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Exhibit 2
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AGREEMENT AND PLAN OF REORGANIZATION
AMONG
FOUNDATION BANCORP, INC.
AN OHIO CORPORATION,
GARFIELD ACQUISITION CORP., AN OHIO CORPORATION,
GARFIELD ACQUISITION SUB CORP., AN OHIO CORPORATION
AND
XXXXXX X. XXXXX
DATED APRIL 3, 2001
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AGREEMENT AND PLAN OF REORGANIZATION
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THIS AGREEMENT AND PLAN OF REORGANIZATION (this "AGREEMENT") is made as
of April 3, 2001 among FOUNDATION BANCORP, INC., an Ohio corporation
("FOUNDATION"), GARFIELD ACQUISITION CORP., an Ohio corporation ("ACQUISITION
COMPANY"), and GARFIELD ACQUISITION SUB CORP., an Ohio corporation and wholly
owned subsidiary of Acquisition Company ("ACQUISITION SUB") and Xxxxxx X. Xxxxx,
the sole shareholder of Acquisition Company ("BUDIG").
RECITALS
A. The Board of Directors of Foundation has approved, and deems it
advisable and in the best interests of Foundation's shareholders to consummate,
the business combination transaction provided for herein in which Acquisition
Sub shall, subject to the terms and conditions set forth herein, merge with and
into Foundation (the "MERGER").
B. The Boards of Directors of Acquisition Company and Acquisition Sub
have each approved, and deem it advisable and in the best interest of their
respective shareholders to consummate, the Merger.
C. Foundation and Acquisition Company desire to make certain
representations, warranties and agreements in connection with the Merger and
also to prescribe certain conditions precedent to the Merger.
D. Acquisition Company has decided to convert the charter of
Foundation's wholly-owned subsidiary, Foundation Savings Bank, from that of an
Ohio savings and loan association to a that of a federal savings bank (the
"Charter Conversion"), and Foundation has indicated to Acquisition Company its
willingness to cooperate and to cause the Bank to cooperate with Acquisition
Company to effectuate the charter conversion.
E. In consideration of the foregoing and the respective
representations, warranties, covenants, and agreements set forth herein,
Acquisition Company, Acquisition Sub and Foundation hereby agree as follows:
ARTICLE 1.
TERMS OF MERGER AND CLOSING
SECTION 1.1 DEFINITIONS.
In addition to terms defined elsewhere in this Agreement, the following
terms shall have the meanings indicated:
"ACQUISITION COMPANY LIQUIDATED DAMAGES AMOUNT" shall have the meaning
set forth in Section 7.2 hereof.
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"ACQUISITION PROPOSAL" shall have the meaning set forth in Section 4.3
hereof.
"BANK" means Foundation Savings Bank, an Ohio permanent capital stock
savings and loan association.
"BANK RECOGNITION PLAN" shall have the meaning set forth in Section 1.7
hereof
"BANK RECOGNITION PLAN CASH PAYMENT AMOUNT" shall have the meaning set
forth in Section 1.7 hereof.
"BREAK-UP FEE" shall have the meaning set forth in Section 7.2 hereof.
"BURDENSOME CONDITION" shall have the meaning set forth in Section 6.1
hereof.
"CRA" shall mean the Community Reinvestment Act, 12 U.S.C. ss.2901, as
implemented by Regulations 12 CFR part 563e.
"CERTIFICATES" shall have the meaning set forth in Section 1.7 hereof.
"CERTIFICATE OF MERGER" shall have the meaning set forth in Section 1.3
hereof.
"CHARTER CONVERSION" shall have the meaning set forth above in Recital
D.
"CLOSING" shall have the meaning set forth in Section 1.8 hereof.
"CLOSING DATE" shall have the meaning set forth in Section 1.8 hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
"CONFIDENTIALITY AGREEMENT" shall have the meaning set forth in Section
8.2 hereof.
"CONTRACT" shall mean, with respect to any Person, any agreement,
indenture, undertaking, debt instrument, contract, lease or other commitment to
which such person is a party or by which it is bound or to which any of its
properties is subject.
"DEPOSIT AMOUNT" shall have the meaning set forth in Section 1.9
hereof.
"DEPOSIT DATE" shall have the meaning set forth in Section 1.9 hereof.
"DISCLOSURE SCHEDULE" shall have the meaning set forth in Article II
hereof.
"DISQUALIFIED INDIVIDUAL" shall have the meaning set forth in Section
2.22 hereof.
"DISSENTING SHARES" shall have the meaning set forth in Section 1.7
hereof.
"EEOC" shall mean the United States Equal Employment Opportunity
Commission or any successor thereto.
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"ERISA" shall have the meaning set forth in Section 2.14 hereof.
"XXXXXXX MONEY DEPOSIT" shall have the meaning set forth in Section
1.10 hereof.
"EFFECTIVE TIME" shall have the meaning set forth in Section 1.3
hereof.
"ENVIRONMENTAL LAWS" shall have the meaning set forth in Section 2.17
hereof.
"EQUAL CREDIT OPPORTUNITY ACT" shall mean the provisions of 15 U.S.C.
1691 ET SEQ.
"ESCROW AGENT" shall have the meaning set forth in Section 1.10 hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
successor thereto.
"FAIR HOUSING ACT" shall mean the Fair Housing Act of 1968, 42
U.S.C.A. ss. 3601 ET SEQ.
"FEDERAL DEPOSIT INSURANCE ACT" shall mean the Federal Deposit
Insurance Act of 1950 (P.L. 81-797, 64 STAT. 873).
"FINANCIAL ADVISOR" shall have the meaning set forth in Section 2.23
hereof.
"FOUNDATION COMMON SHARES" shall mean the shares of common stock of
Foundation Bancorp Inc., no par value per share.
"FOUNDATION EMPLOYEE PLANS" shall have the meaning set forth in Section
2.14 hereof.
"FOUNDATION FINANCIAL STATEMENTS" shall have the meaning as set forth
in Section 2.5 hereof.
"FOUNDATION LIQUIDATED DAMAGES AMOUNT" shall have the meaning set forth
in Section 7.2 hereof.
"FOUNDATION STOCK OPTION PLANS" shall have the meaning set forth in
Section 1.7 hereof.
"HOME OWNERS LOAN ACT" shall mean the Home Owners Loan Act, 12
U.S.C.A. ss. 1461 ET SEQ.
"IRS" shall mean the United States Internal Revenue Service.
"INJUNCTION" shall have the meaning set forth in Section 6.1 hereof.
"LETTER OF TRANSMITTAL" shall have the meaning set forth in Section 1.9
hereof.
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"MATERIAL ADVERSE EFFECT" shall mean, with respect to any Person, a
material adverse effect on the financial condition, the results of operations,
the business, assets or prospects of such Person.
"MATERIAL CONTRACTS" shall have the meaning set forth in Section 2.19
hereof.
"MERGER" shall have the meaning set forth above in Recital A.
"OGCL" shall mean the Ohio General Corporation Law, Ohio Revised Code,
Section 1701.01 et seq.
"OTS" shall mean the Office of Thrift Supervision of the U.S.
Department of the Treasury and its predecessor, the Federal Home Loan Bank
Board, or any successor thereto.
"OUTSTANDING FOUNDATION SHARES" shall mean, as of any given date, the
Foundation Common Shares issued and outstanding.
"PAYING AGENT" shall have the meaning set forth in Section 1.9 hereof.
"PER SHARE MERGER CONSIDERATION" shall mean Seventeen and 60/100
Dollars ($17.60) in cash payable per each Foundation Common Share issued and
outstanding immediately prior to the Effective Time.
"PERSON" means any individual, bank, corporation, limited liability
company, partnership, association, joint-stock company, business trust or
unincorporated organization.
"PRE-CLOSING FINANCIAL STATEMENTS" shall have the meaning set forth in
Section 6.1 hereof.
"PROXY STATEMENT" shall have the meaning set forth in Section 4.1
hereof.
"REGULATORY AGENCY" shall mean the OTS, the FDIC, the SEC or the Ohio
Division of Financial Institutions.
"REGULATORY AGREEMENT" shall have the meaning set forth in Section 2.8
hereof.
"REQUIRED REGULATORY ACTIONS" shall have the meaning set forth in
Section 2.2 hereof.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"SHAREHOLDER APPROVAL" shall have the meaning set forth in Section 4.1
hereof.
"SHAREHOLDERS' MEETING" shall have the meaning set forth in Section 4.1
hereof.
"STOCK OPTION" shall have the meaning set forth in Section 1.7 hereof.
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"SUBSIDIARIES" shall mean, in reference to any Person, any bank,
corporation, partnership, limited liability company, or other organization,
whether incorporated or unincorporated, of which that Person owns a majority of
the voting equity interests.
"SUPERIOR ACQUISITION PROPOSAL" shall have the meaning set forth in
Section 4.3 hereof.
"SURVIVING CORPORATION" shall have the meaning set forth in Section 1.2
hereof.
"TAX RETURN" shall mean any return, declaration, estimate, statement or
report, information return or other document (including any related or
supporting information) with respect to Taxes.
"TAXES" shall mean any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs duties, capital stock,
franchise, profits, withholding, social security, unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated or other tax of any kind whatsoever,
including any interest, penalty or addition thereto, whether disputed or
undisputed.
"TOTAL OPTION AMOUNT" shall have the meaning set forth in Section 1.7
hereof.
SECTION 1.2 The Merger.
Pursuant to the OGCL and subject to and upon the terms and conditions
of this Agreement, Acquisition Sub shall merge with and into Foundation.
Foundation shall be the surviving corporation in the Merger (in this capacity,
the "SURVIVING CORPORATION"). Acquisition Sub shall be the merging corporation
in the Merger and its corporate identity and existence, separate and apart from
the Surviving Corporation, shall cease upon consummation of the Merger.
SECTION 1.3 Effective Time.
On the date of the Closing (as defined in Section 1.8 hereof),
Acquisition Company, Acquisition Sub and Foundation shall cause the Merger to be
consummated by executing and filing a certificate of merger (the "CERTIFICATE OF
MERGER"), together with any required related documents, with the Secretary of
State of the State of Ohio, in such form as required by the OGCL (the time of
such filing being the "EFFECTIVE TIME").
SECTION 1.4 Effect of Merger.
The Merger shall have all of the effects provided for in this
Agreement, the OGCL and under other applicable state and federal law. Without
limiting the generality of the foregoing, at the Effective Time, the separate
existence of Acquisition Sub shall cease; the Surviving Corporation shall
possess all assets and property of every description, and every interest
therein, wherever located, and the rights, privileges, immunities, powers,
franchises and authority, of a public as well as of a private nature, of both
Foundation and Acquisition Sub, all of which shall be vested in the Surviving
Corporation without further act or deed; and all of the separate rights and
obligations of both Foundation and Acquisition Sub shall become the rights and
obligations of the Surviving Corporation after the Effective Time, without
impairing the rights or obligations of either constituent corporation to the
Merger.
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SECTION 1.5 Articles of Incorporation; Regulations.
(a) At the Effective Time, the Articles of Incorporation of
Acquisition Sub, as amended pursuant to this Agreement, shall be the Articles of
Incorporation of the Surviving Corporation until thereafter amended as provided
by the OGCL and such Articles of Incorporation.
(b) The Regulations of Acquisition Sub, as in effect
immediately prior to the Effective Time, shall be the Regulations of the
Surviving Corporation until thereafter amended as provided by the OGCL, the
Articles of Incorporation of the Surviving Corporation and such Regulations.
SECTION 1.6 Directors and Officers.
The directors of Acquisition Company immediately prior to the Effective
Time shall be the initial directors of the Surviving Corporation, each to hold
office in accordance with the Articles of Incorporation and Regulations of the
Surviving Corporation until their respective successors are duly elected or
appointed and qualified. The officers of Foundation immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation to
serve at the pleasure of the Board of Directors of the Surviving Corporation
(without prejudice to the contract rights, if any, of any such officer).
SECTION 1.7 Conversion of Stock; Stock Options; Dissenting Shares.
(a) At the Effective Time, by virtue of the Merger and without
any action on the part of the holder thereof, each of the Outstanding Foundation
Shares shall be converted into, and become, the right to receive the Per Share
Merger Consideration under this Agreement. Each holder of any certificate or
certificates which immediately prior to the Effective Time represented
Outstanding Foundation Shares (the "CERTIFICATES") shall on and after the
Effective Time cease to have any rights with respect to such Outstanding
Foundation Shares, except for dissenters' rights and the right of such holders
to receive, without interest, the Per Share Merger Consideration upon the
surrender of such Certificate or Certificates in accordance with Section 1.9
hereof.
(b) At the Effective Time, each Foundation Common Share, if
any, held in the treasury of Foundation immediately prior to the Effective Time
shall be canceled and not converted into the Per Share Merger Consideration.
(c) At the Effective Time, each outstanding option to purchase
Foundation Common Shares (a "STOCK OPTION") granted under or pursuant to the
Foundation Bancorp, Inc. 1997 Stock Option and Incentive Plan or any stock
option plan or agreement entered into by Foundation with any employee of
Foundation or of the Bank or otherwise existing ("FOUNDATION STOCK OPTION
PLANS"), shall be canceled and the holder thereof shall be entitled to receive
in cash an amount (the "TOTAL OPTION AMOUNT") (less applicable withholding
taxes) equal to the product of: (i) the number of Foundation Common Shares
previously subject to such Stock Option, whether vested or unvested, multiplied
by; (ii) the excess, if any, of the amount of the Per Share Merger Consideration
over the exercise price per share of Foundation Common Shares previously subject
to such Stock Option, payable in accordance with Section 1.9 of this Agreement.
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(d) At the Effective Time, each Foundation Common Share held in
the Foundation Savings Bank Recognition and Retention Plan and Trust Agreement
(the "BANK RECOGNITION PLAN") shall be converted into the right to receive the
Per Share Merger Consolidation, and each outstanding right to be awarded a
Foundation Common Share under the Bank Recognition Plan as to which no
Foundation Common Shares have been acquired by or issued to the Bank Recognition
Plan shall be canceled and the holder thereof shall be entitled to receive in
cash the sum of Seventeen and 60/100 Dollars ($17.60) for each share subject to
an award payable in accordance with Section 1.9 of this Agreement. Amounts
payable under this Section 1.7(d) are collectively referred to as the "Bank
Recognition Plan Cash Payment Amount."
(e) 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, no par
value, of Acquisition Sub issued and outstanding immediately prior to the
Effective Time shall be converted into one validly issued, fully paid and
non-assessable share of common stock, no par value, of the Surviving
Corporation.
(f) Notwithstanding anything in this Agreement to the contrary,
Foundation Common Shares outstanding immediately prior to the Effective Time and
held by a holder who has not voted in favor of the Merger or consented thereto
in writing and who has demanded appraisal for such Foundation Common Shares in
accordance with Section 1701.85 of the OGCL ("DISSENTING SHARES") shall not be
converted into a right to receive the Per Share Merger Consideration, unless
such holder fails to perfect or withdraws or loses his right to appraisal, in
which case such Foundation Common Shares shall be treated as if they had been
converted as of the Effective Time into a right to receive the Per Share Merger
Consideration, without interest thereon. Foundation shall give Acquisition
Company prompt notice of any demands received by Foundation for appraisal of
Foundation Common Shares and, prior to the Effective Time, Acquisition Company
shall have the right to direct all negotiations and proceedings with respect to
such demands. Prior to the Effective Time, Foundation shall not, except with the
prior written consent of Acquisition Company, make any payment with respect to,
or settle or offer to settle, any such demands. From and after the Effective
Time, Acquisition Company shall have the right to direct all negotiations and
proceedings with respect to such demands.
SECTION 1.8 Closing; Closing Date.
The closing of the Merger and the other transactions contemplated
hereby (the "CLOSING") shall take place at the offices of Xxxxxxx, Xxxxxxxx &
Xxxxxxx, XXX, 0000 Provident Tower, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx
00000 at 10:00 a.m., local time, on the second business day after each of the
conditions set forth in Sections 6.1(d) and 6.2(d) hereof is satisfied or waived
in writing by the appropriate party or on such other date after such
satisfaction or written waiver as Foundation and Acquisition Company may agree
(the "CLOSING DATE"). The parties shall use their respective commercially
reasonable best efforts to close as soon as practicable.
SECTION 1.9 Paying Procedures; Surrender of Certificates; Deposit of
Per Share Merger Consideration and Other Sums.
(a) Fifth Third Bank shall act as paying agent for the Merger
(in this capacity, the "PAYING AGENT"). As soon as reasonably practicable after
the Effective Time, not to exceed three (3) days after receipt of the relevant
Foundation shareholder list by the Paying Agent, Acquisition Company shall cause
the Paying Agent to mail to each record holder of Outstanding Foundation Shares
a letter of transmittal (the "LETTER OF TRANSMITTAL") and instructions for use
in (i) effecting
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the surrender of Certificates in exchange for the Per Share Merger
Consideration, (ii) obtaining the Per Share Merger Consideration with respect to
each stock option, and (iii) obtaining amounts due under the Bank Recognition
Plan. The Letter of Transmittal shall specify that delivery of share
Certificates shall be effected, and risk of loss and title to such Certificates
shall pass, only upon proper delivery of the Certificates to the Paying Agent
and shall be in such form and have such other customary provisions as Foundation
and Acquisition Company may determine. Upon surrender to the Paying Agent of a
Certificate, together with a Letter of Transmittal duly executed and any other
required documents, the holder of such Certificate shall be entitled to receive
in exchange therefor solely the Per Share Merger Consideration. No interest on
any consideration payable upon the surrender of the Certificates shall be paid
or accrued for the benefit of holders of Certificates. If any of the Per Share
Merger Consideration is to be issued to a person other than a person in whose
name a surrendered Certificate is registered, it shall be a condition of
issuance that the surrendered Certificate shall be properly endorsed or
otherwise in proper form for transfer and that the person requesting such
issuance shall pay to the Paying Agent any required transfer taxes or other
taxes or establish to the satisfaction of the Paying Agent that such tax has
been paid or is not applicable.
(b) If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by Foundation
in its sole discretion, the posting by such person of a bond in such amount as
Foundation may determine is reasonably necessary as indemnity against any claim
that may be made against it with respect to such Certificate, the Paying Agent
shall issue in exchange for such lost, stolen or destroyed Certificate the Per
Share Merger Consideration deliverable in respect thereof.
