Common use of Merger Consideration; Conversion of Shares Clause in Contracts

Merger Consideration; Conversion of Shares. (a) At the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, each share of common stock of the Company, $7.50 par value per share, issued and outstanding immediately prior to the Effective Time (“Company Common Stock”), other than Excluded Shares and Dissenting Shares, shall be converted into and become the right to receive the following consideration (and thereupon shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist and shall thereafter represent only the right to receive, upon surrender of such certificate in accordance with Section 1.9(b), the following consideration) (the consideration described in clauses (i) and (ii) below, subject to adjustment in accordance with Section 1.4(d) and Section 8.3(c)(iii), the “Merger Consideration”): (i) Each share of Company Common Stock with respect to which an election to receive cash (a “Cash Election”) has been properly made or deemed made in accordance with Section 1.7 (each a “Cash Electing Share”) shall be converted into the right to receive $307.93 in cash without interest (such per share amount is hereinafter referred to as the “Cash Consideration”); or (ii) Each share of Company Common Stock with respect to which an election to receive stock consideration (a “Stock Election”) has been properly made or deemed made in accordance with Section 1.7 (each a “Stock Electing Share”) shall be converted into the right to receive (such per share amount, together with any cash in lieu of fractional shares of Parent Common Stock to be paid pursuant to Section 1.10, is hereinafter referred to as the “Parent Stock Consideration”) 8.0228 (the “Exchange Ratio”) validly issued, fully paid and nonassessable shares of common stock, par value $4.00 per share, of Parent (the “Parent Common Stock”). (b) The holders of any certificates of Company Common Stock (“Company Stock Certificates”) previously evidencing such shares of Company Common Stock outstanding immediately prior to the Effective Time shall cease to have any rights with respect thereto except as otherwise provided in this Agreement or by law. (c) If, between the date of this Agreement and the Effective Time, shares of Parent Common Stock shall be changed into a different number of shares or a different class of shares by reason of any reclassification, recapitalization, split-up, combination, exchange of shares or readjustment, or if a dividend in the form of Parent Common Stock shall be declared with a record date within such period, then the Exchange Ratio will be appropriately and proportionally adjusted so as to provide the holders of Company Common Stock with the same economic effect as contemplated by this Agreement prior to such event and as so adjusted shall, from and after the date of such event, be the Exchange Ratio. (d) In the event the Closing Balance Sheet reflects Consolidated Stockholders’ Equity less than $71,161,583 (the “Minimum Adjusted Net Worth”), for every $50,000 shortfall thereof (and not, for the avoidance of doubt, any portion thereof), the Cash Consideration shall be reduced by $0.216. If the Closing Balance Sheet reflects Consolidated Stockholders’ Equity equal to or greater than the Minimum Adjusted Net Worth, then there will be no adjustment to the Merger Consideration. As used herein, the term “Consolidated Stockholders’ Equity ” shall mean the consolidated stockholders’ equity of the Company reflected on the Closing Balance Sheet; provided, however, that the following amounts shall be disregarded, and not be taken into account or otherwise reduce such consolidated stockholders’ equity: (i) any changes to the valuation of the Company’s investment portfolio attributed to ASC 320, whether upward or downward, from March 31, 2018 until the date of the Closing Balance Sheet, (ii) the aggregate fees and expenses of attorneys, accountants, consultants, financial advisors and other professional advisors incurred by the Company or any Company Subsidiary in connection with this Agreement or the transactions contemplated hereby, (iii) any amounts paid or payable to any director, officer or employee of the Company or any Company Subsidiary under any contract, severance arrangement, benefit plan or employment practice of the Company or any Company Subsidiary and all other payroll and non-payroll related costs and expenses incurred by the Company or any Company Subsidiary in connection with this Agreement or the transactions contemplated hereby, (iv) costs associated with the termination of the Company’s 401(k) Plan, any Company Stock Plan and any other employee benefit plan, (v) any costs associated with the termination of the Company’s data processing agreement (vi) any negative provisions for loan losses taken by the Company from the date of this Agreement until the date of the Closing Balance Sheet and (vii) any other expenses incurred solely in connection with the transactions contemplated hereby, in each case incurred or to be incurred by the Company or any Company Subsidiary through the Effective Time in connection with this Agreement and the transactions contemplated hereby.

