AGREEMENT AND PLAN OF
REORGANIZATION
among
FIRST SHARES BANCORP, INC.,
FIRST BANK,
LINCOLN BANCORP,
and
LINCOLN BANK
March 10, 2004
TABLE OF CONTENTS
Article I The Company Merger.......................................................1
1.01 The Company Merger.....................................................1
1.02 Reservation of Right to Revise Structure...............................2
1.03 Effective Time.........................................................3
1.04 Accounting Treatment...................................................3
Article II The Subsidiary Merger...................................................3
2.01 The Subsidiary Merger..................................................3
2.02 Effective Time.........................................................4
Article III Consideration..........................................................4
3.01 Consideration..........................................................4
3.02 Rights as Shareholders; Stock Transfers................................8
3.03 Fractional Shares......................................................9
3.04 Exchange Procedures....................................................9
3.05 Anti-Dilution Adjustments.............................................10
Article IV Actions Pending the Merger.............................................10
4.01 Forbearances of FSB...................................................10
4.02 Forbearances of Lincoln...............................................13
Article V Representations and Warranties..........................................15
5.01 Disclosure Schedules..................................................15
5.02 Representations and Warranties of FSB.................................15
5.03 Representations and Warranties of Lincoln.............................25
Article VI Covenants..............................................................34
6.01 Reasonable Best Efforts...............................................34
6.02 Shareholder Approval..................................................34
6.03 Registration Statement................................................34
6.04 Press Releases........................................................35
6.05 Access; Information...................................................36
6.06 Acquisition Proposals.................................................36
6.07 Affiliate Agreements..................................................37
6.08 NASDAQ Listing........................................................37
6.09 Regulatory Applications...............................................37
6.10 Title Insurance and Surveys...........................................37
6.11 Environmental Reports.................................................38
6.12 Conforming Accounting and Reserve Policies; Restructuring Expenses....38
6.13 D & O Insurance.......................................................39
6.14 Notification of Certain Matters.......................................40
6.15 Defined Contribution Plans............................................40
6.16 Option Plans..........................................................40
6.17 Debentures and Contracts..............................................41
6.18 Deferred Fee Agreements...............................................41
6.19 Employee Matters......................................................41
6.20 Severance.............................................................42
6.21 Charter Conversion....................................................42
6.22 Short-Swing Trading Exemption.........................................42
Article VII Conditions to Consummation of the Merger..............................43
7.01 Conditions to Each Party's Obligation to Effect the Company Merger....43
7.02 Conditions to Obligation of FSB.......................................44
7.03 Conditions to Obligation of Lincoln...................................45
Article VIII Closing..............................................................46
8.01 Deliveries by FSB at Closing..........................................46
8.02 Deliveries by Lincoln at the Closing..................................47
Article IX Termination............................................................48
9.01 Termination...........................................................48
9.02 Effect of Termination and Abandonment.................................49
9.03 Liquidated Damages....................................................49
Article X Miscellaneous...........................................................50
10.01 Survival...........................................................50
10.02 Waiver; Amendment..................................................50
10.03 Counterparts.......................................................50
10.04 Governing Law......................................................50
10.05 Expenses...........................................................50
10.06 Notices............................................................50
10.07 Entire Understanding; No Third Party Beneficiaries.................51
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is dated as of March
10, 2004, by and among First Shares Bancorp, Inc., an Indiana corporation with
its headquarters in Greenwood, Indiana ("FSB"), First Bank, an Indiana
commercial bank based in Morgantown, Indiana ("First Bank"), Lincoln Bancorp, an
Indiana corporation with its principal place of business in Plainfield, Indiana
("Lincoln"), and Lincoln Bank, a federal savings bank based in Plainfield,
Indiana ("Lincoln Bank").
W I T N E S S E T H:
A. Each of the parties desire to effect a merger of FSB with and into Lincoln,
with Lincoln being the surviving entity in the merger (the "Company Merger").
B. FSB owns all of the issued and outstanding shares of capital stock of First
Bank. Lincoln owns all of the issued and outstanding shares of capital stock of
Lincoln Bank. In addition to the Company Merger, the parties desire to effect a
merger of First Bank with and into Lincoln Bank, with Lincoln Bank being the
surviving entity in the merger (the "Subsidiary Merger").
C. The Boards of Directors of FSB and Lincoln, respectively, each have
determined that it is in the best interests of their respective corporations,
shareholders, customers, and employees to effect the Company Merger and the
Subsidiary Merger.
D. It is the intention of the parties to this Agreement that the business
combinations contemplated hereby each be treated as a "reorganization" under
Section 368 of the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the premises, and of the mutual
covenants, representations, warranties and agreements contained herein, the
parties agree as follows:
Article I
The Company Merger
1.01 The Company Merger. At the date and time at which the Company Merger
becomes effective (the "Effective Time"), the Company Merger contemplated by
this Agreement shall occur and in furtherance thereof:
(a) Structure and Effects of the Company Merger. FSB shall merge with and
into Lincoln, and the separate corporate existence of FSB shall thereupon cease.
Lincoln shall be the surviving corporation in the Company Merger (sometimes
hereinafter referred to as the "Surviving Corporation") and shall continue to be
governed by the laws of the State of Indiana, and the separate corporate
existence of Lincoln with all its rights, privileges, immunities, powers and
franchises shall continue unaffected by the Company Merger. The Company Merger
shall have the effects specified in the Indiana Business Corporation Law, IND.
CODE ss. 23-1-17-1, et seq. (the "IBCL").
(b) Name and Offices. The name of the Surviving Corporation shall be
Lincoln Bancorp. Its principal office shall be located at 0000 Xxxx Xxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxx 00000-0000.
(c) Articles of Incorporation. The Lincoln Articles of Incorporation as in
effect immediately prior to the Effective Time shall continue to be the articles
of incorporation of the Surviving Corporation following the Company Merger,
until duly amended in accordance with the terms thereof and the IBCL.
(d) By-Laws. The Lincoln Code of By-laws as in effect immediately prior to
the Effective Time shall continue to be the by-laws of the Surviving Corporation
following the Company Merger, until duly amended in accordance with the terms
thereof, the Articles of Incorporation of Lincoln, and the IBCL.
(e) Directors. The directors of Lincoln immediately prior to the Effective
Time shall continue to hold such positions following the Company Merger, and
such directors shall hold office until such time as their successors shall be
duly elected and qualified. In addition, Xxxxx X. Xxxxx, X.X. XxXxxxxxx, and
Xxxxx X. Xxxxxx (or in the event one or more of such persons is not able to
serve, another director or directors of FSB selected by agreement between FSB
and Lincoln prior to the Effective Time) shall be appointed to the Board of
Directors of Lincoln effective as of the Effective Time. Xxxxx X. Xxxxxx shall
serve for a one-year term ending at the 2005 annual shareholders' meeting, X.X.
XxXxxxxxx shall serve for a two-year term ending at the 2006 annual
shareholders' meeting, and Xxxxx X. Xxxxx shall serve for a three-year term
ending at the 2007 annual shareholders' meeting, and in each case until such
director's successor shall be duly elected and qualified.
(f) Officers. The officers of Lincoln holding such positions immediately
prior to the Effective Time shall continue to be the officers of the Surviving
Corporation following the Company Merger. In addition, Xxxxx X. Xxxxx shall be
appointed Vice Chairman of Lincoln at the Effective Time, and it is anticipated
that Xxxxx X. Xxxxx shall be appointed as the President and Chief Executive
Officer of Lincoln not later than December 31, 2005.
1.02 Reservation of Right to Revise Structure. At Lincoln's election, the
Company Merger may alternatively be structured so that (a) FSB is merged with
and into any other direct or indirect wholly-owned subsidiary of Lincoln or (b)
any direct or indirect wholly-owned subsidiary of Lincoln is merged with and
into FSB; provided, however, that no such change shall (x) alter or change the
amount or kind of the consideration payable in the Company Merger (the
"Consideration") or the treatment of the holders of FSB Common Stock, $.01 par
value per share ("FSB Common Stock"), (y) prevent the parties from obtaining the
opinions of Xxxxxx & Xxxxxxxxx referred to in Sections 7.02(c) and 7.03(d) or
(z) materially impede or delay consummation of the transactions contemplated by
this Agreement. In the event of such an election, the parties agree to execute
an appropriate amendment to this Agreement in order to reflect such election.
1.03 Effective Time. The Company Merger shall become effective upon the filing,
in the office of the Secretary of State of the State of Indiana, of Articles of
Merger in accordance with IND. CODE ss.23-1-40-5, which shall include the Plan
of Merger attached hereto as Exhibit A, or at such later date and time as may be
set forth in such articles. Subject to the terms of this Agreement, the parties
shall cause the Company Merger to become effective (a) on the date that is the
fifth full National Association of Securities Dealers Automated Quotation System
("NASDAQ") trading day to occur after the last of the conditions set forth in
Article VII shall have been satisfied or waived in accordance with the terms of
this Agreement, or (b) on such date as the parties may agree in writing (the
"Effective Date").
1.04 Accounting Treatment. The combination of Lincoln and FSB effected by the
Company Merger will be accounted for under the purchase method of accounting.
Article II
The Subsidiary Merger
2.01 The Subsidiary Merger. At the Effective Time, the Subsidiary Merger
contemplated by this Agreement shall occur and in furtherance thereof:
(a) Structure and Effects of the Subsidiary Merger. First Bank shall merge
with and into Lincoln Bank on the terms set forth in Exhibit B (which shall be
executed by Lincoln Bank and First Bank simultaneously with the execution of
this Agreement), and the separate corporate existence of First Bank shall
thereupon cease. Lincoln Bank shall be the surviving bank in the Subsidiary
Merger (sometimes hereinafter referred to as the "Surviving Bank") and shall
continue to be governed by federal law, and the separate corporate existence of
Lincoln Bank with all its rights, privileges, immunities, powers and franchises
shall continue unaffected by the Subsidiary Merger. The Subsidiary Merger shall
have the effects specified in IND. CODE ss. 28-1-7-19, and in 12 C.F.R. ss.
552.13(e).
(b) Name and Offices. The name of the Surviving Bank shall be Lincoln Bank.
Its principal office shall be located at 0000 Xxxx Xxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxx 00000-0000. However, subject to applicable legal requirements, it will
conduct business at the offices of First Bank under the name "First Bank, a
division of Lincoln Bank," for a maximum period of one year.
(c) Articles of Conversion. The Lincoln Bank Stock Charter, as in effect
immediately prior to the Effective Time, shall continue to be the charter of the
Surviving Bank following the Subsidiary Merger, until duly amended in accordance
with the terms thereof and the Home Owners' Loan Act of 1933, as amended
("HOLA").
(d) Bylaws. The Lincoln Bank Stock By-Laws, as in effect immediately prior
to the Effective Time, shall continue to be the by-laws of the Surviving Bank
following the Subsidiary Merger, until duly amended in accordance with the terms
thereof, the Stock Charter of Lincoln Bank, and HOLA.
(e) Directors. The directors of Lincoln Bank, immediately prior to the
Effective Time, shall continue to hold such positions following the Subsidiary
Merger, and such directors shall hold offices until such time as their
successors shall be duly elected and qualified. In addition, Xxxxx X. Xxxxx,
X.X. XxXxxxxxx, and Xxxxx X. Xxxxxx (or in the event one or more of such persons
is not able to serve, another director or directors of FSB selected by agreement
between FSB and Lincoln prior to the Effective Time) shall be appointed to the
Board of Directors of Lincoln Bank effective as of the Effective Time. Xxxxx X.
Xxxxxx shall serve for a one-year term ending at the 2005 annual shareholders'
meeting, X.X. XxXxxxxxx shall serve for a two-year term ending at the 2006
annual shareholders' meeting, and Xxxxx X. Xxxxx shall serve for a three-year
term ending at the 2007 annual shareholders' meeting.
(f) Officers. The officers of Lincoln Bank holding such positions
immediately prior to the Effective Time shall continue to be the officers of the
Surviving Bank following the Subsidiary Merger. In addition, Xxxxx X. Xxxxx
shall be appointed Executive Vice President and Chief Operating Officer of the
Surviving Bank, and Xxxx X. Xxxxxxx shall be appointed Senior Vice President of
the Surviving Bank. It is anticipated that Xxxxx X. Xxxxx shall be appointed to
the positions of President and Chief Executive Officer of Surviving Bank no
later than December 31, 2005.
2.02 Effective Time. The Subsidiary Merger shall become effective upon the
filing with the Office of Thrift Supervision (the "OTS"), of Articles of
Combination in accordance with 12 C.F.R. ss. 552.13(j) and Articles of Merger in
accordance with IND. CODE ss. 28-1-7-9, or at such later date and time as may be
set forth in such filings. Subject to the terms of this Agreement, the parties
shall cause the Subsidiary Merger to become effective on the same date that the
Company Merger becomes effective.
Article III
Consideration
3.01 Consideration.
(a) Subject to the terms and conditions of this Agreement, at the Effective
Time:
(1) Each share of FSB Common Stock issued and outstanding immediately
prior to the Effective Time (other than shares held as treasury stock of
FSB and shares held directly or indirectly by Lincoln, except shares held
by Lincoln in a fiduciary capacity or in satisfaction of a debt previously
contracted, if any) shall become and be converted into the right to
receive, subject to adjustment as set forth in Section 3.05:
(A) .75 shares (the "Exchange Ratio") of Common Stock, without
par value, of Lincoln ("Lincoln Common Stock") (the "Per Share Stock
Consideration"), or
(B) $14.80 in cash (such sum, the "Per Share Cash Consideration"
and together with the Per Share Stock Consideration, the
"Consideration");
provided that the aggregate number of shares of Lincoln Common Stock that
shall be issued in the Company Merger shall equal a number which is as
close as possible (after prorations are made and cash in lieu of fractional
shares is determined) to, but no more than, the product of (a) fifty
percent (50%) and (b) the Exchange Ratio, times (c) the number of shares of
FSB Common Stock outstanding immediately prior to the Effective Time (the
"Stock Number").
(2) Each share of FSB Common Stock that, immediately prior to the
Effective Time, is held as treasury stock of FSB or held directly or
indirectly by Lincoln, other than shares held in a fiduciary capacity or in
satisfaction of a debt previously contracted, shall by virtue of the
Company Merger be canceled and retired and shall cease to exist, and no
exchange or payment shall be made therefor.
(3) Each share of Lincoln Common Stock which is issued and outstanding
immediately prior to the Effective Time shall continue to be an issued and
outstanding share of Lincoln Common Stock at and after the Effective Time.
(4) Notwithstanding the foregoing, if any holders of FSB Common Stock
dissent from the Company Merger and demand dissenters' rights under the
IBCL, any issued and outstanding shares of FSB Common Stock held by such
dissenting holders shall not be converted as described in this Section
3.01(a) but shall from and after the Effective Time represent only the
right to receive such consideration as may be determined to be due to such
dissenting holders pursuant to the IBCL; provided, however, that each share
of FSB Common Stock outstanding immediately prior to the Effective Time and
held by a dissenting holder who shall, after the Effective Time, withdraw
his or her demand for dissenters' rights or lose his or her right to
exercise dissenters' rights shall have only the right to receive the
consideration as No-Election Shares (as hereinafter defined).
(b) Subject to the allocation procedures set forth in Section 3.01(c), each
record holder of FSB Common Stock will be entitled (1) to elect to receive
Lincoln Common Stock for all or some of the shares of FSB Common Stock ("Stock
Election Shares") held by such record holder, (2) to elect to receive cash for
all or some of the shares of FSB Common Stock ("Cash Election Shares") held by
such record holder or (3) to indicate that such holder makes no such election
for all or some of the shares of FSB Common Stock ("No-Election Shares") held by
such record holder. All such elections (each, an "Election") shall be made on a
form designed for that purpose by Lincoln and reasonably acceptable to FSB (an
"Election Form"). Any shares of FSB Common Stock with respect to which the
record holder thereof shall not, as of the Election Deadline (as defined below),
have properly submitted to the Exchange Agent (as defined below) a properly
completed Election Form shall be deemed to be No-Election Shares. A record
holder acting in different capacities or acting on behalf of other persons in
any way shall be entitled to submit an Election Form for each capacity in which
such record holder so acts with respect to each person for which it so acts.