(c) At least two (2) business days before the Effective Time
(the "DEPOSIT DATE"), Acquisition Company or Budig shall deposit, or cause to be
deposited, in trust with the Paying Agent immediately available funds in the
aggregate amount of all Per Share Merger Consideration which holders of
Foundation Common Shares shall be entitled at the Effective Time pursuant to
Section 1.7 hereof (less the amount of the Xxxxxxx Money Deposit, which shall
simultaneously be transferred by the Escrow Agent to the Paying Agent), the
Total Option Amount due with respect to all Stock Options and the Bank
Recognition Plan Cash Payment Amount (collectively, the "DEPOSIT AMOUNT"). The
Deposit Amount shall be invested by the Paying Agent, as directed by Acquisition
Company, provided such investment shall be limited to direct obligations of the
United States of America, obligations for which the full faith and credit of the
United States of America is pledged to provide for the payment of principal and
interest, commercial paper rated of the highest quality by Xxxxx'x Investors
Service, Inc. and Standard & Poor's Corporation, or certificates of deposit
issued by a commercial bank having at least Ten Billion Dollars
($10,000,000,000) in assets.
(d) Promptly following the date which is six (6) months after
the Effective Time, Acquisition Company will cause the Paying Agent to deliver
to the Surviving Corporation all cash and documents in its possession relating
to the funds to be deposited on the Deposit Date described in this Agreement,
and the Paying Agent's duties relating thereto shall terminate. Thereafter, each
holder of a Certificate formerly representing a Foundation Common Share
outstanding immediately prior to the Effective Time may surrender such
Certificate to the Surviving Corporation and (subject to applicable abandoned
property, escheat and similar laws) receive in exchange therefor the Per Share
Merger Consideration, without any interest thereon. None of Acquisition Company,
Acquisition Sub, Foundation or the Surviving Corporation shall be liable to any
holder of Foundation Common Shares for any Per Share Merger Consideration
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law. Acquisition Company or the
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Paying Agent shall be entitled to deduct and withhold from the Per Share Merger
Consideration otherwise payable pursuant to this Agreement to any holder of
Foundation Common Shares such amounts as the Acquisition Company or the Paying
Agent is required to deduct and withhold with respect to the making of any such
payment under the Code, or any provision of any state, local or foreign tax law.
To the extent that such amounts are so withheld by the Acquisition Company or
the Paying Agent, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the holder of the Foundation Common Shares
in respect of which deduction withholding was made by the Acquisition Company or
the Paying Agent.
(e) At or after the Effective Time there shall be no transfers
on the stock transfer books of Foundation of any Foundation Common Shares. If,
after the Effective Time, Certificates are presented for transfer, they shall be
canceled and exchanged for the Per Share Merger Consideration as provided in,
and subject to the provisions of, this Section 1.9.
SECTION 1.10 Xxxxxxx Money Deposit.
Upon the date this Agreement is fully executed by Foundation,
Acquisition Company and Acquisition Sub, Acquisition Company or Budig shall make
an xxxxxxx money payment in the amount of Five Hundred Thousand Dollars
($500,000) ("XXXXXXX MONEY DEPOSIT") into an escrow account to be established
pursuant to the escrow agreement in the form attached hereto and incorporated
herein as Exhibit 1.10 ("ESCROW AGREEMENT") among Foundation, Acquisition
Company and Fifth Third Bank, as escrow agent (in this capacity, the "ESCROW
AGENT"), to be held and disbursed by the Escrow Agent upon the terms and
conditions set forth in the Escrow Agreement and in Article 7 hereof.
SECTION 1.11 Closing Deliveries.
(a) At the Closing, Foundation shall deliver to Acquisition
Company:
(i) certified copies of the Articles of Incorporation and
Code of Regulations of Foundation and the Articles of
Incorporation and Constitution of the Bank;
(ii) certificates signed by appropriate officers of
Foundation stating that: (A) each of the representations and
warranties contained in Article 2 hereof is true and correct at
the time of the Closing with the same force and effect as if
such representations and warranties had been made at Closing
(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 only as of such date); and (B) all of the
conditions set forth in Sections 6.1(b) and 6.1(d) hereof have
been satisfied or waived as provided therein;
(iii) certified copies of the resolutions of the Board of
Directors of Foundation and of resolutions of its shareholders
as required for valid approval of the execution of this
Agreement and the consummation of the Merger and the other
transactions contemplated by this Agreement;
(iv) certified copies of the resolutions of the Board of
Directors of the Bank as required for the charter conversion;
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(v) a certificate of the Secretary of State of the State of
Ohio, dated not more than thirty (30) days prior to Closing,
stating that Foundation is in good standing and a certificate
of corporate existence, dated not more than thirty (30) days
prior to Closing, from the OTS as to the Bank;
(vi) the Certificate of Merger executed by Foundation in
proper form for filing with the Secretary of State of the State
of Ohio in order to cause the Merger to become effective;
(vii) a legal opinion from Vorys, Xxxxx, Xxxxxxx and Xxxxx
LLP, counsel for Foundation, in form reasonably acceptable to
counsel to Acquisition Company and Foundation; and,
(viii) a certificate signed by an appropriate officer of
Foundation stating, as of the Closing Date, the number of
Outstanding Foundation Common Shares, the number of Foundation
Common Shares subject to outstanding Stock Options, the
"strike" price for each such Stock Option, the owners of such
Stock Options, the number of Foundation Common Shares held in
the Bank Recognition Plan and the persons to whom such
Foundation Common Shares are issuable and the number of
outstanding rights to be awarded a Foundation Common Share
under the Bank Recognition Plan as to which no Foundation
Common Shares have been acquired by or issued to the Bank
Recognition Plan and the persons to whom such rights have been
awarded.
(b) At the Closing, Acquisition Company shall deliver to
Foundation:
(i) certified copies of the Articles of Incorporation and
Regulations of each of Acquisition Company and of Acquisition
Sub;
(ii) certificates signed by appropriate officers of
Acquisition Company stating that: (A) each of the
representations and warranties contained in Article 3 hereof is
true and correct at the time of the Closing with the same force
and effect as if such representations and warranties had been
made at Closing (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 only as of such
date); and (B) all of the conditions set forth in Section
6.2(b) and 6.2(d) hereof (but excluding the approval of
Foundation's shareholders) have been satisfied or waived as
provided therein;
(iii) certified copies of the resolutions of the Boards of
Directors of Acquisition Company and Acquisition Sub and of
Acquisition Sub's sole shareholder as required for valid
approval of the execution of this Agreement and the
consummation of the Merger and the other transactions
contemplated by this Agreement;
(iv) a legal opinion from Xxxxxxx, Muething & Xxxxxxx, PLL,
counsel for Acquisition Company, in form reasonably acceptable
to counsel for Foundation and Acquisition Company;
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(v) certificates of the Secretary of State of the State of
Ohio, dated not more than thirty (30) days prior to Closing,
stating that Acquisition Company and Acquisition Sub are in
good standing;
(vi) the Certificate of Merger executed by Acquisition Sub,
reflecting the terms and provisions hereof and in proper form
for filing with the Secretary of State of the State of Ohio, in
order to cause the Merger to become effective; and,
(vii) a copy of the signed employment agreement between
Xxxxx X. Xxxxxxx and the Bank referred to in Section 5.5(a).
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF FOUNDATION
Except as set forth in the written disclosure schedule of even date
herewith signed by the President of Foundation and delivered by Foundation to
Acquisition Company on the date hereof (the "DISCLOSURE SCHEDULE"), Foundation
hereby makes the following representations and warranties:
SECTION 2.1 Organization and Capital Stock.
(a) Foundation is a corporation organized, validly existing and
in good standing under the laws of the State of Ohio and has the corporate power
to own all of its property and assets, to incur all of its liabilities and to
carry on its business as now being conducted.
(b) The Bank is incorporated and in good standing as an Ohio
permanent capital stock savings and loan association and has the corporate power
to own all of its property and assets, to incur all of its liabilities and to
carry on its business as now being conducted.
(c) True, complete and correct copies of the Articles of
Incorporation and Code of Regulations of Foundation and the Articles of
Incorporation and Constitution of the Bank, as amended and as in effect on the
date of this Agreement, have been previously delivered to Acquisition Company by
Foundation.
(d) The authorized capital stock of Foundation consists of Two
Million (2,000,000) common shares, no par value, of which, as of the date
hereof, Four Hundred Sixty Two Thousand Eight Hundred Seventy Five (462,875)
shares are issued and outstanding and Forty Six Thousand Two Hundred Eighty
Eight (46,288) shares are subject to outstanding Stock Options. All of the
Outstanding Foundation Shares are duly and validly issued and outstanding and
are fully paid and non-assessable. None of the Outstanding Foundation Shares has
been issued in violation of any preemptive rights of the current or past
shareholders of Foundation.
(e) The authorized capital stock of the Bank consists of Ten
Million (10,000,000) common shares, $1.00 par value, one hundred (100) issued
and outstanding shares of which are owned of record and beneficially by
Foundation free and clear of all liens, encumbrances, rights of first refusal,
options or other restrictions of any nature whatsoever.
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(f) Except as described in this Section 2.1 or in Section 2.1
of the Disclosure Schedule: (i) there are no shares of capital stock or other
equity securities of Foundation or the Bank outstanding and no outstanding
options, warrants, rights to subscribe for, calls, or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for, any capital stock of Foundation or the Bank, or contracts,
commitments, understandings or arrangements by which any of Foundation or the
Bank is or may be obligated to issue additional shares of its capital stock or
options, warrants or rights to purchase or acquire any additional shares of its
capital stock; and (ii) there are no outstanding stock appreciation, phantom
stock or similar rights.
(g) The minute books of Foundation and the Bank accurately
reflect all corporate actions held or taken by their respective shareholders and
Boards of Directors (including board committees) since each was originally
organized.
SECTION 2.2 Authorization.
(a) The Board of Directors of Foundation has, by all
appropriate action, approved this Agreement and the Merger and has authorized
the due execution, delivery and performance hereof by Foundation's officers.
Foundation's Board of Directors has directed that this Agreement and the
transactions contemplated by this Agreement, including the Merger, be submitted
to the shareholders of Foundation for approval at the Shareholders' Meeting.
Except for the adoption and approval of this Agreement by the affirmative vote
of the holders of a majority of the Outstanding Foundation Shares at the
Shareholders' Meeting, no other corporate acts or proceedings are required to be
taken by Foundation to authorize the execution, delivery and performance of this
Agreement and to consummate the Merger and the other transactions contemplated
by this Agreement.
(b) This Agreement has been duly and validly executed and
delivered by Foundation and constitutes a legal, valid and binding obligation of
Foundation, enforceable against it in accordance with its terms, except to the
extent that: (i) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other laws
relating to or from time to time affecting the enforcement of creditors' rights
generally; (ii) the rights of any Regulatory Agency as conservator or receiver;
and (iii) the availability of certain remedies may be precluded by general
principles of equity.
(c) Neither the execution, delivery and performance by
Foundation of this Agreement, nor the consummation by it of the transactions
contemplated hereby (subject to the receipt of approval by the shareholders of
Foundation), nor compliance by it with any of the provisions hereof, will
violate, conflict with or result in a breach of any provisions of, or constitute
a default (or an event which, with notice or lapse of time or both, would
constitute a default) or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration of,
or result in the creation of, any lien upon any of the properties or assets of
Foundation or the Bank under the terms, conditions or provisions of: (A) the
Articles of Incorporation or Code of Regulations of Foundation or the Bank; or
(B) any note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which Foundation or the Bank is a
party or by which they or their respective properties or assets may be bound, or
to which such parties may be subject, or violate any judgment, ruling, order,
writ, injunction, decree, statute, rule or regulation applicable to Foundation
or the Bank or any of their respective properties or assets, or any license or
permit held by Foundation or the Bank.
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(d) Section 2.2(d) of the Disclosure Schedule details all of
the notices, consents, authorizations, approvals or exemptions required of
Foundation or the Bank in connection with the execution and delivery of this
Agreement and the consummation of the Merger, the Charter Conversion and other
transactions contemplated by this Agreement, other than: (i) the approval of the
shareholders of Foundation at the Shareholders' Meeting; and (ii) the actions
required to be taken by any party to this Agreement to comply with the
provisions of the OGCL, Ohio laws relating to savings and loan associations, the
Securities Act, the Exchange Act, the securities or blue sky laws of the various
states, the Home Owners Loan Act, and the rules and regulations of the
Regulatory Agencies having jurisdiction over the parties, including without
limitation, the OTS and the Ohio Division of Financial Institutions (all such
regulatory actions being referred to as the "REQUIRED REGULATORY ACTIONS").
SECTION 2.3 Subsidiaries.
Except for the Bank, Foundation does not have any other direct or
indirect Subsidiaries.
SECTION 2.4 No Defaults.
Neither Foundation nor the Bank is in default under or in violation of
any provision of their Articles of Incorporation or Code of Regulations or any
promissory note, indenture or any evidence of indebtedness or security therefor,
lease, contract, insurance policy, purchase or other commitment or any other
agreement or arrangement (however evidenced), whether written or oral, and there
has not occurred any event that, with the lapse of time or giving of notice or
both, would constitute such a default or violation, which default could
reasonably be expected to cause a Material Adverse Effect on Foundation or the
Bank.
SECTION 2.5 Financial Information.
The consolidated balance sheets of Foundation as of June 30, 2000 and
1999, and related consolidated statements of income, changes in stockholders'
equity and cash flows for each of the three (3) years in the period ended June
30, 2000 together with the notes thereto, included in Foundation's Annual Report
on Form 10-KSB for the year ended June 30, 2000, as currently on file with the
SEC, the reports on Form 10-QSB for the periods ended September 30, 2000 and
December 31, 2000 (together, the "FOUNDATION FINANCIAL STATEMENTS"), have been
prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis (except as may be disclosed therein)
and fairly present in all material respects the consolidated financial position
and the consolidated results of operations, changes in stockholders' equity and
cash flows of Foundation and its consolidated Subsidiaries as of the dates and
for the periods indicated (subject, in the case of interim financial statements,
to normal recurring year-end adjustments, none of which shall be material). The
books and records of Foundation and the Bank have been, and are being,
maintained in accordance with generally accepted accounting principles and all
other applicable legal and accounting requirements (except for any regulatory
reporting differences required by the reports of the Bank).
SECTION 2.6 Absence of Changes.
Since June 30, 2000, there has been no material adverse change in the
financial condition, the results of operations, business or prospects of
Foundation or the Bank. Except as set forth in Section
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2.6 of the Disclosure Schedule, since June 30, 2000, Foundation has not declared
or paid any dividend or made any other distribution to its stockholders, whether
in cash, stock or other property.
SECTION 2.7 Litigation and Related Matters.
Except as set forth in Section 2.7 of the Disclosure Schedule, there is
no litigation, claim or other proceeding pending or, to the knowledge of
Foundation or the Bank, threatened, against Foundation or the Bank, or of which
the property of Foundation or the Bank is or would be subject, and there is no
injunction, order, judgment, decree or regulatory restriction imposed upon
Foundation or the Bank or the assets of Foundation or the Bank which would have
a Material Adverse Effect on Foundation or the Bank. For purposes of this
Section only, the term "Material Adverse Effect" shall mean any litigation,
claim or other proceeding, pending or threatened, in which an adverse outcome
would result in a liability to Foundation or the Bank in excess of Twenty-Five
Thousand Dollars ($25,000.00).
SECTION 2.8 Regulatory Matters.
Foundation is a registered savings and loan holding company under
Section 10 of the Home Owners Loan Act, as amended. The Bank is an Ohio
chartered permanent capital stock savings and loan association subject to
regulation, examination and supervision by the Ohio Division of Financial
Institutions, the OTS and the FDIC. The Bank is a member of the Federal Home
Loan Bank System. The Bank is an insured institution (within the meaning of the
Federal Deposit Insurance Act) and the deposits of the Bank are insured by the
FDIC up to the FDIC limits. Neither Foundation nor the Bank is subject or is
party to, or has received any notice or advice that it may become subject or
party to, any investigation with respect to, any cease-and-desist order,
agreement, consent agreement, memorandum of understanding or other regulatory
enforcement action, proceeding or order with or by, or is a party to any
commitment letter or similar undertaking to, or is subject to any directive by,
or has been a recipient of any supervisory letter from, or has adopted any board
resolutions at the request of, any Regulatory Agency that currently restricts
the conduct of its business or that currently affects its capital adequacy, its
credit policies, its management or its business (each, a "REGULATORY
AGREEMENT"), nor has Foundation or the Bank been advised by any Regulatory
Agency that it is considering issuing or requesting any such Regulatory
Agreement. Except as set forth in Section 2.8 of the Disclosure Schedule, there
is no unresolved violation, criticism or exception by any Regulatory Agency with
respect to any report or statement relating to the most recent examinations of
Foundation or the Bank.
SECTION 2.9 Reports.
Foundation and the Bank have filed all reports and statements, together
with any amendments required to be made with respect thereto, if any, that they
have been required to be filed with: (i) the FDIC; (ii) the OTS; (iii) the SEC
and any state securities authorities; or (iv) any other Regulatory Agency with
jurisdiction over Foundation or the Bank, and have paid all fees and assessments
due and payable in connection therewith. As of their respective dates, each of
such reports and documents, as amended, including any financial statements,
exhibits and schedules thereto, complied with the relevant statutes, rules and
regulations enforced or promulgated by the Regulatory Agency with which they
were filed, and did not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
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SECTION 2.10 Non-Banking Activities of Foundation and Subsidiaries.
Foundation is not engaged in any activity, either directly or
indirectly through the Bank or other equity investments, which is not permitted
of a savings and loan holding company or of the subsidiary or other enterprises
through which such activity is conducted. The Bank is not engaged in any
activity, either directly or indirectly through a Subsidiary or other equity
investments, which is not permitted of an Ohio chartered permanent capital stock
savings and loan association or a subsidiary of an Ohio chartered permanent
capital stock savings and loan association.
SECTION 2.11 Fiduciary Responsibilities.