Merger Consideration; Conversion of Shares. (a) At the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, each share of common stock of the Company, $7.50 0.10 par value per shareshare (“Company Common Stock”), issued and outstanding immediately prior to the Effective Time (“other than shares of Company Common Stock”), other than Excluded Shares Stock to be cancelled pursuant to Section 1.5 and Dissenting Shares, ) shall be converted into and become the right to receive the following consideration (and thereupon shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist and shall thereafter represent only the right to receive, upon surrender of such certificate in accordance with Section 1.9(b1.6(c), the following consideration) (the consideration described in clauses (i) and (ii) below, subject to adjustment in accordance with Section 1.4(d) and Section 8.3(c)(iii), the “Merger Consideration”): (i) Each share of Company Common Stock with respect to which an election to receive cash (a “Cash Election”) has been properly made or deemed made in accordance with Section 1.7 1.10 (each a “Cash Electing Share”) shall be converted into the right to receive receive, subject to adjustment in accordance with Section 1.4(d), $307.93 12.87 in cash without interest (such per share amount is hereinafter referred to as the “Cash Consideration”); or (ii) Each share of Company Common Stock with respect to which an election to receive stock consideration (a “Stock Election”) has been properly made or deemed made in accordance with Section 1.7 1.10 (each a “Stock Electing Share”) shall be converted into the right to receive receive, subject to adjustment in accordance with Section 1.4(d) or Section 8.1(c)(iii) (such per share amount, together with any cash in lieu of fractional shares of Parent Common Stock to be paid pursuant to Section 1.101.7, is hereinafter referred to as the “Parent Stock Consideration”) 8.0228 0.495 (the “Exchange Ratio”) validly issued, fully paid and nonassessable shares of common stock, par value $4.00 per share, of Parent (the “Parent Common Stock”). (b) The holders of any certificates of Company Common Stock (“Company Stock Certificates”) previously evidencing such shares of Company Common Stock outstanding immediately prior to the Effective Time shall cease to have any rights with respect thereto except as otherwise provided in this Agreement or by law. (c) If, between the date of this Agreement and the Effective Time, shares of Parent Common Stock shall be changed into a different number of shares or a different class of shares by reason of any reclassification, recapitalization, split-up, combination, exchange of shares or readjustment, or if a stock dividend in the form of Parent Common Stock thereof shall be declared with a record date within such period, then the Exchange Ratio will be appropriately and proportionally adjusted so as to provide the holders of Company Common Stock Electing Shares with the same economic effect as contemplated by this Agreement prior to such event and as so adjusted shall, from and after the date of such event, be the Exchange Ratio. (d) In the event the Closing Balance Sheet reflects Consolidated Stockholders’ Equity less than $71,161,583 80,700,000 (the “Minimum Adjusted Net Worth”), for every $50,000 shortfall thereof (and not, for the avoidance of doubt, any portion thereof), (i) the Cash Consideration shall be reduced by $0.2160.0075 and (ii) the Exchange Ratio shall be reduced by 0.00025. If the Closing Balance Sheet reflects Consolidated Stockholders’ Equity equal to or greater than the Minimum Adjusted Net Worth, then there will be no adjustment to the Merger Consideration. As used herein, the term “Consolidated Stockholders’ Equity ” shall mean the consolidated stockholders’ equity of the Company reflected on the Closing Balance Sheet; provided, however, that the following amounts shall be disregarded, and not be taken into account or otherwise reduce such consolidated stockholders’ equity: (i) any changes to the valuation of the Company’s investment portfolio attributed to ASC 320, whether upward or downward, from March December 31, 2018 2015 until the date of the Closing Balance Sheet, (ii) the aggregate fees and expenses of attorneys, accountants, consultants, financial advisors and other professional advisors incurred by the Company or any Company Subsidiary in connection with this Agreement or the transactions contemplated hereby, (iii) any amounts paid or payable to any director, officer or employee of the Company or any Company Subsidiary under any contract, severance arrangement, benefit plan or employment practice of the Company or any Company Subsidiary and all other payroll and non-payroll related costs and expenses incurred by the Company or any Company Subsidiary in connection with this Agreement or the transactions contemplated hereby, (iv) costs associated with the termination of the Company’s 401(k) Plan, any Company Stock Plan the Company’s Salary Continuation Agreements, and any other employee benefit plan, (v) any costs associated with the termination of the Company’s data processing agreement (vi) any negative provisions for loan losses taken by the Company from the date of this Agreement until the date of the Closing Balance Sheet and (vii) any other expenses incurred solely in connection with the transactions contemplated hereby, in each case incurred or to be incurred by the Company or any Company Subsidiary through the Effective Time in connection with this Agreement and the transactions contemplated hereby.

Merger Consideration; Conversion of Shares. (a) At the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, each share of common stock of the Company, $7.50 par value $0.01 per share, issued and outstanding immediately prior to the Effective Time (“Company Common Stock”), other than Excluded Shares and Dissenting Shares, shall be converted into and become the right to receive 1.15 (the following consideration “Exchange Ratio”) validly issued, fully paid and nonassessable shares of common stock, par value $4.00 per share, of Parent (the “Parent Common Stock”) and thereupon shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist and shall thereafter represent only the right to receive, upon surrender of such certificate in accordance with Section 1.9(b), the following consideration) (the consideration described in clauses (i) and (ii) belowthis Section 1.4(a), subject to adjustment in accordance with Section 1.4(d) and Section 8.3(c)(iii1.4(d)(i), the “Merger Consideration”): (i) Each share of Company Common Stock with respect to which an election to receive cash (a “Cash Election”) has been properly made or deemed made in accordance with Section 1.7 (each a “Cash Electing Share”) shall be converted into the right to receive $307.93 in cash without interest (such per share amount is hereinafter referred to as the “Cash Consideration”); or (ii) Each share of Company Common Stock with respect to which an election to receive stock consideration (a “Stock Election”) has been properly made or deemed made in accordance with Section 1.7 (each a “Stock Electing Share”) shall be converted into the right to receive (such per share amount, together with any cash in lieu of fractional shares of Parent Common Stock to be paid pursuant to Section 1.10, is hereinafter referred to as the “Parent Stock Merger Consideration”) 8.0228 (the “Exchange Ratio”) validly issued, fully paid and nonassessable shares of common stock, par value $4.00 per share, of Parent (the “Parent Common Stock”).): (b) The holders of any certificates of Company Common Stock (“Company Stock Certificates”) previously evidencing such shares of Company Common Stock outstanding immediately prior to the Effective Time shall cease to have any rights with respect thereto except as otherwise provided in this Agreement or by law. (c) If, between the date of this Agreement and the Effective Time, shares of Parent Common Stock shall be changed into a different number of shares or a different class of shares by reason of any reclassification, recapitalization, split-up, combination, exchange