(c) Not later than the 5th day after the Election Deadline, Lincoln shall
cause the Exchange Agent to effect the allocation among the holders of FSB
Common Stock of rights to receive the Per Share Stock Consideration or the Per
Share Cash Consideration in the Company Merger as follows:
(1) Number of Stock Election Shares Less Than the Stock Number. If the
number of Stock Election Shares (on the basis of Election Forms received as
of the Election Deadline) is less than the Stock Number, then
(A) all Stock Election Shares shall be, as of the Effective Time,
converted into the right to receive the Per Share Stock Consideration,
(B) the Exchange Agent shall allocate pro rata from among the
No-Election Shares a sufficient number of No-Election Shares such that
the sum of such number and the number of Stock Election Shares shall
equal as closely as practicable the Stock Number, and all such
selected shares ("Stock-Selected No-Election Shares") shall be, as of
the Effective Time, converted into the right to receive the Per Share
Stock Consideration; provided that if the sum of all No-Election
Shares and Stock Election Shares is less than the Stock Number, all
No-Election Shares shall be Stock-Selected No-Election Shares,
(C) if the sum of Stock Election Shares and No-Election Shares is
less than the Stock Number, the Exchange Agent shall allocate pro rata
from among the Cash Election Shares a number of Cash Election Shares
such that the sum of such number, plus the number of Stock Election
Shares and the number of Stock-Selected No-Election Shares, shall
equal as closely as practicable the Stock Number, and all such
selected shares ("Converted Cash Election Shares") shall be, as of the
Effective Time, converted into the right to receive the Per Share
Stock Consideration, and
(D) the No-Election Shares and Cash Election Shares that are not
Stock-Selected No-Election Shares or Converted Cash Election Shares
(as the case may be) shall be, as of the Effective Time, converted
into the right to receive the Per Share Cash Consideration; or
(2) Number of Stock Election Shares Greater Than the Stock Number. If
the number of Stock Election Shares (on the basis of Election Forms
received by the Election Deadline) is greater than the Stock Number, then:
(A) all Cash Election Shares shall be, as of the Effective Time,
converted into the right to receive the Per Share Cash Consideration;
(B) all No-Election Shares shall be, as of the Effective Time,
converted into the right to receive the Per Share Cash Consideration
(the "Cash-Selected No-Election Shares");
(C) the Exchange Agent shall allocate pro rata from among the
Stock Election Shares a number of Stock Election Shares such that
after converting such Stock Election Shares to Cash Election Shares,
the number of remaining Stock Election Shares shall equal as closely
as practicable the Stock Number, and all such selected shares
("Converted Stock Election Shares") shall be, as of the Effective
Time, converted into the right to receive the Per Share Cash
Consideration, and
(D) the Stock Election Shares that are not Converted Stock
Election Shares shall be, as of the Effective Time, converted into the
right to receive the Per Share Stock Consideration; or
(3) Number of Stock Election Shares Equal to the Stock Number. If the
number of Stock Election Shares (on the basis of Election Forms received by
the Election Deadline) is equal to the Stock Number, then:
(A) all Stock Election Shares shall be, as of the Effective Time,
converted into the right to receive the Per Share Stock Consideration,
and
(B) all No-Election Shares and all Cash Election Shares shall be,
as of the Effective Time, converted into the right to receive the Per
Share Cash Consideration.
(d) Stock Options.
(1) With respect to options for FSB Common Stock ("FSB Stock Option")
held by directors of FSB or First Bank who are not also officers or
employees of FSB or First Bank, at the Effective Time, each outstanding
option granted and outstanding under the First Shares Bancorp, Inc. Amended
and Restated 1996 Option Plan and the First Shares Bancorp, Inc. Amended
and Restated 1999 Stock Option Plan (the "Option Plans"), without any act
on the part of any holder thereof, shall be converted into the right to
receive from Lincoln , at the Effective Time, an amount in cash equal to
$14.80 minus the per share exercise price for each share of FSB Common
Stock subject to an FSB Stock Option; provided, however, that the payer
shall withhold from such cash payment any taxes required to be withheld by
applicable law. Each FSB Stock Option held by a director to which this
subparagraph applies shall be cancelled and cease to exist by virtue of
such payment.
(2) At the Effective Time, subject to any consents required by law and
Section 6.16 hereof, each outstanding option for FSB Common Stock held by
an officer or employee of FSB or First Bank, whether or not vested ("FSB
Common Stock"), shall be converted into an option (a "Replacement Option")
to acquire, on the same terms and conditions as were applicable under such
FSB Stock Option, a specified number of shares of Lincoln Common Stock, at
a specified exercise price per share. In respect of each option or set of
identical options outstanding to the same holder, such number shall be
determined by multiplying the number of shares of FSB Common Stock subject
to such FSB Stock Option or set of identical FSB Stock Options by the
Exchange Ratio and rounding such product to the nearest whole number, and
such exercise price per share shall be determined by dividing the per share
exercise price under such FSB Stock Option or set of identical FSB Stock
Options by the Exchange Ratio and rounding such quotient to the nearest
whole cent. For example, an FSB Stock Option to purchase 200 shares of FSB
Common Stock at an exercise price of $15.00 per share would be converted
into an option to purchase 150 shares of Lincoln Common Stock at an
exercise price of $20.00 per share. Notwithstanding the foregoing, each FSB
Stock Option which is intended to be an "incentive stock option" (as
defined in Section 422 of the Code) shall be adjusted in accordance with
the requirements of Section 424 of the Code. Accordingly, with respect to
"incentive stock options," fractional shares will be rounded down to the
nearest whole number of shares and where necessary the per share exercise
price will be rounded up to the nearest cent. At or prior to the Effective
Time, FSB may modify any or all outstanding FSB Stock Options held by
employees of FSB and its Subsidiaries who become employees of Lincoln or
its Subsidiaries on the Effective Date to provide that they shall become
exercisable, subject to any applicable bank regulatory requirements, in
full in the event the optionee's qualifying service with Lincoln and its
Subsidiaries is terminated by Lincoln or its Subsidiaries without cause or
by the optionee for good reason, in which case the Replacement Option shall
reflect the terms and conditions of the non-vested FSB Stock Option as so
modified. At the Effective Time, Lincoln shall assume FSB Stock Plans. At
all times after the Effective Time, Lincoln shall reserve for issuance such
number of shares of Lincoln Common Stock as are needed to permit the
Replacement Options to be exercised in the manner contemplated by this
Agreement and the instruments pursuant to which such options were granted.
Lincoln shall file with the SEC a registration statement on an appropriate
form under the Securities Act with respect to the shares of Lincoln Common
Stock subject to the Replacement Options and shall use its reasonable best
efforts to maintain the current status of the prospectus contained therein,
as well as comply with any applicable state securities or "blue sky" laws,
for so long as such options remain outstanding.
(e) Subject to any consents required by law and Section 6.17 hereof, on or
before the Effective Time, all of FSB's outstanding Commonly Registered Equity
Contracts and Collateralized Equity Contracts (collectively the "Contracts")
shall either be exercised for shares of FSB Common Stock by holders thereof
and/or cancelled by FSB, and (2) all of FSB's outstanding Commonly Registered
Debentures and Unrestricted Debentures (the "Debentures") shall either be
surrendered to FSB by the holders thereof as consideration for the exercise of
the Contracts or shall be redeemed by FSB. Each of these actions shall be taken
in accordance with the terms of a Trust Indenture for the Debentures and the
Equity Contract Agency Agreement relating to the Contracts (the "Master
Contract") and upon payment of no more than the applicable redemption price
(principal, accrued interest and premium) prescribed by the Trust Indenture and
any cancellation payment prescribed by the Trust Indenture and the Master
Contract. On or before the Effective Time, the Contracts and Debentures so
exercised, surrendered and/or redeemed will be cancelled and cease to exist.
3.02 Rights as Shareholders; Stock Transfers. At the Effective Time, (a) holders
of FSB Common Stock shall cease to be, and shall have no rights as, shareholders
of FSB, other than the right to receive (1) any dividend or other distribution
with respect to such FSB Common Stock with a record date occurring prior to the
Effective Time, (2) the Consideration provided under this Article III, and (3)
any dissenters' rights to which they may be entitled under the IBCL if such
holders have dissented to the Company Merger. After the Effective Time, there
shall be no transfers on the stock transfer books of FSB or the Surviving
Corporation of shares of FSB Common Stock.
3.03 Fractional Shares. Notwithstanding any other provision in this Agreement,
no fractional shares of Lincoln Common Stock and no certificates or scrip
therefor, or other evidence of ownership thereof, will be issued in the Company
Merger; instead, Lincoln shall pay to each holder of FSB Common Stock who
otherwise would be entitled to a fractional share of Lincoln Common Stock an
amount in cash (without interest) determined by multiplying such fraction by the
quotient of the Per Share Consideration and the Exchange Ratio.
3.04 Exchange Procedures. (a) Not later than the 20th business day prior to the
anticipated Effective Date or such other date as the parties may agree in
writing (the "Mailing Date"), Lincoln shall mail an Election Form and a letter
of transmittal to each holder of record of FSB Common Stock. To be effective, an
Election Form must be properly completed, signed and actually received by
Computershare Investor Services, LLC, as Exchange Agent (the "Exchange Agent"),
no later than 5:00 p.m., Chicago time, on the 20th calendar day after the
Mailing Date (the "Election Deadline") or such other time and date as the
parties may agree in writing, and in order to be deemed properly completed the
Election Form must be accompanied by one or more certificates (the "Old
Certificates") (or an indemnity satisfactory to the Surviving Corporation and
the Exchange Agent, if any of such certificates are lost, stolen or destroyed )
representing all shares of FSB Common Stock covered by such Election Form,
together with duly executed transmittal materials included in or required by the
Election Form. Lincoln shall have reasonable discretion, which it may delegate
in whole or in part to the Exchange Agent, to determine whether Election Forms
(and the accompanying certificates and material) have been properly completed,
signed and timely submitted or to disregard defects in Election Forms; such
decisions of Lincoln (or of the Exchange Agent) shall be conclusive and binding.
Neither Lincoln nor the Exchange Agent shall be under any obligation to notify
any person of any defect in an Election Form submitted to the Exchange Agent.
The Exchange Agent and Lincoln shall also make all computations contemplated by
Section 3.01 hereof, and, after consultation with FSB, all such computations
shall be conclusive and binding on the former holders of FSB Common Stock absent
manifest error. Shares of FSB Common Stock covered by an Election Form which is
not effective shall be treated as if no Election had been made with respect to
such shares of FSB Common Stock. Once an Election is made it may be amended at
any time prior to the Election Deadline, but thereafter it may not be amended or
revoked.
(b) At or prior to the Effective Time, Lincoln shall deposit, or shall
cause to be deposited, with the Exchange Agent, certificates representing the
shares of Lincoln Common Stock ("New Certificates") and an estimated amount of
cash to be issued as Consideration (such cash and New Certificates, together
with any dividends or distributions with a record date occurring on or after the
Effective Date with respect thereto (without any interest on any such cash,
dividends or distributions), being hereinafter referred to as the "Exchange
Fund").
(c) The Surviving Corporation shall cause the New Certificates into which
shares of a shareholder's FSB Common Stock are converted on the Effective Date
and/or any check in respect of any Per Share Cash Consideration, fractional
share amounts or dividends or distributions which such person shall be entitled
to receive to be delivered to such shareholder no later than the later of (i) 15
days following delivery to the Exchange Agent of certificates representing such
shares of FSB Common Stock ("Old Certificates") (or indemnity satisfactory to
the Surviving Corporation and the Exchange Agent, if any of such certificates
are lost, stolen or destroyed) owned by such shareholder, or (ii) 15 days
following the Effective Date. No interest will be paid on any Consideration that
any such person shall be entitled to receive pursuant to this Article III upon
such delivery.
(d) No dividends or other distributions on Lincoln Common Stock with a
record date occurring on or after the Effective Time shall be paid to the holder
of any unsurrendered Old Certificate representing shares of FSB Common Stock
converted in the Company Merger into the right to receive shares of such Lincoln
Common Stock until the holder thereof shall be entitled to receive New
Certificates in exchange therefor in accordance with this Article III. After
becoming so entitled in accordance with this Article III, the record holder
thereof also shall be entitled to receive any such dividends or other
distributions, without any interest thereon, which theretofore had become
payable with respect to shares of Lincoln Common Stock such holder had the right
to receive upon surrender of the Old Certificate, as of the Effective Date.
(e) Any portion of the Exchange Fund that remains unclaimed by the
shareholders of FSB for six months after the Effective Time shall be returned to
Lincoln. Any shareholders of FSB who have not theretofore complied with this
Article III shall thereafter look only to Lincoln for payment of Per Share Stock
Consideration, Per Share Cash Consideration, cash in lieu of any fractional
shares and unpaid dividends and distributions on Lincoln Common Stock
deliverable in respect of each share of FSB Common Stock such shareholder holds
as determined pursuant to this Agreement, in each case, without any interest
thereon.
(f) Notwithstanding the foregoing, neither the Exchange Agent nor any party
hereto shall be liable to any former holder of FSB Common Stock for any amount
properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
3.05 Anti-Dilution Adjustments. Should Lincoln change (or establish a record
date for changing) the number of shares of Lincoln Common Stock issued and
outstanding prior to the Effective Time by way of a stock split, stock dividend,
recapitalization or similar transaction with respect to the outstanding Lincoln
Common Stock, and the record date therefor shall be prior to the Effective Time,
the Exchange Ratio shall be proportionately adjusted.
Article IV
Actions Pending the Merger
4.01 Forbearances of FSB. From the date hereof until the earlier of the
termination of this Agreement or the Effective Time, except as expressly
contemplated by this Agreement or the Disclosure Schedule (as hereinafter
defined in Section 5.01), without the prior written consent of Lincoln, FSB will
not, and will cause First Bank not to:
(a) Ordinary Course. Conduct the business of FSB and First Bank other than
in the ordinary and usual course or, to the extent consistent therewith, fail to
use reasonable efforts to preserve intact their business organizations and
assets and maintain their rights, franchises and existing relations with
customers, suppliers, employees and business associates.
(b) Capital Stock. Except as contemplated by Sections 3.01(d) and 3.01(e),
or as may be necessary to fund the redemption of Debentures by the sale of
shares of FSB Common Stock not to exceed the number of shares of FSB Common
Stock that would be required to be issued upon the conversion of the Debentures
into shares of FSB Common Stock, or pursuant to currently outstanding options or
similar securities or obligations convertible into or exercisable or
exchangeable into shares of capital stock (1) issue, sell or otherwise permit to
become outstanding, or authorize the creation of, any additional shares of FSB
Common Stock or any rights to subscribe for or purchase FSB Common Stock or any
other capital stock, or securities convertible into or exchangeable for any
capital stock, of FSB or First Bank, (2) permit any additional shares of FSB
Common Stock or capital stock of First Bank to become subject to grants of
employee or director stock options, restricted stock grants, or similar
stock-based employee or director rights, (3) repurchase, redeem or otherwise
acquire, directly or indirectly, any shares of FSB Common Stock or capital stock
of First Bank, (4) effect any recapitalization, reclassification, stock split or
like change in capitalization, (5) form a new subsidiary, or (6) enter into, or
take any action to cause any holders of FSB Common Stock to enter into, any
agreement, understanding or commitment relating to the right of holders of FSB
Common Stock to vote any shares of FSB Common Stock, or cooperate in any
formation of any voting trust relating to such shares.
(c) Dividends, Etc. Make, declare, pay or set aside for payment any
dividend other than dividends from First Bank to FSB consistent with past
practice, on or in respect of, any shares of its capital stock.
(d) Compensation; Employment Contracts; Etc. Enter into, amend, modify,
renew or terminate any employment, consulting, severance or similar contracts
with any directors, officers or employees of, or independent contractors with
respect to, FSB or First Bank, or grant any salary, wage or other increase or
increase any employee benefit (including incentive or bonus payments), except
(1) for normal general increases in salary to individual employees in the
ordinary course of business consistent with past practice, (2) for other changes
that are required by applicable law, (3) to satisfy contracts described in the
Disclosure Schedule existing on the date hereof, (4) for the hiring of new
non-salaried employees to replace prior employees, or (5) for changes
contemplated by Sections 6.18, 6.19 and 6.20 hereof.
(e) Benefit Plans. Except as set forth in the Disclosure Schedule, Enter
into, establish, adopt, amend, modify or terminate any pension, retirement,
stock option, stock purchase, savings, profit sharing, employee stock ownership,
deferred compensation, consulting, bonus, group insurance or other employee or
director benefit, incentive or welfare contract, plan or arrangement, or any
trust agreement (or similar arrangement) related thereto, or make any new or
increase any outstanding grants or awards under any such contract, plan or
arrangement, in respect of any current or former directors, officers or
employees of, or independent contractors with respect to, FSB or First Bank (or
any dependent or beneficiary of any of the foregoing persons), including taking
any action that accelerates the vesting or exercisability of or the payment or
distribution with respect to other compensation or benefits payable thereunder,
except, in each such case, (1) as may be required by applicable law or to
satisfy contracts existing on the date hereof and described in the Disclosure
Schedule or (2) as are provided for or contemplated by this Agreement.
(f) Dispositions. Except as set forth in the Disclosure Schedule, sell,
transfer, mortgage, lease, encumber or otherwise dispose of or discontinue any
material portion of its assets, business or properties.
(g) Acquisitions. Except (1) pursuant to contracts existing on the date
hereof and described in the Disclosure Schedule, (2) for short-term investments
for cash management purposes, (3) pursuant to bona fide hedging transactions, or
(4) by way of foreclosures or otherwise in satisfaction of debts previously
contracted in good faith, in each case in the ordinary and usual course of
business consistent with past practice, neither FSB nor First Bank will acquire
any assets or properties of another person in any one transaction or a series of
related transactions, other than readily marketable securities in the ordinary
and usual course of business consistent with past practice.
(h) Governing Documents. Amend the FSB Articles of Incorporation, FSB
By-laws or the articles of incorporation or by-laws of First Bank.
(i) Accounting Methods. Implement or adopt any change in the accounting
principles, practices or methods used by FSB and First Bank, other than as may
be required by generally accepted accounting principles, as concurred with by
FSB's independent auditors or as required by Section 6.12 hereof.
(j) Contracts. Except in the ordinary course of business consistent with
past practice, enter into or terminate any material contract or amend or modify
in any material respect any of its existing material contracts.
(k) Claims. Settle any claim, action or proceeding, except for any claim,
action or proceeding involving solely money damages in an amount, individually
or in the aggregate, that is not material to FSB and First Bank, taken as a
whole.
(l) Risk Management. Except as required by applicable law or regulation:
(1) implement or adopt any material change in its interest rate risk management
and hedging policies, procedures or practices; (2) fail to follow its existing
policies or practices with respect to managing its exposure to interest rate
risk; or (3) fail to use commercially reasonable means to avoid any material
increase in its aggregate exposure to interest rate risk.
(m) Indebtedness. Other than in the ordinary course of business (including
creation of deposit liabilities, enter into repurchase agreements, purchases or
sales of federal funds, and sales of certificates of deposit) consistent with
past practice, (1) incur any indebtedness for borrowed money, (2) assume,
guarantee, endorse or otherwise as an accommodation become responsible for the
obligations of any other person or (3) cancel, release, assign or modify any
material amount of indebtedness of any other person.
