EXHIBIT 10.1
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STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") is made as of
September 9, 1999, by and between OLD KENT FINANCIAL CORPORATION, a
Michigan corporation ("Grantee"), and GRAND PREMIER FINANCIAL, INC., a
Delaware corporation ("Issuer").
As a condition to, and contemporaneous with, the execution of
this Agreement, the parties are entering into an Agreement and Plan of
Merger dated as of September 9, 1999 (the "Plan of Merger"). In
consideration therefor, and as an inducement to Grantee to pursue the
transactions contemplated by the Plan of Merger, Issuer has agreed to
grant Grantee the Option (as defined below). The board of directors of
Issuer has approved the grant of the Option and the Plan of Merger.
Capitalized terms used but not defined in this Agreement shall have
the meanings given to those terms in the Plan of Merger.
In consideration of the foregoing, and the mutual covenants and
agreements set forth in this Agreement and in the Plan of Merger, the
parties agree:
1. GRANT OF OPTION.
(a) Issuer hereby grants to Grantee an unconditional,
irrevocable option (the "Option") to purchase, subject to the terms of
this Agreement, up to 4,469,722 fully paid and nonassessable shares of
Issuer Common Stock, par value $0.01 ("Common Stock"), at a price per
share equal to $15.00; PROVIDED that in the event Issuer issues or
agrees to issue any shares of Common Stock prior to an Exercise
Termination Event (or such later date as provided in Section 10) at a
price per share less than $15.00 (as adjusted pursuant to Section
5(b)) (other than as permitted under the Plan of Merger), such price
shall be equal to such lesser price (as adjusted, if applicable, the
"Option Price") for each share of Common Stock then remaining subject
to the Option; FURTHER PROVIDED, that in no event shall the number of
shares for which this Option is exercisable, together with the number
of shares owned by Grantee other than shares held by Grantee in a
fiduciary capacity for a customer as to which it has no beneficial
interest ("Fiduciary Shares"), exceed 19.99% of the Issuer's issued
and outstanding shares of Common Stock without giving effect to any
shares subject or issued pursuant to the Option.
(b) The number of shares of Common Stock subject to
the Option shall be increased or decreased, as appropriate, in the
event that any additional shares of Common Stock are issued or
otherwise become outstanding (other than pursuant to this Agreement or
pursuant to an event described in Section 5(a) of this Agreement) or
existing shares are redeemed, retired or otherwise become no longer
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outstanding after the date of this Agreement so that, after any such
issuance, redemption or retirement, together with the number of shares
previously issued pursuant to this Agreement or otherwise owned by
Grantee other than Fiduciary Shares, the number of shares of Common
Stock subject to the Option equals 19.99% of the number of shares of
Common Stock then issued and outstanding without giving effect to any
shares subject or issued pursuant to the Option. Nothing contained in
this Section 1(b) or elsewhere in this Agreement shall be considered
to authorize Issuer to issue shares in breach of any provision of the
Plan of Merger.
2. EXERCISE OF OPTION.
(a) The holder or holders of the Option (the "Holder")
may exercise the Option, in whole or part, if and when at any time
both an Initial Triggering Event (as defined below) and a Subsequent
Triggering Event (as defined below) shall have occurred prior to the
occurrence of an Exercise Termination Event (as defined below),
PROVIDED that the Holder shall have sent notice of such exercise (as
required by Section 2(f)) within six months following such Subsequent
Triggering Event (or such later date as provided in Section 10).
(b) Each of the following shall be an "Exercise
Termination Event": (i) consummation of the Merger at the Effective
Time of the Merger; (ii) termination of the Plan of Merger in
accordance with the provisions thereof if such termination occurs
before the occurrence of an Initial Triggering Event; and (iii) the
passage of 18 months (or such longer period as provided in Section 10)
after termination of the Plan of Merger if such termination follows
the occurrence of an Initial Triggering Event. Notwithstanding
anything to the contrary in this Agreement: (i) the Option may not be
exercised at any time when Grantee shall be in material breach of any
of its covenants or agreements contained in the Plan of Merger such
that Issuer shall be entitled to terminate the Plan of Merger as a
result of such material breach; and (ii) this Agreement shall
automatically terminate upon the proper termination of the Plan of
Merger (x) by Issuer as a result of the material breach by Grantee of
its covenants or agreements contained in the Plan of Merger, or (y) by
Issuer or Grantee if the approval by any federal or state governmental
authority or regulatory or administrative agency or commission (each a
"Governmental Entity") necessary to consummate the Merger and the
other transactions contemplated by the Plan of Merger shall have been
denied by final nonappealable action of such agency or authority.