of shares or readjustment, or if a dividend in the form of Parent Common Stock shall be declared with a record date within such period, then the Exchange Ratio will be appropriately and proportionally adjusted so as to provide the holders of Company Common Stock with the same economic effect as contemplated by this Agreement prior to such event and as so adjusted shall, from and after the date of such event, be the Exchange Ratio. (d) In the event the Closing Balance Sheet reflects Consolidated Stockholders’ Equity less than $71,161,583 (the “Minimum Adjusted Net Worth”), for every $50,000 shortfall thereof (and not, for the avoidance of doubt, any portion thereof), the Cash Consideration shall be reduced by $0.216. If the Closing Balance Sheet reflects Consolidated Stockholders’ Equity equal to or greater than the Minimum Adjusted Net Worth, then there will be no adjustment to the Merger Consideration. As used herein, the term “Consolidated Stockholders’ Equity ” shall mean the consolidated stockholders’ equity of the Company reflected on the Closing Balance Sheet; provided, however, that the following amounts shall be disregarded, and not be taken into account or otherwise reduce such consolidated stockholders’ equity: (i) any changes to the valuation of the Company’s investment portfolio attributed to ASC 320, whether upward or downward, from March 31, 2018 until the date of the Closing Balance Sheet, (ii) the aggregate fees and expenses of attorneys, accountants, consultants, financial advisors and other professional advisors incurred by the Company or any Company Subsidiary in connection with this Agreement or the transactions contemplated hereby, (iii) any amounts paid or payable to any director, officer or employee of the Company or any Company Subsidiary under any contract, severance arrangement, benefit plan or employment practice of the Company or any Company Subsidiary and all other payroll and non-payroll related costs and expenses incurred by the Company or any Company Subsidiary in connection with this Agreement or the transactions contemplated hereby, (iv) costs associated with the termination of the Company’s 401(k) Plan, any Company Stock Plan and any other employee benefit plan, (v) any costs associated with the termination of the Company’s data processing agreement (vi) any negative provisions for loan losses taken by the Company from the date of this Agreement until the date of the Closing Balance Sheet and (vii) any other expenses incurred solely in connection with the transactions contemplated hereby, in each case incurred or to be incurred by the Company or any Company Subsidiary through the Effective Time in connection with this Agreement and the transactions contemplated hereby.

Merger Consideration; Conversion of Shares. (a) At the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, each share of common stock of the Company, $7.50 10.00 par value per share, issued and outstanding immediately prior to the Effective Time (“Company Common Stock”), other than Excluded Shares and Dissenting Shares, shall be converted into and become the right to receive the following consideration (and thereupon shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist and shall thereafter represent only the right to receive, upon surrender of such certificate in accordance with Section 1.9(b), the following consideration) (the consideration described in clauses (i) and (ii) below, subject to adjustment in accordance with Section 1.4(d) and Section 8.3(c)(iii), the “Merger Consideration”): (i) Each $352.26 per share of Company Common Stock with respect to which an election to receive cash (a “Cash Election”) has been properly made or deemed made in accordance with Section 1.7 (each a “Cash Electing Share”) shall be converted into the right to receive $307.93 in cash without interest (such per share amount is hereinafter referred to as the “Cash Consideration”); orand (ii) Each share of Company Common Stock with respect to which an election to receive stock consideration (a “Stock Election”) has been properly made or deemed made in accordance with Section 1.7 (each a “Stock Electing Share”) shall be converted into the right to receive (such per share amount, together with any cash in lieu of fractional shares of Parent Common Stock to be paid pursuant to Section 1.10, is hereinafter referred to as the “Parent Stock Consideration”) 8.0228 55.1061 (the “Exchange Ratio”) validly issued, fully paid and nonassessable shares of common stock, par value $4.00 per share, of Parent (the “Parent Common Stock”) (such per share amount, together with any cash in lieu of fractional shares of Parent Common Stock to be paid pursuant to Section 1.8, is hereinafter referred to as the “Parent Stock Consideration”). (b) The holders of any certificates of Company Common Stock (“Company Stock Certificates”) previously evidencing such shares of Company Common Stock outstanding immediately prior to the Effective Time shall cease to have any rights with respect thereto except as otherwise provided in this Agreement or by law. (c) If, between the date of this Agreement and the Effective Time, shares of Parent Common Stock shall be changed into a different number of shares or a different class of shares by reason of any reclassification, recapitalization, split-up, combination, exchange of shares or readjustment, or if a dividend in the form of Parent Common Stock shall be declared with a record date within such period, then the Exchange Ratio will be appropriately and proportionally adjusted so as to provide the holders of Company Common Stock with the same economic effect as contemplated by this Agreement prior to such event and as so adjusted shall, from and after the date of such event, be the Exchange Ratio. (d) In the event the Closing Balance Sheet reflects Consolidated StockholdersShareholders’ Equity less than $71,161,583 75,411,189 (the “Minimum Adjusted Net Worth”), for every $50,000 shortfall thereof (and not, for the avoidance of doubt, any portion thereof), the Cash Consideration shall be reduced by $0.216. If the Closing Balance Sheet reflects Consolidated Stockholders’ Equity equal to or greater than the Minimum Adjusted Net Worth, then there will be no adjustment to the Merger Consideration. As used herein, the term “Consolidated Stockholders’ Equity ” shall mean the consolidated stockholders’ equity of the Company reflected on the Closing Balance Sheet; provided, however, that the following amounts shall be disregarded, and not be taken into account or otherwise reduce such consolidated stockholders’ equity: (i) any changes to the valuation of the Company’s investment portfolio attributed to ASC 320, whether upward or downward, from March 31, 2018 until the date of the Closing Balance Sheet, (ii) the aggregate fees and expenses of attorneys, accountants, consultants, financial advisors and other professional advisors incurred by the Company or any Company Subsidiary in connection with this Agreement or the transactions contemplated hereby, (iii) any amounts paid or payable to any director, officer or employee of the Company or any Company Subsidiary under any contract, severance arrangement, benefit plan or employment practice of the Company or any Company Subsidiary and all other payroll and non-payroll related costs and expenses incurred by the Company or any Company Subsidiary in connection with this Agreement or the transactions contemplated hereby, (iv) costs associated with the termination of the Company’s 401(k) Plan, any Company Stock Plan and any other employee benefit plan, (v) any costs associated with the termination of the Company’s data processing agreement (vi) any negative provisions for loan losses taken by the Company from the date of this Agreement until the date of the Closing Balance Sheet and (vii) any other expenses incurred solely in connection with the transactions contemplated hereby, in each case incurred or to be incurred by the Company or any Company Subsidiary through the Effective Time in connection with this Agreement and the transactions contemplated hereby1.