(n) Loans. Without prior consultation with Lincoln, make any loan or
advance in excess of $500,000 other than residential mortgage loans in the
ordinary course of business consistent with lending policies as in effect on the
date hereof, provided that in the case of any loan for which consultation is
required, FSB or First Bank may make any such loan in the event (A) FSB or First
Bank has delivered to Lincoln or its designated representative a notice of its
intention to make such loan and such additional information as Lincoln or its
designated representative may reasonably require and (B) Lincoln or its
designated representative shall not have reasonably objected to such loan by
giving notice of such objection within three business days following the
delivery to Lincoln of the applicable notice of intention.
(o) Adverse Actions. (1) Take any action reasonably likely to prevent or
impede the Company Merger or the Subsidiary Merger from qualifying as a
reorganization within the meaning of Section 368 of the Code; or (2) take any
action that is intended or is reasonably likely to result in (A) any of its
representations and warranties set forth in this Agreement being or becoming
untrue in any material respect at any time at or prior to the Effective Time,
(B) any of the conditions to the Company Merger set forth in Article VII not
being satisfied or (C) a material breach of any provision of this Agreement;
except, in each case, as may be required by applicable law.
(p) Interest Rates. Increase or decrease the rate of interest paid by First
Bank on any deposit product, including without limitation on certificates of
deposit, except in a manner and pursuant to policies consistent with past
practices; provided, however, that, notwithstanding the foregoing, in no event
shall First Bank pay a rate of interest on any deposit product which is more
than the greater of (i) 0.0025 above the average of the rates paid on comparable
deposit products by the five (5) highest deposit interest paying other banks or
thrifts located in the market in which such deposit product is offered by First
Bank or, if fewer than five (5) other banks and thrifts are located in such
market, the average of the rates paid by all other banks and thrifts located in
such market or (ii) the rate paid by Lincoln Bank.
(q) Commitments. Agree or commit to do, or enter into any contract
regarding, anything that would be precluded by clauses (a) through (p) without
first obtaining Lincoln's consent.
4.02 Forbearances of Lincoln. From the date hereof until the Effective Time,
except as expressly contemplated by this Agreement, without the prior written
consent of FSB, Lincoln will not, and will cause each of its direct or indirect
subsidiaries (collectively, the "Subsidiaries") not to:
(a) Ordinary Course. Conduct the business of Lincoln and its Subsidiaries
other than in the ordinary and usual course or, to the extent consistent
herewith, fail to use reasonable efforts to preserve intact their business
organizations and assets and maintain their rights, franchises and existing
relations with customers, suppliers, employees and business associates.
(b) Capital Stock. Except as contemplated by this Agreement or pursuant to
currently outstanding options or similar securities or obligations convertible
into or exercisable into shares of capital stock or pursuant to previously
authorized stock repurchase programs, (1) issue, sell or otherwise permit to
become outstanding, or authorize the creation of, any additional shares of
Lincoln Common Stock or any rights to subscribe for or purchase Lincoln Common
Stock or any other capital stock, or securities convertible into or exchangeable
for any capital stock, Lincoln or Lincoln Bank, (2) permit any additional shares
of Lincoln Common Stock or capital stock of Lincoln Bank to become subject to
grants of employee or director stock options, restricted stock grants, or
similar stock-based employee or director rights, (3) repurchase, redeem or
otherwise acquire, directly or indirectly, any shares of Lincoln Common Stock or
capital stock of Lincoln Bank, (4) effect any recapitalization,
reclassification, stock split or like change in capitalization, (5) form a new
subsidiary, or (6) enter into, or take any action to cause any holders of
Lincoln Common Stock to enter into, any agreement, understanding or commitment
relating to the right of holders of Lincoln Common Stock to vote any shares of
Lincoln Common Stock, or cooperate in any formation of any voting trust relating
to such shares.
(c) Dividends, Etc. Make, declare, pay or set aside for payment any
dividend, other than dividends from Lincoln Bank to Lincoln consistent with past
practice or dividends from Lincoln Bank to Lincoln to allow Lincoln to pay any
of the Consideration under this Agreement, on or in respect of, any shares of
its capital stock and quarterly dividends by Lincoln to its shareholders in the
ordinary course of business and consistent with past practice.
(d) Accounting Methods. Implement or adopt any change in the accounting
principles, practices or methods used by Lincoln and its Subsidiaries, other
than as may be required by generally accepted accounting principles, as
concurred with by Lincoln's independent auditors.
(e) Risk Management. Except as provided by applicable law or regulation:
(1) implement or adopt any material change in its interest rate risk management
and hedging policies, procedures or practices; (2) fail to follow its existing
policies or practices with respect to managing its exposure to interest rate
risk; or (3) fail to use commercially reasonable means to avoid any material
increase in its aggregate exposure to interest rate risk.
(f) Indebtedness. Other than in the ordinary course of business (including
creation of deposit liabilities, entry into repurchase agreements, purchases or
sales of federal funds, and sales of certificates of deposit) consistent with
past practice, (1) incur any indebtedness for borrowed money, (2) assume,
guarantee, endorse or otherwise as an accommodation become responsible for the
obligations of any other person, or (3) cancel, release, assign or modify any
material amount of indebtedness of any other person.
(g) Loans. Without prior consultation with FSB, make any loan or advance in
excess of $500,000 other than residential mortgage loans in the ordinary course
of business consistent with lending policies as in effect on the date hereof,
provided that in the case of any loan for which consultation is required,
Lincoln or Lincoln Bank may make any such loan in the event (A) Lincoln or
Lincoln Bank has delivered to FSB or its designated representative a notice of
its intention to make such loan and such additional information as FSB or its
designated representative may reasonably require and (B) FSB or its designated
representative shall not have reasonably objected to such loan by giving notice
of such objection within three (3) business days following the delivery to FSB
of the applicable notice of intention.
(h) Adverse Actions. (1) Take any action reasonably likely to prevent or
impede the Company Merger or the Subsidiary Merger from qualifying as a
reorganization within the meaning of Section 368 of the Code; or (2) take any
action that is intended or is reasonably likely to result in (A) any of its
representations and warranties set forth in this Agreement being or becoming
untrue in any material respect at any time at or prior to the Effective Time,
(B) any of the conditions to the Company Merger set forth in Article VII not
being satisfied or (C) a material breach of any provision of this Agreement;
except, in each case, as may be required by applicable law.
(i) Governing Documents. Amend the Lincoln Articles of Incorporation or the
Lincoln Code of By-Laws in a manner that would be materially adverse to the
holders of Lincoln Common Stock.
(j) Commitments. Agree or commit to do, or enter into any contract
regarding, anything that would be precluded by clauses (a) through (d) without
first obtaining FSB's consent.
(k) Benefit Plans. Except for the potential termination or modification of
its existing defined benefit plan, enter into, establish, adopt, amend, modify
or terminate any pension, retirement, stock option, stock purchase, savings,
profit sharing, employee stock ownership, deferred compensation, consulting,
bonus, group insurance or other employee or director benefit, incentive or
welfare contract, plan or arrangement, or any trust agreement (or similar
arrangement) related thereto, or make any new or increase any outstanding grants
or awards under any such contract, plan or arrangement, in respect of any
current or former directors, officers or employees of, or independent
contractors with respect to, Lincoln or Lincoln Bank (or any dependent or
beneficiary of any of the foregoing persons), including taking any action that
accelerates the vesting or exercisability of or the payment or distribution with
respect to other compensation or benefits payable thereunder, except, in each
such case, (1) as may be required by applicable law or to satisfy contracts or
obligations existing on the date hereof and described in the Disclosure Schedule
or (2) as are provided for or contemplated by this Agreement.
Article V
Representations and Warranties
5.01 Disclosure Schedules. On or prior to the date hereof, FSB has delivered to
Lincoln and Lincoln has delivered to FSB a schedule (respectively, each party's
"Disclosure Schedule") setting forth, among other things, items the disclosure
of which is necessary or appropriate either (1) in response to an express
disclosure requirement contained in a provision hereof or (2) as an exception to
one or more representations or warranties contained in Section 5.02 or 5.03,
respectively, or to one or more of its covenants contained in Article IV.
5.02 Representations and Warranties of FSB. Except as set forth in the
Disclosure Schedule, FSB and First Bank hereby represent and warrant, jointly
and severally, to Lincoln:
(a) Organization and Capital Stock.
(1) FSB is a corporation duly organized, validly existing and in good
standing under the laws of the State of Indiana 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. FSB is a bank holding
company registered with the Board of Governors of the Federal Reserve
System ("Federal Reserve").
(2) The authorized capital stock of FSB consists of (i) 12,000,000
shares of FSB Common Stock, of which, as of the date hereof, 1,622,662
shares are issued and outstanding, and (ii) 2,000,000 shares of preferred
stock, $.01 par value per share, of which no shares are issued and
outstanding. All of the issued and outstanding shares of FSB Common are
duly and validly issued and outstanding and are fully paid and
non-assessable. None of the outstanding shares of FSB Common Stock has been
issued in violation of any preemptive rights of the current or past
shareholders of FSB.
(3) Except as disclosed in the Disclosure Schedule, there are no
shares of FSB Common or other capital stock or other equity securities of
FSB 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, shares of FSB
Common Stock or other capital stock of FSB or contracts, commitments,
understandings or arrangements by which FSB 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.
(4) Except as disclosed in the Disclosure Schedule, each certificate
representing shares of FSB Common Stock issued by FSB in replacement of any
certificate theretofore issued by it which was claimed by the record holder
thereof to have been lost, stolen or destroyed was issued by FSB only upon
receipt of an Affidavit of lost stock certificate and indemnity agreement
of such shareholder indemnifying FSB against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such replacement certificate.
(b) Authorization and No Default. FSB's Board of Directors has, by all
appropriate action, approved this Agreement and the Company Merger and
authorized the execution of this Agreement on its behalf by its duly authorized
officers and the performance by FSB of its obligations hereunder. First Bank's
Board of Directors has, by all appropriate action, approved this Agreement,
Exhibit B, and the Subsidiary Merger and authorized the execution hereof and of
Exhibit B on its behalf by its duly authorized officers and the performance by
First Bank of its obligations hereunder and under Exhibit B. Nothing in the
articles of incorporation or bylaws of FSB or First Bank, as amended, or any
other agreement, instrument, decree, proceeding, law or regulation (except as
specifically referred to in or contemplated by this Agreement) by or to which
FSB or First Bank are bound or subject which is material to FSB and First Bank
taken as a whole or to the Company Merger or the Subsidiary Merger would
prohibit or inhibit FSB or First Bank from consummating this Agreement, the
Company Merger or the Subsidiary Merger on the terms and conditions herein
contained. This Agreement has been duly and validly executed and delivered by
FSB and First Bank and constitutes a legal, valid and binding obligation of FSB
and First Bank, enforceable against FSB and First Bank in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws affecting the
enforceability of creditors' rights generally and by judicial discretion in
applying principles of equity. No other corporate acts or proceedings are
required to be taken by FSB or First Bank (except for approval by FSB's
shareholders and the sole shareholder of First Bank and Lincoln Bank) to
authorize the execution, delivery and performance of this Agreement and Exhibit
B. Except for the requisite approval of the OTS, and notices to the Indiana
Department of Financial Institutions (the "DFI") and the Federal Reserve, no
notice to, filing with, or authorization by, or consent or approval of, any
federal or state bank regulatory authority is necessary for the execution of
this Agreement or consummation of the Company Merger by FSB or the Subsidiary
Merger by First Bank. FSB and First Bank are neither in default under, nor in
violation of, any provision of their articles of incorporation, or bylaws, or
any promissory note, indenture or any evidence of indebtedness or security
therefor, lease, contract, purchase or other commitment or any other agreement,
except for defaults and violations which will not have a Material Adverse Effect
on FSB and First Bank, taken as a whole. For purposes of this Agreement,
"Material Adverse Effect" means with respect to Lincoln or FSB, any effect that
(1) is both material and adverse to the financial position, results of operation
or business of Lincoln and its Subsidiaries, taken as a whole, or FSB and First
Bank, taken as a whole, respectively, other than (A) the effects of any change
attributable to or resulting from changes in economic conditions, laws,
regulations or accounting guidelines (generally accepted accounting principles
or otherwise) applicable to depository institutions generally, or in general
levels of interest rates, (B) payments associated with the Company Merger or the
Subsidiary Merger, (C) charges required under Section 6.12 hereof, or (D)
actions or omissions of either Lincoln, FSB, First Bank or any of Lincoln's
Subsidiaries, taken with the prior informed written consent of the other party
in contemplation of the transactions contemplated by this Agreement; or (2)
would materially impair the ability of either Lincoln or FSB to perform its
obligations under this Agreement or otherwise materially threaten or materially
impede the consummation of the Company Merger or the Subsidiary Merger and the
other transactions contemplated by this Agreement.
(c) Subsidiaries. First Bank is wholly-owned by FSB and is a commercial
bank duly organized, validly existing and in good standing under Indiana law and
has the corporate power to own its respective properties and assets, to incur
its respective liabilities and to carry on its respective business as now being
conducted. The number of issued and outstanding shares of capital stock of First
Bank is set forth in the Disclosure Schedule, all of which shares are owned by
FSB free and clear of all liens, encumbrances, rights of first refusal, options
or other restrictions of any nature whatsoever. FSB has no other direct or
indirect subsidiaries. There are no options, warrants or rights outstanding to
acquire any capital stock of First Bank and no person or entity has any other
right to purchase or acquire any unissued shares of stock of First Bank, nor
does First Bank have any obligation of any nature with respect to its unissued
shares of stock. Except for the ownership of readily marketable securities,
Federal Home Loan Bank or Federal Reserve Bank stock and as may be disclosed in
the Disclosure Schedule, neither FSB nor First Bank is a party to any
partnership or joint venture or owns an equity interest in any other business or
enterprise.
(d) Financial Information. The consolidated balance sheets of FSB and First
Bank as of December 31, 2002 and December 30, 2001, and related consolidated
income statements and statements of changes in shareholders' equity and of cash
flows for the three (3) years ended December 31, 2002, together with the notes
thereto, included in FSB's Form 10-KSB for the fiscal year ended December 31,
2002, as currently on file with the SEC, and the periodic financial statements
for the fiscal quarter September 30, 2003, together with the notes thereto
included in FSB's Form 10-QSB for that quarter as currently on file with the SEC
(together, the "FSB Financial Statements"), copies of which have been provided
to Lincoln, have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except as may be disclosed therein and
for the absence of footnotes and normal year end adjustments in the quarterly
FSB Financial Statements) and fairly present in all material respects the
consolidated financial position and the consolidated results of operations,
changes in shareholders' equity and cash flows of FSB and First Bank as of the
dates and for the periods indicated.
(e) Absence of Changes. Except as set forth in the Disclosure Schedule,
since September 30, 2003, there has not been any material adverse change in the
financial condition, the results of operations or the business of FSB and First
Bank taken as a whole, nor have there been any events or transactions having a
Material Adverse Effect on FSB and First Bank, taken as a whole.
(f) Regulatory Enforcement Matters. Except as may be disclosed in the
Disclosure Schedule, neither FSB nor First Bank is subject to, or has received
any notice or advice that it may become subject to, any order, agreement or
memorandum of understanding with any federal or state agency charged with the
supervision or regulation of banks or bank holding companies or engaged in the
insurance of financial institution deposits or any other governmental agency
having supervisory or regulatory authority with respect to FSB or First Bank.
(g) Tax Matters. FSB and First Bank have each filed with the appropriate
governmental agencies all federal, state and local income, franchise, excise,
sales, use, real and personal property and other tax returns and reports
required to be filed by it. Except as set forth in the Disclosure Schedule,
neither FSB nor First Bank is (a) delinquent in the payment of any taxes shown
on such returns or reports or on any assessments received by it for such taxes;
(b) aware of any pending or threatened examination for income taxes for any year
by the Internal Revenue Service (the "IRS") or any state tax agency; (c) subject
to any agreement extending the period for assessment or collection of any
federal or state tax; or (d) a party to any action or proceeding with, nor has
any claim been asserted against it by, any court, administrative agency or
commission or other federal, state or local governmental authority or
instrumentality ("Governmental Authority") for assessment or collection of
taxes. None of the tax returns of FSB or First Bank has been audited by the IRS
or any state tax agency for any period since December 31, 1999. Neither FSB nor
First Bank is, to the knowledge of FSB, the subject of any threatened action or
proceeding by any Governmental Authority for assessment or collection of taxes.
The reserve for taxes in the unaudited financial statements of FSB for the
quarter ended September 30, 2003, is, in the opinion of management, adequate to
cover all of the tax liabilities of FSB and First Bank (including, without
limitation, income taxes and franchise fees) as of such date in accordance with
generally accepted accounting principles ("GAAP").
(h) Litigation. Except as may be disclosed in the Disclosure Schedule and
except for foreclosure and other collection proceedings commenced in the
ordinary course of business by First Bank with respect to loans in default with
respect to which no claims have been asserted against First Bank, there is no
litigation, claim or other proceeding before any arbitrator or Governmental
Authority pending or, to the knowledge of FSB, threatened, against FSB or First
Bank, or of which the property of FSB or First Bank is or would be subject
involving a monetary amount, singly or in the aggregate, in excess of $25,000,
or a request for specific performance, injunctive relief, or other equitable
relief. No litigation, claim or other proceeding disclosed in the Disclosure
Schedule is material to FSB and First Bank taken as a whole.
(i) Employment Agreements. Except as disclosed in the Disclosure Schedule,
neither FSB nor First Bank is a party to or bound by any contract for the
employment, retention or engagement, or with respect to the severance, of any
officer, employee, agent, consultant or other person or entity which, by its
terms, is not terminable by FSB or First Bank on thirty (30) days written notice
or less without the payment of any amount by reason of such termination. A
description of each such agreement which is in writing is included in the
Disclosure Schedule.