(c) The term "Initial Triggering Event" shall mean any
of the following events or transactions occurring on or after the date
of this Agreement:
(i) Issuer or any of its subsidiaries (an "Issuer
Subsidiary"), without having received Grantee's prior written
consent, shall have entered into an agreement to engage in an
Acquisition Transaction (as defined below) with any person (for
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purposes of this Agreement, the term "person" has the meaning
given that term in Sections 3(a)(9) and 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"
), and the rules and regulations thereunder) other than Grantee
or any of its subsidiaries (a "Grantee Subsidiary");
(ii) the board of directors of Issuer shall have
recommended that the stockholders of Issuer approve or accept any
Acquisition Transaction other than the Merger;
(iii) any person other than Grantee or any
Grantee Subsidiary shall have acquired beneficial ownership or
the right to acquire beneficial ownership of 15% or more of the
outstanding shares of Common Stock (for purposes of this
Agreement, the term "beneficial ownership" has the meaning given
that term in Section 13(d) of the Exchange Act and the rules and
regulations thereunder) PROVIDED, that this Section 2(c)(iii)
shall not be triggered (and it shall not constitute an Initial
Triggering Event) by any acquisition of Issuer Common Stock by
any person or entity specifically identified as being excluded
(under certain circumstances) from becoming an "Acquiring Person"
in Section 1(b) of the Rights Agreement dated as of July 8, 1996,
between Issuer and Grand Premier Trust and Investment, Inc.,
N.A., as successor to Premier Trust Services, Inc., as Rights
Agent (the "Rights Agreement") (before any relettering of the
subsections of the Rights Agreement contemplated by the amendment
of the Rights Agreement executed as of the date hereof) if such
acquisition of Issuer Common Stock by such person or entity would
not cause such person or entity to become an "Acquiring Person"
under the terms of the Rights Agreement;
(iv) the stockholders of Issuer shall have voted
and failed to approve the Plan of Merger and the Merger at a
meeting that was held for that purpose or any adjournment or
postponement thereof, or such meeting shall not have been held in
violation of the Plan of Merger or shall have been canceled prior
to termination of the Plan of Merger if, prior to such meeting
(or if such meeting shall not have been held or shall have been
canceled, prior to such termination), it shall have been publicly
announced or the stockholders of Issuer shall have been advised
that any person (other than Grantee or any Grantee Subsidiary)
shall have made, or shall have an intention to make, a proposal
to engage in an Acquisition Transaction;
(v) the board of directors of Issuer shall not
have recommended, or shall have withdrawn or modified (or
publicly announced its intention to withdraw or modify) in any
manner adverse in any respect to Grantee its recommendation that
the stockholders of Issuer approve the transactions contemplated
by the Plan of Merger at any meeting that was held for that
purpose, in anticipation of engaging in an Acquisition
Transaction (other than with Grantee or any Grantee Subsidiary)
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or following a proposal to Issuer to engage in an Acquisition
Transaction, or Issuer or any Issuer Subsidiary shall have
authorized, recommended or proposed (or publicly announced or
advised its stockholders of its intention to authorize, recommend
or propose) an agreement to engage in an Acquisition Transaction
with any person other than Grantee or any Grantee Subsidiary;
(vi) any person other than Grantee or any Grantee
Subsidiary shall have filed with the Securities and Exchange
Commission ("SEC") a registration statement or tender offer
materials with respect to a potential exchange or tender offer
that would constitute an Acquisition Transaction (or filed a
preliminary proxy statement with the SEC with respect to a
potential vote by its stockholders to approve the issuance of
shares to be offered in such an exchange or tender offer);
(vii) Issuer shall have willfully breached any
covenant or obligation contained in the Plan of Merger in
anticipation of engaging in an Acquisition Transaction (other
than with Grantee or any Grantee Subsidiary), and following such
breach Grantee would be entitled to terminate the Plan of Merger;
(xiii) any person other than Grantee or any
Grantee Subsidiary shall have filed an application or notice with
the applicable Governmental Entity under the Bank Holding Company
Act of 1956, the Federal Deposit Insurance Act, the Illinois Bank
Holding Company Act of 1957, the Illinois Banking Act, or other
applicable state or federal banking laws or regulations, which
application or notice has been accepted for processing, for
approval to engage in an Acquisition Transaction; or
(xiv) a Fiduciary Event shall have occurred under
the Plan of Merger.