Merger Consideration; Conversion of Shares. (a) At the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, each share of common stock of the Company, $7.50 0.01 par value per shareshare (“Company Common Stock”), issued and outstanding immediately prior to the Effective Time (“other than shares of Company Common Stock”), other than Excluded Shares Stock to be cancelled pursuant to Section 1.5 and Dissenting Shares, ) shall be converted into and become the right to receive the following consideration (and thereupon shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist and shall thereafter represent only the right to receive, upon surrender of such certificate in accordance with Section 1.9(b1.6(c), the following consideration) (the consideration described in clauses (i) and (ii) below, subject to adjustment in accordance with Section 1.4(d) and Section 8.3(c)(iii), the “Merger Consideration”): (i) Each share of Company Common Stock with respect to which an election to receive cash (a “Cash Election”) has been properly made or deemed made in accordance with Section 1.7 (each a “Cash Electing Share”) shall be converted into the right to receive $307.93 5.00 in cash without interest (such per share amount is hereinafter referred to as the “Cash Consideration”); orand (ii) Each share of Company Common Stock with respect subject to which an election to receive stock consideration (a “Stock Election”) has been properly made or deemed made adjustment in accordance with Section 1.7 (each a “Stock Electing Share”1.4(d) shall be converted into the right to receive or Section 8.3(c)(iii), (such per share amount, together with any cash in lieu of fractional shares of Parent Common Stock to be paid pursuant to Section 1.101.7, is hereinafter referred to as the “Parent Stock Consideration”) 8.0228 0.80 (the “Exchange Ratio”) validly issued, fully paid and nonassessable shares of common stock, par value $4.00 per share, of Parent (the “Parent Common Stock”). (b) The holders of any certificates of Company Common Stock (“Company Stock Certificates”) previously evidencing such shares of Company Common Stock outstanding immediately prior to the Effective Time shall cease to have any rights with respect thereto except as otherwise provided in this Agreement or by law. (c) If, between the date of this Agreement and the Effective Time, shares of Parent Common Stock shall be changed into a different number of shares or a different class of shares by reason of any reclassification, recapitalization, split-up, combination, exchange of shares or readjustment, or if a dividend in the form of Parent Common Stock shall be declared with a record date within such period, then the Exchange Ratio will be appropriately and proportionally adjusted so as to provide the holders of Company Common Stock with the same economic effect as contemplated by this Agreement prior to such event and as so adjusted shall, from and after the date of such event, be the Exchange Ratio. (d) In the event the Closing Balance Sheet reflects Consolidated Stockholders’ Equity less than $71,161,583 47,100,000 (the “Minimum Adjusted Net Worth”), for every $50,000 shortfall thereof (and not, for the avoidance of doubt, any portion thereof), the Cash Consideration shall be reduced by $0.2160.00339. If the Closing Balance Sheet reflects Consolidated Stockholders’ Equity equal to or greater than the Minimum Adjusted Net Worth, then there will be no adjustment to the Merger Consideration. As used herein, the term “Consolidated Stockholders’ Equity ” shall mean the consolidated stockholders’ equity of the Company reflected on the Closing Balance Sheet; provided, however, that and not withstanding any provision in this Agreement to the contrary, the following amounts shall be disregarded, and not be taken into account or otherwise reduce such consolidated stockholders’ equity: (i) any changes to the valuation of the Company’s investment portfolio attributed to ASC 320, whether upward or downward, from March 31September 30, 2018 2017 until the date of the Closing Balance Sheet, (ii) any changes to the valuation of the Company’s deferred tax asset resulting from any amendments or changes to the Code enacted after the date of this Agreement; (iii) the aggregate fees and expenses of attorneys, accountants, consultants, financial advisors and other professional advisors incurred by the Company or any Company Subsidiary in connection with this Agreement or the transactions contemplated hereby, (iiiiv) any amounts paid or payable to any director, officer or employee of the Company or any Company Subsidiary under any contract, severance arrangement, benefit plan or employment practice of the Company or any Company Subsidiary and all other payroll and non-payroll related costs and expenses incurred by the Company or any Company Subsidiary in connection with this Agreement or the transactions contemplated hereby, (ivv) costs associated with the termination of the Company’s 401(k) Plan, any Company Stock Plan employee stock ownership plan, Recognition and Retention Plan, and any other employee benefit plan, (vvi) any costs associated with the termination of the Company’s data processing agreement (vivii) any negative provisions for loan losses taken by the Company from the date of this Agreement until the date of the Closing Balance Sheet and (viiviii) any other expenses incurred solely in connection with the transactions contemplated hereby, in each case incurred or to be incurred by the Company or any Company Subsidiary through the Effective Time in connection with this Agreement and the transactions contemplated hereby.