(j) Reports. Except as may be disclosed in the Disclosure Schedule, FSB and
First Bank have filed all reports and statements, together with any amendments
required to be made with respect thereto, if any, that they were required to
file with (i) the DFI, (ii) the FDIC, (iii) the Federal Reserve, and (iv) any
other Governmental Authority with jurisdiction over FSB or First Bank, including
the SEC. As of their respective dates, each of such reports and documents,
including the financial statements, exhibits and schedules thereto, complied in
all material respects with the relevant statutes, rules and regulations enforced
or promulgated by the regulatory authority 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.
(k) Loans and Investments.
(1) Except as set forth in the Disclosure Schedule, as of September
30, 2003, First Bank had no loan in excess of $10,000 that has been
classified by regulatory examiners or management of First Bank as
"Substandard," "Doubtful" or "Loss" or in excess of $10,000 that has been
identified by accountants or auditors (internal or external) as having a
significant risk of uncollectability. As of the date hereof, the most
recent loan watch list of First Bank and a list of all loans in excess of
$10,000 that First Bank has determined to be ninety (90) days or more past
due with respect to principal or interest payments or has placed on
nonaccrual status are set forth in the Disclosure Schedule.
(2) All loans reflected in the FSB Financial Statements as of
September 30, 2003, and which have been made, extended, renewed,
restructured, approved, amended or acquired since September 30, 2003, (i)
have been made for good, valuable and adequate consideration in the
ordinary course of business; (ii) to the best of First Bank's knowledge,
constitute the legal, valid and binding obligation of the obligor and any
guarantor named therein, except to the extent limited by general principles
of equity and public policy or by bankruptcy, insolvency, fraudulent
transfer, reorganization, liquidation, moratorium, readjustment of debt or
other laws of general application relative to or affecting the enforcement
of creditors' rights; (iii) are evidenced by notes, instruments or other
evidences of indebtedness which are true, genuine and what they purport to
be; and (iv) are secured, to the extent that First Bank has a security
interest in collateral or a mortgage securing such loans, by perfected
security interests or recorded mortgages naming First Bank as the secured
party or mortgagee.
(3) Except as set forth in the Disclosure Schedule, the reserves, the
allowance for possible loan and lease losses and the carrying value for
real estate owned which are shown on the FSB Financial Statements are, in
the opinion of management of FSB, adequate in all respects under the
requirements of generally accepted accounting principles applied on a
consistent basis to provide for possible losses on items for which reserves
were made, on loans and leases outstanding and real estate owned as of the
respective dates. To the best knowledge of FSB, the aggregate loan balances
outstanding as of September 30, 2003, in excess of the reserve for loan
losses as of such date, were, as of September 30, 2003, collectible in
accordance with their respective terms.
(4) None of the investments reflected in the FSB Financial Statements
as of and for the quarter ended September 30, 2003, and none of the
investments made by FSB or First Bank since September 30, 2003, are subject
to any restriction, whether contractual or statutory, which materially
impairs the ability of FSB or First Bank to dispose freely of such
investment at any time.
(5) Set forth in the Disclosure Schedule is a true, accurate and
complete list of all loans in which FSB has any participation interest or
which have been made with or through another financial institution on a
recourse basis against First Bank.
(l) Employee Matters and ERISA.
(1) Except as may be disclosed in the Disclosure Schedule, neither FSB
nor First Bank has entered into any collective bargaining agreement with
any labor organization with respect to any group of employees of FSB or
First Bank and to the knowledge of FSB there is no present effort nor
existing proposal to attempt to unionize any group of employees of FSB or
First Bank.
(2) Except as may be disclosed in the Disclosure Schedule, (i) FSB and
First Bank are and have been in material compliance 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 FSB nor First Bank is engaged in any
unfair labor practice; (ii) there is no unfair labor practice complaint
against FSB or First Bank pending or, to the knowledge of FSB, threatened
before the National Labor Relations Board; (iii) there is no labor dispute,
strike, slowdown or stoppage actually pending or, to the knowledge of FSB,
threatened against or directly affecting FSB or First Bank; and (iv)
neither FSB nor First Bank has experienced any work stoppage or other such
labor difficulty during the past five (5) years.
(3) Except as may be disclosed in the Disclosure Schedule, neither FSB
nor First Bank maintains, contributes to or participates in or has any
liability under any employee benefit plans, as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
including (without limitation) any multiemployer plan (as defined in
Section 3(37) of ERISA), or any nonqualified employee benefit plans or
deferred compensation, bonus, stock or incentive plans, or other employee
benefit or fringe benefit programs for the benefit of former or current
employees or directors (or their beneficiaries or dependents) of FSB or
First Bank (the "FSB Employee Plans"). To the knowledge of FSB, no present
or former employee of FSB or First Bank has been charged with breaching nor
has breached a fiduciary duty under any of the FSB Employee Plans. Except
as may be disclosed in the Disclosure Schedule, neither FSB nor First 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
multiemployer plan. Except as may be disclosed in the Disclosure Schedule,
neither FSB nor First Bank maintains, contributes to, or participates in,
any plan that provides health, major medical, disability or life insurance
benefits to former employees or directors of FSB or First Bank. FSB has
provided to Lincoln a true, accurate and complete copy of each written plan
or program disclosed in the Disclosure Schedule or a summary plan
description therefor. FSB has also provided to Lincoln, with respect to
each such plan or program to the extent available to FSB, all (i)
amendments or supplements thereto, (ii) summary plan descriptions, (iii)
descriptions of all current participants in such plans and programs and all
participants with benefit entitlements under such plans and programs, (iv)
contracts relating to plan documents, (v) actuarial valuations for any
defined benefit plan, (vi) valuations for any plan as of the most recent
date, (vii) determination letters from the IRS, (viii) the most recent
annual report filed with the IRS, (ix) registration statements on Form S-8
and prospectuses, and (x) trust agreements.
(4) All liabilities of the FSB Employee Plans have been funded on the
basis of consistent methods in accordance with sound actuarial assumptions
and practices, and no FSB Employee Plan, at the end of any plan year, or at
September 30, 2003, had or has had an accumulated funding deficiency
(within the meaning of Section 302 of ERISA or Section 412 of the Code). No
actuarial assumptions have been changed since the last written report of
actuaries on such FSB 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. Except as may be noted on the FSB Financial Statements, FSB and
First Bank have no contingent or actual liabilities under Title IV of ERISA
as of December 31, 2003. 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 FSB Employee Plans, whether or not
waived, nor does FSB or any of its affiliates have any liability or
potential liability as a result of the underfunding of, or termination of,
or withdrawal from, any plan by FSB or by any person which may be
aggregated with FSB for purposes of Section 412 of the Code. No reportable
event (as defined in Section 4043 of ERISA) has occurred with respect to
any of the FSB Employee Plans as to which a notice would be required to be
filed with the Pension Benefit Guaranty Corporation. No claim is pending,
or to the knowledge of FSB threatened or imminent with respect to any FSB
Employee Plan (other than a routine claim for benefits for which plan
administrative review procedures have not been exhausted) for which FSB or
First Bank would be liable after September 30, 2003, except as is reflected
on the FSB Financial Statements. As of December 31, 2003, FSB and First
Bank had no liability 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 FSB Employee Plan. All FSB Employee Plans have been
operated, administered and maintained in accordance with the terms thereof
and in material compliance with the requirements of all applicable laws,
including, without limitation, ERISA.
(m) Title to Properties; Insurance. Except as may be disclosed in the
Disclosure Schedule, (i) FSB and First 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 FSB
Financial Statements and easements, rights-of-way, and other restrictions which
do not have a Material Adverse Effect on FSB and First Bank, taken as a whole,
and further excepting in the case of other real estate owned ("OREO"), as such
real estate is internally classified on the books of FSB or First Bank, rights
of redemption under applicable law) to all of their owned real properties; (ii)
all leasehold interests for real property and any material personal property
used by FSB and First Bank in their businesses are held pursuant to lease
agreements which are valid and enforceable in accordance with their terms; (iii)
to our knowledge, all such properties comply in all material respects with all
applicable private agreements, zoning requirements and other governmental laws
and regulations relating thereto and there are no condemnation proceedings
pending or, to the knowledge of FSB, threatened with respect to such properties;
and (iv) FSB and First Bank have valid title or other ownership rights under
licenses to all material intangible personal or intellectual property used by
FSB or First Bank in their respective businesses, free and clear of any claim,
defense or right of any other person or entity which is material to such
property, subject only to rights of the licensors pursuant to applicable license
agreements and, in the case of non-exclusive licenses, of other licensees, which
rights do not materially adversely interfere with the use of such property. All
material insurable properties owned or held by FSB and First 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 bank holding companies of similar size. The
Disclosure Schedule sets forth, for each policy of insurance maintained by FSB
and First Bank, the amount and type of insurance, the name of the insurer and
the amount of the annual premium.
(n) Environmental Matters.
(1) As used in this Agreement, "Environmental Laws" means all local,
state and federal environmental, health and safety laws and regulations in
all jurisdictions in which FSB, First Bank, Lincoln and Lincoln's
Subsidiaries 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.
(2) Except as may be disclosed in the Disclosure Schedule and based on
the best knowledge, after reasonable investigation, of FSB, neither the
conduct nor operation of FSB or First Bank nor any condition of any
property presently or previously owned, leased or operated by either of
them violates or violated Environmental Laws in any respect material to the
business of FSB and First Bank and no condition has existed or event has
occurred with respect to either of them or any such property that, with
notice or the passage of time, or both, would constitute a violation
material to the business of FSB and First Bank of Environmental Laws or
obligate (or potentially obligate) FSB or First Bank to remedy, stabilize,
neutralize or otherwise alter the environmental condition of any such
property where the aggregate cost of such actions would be material to FSB
and First Bank. Except as may be disclosed in the Disclosure Schedule and
based on the best knowledge, after reasonable investigation, of FSB,
neither FSB nor First Bank has received any notice from any person or
entity that FSB or First 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 or that either 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.
(o) Compliance with Law. FSB and First Bank have all licenses, franchises,
permits and other governmental authorizations that are legally required to
enable them to conduct their respective businesses in all material respects and
conduct and have conducted their businesses in compliance in all material
respects with all applicable federal, state and local statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees applicable thereto
or to the employees conducting such businesses.
(p) Brokerage. Except as may be disclosed in the Disclosure Schedule and
with the exception of fees payable to Xxxxx X. Xxxxx & Company ("Xxxxx Xxxxx"),
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 FSB or First Bank.
(q) No Undisclosed Liabilities. To the knowledge or FSB and First Bank, FSB
and First Bank do not have any material liability, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due (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 FSB or First Bank giving rise to any such
liability) required in accordance with GAAP to be reflected in an audited
consolidated balance sheet of FSB or the notes thereto, except (i) for
liabilities set forth or reserved against in the FSB Financial Statements, (ii)
for normal fluctuations in the amount of the liabilities referred to in clause
(i) above or other liabilities occurring in the ordinary course of business of
FSB and First Bank since the date of the most recent balance sheet included in
the FSB Financial Statements, which such fluctuations in the aggregate are not
material to FSB and First Bank taken as a whole, (iii) liabilities relating to
the possible sale of FSB or other transactions contemplated by this Agreement,
and (iv) as may be disclosed in the Disclosure Schedule.
(r) Properties, Contracts and Other Agreements. The Disclosure Schedule
lists or describes the following:
(1) Each parcel of real property owned by FSB or First Bank and the
principal buildings and structures located thereon;
(2) Each lease of real property to which FSB or First Bank is a party,
identifying the parties thereto, the annual rental payable, the term and
expiration date thereof and a brief description of the property covered;
(3) Each loan and credit agreement, conditional sales contract,
indenture or other title retention agreement or security agreement relating
to money borrowed by FSB;
(4) Each guaranty by FSB or First Bank of any obligation for the
borrowing of money or otherwise (excluding any endorsements and guarantees
in the ordinary course of business and letters of credit issued by First
Bank in the ordinary course of its business) or any warranty or
indemnification agreement;
(5) Each agreement between FSB or First Bank and any present or former
officer, director or greater than 5% shareholder of FSB or First Bank
(except for deposit or loan agreements entered into in the ordinary course
of First Bank's business);
(6) Each lease or license where FSB has an annual payment in excess of
$10,000 with respect to personal property involving FSB or First Bank,
whether as lessee or lessor or licensee or licensor;
(7) The name and annual salary as of January 1, 2004, of each director
or employee of FSB or First Bank and any employment agreement or
arrangement with respect to each such person; and
(8) Each agreement, loan, contract, lease, guaranty, letter of credit,
line of credit or commitment of FSB or First Bank not referred to elsewhere
in this Section which (i) involves payment by FSB or First Bank (other than
as disbursement of loan proceeds to customers) of more than $50,000
annually or in the aggregate unless, in the latter case, such is terminable
within one (1) year without premium or penalty; (ii) involves payments
based on profits of FSB or First Bank; (iii) relates to the future purchase
of goods or services in excess of the requirements of its respective
business at current levels or for normal operating purposes; or (iv) were
not made in the ordinary course of business.
Final and complete copies of each document, plan or contract listed and
described in the Disclosure Schedule have been provided to Lincoln. Neither FSB
nor First Bank nor, to FSB's knowledge, any other party thereof, is in default
under any such contracts and there has not occurred any event that with the
lapse of time or the giving of notice, or both, would constitute such a default.
(s) Interim Events. Except as provided in the Disclosure Schedule, since
September 30, 2003, neither FSB nor First Bank has paid or declared any dividend
or made any other distribution to shareholders or taken any action which if
taken after the date of this Agreement would require the prior written consent
of Lincoln pursuant to Section 4.01 hereof.
(t) Statements True and Correct. None of the information supplied or to be
supplied by FSB or First Bank for inclusion in (i) the Proxy Statement (as
defined in Section 6.03 hereof), and (ii) any other documents to be filed with
the SEC or any banking or other regulatory authority in connection with the
transactions contemplated hereby, will, at the respective times such documents
are filed, and with respect to the Proxy Statement, when first mailed to the
shareholders of FSB and at the time of the FSB shareholders' meeting referred to
in 6.02 hereof, 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 FSB is responsible for filing with the SEC or any other
regulatory authority in connection with the transactions contemplated hereby
will comply as to form in all material respects with the provisions of
applicable law and the applicable rules and regulations thereunder.
(u) Books and Records. The books and records of FSB and First Bank have
been fully, properly and accurately maintained in all material respects, there
are no material inaccuracies or discrepancies of any kind contained or reflected
therein, and they fairly present the financial position of FSB and First Bank.
(v) Deposit Insurance. The deposits of First Bank are insured by the FDIC
up to applicable limits and in accordance with the Federal Deposit Insurance
Corporation Act, as amended, and First Bank has paid or properly reserved or
accrued for all current premiums and assessments with respect to such deposit
insurance.
5.03 Representations and Warranties of Lincoln. Except as set forth in the
Disclosure Schedule corresponding to the relevant paragraph below, Lincoln and
Lincoln Bank hereby represent and warrant, jointly and severally, to FSB as
follows:
(a) Organization and Capital Stock.
(1) Lincoln is a corporation duly organized, validly existing and in
good standing under the laws of the State of Indiana 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. Lincoln
is a savings and loan holding company registered with the OTS under HOLA.
Lincoln Bank is wholly-owned by Lincoln and is a federal savings bank
validly existing under federal law.
(2) The authorized capital stock of Lincoln consists of (i) 20,000,000
shares of Lincoln Common Stock, of which, as of the date hereof, 4,414,391
shares are issued and outstanding, and (ii) 2,000,000 shares of preferred
stock, without par value, of which no shares are issued and outstanding.
All of the issued and outstanding shares of Lincoln Common Stock are duly
and validly issued and outstanding and are fully paid and non-assessable.
None of the outstanding shares of Lincoln Common Stock has been issued in
violation of any preemptive rights of the current or past shareholders of
Lincoln.
(3) Except as disclosed in the Disclosure Schedule, there are no
shares of Lincoln Common Stock or other capital stock or other equity
securities of Lincoln 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,
shares of Lincoln Common Stock or other capital stock of Lincoln or
contracts, commitments, understandings or arrangements by which Lincoln 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.
(b) Authorization and No Default. Lincoln's Board of Directors has, by
all appropriate action, approved this Agreement and the Company Merger and
authorized the execution of this Agreement on its behalf by its duly authorized
officers and the performance by Lincoln of its obligations hereunder. Lincoln
Bank's Board of Directors has, by all appropriate action, approved this
Agreement, Exhibit B, and the Subsidiary Merger and authorized the execution
hereof and of Exhibit B on its behalf by its duly authorized officers and the
performance by Lincoln Bank of its obligations hereunder and under Exhibit B.
Nothing in the articles of incorporation, charter or bylaws of Lincoln or
Lincoln Bank, as amended, or any other agreement, instrument, decree,
proceeding, law or regulation (except as specifically referred to in or
contemplated by this Agreement) by or to which Lincoln or Lincoln Bank or any of
Lincoln's other Subsidiaries are bound or subject which is material to Lincoln
and its Subsidiaries taken as a whole or to the Company Merger or the Subsidiary
Merger would prohibit or inhibit Lincoln or Lincoln Bank from consummating this
Agreement, the Company Merger or the Subsidiary Merger on the terms and
conditions herein contained. This Agreement has been duly and validly executed
and delivered by Lincoln and Lincoln Bank and constitutes a legal, valid and
binding obligation of Lincoln and Lincoln Bank, enforceable against Lincoln and
Lincoln Bank in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting the enforceability of creditors' rights
generally and by judicial discretion in applying principles of equity. No other
corporate acts or proceedings are required to be taken by Lincoln or Lincoln
Bank except for approvals by the sole shareholder of Lincoln Bank to authorize
the execution, delivery and performance of this Agreement and Exhibit B. Except
for the requisite approval of the OTS and notices to the DFI and the Federal
Reserve, no notice to, filing with, or authorization by, or consent or approval
of, any federal or state bank regulatory authority is necessary for the
execution of this Agreement or consummation of the Company Merger by Lincoln or
the Subsidiary Merger by Lincoln Bank. Lincoln and its Subsidiaries are neither
in default under nor in violation of any provision of their articles of
incorporation or charter or bylaws, or any promissory note, indenture or any
evidence of indebtedness or security therefor, lease, contract, purchase or
other commitment or any other agreement, except for defaults and violations
which will not have a Material Adverse Effect on Lincoln and its Subsidiaries,
taken as a whole.