For purposes of this Agreement, "Acquisition Transaction" means: (a) a
merger or consolidation, or any similar transaction, involving Issuer
or any Issuer Subsidiary (other than mergers, consolidations or
similar transactions (i) involving solely Issuer and/or one or more
wholly-owned (except for directors' qualifying shares) Issuer
Subsidiary, PROVIDED, any such transaction is not entered into in
violation of the terms of the Plan of Merger or (ii) in which the
stockholders of Issuer immediately prior to the completion of such
transaction own at least 50% of the Common Stock of Issuer (or the
resulting or surviving entity in such transaction) immediately after
completion of such transaction, PROVIDED, any such transaction is not
entered into in violation of the terms of the Plan of Merger); (b) a
purchase, lease or other acquisition of all or a substantial part of
the assets or deposits of Issuer or Issuer Subsidiary; (c) a purchase
or other acquisition (including by way of merger, consolidation, share
exchange or otherwise) of securities representing 15% or more of the
voting power of Issuer or any Issuer Subsidiary; or (d) any
substantially similar transaction. For purposes of this Agreement,
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"subsidiary" has the meaning given to the term "significant
subsidiary" in Rule 12b-2 under the Exchange Act. In this Agreement,
the phrase "in anticipation of engaging in an Acquisition Transaction"
shall include, without limitation, any action taken by Issuer's
officers or board of directors after any written or oral, authorized
or unauthorized, proposal or expression of interest has been
communicated to any member of Issuer's management or board of
directors concerning an Acquisition Transaction that in any way would
involve Issuer and such proposal or expression of interest has not
been withdrawn at the time of the action.
(d) The term "Subsequent Triggering Event" shall mean
either of the following events or transactions occurring after the
date of this Agreement:
(i) the acquisition by any person (other than
Grantee or any Grantee Subsidiary) of beneficial ownership of 25%
or more of the then outstanding Common Stock, PROVIDED, that this
Section 2(d)(i) shall not be triggered (and it shall not
constitute a Subsequent Triggering Event) by any acquisition of
Issuer Common Stock by any person or entity specifically
identified as being excluded (under certain circumstances) from
becoming an "Acquiring Person" in Section 1(b) of the Rights
Agreement dated as of July 8, 1996, between Issuer and Grand
Premier Trust and Investment, Inc., N.A., as successor to Premier
Trust Services, Inc., as Rights Agent (the "Rights Agreement")
(before any relettering of the subsections of the Rights
Agreement contemplated by the amendment of the Rights Agreement
executed as of the date hereof) if such acquisition of Issuer
Common Stock by such person or entity would not cause such person
or entity to become an "Acquiring Person" under the terms of the
Rights Agreement; or
(ii) occurrence of the Initial Triggering Event
described in clause (i) of Section 2(c), except that the
percentage referred to for purposes of defining "Acquisition
Transaction" in clause (c) of that definition shall be 25%.
(e) Issuer shall notify Grantee promptly in writing
of the occurrence of any Initial Triggering Event or Subsequent
Triggering Event (collectively, "Triggering Events"), it being
understood that the giving of such notice by Issuer shall not be a
condition to the right of Holder to exercise the Option.
(f) If Holder is entitled and wishes to exercise the
Option (or any portion thereof), it shall send to Issuer a written
notice (the date of such notice is referred to as the "Notice Date")
specifying: (i) the total number of shares it will purchase pursuant
to such exercise; and (ii) a place and date not earlier than three
business days nor later than 45 business days from the Notice Date for
the closing of such purchase (the "Closing Date"); PROVIDED, that if
prior notification to or approval of any Governmental Entity is
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required in connection with such purchase, Holder shall promptly file
the required notice or application for approval, shall notify Issuer
of such filing, and shall expeditiously process the same and the
period of time that otherwise would run pursuant to this sentence
shall run instead from the date on which any required notification
periods have expired or been terminated or such approvals have been
obtained and any requisite waiting period or periods shall have
passed. Any exercise of the Option shall be considered to occur on the
Notice Date relating thereto.