Merger Consideration; Conversion of Shares. (a) At the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, each share of common stock of the Company, $7.50 1.00 par value per share, issued and outstanding immediately prior to the Effective Time (“Company Common Stock”), other than Excluded Shares and Dissenting Shares, shall be converted into and become the right to receive the following consideration (and thereupon shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist and shall thereafter represent only the right to receive, upon surrender of such certificate in accordance with Section 1.9(b), the following consideration) (the consideration described in clauses (i) and (ii) below, subject to adjustment in accordance with Section 1.4(d) and Section 8.3(c)(iii), the “Merger Consideration”): (i) Each share ): As set forth on, and in accordance with, Schedule 1.4(a), the shares of Company Common Stock with respect to which an election to receive cash (a “Cash Election”) has been properly made or deemed made in accordance with Section 1.7 (each a “Cash Electing Share”) shall be converted into the right to receive receive: (i) the aggregate amount of $307.93 116,500,000, less the Special Dividend Amount, in cash without interest allocated among the Sellers as provided on Schedule 1.4(a) (such per share aggregate amount of cash less the Special Dividend Amount is hereinafter referred to as the “Cash Consideration”); or , and (ii) Each share an aggregate of Company Common Stock with respect to which an election to receive stock consideration (a “Stock Election”) has been properly made or deemed made in accordance with Section 1.7 (each a “Stock Electing Share”) shall be converted into the right to receive (such per share amount, together with any cash in lieu of fractional shares of Parent Common Stock to be paid pursuant to Section 1.10, is hereinafter referred to as the “Parent Stock Consideration”) 8.0228 (the “Exchange Ratio”) 1,262,246 validly issued, fully paid and nonassessable shares of common stock, par value $4.00 per share, of Parent (the “Parent Common Stock”) (such per share amount, together with any cash in lieu of fractional shares of Parent Common Stock to be paid pursuant to Section 1.6, is hereinafter referred to as the “Parent Stock Consideration”) allocated among the Sellers as provided on Schedule 1.4(a). In accordance with Section 1.4(d), the Cash Consideration is subject to adjustment. (b) The holders of any certificates of Company Common Stock (“Company Stock Certificates”) previously evidencing such shares of Company Common Stock outstanding immediately prior to the Effective Time shall cease to have any rights with respect thereto except as otherwise provided in this Agreement or by law. (c) If, between the date of this Agreement and the Effective Time, shares of Parent Common Stock shall be changed into a different number of shares or a different class of shares by reason of any reclassification, recapitalization, split-up, combination, exchange of shares or readjustment, or if a dividend in the form of Parent Common Stock shall be declared with a record date within such period, then the Exchange Ratio aggregate number of shares included in the Parent Stock Consideration will be appropriately and proportionally adjusted so as to provide the holders of Company Common Stock with the same economic effect as contemplated by this Agreement prior to such event and as so adjusted shall, from and after the date of such event, be the Exchange Ratio. (d) In the event the Closing Balance Sheet reflects Consolidated Stockholders’ Equity less than $71,161,583 169,682,102.00 (the “Minimum Adjusted Net Worth”), for every $50,000 50,000.00 shortfall thereof (and not, for the avoidance of doubt, any portion thereof), the Cash Consideration shall be reduced by an aggregate amount equal to $0.21639,000.00, to be applied pro rata to each share receiving Cash Consideration as set forth on Schedule 1.4(a). If the Closing Balance Sheet reflects Consolidated StockholdersShareholders’ Equity equal to or greater than the Minimum Adjusted Net Worth, then there will be no adjustment to the Merger Consideration. As used herein, the term “Consolidated StockholdersShareholders’ Equity Equity” shall mean the consolidated stockholdersshareholders’ equity of the Company reflected on the Closing Balance Sheet; provided, however, that the following amounts shall be disregarded, and not be taken into account or otherwise reduce such consolidated stockholdersshareholders’ equity: (i) any changes to the valuation of the Company’s investment portfolio attributed to ASC 320, whether upward or downward, from March 31June 30, 2018 2020 until the date of the Closing Balance Sheet, (ii) the aggregate fees and expenses of attorneys, accountants, consultants, financial advisors and other professional advisors incurred by the Company or any Company Subsidiary in connection with this Agreement or the transactions contemplated hereby, (iii) any amounts paid or payable to any director, officer or employee of the Company or any Company Subsidiary under any contract, severance arrangement, benefit plan or employment practice of the Company or any Company Subsidiary and all other payroll and non-payroll related costs and expenses incurred by the Company or any Company Subsidiary in connection with this Agreement or the transactions contemplated hereby, (iv) costs associated with the termination of the Company’s 401(k) Plan, any Company Stock Plan and any other employee benefit planplans, (v) any costs associated with the termination of the Company’s and Company Subsidiaries’ data processing agreement and other contracts, (vi) any negative provisions for loan losses taken by the Company from the date of this Agreement until the date of the Closing Balance Sheet and (vii) any other expenses incurred solely in connection with the transactions contemplated hereby, in each case incurred or to be incurred by the Company or any Company Subsidiary through the Effective Time in connection with this Agreement and the transactions contemplated hereby.