(c) Subsidiaries.
(1) Lincoln Bank is wholly-owned by Lincoln and is a federal savings
bank duly organized, validly existing and in good standing under federal
law and has the corporate power to own its respective properties and
assets, to incur its respective liabilities and to carry on its respective
business as now being conducted. All of the outstanding shares of capital
stock of Lincoln Bank are owned by Lincoln free and clear of all liens,
encumbrances, rights of first refusal, options or other restrictions of any
nature whatsoever. There are no options, warrants or rights outstanding to
acquire any capital stock of Lincoln Bank and no person or entity has any
other right to purchase or acquire any unissued shares of stock of Lincoln
Bank, nor does Lincoln Bank have any obligation of any nature with respect
to its unissued shares of stock. Except for the ownership of readily
marketable securities, Federal Home Loan Bank or Federal Reserve Bank stock
and as may be disclosed in the Disclosure Schedule, neither Lincoln nor
Lincoln Bank is a party to any partnership or joint venture or owns any
equity interest in any other business or enterprise.
(2) Except as set forth in the Disclosure Schedule, Lincoln has no
Subsidiaries, other than Lincoln Bank, and each of the Subsidiaries
identified on the Disclosure Schedule is a corporation duly organized,
validly existing and in good standing under the laws of the State in which
it was organized and has the corporate power to own its respective
properties, to incur its respective liabilities and to carry on its
respective business as now being conducted. The Disclosure Schedule sets
forth the number of shares of such Subsidiaries owned by Lincoln or Lincoln
Bank. All of such shares are so owned free and clear of all liens,
encumbrances, rights of first refusal, options or other restrictions of any
nature whatsoever, with no options, warrants or rights outstanding to
acquire any of their capital stock, and no person or entity has any other
right to purchase or acquire any unissued stock of any of the Subsidiaries.
(d) Financial Information. The consolidated balance sheets of Lincoln and
its Subsidiaries as of December 31, 2002 and December 31, 2001, and related
consolidated income statements and statements of changes in shareholders' equity
and of cash flows for the three (3) years ended December 31, 2002, together with
the notes thereto, included in Lincoln's Form 10-K for the fiscal year ended
December 31, 2002, as currently on file with the SEC, and the periodic financial
statements for the fiscal quarter ended September 30, 2003, together with the
notes thereto, included in Lincoln's Form 10-Q for that quarter as currently on
file with the SEC (together, the "Lincoln Financial Statements"), copies of
which have been provided to FSB, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis (except as may be
disclosed therein and for the absence of footnotes and normal year end
adjustments in the quarterly Lincoln Financial Statements) and fairly present in
all material respects the consolidated financial position and the consolidated
results of operations, changes in shareholders' equity and cash flows of Lincoln
and its Subsidiaries as of the dates and for the periods indicated.
(e) Absence of Changes. Except as set forth in the Disclosure Schedule,
since September 30, 2003, there has not been any material adverse change in the
financial condition, the results of operations or the business of Lincoln and
its Subsidiaries taken as a whole, nor have there been any events or
transactions having a Material Adverse Effect on Lincoln and its Subsidiaries,
taken as a whole.
(f) Regulatory Enforcement Matters. Except as may be disclosed in the
Disclosure Schedule, neither Lincoln nor any of its Subsidiaries is subject to,
or has received any notice or advice that it may become subject to, any order,
agreement or memorandum of understanding with any federal or state agency
charged with the supervision or regulation of banks or bank holding companies or
engaged in the insurance of financial institution deposits or any other
governmental agency having supervisory or regulatory authority with respect to
Lincoln or any of its Subsidiaries.
(g) Tax Matters. Lincoln and its Subsidiaries have each filed with the
appropriate governmental agencies all federal, state and local income,
franchise, excise, sales, use, real and personal property and other tax returns
and reports required to be filed by it. Neither Lincoln nor its Subsidiaries is
(a) delinquent in the payment of any taxes shown on such returns or reports or
on any assessments received by it for such taxes; (b) aware of any pending or
threatened examination for income taxes for any year by the Internal Revenue
Service (the "IRS") or any state tax agency; (c) subject to any agreement
extending the period for assessment or collection of any federal or state tax;
or (d) a party to any action or proceeding with, nor has any claim been asserted
against it by, any court, administrative agency or commission or other federal,
state or local governmental authority or instrumentality ("Governmental
Authority") for assessment or collection of taxes. None of the tax returns of
Lincoln or its Subsidiaries has been audited by the IRS or any state tax agency
since 1999. Neither Lincoln nor its Subsidiaries is, to the knowledge of
Lincoln, the subject of any threatened action or proceedings by any Governmental
Authority for assessment or collection of taxes. The reserve for taxes in the
unaudited financial statements of Lincoln for the quarter ended September 30,
2003, is, in the opinion of management, adequate to cover all of the tax
liabilities of Lincoln and its Subsidiaries (including, without limitation,
income taxes and franchise fees) as of such date in accordance with generally
accepted accounting principles ("GAAP").
(h) Litigation. Except for foreclosure and other collection proceedings
commenced in the ordinary course of business by Lincoln Bank with respect to
loans in default with respect to which no claims have been asserted against
Lincoln Bank, there is no litigation, claim or other proceeding before any
arbitrator or Governmental Authority pending or to the knowledge of Lincoln,
threatened, against Lincoln or its Subsidiaries, or of which the property of
Lincoln or its Subsidiaries is or would be subject involving a monetary amount,
singly or in the aggregate, in excess of $25,000, or a request for specific
performance, injunctive relief, or other equitable relief.
(i) Reports. Except as may be disclosed in the Disclosure Schedule, Lincoln
and its Subsidiaries have filed all reports and statements, together with any
amendments required to be made with respect thereof, if any, that they were
required to file with (i) the OTS, (ii) the FDIC, and (iii) any other
Governmental Authority with jurisdiction over Lincoln or its Subsidiaries,
including the SEC. As of their respective dates, each of such reports and
documents, including the financial statements, exhibits and schedules thereto,
complied in all material respects with the relevant statutes, rules and
regulations enforced or promulgated by the regulatory authority 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.
(j) Loans and Investments.
(1) Except as set forth in the Disclosure Schedule, as of September
30, 2003, Lincoln Bank has no loan in excess of $10,000 that has been
classified by regulatory examiners or management of Lincoln Bank as
"Substandard," "Doubtful" or "Loss" or in excess of $10,000 that has been
identified by accountants or auditors (internal or external) as having a
significant risk of uncollectability. As of the date hereof, the most
recent loan watch list of Lincoln Bank and a list of all loans in excess of
$10,000 that Lincoln Bank has determined to be ninety (90) days or more
past due with respect to principal or interest payments or has placed on
nonaccrual status are set forth in the Disclosure Schedule.
(2) All loans reflected in the Lincoln Financial Statements as of
September 30, 2003, and which have been made, extended, renewed,
restructured, approved, amended or acquired since September 30, 2003, (i)
have been made for good, valuable and adequate consideration in the
ordinary course of business; (ii) to the best of Lincoln Bank's knowledge,
constitute the legal, valid and binding obligation of the obligor and any
guarantor named therein, except to the extent limited by general principles
of equity and public policy or by bankruptcy, insolvency, fraudulent
transfer, reorganization, liquidation, moratorium, readjustment of debt or
other laws of general application relative to or affecting the enforcement
of creditors' rights; (iii) are evidenced by notes, instruments or other
evidences of indebtedness which are true, genuine and what they purport to
be; and (iv) are secured, to the extent that Lincoln Bank has a security
interest in collateral or a mortgage securing such loans, by perfected
security interests or recorded mortgages naming Lincoln Bank as the secured
party or mortgagee.
(3) Except as set forth in the Disclosure Schedule, the reserves, the
allowance for possible loan and lease losses and the carrying value for
real estate owned which are shown on the Lincoln Financial Statements are,
in the opinion of management of Lincoln, adequate in all respects under the
requirements of generally accepted accounting principles applied on a
consistent basis to provide for possible losses on items for which reserves
were made, on loans and leases outstanding and real estate owned as of the
respective dates. To the best knowledge of Lincoln, the aggregate loan
balances outstanding as of September 30, 2003, in excess of the reserve for
loan losses as of such date, were, as of September 30, 2003, collectible in
accordance with their respective terms.
(4) Except as set forth in the Disclosure Schedule, none of the
investments reflected in the Lincoln Financial Statements as of and for the
quarter ended September 30, 2003, and none of the investments made by
Lincoln or Lincoln Bank since September 30, 2003, are subject to any
restriction, whether contractual or statutory, which materially impairs the
ability of Lincoln or Lincoln Bank to dispose freely of such investment at
any time.
(k) Employee Benefit Plans.
(1) Lincoln's Disclosure Schedule contains a complete list of all
bonus, vacation, deferred compensation-based compensation, pension,
retirement, profit-sharing, thrift, savings, employee stock ownership,
stock bonus, stock purchase, restricted stock, stock appreciation and stock
option plans, all employment or severance contracts, all medical, dental,
disability, severance, health and life insurance plans, all other employee
benefit and fringe benefit plans, contracts or arrangements maintained or
contributed to by Lincoln or any of its Subsidiaries for the benefit of
current or former officers, employees or directors or the beneficiaries or
dependents of any of the foregoing (collectively, "Lincoln Compensation
Plans").
(2) With respect to each Lincoln Compensation Plan, if applicable,
Lincoln has provided or made available to FSB, true and complete copies of
existing: (A) Lincoln Compensation Plan documents and amendments thereto;
(B) trust instruments and insurance contracts; (C) the most recent Form
5500 filed with the IRS; (D) the most recent actuarial report and financial
statement; (E) the most recent summary plan description; (F) forms filed
with the PBGC (other than for premium payments); (G) the most recent
determination letter issued by the IRS; and (H) any Form 5310 or Form 5330
filed with the IRS. Each Form 5500, actuarial report and financial
statement referred to in the preceding sentence accurately reflects the
contributions, liabilities and funding levels of the applicable Lincoln
Compensation Plan.
(l) Employee Matters and ERISA.
(1) Neither Lincoln nor its Subsidiaries has entered into any
collective bargaining agreement with any labor organization with respect to
any group of employees of Lincoln or its Subsidiaries and to the knowledge
of Lincoln there is no present effort nor existing proposal to attempt to
unionize any group of employees of Lincoln or its Subsidiaries.
(2) Except as may be disclosed in the Disclosure Schedule, (i) Lincoln
and its Subsidiaries are and have been in material compliance 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 Lincoln nor its
Subsidiaries is engaged in any unfair labor practice; (ii) there is no
unfair labor practice complaint against Lincoln or its Subsidiaries pending
or, to the knowledge of Lincoln, threatened before the National Labor
Relations Board; (iii) there is no labor dispute, strike, slowdown or
stoppage actually pending or to the knowledge of Lincoln, threatened
against or directly affecting Lincoln or its Subsidiaries; and (iv) neither
Lincoln nor its Subsidiaries has experienced any work stoppage or other
such labor difficulty during the past five (5) years.
(3) Except as may be disclosed in the Disclosure Schedule, neither
Lincoln nor its Subsidiaries maintains, contributes to or participates in
or has any liability under any employee benefit plans, as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), including (without limitation) any multiemployer plan
(as defined in Section 3(37) of ERISA), or any nonqualified employee
benefit plans or deferred compensation, bonus, stock or incentive plans, or
other employee benefit or fringe benefit programs for the benefit of former
or current employees or directors (or their beneficiaries or dependents) of
Lincoln or its Subsidiaries (the "Lincoln Employee Plans"). To the
knowledge of Lincoln, no present or former employee of Lincoln or its
Subsidiaries has been charged with breaching nor has breached a fiduciary
duty under any of the Lincoln Employee Plans. Except as may be disclosed in
the Disclosure Schedule, neither Lincoln nor its Subsidiaries 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 multiemployer plan.
Except as may be disclosed in the Disclosure Schedule, neither Lincoln nor
its Subsidiaries maintains, contributes to, or participates in, any plan
that provides health, major medical, disability or life insurance benefits
to former employees or directors of Lincoln or its Subsidiaries. Lincoln
has provided to FSB a true, accurate and complete copy of each written plan
or program disclosed in the Disclosure Schedule or a summary plan
description therefor. Lincoln has also provided to FSB, with respect to
each such plan or program to the extent available to Lincoln, all (i)
amendments or supplements thereto, (ii) summary plan descriptions, (iii)
descriptions of all current participants in such plans and programs and all
participants with benefit entitlements under such plans and programs, (iv)
contracts relating to plan documents, (v) actuarial valuations for any
defined benefit plan, (vi) valuations for any plan as of the most recent
date, (vii) determination letters from the IRS, (viii) the most recent
annual report filed with the IRS, (ix) registration statements on Form S-8
and prospectuses, and (x) trust agreements.
(4) All liabilities of the Lincoln Employee Plans have been funded on
the basis of consistent methods in accordance with sound actuarial
assumptions and practices, and no Lincoln Employee Plan, at the end of any
plan year, or at September 30, 2003, had or has had an accumulated funding
deficiency (within the meaning of Section 302 of ERISA or Section 412 of
the Code). No actuarial assumptions have been changed since the last
written report of actuaries on such Lincoln 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. Except as may be noted on the Lincoln Financial
Statements, Lincoln and its Subsidiaries have no contingent or actual
liabilities under Title IV of ERISA as of December 31, 2003. 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 Lincoln
Employee Plans, whether or not waived, nor does Lincoln or any of its
affiliates have any liability or potential liability as a result of the
underfunding of, or termination of, or withdrawal from, any plan by Lincoln
or by any person which may be aggregated with Lincoln for purposes of
Section 412 of the Code. No reportable event (as defined in Section 4043 of
ERISA) has occurred with respect to any of the Lincoln Employee Plans as to
which a notice would be required to be filed with the Pension Benefit
Guaranty Corporation. No claim is pending, or to the knowledge of Lincoln
threatened or imminent with respect to any Lincoln Employee Plan (other
than a routine claim for benefits for which plan administrative review
procedures have not been exhausted) for which Lincoln or its Subsidiaries
would be liable after September 30, 2003, except as is reflected on the
Lincoln Financial Statements. As of December 31, 2003, Lincoln and its
Subsidiaries had no liability 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 Lincoln Employee Plan. All Lincoln Employee Plans
have been operated, administered and maintained in accordance with the
terms thereof and in material compliance with the requirements of all
applicable laws, including, without limitation, ERISA.
(m) Title to Properties; Insurance. Except as may be disclosed in the
Disclosure Schedule, (i) Lincoln and its Subsidiaries 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 Lincoln Financial Statements and easements, rights-of-way, and other
restrictions which do not have a Material Adverse Effect on Lincoln or its
Subsidiaries, taken as a whole, and further excepting in the case of OREO, as
such real estate is internally classified on the books of Lincoln or its
Subsidiaries, rights of redemption under applicable law) to all of their owned
real properties; (ii) all leasehold interests for real property and any material
personal property used by Lincoln and its Subsidiaries in their businesses are
held pursuant to lease agreements which are valid and enforceable in accordance
with their terms; (iii) to our knowledge, all such properties comply in all
material respects with all applicable private agreements, zoning requirements
and other governmental laws and regulations relating thereto and there are no
condemnation proceedings pending or, to the knowledge of Lincoln, threatened
with respect to such properties; and (iv) Lincoln and its Subsidiaries have
valid title or other ownership rights under licenses to all material intangible
personal or intellectual property used by Lincoln or its Subsidiaries in their
respective businesses, free and clear of any claim, defense or right of any
other person or entity which is material to such property, subject only to
rights of the licensors pursuant to applicable license agreements and, in the
case of non-exclusive licenses, of other licensees, which rights do not
materially adversely interfere with the use of such property. All material
insurable properties owned or held by Lincoln and its Subsidiaries 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 thrift holding companies of similar
size.
(n) Environmental Matters. Except as may be disclosed in the Disclosure
Schedule and based on the best knowledge, after reasonable investigation, of
Lincoln, neither the conduct nor operation of Lincoln or its Subsidiaries nor
any condition of any property presently or previously owned, leased or operated
by any of them violates or violated Environmental Laws in any respect material
to the business of Lincoln and its Subsidiaries and 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 material to
the business of Lincoln and its Subsidiaries of Environmental Laws or obligate
(or potentially obligate) Lincoln or its Subsidiaries to remedy, stabilize,
neutralize or otherwise alter the environmental condition of any such property
where the aggregate cost of such actions would be material to Lincoln and its
Subsidiaries. Except as may be disclosed in the Disclosure Schedule and based on
the best knowledge, after reasonable investigation, of Lincoln, neither Lincoln
nor any of its Subsidiaries has received any notice from any person or entity
that Lincoln or its Subsidiaries or the operation or condition of any property
ever owned, leased or operated by any of them are or were in violation of any
Environmental Laws 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.
(o) Compliance with Law. Lincoln and its Subsidiaries have all licenses,
franchises, permits and other governmental authorizations that are legally
required to enable them to conduct their respective businesses in all material
respects and are in compliance in all material respects and conduct and have
conducted their businesses in compliance in all material respects with all
applicable federal, state and local statutes, laws, regulations, ordinances,
rules, judgments, orders or decrees applicable thereto or to the employees
conducting such businesses.