During the applicable statute of limitations period: (i) the Bank has
properly administered all accounts (if any) for which it acts as a fiduciary or
agent, in accordance with the terms of the governing documents and applicable
state and federal law and regulation and common law; and (ii) neither
Foundation, the Bank, nor any director, officer or employee of Foundation or the
Bank acting on behalf of Foundation or the Bank, has committed any breach of
trust with respect to any such fiduciary or agency account, and the accountings
for each such fiduciary or agency account are true and correct and accurately
reflect the assets of such fiduciary or agency account. There is no
investigation or inquiry by any Regulatory Agency pending, or to the knowledge
of Foundation or the Bank, threatened, against or affecting Foundation or the
Bank relating to the compliance by Foundation or the Bank with sound fiduciary
principles and applicable regulations.
SECTION 2.12 Fair Lending; Community Reinvestment Act.
With the exception of routine investigation of consumer complaints,
neither Foundation nor the Bank has been advised by any Regulatory Agency that
it is or may be in violation of the Equal Credit Opportunity Act or the Fair
Housing Act or any similar federal or state statute. The Bank received a CRA
rating of "satisfactory" in its most recent CRA examination.
SECTION 2.13 Employment Agreements.
Section 2.13 of the Disclosure Schedule lists each agreement,
arrangement, commitment or contract (whether written or oral) for the
employment, retention or engagement, or with respect to the severance, of any
present or former officer, director, employee, agent, consultant or other person
or entity to which Foundation or the Bank is a party to or bound by and which,
by its terms, is not terminable by Foundation or the Bank on thirty (30) days
written notice or less without the payment of any amount by reason of such
termination. Copies of each written (and summaries of each oral) agreement,
arrangement, commitment or contract listed in Section 2.13 of the Disclosure
Schedule have been previously delivered to Acquisition Company by Foundation.
SECTION 2.14 Employee Matters and ERISA.
(a) Neither Foundation nor the Bank has entered into any
collective bargaining agreement with any labor organization with respect to any
group of employees of Foundation or the Bank and, to the knowledge of Foundation
and the Bank, there is no present effort nor existing proposal to attempt to
unionize any group of employees of Foundation or the Bank.
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(b) (i) Foundation and the Bank are, and have been, in
compliance in all material respects with all applicable laws respecting
employment and employment practices, terms and conditions of employment and
wages and hours, including, without limitation, any such laws respecting
employment discrimination and occupational safety and health requirements, and
neither Foundation nor the Bank is engaged in any unfair labor practice; (ii)
there is no unfair labor practice complaint against Foundation or the Bank
pending or, to the knowledge of Foundation or the Bank, threatened before the
National Labor Relations Board; (iii) there is no labor dispute, strike,
slowdown or stoppage actually pending or, to the knowledge of Foundation and the
Bank, threatened against or directly affecting Foundation or the Bank; (iv)
neither Foundation nor the Bank has experienced any work stoppage or other labor
difficulty during the past five (5) years; and (v) there are no EEOC or similar
agency complaints against Foundation or the Bank pending, or to the knowledge of
Foundation and the Bank, threatened.
(c) Section 2.14(c) of the Disclosure Schedule lists each
employee benefit plan, as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and each nonqualified
employee benefit plan, deferred compensation, bonus, stock and incentive plan,
and each other employee benefit and fringe benefit program for the benefit of
former or current officers, directors or employees of Foundation or the Bank
(the "FOUNDATION EMPLOYEE PLANS") which Foundation or the Bank maintains,
contributes to or participates in or has any liability under (other than
incidental employee benefits as described by U.S. Department of Labor Regulation
2510.3-1(b) through (k)). No present or former employee of Foundation or the
Bank has been charged with breaching, or has breached in any material respect, a
fiduciary duty under any of the Foundation Employee Plans. Neither Foundation
nor the Bank participates in, nor has it in the past five (5) years participated
in, nor has it any present or future obligation or liability under, any
multi-employer plan (as defined at Section 3(37) of ERISA). Section 2.14(c) of
the Disclosure Schedule lists all plans that provide health, major medical,
disability or life insurance benefits to former employees of Foundation or the
Bank that any of them maintain, contribute to, or participate in.
(d) With respect to any Foundation Employee Plan subject to
Title IV of ERISA, no reportable event (as defined in Section 4043 of ERISA) has
occurred as to which a notice would be required to be filed with the Pension
Benefit Guaranty Corporation. No claim is pending, and neither of Foundation nor
the Bank has received notice of any threatened or imminent claim with respect to
any Foundation Employee Plan (other than a routine claim for benefits for which
plan administrative review procedures have not been exhausted) for which
Foundation or the Bank would be liable after June 30, 2000, except as reflected
on the Foundation Financial Statements. All liabilities of the Foundation
Employee Plans have been funded on the basis of consistent methods in accordance
with sound actuarial assumptions and practices, and no Foundation Employee Plan,
at the end of any plan year, or at June 30, 2000, had or has had an accumulated
funding deficiency. No actuarial assumptions have been changed since the last
written report of Foundation's actuaries on such Foundation Employee Plans. All
insurance premiums (including premiums to the Pension Benefit Guaranty
Corporation) have been paid in full, subject only to normal retrospective
adjustments in the ordinary course. Foundation and the Bank have no contingent
or actual liabilities under Title IV of ERISA. No accumulated funding deficiency
(within the meaning of Section 302 of ERISA or Section 412 of the Code) has been
incurred with respect to any of the Foundation Employee Plans, whether or not
waived. Foundation and the Bank do not have any liabilities for excise taxes
under Sections 4971, 4975, 4976, 4977, 4979 or 4980B of the Code or for a fine
under Section 502 of ERISA with respect to any Foundation Employee Plan. All
Foundation Employee Plans (including any plans terminated prior to the date
hereof) have been operated, administered and
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maintained in accordance with the terms thereof and in substantial compliance
with the requirements of all applicable laws, including, without limitation,
ERISA and the Code.
(e) Except as provided in Section 4.7 of this Agreement,
neither the execution or delivery of this Agreement nor the consummation of the
transactions contemplated by this Agreement (either alone or upon the occurrence
of any additional acts or events) would: (i) result in any payment (including,
without limitation, severance, unemployment compensation, golden parachute or
otherwise) becoming due to any director, officer or employee of Foundation or
the Bank from Foundation or the Bank under any contractual arrangement (except
for the Employment Agreements with the executive officers of Foundation
described in Section 2.13 of the Disclosure Schedule), Foundation Employee Plan
or otherwise; (ii) increase any benefits otherwise payable under any Foundation
Employee Plan (other than expressly by the terms of such Plan); or (iii) except
for the Bank Recognition Plan, result in any acceleration of the time of payment
or vesting of any such benefits (other than expressly by the terms of such
agreement or Plan or as provided in this Agreement), including, without
limitation, the vesting of any additional Foundation Common Shares in any
participant in any Foundation Employee Plan.
(f) Copies of each Foundation Employee Plan described in
Section 2.14(c) of the Disclosure Schedule, and all amendments or supplements
thereto, have been previously delivered to Acquisition Company by Foundation.
Section 2.14(f) of the Disclosure Schedule lists, for each Foundation Employee
Plan, to the extent applicable, all of the following with respect thereto: (i)
summary plan descriptions; (ii) lists of all current participants and all
participants with benefit entitlements; (iii) contracts relating to plan
documents; (iv) valuations for any plan as of the most recent date; (v)
determination letters from the IRS; (vi) the most recent annual report filed
with the IRS; and (vii) trust agreements. Copies of each of the documents
described in the preceding sentence have been previously delivered to
Acquisition Company by Foundation.
SECTION 2.15 Title to Properties; Insurance.
(i) Foundation and the Bank have good and marketable title, free
and clear of all liens, charges and encumbrances (except Taxes which are a lien
but not yet payable and liens, charges or encumbrances reflected in the
Foundation Financial Statements and easements, rights-of-way, and other
restrictions and imperfections not material in nature, and rights of redemption
under applicable law) to all of their owned real properties, a list of which is
included in Section 2.15 of the Disclosure Schedule; (ii) all leasehold
interests for real property and personal property used by Foundation and the
Bank in their businesses are held pursuant to lease agreements which are valid
and enforceable in accordance with their terms, a list of which is included in
Section 2.15 of the Disclosure Schedule and copies of which have been delivered
to Acquisition Company by Foundation; (iii) all such properties comply with all
applicable private agreements, zoning requirements and other governmental laws
and regulations relating thereto and there are no condemnation proceedings
pending or, to our knowledge, threatened with respect to such properties; (iv)
all insurable properties owned or held by Foundation or the Bank are adequately
insured by financially sound and reputable insurers in such amounts and against
fire and other risks insured against by extended coverage and public liability
insurance, as is customary with savings banks and savings and loan holding
companies of similar size, and there are presently no claims pending under such
policies of insurance and no notices have been given by Foundation or the Bank
under such policies; and (v) all tangible properties used in the businesses of
Foundation or the Bank are in good condition, reasonable wear and tear excepted,
and are useable in the ordinary course of business consistent with past
practices. Section 2.15 of the Disclosure Schedule sets forth, for each policy
of insurance maintained by
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Foundation and the Bank, the amount and type of insurance, the name of the
insurer and the amount of the annual premium.
SECTION 2.16 Intellectual Property Rights.
Except as set forth in Section 2.16 of the Disclosure Schedule,
Foundation and the Bank have valid title or other ownership rights under the
OGCL or common law or under royalty-free, perpetual and exclusive licenses to
all intangible personal or intellectual property necessary to conduct the
business and operations of Foundation and the Bank as presently conducted,
including without limitation all franchises, trademarks, tradenames, patents,
software licenses and other rights necessary or appropriate to conduct their
respective businesses as currently conducted (none of which shall be adversely
affected by the Merger) and free and clear of any claim, defense or right of any
other person or entity except, in the case of licenses, for the rights of the
licensors pursuant to applicable license agreements, which rights do not
adversely interfere with the use of such property.
SECTION 2.17 Environmental Matters.
(a) As used herein, the term "ENVIRONMENTAL LAWS" shall mean
all applicable local, state and federal environmental, health and safety laws
and regulations and environmental common law standards in effect as of the date
of this Agreement in all jurisdictions in which Foundation and the Bank have
done business or owned, leased or operated property, including, without
limitation, the Federal Resource Conservation and Recovery Act, the Federal
Comprehensive Environmental Response, Compensation and Liability Act, the
Federal Clean Water Act, the Federal Clean Air Act, and the Federal Occupational
Safety and Health Act.
(b) To the knowledge of Foundation and the Bank, (i) neither
the conduct nor operation of Foundation or the Bank nor any condition of any
property presently or previously owned, leased or operated by any of them is in
violation of any Environmental Laws in a manner or to any extent exposing
Foundation or the Bank to liability and (ii) no condition has existed or event
has occurred with respect to any of them or any such property that, with notice
or the passage of time, or both, would constitute a violation of Environmental
Laws in a manner or to any extent that would obligate Foundation or the Bank to
remedy, stabilize, neutralize or otherwise alter the environmental condition of
any such property. Neither Foundation nor the Bank has received any notice from
any person or entity that Foundation or the Bank or the operation or condition
of any property ever owned, leased or operated by either of them are or were in
violation of any Environmental Laws in a manner or to any extent exposing
Foundation or the Bank to liability or potential liability or that any of them
are responsible (or potentially responsible) for the cleanup or other
remediation of any pollutants, contaminants, or hazardous or toxic wastes,
substances or materials at, on or beneath any such property. To the knowledge of
Foundation and the Bank, no property presently owned, leased or operated by
Foundation or the Bank contains any pollutants, contaminants, or hazardous or
toxic wastes, substances or materials at, on or beneath any such property in
material violation of any Environmental Laws.
(c) Neither Foundation nor the Bank is aware of any material
violation of any Environmental Laws by their respective customers, or any
condition affecting any real estate owned by such customers and presently
mortgaged to Foundation or the Bank which, if ever owned, leased or operated by
Foundation or the Bank, as a result of foreclosure of such mortgage or
otherwise, would give rise to a material liability under any Environmental Laws
or otherwise have a Material Adverse Effect on Foundation or the Bank.
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SECTION 2.18 Certain Operational Matters.
(a) Neither Foundation nor the Bank is a party to any agreement
or subject to any arrangement which would prevent, limit or restrict it from the
sale, lease or other disposition of its main offices or any branch office.
(b) Except as set forth in Section 2.18(b) of the Disclosure
Schedule, consummation of the Merger shall not result in the termination or
cancellation before its stated expiration of any contract to which Foundation or
the Bank is a party or cause them to incur any financial penalty, liquidated
damages, assessment or other costs solely by reason of the Merger.
SECTION 2.19 Material Contracts and Agreements.
Section 2.19 of the Disclosure Schedule contains a list of all
contracts, agreements, indentures, guaranties, arrangements or commitments,
whether or not made in the ordinary course of business, to which Foundation or
the Bank is a party or by which either of them is bound and individually
involving the payment or commitment to pay by Foundation or the Bank of more
than Twenty-Five Thousand and 00/100 Dollars ($25,000.00) ("MATERIAL
CONTRACTS"), other than: (i) loan agreements made in the ordinary course of
business of the Bank; (ii) any loan commitments with customers made in the
ordinary course of business in an amount less than Two Hundred Fifty Thousand
and 00/100 Dollars ($250,000.00) for any single family residential mortgage
loan; (iii) agreements pertaining to advances from the Federal Home Loan Bank;
and (iv) the contracts and benefit plans listed in Sections 2.13 and 2.14 of the
Disclosure Schedule. Except as described in Section 2.19 of the Disclosure
Schedule, neither Foundation nor the Bank is a party to, or is bound by, any
other Material Contract. Complete and accurate copies of each of the Material
Contracts (other than loan agreements and promissory notes) have been delivered
to Acquisition Company by Foundation.
SECTION 2.20 Interest Rate Risk Management Instruments.
Neither Foundation nor the Bank is a party to any interest rate swaps,
caps, floors, option agreements, or any other interest rate risk management
agreements whatsoever.
SECTION 2.21 Chapter 1704 of the Ohio Revised Code Not Applicable.
Assuming that neither Acquisition Company, Acquisition Sub nor Budig is
an "interested shareholder" (as defined in Chapter 1704 of the Ohio Revised
Code), the Board of Directors of Foundation has taken all action so that
restrictions contained in Chapter 1704 of the Ohio Revised Code applicable to a
"business combination" (as defined in said Chapter 1704) will not apply to the
execution, delivery or performance of this Agreement or the consummation of the
Merger or other transactions contemplated by this Agreement.
SECTION 2.22 Tax Matters.
(a) Except as set forth in Section 2.22 of the Disclosure
Schedule, Foundation and the Bank have: (i) duly and timely filed or will duly
and timely file (including applicable extensions
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granted without penalty) all Tax Returns required to be filed at or prior to the
Effective Time, and such Tax Returns which have heretofore been filed are, and
those to be hereinafter filed will be, true, correct and complete; and (ii) paid
in full or, to the best knowledge of Foundation and the Bank, have made adequate
provision for on the financial statements of Foundation and the Bank (in
accordance with generally accepted accounting principles) all Taxes and will pay
in full or make adequate provision for all Taxes. There are no liens for Taxes
upon the assets of either Foundation or the Bank except for statutory liens for
current Taxes not yet due. Except as set forth in Section 2.22 of the Disclosure
Schedule, neither Foundation nor the Bank has requested any extension of time
within which to file any Tax Returns in respect of any fiscal year which have
not since been filed and no request for waivers of the time to assess any Taxes
are pending or outstanding. The federal and state income Tax Returns of
Foundation and the Bank have been audited by the Internal Revenue Service or
appropriate state tax authorities with respect to those periods and
jurisdictions set forth on Section 2.22 of the Disclosure Schedule. Neither
Foundation nor the Bank has any liability for Taxes for any period prior to the
Effective Time (except as set forth in Section 2.22 of the Disclosure Schedule)
or any other deficiency for any Taxes. No deficiencies for any Taxes, assessment
or governmental charge have been proposed, asserted or assessed in writing by
any governmental or taxing authority against Foundation or the Bank which have
not been settled or would not be covered by existing reserves. Except as set
forth in Schedule 2.22, neither Foundation nor the Bank: (i) is a party to any
agreement providing for the allocation or sharing of Taxes; or (ii) is required
to include in income any adjustment pursuant to Section 481(a) of the Code, by
reason of the voluntary change in accounting method (nor has any taxing
authority proposed in writing any such adjustment or change of accounting
method).
(b) Any amount that will become receivable (whether in cash or
property or the vesting of property) as a result of any of the transactions
contemplated by this Agreement by any employee, officer or director of
Foundation or the Bank who is a "DISQUALIFIED INDIVIDUAL" (as such term is
defined in proposed Treasury Regulation Section 1.280G-1) under any employment,
severance or termination agreement, other compensation arrangement or Foundation
Employee Plan (as defined in Section 2.14(c) hereof) currently in effect will
not be characterized as an "excess parachute payment" (as such term is defined
in Section 1.280G-1 of the Code).
SECTION 2.23 Opinion of Financial Advisor.
Foundation has received the opinion of Xxxxx, Xxxxxxxx & Xxxxx, Inc.
(the "FINANCIAL ADVISOR"), dated as of the date of this Agreement, satisfactory
to Foundation, and a signed copy of which has been provided to Acquisition
Company, to the effect that the Per Share Merger Consideration is fair, from a
financial point of view, to the holders of Foundation Common Shares.
SECTION 2.24 Compliance with Law.
Foundation and the Bank have all licenses, franchises, permits and
other governmental authorizations that are legally required to enable them to
conduct their respective businesses and are in compliance with all applicable
laws and regulations.
SECTION 2.25 No Undisclosed Liabilities.
Foundation and the Bank do not have any liability, including any
liability for Taxes (and there is no past or present fact, situation,
circumstance, condition or other basis for any present or future action, suit or
proceeding, hearing, charge, complaint, claim or demand against Foundation or
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the Bank giving rise to any such liability), except: (i) for liabilities set
forth in the Foundation Financial Statements; and (ii) normal fluctuation in the
amount of the liabilities referred to in clause (i) above occurring in the
ordinary course of business of Foundation and the Bank since the date of the
most recent balance sheet included in the Foundation Financial Statements.
SECTION 2.26 Brokerage.