Merger Consideration; Conversion of Shares. (a) At Subject to Sections 1.8(c) and 1.9, the consideration payable in the Merger to holders of (i) shares of Company Common Stock (including all shares of Company Common Stock issued upon conversion of all preferred stock ($0.01 par value per share) of the Company ("Company Preferred Stock") and upon exercise of any Company Warrant prior to the Closing) and (ii) shares of Company Preferred Stock that have not previously been converted to Company Common Stock, outstanding immediately prior to the Effective Time, shall consist of the consideration in Section 1.5(f) (payable to the Stockholders' Agent) and of shares of the common stock (par value $0.001 per share) of Parent ("Parent Common Stock"), such shares of Parent Common Stock to have such rights as are set forth in the Certificate of Incorporation of Parent and to be issuable solely in accordance with the terms of this Agreement. The Parent Common Stock to be received as consideration pursuant to the Merger by each holder of shares of Company Common Stock (including all shares of Company Common Stock issued upon conversion of all Company Preferred Stock and upon exercise of any Company Warrant prior to the Closing, together with cash in lieu of fractional shares of Parent Common Stock, as specified below) and Company Preferred Stock is referred to herein as the "Merger Consideration." (b) Subject to Sections 1.8(c) and 1.9, at the Effective Time, by virtue of the Merger and without any further action on the part of Parent, Merger Sub, the holder thereof, Company or any stockholder of the Company: (i) each share of common stock Company Common Stock (including (x) all shares of Company Common Stock issued upon conversion of all Company Preferred Stock and (y) all shares of Company Common Stock issued upon exercise of any Company Warrant prior to the CompanyClosing) and each share of Company Preferred Stock that has not previously been converted to Company Common Stock, $7.50 par value per share, issued and outstanding immediately prior to the Effective Time (“Company Common Stock”), other than Excluded Shares and Dissenting Shares, for which appraisal rights have not been exercised under the Delaware General Corporation Law shall be converted into and become the right to receive the following consideration (and thereupon shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist and shall thereafter represent only the right to receive, upon surrender of such certificate in accordance with Section 1.9(b), the following consideration) (the consideration described in clauses (i) and (ii) below, subject to adjustment in accordance with Section 1.4(d) and Section 8.3(c)(iii), the “Merger Consideration”): (i) Each share of Company Common Stock with respect to which an election to receive cash (a “Cash Election”) has been properly made or deemed made in accordance with Section 1.7 (each a “Cash Electing Share”) shall be converted into the right to receive $307.93 in cash without interest the Applicable Fraction (such per as defined below) of a share amount is hereinafter referred to as the “Cash Consideration”); or (ii) Each share of Company Common Stock with respect to which an election to receive stock consideration (a “Stock Election”) has been properly made or deemed made in accordance with Section 1.7 (each a “Stock Electing Share”) shall be converted into the right to receive (such per share amount, together with any cash in lieu of fractional shares of Parent Common Stock and a cash payment (payable to the Stockholders' Agent) as set forth in Section 1.5(f) below. The "Applicable Fraction" shall be paid pursuant the fraction (rounded to Section 1.10, is hereinafter referred the nearest five decimal points) (A) having a numerator equal to the Merger Consideration Shares (as defined below) and (B) having a denominator equal to the “Parent Stock Consideration”) 8.0228 (the “Exchange Ratio”) validly issued, fully paid and nonassessable shares Fully Diluted Number of common stock, par value $4.00 per share, Company Shares. The number of Parent (the “Parent Common Stock”)."Merger Consideration Shares" shall be calculated as follows: (b) The holders of any certificates of Company Common Stock (“Company Stock Certificates”) previously evidencing such shares of Company Common Stock outstanding immediately prior to the Effective Time shall cease to have any rights with respect thereto except as otherwise provided in this Agreement or by law. (c) If, between the date of this Agreement and the Effective Time, shares of Parent Common Stock shall be changed into a different number of shares or a different class of shares by reason of any reclassification, recapitalization, split-up, combination, exchange of shares or readjustment, or if a dividend in the form of Parent Common Stock shall be declared with a record date within such period, then the Exchange Ratio will be appropriately and proportionally adjusted so as to provide the holders of Company Common Stock with the same economic effect as contemplated by this Agreement prior to such event and as so adjusted shall, from and after the date of such event, be the Exchange Ratio. (d1) In the event the Parent Average Closing Balance Sheet reflects Consolidated Stockholders’ Equity Price (as defined below) shall be less than $71,161,583 27.72550 (the “Minimum Adjusted Net Worth”"Lower Collar"), for every then the number of Merger Consideration Shares shall be equal to 8,799,605; (2) In the event the Parent Average Closing Price shall be greater than $50,000 shortfall thereof 34.02675 (and not, for the avoidance of doubt, any portion thereof"Upper Collar"), then the Cash number of Merger Consideration Shares shall be reduced by $0.216. If equal to 7,170,048; and (3) In the event the Parent Average Closing Balance Sheet reflects Consolidated Stockholders’ Equity Price shall be equal to or greater than the Minimum Adjusted Net WorthLower Collar and equal to or less than the Upper Collar, then there will be no adjustment to the number of Merger Consideration. As used herein, the term “Consolidated Stockholders’ Equity ” shall mean the consolidated stockholders’ equity of the Company reflected on the Closing Balance Sheet; provided, however, that the following amounts Consideration Shares shall be disregarded, and not be taken into account or otherwise reduce such consolidated stockholders’ equity: (i) any changes equal to the valuation of the Company’s investment portfolio attributed to ASC 320, whether upward or downward, from March 31, 2018 until the date of the Closing Balance Sheet, (ii) the aggregate fees and expenses of attorneys, accountants, consultants, financial advisors and other professional advisors incurred 243,973,438 divided by the Company or any Company Subsidiary in connection with this Agreement or the transactions contemplated hereby, (iii) any amounts paid or payable to any director, officer or employee of the Company or any Company Subsidiary under any contract, severance arrangement, benefit plan or employment practice of the Company or any Company Subsidiary and all other payroll and non-payroll related costs and expenses incurred by the Company or any Company Subsidiary in connection with this Agreement or the transactions contemplated hereby, (iv) costs associated with the termination of the Company’s 401(k) Plan, any Company Stock Plan and any other employee benefit plan, (v) any costs associated with the termination of the Company’s data processing agreement (vi) any negative provisions for loan losses taken by the Company from the date of this Agreement until the date of the Parent Average Closing Balance Sheet and (vii) any other expenses incurred solely in connection with the transactions contemplated hereby, in each case incurred or to be incurred by the Company or any Company Subsidiary through the Effective Time in connection with this Agreement and the transactions contemplated herebyPrice.