(p) Brokerage. Except as may be disclosed in the Disclosure Schedule and
with the exception of fees payable to Xxxxx, Xxxxxxxx & Xxxxx, Inc., 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 Lincoln or its Subsidiaries.
(q) No Undisclosed Liabilities. To the knowledge of Lincoln and Lincoln
Bank, Lincoln and its Subsidiaries do not have any material liability, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become due
(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 Lincoln or its Subsidiaries giving
rise to any such liability) required in accordance with GAAP to be reflected in
an audited consolidated balance sheet of Lincoln or the notes thereto, except
(i) for liabilities set forth in or reserved against the Lincoln Financial
Statements, (ii) for normal fluctuations in the amount of the liabilities
referred to in clause (i) above or other liabilities occurring in the ordinary
course of business of Lincoln and its Subsidiaries since the date of the most
recent balance sheet included in the Lincoln Financial Statements, which such
fluctuations in the aggregate are not material to Lincoln and its Subsidiaries
taken as a whole, (iii) liabilities relating to the possible acquisition of FSB
or other transactions contemplated by this Agreement, and (iv) as may be
disclosed in the Disclosure Schedule.
(r) Interim Events. Other than as disclosed on the Disclosure Schedule,
since September 30, 2003, Lincoln has not paid or declared any dividend, other
than Lincoln's scheduled quarterly dividend, or made any other distribution to
shareholders or taken any action which if taken after the date of this Agreement
would require the prior written consent of FSB pursuant to Section 4.02 hereof.
(s) Statements True and Correct. None of the information supplied or to be
supplied by Lincoln or its Subsidiaries for inclusion in (i) the Proxy Statement
(as defined in Section 6.03 hereof), and (ii) any other documents to be filed
with the SEC or any banking or other regulatory authority in connection with the
transactions contemplated hereby, will, at the respective times such documents
are filed, and with respect to the Proxy Statement, when first mailed to the
shareholders of FSB and at the time of the FSB shareholders' meeting (referred
to in Section 6.02 hereof), 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 Lincoln is responsible for filing with the SEC or
any other regulatory authority in connection with the transactions contemplated
hereby will comply as to form in all material respects with the provisions of
applicable law and the applicable rules and regulations thereunder.
(t) Books and Records. The books and records of Lincoln and its
Subsidiaries have been fully, properly and accurately maintained in all material
respects, there are no material inaccuracies or discrepancies of any kind
contained or reflected therein, and they fairly present the financial position
of Lincoln and its Subsidiaries.
(u) Deposit Insurance. The deposits of Lincoln Bank are insured by the FDIC
up to applicable limits and in accordance with the Federal Deposit Insurance
Corporation Act, as amended, and Lincoln Bank has paid or properly reserved or
accrued for all current premiums and assessments with respect to such deposit
insurance.
Article VI
Covenants
6.01 Reasonable Best Efforts. Subject to the terms and conditions of this
Agreement, each of FSB, Lincoln, First Bank and Lincoln Bank agrees to use its
reasonable best efforts in good faith to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
desirable, or advisable under applicable laws, so as to permit consummation of
the Company Merger and the Subsidiary Merger as promptly as practicable and
otherwise to enable consummation of the transactions contemplated hereby and
shall cooperate fully with the other party hereto to that end.
6.02 Shareholder Approval.
(a) Each of Lincoln and FSB agrees to take, in accordance with applicable
law, applicable rules of NASDAQ, and its articles of incorporation and by-laws,
all action necessary to convene an appropriate meeting of its shareholders to
consider and vote upon the approval and adoption of this Agreement and the
consummation of the actions and transactions contemplated hereby, and to solicit
shareholder approval and adoption, as promptly as practicable after the
Registration Statement (as hereinafter defined) is declared effective. The
Lincoln Board of Directors and the FSB Board of Directors each is recommending
and, unless either Board of Directors, after having consulted with and
considered the written advice of outside counsel and its financial advisor, has
determined in good faith that to do so would result in a failure by the
directors to discharge properly their fiduciary duties in accordance with
Indiana law, the Lincoln Board of Directors and the FSB Board of Directors will
continue to recommend to the shareholders of Lincoln and FSB, respectively, that
they approve this Agreement and the Company Merger, and will take any other
action required to permit consummation of the transactions contemplated hereby.
(b) Each of FSB and Lincoln agree to take all action necessary in their
respective capacities as sole shareholder of First Bank and Lincoln Bank to
approve and adopt the Merger Agreement for Subsidiary Merger set forth in
Exhibit B hereto and the transactions contemplated thereby.
6.03 Registration Statement.
(a) Lincoln agrees to prepare a registration statement on Form S-4 (the
"Registration Statement"), to be filed by Lincoln with the SEC in connection
with the issuance of Lincoln Common Stock in the Company Merger (including the
proxy statements and prospectus and other proxy solicitation materials of
Lincoln and FSB constituting a part thereof (the "Proxy Statements") and all
related documents). The Proxy Statements shall fully disclose that FSB's
shareholders have dissenters' rights under IND. CODE ss. 23-1-44 et. seq. FSB
shall advise Lincoln promptly of any exercise of such rights by an FSB
shareholder. Both FSB and the Surviving Corporation agree to comply with the
requirements contained in IND. CODE ss. 23-1-44 et. seq. applicable to them. FSB
agrees to cooperate, and to cause First Bank to cooperate, with Lincoln, its
counsel and its accountants, in preparation of the Registration Statement and
the Proxy Statements; and, provided that FSB and First Bank have cooperated as
required above, Lincoln agrees to file the Registration Statement with the SEC
as promptly as reasonably practicable after the date hereof. Each of FSB and
Lincoln agrees to use its reasonable best efforts to cause the Registration
Statement to be declared effective under the Securities Act of 1933, as amended
(the "Securities Act") as promptly as reasonably practicable after filing
thereof. Lincoln also agrees to use all reasonable best efforts to obtain all
necessary state securities law or "Blue Sky" permits and approvals required to
carry out the transactions contemplated by this Agreement. FSB agrees to furnish
to Lincoln all information concerning FSB, First Bank, and their officers,
directors and shareholders as may be reasonably requested in connection with the
foregoing.
(b) FSB agrees, as to itself and First Bank, and Lincoln agrees, as to
itself and its Subsidiaries, that none of the information supplied or to be
supplied by it for inclusion or incorporation by reference in (1) the
Registration Statement will, at the time the Registration Statement and each
amendment or supplement thereto, if any, becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and (2) the Proxy Statements and any amendment or
supplement thereto will, at the date of mailing to shareholders and at the time
of the shareholders meetings for the respective corporations, contain any untrue
statement which, at the time and in the light of the circumstances under which
such statement is made, is false or misleading with respect to any material
fact, or omit to state any material fact necessary in order to make the
statements therein not false or misleading or necessary to correct any statement
in any earlier statement in the Proxy Statements or any amendment or supplement
thereto. Each of FSB and Lincoln further agrees that if it shall become aware
prior to the Effective Date of any information furnished by it that would cause
any of the statements in the Proxy Statements to be false or misleading with
respect to any material fact, or to omit to state any material fact necessary to
make the statements therein not false or misleading, to promptly inform the
other party thereof and to take the necessary steps to correct the Proxy
Statements.
(c) Lincoln agrees to advise FSB, promptly after Lincoln receives notice
thereof, of the time when the Registration Statement has become effective or any
supplement or amendment has been filed, of the issuance of any stop order or the
suspension of the qualification of Lincoln Common Stock for offering or sale in
any jurisdiction, of the initiation or threat of any proceeding for any such
purpose, or of any request by the SEC for the amendment or supplement of the
Registration Statement or for additional information.
6.04 Press Releases. Each of FSB and Lincoln agrees that it will not, without
the prior approval of the other party, issue any press release or written
statement for general circulation relating to the transactions contemplated
hereby (except for any release or statement that, in the written opinion of
outside counsel to such party, is required by law or regulation and as to which
such party has used its best efforts to discuss with the other party in advance,
provided that such release or statement has not been caused by, or is not the
result of, a previous disclosure by or at the direction of such party or any of
its representatives that was not permitted by this Agreement).
6.05 Access; Information.
(a) Each of FSB and Lincoln agrees that upon reasonable notice and subject
to applicable laws relating to the exchange of information, it shall afford the
other party and the other party's officers, employees, counsel, accountants and
other authorized representatives, such access during normal business hours
throughout the period prior to the Effective Time to the books, records
(including, without limitation, tax returns and work papers of independent
auditors), properties, personnel and to such other information as any party may
reasonably request and, during such period, it shall furnish promptly to such
other party (1) a copy of each material report, schedule and other document
filed by it pursuant to the requirements of federal or state securities or
banking laws, and (2) all other information concerning the business, properties
and personnel of it as the other may reasonably request.
(b) Each of FSB and Lincoln agrees that it will not, and will cause its
representatives not to, use any information obtained pursuant to this Section
6.05 for any purpose unrelated to the consummation of the transactions
contemplated by this Agreement. Subject to the requirements of law, each party
will keep confidential, and will cause its representatives to keep confidential,
all information and documents obtained pursuant to this Section 6.05 in
accordance with that certain Confidentiality Agreement dated as of September 17,
2003, by and between Lincoln and FSB. In the event that this Agreement is
terminated or the transactions contemplated by this Agreement shall otherwise
fail to be consummated, each party shall promptly cause all copies of documents
or extracts thereof containing information and data as to another party hereto
to be returned to the party which furnished the same.
(c) No investigation by either party of the business and affairs of the
other shall affect or be deemed to modify or waive any representation, warranty,
covenant or agreement in this Agreement, or the conditions to either party's
obligation to consummate the transactions contemplated by this Agreement.
6.06 Acquisition Proposals. Lincoln and FSB each agree that it shall not, and
shall cause its Subsidiaries and its Subsidiaries' officers, directors, agents,
advisors and affiliates not to, solicit or encourage inquiries or proposals with
respect to, or engage in any negotiations concerning, or provide any
confidential information to, or have any discussions with, any person relating
to, any tender or exchange offer, proposal for a merger, consolidation or other
business combination involving Lincoln or FSB, respectively, or any of its
Subsidiaries or any proposal or offer to acquire in any manner a substantial
equity interest in, or a substantial portion of the assets or deposits of,
Lincoln or FSB, respectively, or any of its Subsidiaries, other than the
transactions contemplated by this Agreement (any of the foregoing, an
"Acquisition Proposal"); provided however, that if Lincoln or FSB is not
otherwise in violation of this Section 6.06, the Lincoln or FSB Board of
Directors may provide information to, and may engage in such negotiations or
discussions with, a person with respect to an Acquisition Proposal, directly or
through representatives, if the Lincoln or FSB Board of Directors, after
consulting with and considering the advice of its financial advisor and its
outside counsel, determines in good faith that its failure to engage in any such
negotiations or discussions would constitute a failure to discharge properly the
fiduciary duties of such directors in accordance with Indiana law. Lincoln or
FSB shall promptly (within 24 hours) advise the other following the receipt by
it of any Acquisition Proposal and the substance thereof (including the identity
of the person making such Acquisition Proposal and a copy of such Acquisition
Proposal), and advise the other of any developments with respect to such
Acquisition Proposal immediately upon the occurrence thereof.
6.07 Affiliate Agreements. Not later than the 15th day prior to the mailing of
the Proxy Statements FSB shall deliver to Lincoln a schedule of each person
that, to FSB's knowledge, is or is reasonably likely to be, as of the date of
FSB shareholders' meeting, deemed to be an "affiliate" of it (each, an "FSB
Affiliate") as that term is used in Rule 145 under the Securities Act. FSB
agrees to use its reasonable best efforts to cause each person who may be deemed
to be an FSB Affiliate to execute and deliver to FSB and Lincoln on or before
the date of mailing of the Proxy Statement an agreement in the form attached
hereto as Exhibit C.
6.08 NASDAQ Listing. Lincoln agrees to use its reasonable best efforts to list,
prior to the Effective Date, on the National Market System of NASDAQ, subject to
official notice of issuance, the shares of Lincoln Common Stock to be issued to
the holders of FSB Common Stock in the Company Merger.
6.09 Regulatory Applications.
(a) Lincoln and FSB and their respective Subsidiaries shall cooperate and
use their respective reasonable best efforts to prepare all documentation, to
effect all filings and to obtain all permits, consents, approvals and
authorizations of all third parties and any Governmental Authority necessary to
consummate the transactions contemplated by this Agreement. Each of Lincoln,
FSB, First Bank and Lincoln Bank agrees that it will consult with the other
party hereto with respect to the obtaining of all material permits, consents,
approvals and authorizations of all third parties and Governmental Authorities
necessary or advisable to consummate the transactions contemplated by this
Agreement and each party will keep the other party appraised of the status of
material matters relating to completion of the transactions contemplated hereby.
Copies of applications and correspondence with such Governmental Authorities
promptly shall be provided to the other party.
(b) Each of Lincoln and FSB agrees, upon request, to furnish the other
party with all information concerning itself, First Bank, Lincoln's
Subsidiaries, and their respective directors, officers and shareholders and such
other matters as may be reasonably necessary or advisable in connection with any
filing, notice or application made by or on behalf of such party or Lincoln Bank
or First Bank to any third party or Governmental Authority.
6.10 Title Insurance and Surveys. FSB shall deliver to Lincoln prior to the
Effective Date copies of its most recent owner's closing title insurance binder
or abstract and surveys on each parcel of real estate described in the
Disclosure Schedule, or such other evidence of title reasonably acceptable to
Lincoln. FSB will also provide to Lincoln upon request any updates or new
policies, abstracts or surveys on any such real estate as Lincoln shall
reasonably request. Lincoln shall make any such requests for new policies,
abstracts or surveys within 20 days after the date hereof, and agrees to pay the
costs of any such policies, abstracts or surveys so requested.
6.11 Environmental Reports. FSB shall provide Lincoln copies of any
environmental reports it has obtained or received with respect to real property
owned, leased or operated by FSB or First Bank within 5 days after the date
hereof. Lincoln, within 20 days after the date hereof, shall order a phase one
environmental report of real property owned by FSB or First Bank as to which
Lincoln has not been provided reports pursuant to the foregoing sentence for
which Lincoln desires a phase one environmental investigation. No such reports
shall be requested with respect to single family non-agricultural residential
property of one acre or less unless Lincoln has reason to believe that such
property might contain any waste materials or otherwise might be contaminated.
If required by any phase one investigation or similar environmental report
provided to or obtained by Lincoln pursuant to this Section 6.11 in Lincoln's
reasonable opinion, and within 10 days after learning of such requirement,
Lincoln shall order a report of a phase two investigation on properties
requiring such additional study. Lincoln shall have fifteen (15) business days
from the receipt of any such phase two investigation report to notify FSB of any
dissatisfaction with the contents of such report. Should the cost of taking all
remedial or other corrective actions and measures (i) required by applicable
law, or (ii) recommended or suggested by such report or reports or prudent in
light of serious life, health or safety concerns, in the aggregate, exceed the
sum of $250,000 as reasonably estimated by an environmental expert retained for
such purpose by Lincoln and reasonably acceptable to FSB, or if the cost of such
actions and measures cannot be so reasonably estimated by such expert to be such
amount or less with any reasonable degree of certainty, then Lincoln shall have
the right pursuant to Section 9.01(e) hereof, for a period of fifteen (15)
business days following receipt of such estimate or indication that the cost of
such actions and measures cannot be so reasonably estimated, to terminate this
Agreement, which shall be Lincoln's sole remedy in such event. Lincoln agrees to
pay the costs of any phase one investigation or environmental report requested
pursuant to this section and the cost of any phase two investigation prepared or
conducted at Lincoln's request pursuant to this section which does not recommend
or suggest as being appropriate the taking of any remedial or corrective
actions. FSB agrees to pay the costs of any phase two investigation prepared or
conducted at Lincoln's request pursuant to this section which recommends or
suggests as being appropriate the taking of any remedial or corrective action.
6.12 Conforming Accounting and Reserve Policies; Restructuring Expenses.
(a) Notwithstanding that FSB believes that it and First Bank have
established all reserves and taken all provisions for possible loan losses
required by generally accepted accounting principles and applicable laws, rules
and regulations, FSB recognizes that Lincoln may have adopted different loan,
accrual and reserve policies (including loan classifications and levels of
reserves for possible loan losses). From and after the date of this Agreement to
the Effective Time, Lincoln and FSB shall consult and cooperate with each other
with respect to conforming, based upon such consultation, as specified in each
case in writing to FSB by Lincoln, and subject to the conditions in Section
6.12(d) below and as hereinafter provided, the loan, accrual and reserve
policies of FSB and First Bank to those policies of Lincoln.
(b) In addition, from and after the date of this Agreement to the Effective
Time, FSB and Lincoln shall consult and cooperate with each other with respect
to determining, as specified in a written notice from Lincoln to FSB, based upon
such consultation, subject to the conditions in Section 6.12(d) below and as
hereinafter provided, appropriate and reasonable accruals, reserves and charges
to establish and take in respect of severance costs and other appropriate and
reasonable charges and accounting adjustments taking into account the parties'
business plans following the Company Merger.
(c) FSB and Lincoln shall consult and cooperate with each other with
respect to determining, as specified in a written notice from Lincoln to FSB,
based upon such consultation, subject to the conditions in Section 6.12(d) below
and as hereinafter provided, the amount and the timing for recognizing for
financial accounting purposes the expenses of the Company Merger and the
Subsidiary Merger to be incurred in connection with the Company Merger and the
Subsidiary Merger.