(g) At the closing referred to in Section 2(f), Holder
shall (i) pay to Issuer the aggregate purchase price for the shares of
Common Stock purchased pursuant to the exercise of the Option in
immediately available funds by wire transfer to a bank account
designated by Issuer and (ii) present and surrender this Agreement to
Issuer at its principal executive offices; PROVIDED, that failure or
refusal of Issuer to designate such a bank account or accept surrender
of this Agreement shall not preclude Holder from exercising the
Option.
(h) At the closing, simultaneously with the delivery
of immediately available funds as provided in Section 2(g), Issuer
shall deliver to Holder a certificate or certificates representing the
number of shares of Common Stock purchased by Holder and, if the
Option should be exercised in part only, a new Option evidencing the
rights of Holder to purchase the balance of the shares subject to this
Option.
(i) Certificates for Common Stock delivered at a
closing under this Agreement may be endorsed with a restrictive legend
that shall read substantially as follows:
"The transfer of the shares represented by this certificate
is subject to certain provisions of an agreement, dated as
of September 9, 1999, between the registered holder hereof
and Issuer and to resale restrictions arising under the
Securities Act of 1933, as amended. A copy of such
agreement is on file at the principal office of Issuer and
will be provided to the holder hereof without charge upon
receipt by Issuer of a written request therefor."
It is understood and agreed that: (i) the reference to the resale
restrictions of the Securities Act of 1933, as amended (the
"Securities Act"), in the above legend shall be removed by delivery of
substitute certificate(s) without such reference if Holder shall have
delivered to Issuer a copy of a letter from the staff of the SEC, or
an opinion of counsel, in form and substance reasonably satisfactory
to Issuer, to the effect that such legend is not required for purposes
of the Securities Act; (ii) the reference to the provisions of this
Agreement in the above legend shall be removed by delivery of
substitute certificate(s) without such reference if the shares have
been sold or transferred in compliance with the provisions of this
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Agreement and under circumstances that do not require the retention of
such reference in the opinion of counsel to Holder; and (iii) the
legend shall be removed in its entirety if the conditions in the
preceding clauses (i) and (ii) are both satisfied. In addition, such
certificates shall bear any other legend as may be required by law.
(j) Upon the giving by Holder to Issuer of the written
notice of exercise of the Option provided for under Section 2(f) and
the tender of the applicable purchase price in immediately available
funds, Holder shall be considered, subject to the receipt of any
necessary regulatory approvals, to be the holder of record of the
shares of Common Stock issuable upon such exercise, notwithstanding
that the stock transfer books of Issuer shall then be closed or that
certificates representing such shares of Common Stock shall not then
be actually delivered to Holder. Issuer shall pay all expenses, and
any and all federal, state and local taxes and other charges that may
be payable in connection with the preparation, issuance and delivery
of stock certificates under this Section 2 in the name of Holder or
its assignee, transferee or designee.
3. COVENANTS OF ISSUER. Issuer agrees: (i) that it shall
at all times maintain, free from preemptive rights, sufficient
authorized but unissued or treasury shares of Common Stock so that the
Option may be exercised without additional authorization of Common
Stock after giving effect to all other options, warrants, convertible
securities and other rights to purchase Common Stock; (ii) that it
will not, by charter amendment or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any other
voluntary act, avoid or seek to avoid the observance or performance of
any of the covenants, stipulations or conditions to be observed or
performed under this Agreement by Issuer; (iii) promptly to take all
action as may from time to time be required (including (x) complying
with all applicable premerger notification, reporting and waiting
period requirements and (y) if, under the applicable federal or state
regulatory requirements or any state or federal banking law, prior
approval of or notice to any Governmental Entity is necessary before
the Option may be exercised, cooperating fully with Holder in
preparing such applications or notices and providing such information
to each such Governmental Entity as they may require) to permit Holder
to exercise the Option and Issuer duly and effectively to issue shares
of Common Stock pursuant to this Agreement; and (iv) promptly to take
all action provided in this Agreement to protect the rights of Holder
against dilution.
4. EXCHANGE OF OPTION. This Agreement (and the Option
granted by this Agreement) are exchangeable, without expense, at the
option of Holder, upon presentation and surrender of this Agreement at
the principal office of Issuer, for other Agreements providing for
Options of different denominations entitling Holder to purchase, on
the same terms and subject to the same conditions as are set forth in
this Agreement, in the aggregate the same number of shares of Common
Stock subject to this Option. The terms "Agreement" and "Option" as
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used in this Agreement include any stock option agreements and related
options for which this Agreement (and the Option granted by this
Agreement) may be exchanged. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Agreement, if mutilated, Issuer
will execute and deliver a new Agreement of like tenor and date. Any
such new Agreement executed and delivered shall constitute an
additional contractual obligation on the part of Issuer, whether or
not the Agreement so lost, stolen, destroyed or mutilated shall at any
time be enforceable by anyone.