Merger Consideration; Conversion of Shares. (a) Subject to the terms and conditions hereof, as consideration for the Merger, Parent shall pay (in the manner set forth in Section 2.6 of this Agreement) an aggregate of $26,500,000 in cash, as adjusted prior to the Closing pursuant to Section 2.8 of this Agreement (the “Merger Consideration”). (b) At the Effective Time, by virtue of the Merger and without any further corporate action on the part of the holder thereofholders of the Shares and provided that, prior to the Effective Time, the Company shall have taken all actions necessary so that all outstanding options and warrants shall have been exercised or converted into Shares or terminated immediately prior to the Effective Time: (i) each share of common stock of the Company, $7.50 par value per share, Series A Preferred issued and outstanding immediately prior to the Effective Time (“Company Common Stock”)Time, if any, other than Excluded Shares any shares of Series A Preferred to be canceled pursuant to Section 2.5(b)(v) and any Dissenting Shares, shall be converted into and become the right to receive the following consideration (and thereupon shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist and shall thereafter represent only the right to receive, upon surrender of such certificate in accordance with Section 1.9(b), the following consideration) (the consideration described in clauses (i) and (ii) below, subject to adjustment in accordance with Section 1.4(d) and Section 8.3(c)(iii), the “Merger Consideration”): (i) Each share of Company Common Stock with respect to which an election to receive cash (a “Cash Election”) has been properly made or deemed made in accordance with Section 1.7 (each a “Cash Electing Share”) shall be converted into the right to receive $307.93 in cash without interest (such per share amount is hereinafter referred to as the “Cash Series A Per Share Consideration”); or; (ii) Each each share of Company Common Stock with respect the Series B Preferred issued and outstanding immediately prior to which an election the Effective Time, if any, other than any shares of Series B Preferred to receive stock consideration (a “Stock Election”be canceled pursuant to Section 2.5(b)(v) has been properly made or deemed made in accordance with Section 1.7 (each a “Stock Electing Share”) and any Dissenting Shares, shall automatically be converted into the right to receive the Series B Per Share Consideration; (such per iii) each share amountof the Series C Preferred issued and outstanding immediately prior to the Effective Time, together with if any, other than any cash in lieu of fractional shares of Parent Series C Preferred Stock to be canceled pursuant to Section 2.5(b)(v) and any Dissenting Shares, shall automatically be converted into the right to receive the Series C Per Share Consideration; (iv) each share of Common Stock issued and outstanding immediately prior to the Effective Time, other than any shares of Common Stock to be paid canceled pursuant to Section 1.102.5(b)(v) and any Dissenting Shares, is hereinafter referred shall automatically be converted into the right to as receive the “Parent Stock Common Per Share Consideration”) 8.0228 (the “Exchange Ratio”) validly issued, fully paid and nonassessable shares of common stock, par value $4.00 per share, of Parent (the “Parent Common Stock”).; and (bv) The holders of any certificates of each Share owned directly by the Company Common Stock (“Company Stock Certificates”) previously evidencing such shares of Company Common Stock outstanding immediately prior to the Effective Time shall cease to have be automatically canceled and extinguished without any rights with respect thereto except as otherwise provided in this Agreement exchange thereof and without any further action on the part of Parent, Acquisition Sub or by lawthe Surviving Corporation. (c) If, between the date of this Agreement and the Effective Time, All shares of Parent Common Stock shall be changed into a different number common stock of shares or a different class Acquisition Sub outstanding as of shares by reason of any reclassification, recapitalization, split-up, combination, exchange of shares or readjustment, or if a dividend in the form of Parent Common Stock shall be declared with a record date within such period, then the Exchange Ratio will be appropriately and proportionally adjusted so as to provide the holders of Company Common Stock with the same economic effect as contemplated by this Agreement prior to such event and as so adjusted shall, from and after the date of such event, be the Exchange Ratio. (d) In the event the Closing Balance Sheet reflects Consolidated Stockholders’ Equity less than $71,161,583 (the “Minimum Adjusted Net Worth”), for every $50,000 shortfall thereof (and not, for the avoidance of doubt, any portion thereof), the Cash Consideration shall be reduced by $0.216. If the Closing Balance Sheet reflects Consolidated Stockholders’ Equity equal to or greater than the Minimum Adjusted Net Worth, then there will be no adjustment to the Merger Consideration. As used herein, the term “Consolidated Stockholders’ Equity ” shall mean the consolidated stockholders’ equity of the Company reflected on the Closing Balance Sheet; provided, however, that the following amounts shall be disregarded, and not be taken into account or otherwise reduce such consolidated stockholders’ equity: (i) any changes to the valuation of the Company’s investment portfolio attributed to ASC 320, whether upward or downward, from March 31, 2018 until the date of the Closing Balance Sheet, (ii) the aggregate fees and expenses of attorneys, accountants, consultants, financial advisors and other professional advisors incurred by the Company or any Company Subsidiary in connection with this Agreement or the transactions contemplated hereby, (iii) any amounts paid or payable to any director, officer or employee of the Company or any Company Subsidiary under any contract, severance arrangement, benefit plan or employment practice of the Company or any Company Subsidiary and all other payroll and non-payroll related costs and expenses incurred by the Company or any Company Subsidiary in connection with this Agreement or the transactions contemplated hereby, (iv) costs associated with the termination of the Company’s 401(k) Plan, any Company Stock Plan and any other employee benefit plan, (v) any costs associated with the termination of the Company’s data processing agreement (vi) any negative provisions for loan losses taken by the Company from the date of this Agreement until the date of the Closing Balance Sheet and (vii) any other expenses incurred solely in connection with the transactions contemplated hereby, in each case incurred or to be incurred by the Company or any Company Subsidiary through the Effective Time shall, in connection with this Agreement and the transactions contemplated herebyaggregate, be converted into one share of common stock of the Surviving Corporation.