(d) Subject to applicable laws, FSB shall (i) establish and take such
reserves and accruals at such time as Lincoln shall reasonably request to
conform FSB's loan, accrual and reserve policies to Lincoln's policies, and (ii)
establish and take such accruals, reserves and charges in order to implement
such policies and to recognize for financial accounting purposes such expenses
of the Company Merger and the Subsidiary Merger and restructuring charges
related to or to be incurred in connection with the Company Merger and the
Subsidiary Merger, in each case at such times as are reasonably requested by
Lincoln, but in no event prior to two business days before the Effective Date;
provided, however, that on the date such reserves, accruals and charges are to
be taken, Lincoln shall certify to FSB that all conditions to Lincoln's
obligation to consummate the Company Merger set forth in Sections 7.01 and 7.03
hereof (other than the delivery of certificates, opinions and other instruments
and documents to be delivered at the Closing or otherwise to be dated at the
Effective Time, the delivery of which shall continue to be conditions to
Lincoln's obligation to consummate the Company Merger) have been satisfied or
waived; and provided, further, that FSB shall not be required to take any such
action that is not consistent with GAAP and regulatory accounting principles.
(e) No reserves, accruals or charges taken in accordance with this Section
6.12 may be a basis to assert a violation of a breach of a representation,
warranty or covenant of FSB or First Bank herein or a basis to assert that FSB
has suffered a Material Adverse Effect.
6.13 D & O Insurance.
(a) For a period of three years from the Effective Time, Lincoln shall use
its reasonable best efforts to obtain an endorsement to its director's and
officer's liability insurance policy to cover the present and former officers
and directors of FSB or First Bank (determined as of the Effective Time) with
respect to claims against such directors and officers arising from facts or
events which occurred before the Effective Time, which insurance shall contain
at least the same coverage and amounts, and contain terms and conditions no less
advantageous, as that coverage currently provided by FSB; provided however, that
if Lincoln is unable to obtain such endorsement, then FSB may purchase tail
coverage under its existing director and officer liability insurance policy for
such claims; provided further that in no event shall Lincoln be required to
expend in the aggregate during such three-year period more than three times the
current annual amount spent by FSB (the "Insurance Amount") to maintain or
procure its current directors' and officers' insurance coverage; provided
further, that if Lincoln is unable to maintain or obtain the insurance called
for by this Section 6.13(a), Lincoln shall use its reasonable best efforts to
obtain as much comparable insurance as is available for the Insurance Amount;
provided, further, that officers and directors of FSB or First Bank may be
required to make application and provide customary representations and
warranties to Lincoln's insurance carrier for the purpose of obtaining such
insurance.
(b) For six years after the Effective Time, the Surviving Corporation shall
indemnify, defend and hold harmless the present and former officers and
directors of FSB and First Bank against all losses, expenses (including
attorneys' fees), claims, damages or liabilities arising out of actions or
omissions occurring on or prior to the Effective Time (including, without
limitation, the transactions contemplated by this Agreement) to the full extent
then permitted under the IBCL and by Lincoln's Articles of Incorporation as in
effect on the date hereof, including provisions relating to advances of expenses
incurred in the defense of any action or suit.
(c) If Lincoln shall consolidate with or merge into any other entity and
shall not be the continuing or surviving entity of such consolidation or merger
or shall transfer all or substantially all of its assets to any entity, then and
in each case, proper provision shall be made so that the successors and assigns
of Lincoln shall assume the obligations set forth in this Section 6.13.
6.14 Notification of Certain Matters. Each of FSB and Lincoln shall give prompt
notice to the other of any fact, event or circumstance known to it that (1) is
reasonably likely, individually or taken together with all other facts, events
and circumstances known to it, to result in any Material Adverse Effect with
respect to it or (2) would cause or constitute a material breach of any of its
representations, warranties, covenants or agreements contained herein.
6.15 Defined Contribution Plans. First Bank maintains a 401(k) Plan ("First Bank
401(k) Plan") and Lincoln Bank maintains an Employees' Salary Savings Plan
("Lincoln Bank 401(k) Plan"). FSB shall make contributions to the FSB 401(k)
Plan between the date hereof and the Effective Date consistent with the terms of
the FSB 401(k) Plan and past practices. At the Effective Time, subject to
applicable law and the requirements of the Lincoln Bank 401(k) Plan, Lincoln
Bank shall assume the FSB 401(k) Plan, merge such plan into its own Lincoln Bank
401(k) Plan, and amend as necessary the participation agreement of such merged
plan so that, (i) from and after the Effective Time, employees of First Bank who
become employees of Lincoln Bank will accrue benefits pursuant to the Lincoln
Bank 401(k) Plan as adopted by Lincoln Bank resulting from the merger of the
First Bank 401(k) Plan with the Lincoln Bank 401(k) Plan, and (ii) from and
after the merger of those plans, former First Bank employees participating in
the merged plan shall receive credit for eligibility and vesting purposes, for
the service of such employees with First Bank prior to the Effective Time as if
such service were with Lincoln and First Bank; provided, however, that the
benefit of any such former FSB employee in respect of service prior to the
Effective Time shall be determined under the contribution formulae under the
First Bank 401(k) Plan as in effect from time to time prior to the Effective
Time and the benefit of any such former FSB employee in respect of service from
and after the Effective Time shall be determined under the contribution formulae
under the Lincoln Bank 401(k) Plan as in effect from time to time from and after
the Effective Time.
6.16 Option Plans.(a). Within 45 days of the date as of which this Agreement is
dated, FSB will use its best efforts to obtain written consents from each holder
of an FSB Stock Option who is an employee of First Bank consenting to the
disposition of such options in accordance with the provisions of Section 3.01(d)
above. By signing the signature page hereof, the directors of FSB or First Bank
who are not also officers or employees of FSB or First Bank hereby consent to
the cashing out of their FSB Stock Options as provided in Section 3.01(d) above
and agree not to exercise their options on or before the Effective Time unless
(A) this Agreement is terminated and the Company Merger is abandoned pursuant to
Article IX or (B) such exercise is made not more than one week before the date
on which the option otherwise would cease to be exercisable.
6.17 Debentures and Contracts.(a) On or before the Closing, FSB shall take steps
to cause the Debentures to be redeemed or applied to the purchase of shares
pursuant to the Contracts, and any remaining Contracts to be cancelled. These
actions shall be taken consistent with the terms of the Trust Indenture and the
Master Contract and with the payment of no more than any redemption price
(principal, accrued interest and premium) payable under the Trust Indenture and
any cancellation payment due under the Master Contract.
6.18 Deferred Fee Agreements. Pursuant to the terms of the Deferred Fee
Agreements between the Bank and Xxxxx X. Xxxxx, H. Xxxx Xxxxxxx, Xxxxxxx
Xxxxxxxx and Xxxxxx X. Xxxxxxxx (the "Directors"), no later than 60 days
following the Effective Date, the Directors shall be paid in one lump sum their
previously accrued account balances under those Deferred Fee Agreements, and the
Deferred Fee Plan shall be terminated.
6.19 Employee Matters.
(a) Lincoln agrees that those employees of FSB or First Bank who become
employees of Lincoln or its Subsidiaries, on the Effective Date ("Former FSB
Employees"), while they remain employees of Lincoln or its Subsidiaries after
the Effective Date will be provided with benefits under employee benefit plans
during their period of employment which are no less favorable in the aggregate
than those provided by Lincoln to similarly situated employees of Lincoln and
its Subsidiaries, except as otherwise provided herein. Except as hereinafter
provided, at the Effective Time, Lincoln will amend or cause to be amended each
employee benefit and welfare plan of Lincoln and its Subsidiaries in which
Former FSB Employees are eligible to participate, to the extent necessary, so
that as of the Effective Time (i) such plans take into account for purposes of
eligibility, participation, vesting, and benefit accrual (except that there
shall not be any benefit accrual for past service under any qualified defined
benefit pension plan), the service of such employees with FSB and First Bank as
if such service were with Lincoln and its Subsidiaries, (ii) Former FSB
Employees are not subject to any waiting periods or pre-existing condition
limitations under the medical, dental and health plans of Lincoln or its
Subsidiaries in which they are eligible to participate and may commence
participation in such plans on the Effective Date, (iii) Former FSB Employees
will retain credit for unused sick leave and vacation pay which has been accrued
as of the Effective Time, (iv) for purposes of determining the entitlement of
Former FSB Employees to sick leave and vacation pay following the Effective
Time, the service of such employees with FSB and First Bank shall be treated as
if such service were with Lincoln and its Subsidiaries; and (v) former FSB
Employees are first eligible to participate and will commence participation in
the Lincoln Bank 401(k) Plan on the Effective Date. Notwithstanding the
foregoing, no Former FSB Employees shall be eligible to participate in Lincoln
Bank's Financial Institutions Retirement Fund as Lincoln Bank agrees that it
will freeze or terminate that plan as soon as practicable after the date hereof,
and the entry date of Former FSB Employees into the Lincoln Bancorp Employee
Stock Ownership Plan and Trust shall be January 1, 2005.
(b) FSB and First Bank will comply with applicable law and the terms of the
relevant Employee Plan with respect to the voting of any FSB Common Stock held
by any such plan.
(c) Lincoln Bank agrees to employ Xxxxx X. Xxxxx pursuant to the terms of
the Employment Agreement attached hereto as Exhibit D, and agrees to use its
best efforts to negotiate and enter into with Xx. Xxxxx an agreement on the
terms set forth in Exhibit D or on such alternate terms as Xx. Xxxxx and Lincoln
reasonably may agree. Lincoln Bank agrees to employ Xxxx X. Xxxxxxx pursuant to
the terms of the Employment Agreement attached hereto as Exhibit E, and agrees
to use its best efforts to negotiate and enter into with Xx. Xxxxxxx an
agreement on the terms set forth in Exhibit E or on such alternate terms as Xx.
Xxxxxxx and Lincoln reasonably may agree. Prior to the Effective Time, Xx. Xxxxx
and Xx. Xxxxxxx will continue to be paid the compensation provided for in their
employment agreements with First Bank and will continue participating in the
employee benefit, retirement, and compensation plans and other perquisites
provided for in such Agreement. At the Effective Time, Xx. Xxxxx'x and Xx.
Xxxxxxx' employment agreements with First Bank shall terminate without the
payment of any consideration other than entering into the new employment
agreements with the Surviving Bank contemplated by this Section 6.19(c). First
Bank will use its best efforts to obtain from Xx. Xxxxx and Xx. Xxxxxxx, within
30 days of the date of this Agreement, a binding written commitment, in the
event the Company Merger is consummated, to accept the terms of this Section
6.19(c). Lincoln has concluded that Xx. Xxxxx possesses the qualifications its
Board of Directors will seek in a successor to current Lincoln President, Mr. T.
Xxx Xxxxx, and anticipates that Xx. Xxxxx will succeed Xx. Xxxxx as President
and Chief Executive Officer not later than December 31, 2005.
6.20 Severance. With the exception of Xxxxx X. Xxxxx and Xxxx X. Xxxxxxx, those
employees of FSB or First Bank as of the Effective Time (i) who Lincoln or its
Subsidiaries elect not to employ after the Effective Time or who are terminated
other than for cause within six months after the Effective Date, and (ii) who
sign and deliver a termination and release agreement in the form attached hereto
as Exhibit F, shall be entitled to severance pay equal to one week of pay, at
their rate of pay in effect at the Effective Time, for each full year of
continuous service with FSB or First Bank or their successors not in excess of
26 years completed prior to the Effective Time or, in the case of employees who
continue as employees of Lincoln or its Subsidiaries after the Effective Time,
prior to their termination as such. Furthermore, any terminated employees shall
be entitled to continuation coverage under Lincoln Bank's (or First Bank's, if
they are never employed by Lincoln Bank) group health plans as required by
COBRA. Nothing in this Section 6.20 shall be deemed to limit or modify Lincoln's
or Lincoln Bank's at will employment policy.
6.21 Charter Conversion. Lincoln will use its best efforts to cause Lincoln Bank
to convert from a federal savings bank to an Indiana commercial state bank no
later than one year after the Effective Time, including using its best efforts
to obtain any and all necessary regulatory approvals for such conversion.
6.22 Short-Swing Trading Exemption. Prior to the Effective Date, the board of
directors of Lincoln shall adopt such resolutions as necessary to cause any
shares of Lincoln Common Stock to be received by Xxxxx X. Xxxxx, Xxxx X.
Xxxxxxx, Xxxxx X. Xxxxxx or X.X. XxXxxxxxx as part of the Consideration, all
Replacement Options to be granted to such persons and all other stock options to
be granted to Xx. Xxxxx or Xx. Xxxxxxx pursuant to their employment agreements
to qualify for the exemptions provided in Rule 16b-3(d) under the Securities
Exchange Act of 1934, as amended.
Article VII
Conditions to Consummation of the Merger
7.01 Conditions to Each Party's Obligation to Effect the Company Merger. The
respective obligation of each of Lincoln and FSB to consummate the Company
Merger is subject to the fulfillment or written waiver by Lincoln and FSB prior
to the Effective Time of each of the following conditions:
(a) Shareholder Approval. This Agreement and the actions and transactions
contemplated hereby shall have been duly adopted by the affirmative vote of the
holders of the requisite number of the outstanding shares of Lincoln Common
Stock and FSB Common Stock entitled to vote thereon in accordance with
applicable law, the Lincoln Articles of Incorporation, the Lincoln Code of
By-Laws, the FSB Articles of Incorporation and the FSB Bylaws, and the actions
and transactions contemplated in the Merger Agreement for Subsidiary Merger
shall have been duly adopted by FSB and Lincoln, acting in their respective
capacities as sole shareholders of First Bank and Lincoln Bank.
(b) Governmental and Regulatory Consents. All approvals and authorizations
of, filings and registrations with, and notifications to, all Governmental
Authorities required for the consummation of the Company Merger and the
Subsidiary Merger, and for the prevention of any termination of any material
right, privilege, license or agreement of either Lincoln, FSB, First Bank, or
Lincoln's Subsidiaries, shall have been obtained or made and shall be in full
force and effect and all waiting periods required by law shall have expired;
provided, however, that none of the preceding shall be deemed obtained or made
if it shall be subject to any condition or restriction the effect of which would
have been such that Lincoln would not reasonably have entered into this
Agreement had such condition or restriction been known as of the date hereof.
(c) Third Party Consents. All consents or approvals of all persons, other
than Governmental Authorities, required for or in connection with the execution,
delivery and performance of this Agreement and the consummation of the Company
Merger and the Subsidiary Merger shall have been obtained and shall be in full
force and effect, unless the failure to obtain any such consent or approval is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on the Surviving Corporation and its Subsidiaries, taken as a
whole.
(d) No Injunction. No Governmental Authority of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and prohibits consummation of the
transactions contemplated by this Agreement.
(e) Registration Statement. The Registration Statement shall have become
effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the SEC.
(f) Blue Sky Approvals. All permits and other authorizations under the
state securities laws necessary to consummate the transactions contemplated
hereby and to issue the shares of Lincoln Common Stock to be issued in the
Company Merger shall have been received and be in full force and effect.
(g) Listing. The shares of Lincoln Common Stock to be issued in the Company
Merger shall have been approved for listing on the National Market System of
NASDAQ, subject to official notice of issuance.
7.02 Conditions to Obligation of FSB. The obligation of FSB to consummate the
Company Merger is also subject to the fulfillment or written waiver by FSB prior
to the Effective Time of each of the following conditions:
(a) Representations and Warranties. The representations and warranties of
Lincoln set forth in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and, except for any failures,
noncompliances, facts, events or circumstances, which when aggregated with all
other failures, non-compliances, facts, events or circumstances would not have a
Material Adverse Effect, as of the Effective Date as though made on and as of
the Effective Date (except that representations and warranties that by their
terms speak as of the date of this Agreement or some other date shall be true
and correct only as of such date), and FSB shall have received a certificate,
dated the Effective Date, signed on behalf of Lincoln by the Chief Executive
Officer and the Chief Financial Officer of Lincoln to such effect.
(b) Performance of Obligations of Lincoln. Lincoln shall have performed in
all material respects all obligations required to be performed by it under this
Agreement at or prior to the Effective Time, and FSB shall have received a
certificate, dated the Effective Date, signed on behalf of Lincoln by the Chief
Executive Officer and the Chief Financial Officer of Lincoln to such effect.
(c) Opinion of Counsel. FSB shall have received an opinion, dated the
Effective Date, of Xxxxxx & Xxxxxxxxx, counsel to Lincoln, in substantially the
same form as that attached hereto as Exhibit G.
(d) Tax Opinion of Lincoln's Counsel. FSB shall have received an opinion of
Xxxxxx & Xxxxxxxxx, counsel to Lincoln, to the effect that (1) the Company
Merger constitutes a "reorganization" within the meaning of Section 368 of the
Code and (2) no gain or loss will be recognized by shareholders of FSB to the
extent they receive shares of Lincoln Common Stock as Consideration in exchange
for shares of FSB Common Stock.
(e) Xxxxx X. Xxxxx and Co. Fairness Opinion. FSB shall have received the
opinion of Xxxxx X. Xxxxx and Co., dated the date of this Agreement (which shall
be appended as an exhibit to the Proxy Statements), that the Consideration to be
received in the Company Merger by the shareholders of FSB is fair to the
shareholders of FSB from a financial point of view.
(f) Employment Matters. Either (1) Lincoln Bank and Xxxxx X. Xxxxx shall
have entered into a mutually acceptable Employment Agreement as provided in
Section 6.19(c) above or (2) Lincoln Bank shall have offered to enter into the
Employment Agreement attached hereto as Exhibit D and Xx. Xxxxx shall not have
accepted such offer. Either Xxxx X. Xxxxxxx shall have entered into a mutually
acceptable Employment Agreement as provided in Section 6.19(c) above or (2)
Lincoln Bank shall have offered to enter into the Employment Agreement attached
hereto as Exhibit E and Xx. Xxxxxxx shall not have accepted such offer.
Furthermore, Lincoln and its Subsidiaries shall have amended or adopted employee
benefit plans to the extent necessary to comply with Section 6.19(a).