There are no existing claims or agreements for brokerage commissions,
finders' fees, or similar compensation in connection with the transactions
contemplated by this Agreement payable by Foundation or the Bank, other than an
agreement with Xxxxx, Xxxxxxxx & Xxxxx, Inc., a copy of which has been
previously delivered to Acquisition Company, providing for the payment of fees
by Foundation.
SECTION 2.27 Statements True and Correct.
None of the information supplied or to be supplied by Foundation or the
Bank or by their auditors, attorneys, financial advisors or other consultants or
advisors in writing specifically for use in the Proxy Statement or in any other
documents filed with any Regulatory Agency in connection with the transactions
contemplated by this Agreement shall, at the time such documents are filed, at
the time mailed to Foundation's shareholders, at the time of the Shareholders'
Meeting and at the Effective Time, will contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they are
made, not misleading. All documents that Foundation and the Bank shall be
responsible for filing with any Regulatory Agency in connection with the
transactions contemplated by this Agreement, including (without limitation) the
Proxy Statement, shall comply as to form in all material respects with the
provisions of applicable law and the applicable rules and regulations
thereunder.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF ACQUISITION COMPANY
Acquisition Company, Acquisition Sub and Budig, jointly and severally,
hereby make the following representations and warranties:
SECTION 3.1 Organization.
Each of Acquisition Company and Acquisition Sub is a corporation
organized, validly existing and in good standing under the laws of the State of
Ohio and has the corporate power to own all of its property and assets, to incur
all of its liabilities and to carry on its business as now being conducted.
SECTION 3.2 Authorization.
(a) The Boards of Directors of Acquisition Company and
Acquisition Sub have, by all appropriate action, approved this Agreement, the
Merger and the other transactions contemplated by this Agreement and authorized
the due execution, delivery and performance hereof by their respective officers.
Acquisition Company, in its capacity as the sole shareholder of
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Acquisition Sub, has duly adopted and approved this Agreement, the Merger and
the other transactions contemplated by this Agreement. No other corporate acts
or proceedings are required to be taken by Acquisition Company or Acquisition
Sub to authorize the execution, delivery and performance of this Agreement and
to consummate the Merger and the other transactions contemplated by this
Agreement.
(b) This Agreement has been duly and validly executed and
delivered by Acquisition Company and Acquisition Sub and constitutes a legal,
valid and binding obligation of Acquisition Company and Acquisition Sub,
enforceable against them in accordance with its terms; except to the extent
that: (i) the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other laws relating to or
from time to time affecting the enforcement of creditors' rights generally; and
(ii) the availability of certain remedies may be precluded by general principles
of equity.
(c) Neither the execution, delivery and performance by
Acquisition Company or Acquisition Sub of this Agreement, nor the consummation
by Acquisition Company or Acquisition Sub of the transactions contemplated
hereby, nor compliance by Acquisition Company or Acquisition Sub with any of the
provisions hereof, will violate, conflict with or result in a breach of any
provisions of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) or result in the termination of, or
accelerate the performance required by, or result in a right of termination or
acceleration of, or result in the creation of, any lien upon any of the
properties or assets of either Acquisition Company of Acquisition Sub under the
terms, conditions or provisions of: (A) its articles of incorporation or
regulations; or (B) any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which Acquisition Company
or Acquisition Sub or any of the properties or assets of Acquisition Company or
Acquisition Sub is a party or by which it may be bound, or to which such party
may be subject, or violate any judgment, ruling, order, writ, injunction,
decree, statute, rule or regulation applicable to Acquisition Company of
Acquisition Sub or any of their respective properties or assets, or any license
or permit held by Acquisition Company or Acquisition Sub.
(d) Except for the Required Regulatory Actions, no other notice
to, or filing with, exemption or review by, or authorization, consent or
approval of, any public body or authority is necessary for the execution and
delivery of this Agreement or the consummation of the Merger.
SECTION 3.3 No Defaults.
Acquisition Company and Acquisition Sub are neither in default under
nor in violation of any provision of their articles of incorporation or
regulations, or any promissory note, indenture or any evidence of indebtedness
or security therefor, lease, contract, insurance policy, purchase or other
commitment or any other agreement or arrangement (however evidenced), whether
written or oral, and there has not occurred any event that, with the lapse of
time or giving of notice or both, would constitute such a default or violation,
which default could reasonably be expected to cause a Material Adverse Effect on
Acquisition Company.
SECTION 3.4 Litigation and Related Matters.
There is no litigation, claim or other proceeding pending or, to the
knowledge of Acquisition Company or Acquisition Sub, threatened, against
Acquisition Company or Acquisition Sub, or of which the property of Acquisition
Company or Acquisition Sub is or would be subject, and there is
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no injunction, order, judgment, decree or regulatory restriction imposed upon
Acquisition Company or the Bank or the assets of Acquisition Company or
Acquisition Sub which would have a Material Adverse Effect on Acquisition
Company or Acquisition Sub.
SECTION 3.5 Brokerage.
There are no existing claims or agreements for brokerage commissions,
finders' fees, or similar compensation in connection with the transactions
contemplated by this Agreement payable by Acquisition Company or Acquisition
Sub.
SECTION 3.6 Compliance With Law.
Acquisition Company and Acquisition Sub have all licenses, franchises,
permits and other governmental authorizations that are legally required to
enable them to conduct their respective businesses and are in compliance with
all applicable laws and regulations.
SECTION 3.7 State Takeover Statutes.
Acquisition Company has taken all action necessary to exempt
transactions between Acquisition Company, Acquisition Sub and Foundation from
the operation of any anti-takeover laws of any applicable jurisdiction designed
to restrict Acquisition Company's ability to consummate the transactions
contemplated by this Agreement, including the Merger. Neither Acquisition
Company, Acquisition Sub nor Budig is an "interested shareholder" (as defined in
Chapter 1704 of the Ohio Revised Code).
SECTION 3.8 Proxy Statement.
None of the information provided by Acquisition Company or Acquisition
Sub or by their auditors, attorneys, financial advisors or other consultants or
advisors in writing specifically for use in the Proxy Statement shall, at the
time filed with the SEC, at the time mailed to Foundation's shareholders, at the
time of the Shareholders' meeting or at the Effective Time, contain any untrue
statement of material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading.
SECTION 3.9 Ability To Pay Per Share Merger Consideration; Financial
Statements.
Budig will make available to Acquisition Company sufficient cash to pay
the aggregate Per Share Merger Consideration to holders of Foundation Common
Shares as set forth in Section 1.7 hereof and to make the other payments
contemplated under Section 1.7.
The statement of financial condition of Budig as of December 31, 2000
was prepared in accordance with standards established by the American Institute
of Certified Public Accountants and fairly presents in all material respects the
financial position of Budig as of such date. Since December 31, 2000, there has
been no material adverse change in the financial condition of Budig, taken as a
whole.
To his knowledge, as of December 31, 2000, Budig did not have any
material liability, including any material liability for Taxes (and to his
knowledge, there is no past or present fact,
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situation, circumstance, condition or other basis for any present or future
action, suit or proceeding, hearing, charge, complaint, claim or demand against
Budig giving rise to any such material liability), except for liabilities set
forth in or reflected on the Budig statement of financial condition.
SECTION 3.10 Ownership of Acquisition Company and Acquisition Sub.
(a) The authorized capital stock of Acquisition Company
consists of Twenty Thousand (20,000) common shares, Ten Thousand (10,000) of
which are issued and outstanding. Each of the Ten Thousand (10,000) issued and
outstanding common shares of Acquisition Company is owned beneficially and of
record by Budig, free and clear of all liens, encumbrances, rights of first
refusal, options or other restrictions of any nature whatsoever. All of the
outstanding shares of Acquisition Company are duly and validly issued and
outstanding and are fully paid and non-assessable. None of the outstanding
shares of Acquisition Company has been issued in violation of any preemptive
rights of the current or past shareholders of Acquisition Company .
(b) The authorized capital of Acquisition Sub consists solely
of Eight Hundred Fifty (850) common shares, of which One Hundred (100) are
issued and outstanding and owned beneficially and of record by Acquisition
Company, free and clear of all liens, encumbrances, rights of first refusal,
options or other restrictions of any nature whatsoever. All of the outstanding
shares of Acquisition Sub are duly and validly issued and outstanding and are
fully paid and non-assessable. None of the outstanding shares of Acquisition Sub
has been issued in violation of any preemptive rights of the current or past
shareholders of Acquisition Sub.
(c) There are no outstanding options, warrants, rights to
subscribe for, calls, or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, any capital stock of
Acquisition Company or Acquisition Sub, or contracts, commitments,
understandings or arrangements by which either of Acquisition Company or
Acquisition Sub is or may be obligated to issue additional shares of its capital
stock or options, warrants or rights to purchase or acquire any additional
shares of its capital stock; and (ii) there are no outstanding stock
appreciation, phantom stock or similar rights.
SECTION 3.11 Statements True and Correct.
None of the information supplied or to be supplied by Acquisition
Company, Acquisition Sub or Budig, or by their auditors, attorneys, financial
advisors or other consultants or advisors in writing specifically for use in the
Proxy Statement or in any other documents filed with any Regulatory Agency in
connection with the transactions contemplated by this Agreement shall, at the
time such documents are filed, at the time mailed to Foundation's shareholders,
at the time of the Shareholders' Meeting and at the Effective Time, will contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they are made, not misleading. All documents that
Acquisition Company, Acquisition Sub or Budig shall be responsible for filing
with any Regulatory Agency in connection with the transactions contemplated by
this Agreement shall comply as to form in all material respects with the
provisions of applicable law and the applicable rules and regulations
thereunder.
SECTION 3.12 RB-20 Certification.
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(a) Neither Budig nor, to the knowledge of Acquisition Company,
Acquisition Sub or Budig, any individual who is serving or will serve as a
director or officer of Acquisition Company, Acquisition Sub or the Bank after
the Effective Time, is or has been the subject of any criminal, civil or
administrative judgments, consents, undertakings or orders, or any past or
ongoing indictments, formal investigations, examinations, or administrative
proceedings (excluding routine or customary audits, inspections and
investigations) issued by any federal or state court, any department, agency, or
commission of the U.S. Government, any state or municipality, any
self-regulatory trade or professional organization, or any foreign government or
governmental entity, which involve: (i) commission of a felony, fraud, moral
turpitude, dishonesty or breach of trust; (ii) violation of securities or
commodities laws or regulations; (iii) violation of depository institution laws
or regulations; (iv) violation of housing authority laws or regulations; (v)
violation of the rules, regulations, codes of conduct or ethics of a
self-regulatory trade or professional organization; or (vi) adjudication of
bankruptcy or insolvency or appointment of a receiver, conservator, trustee,
referee, or guardian.
(b) Neither Budig, nor to the knowledge of Acquisition Company,
Acquisition Sub or Budig, any individual who is serving or will serve as a
director or officer of Acquisition Company, Acquisition Sub or the Bank after
the Effective Time, has ever filed: (i) any application relating to the
organization of or obtaining insurance of accounts for a bank, savings bank, or
savings and loan association; (ii) an application to acquire any of the
foregoing under the Home Owners' Loan Act or the Bank Holding Company Act; (iii)
a notice relating to a change in control of any of the foregoing under the Home
Owner's Loan Act or the Bank Holding Company Act; or (iv) an application to
acquire a foreign bank or parent thereof; and (v) which was denied, or was
withdrawn by the Applicant after receipt of formal or informal notice of a
recommendation of denial.
(c) Neither Acquisition Company, Acquisition Sub nor Budig owns
more than five percent (5%) of the outstanding equity securities of any insured
financial institution or holding company thereof.
(d) Neither Acquisition Company, Acquisition Sub nor Budig has
any investments in other savings and loan associations in excess of the levels
permitted under Section 10(e)(1)(A)(iii) of the Home Owners' Loan Act.
ARTICLE 4.
AGREEMENTS OF FOUNDATION AND THE BANK
SECTION 4.1 Preparation of Proxy Statement; Shareholder Meeting.
(a) Promptly following the date of this Agreement, Foundation
shall prepare a proxy statement (the "PROXY STATEMENT") to be distributed to
holders of Foundation Common Shares in connection with the Merger and include
therein the unanimous recommendation of Foundation's Board of Directors that the
shareholders of Foundation vote in favor of the approval and adoption of this
Agreement and the Merger and include therein the written opinion of the
Financial Advisor as of a date proximate to the date of the Proxy Statement that
the Per Share Merger Consideration to be received by the shareholders of
Foundation pursuant to the Merger is fair, from a financial point of view, to
such shareholders; provided, however, that Foundation's Board of Directors may
fail to
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make or may withdraw or modify such recommendation, if, (i) in accordance with
Section 7.1(g) hereof, Foundation's Board of Directors recommends a Superior
Acquisition Proposal or (ii) the Financial Advisor or any other financial
advisor engaged by Foundation's Board of Directors in its sole discretion for
such purpose does not issue the opinion described above. Foundation shall use
its reasonable best efforts to obtain and furnish the information required to be
included by it in the Proxy Statement. Acquisition Company and Acquisition Sub
will cooperate with Foundation in connection with the preparation of the Proxy
Statement including, but not limited to, furnishing to Foundation any and all
information regarding Acquisition Company as may be required to be disclosed
therein. Foundation will use reasonable best efforts to cause the Proxy
Statement to be mailed to Foundation's shareholders as promptly as practicable.
(b) All mailings to Foundation's shareholders in connection
with the Merger, including the Proxy Statement, shall be subject to the prior
review, comment and approval of Acquisition Company and Acquisition Sub (and
such approval shall not be unreasonably withheld or delayed).
(c) Foundation shall, as soon as reasonably practicable
following the date on which the Acquisition Company or Budig is notified by the
OTS (whether formally or informally) that the application to secure the
requisite approval of the OTS to the consummation of the Merger is deemed
complete and in consultation with Acquisition Company and Acquisition Sub, duly
call and give notice of, and, provided that this Agreement has not been
terminated, convene and hold, a special meeting of the holders of Foundation
Common Shares (the "SHAREHOLDERS' MEETING") for the purpose of approving this
Agreement, the Merger and the transactions contemplated by this Agreement to the
extent required by the OGCL (the "SHAREHOLDER APPROVAL"). Foundation will use
reasonable best efforts to hold such meeting as soon as reasonably practicable
after such date.
SECTION 4.2 Business of Foundation in Ordinary Course.
(a) Foundation shall not declare or pay any dividend or make
any other distribution to shareholders, whether in cash, stock or other
property, after the date hereof, except for an annual dividend payable in cash;
provided, however, that such cash dividend shall not be paid sooner than the
anniversary date in 2001 of the date on which the annual cash dividend was paid
by Foundation in 2000 and further provided; that the amount of such cash
dividend per share shall not exceed the amount of the annual cash dividend per
share paid by Foundation in 2000. Such annual cash dividend shall be declared
and paid in a manner consistent with past practices.
(b) Foundation and the Bank shall: (1) continue to carry on
after the date hereof its respective business and the discharge or incurrence of
obligations and liabilities, only in the usual, regular and ordinary course of
business, as heretofore conducted; and (2) use reasonable best efforts to
maintain and preserve intact its respective business organization, employees and
advantageous business relationships and retain the services of its officers and
key employees. Foundation and the Bank shall not, without the prior written
consent of Foundation:
(i) issue any Foundation Common Shares or other capital
stock or any options, warrants, or other rights to subscribe
for or purchase Foundation Common Shares or any other capital
stock or any securities convertible into or exchangeable for
any capital stock of Foundation or the Bank (except pursuant to
Stock Options previously granted; or
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(ii) directly or indirectly redeem, purchase or otherwise
acquire any Foundation Common Shares or any other capital stock
of Foundation or the Bank or effect a reclassification,
recapitalization, split-up, exchange of shares, readjustment or
other similar change in or to any capital stock or otherwise
reorganize or recapitalize Foundation or the Bank; or
(iii) change the Articles of Incorporation, Code of
Regulations or other charter documents of Foundation or the
Bank; or
(iv) grant any increase, other than ordinary and normal
increases consistent with past practices, in the compensation
payable or to become payable to officers or salaried employees
or, except as required by law or as required by existing
contractual obligations which shall have been described in
Sections 2.14(c) or 2.19 of the Disclosure Schedule, adopt or
make any material change in any bonus, insurance, pension, or
other Foundation Employee Plan, agreement, payment or
arrangement made to, for or with any of such officers or
employees; or
(v) borrow or agree to borrow any material amount of funds
except in the ordinary course of business, or directly or
indirectly guarantee or agree to guarantee any material
obligations of others, except in the ordinary course of
business; or
(vi) make or commit to make any new loan or letter of
credit or any new or additional discretionary advance under any
existing line of credit, except in the ordinary course of
business; provided, however, without the prior consent of
Acquisition Company, which consent shall not be unreasonably
withheld, the Bank will not make or commit to make any new loan
secured by residential real estate in excess of $300,000 or
make or commit to make any new loans secured by commercial real
estate in excess of $500,000; or
(vii) purchase or otherwise acquire any investment security
for its own account, except in a manner and pursuant to
policies consistent with past practice; or
(viii) materially increase or decrease the rate of interest
paid on time deposits, or on certificates of deposit, except in
a manner and pursuant to policies consistent with past
practices; or
(ix) enter into any agreement, contract or commitment of a
material nature out of the ordinary course of business; or
(x) except in the ordinary course of business, place on any
of its material assets or properties any mortgage, pledge,
lien, charge, or other encumbrance of a material nature; or
(xi) except in the ordinary course of business, cancel or
accelerate any material indebtedness owing to Foundation or the
Bank or any claims which Foundation or the Bank may possess or
waive any material rights with respect thereto; or
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(xii) sell, assign, transfer, convey, license, subcontract,
cancel, amend or alter in any other material respect any loan
servicing rights of Foundation or the Bank; or
(xiii) except as set forth in Section 4.2(b)(xiii) of the
Disclosure Schedule, sell or otherwise dispose of any material
real property or any material amount of any tangible or
intangible personal property other than in the ordinary course
of business and other than properties acquired in foreclosure
or otherwise in the ordinary collection of indebtedness to
Foundation or the Bank; or
(xiv) with respect to the branch operations of the Bank,
take any action to close any existing branch, open new
branches, acquire by purchase, merger or otherwise additional
branches, or otherwise affect the number, location, and nature
of the branch operations, or to make any public announcement
regarding the continuation or discontinuation of any branch
operations; or
(xv) foreclose upon or otherwise take title to or
possession or control of any real property without first
obtaining a Phase I environmental report thereon which
indicates that the property is free of pollutants, contaminants
or hazardous or toxic waste materials; provided, however, that
no report shall be required with respect to single family,
non-agricultural residential property of one acre or less to be
foreclosed upon unless there is reason to believe that such
property might contain any such waste materials or otherwise
might be contaminated; or
(xvi) commit any act or fail to do any act which would
cause a breach of any agreement, contract or commitment and
which would have a Material Adverse Effect on Foundation or the
Bank; or
(xvii) purchase any real or personal property or make any
other capital expenditure in excess of $5,000.00; or
(xviii) take any action which would materially and
adversely affect or delay the ability of any party hereto to
obtain any necessary approvals of any Regulatory Agency or
other governmental authority required for the transactions
contemplated by this Agreement or to perform its covenants and
agreements under this Agreement.