Merger Consideration; Conversion of Shares. (a) As consideration for the exchange of the Company's common stock for shares of common stock of Parent, as further described in this Section 1.7(a), the holders of the Company's common stock shall receive, in the aggregate, One Hundred Seventy-Five Thousand ($175,000) dollars, payable in shares of common stock of Parent, valued on the basis of the average closing price per share of Parent for the thirty (30) trading days immediately preceding the date of public disclosure of the transactions contemplated herein, as determined by the date of filing by Parent of a Form 8-K with the United States Securities and Exchange Commission (the "Share Consideration"). At the Effective TimeDate, each share of common stock, no par value per share, of the Company's common stock issued and outstanding immediately prior to the Effective Date (other than shares of Company common stock held in the Company's treasury or by any of the Company's subsidiaries) shall, by virtue of the Merger and without any action on the part of the holder thereof, each share of common stock any of the Companyparties, $7.50 par value per share, issued and outstanding immediately prior to the Effective Time (“Company Common Stock”), other than Excluded Shares and Dissenting Shares, shall be converted into and shall become the right to receive the following consideration (and thereupon Share Consideration, in the individual amounts provided on Schedule I attached hereto. In addition to the Share Consideration, the shareholders of record of the Company shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist and shall thereafter represent only the right to receive, upon surrender in the aggregate, commencing with the first fiscal quarter following the Effective Date, twenty-five percent (25%) of such certificate the after-tax net profits of the Company, computed in accordance with Section 1.9(bgenerally accepted accounting principles consistently applied ("GAAP"), until such shareholders shall have received, in the following considerationaggregate, Five Million ($5,000,000) dollars (the consideration described in clauses (i) and (ii) below"Earnout Consideration"), subject such Earnout Consideration to adjustment be paid to the Company's shareholders in accordance with Section 1.4(d) and Section 8.3(c)(iii), the “Merger Consideration”): (i) Each share of Company Common Stock with respect to which an election to receive cash (a “Cash Election”) has been properly made or deemed made in accordance with Section 1.7 (each a “Cash Electing Share”) shall be converted into the right to receive $307.93 in cash without interest (such per share amount is hereinafter referred to as the “Cash Consideration”); or (ii) Each share of Company Common Stock with respect to which an election to receive stock consideration (a “Stock Election”) has been properly made or deemed made in accordance with Section 1.7 (each a “Stock Electing Share”) shall be converted into the right to receive (such per share amount, together with any cash in lieu of fractional shares of Parent Common Stock to be paid pursuant to Section 1.10, is hereinafter referred to as the “Parent Stock Consideration”) 8.0228 (the “Exchange Ratio”) validly issued, fully paid and nonassessable shares of common stock, par value $4.00 per share, of Parent (the “Parent Common Stock”)percentage allocations set forth on Schedule I attached hereto. (b) The holders At the Effective Date, each share of any certificates the Company's common stock held in the treasury of the Company Common Stock (“Company Stock Certificates”) previously evidencing such shares of Company Common Stock outstanding immediately prior to the Effective Time shall Date shall, by virtue of the Merger and without any action on the part of Acquisition Sub, the Company or the holder thereof, be canceled, retired and cease to have any rights with respect thereto except as otherwise provided in this Agreement or by lawexist. (c) If, between the date of this Agreement and At the Effective TimeDate, shares each outstanding share of Parent Common Stock the common stock, no par value, of Acquisition Sub shall be changed converted into a different number one share of shares or a different class of shares by reason of any reclassificationcommon stock, recapitalizationno par value, split-up, combination, exchange of shares or readjustment, or if a dividend in the form of Parent Common Stock shall be declared with a record date within such period, then the Exchange Ratio will be appropriately and proportionally adjusted so as to provide the holders of Company Common Stock with the same economic effect as contemplated by this Agreement prior to such event and as so adjusted shall, from and after the date of such event, be the Exchange Ratio. (d) In the event the Closing Balance Sheet reflects Consolidated Stockholders’ Equity less than $71,161,583 (the “Minimum Adjusted Net Worth”), for every $50,000 shortfall thereof (and not, for the avoidance of doubt, any portion thereof), the Cash Consideration shall be reduced by $0.216. If the Closing Balance Sheet reflects Consolidated Stockholders’ Equity equal to or greater than the Minimum Adjusted Net Worth, then there will be no adjustment to the Merger Consideration. As used herein, the term “Consolidated Stockholders’ Equity ” shall mean the consolidated stockholders’ equity of the Company reflected on the Closing Balance Sheet; provided, however, that the following amounts shall be disregarded, and not be taken into account or otherwise reduce such consolidated stockholders’ equity: (i) any changes to the valuation of the Company’s investment portfolio attributed to ASC 320, whether upward or downward, from March 31, 2018 until the date of the Closing Balance Sheet, (ii) the aggregate fees and expenses of attorneys, accountants, consultants, financial advisors and other professional advisors incurred by the Company or any Company Subsidiary in connection with this Agreement or the transactions contemplated hereby, (iii) any amounts paid or payable to any director, officer or employee of the Company or any Company Subsidiary under any contract, severance arrangement, benefit plan or employment practice of the Company or any Company Subsidiary and all other payroll and non-payroll related costs and expenses incurred by the Company or any Company Subsidiary in connection with this Agreement or the transactions contemplated hereby, (iv) costs associated with the termination of the Company’s 401(k) Plan, any Company Stock Plan and any other employee benefit plan, (v) any costs associated with the termination of the Company’s data processing agreement (vi) any negative provisions for loan losses taken by the Company from the date of this Agreement until the date of the Closing Balance Sheet and (vii) any other expenses incurred solely in connection with the transactions contemplated hereby, in each case incurred or to be incurred by the Company or any Company Subsidiary through the Effective Time in connection with this Agreement and the transactions contemplated herebySurviving Corporation.