7.03 Conditions to Obligation of Lincoln. The obligation of Lincoln to
consummate the Company Merger is also subject to the fulfillment or written
waiver by Lincoln prior to the Effective Time of each of the following
conditions:
(a) Representations and Warranties. The representations and warranties of
FSB set forth in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and, except for any failures,
non-compliances, facts, events or circumstances, which when aggregated with all
other failures, non-compliances, facts, events or circumstances would not have a
Material Adverse Effect, as of the Effective Date as though made on and as of
the Effective Date (except that representations and warranties that by their
terms speak as of the date of this Agreement or some other date shall be true
and correct only as of such date) and FSB shall have received a certificate,
dated the Effective Date, signed on behalf of FSB by the Chief Executive Officer
and the Chief Financial Officer of FSB to such effect.
(b) Performance of Obligations of FSB. FSB shall have performed in all
material respects all obligations required to be performed by it under this
Agreement at or prior to the Effective Time, and Lincoln shall have received a
certificate, dated the Effective Date, signed on behalf of FSB by the Chief
Executive Officer and the Chief Financial Officer of FSB to such effect.
(c) Opinion of Counsel. Lincoln shall have received an opinion, dated the
Effective Date, of Bose XxXxxxxx &Evansns LLP, Counsel to FSB, in substantially
the same form as that attached hereto as Exhibit H.
(d) Xxxxx, Xxxxxxxx & Xxxxx, Inc. Fairness Opinion. Lincoln shall have
received the opinion of Xxxxx, Xxxxxxxx & Xxxxx, Inc., dated the date of this
Agreement (which shall be appended as an exhibit to the Proxy Statements), that
the Consideration to be received in the Company Merger by the shareholders of
FSB is fair to the shareholders of Lincoln from a financial point of view.
(e) Tax Opinion of Lincoln's Counsel. Lincoln shall have received an
opinion of Xxxxxx & Xxxxxxxxx, counsel to Lincoln, dated the Effective Date, to
the effect that the Company Merger constitutes a "reorganization" within the
meaning of Section 368 of the Code.
(f) Environmental Report. Lincoln shall have received the environmental
reports required by Section 6.11 hereof, and shall not have elected, pursuant
thereto and pursuant to Section 9.01(e) hereof, to terminate and cancel this
Agreement.
(g) Closing Book Value. The Closing Book Value of FSB shall not be less
than the consolidated stockholders' equity of FSB as of September 30, 2003. As
used in the preceding sentence, the term "Closing Book Value" shall mean the
amount of the consolidated stockholders' equity of FSB, as of the end of the
month immediately preceding the Closing Date, determined in accordance with
generally accepted accounting principles, plus (i) the amount of any decrease in
the consolidated stockholders' equity of FSB resulting from or attributable to
expenses of the Company Merger or the Subsidiary Merger, plus (ii) any reduction
of consolidated stockholders' equity theretofore recorded solely as a result of
accruals, reserves or charges taken by FSB at the request of Lincoln pursuant to
Section 6.12 hereof, plus (iii) any reduction of consolidated stockholders'
equity as a result of the actions taken pursuant to Section 301(e).
(h) Approval of Supplemental Indenture. To the extent required to comply
with Section 3.01(e), the requisite number of holders of the Debentures shall
have adopted a supplemental indenture to the Trust Indenture governing the
Debentures to allow FSB to redeem the Debentures without restriction, except for
any applicable notice requirements to the holders of the Debentures and except
for the payment of the redemption premium.
(i) Conversion of Contracts and/or Redemption of Debentures. (1) All of the
outstanding Contracts shall have been exercised by the holders thereof and/or
cancelled by FSB with the payment of all applicable cancellation payments, and
(2) all of the outstanding Debentures shall have been surrendered to FSB by the
holders thereof as consideration for the exercise of a corresponding amount of
Contracts and/or shall have been redeemed by FSB with the payment of all
applicable redemption premiums.
Article VIII
Closing
8.01 Deliveries by FSB at Closing. At the Closing, FSB shall deliver to Lincoln:
(a) certified copies of the Articles of Incorporation and Bylaws of FSB and
First Bank;
(b) the officers' certificates required by Sections 7.03(a) and 7.03(b)
hereof;
(c) a certified copy of the resolutions of FSB's Board of Directors and
shareholders, as required for valid approval of the execution of this Agreement
and the consummation of the Company Merger;
(d) a certified copy of the resolutions of First Bank's Board of Directors
and sole shareholder, as required for valid approval of the execution of this
Agreement and Exhibit B and the consummation of the Subsidiary Merger;
(e) a Certificate of the Secretary of State of the State of Indiana, dated
a recent date, stating that FSB is validly existing;
(f) Certificates of the DFI, the Indiana Secretary of State and the FDIC,
dated recent dates, relating to the valid existence and the FDIC insurance of
deposits of First Bank;
(g) Articles of Merger executed by the proper parties thereto reflecting
the terms and provisions of this Agreement and including as an exhibit thereto
the Plan of Merger attached hereto as Exhibit A in proper form for filing with
the Secretary of State of the State of Indiana in order to cause the Company
Merger to become effective pursuant to the IBCL;
(h) Articles of Consolidation and Articles of Merger executed by First Bank
reflecting the terms and provisions of this Agreement and Exhibit B in proper
form for filing with the OTS and the DFI in order to cause the Subsidiary Merger
to become effective under federal law;
(i) a legal opinion from counsel for FSB in form reasonably acceptable to
Lincoln counsel, opining with respect to the matters required by Section 7.03(c)
hereto; and
(j) such other documents as Lincoln or its counsel may reasonably request.
8.02 Deliveries by Lincoln at the Closing. At the Closing, Lincoln shall deliver
to FSB:
(a) certified copies of the Articles of Incorporation and Bylaws of Lincoln
and Lincoln Bank;
(b) the officers' certificates required by Section 7.02(a) and (b) hereof;
(c) a certified copy of the resolutions of Lincoln's Board of Directors and
shareholders authorizing the execution of this Agreement and the consummation of
the Company Merger;
(d) a certified copy of the resolutions of Lincoln Bank's Board of
Directors and its sole shareholder authorizing the execution of this Agreement
and the consummation of the Subsidiary Merger;
(e) Articles of Merger executed by the proper parties thereto reflecting
the terms and provisions of this Agreement and including as an exhibit thereto
the Plan of Merger attached hereto as Exhibit A in proper form for filing with
the Secretary of State of the State of Indiana in order to cause the Company
Merger to become effective pursuant to the IBCL;
(f) Articles of Combination and Articles of Merger executed by Lincoln Bank
reflecting the terms and provisions of this Agreement and Exhibit B in proper
form for filing with the OTS and the DFI, respectively, in order to cause the
Subsidiary Merger to become effective under federal law;
(g) a legal opinion from counsel for Lincoln, in form reasonably acceptable
to FSB's counsel, opining with respect to the matters required by Section
7.02(c) hereto; and
(h) the tax opinion required by Section 7.02(d) hereto; and
(i) such other documents as FSB or its counsel may reasonably request.
Article IX
Termination
9.01 Termination. This Agreement may be terminated and the Company Merger may be
abandoned:
(a) Mutual Consent. At any time prior to the Effective Time, by the mutual
consent of Lincoln and FSB, if the Board of Directors of each so determines by
vote of a majority of the members of its entire Board.
(b) Breach. At any time prior to the Effective Time, by Lincoln or FSB, in
each case if its Board of Directors so determines by vote of a majority of the
members of its entire Board, in the event of either: (1) a breach by the other
party of any representation or warranty contained herein, which breach cannot be
or has not been cured within 30 days after the giving of written notice to the
breaching party of such breach; or (2) a breach by the other party of any of the
covenants or agreements contained herein, which breach cannot be or has not been
cured within 30 days after the giving of written notice to the breaching party
of such breach.
(c) Delay. At any time prior to the Effective Time, by Lincoln or FSB, in
each case if its Board of Directors so determines by vote of a majority of the
members of its entire Board of Directors, in the event that the Company Merger
is not consummated by December 31, 2004, except to the extent that the failure
of the Company Merger then to be consummated arises out of or results from the
action or inaction of the party seeking to terminate pursuant to this Section
9.01(c).
(d) No Approval. By FSB or Lincoln, in each case if its Board of Directors
so determines by a vote of a majority of the members of its entire Board, in the
event (1) the approval of any Governmental Authority required for consummation
of the Company Merger and the other transactions contemplated by this Agreement
shall have been denied by final non-appealable action of such Governmental
Authority or (2) the shareholder approval contemplated by Section 6.02 herein is
not obtained.
(e) Environmental Reports. Lincoln may terminate this Agreement to the
extent provided by Section 6.11 hereof by giving written notice thereof to FSB.
(f) Failure to Recommend, Etc. By either party if (1) prior to the
effectiveness of the Registration Statement, the Board of Directors of the other
party shall not have recommended adoption and approval of this Agreement to its
shareholders, or (2) at any time prior to the receipt of the approval of the
other party's shareholders contemplated by Section 7.01(a), the other party's
Board of Directors shall have withdrawn such recommendation or modified or
changed such recommendation in a manner adverse to the interests of the other
party (whether in accordance with Section 6.02 or otherwise).
(g) Acceptance of Superior Proposal. By FSB, if, without breaching Section
6.06, FSB shall contemporaneously enter into a definitive agreement with a third
party providing for an Acquisition Proposal on terms determined in good faith by
the FSB Board, after consulting with and considering the advice of FSB's outside
counsel and financial advisors, to constitute a Superior Proposal; provided,
that the right to terminate this Agreement under this Section 9.01(g) shall not
be available to FSB unless it delivers to Lincoln (1) written notice of FSB's
intention to terminate at least five days prior to termination and (2)
simultaneously with such termination, the Fee referred to in Section 9.03. For
purposes of this Section 9.01(g), "Superior Proposal" means an Acquisition
Proposal made by a third party after the date hereof which, in the good faith
judgment of the Board of Directors of FSB receiving the Acquisition Proposal,
taking into account the various legal, financial and regulatory aspects of the
proposal and the person making such proposal, (1) if accepted, is significantly
more likely than not to be consummated, and (2) if consummated, is reasonably
likely to result in a materially more favorable transaction than the Company
Merger for FSB and its shareholders and other relevant constituencies.
9.02 Effect of Termination and Abandonment. In the event of termination of
this Agreement and the abandonment of the Company Merger pursuant to this
Article IX, no party to this Agreement shall have any liability or further
obligation to any other party hereunder except (a) as set forth in Sections 9.03
and 10.01 and (b) that termination will not relieve a breaching party from
liability for any willful breach of this Agreement giving rise to such
termination.
9.03 Liquidated Damages. If (1) Lincoln terminates this Agreement pursuant
to Section 9.01(f) (at a time when FSB could not also terminate pursuant to
Section 9.01(f)) or (2) FSB terminates this Agreement pursuant to Section
9.01(g), then, within five business days of such termination, FSB shall pay
Lincoln by wire transfer in immediately available funds, as agreed upon
liquidated damages and not as a penalty and as the sole and exclusive remedy,
$1,000,000 (the "Fee"). If FSB terminates this Agreement pursuant to Section
9.01(f) (at a time when Lincoln would not also do so pursuant to Section
9.01(f)), then, within five (5) business days of such termination, Lincoln shall
pay the Fee to FSB by wire transfer in immediately available funds. If this
Agreement is terminated solely by reason of the failure of FSB to receive
shareholder approval of the Company Merger, and if, and only if, an Acquisition
Proposal for FSB was publicly announced (or otherwise disseminated to the
shareholders of the party), prior to the date that the party's shareholders
voted against the adoption of this Agreement) and if, within twelve months after
the date of such termination, a change in control of FSB is consummated, then
FSB shall pay the Fee to Lincoln by wire transfer in immediately available
funds. (For purposes of this Section 9.03, a "change in control" of FSB shall be
deemed to have taken place if: (w) any person or entity, including a "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934, other than
FSB, First Bank, or any employee benefit plan of FSB or First Bank, is or
becomes the beneficial owner, directly or indirectly, of securities representing
fifty percent (50%) or more of the then-issued and outstanding common stock of
FSB or First Bank or the combined voting power of the then-outstanding
securities of FSB or First Bank, whether through a tender offer or otherwise;
(x) there occurs any consolidation or merger in which FSB or First Bank is not
the continuing or surviving corporation (except for a merger in which the
holders of FSB or First Bank's common stock and/or other voting stock
immediately prior to the merger have the same proportionate ownership of common
and/or other voting stock of the surviving corporation immediately after the
merger); (y) there occurs any consolidation or merger in which FSB or First Bank
is the surviving corporation but in which shares of its common and/or other
voting stock would be converted into cash or securities of any other corporation
or other property or if its shareholders own less than 50% of the outstanding
common stock immediately after the transaction; or (z) there occurs any sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of FSB or First Bank.
Notwithstanding the foregoing, no Fee shall be required to be paid if Lincoln or
FSB terminates this Agreement solely because of the failure of FSB to obtain the
shareholder approval of this Agreement and the actions and transactions
contemplated hereby.
Article X
Miscellaneous
10.01 Survival. None of the representations, warranties, covenants and other
agreements in this Agreement or in any instrument delivered pursuant to this
Agreement, other than those contained in Sections 6.05(b), 9.02, and 9.03 and in
this Article X, shall survive the termination of this Agreement if this
Agreement is terminated prior to the Effective Time. None of the
representations, warranties, covenants and other agreements in this Agreement or
in any instrument delivered pursuant to this Agreement, including any rights
arising out of any breach of such representations, warranties, covenants and
other agreements, shall survive the Effective Time, except for those covenants
and agreements contained in Sections 1.01(e), 2.01(e), 6.13, 6.18, 6.19, 6.20
and 6.21, which by its terms apply or are to be performed in whole or in part
after the Effective Time and this Article X.
10.02 Waiver; Amendment. Prior to the Effective Time, any provision of this
Agreement may be (a) waived in writing by the party benefited by the provision,
or (b) amended or modified by an agreement in writing executed by both parties,
except that, after approval of the Company Merger by the shareholders of FSB or
of Lincoln, no amendment may be made which under applicable law requires further
approval of such shareholders without obtaining such required further approval.
10.03 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to constitute an original.
10.04 Governing Law. This Agreement shall be governed by, and interpreted in
accordance with, the laws of the State of Indiana applicable to contracts made
and to be performed entirely within such State.
10.05 Expenses. Subject to Sections 9.03, each party hereto will bear all
expenses incurred by it in connection with this Agreement and the transactions
contemplated hereby, except that printing and postage expenses relating to the
FSB and the Lincoln shareholder meeting shall be shared equally between FSB and
Lincoln.
10.06 Notices. All notices, requests and other communications hereunder to a
party shall be in writing and shall be deemed given (a) on the date of delivery,
if personally delivered or telecopied (with confirmation), (b) on the first
business day following the date of dispatch, if delivered by a recognized
next-day courier service, or (c) on the third business day following the date of
mailing, if mailed by registered or certified mail (return receipt requested),
in each case to such party at its address or telecopy number set forth below or
such other address or numbers as such party may specify by notice to the parties
hereto.
If to Lincoln, to:
T. Xxx Xxxxx, President
Lincoln Bancorp
0000 Xxxx Xxxx Xxxxxx
XX Xxx 000
Xxxxxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxxxxxx
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
If to FSB, to:
Xxxxx X. Xxxxx, President
First Shares Bancorp, Inc.
000 X. Xxxxx Xxxx 000
Xxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
With a copy to:
Xxxxx X. Xxxxxxx, Esq.
Bose XxXxxxxx & Xxxxx LLP
0000 Xxxxx Xxxxxxx Xxxxx
000 Xxxxx Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
10.07 Entire Understanding; No Third Party Beneficiaries. This Agreement
(together with the Disclosure Schedules and the Exhibits hereto) represents the
entire understanding of the parties hereto with reference to the transactions
contemplated hereby and this Agreement supersedes any and all other oral or
written agreements heretofore made. Except for Sections 1.01(e), 2.01(e), 6.13,
6.18, 6.19, 6.20 and 6.21 hereof (which is intended to be for the benefit of
those present and former officers and directors of FSB and First Bank affected
thereby and may be enforced by such persons), nothing in this Agreement,
expressed or implied, is intended to confer upon any person, other than the
parties hereto or their respective successors and permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
FIRST SHARES BANCORP, INC. LINCOLN BANCORP
("FSB") ("Lincoln")
By:/s/ Xxxxx X. Xxxxx By:/s/ T. Xxx Xxxxx
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Printed: Xxxxx X. Xxxxx Printed: T. Xxx Xxxxx
Title: President Title: President
FIRST BANK LINCOLN BANK
By:/s/ Xxxxx X. Xxxxx By:/s/ T. Xxx Xxxxx
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Printed: Xxxxx X. Xxxxx Printed: T. Xxx Xxxxx
Title: President Title: President
Each of the undersigned directors of FSB hereby (a) agrees in his capacity
as a director to recommend to FSB's shareholders the approval of this Agreement
and the Merger, except as otherwise provided in Sections 6.02 and 6.06 of this
Agreement, and (b) agrees in his individual capacity to vote his shares of FSB
Common Stock that are registered in his personal name (and agrees to use his
best efforts to cause all additional shares of FSB Common Stock owned jointly
with any other person or by his spouse or over which he has voting influence or
control to be voted) in favor of this Agreement and the Company Merger. In
addition, each of the undersigned directors hereby agrees not to make any
transfers of shares of FSB Common Stock with the purpose of avoiding his
agreements set forth in the preceding sentence. Each of the undersigned
directors who are not also officers or employees of FSB or First Bank agrees to
the terms of Section 6.16 of this Agreement.
Dated this 10th day of March, 2004.
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
/s/ H. Xxxx Xxxxxxx
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H. Xxxx Xxxxxxx
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
/s/ X.X. XxXxxxxxx
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X.X. XxXxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