5. ADJUSTMENTS. In addition to the adjustment in the
number of shares of Common Stock that are subject to the Option
pursuant to Section 1 of this Agreement, the number of shares of
Common Stock subject to the Option and the Option Price shall be
subject to adjustment from time to time as provided in this Section 5.
(a) In the event of any change in, or distributions in
respect of, Common Stock by reason of stock dividends, stock splits,
mergers, recapitalizations, combinations, subdivisions, conversions,
exchanges of shares or the like, the type and number of shares of
Common Stock subject to the Option shall be appropriately adjusted and
proper provision shall be made so that, if any additional shares of
Common Stock are to be issued or otherwise become outstanding as a
result of any such change (other than pursuant to an exercise of the
Option), the number of shares of Common Stock that remain subject to
the Option shall be increased so that, after such issuance and
together with shares of Common Stock previously issued pursuant to the
exercise of the Option (as adjusted on account of any of the foregoing
changes in the Common Stock), such number equals 19.99% of the number
of shares of Common Stock then issued and outstanding.
(b) Whenever the number of shares of Common Stock
subject to the Option is adjusted as provided in this Section 5, the
Option Price shall be adjusted by multiplying the Option Price by a
fraction, the numerator of which shall be equal to the number of
shares of Common Stock subject to the Option prior to the adjustment
and the denominator of which shall be equal to the number of shares of
Common Stock subject to the Option after the adjustment.
6. REGISTRATION RIGHTS. Upon the occurrence of a
Subsequent Triggering Event that occurs prior to an Exercise
Termination Event, Issuer shall, at the request of Grantee delivered
within 12 months (or such later period as provided in Section 10) of
such Subsequent Triggering Event (whether on its own behalf or on
behalf of any subsequent holder of this Option (or part thereof) or
owner of any of the shares of Common Stock issued pursuant hereto),
promptly prepare, file and keep current a shelf registration statement
under the Securities Act covering any shares issued and/or issuable
pursuant to this Option and shall use its commercially reasonable
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efforts to cause such registration statement to become effective and
remain current to permit the sale or other disposition of any shares
of Common Stock issued upon total or partial exercise of this Option
("Option Shares") in accordance with any plan of disposition requested
by Grantee. Issuer will use its commercially reasonable efforts to
cause such registration statement promptly to become effective and
then to remain effective for such period not in excess of 180 days
from the day such registration statement first becomes effective or
such shorter time as may be reasonably necessary to effect such sales
or other dispositions. Grantee shall have the right to demand two such
registrations. Issuer shall bear the costs of both of such
registrations (including, without limitation, Issuer's attorneys'
fees, printing costs and filing fees, except for underwriting
discounts or commissions, brokers' fees and the fees and disbursements
of Grantee's counsel related thereto). Notwithstanding the above, if,
at the time of any request by Grantee for registration of Option
Shares as provided above, Issuer is in the process of registration
with respect to an underwritten public offering by Issuer of shares of
Common Stock, and if in the good faith judgment of the managing
underwriter or managing underwriters (or, if none, the sole
underwriter or underwriters) of such offering the offer and sale of
the Option Shares would interfere with the successful marketing of the
shares of Common Stock offered by Issuer, the number of Option Shares
otherwise to be covered in the registration statement contemplated by
this Section 6 may be reduced; PROVIDED, that, after any such required
reduction, the number of Option Shares included in such offering for
the account of Holder shall constitute at least 25% of the total
number of shares to be sold by Holder and Issuer in the aggregate;
PROVIDED FURTHER, that if such reduction occurs, then Issuer shall
file a registration statement (which shall not count as one of
Holder's two demand registrations) for the balance of the Option
Shares subject to the registration demand as promptly as practical as
to which no reduction pursuant to this Section 6 shall be permitted or
occur and, if such required reduction occurs in connection with the
Holder's first demand registration, the 12 month period referred to in
the first sentence of this Section shall be increased to 24 months for
the Holder's second demand registration. Each such Holder shall
provide all information reasonably requested by Issuer for inclusion
in any registration statement to be filed to register Option Shares.