(c) Foundation and the Bank shall not, without the prior
written consent of Acquisition Company, engage in any transaction or take any
action that would render untrue any of the representations and warranties of
Foundation and the Bank contained in Article 2 hereof (except for any such
representations and warranties made only as of a specified date), if such
representations and warranties were given as of the date of such transaction or
action.
(d) Foundation may, in its discretion, file a Form 15 with the
SEC.
SECTION 4.3 Acquisition Proposals.
Prior to the Effective Time, Foundation agrees that: (a) neither it nor
the Bank shall initiate, solicit or encourage, directly or indirectly, any
inquiries or the making or implementation of any proposal or offer (including,
without limitation, to the holders of Foundation Common Shares) with
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respect to a merger, acquisition, tender offer, exchange offer, consolidation,
sale of assets or similar transaction involving all or any significant portion
of the assets or any equity securities of Foundation or of the Bank, other than
the transactions contemplated by this Agreement (any such proposal or offer
being hereinafter referred to as an "ACQUISITION PROPOSAL") or engage in any
negotiations concerning or providing any confidential information or data to or
having discussions with, any Person relating to an Acquisition Proposal, or
otherwise facilitate any effort or attempt to make or implement an Acquisition
Proposal; (b) it will use its best efforts not to permit any of its officers,
employees, agents or financial advisors to engage in any of the activities
described in Section 4.3(a); (c) it will immediately cease and cause to be
terminated any existing activities, discussions and negotiations with any
parties conducted heretofore with respect to any of the foregoing and will take
the necessary steps to inform the individuals or entities referred to in Section
4.3(b) of the obligations undertaken in this Section 4.3; and (d) it will notify
Acquisition Company immediately if Foundation receives any such inquiries or
proposals, or any request for such information, or if any such negotiations or
discussions are sought to be initiated with it; PROVIDED, HOWEVER, that nothing
contained in this Section 4.3 shall prohibit the Foundation Board of Directors
from: (i) furnishing information to or entering into discussions or negotiations
with, any Person or entity that makes an unsolicited Acquisition Proposal, if,
and only to the extent that (A) the Foundation Board of Directors determines in
good faith that failure to do so would create a reasonable probability of a
breach of its duties to shareholders imposed by law, (B) prior to furnishing
such information to, or entering into such discussions or negotiations with,
such Person or entity, Foundation provides written notice to Acquisition Company
to the effect that it is furnishing information to, or entering discussions
with, such Person or entity, and (C) subject to any confidentiality agreement
with such Person or entity (which Foundation determined in good faith was
required to be executed in order for the Foundation Board of Directors to comply
with its duties to shareholders imposed by law), Foundation keeps Acquisition
Company informed of the status (not the terms) of any such discussions or
negotiations; and (ii) to the extent applicable, complying with Rule 14e-2 or
14d-9 promulgated under the Exchange Act with respect to an Acquisition
Proposal.
Nothing in this Section 4.3 shall: (x) permit Foundation to terminate
this Agreement (except as specially provided in Article 7 hereof), (y) permit
Foundation to enter into an agreement with respect to an Acquisition Proposal
during the term of this Agreement (it being agreed that during the term of this
Agreement, Foundation shall not enter into an agreement with any Person that
provides for, or in any way facilitates, an Acquisition Proposal) other than a
confidentiality agreement in customary form executed as provided before, or (z)
affect any other obligation of Foundation under this Agreement; PROVIDED,
HOWEVER, that, subject to the provisions of Section 7.2, the Foundation Board of
Directors may approve and recommend a Superior Acquisition Proposal and, in
connection therewith, withdraw or modify its approval or recommendation of this
Agreement and the Merger.
As used herein, "SUPERIOR ACQUISITION PROPOSAL" means a bona fide
Acquisition Proposal made by a third party which a majority of the members of
the Foundation Board of Directors determines to in good faith to be more
favorable of the holders of Foundation Common Shares from a financial point of
view than the Merger and which the Foundation Board of Directors determines is
reasonably capable of being consummated.
SECTION 4.4 Breaches.
Foundation and the Bank shall, in the event either has knowledge of the
occurrence, or impending or threatened occurrence, of any event or condition
which would cause or constitute a
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breach (or would have caused or constituted a breach had such event occurred or
been known prior to the date hereof) of any of its representations or agreements
contained or referred to herein, give prompt written notice thereof to the other
parties hereto and use its best efforts to prevent or promptly remedy the same.
SECTION 4.5 Consents to Contracts and Leases.
Foundation and the Bank shall use their respective best efforts to
obtain all necessary consents with respect to all interests of Foundation and
the Bank in any material leases, licenses, contracts, instruments and rights
which require the consent of another person for their transfer or assumption
pursuant to the Merger, including, but not limited to any landlord approvals
required in Section 6.1(h).
SECTION 4.6 Consummation of Agreement.
Foundation and the Bank shall use their best efforts to perform and
fulfill all conditions and obligations on their part to be performed or
fulfilled under this Agreement as promptly as possible and to effect the Merger,
the Charter Conversion and the other transactions contemplated hereby
expeditiously in accordance with the terms and provisions hereof. Foundation and
the Bank shall furnish to Acquisition Company in a timely manner, all
information, data and documents in the possession of Foundation and the Bank
requested by Acquisition Company as may be required to obtain any necessary
regulatory or other approvals of the Merger and the Charter Conversion and shall
otherwise cooperate fully with Acquisition Company to carry out the purpose and
intent of this Agreement.
SECTION 4.7 Employee Benefit Plans.
(a) Subject to the Code, (i) as soon as practicable after the
date of this Agreement, Foundation will terminate its employee stock ownership
plan ("Foundation ESOP") as of the Effective Time contingent on completion of
the transaction contemplated in this Agreement, (ii) as soon as practicable
Foundation will submit an application to the IRS requesting a determination
letter to the effect that termination of the Foundation ESOP as of the Effective
Time (and subsequent liquidation of its assets) will not adversely affect
compliance of the Foundation ESOP with Section 401(a) of the Code or the
qualification of the Foundation ESOP's trust under Section 501(a) of the Code
and (iii) as of the Effective Time, or as soon as practicable thereafter, (A)
each Foundation Common Share allocated to participants' accounts will be
exchanged for cash equal to the Per Share Merger Consideration, (B) the loan to
the Foundation ESOP shall be repaid in full with the Per Share Merger
Consideration received from Acquisition Sub for the unallocated shares of
Foundation Common Shares held in the Foundation ESOP, and (C) that remaining Per
Share Merger Consideration will be allocated to participants' accounts as
investment earnings not subject to the limitations imposed under Section 415 of
the Code. After the Effective Time, and while the determination letter
application described in Section 4.7(b)(ii) is pending, the current
administrator of the Foundation ESOP, or another administrator selected by
Acquisition Sub (subject to consultation with Foundation ESOP's then current
trustee), shall continue to administer the Foundation ESOP subsequent to the
Effective Time, and the current Trustee of the Foundation ESOP, or such other
trustee(s) selected by Acquisition Sub (subject to consultation with Foundation
ESOP's then current trustee) or the administrators, shall continue to be the
Trustee subsequent to the Effective Time. The parties agree that the Foundation
ESOP shall be amended to the extent
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necessary to receive a favorable determination letter from the IRS as to the tax
qualified status of the Foundation ESOP upon its termination under Section
401(a) and 4975(e)(7) of the Code (the "Final Determination Letter"). Promptly
following the receipt of the Final Determination Letter, distributions of the
account balances under the Foundation ESOP shall be made to the ESOP
Participants. From and after the date hereof, in anticipation of such
termination and distribution, Acquisition Sub and Foundation prior to the
Effective Time, and Acquisition Sub after the Effective Time, shall use their
best efforts to obtain the favorable Final Determination Letter. In the event
that Acquisition Sub and Foundation, prior to the Effective Time, and
Acquisition Sub after the Effective Time, reasonably determine that the
Foundation ESOP cannot obtain a favorable Final Determination Letter, or that
the amounts held therein cannot be applied, allocated or distributed without
causing the Foundation ESOP to lose its tax qualified status, Foundation prior
to the Effective Time and Acquisition Sub after the Effective Time shall take
such action as they may reasonably determine is necessary to preserve the tax
status of the ESOP and its trust, the tax characterization of distributions to
ESOP Participants and the liquidation of the ESOP's trust. All ESOP Participants
shall fully vest and have a nonforfeitable interest in their accounts under the
Foundation ESOP determined as of the termination date.
(b) Prior to the Effective Time, Foundation and the Bank shall
adopt and implement a severance plan providing benefits of not more than two
weeks of salary for each year of service to Foundation or the Bank for each
employee of Foundation or the Bank (excluding, however, Xxxxx X. Xxxxxxx) whose
employment is terminated by the Surviving Corporation or the Bank, other than
for cause, within one (1) year following the Effective Time. Acquisition Company
and Acquisition Sub agree to assume all obligations of Foundation or the Bank
under such severance plan.
SECTION 4.8 Access to Information.
Foundation and the Bank shall permit Acquisition Company reasonable
access in a manner which shall avoid undue disruption or interference with
Foundation's and the Bank's normal operations to their operations and premises
and shall disclose and make available to Acquisition Company all books,
documents, papers, records and computer systems documentation and files relating
to its assets, stock ownership, properties, operations, obligations and
liabilities, including, but not limited to, all books of account (including the
general ledger), tax records, minute books of directors' and shareholders'
meetings, organizational documents, contracts and agreements, loan files,
filings with any regulatory authority, accountants' workpapers (if available and
subject to the respective independent accountants' consent), litigation files
(except for matters covered by the attorney-client privilege), Foundation
Employee Plans, and any other business activities or prospects. Foundation and
the Bank shall provide notice of and permit a representative of Acquisition
Company to attend all meetings of the Boards of Directors and committees
thereof; provided, however, that the Boards of Directors may exclude such
representative from attending any deliberations during which the Boards may
discuss an Acquisition Proposal or any matter covered by the attorney-client
privilege. Acquisition Company shall hold any such information which is
nonpublic in confidence in accordance with the confidentiality provisions
hereof.
SECTION 4.9 Regulatory Applications.
(a) Foundation and the Bank will prepare and cause to be filed
at their expense such applications and related documents with the FDIC, the OTS,
the Ohio Division of Financial
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Institutions, and any other governmental agencies as are required of them to
secure the requisite approval of such agencies to the consummation of the Merger
and the Charter Conversion. Foundation and the Bank shall use all reasonable
efforts to file all applications and related documents relating to the
consummation of the Merger within thirty (30) days of the date of this Agreement
and to secure all such approvals. Foundation and the Bank shall, in addition,
use all reasonable efforts to file all applications and related documents
relating to the consummation of the Charter Conversion as reasonably requested
by Acquisition Company and to secure all such approvals.
(b) Foundation and the Bank agree that they will, as promptly
as practicable after request and at their own expense, provide Acquisition
Company with all information and documents concerning Foundation and the Bank as
shall be required in connection with preparing any applications, and other
documents which are to be prepared and filed by Acquisition Company and in
connection with regulatory approvals required to be obtained by Acquisition
Company hereunder.
(c) Acquisition Company agrees that it will, as promptly as
practicable after request and at its own expense, provide Foundation and the
Bank with all information and documents concerning Acquisition Company as shall
be required in connection with preparing such applications and related documents
which are to be prepared and filed by Foundation or the Bank in connection with
approvals required to be obtained by Foundation or the Bank hereunder.
(d) Prior to filing such applications or other documents with
the applicable governmental agency, Foundation and the Bank shall provide copies
thereof to Acquisition Company at least five (5) days prior to the filing date.
ARTICLE 5.
AGREEMENTS OF ACQUISITION COMPANY, ACQUISITION SUB AND BUDIG
SECTION 5.1 Regulatory Approvals; Other Agreements.
(a) Acquisition Company, Acquisition Sub and Budig will prepare
and cause to be filed at their expense such applications and other documents
with the FDIC, the OTS, the Ohio Division of Financial Institutions, and any
other governmental agencies as are required of them to secure the requisite
approval of such agencies to the consummation of the transactions provided for
in this Agreement. Acquisition Company, Acquisition Sub and Budig shall use all
reasonable efforts to file all such applications within thirty (30) days of the
date of this Agreement and to secure all such approvals.
(b) Acquisition Company, Acquisition Sub and Budig agree that
they will, as promptly as practicable after request and at their own expense,
provide Foundation and the Bank with all information and documents concerning
Acquisition Company, Acquisition Sub and Budig as shall be required in
connection with preparing any applications, and other documents which are to be
prepared and filed by Foundation and the Bank in connection with regulatory
approvals required to be obtained by Foundation and the Bank hereunder.
(c) Acquisition Company, Acquisition Sub and Budig agree that
they will, as promptly as practicable after request and at their own expense,
provide Foundation and the Bank
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with all information and documents concerning Acquisition Company, Acquisition
Sub and Budig as shall be required in connection with preparing such
applications and other documents which are to be prepared and filed by
Foundation or the Bank in connection with approvals required to be obtained by
Foundation or the Bank hereunder.
(d) Prior to filing such applications or other documents with
the applicable governmental agency, Acquisition Company, Acquisition Sub and
Budig shall provide copies thereof to Acquisition Company at least five (5) days
prior to the filing date.
SECTION 5.2 Breaches.
Acquisition Company shall, in the event it has knowledge of the
occurrence, or impending or threatened occurrence, of any event or condition
which would cause or constitute a breach (or would have caused or constituted a
breach had such event occurred or been known prior to the date hereof) of any of
its representations or agreements contained or referred to herein, give prompt
written notice thereof to Foundation and use its best efforts to prevent or
promptly remedy the same.
SECTION 5.3 Consummation of Agreement.
Acquisition Company and Acquisition Sub shall use their best efforts to
perform and fulfill all conditions and obligations on their part to be performed
or fulfilled under this Agreement and to effect the Merger and the Charter
Conversion in accordance with the terms and conditions of this Agreement.
SECTION 5.4 Director and Officer Matters.
Effective as of the Effective Time, Acquisition Company shall cause to
be issued one or more policies of insurance, with a three (3) year term, for all
of the current directors and officers of Foundation and the Bank for the acts
and omissions of such directors and officers occurring in their respective
capacities as such prior to the Effective Time, providing liability insurance
coverage on substantially the same terms and conditions as presently provided
for the benefit of the directors and officers of Foundation and the Bank under
their respective existing directors' and officers' liability insurance policies,
but only to the extent that such insurance may be purchased or kept in force on
commercially reasonable terms taking into account the cost thereof and the
benefits provided thereby. The cost of such insurance shall be considered
commercially reasonable so long as it does not exceed 150% of the costs
currently paid for such coverage by Foundation. Proof of such insurance shall be
furnished to any of the former directors and officers of Foundation and the Bank
upon request. Acquisition Company agrees that all rights to indemnification that
the directors and officers of Foundation or the Bank have pursuant to the
Articles of Incorporation, Code of Regulations or similar charter documents of
Foundation and the Bank or under applicable law, shall survive the Merger and
shall continue in full force and effect. In the case of any former officer of
director of Foundation or the Bank who is not an officer or director as of the
date hereof, and who is entitled to and is currently receiving the benefits of
any existing contractual arrangement with Foundation or the Bank providing
benefits similar to those set forth in this Section 5.4, Acquisition Company
shall be obligated to honor the terms and conditions of any such prior
contractual arrangement.
SECTION 5.5 Employment Agreements; Employee Benefit Plans.
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(a) Xxxxx X. Xxxxxxx is the only executive officer of
Foundation and the Bank who is party to employment or severance agreements,
pursuant to which he shall be entitled, under certain circumstances, to payments
in connection with a termination of employment resulting from a "change in
control" transaction. Acquisition Company and Budig agree the Bank shall enter
into a new employment agreement with Xx. Xxxxxxx in the form attached hereto as
Exhibit 5.5, such employment agreement to become effective upon the consummation
of the Merger.
(b) Acquisition Company or Acquisition Sub will cause
Foundation after the Effective Time to provide health, disability, vacation and
sick leave benefits to the employees of Foundation comparable to the benefits
provided to such employees by Foundation or the Bank as of the date of this
Agreement and to adopt and implement a retirement plan for the employees of
Foundation (which may be in the form of a 401(k) plan, individual retirement
accounts or otherwise as determined by Acquisition Company); provided, however,
notwithstanding the foregoing, Foundation shall not be obligated to provide or
maintain to or for the benefit of such employees any plan comparable to the
Foundation Stock Option Plans, the Bank Recognition Plan or the Foundation ESOP.
SECTION 5.6 Business of Acquisition Company, Acquisition Sub and Budig.
(a) Acquisition Company, Acquisition Sub and Budig shall not,
without the prior written consent of Foundation:
(i) issue any common shares or other capital stock or any
options, warrants, or other rights to subscribe for or purchase
common shares or any other capital stock or any securities
convertible into or exchangeable for any capital stock of
Acquisition Company or Acquisition Sub;
(ii) transfer, sell, assign or encumber in any manner
Budig's right, title and interest in and to the shares of
Acquisition Company;
(iii) transfer, sell, assign or encumber in any manner
Acquisition Company's right, title and interest in and to the
shares of Acquisition Sub;
(iv) commit any act or fail to do any act which would cause
a breach of any agreement, contract or commitment and which
would have a Material Adverse Effect on Acquisition Company,
Acquisition Sub or Budig; or
(v) take any action which would materially and adversely
affect or delay the ability of any party hereto to obtain any
necessary approvals of any Regulatory Agency or other
governmental authority required for the transactions
contemplated by this Agreement or to perform its covenants and
agreements under this Agreement.
