accordance with a no-action letter from the Commission, some other exemption
from registration is available with respect to any such proposed sale, transfer
or other disposition of the Sky Common Shares.
D. I also understand that stop transfer instructions will be
given to Sky's transfer agent with respect to any Sky Common Shares that I
receive in the Merger and that there will be placed on the certificates for such
Sky Common Shares, a legend stating in substance:
"The shares represented by this certificate have been issued
or transferred to the registered holder as a result of a transaction to
which Rule 145 under the Securities Act of 1933, as amended (the
"Act"), applies. The shares represented by this certificate may not be
sold, transferred or assigned, and the issuer shall not be required to
give effect to any attempted sale, transfer or assignment, except
pursuant to (i) an effective registration statement under the Act, (ii)
a transaction permitted by Rule 145 and as to which the issuer has
received reasonable and satisfactory evidence of compliance with the
provisions of Rule 145, or (iii) a transaction in which, in the opinion
of Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P. or other counsel satisfactory to
the issuer or in accordance with a "no action" letter from the staff of
the Securities and Exchange Commission, such shares are not required to
be registered under the Act."
A-2
It is understood and agreed that the legend set forth in Paragraph D
above shall be promptly removed and any stop order instructions with respect
thereto shall be canceled upon receipt of advice from Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
L.L.P., or other counsel satisfactory to Sky, that such actions are appropriate
under the then-existing circumstances. Such advice of Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
L.L.P. shall be given promptly at no cost to such affiliate, upon receipt of
reasonably satisfactory evidence of compliance with Rule 145.
Very truly yours,
Date: _____________, 2003 ______________________________________
(Name of Affiliate)
PLEASE PRINT YOUR NAME HERE:
______________________________________
Accepted this _____ day of
__________, 2003
SKY FINANCIAL GROUP, INC.
By ___________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman, President and CEO
A-3
EXHIBIT B
PEER GROUP COMMERCIAL FINANCIAL INSTITUTIONS FOR
INDEX PURSUANT TO SECTION 8.01(e)
SKYF GLBK MERGER TERMINATION TRIGGERS
Recommended
July 15 GLBK
Shares Share Market Index
Company Outstanding Price Capitalization Weighting
------- ----------- ----- -------------- -----------
AMCORE Financial, Inc. AMFI 24,849,209 24.30 603,835,779 1.1496%
Associated Banc-Corp. ASBC 73,970,806 38.23 2,827,903,913 5.3838%
Banknorth Group, Inc. BNK 163,881,000 26.87 4,403,482,470 8.3834%
Citizens Banking Company CBCF 43,265,567 26.67 1,153,892,672 2.1968%
Commerce Bancshares, Inc. CBSH 66,230,707 41.90 2,775,066,623 5.2832%
Charter One Financial, Inc. CF 225,005,000 31.00 6,975,155,000 13.2794%
Community First Bankshares, Inc. CFBX 38,447,050 28.13 1,081,515,517 2.0590%
First Commonwealth Financial Corporation FCF 59,004,000 13.40 790,653,600 1.5053%
First Midwest Bancorp, Inc. FMBI 46,598,763 29.77 1,387,245,175 2.6411%
FirstMerit Corporation FMER 84,463,971 24.42 2,062,610,172 3.9268%
▇▇▇▇▇▇ Financial Corporation FULT 105,578,000 20.94 2,210,803,320 4.2090%
Huntington Banchares Incorporated HBAN 228,628,958 20.25 4,629,736,400 8.8142%
NBT Bancorp, Inc. NBTB 32,416,670 20.26 656,761,734 1.2504%
North Fork Bancorporation NFB 156,658,000 35.60 5,577,024,800 10.6176%
Old National Bancorp ONB 63,372,000 23.62 1,496,846,640 2.8497%
Provident Financial Group, Inc. PFGI 48,765,906 28.21 1,375,686,208 2.6191%
Park National Corporation PRK 13,754,789 114.25 1,571,484,643 2.9918%
Republic Bancorp, Inc. RBNC 57,527,143 13.90 799,627,288 1.5223%
S&T Bancorp, Inc. STBA 26,327,213 29.40 774,020,062 1.4736%
Susquehanna Bancshares, Inc. SUSQ 39,675,183 24.89 987,515,305 1.8800%
TCF Financial Corporation TCB 72,514,000 42.04 3,048,488,560 5.8038%
United Bankshares, Inc. UBSI 41,647,132 29.75 1,239,002,177 2.3588%
UMB Financial Corporation UMBF 21,754,485 44.29 963,506,141 1.8343%
Valley National Bancorp VLY 93,733,000 27.84 2,609,526,720 4.9681%
WesBanco, Inc. WSBC 20,181,516 26.00 524,719,416 0.9990%
Total 52,526,110,334 100.0000%
B-1