(b) Neither Acquisition Company, Acquisition Sub nor Budig
shall, without the prior written consent of Foundation, engage in any
transaction or take any action that would render untrue any of the
representations and warranties of Acquisition Company, Acquisition Sub or Budig
contained in Article 3 hereof (except for any such representations and
warranties made only as of a specified date), if such representations and
warranties were given as of the date of such transaction or action.
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SECTION 5.7 Funding of Acquisition Company.
Budig agrees that he will provide sufficient funds to Acquisition
Company and Acquisition Sub to enable them to timely perform all of their
obligations under this Agreement.
ARTICLE 6.
CONDITIONS PRECEDENT TO MERGER
SECTION 6.1 Conditions to Obligations of Acquisition Company.
The obligation of Acquisition Company to effect the Merger shall be
subject to the satisfaction (or waiver by Acquisition Company) prior to or on
the Closing Date of the following conditions:
(a) The representations and warranties made by Foundation and
the Bank in this Agreement shall be true and correct in all material respects on
and as of the Closing Date with the same effect as though such representations
and warranties had been made or given on and as of the Closing Date (except for
any such representations and warranties made only as of a specified date which
shall be true and correct as of such date);
(b) Foundation and the Bank shall have performed and complied
in all material respects with all of their respective obligations and agreements
required to be performed on or prior to the Closing Date under this Agreement;
(c) No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
legal restraint or prohibition (an "INJUNCTION") preventing the consummation of
the Merger shall be in effect, nor shall any proceeding by any Regulatory Agency
or other person seeking any of the foregoing be pending. There shall not be any
action taken, or any statute, rule, regulation or order enacted, entered,
enforced or deemed applicable to the Merger which makes the consummation of the
Merger illegal;
(d) All necessary regulatory approvals, consents,
authorizations and other approvals, including the requisite approval of this
Agreement and the Merger by the shareholders, required by law or any Regulatory
Agency for consummation of the Merger shall have been obtained and all waiting
periods required by law shall have expired, and no regulatory approval shall
have imposed any condition, requirement or restriction which Acquisition Company
reasonably determines in good faith would so materially adversely impact the
economic or business benefits of the transactions contemplated by this Agreement
to Acquisition Company as to render inadvisable the consummation of the Merger
(any such condition, requirement or restriction, a "BURDENSOME CONDITION". For
purposes of this Agreement, a condition which requires Budig or Acquisition
Company to maintain the net worth or regulatory capital of Foundation or the
Bank at not more than 10% of total assets shall not be considered a Burdensome
Condition.
(e) Acquisition Company shall have received all documents
required by this Agreement to be received, on or prior to the Closing Date, all
in form and substance reasonably satisfactory to Acquisition Company;
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(f) Acquisition Company shall have received the unaudited
consolidated balance sheets of Foundation and the Bank and the related unaudited
consolidated income statements and statements of changes in shareholders' equity
and cash flows for each quarter prior to the Effective Time, together with the
notes thereto (all such financial statements being collectively referred to as
the "PRE-CLOSING FINANCIAL STATEMENTS"), in each instance prepared on a basis
consistent with prior periods and in accordance with generally accepted
accounting principles;
(g) The Pre-Closing Financial Statements as at the end of the
month prior to the Closing Date shall reflect shareholders' equity, as of the
Closing Date, of not less than Seven Million Seventy Five Thousand and 00/100
Dollars ($7,075,000) (disregarding, however, fees and expenses of legal counsel
to Foundation and the Bank related to the Merger, investment banking fees paid
to Xxxxx, Xxxxxxxx & Xxxxx Inc., proxy preparation and printing expenses, change
in control payments to executive officers and other expenses incurred in
connection with the transactions contemplated by this Agreement); and,
SECTION 6.2 Conditions to Obligations of Foundation and the Bank.
The obligation of Foundation and the Bank to effect the Merger shall be
subject to the satisfaction (or waiver by Foundation and the Bank) prior to or
on the Closing Date of the following conditions:
(a) The representations and warranties made by Acquisition
Company in this Agreement shall be true and correct in all material respects on
and as of the Closing Date with the same effect as though such representations
and warranties had been made or given on and as of the Closing Date (except for
any such representations and warranties made only as of a specified date which
shall be true and correct as of such date);
(b) Acquisition Company shall have performed and complied in
all material respects with all of its obligations and agreements hereunder
required to be performed on or prior to the Closing Date under this Agreement;
(c) No Injunction preventing the consummation of the Merger
shall be in effect, nor shall any proceeding by any Regulatory Agency or any
other person seeking any of the foregoing be pending. There shall not be any
action taken, or any statute, rule, regulation or order enacted, entered,
enforced or deemed applicable to the Merger which makes the consummation of the
Merger illegal;
(d) All necessary regulatory approvals, consents,
authorizations and other approvals, including the requisite approval of this
Agreement and the Merger by the shareholders of the parties hereto, required by
law or any Regulatory Agency for consummation of the Merger shall have been
obtained and all waiting periods required by law shall have expired; and,
(e) Foundation and the Bank shall have received all documents
required to be received from Acquisition Company on or prior to the Closing
Date, all in form and substance reasonably satisfactory to Foundation and the
Bank.
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ARTICLE 7.
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1 Termination.
This Agreement may be terminated at any time prior to the acceptance of
the Certificate of Merger for record by the Secretary of State of the State of
Ohio, whether before or after the Shareholder Approval has been obtained:
(a) by mutual written consent duly authorized by the Boards of
Directors of Foundation and Acquisition Company;
(b) by Acquisition Company, upon a breach of any
representation, warranty, covenant, obligation or agreement on the part of
Foundation or the Bank set forth in this Agreement, such that the conditions set
forth in Section 6.1 hereof would be incapable of being satisfied by December
31, 2001 (or as otherwise extended);
(c) by Foundation, upon a breach of any representation,
warranty, covenant obligation or agreement on the part of Acquisition Company,
Acquisition Sub or Budig set forth in this Agreement, such that the conditions
set forth in Section 6.2 hereof would be incapable of being satisfied by
December 31, 2001 (or as otherwise extended);
(d) by either Foundation or Acquisition Company, if any
judgment, injunction, order, decree or action by any governmental entity of
competent authority preventing the consummation of the Merger or imposing a
Burdensome Condition on the transactions contemplated hereby shall have become
final and nonappealable;
(e) by either Foundation or Acquisition Company, if the Merger
shall not have been consummated before December 31, 2001; provided, that in the
case of termination pursuant to this Section 7.1(e), the terminating party shall
not have breached in any material respect its obligations under this Agreement
in any manner that shall have proximately contributed to the occurrence of the
failure referred to in this Section 7.1(e);
(f) by either Foundation or Acquisition Company if, upon a vote
at a duly held Shareholders' Meeting or any adjournment thereof, the Shareholder
Approval shall not have been obtained;
(g) by Foundation, if prior to the conclusion of the tabulation
of the votes with respect to the Merger at the Shareholders' Meeting, the
Foundation Board of Directors has withdrawn or modified its approval or
recommendation of the Merger or this Agreement and the Foundation Board of
Directors has approved, recommended or entered into a Superior Acquisition
Proposal; or,
(h) by Acquisition Company, if the record holders of more than
ten percent (10%) of the Outstanding Foundation Shares on the Effective Date
have properly served a demand on Foundation seeking relief pursuant to the
provisions of Section 1701.85 of the OGCL.
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(i) by Foundation, if Acquisition Company, Acquisition Sub or
Budig are notified by any applicable Regulatory Authority that their regulatory
application(s) will be denied or should be withdrawn.
SECTION 7.2 Certain Fees and Expenses.
(a) If this Agreement shall be terminated pursuant to Section
7.1(g), then Foundation shall pay Acquisition Company (provided Foundation was
not entitled to terminate this Agreement pursuant to Section 7.1(c) at the time
of such termination) a fee equal to the Break-Up Fee (as defined below) and the
Xxxxxxx Money Deposit shall be returned to Acquisition Company.
(b) If this Agreement shall be terminated pursuant to Section
7.1(b), then Foundation shall pay Acquisition Company (provided Foundation was
not entitled to terminate this Agreement pursuant to Section 7.1(c) at the time
of such termination) an amount equal to the Acquisition Company Liquidated
Damages Amount (as defined below) and the Xxxxxxx Money Deposit shall be
returned to Acquisition Company.
(c) If this Agreement shall be terminated pursuant to Section
7.1(c), then Acquisition Company or Budig will pay Foundation (provided
Acquisition Company was not entitled to terminate this Agreement pursuant to
Section 7.1(b) at the time of such termination), an amount equal to the
Foundation Liquidated Damages Amount (as defined below), which may be satisfied
out of the Xxxxxxx Money Deposit.
(d) If this Agreement shall be terminated pursuant to Section
7.1(i), then Acquisition Company or Budig will pay Foundation (provided
Acquisition Company was not entitled to terminate this Agreement pursuant to
Section 7.1(b) at the time of such termination), an amount equal to 50% of the
Foundation Liquidated Damages Amount (as defined below), which may be satisfied
out of the Xxxxxxx Money Deposit.
(e) If this Agreement shall be terminated pursuant to Section
7.1(a) or by Foundation pursuant to Section 7.1(e), and at the time of the
termination of this Agreement an Acquisition Proposal has been received by
Foundation, and either prior to the termination of this Agreement or within
twelve (12) months thereafter Foundation or the Bank enters into any written
Acquisition Proposal which is subsequently consummated (provided such
Acquisition Proposal is the same or substantially the same Acquisition Proposal
that had been received at the time of the termination of this Agreement), then
Foundation shall pay the Break-Up Fee to Acquisition Company.
(f) The Foundation and Acquisition Company agree that actual
damages accruing from a termination of the Agreement pursuant to the subsections
of Section 7.1 with respect to which the provisions of Section 7.2 provide for
the payment of damages, are incapable of precise estimation and would be
difficult to prove, that the payment to Acquisition Company or Foundation, as
applicable, of the Acquisition Company Liquidated Damages Amount, the Foundation
Liquidated Damages Amount or the Break-Up Fee shall constitute liquidated
damages, that the rights to the Acquisition Company Liquidated Damages Amount,
the Foundation Liquidated Damages Amount or the Break-Up Fee, as applicable,
stipulated in this Section 7.2, bear a reasonable relationship to the potential
injury likely to be sustained in the event of such a termination and that such
stipulated rights to liquidated damages are intended by the parties to provide
just compensation in the event of such a termination and are not intended to
compel performance or to constitute a penalty for
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nonperformance. Payment of the Acquisition Company Liquidated Damages Amount or
the Break-Up Fee by Foundation and the return of the Xxxxxxx Money Deposit to
Acquisition Company shall terminate all of Acquisition Company's rights and
remedies at law or in equity against Foundation in respect of a termination of
this Agreement pursuant to the subsections of Section 7.1 with respect to which
the provisions of Section 7.2 provide for the payment of damages. Payment of the
Foundation Liquidated Damages Amount by Acquisition Company shall terminate all
of Foundation's rights and remedies at law or in equity against Acquisition
Company in respect of a termination of this Agreement pursuant to Section
7.1(c). The Acquisition Company Liquidated Damages Amount or the Break-Up Fee
shall be paid by Foundation to Acquisition Company, or the Foundation Liquidated
Damages Amount shall be paid by Acquisition Company to Foundation, in
immediately available funds within fifteen (15) days after the date of the event
giving rise to the obligation to make such payment occurred.
The "ACQUISITION COMPANY LIQUIDATED DAMAGES AMOUNT" payable to
Acquisition Company by Foundation shall be Two Hundred Seventy Five Thousand
Dollars ($275,000).
The "FOUNDATION LIQUIDATED DAMAGES AMOUNT" payable to Foundation by
Acquisition Company shall be Three Hundred Seventy Five Thousand Dollars
($375,000).
As used in this Agreement, "BREAK-UP FEE" shall be an amount equal to
Five Hundred Fifty Thousand Dollars ($550,000), less the Acquisition Company
Liquidated Damages Amount, if such Acquisition Company Liquidated Damages Amount
has been paid in full by Foundation to Acquisition Company.
ARTICLE 8.
GENERAL
SECTION 8.1 Updates to Disclosure Schedule.
Foundation and the Bank shall update and supplement the Disclosure
Schedule so as to disclose exceptions to one or more representations or
warranties contained in Article 2 hereof which shall have arisen between the
date hereof and the Closing Date, but any exceptions or other information
subsequently disclosed shall not be taken into consideration in determining, for
purposes of this Agreement, whether the condition set forth in Section 6.1(a)
hereof shall have been satisfied.
SECTION 8.2 Confidential Information.
The parties acknowledge the general confidential and proprietary nature
of the information which has heretofore been exchanged and which shall be
received from each other hereunder and agree to hold and keep the same
confidential. Confidential information does not include, however, information
which is or becomes generally available to the public other than as a result of
a disclosure by a party or its representatives in violation of this Agreement.
The parties agree that the information shall be used solely for the purposes
contemplated by this Agreement and that such information shall not be disclosed
to any person other than employees and agents of a party who are directly
involved in evaluating the transaction. The information shall not be used in any
way detrimental to a party, including use directly or indirectly in the conduct
of the other party's business
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or any business or enterprise in which such party may have an interest, now or
in the future, and whether or not now in competition with such other party. The
provisions of this Section 8.2 shall survive the termination of this Agreement,
regardless of the circumstances which give rise to such termination.
SECTION 8.3 Publicity.
Foundation and Acquisition Company shall cooperate with each other in
the development and distribution of all news releases and other public
disclosures concerning this Agreement and the Merger and shall not issue any
news release or make any other public disclosure prior to the Effective Time
without the prior consent of the other party, unless it reasonably believes such
is required by law upon the advice of counsel or is in response to published
newspaper or other mass media reports regarding the transactions contemplated by
this Agreement, in which such latter event the parties shall give reasonable
notice, and to the extent practicable, consult with each other regarding such
responsive public disclosure. Subsequent to the Effective Time, Acquisition
Company shall have the exclusive right to issue news releases and other public
disclosures concerning this Agreement and the Merger.
SECTION 8.4 Return of Documents.
Upon termination of this Agreement without the Merger becoming
effective, each party shall deliver to the other originals and all copies of all
information made available to such party and shall not retain any copies,
extracts or other reproductions in whole or in part of such information.
SECTION 8.5 Notices.
Any notice or other communication shall be in writing and shall be
deemed to have been given or made on the date of delivery, in the case of hand
delivery, or three (3) business days after deposit in the United States
Registered Mail, postage prepaid, or upon receipt if transmitted by facsimile
telecopy or any other means, addressed (in any case) as follows:
(a) if to Acquisition Company:
c/o Xxxxxx X. Xxxx Co.
0000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xx. Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx, Xxxxxxxx & Xxxxxxx, P.L.L.
1400 Provident Tower
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
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and
(b) if to Foundation or the Bank:
Foundation Bancorp, Inc.
00 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx, President and CEO
Facsimile: (000) 000-0000
with a copy to:
Vorys Xxxxx Xxxxxxx and Xxxxx LLP
Atrium Two, Suite 2100
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxx Xxxxxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address as any party may from time to time designate by notice
to the others.
SECTION 8.6 Survival of Representations and Warranties.
The representations and warranties of Foundation, the Bank and
Acquisition Company contained herein shall expire at the Effective Time.
SECTION 8.7 Entire Agreement.
This Agreement, together with the Exhibits, the Disclosure Schedule and
the Confidentiality Agreement, constitute the entire agreement between the
parties and supersedes and cancels any and all prior discussions, negotiations,
undertakings, agreements in principle or other agreements between the parties
relating to the subject matter hereof.
SECTION 8.8 Headings and Captions.
The captions of Articles and Sections hereof are for convenience only
and shall not control or affect the meaning or construction of any of the
provisions of this Agreement.
SECTION 8.9 Waiver, Amendment or Modification.
The conditions of this Agreement which may be waived may only be waived
in writing by the party waiving such condition. The failure of any party at any
time or times to require performance of any provision hereof shall in no manner
affect the right at a later time to enforce the same. This Agreement may not be
amended or modified except by a written document duly executed by each of the
parties hereto. This Agreement may be amended or modified by the parties hereto,
at any time before or after Shareholder Approval, PROVIDED, HOWEVER, that after
any such approval no such amendment or modification shall alter the amount or
change the form of the Per Share Merger Consideration contemplated by this
Agreement to be received by shareholders of Foundation and, provided, further,
that after Shareholder Approval, if any such amendment or
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modification does not alter the amount or change the form of the Per Share
Merger Consideration, no further action or approval by the shareholders of
Foundation shall be required.
SECTION 8.10 Rules of Construction.
Unless the context otherwise requires: (i) a term has the meaning
assigned to it; (ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with United States generally accepted accounting
principles in effect as of the date of this Agreement; (iii) "or" is not
exclusive; (iv) words in the singular may include the plural and words in the
plural include the singular; and (v) "knowledge" of a party means the actual or
constructive knowledge of any director or executive officer of such party.
SECTION 8.11 Counterparts.
This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original and all of which shall be deemed one and the same
instrument. For purposes of executing this Agreement, a document (or signature
page thereto) signed and transmitted by facsimile machine or telecopier is to be
treated as an original document. The signature of any party thereon, for
purposes hereof, is to be considered as an original signature, and the document
transmitted is to be considered to have the same binding effect as an original
signature on an original document. At the request of any party, any facsimile or
telecopy document shall be re-executed in original form by the parties who
executed the facsimile or telecopy document. No party may raise the use of a
facsimile machine or telecopier or the fact that any signature was transmitted
through the use of a facsimile or telecopier machine as a defense to the
enforcement of this Agreement or any amendment or other document executed in
compliance with this Section 8.11.
SECTION 8.12 Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. No person
or entity not a party to this Agreement (other than (i) the holders of
Foundation Common Shares, to the extent they are entitled to payment of the Per
Share Merger Consideration, (ii) the holders of Stock Options and Bank
Recognition Plan participants, to the extent that they are entitled to payment
under Section 1.7 hereof, and (iii) the employees of Foundation or the Bank, to
the extent that they are entitled to benefits under Section 4.7(b) and 5.5
hereof) shall be deemed to be a third party beneficiary of this Agreement.
SECTION 8.13 Severability.
In the event that any provisions of this Agreement or any portion
thereof shall be finally determined to be unlawful or unenforceable, such
provision or portion thereof shall be deemed to be severed from this Agreement,
and every other provision, and any portion of a provision, that is not
invalidated by such determination, shall remain in full force and effect. To the
extent that a provision is deemed unenforceable by virtue of its scope but may
be made enforceable by limitation thereof, such provision shall be enforceable
to the fullest extent permitted under applicable laws and public policy.
SECTION 8.14 Governing Law; Assignment.
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This Agreement shall be governed by the internal substantive laws of
the State of Ohio and applicable federal laws and regulations. This Agreement
may not be assigned by Foundation without the prior written consent of
Acquisition Company or by Acquisition Company or Acquisition Sub without the
prior written consent of Foundation.
SECTION 8.15 Enforcement of Agreement.
The parties hereto agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. Accordingly, a
non-breaching party to this Agreement shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction and such right shall be in addition to any other remedy to
which they shall be entitled at law or in equity.
(Remainder of page intentionally blank; signature page follows)
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
FOUNDATION BANCORP, INC.,
an Ohio corporation
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
--------------------------------
Title: President and CEO
--------------------------------
GARFIELD ACQUISITION CORP.,
an Ohio corporation
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
--------------------------------
Title: President
--------------------------------
GARFIELD ACQUISITION SUB CORP.,
an Ohio corporation
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
--------------------------------
Title: President
--------------------------------
/s/ Xxxxxx X. Xxxxx
-------------------
XXXXXX X. XXXXX, individually
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JOINDER AGREEMENT
-----------------
The undersigned, Foundation Savings Bank, hereby agrees to duly
discharge and perform all of its covenants and agreements set forth in Article 4
of the preceding Agreement and Plan of Reorganization.
IN WITNESS WHEREOF, the undersigned has duly executed its Joinder
Agreement as of April 3, 2001.
FOUNDATION SAVINGS BANK
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
-------------------------------
Title: President
-------------------------------
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TABLE OF CONTENTS
-----------------
Page
ARTICLE 1.........................................................................................................1
SECTION 1.1 DEFINITIONS..................................................................................1
SECTION 1.2 The Merger...................................................................................5
SECTION 1.3 Effective Time...............................................................................5
SECTION 1.4 Effect of Merger.............................................................................5
SECTION 1.5 Articles of Incorporation; Regulations.......................................................6
SECTION 1.6 Directors and Officers.......................................................................6
SECTION 1.7 Conversion of Stock; Stock Options; Dissenting Shares........................................6
SECTION 1.8 Closing; Closing Date........................................................................7
SECTION 1.9 Paying Procedures; Surrender of Certificates; Deposit of Per Share Merger Consideration and
Other Sums...............................................................................................7
SECTION 1.10 Xxxxxxx Money Deposit.......................................................................9
SECTION 1.11 Closing Deliveries..........................................................................9
ARTICLE 2........................................................................................................11
SECTION 2.1 Organization and Capital Stock..............................................................11
SECTION 2.2 Authorization...............................................................................12
SECTION 2.3 Subsidiaries................................................................................13
SECTION 2.4 No Defaults.................................................................................13
SECTION 2.5 Financial Information.......................................................................13
SECTION 2.6 Absence of Changes..........................................................................13
SECTION 2.7 Litigation and Related Matters..............................................................14
SECTION 2.8 Regulatory Matters..........................................................................14
SECTION 2.9 Reports.....................................................................................14
SECTION 2.10 Non-Banking Activities of Foundation and Subsidiaries......................................15
SECTION 2.11 Fiduciary Responsibilities.................................................................15
SECTION 2.12 Fair Lending; Community Reinvestment Act...................................................15
SECTION 2.13 Employment Agreements......................................................................15
SECTION 2.14 Employee Matters and ERISA.................................................................15
SECTION 2.15 Title to Properties; Insurance.............................................................17
SECTION 2.16 Intellectual Property Rights...............................................................18
SECTION 2.17 Environmental Matters......................................................................18
SECTION 2.18 Certain Operational Matters................................................................19
SECTION 2.19 Material Contracts and Agreements..........................................................19
SECTION 2.20 Interest Rate Risk Management Instruments..................................................19
SECTION 2.21 Chapter 1704 of the Ohio Revised Code Not Applicable.......................................19
SECTION 2.22 Tax Matters................................................................................19
SECTION 2.23 Opinion of Financial Advisor...............................................................20
SECTION 2.24 Compliance with Law........................................................................20
SECTION 2.25 No Undisclosed Liabilities.................................................................20
SECTION 2.26 Brokerage..................................................................................21
SECTION 2.27 Statements True and Correct................................................................21
ARTICLE 3........................................................................................................21
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SECTION 3.1 Organization................................................................................21
SECTION 3.2 Authorization...............................................................................21
SECTION 3.3 No Defaults.................................................................................22
SECTION 3.4 Litigation and Related Matters..............................................................22
SECTION 3.5 Brokerage...................................................................................23
SECTION 3.6 Compliance With Law.........................................................................23
SECTION 3.7 State Takeover Statutes.....................................................................23
SECTION 3.8 Proxy Statement.............................................................................23
SECTION 3.9 Ability To Pay Per Share Merger Consideration; Financial Statements.........................23
SECTION 3.10 Ownership of Acquisition Company and Acquisition Sub.......................................24
SECTION 3.11 Statements True and Correct................................................................24
SECTION 3.12 RB-20 Certification........................................................................24
ARTICLE 4........................................................................................................25
SECTION 4.1 Preparation of Proxy Statement; Shareholder Meeting.........................................25
SECTION 4.2 Business of Foundation in Ordinary Course...................................................26
SECTION 4.3 Acquisition Proposals.......................................................................28
SECTION 4.4 Breaches....................................................................................29
SECTION 4.5 Consents to Contracts and Leases............................................................30
SECTION 4.6 Consummation of Agreement...................................................................30
SECTION 4.7 Employee Benefit Plans......................................................................30
SECTION 4.8 Access to Information.......................................................................31
SECTION 4.9 Regulatory Applications.....................................................................31
ARTICLE 5........................................................................................................32
SECTION 5.1 Regulatory Approvals; Other Agreements......................................................32
SECTION 5.2 Breaches....................................................................................33
SECTION 5.3 Consummation of Agreement...................................................................33
SECTION 5.4 Director and Officer Matters................................................................33
SECTION 5.5 Employment Agreements; Employee Benefit Plans...............................................33
SECTION 5.6 Business of Acquisition Company, Acquisition Sub and Budig..................................34
SECTION 5.7 Funding of Acquisition Company..............................................................35
ARTICLE 6........................................................................................................35
SECTION 6.1 Conditions to Obligations of Acquisition Company............................................35
SECTION 6.2 Conditions to Obligations of Foundation and the Bank........................................36
ARTICLE 7........................................................................................................37
SECTION 7.1 Termination.................................................................................37
SECTION 7.2 Certain Fees and Expenses...................................................................38
ARTICLE 8........................................................................................................39
SECTION 8.1 Updates to Disclosure Schedule..............................................................39
SECTION 8.2 Confidential Information....................................................................39
SECTION 8.3 Publicity...................................................................................40
SECTION 8.4 Return of Documents.........................................................................40
SECTION 8.5 Notices.....................................................................................40
SECTION 8.6 Survival of Representations and Warranties..................................................41
SECTION 8.7 Entire Agreement............................................................................41
SECTION 8.8 Headings and Captions.......................................................................41
SECTION 8.9 Waiver, Amendment or Modification...........................................................41
SECTION 8.10 Rules of Construction......................................................................42
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SECTION 8.11 Counterparts...............................................................................42
SECTION 8.12 Successors and Assigns.....................................................................42
SECTION 8.13 Severability...............................................................................42
SECTION 8.14 Governing Law; Assignment..................................................................42
SECTION 8.15 Enforcement of Agreement...................................................................43
EXHIBITS
Exhibit 1.10 Agreement of Merger
Exhibit 5.5 Employment Agreement
SCHEDULES
---------
Disclosure Schedule
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EXHIBIT 1.10 TO AGREEMENT AND PLAN OF REORGANIZATION
----------------------------------------------------
ESCROW AGREEMENT
----------------
THIS ESCROW AGREEMENT ("Escrow Agreement") is dated as of the ____ day
of ___________, 2001 among GARFIELD ACQUISITION CORP., an Ohio corporation
("Acquisition Company"), FOUNDATION BANCORP, INC., an Ohio corporation
("Foundation"), and FIFTH THIRD BANK, an Ohio banking corporation, as the escrow
agent hereunder (in this capacity, "Escrow Agent").
BACKGROUND
----------
A. Acquisition Company, Garfield Acquisition Sub Corp., an Ohio
corporation and wholly owned subsidiary of Acquisition Company ("Acquisition
Sub"), and Foundation have entered into an Agreement and Plan of Reorganization
of even date herewith (the "Reorganization Agreement") pursuant to which
Acquisition Sub shall merge with and into Foundation (the "Merger") and the
holders of Foundation's common shares shall receive as Merger Consideration the
sum of ______________ Dollars ($______) per share.
B. The parties desire to enter into this Escrow Agreement to provide
for an escrow of Five Hundred Thousand Dollars ($500,000.00) to be released to
Fifth Third Bank, as exchange agent under the Reorganization Agreement (in this
capacity, the "Exchange Agent"), upon the consummation of the transactions
contemplated in the Reorganization Agreement or otherwise distributed in
accordance with the provisions of this Escrow Agreement.
C. Capitalized terms used herein but not defined herein shall have the
respective meanings described thereto in the Reorganization Agreement.
NOW, THEREFORE, in consideration of the mutual covenants set forth
below and other good and valuable consideration, the parties hereto agree as
follows:
1. DESIGNATION AND DELIVERY. Acquisition Company and Foundation hereby
designate Fifth Third Bank as "Escrow Agent" under this Escrow Agreement.
Acquisition Company and Foundation hereby deliver to the Escrow Agent a copy of
the Reorganization Agreement, which agreement is attached hereto as Exhibit "A."
Acquisition Company, in accordance with the Reorganization Agreement, hereby
delivers to the Escrow Agent the sum of Five Hundred Thousand Dollars
($500,000.00) in immediately available funds (the "Deposit").
2. INVESTMENT OF THE DEPOSIT. The Escrow Agent shall invest the Deposit
in an income-producing account utilizing investments mutually acceptable to
Acquisition Company and Foundation. The Escrow Agent shall cause all interest
and other income earned on or with respect to the Deposit to be added to the
Deposit. Such deposited interest and other income shall, together with the
Deposit, constitute the "Escrow Fund" to be distributed as provided in Section 5
hereof.
3. ESCROW AGENT AS CUSTODIAN; EXPENSES. The Escrow Agent shall, for all
purposes of this Escrow Agreement, be treated as and considered legally a
custodian. The Escrow Agent shall be entitled to rely conclusively upon the
written notice provided in Section 5 and may assume the
51
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genuineness of all signatures and documents and the authority of all
signatories. The Escrow Agent shall have no liability except for negligence or
willful misconduct in the performance of its duties under this Escrow Agreement
and shall not have any liability for any action taken (or any failure to act) in
good faith. Acquisition Company shall assume and pay all costs and expenses of
the Escrow Agent incurred in its capacity as the Escrow Agent under this Escrow
Agreement.
4. RESIGNATION; DISAGREEMENTS.
(a) Escrow Agent (and any successor Escrow Agent) may at any
time resign as such by delivering the Escrow Fund to any successor
Escrow Agent designated by the other parties hereto in writing, or to
any court of competent jurisdiction as provided below. The resignation
of Escrow Agent will take effect on the earlier of: (a) the appointment
of a successor (including a court of competent jurisdiction); or (b)
the day which is thirty (30) days after the date of delivery of its
written notice of resignation to the other parties hereto. If at that
time Escrow Agent has not received a designation of a successor Escrow
Agent, Escrow Agent's sole responsibility after that time shall be to
retain and safeguard the Escrow Fund until receipt of a designation of
successor Escrow Agent or a joint written disposition instruction by
the other parties hereto or a final non-appealable order of a court of
competent jurisdiction.
(b) In the event of any disagreement between the other parties
hereto resulting in adverse claims or demands being made in connection
with the Escrow Fund or in the event that Escrow Agent is in doubt as
to what action it should take hereunder, Escrow Agent shall be entitled
to retain the Escrow Fund until Escrow Agent shall have received: (i) a
final non-appealable order of a court of competent jurisdiction
directing delivery of the Escrow Fund; or (ii) a written agreement
executed by the other parties hereto directing delivery of the Escrow
Fund, in which event Escrow Agent shall disburse the Escrow Fund in
accordance with such order or agreement. Any court order shall be
accompanied by a legal opinion of counsel for the presenting party
satisfactory to Escrow Agent to the effect that the order is final and
non-appealable. Escrow Agent shall act on such court order and legal
opinion without further question.
5. TERMINATION AND DISTRIBUTION OF ESCROW.
(a) This Escrow Agreement shall terminate on the date upon
which the Escrow Agent shall have distributed the Escrow Fund as
provided herein.
(b) If on December 31, 2001, the Escrow Agent has not
distributed out to the Exchange Agent the Escrow Fund in connection
with the consummation of the transactions contemplated by the
Reorganization Agreement and if Foundation shall not have delivered to
the Escrow Agent a notice of objection to the return of the Escrow Fund
to Acquisition Company, the Escrow Agent shall immediately return the
Escrow Fund to Acquisition Company.
(c) If on the Closing Date (as defined in the Reorganization
Agreement), Acquisition Company and Foundation shall deliver a joint
written notice to the Escrow
52
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Agent directing the Escrow Agent to distribute the Escrow Fund to the
Exchange Agent, the Escrow Agent shall immediately disburse the Escrow
Fund to the Exchange Agent.
(d) If, on or after the date the Reorganization Agreement is
terminated by Foundation pursuant to either of Sections 7.1(c), 7.1(e)
or 7.1(i) of the Reorganization Agreement, Foundation shall deliver to
the Escrow Agent (with a copy to Acquisition Company) a notice of claim
with respect to the Escrow Fund (or, in the event of a termination
under Section 7.1(i), a claim to an amount equal to fifty percent (50%)
of the Foundation Liquidated Damages Amount), the Escrow Agent shall
disburse the Escrow Fund (or, in the case of a termination under
Section 7.1(i), the lesser claimed amount) to Foundation ten (10) days
after receipt of such notice if Acquisition Company shall not have
earlier delivered to the Escrow Agent a notice of objection to the
disbursement of the Escrow Fund (or, in the case of a termination under
Section 7.1(i), the lesser claimed amount) to Foundation or a notice of
claim with respect to the Escrow Fund.
(e) If, on or after the date the Reorganization Agreement is
terminated by Acquisition Company pursuant to any of Sections 7.1(b),
7.1(e), 7.1(f) or 7.1(h) of the Reorganization Agreement or by
Foundation pursuant to either of Sections 7.1(f) or 7.1(g) of the
Reorganization Agreement, Acquisition Company shall deliver to the
Escrow Agent (with a copy to Foundation) a notice of claim with respect
to the Escrow Fund, the Escrow Agent shall return the Escrow Fund to
Acquisition Company ten (10) days after receipt of such notice if
Foundation shall not have delivered to the Escrow Agent a notice of
objection to the return of the Escrow Fund to Acquisition Company or a
notice of claim with respect to the Escrow Fund.
6. DUTIES OF ESCROW AGENT. The duties of Fifth Third Bank under this
Escrow Agreement shall be entirely administrative and the Escrow Agent shall not
be liable to any third party as a result of any action or omission taken or made
by it, except for negligence or willful misconduct in performing its duties. In
the event of disagreement or dispute between Acquisition Company and Foundation
with respect to disposition of the Escrow Fund, the Escrow Agent shall promptly
initiate an appropriate legal proceeding to obtain a judicial determination of
the respective parties' rights to the Escrow Fund. No rights are intended to be
granted to any third party hereunder. Acquisition Company and Foundation shall
severally (each being responsible for 50% of the indemnity account) indemnify,
defend and hold harmless the Escrow Agent and reimburse the Escrow Agent from
and for any and all liability, costs and expenses the Escrow Agent may suffer or
incur by reason of its execution and performance of this Escrow Agreement.
7. NOTICES. All notices, consents or other communications required or
permitted to be given under this Escrow Agreement shall be in writing and shall
be deemed to have been duly given:
(a) when delivered personally,
(b) one (1) business day after being sent by an overnight
delivery service, postage or delivery charges prepaid, or
53
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(c) on the date on which a telegram or facsimile is
transmitted to the parties at their respective addresses stated in the
Reorganization Agreement.
Any party may change its address for notice and the address to which copies must
be sent by giving notice of the new addresses to the other parties in accordance
with this Section 7, except that any such change of address notice shall not be
effective unless and until received.
8. AMENDMENT. No amendment or modification of this Escrow Agreement
shall be effective unless in writing and signed by the parties. This Escrow
Agreement may not be terminated except in a written document signed by the
parties.
9. PARTIES IN INTEREST. This Escrow Agreement shall bind, benefit, and
be enforceable by and against each party hereto and their successors, assigns,
heirs and personal representatives. No party shall in any manner assign any of
its rights or obligations under this Escrow Agreement without the express prior
written consent of the other parties.
10. NO WAIVERS. No waiver with respect to this Escrow Agreement shall
be enforceable unless in writing and signed by the party against whom
enforcement is sought. Except as otherwise expressly provided herein, no failure
to exercise, delay in exercising, or single or partial exercise of any right,
power or remedy by any party, and no course of dealing between or among any of
the parties, shall constitute a waiver of, or shall preclude any other or
further exercise of the same or any other right, power or remedy.
11. SEVERABILITY. If any provision of this Escrow Agreement is
construed to be invalid, illegal or unenforceable, then the remaining provisions
hereof shall not be affected thereby and shall be enforceable without regard
thereto.
12. COUNTERPARTS. This Escrow Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall constitute
an original hereof, and it shall not be necessary in making proof of this Escrow
Agreement to produce or account for more than one original counterpart hereof.
13. CONTROLLING LAW. This Escrow Agreement is made under, and shall be
construed and enforced in accordance with, the laws of the State of Ohio
applicable to agreements made and to be performed solely therein, without giving
effect to principles of conflicts of law.
14. DEFINITIONS. To the extent not specifically defined herein, all
terms used herein shall have the meanings ascribed to them in the Reorganization
Agreement.
IN WITNESS WHEREOF, the parties have executed, or caused their duly
authorized representatives to execute, this Escrow Agreement on the date first
written above.
GARFIELD ACQUISITION CORP.
By:
----------------------------------------------
54
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Xxxxxx X. Xxxxx
President
FOUNDATION BANCORP, INC.
By:
----------------------------------------------
Xxxxx X. Xxxxxxx
President
Received and accepted:
FIFTH THIRD BANK,
as Escrow Agent
By:
----------------------------------------------
Name:
Title:
55
EXHIBIT "A"
-----------
REORGANIZATION AGREEMENT
------------------------
56
EXHIBIT 5.5 TO AGREEMENT AND PLAN OF REORGANIZATION
---------------------------------------------------
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is entered into as of the
___ day of ___________, 2001, by and between Foundation Savings Bank, a savings
and loan association incorporated under Ohio law (the "EMPLOYER"), and Xxxxx X.
Xxxxxxx, an individual (the "EMPLOYEE");
WITNESSETH:
WHEREAS, the EMPLOYEE is currently employed as the President and Chief
Executive Officer of the EMPLOYER;
WHEREAS, pursuant to an Agreement and Plan of Reorganization by and
among Foundation Bancorp, Inc., Garfield Acquisition Company ("ACQUISITION
CO."), and Garfield Acquisition Sub Corp. and Xxxxxx X. Xxxxx (the "ACQUISITION
AGREEMENT"), the EMPLOYER has become an indirect wholly-owned subsidiary of
ACQUISITION CO.;
WHEREAS, as a result of the skill, knowledge and experience of the
EMPLOYEE, the Board of Directors of the EMPLOYER desires to retain the services
of the EMPLOYEE as the President and Chief Executive Officer of the EMPLOYER;
WHEREAS, the EMPLOYEE desires to continue to serve as the President and
Chief Executive Officer of the EMPLOYER; and
WHEREAS, the EMPLOYEE and the EMPLOYER desire to enter into this
AGREEMENT to set forth the terms and conditions of the employment relationship
between the EMPLOYER and the EMPLOYEE;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the EMPLOYER and the EMPLOYEE hereby agree as follows:
1. EMPLOYMENT AND TERM.
TERM. Upon the terms and subject to the conditions of this
AGREEMENT, the EMPLOYER hereby employs the EMPLOYEE, and the EMPLOYEE hereby
accepts employment, as the President and Chief Executive Officer of the
EMPLOYER. The TERM of this AGREEMENT shall commence on the effective date of the
MERGER (as defined in the ACQUISITION AGREEMENT) and shall end on December 31,
2002 (the "TERM").
57
2. DUTIES OF EMPLOYEE.
(a) GENERAL DUTIES AND RESPONSIBILITIES. The EMPLOYEE shall serve as
the President and Chief Executive Officer of the EMPLOYER. Subject to the
direction of the Board of Directors of the EMPLOYER, the EMPLOYEE shall have
responsibility for the general management and control of the business and
affairs of the EMPLOYER, and shall perform all duties and shall have all powers
which are commonly incident to the office of President and Chief Executive
Officer or which, consistent therewith, are delegated to him by the Board of
Directors. Such duties include, but are not limited to, (1) managing the
day-to-day operations of the EMPLOYER, (2) managing the efforts of the EMPLOYER
to comply with applicable laws and regulations, (3) promotion of the EMPLOYER
and its services, (4) supervising other employees of the EMPLOYER, (5) providing
prompt and accurate reports to the Board of Directors of the EMPLOYER regarding
the affairs and conditions of the EMPLOYER, and (6) making recommendations to
the Board of Directors of the EMPLOYER concerning the strategies, capital
structure, tactics, and general operations of the EMPLOYER. The EMPLOYER shall
employ the EMPLOYEE during the TERM as President and Chief Executive Officer
without material diminishment of the importance or prestige of his position.
(b) DEVOTION OF ENTIRE TIME TO THE BUSINESS OF THE EMPLOYER. The
EMPLOYEE shall devote his entire productive time, ability and attention during
normal business hours throughout the TERM to the faithful performance of his
duties under this AGREEMENT. The EMPLOYEE shall not directly or indirectly
render any services of a business, commercial or professional nature to any
person or organization other than the EMPLOYER and its subsidiaries and
affiliates without the prior written consent of the Board of Directors of the
EMPLOYER; provided, however, that the EMPLOYEE shall not be precluded from (i)
vacations and other leave time in accordance with Section 3(d) hereof; (ii)
reasonable participation in community, civic, charitable or similar
organizations; or (iii) the pursuit of personal investments which do not
interfere or conflict with the performance of the EMPLOYEE's duties to the
EMPLOYER. Nothing in this section shall limit the EMPLOYEE's right to invest in
securities of any business that does not provide services or products of the
type or competing with those provided by the EMPLOYER or its subsidiaries or
affiliates or, solely as a passive investor, in any business.
3. COMPENSATION, BENEFITS AND REIMBURSEMENTS.
(a) SALARY. The EMPLOYEE shall receive during the TERM an annual
salary payable in equal installments not less often than monthly. The amount of
such annual salary shall be One Hundred Thousand Dollars ($100,000).
(b) EXPENSES; CAR ALLOWANCE. In addition to any compensation
received under Section 3(a) of this AGREEMENT, the EMPLOYER shall (i) pay or
reimburse the EMPLOYEE for all reasonable travel, entertainment and
miscellaneous expenses incurred in connection with the performance of his duties
under this AGREEMENT, (ii) pay or reimburse the EMPLOYEE for all reasonable
travel and miscellaneous expenses incurred in connection with the performance of
his duties as a trustee of the Ohio League of Financial Institutions (the
"LEAGUE"), including but not limited to travel to and attendance at LEAGUE
meetings, activities and functions, (iii) pay the EMPLOYEE a car allowance of
$400 per month.
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58
(c) EMPLOYEE BENEFIT PROGRAMS. During the TERM, the EMPLOYEE shall be
entitled to participate in all formally established employee benefit, bonus,
pension and profit-sharing plans and similar programs that are maintained by the
EMPLOYER from time to time, including group health, disability or life
insurance, and all employee benefit plans or programs hereafter adopted in
writing by the Board of Directors of the EMPLOYER, for which senior management
personnel are eligible (collectively, the "BENEFIT PLANS"). Notwithstanding the
foregoing sentence, the EMPLOYER may discontinue or terminate at any time any
such BENEFIT PLANS, now existing or hereafter adopted, to the extent permitted
by the terms of such plans and applicable law, and shall not be required to
compensate the EMPLOYEE for such discontinuance or termination; and
(d) VACATION AND SICK LEAVE. The EMPLOYEE shall be entitled, without
loss of pay, to be absent voluntarily from the performance of his duties under
this AGREEMENT, subject to the following conditions:
(i) The EMPLOYEE shall be entitled to an annual vacation in
accordance with the policies periodically established by the Board of
Directors of the EMPLOYER for senior management officials of the EMPLOYER,
provided that such annual vacation shall be for a period of at least five
weeks;
(ii) The EMPLOYEE shall be entitled to annual sick leave as
established by the Board of Directors of the EMPLOYER for senior management
officials of the EMPLOYER;
(iii) The EMPLOYEE shall be entitled to paid leave for attendance at
meetings, conferences, functions and activities in connection with his
service as a trustee of the LEAGUE; and,
(iv) In addition to the foregoing, the EMPLOYEE shall be entitled,
without loss of pay, to absent himself voluntarily from the performance of
his employment with the EMPLOYER for such additional period of time and for
such valid and legitimate reasons as the Board may, in its discretion,
determine, and the Board may grant to the EMPLOYEE a leave or leaves of
absence, with or without pay, at such time or times and upon such terms and
conditions as such Board, in its discretion, may determine.
(e) DEFERRED COMPENSATION. Not later than the fifth (5th) business day
after the end of the TERM, the EMPLOYER shall pay to the EMPLOYEE the sum of
$297,500 as compensation for services rendered by the EMPLOYEE to the EMPLOYER
prior to the effective date of this AGREEMENT.
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59
4. TERMINATION OF EMPLOYMENT.
(a) GENERAL. The employment of the EMPLOYEE shall terminate at any
time during the TERM at the option of the EMPLOYER upon the delivery by the
EMPLOYER of written notice of employment termination to the EMPLOYEE.
(b) TERMINATION FOR JUST CAUSE. In the event that the EMPLOYER
terminates the employment of the EMPLOYEE before the expiration of the TERM
because of the EMPLOYEE's personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional failure or
refusal to perform the duties and responsibilities assigned in this AGREEMENT,
willful violation of any law, rule, regulation (other than traffic violations or
similar offenses) or final cease-and-desist order, conviction of a felony or for
fraud or embezzlement, or material breach of any provision of this AGREEMENT
(collectively, "JUST CAUSE"), the EMPLOYEE shall not receive, and shall have no
right to receive, any compensation or other benefits for any period after such
termination.
(c) DEATH OF THE EMPLOYEE. The TERM automatically terminates upon
the death of the EMPLOYEE. In the event of such death, the EMPLOYEE's estate
shall be entitled to receive the compensation due the EMPLOYEE through the last
day of the calendar month in which the death occurred.
5. SPECIAL REGULATORY EVENTS. Notwithstanding Section 4 of this
AGREEMENT, the obligations of the EMPLOYER to the EMPLOYEE shall be as follows
in the event of the following circumstances:
(a) If the EMPLOYEE is suspended and/or temporarily prohibited from
participating in the conduct of the EMPLOYER's affairs by a notice served under
Section 8(e) (3) or (g) (1) of the Federal Deposit Insurance Act (hereinafter
referred to as the "FDIA"), the EMPLOYER's obligations under this AGREEMENT
shall be suspended as of the date of service of such notice, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the
EMPLOYER shall (i) pay the EMPLOYEE all of the compensation withheld while the
obligations in this AGREEMENT were suspended and (ii) reinstate any of the
obligations that were suspended.
(b) If the EMPLOYEE is removed and/or permanently prohibited from
participating in the conduct of the EMPLOYER's affairs by an order issued under
Section 8(e) (4) or (g) (1) of the FDIA, all obligations of the EMPLOYER under
this AGREEMENT shall terminate as of the effective date of such order; provided,
however, that vested rights of the EMPLOYEE shall not be affected by such
termination.
(c) If the EMPLOYER is in default as defined in Section 3(x)(1) of
the FDIA, all obligations under this AGREEMENT shall terminate as of the date of
default; provided, however, that vested rights of the EMPLOYEE shall not be
affected.
(d) All obligations under this AGREEMENT shall be terminated, except
to the extent of a determination that the continuation of this AGREEMENT is
necessary for the continued operation of the EMPLOYER, (i) by the Director of
the OTS, or his or her designee at the time that the Federal Deposit Insurance
Corporation enters into an agreement to provide
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60
assistance to or on behalf of the EMPLOYER under the authority contained in
Section 13(c) of the FDIA or (ii) by the Director of the OTS, or his or her
designee, at any time the Director of the OTS, or his or her designee, approves
a supervisory merger to resolve problems related to the operation of the
EMPLOYER or when the EMPLOYER is determined by the Director of the OTS to be in
an unsafe or unsound condition. No vested rights of the EMPLOYEE shall be
affected by any such action.
6. CONSOLIDATION, MERGER OR SALE OF ASSETS. Nothing in this AGREEMENT
shall preclude the EMPLOYER from consolidating with, merging into, or
transferring all, or substantially all, of its assets to another corporation
that assumes all of the EMPLOYER's obligations and undertakings hereunder. Upon
such a consolidation, merger or transfer of assets, the term "EMPLOYER" as used
herein, shall mean such other corporation or entity, and this AGREEMENT shall
continue in full force and effect.
7. CONFIDENTIAL INFORMATION. The EMPLOYEE acknowledges that during his
employment he will learn and have access to confidential information regarding
the EMPLOYER and its customers and businesses. The EMPLOYEE agrees and covenants
not to disclose or use for his own benefit, or the benefit of any other person
or entity, any confidential information, unless or until the EMPLOYER consents
to such disclosure or use or such information becomes common knowledge in the
industry or is otherwise legally in the public domain. The EMPLOYEE shall not
knowingly disclose or reveal to any unauthorized person any confidential
information relating to the EMPLOYER, its parent, subsidiaries or affiliates, or
to any of the businesses operated by them, and the EMPLOYEE confirms that such
information constitutes the exclusive property of the EMPLOYER. The EMPLOYEE
shall not otherwise knowingly act or conduct himself (a) to the material
detriment of the EMPLOYER, its subsidiaries, or affiliates, or (b) in a manner
which is inimical or contrary to the interests of the EMPLOYER.
8. NONASSIGNABILITY. Neither this AGREEMENT nor any right or interest
hereunder shall be assignable by the EMPLOYEE, his beneficiaries, or legal
representatives without the EMPLOYER's prior written consent; provided, however,
that nothing in this Section 8 shall preclude (a) the EMPLOYEE from designating
a beneficiary to receive any benefits payable hereunder upon his death, or (b)
the executors, administrators, or other legal representatives of the EMPLOYEE or
his estate from assigning any rights hereunder to the person or persons entitled
thereto.
9. NO ATTACHMENT. Except as required by law, no right to receive
payment under this AGREEMENT shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to
execution, attachment, levy, or similar process of assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect.
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10. INDEMNIFICATION; INSURANCE.
(a) INDEMNIFICATION. The EMPLOYER agrees to indemnify the EMPLOYEE
and his heirs, executors, and administrators to the fullest extent permitted
under applicable law and regulations, including, without limitation 12 U.S.C.
Section 1828(k), against any and all expenses and liabilities reasonably
incurred by the EMPLOYEE in connection with or arising out of any action, suit
or proceeding in which the EMPLOYEE may be involved by reason of his having been
a director or officer of the EMPLOYER or any of its subsidiaries, whether or not
the EMPLOYEE is a director or officer at the time of incurring any such expenses
or liabilities. Such expenses and liabilities shall include, but shall not be
limited to, judgments, court costs and attorney's fees and the cost of
reasonable settlements. The EMPLOYEE shall be entitled to indemnification in
respect of a settlement only if the Board of Directors of the EMPLOYER has
approved such settlement. Notwithstanding anything herein to the contrary, (i)
indemnification for expenses shall not extend to matters for which the EMPLOYEE
has been terminated for JUST CAUSE, and (ii) the obligations of this Section 10
shall survive the TERM of this AGREEMENT. Nothing contained herein shall be
deemed to provide indemnification prohibited by applicable law or regulation.
(b) INSURANCE. During the TERM, the EMPLOYER shall provide the
EMPLOYEE (and his heirs, executors, and administrators) with coverage under a
directors' and officers' liability policy at the EMPLOYER's expense, at least
equivalent to such coverage provided to directors and senior officers of the
EMPLOYER.
11. BINDING AGREEMENT. This AGREEMENT shall be binding upon, and inure
to the benefit of, the EMPLOYEE and the EMPLOYER and their respective permitted
successors and assigns.
12. AMENDMENT OF AGREEMENT. This AGREEMENT may not be modified or
amended, except by an instrument in writing signed by the parties hereto.
13. WAIVER. No term or condition of this AGREEMENT shall be deemed to
have been waived, nor shall there be an estoppel against the enforcement of any
provision of this AGREEMENT, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver, unless specifically stated therein, and each waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than the act specifically waived.
14. SEVERABILITY. If, for any reason, any provision of this AGREEMENT
is held invalid, such invalidity shall not affect the other provisions of this
AGREEMENT not held so invalid, and each such other provision shall, to the full
extent consistent with applicable law, continue in full force and effect. If
this AGREEMENT is held invalid or cannot be enforced, then any prior Agreement
between the EMPLOYER (or any predecessor thereof) and the EMPLOYEE shall be
deemed reinstated to the full extent permitted by law, as if this AGREEMENT had
not been executed.
15. HEADINGS. The headings of the paragraphs herein are included solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this AGREEMENT.
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16. GOVERNING LAW; REGULATORY AUTHORITY. This AGREEMENT has been
executed and delivered in the State of Ohio and its validity, interpretation,
performance, and enforcement shall be governed by the laws of the State of Ohio,
except to the extent that federal law is governing. References to the OTS
included herein shall include any successor primary federal regulatory authority
of the EMPLOYER.
17. EFFECT OF PRIOR AGREEMENTS. This AGREEMENT contains the entire
understanding between the parties hereto and supersedes any prior employment
agreement between the EMPLOYER or any predecessor of the EMPLOYER and the
EMPLOYEE. This AGREEMENT supercedes the prior Employment Agreement between the
EMPLOYER and the EMPLOYEE dated October 1, 1996, and the Employment Agreement
between Foundation Bancorp, Inc., and the EMPLOYEE dated October 1, 1996, which
are hereby terminated.
18. NOTICES. Any notice or other communication required or permitted
pursuant to this AGREEMENT shall be deemed delivered if such notice or
communication is in writing and is delivered personally or by facsimile
transmission or is deposited in the United States mail, postage prepaid,
addressed as follows:
If to the EMPLOYER:
Foundation Savings Bank
00 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
with a required copy (which shall not constitute notice) to:
Xxxxxxx, Xxxxxxxx & Xxxxxxx, P.L.L.
1400 Provident Tower
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
If to the EMPLOYEE:
Xx. Xxxxx X. Xxxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
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IN WITNESS WHEREOF, the EMPLOYER has caused this AGREEMENT to be
executed by its duly authorized officer, and the EMPLOYEE has signed this
AGREEMENT, each as of the day and year first above written.
Attest: FOUNDATION SAVINGS BANK
By
-------------------------------- ----------------------------------
Attest:
-------------------------------- -----------------------------------
Xxxxx X. Xxxxxxx
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