If requested by any such Holder in connection with such registration,
Issuer shall become a party to any underwriting agreement relating to
the sale of such shares, but only to the extent of obligating itself
in respect of representations, warranties, indemnities and other
agreements customarily included in such underwriting agreements for
Issuer. Upon receiving any request under this Section 6 from any
Holder, Issuer agrees to send a copy thereof to any other person known
to Issuer to be entitled to registration rights under this Section 6,
in each case by promptly mailing the same, postage prepaid, to the
address of record of the persons entitled to receive such copies.
Notwithstanding anything to the contrary in this Agreement, in no
event shall the number of registrations that Issuer is obligated to
effect be increased by reason of the fact that there shall be more
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than one Holder as a result of any assignment or division of this
Agreement.
7. REPURCHASE OF OPTION.
(a) At any time after the occurrence of a Repurchase
Event (defined below): (i) at the request of Holder, delivered prior
to an Exercise Termination Event (or such later period as provided in
Section 10), Issuer (or any successor to Issuer) shall repurchase the
Option from Holder at a price (the "Option Repurchase Price") equal to
the amount by which (x) the market/offer price (as defined below)
exceeds (y) the Option Price, multiplied by the number of shares for
which this Option may then be exercised; and (ii) at the request of
the owner of Option Shares from time to time (the "Owner"), delivered
prior to an Exercise Termination Event (or such later period as
provided in Section 10), Issuer (or any successor to Issuer) shall
repurchase such number of the Option Shares from Owner as Owner shall
designate at a price (the "Option Share Repurchase Price") equal to
the market/offer price multiplied by the number of Option Shares so
designated. The term "market/offer price" shall mean the highest of:
(i) the price per share of Common Stock at which a tender or exchange
offer therefor has been made; (ii) the price per share of Common Stock
to be paid by any third party pursuant to an agreement with Issuer;
(iii) the highest sale price for shares of Common Stock within the
six-month period immediately preceding the date Holder gives notice of
the required repurchase of this Option or Owner gives notice of the
required repurchase of Option Shares, as the case may be; or (iv) in
the event of a sale of all or any substantial part of the assets or
deposits of Issuer or any Issuer Subsidiary, the sum of the net price
paid in such sale for such assets or deposits and the current market
value of the remaining assets of Issuer as determined by a nationally
recognized investment banking firm selected by Holder or Owner, as the
case may be, and reasonably acceptable to Issuer, divided by the
number of shares of Common Stock of Issuer outstanding at the time of
such sale. In determining the market/offer price, the value of
consideration other than cash shall be determined by a nationally
recognized investment banking firm selected by Holder or Owner, as the
case may be, and reasonably acceptable to Issuer.
(b) Holder or Owner, as the case may be, may exercise
its right to require Issuer to repurchase the Option and any Option
Shares pursuant to this Section 7 by surrendering for such purpose to
Issuer, at its principal office, a copy of this Agreement or
certificates for Option Shares, as applicable, accompanied by a
written notice or notices stating that Holder or Owner, as the case
may be, elects to require Issuer to repurchase this Option and/or the
Option Shares in accordance with the provisions of this Section 7. As
promptly as practicable, and in any event within five business days
after the surrender of the Option and/or certificates representing
Option Shares and the receipt of such notice or notices relating
thereto, Issuer shall deliver or cause to be delivered in immediately
available funds to Holder the Option Repurchase Price and/or to Owner
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the Option Share Repurchase Price therefor or the portion thereof that
Issuer is not then prohibited under applicable law and regulation from
so delivering.
(c) To the extent that Issuer is prohibited under
applicable law or regulation, or as a consequence of administrative
policy, from repurchasing the Option and/or the Option Shares in full,
Issuer shall immediately so notify Holder and/or Owner and thereafter
deliver or cause to be delivered in immediately available funds, from
time to time, to Holder and/or Owner, as appropriate, the portion of
the Option Repurchase Price and the Option Share Repurchase Price,
respectively, that it is no longer prohibited from delivering, within
five business days after the date on which Issuer is no longer so
prohibited; PROVIDED, that if Issuer at any time after delivery of a
notice of repurchase pursuant to Section 7(b) is prohibited under
applicable law or regulation, or as a consequence of administrative
policy, from delivering to Holder and/or Owner, as appropriate, the
Option Repurchase Price and the Option Share Repurchase Price,
respectively, in full (and Issuer hereby undertakes to use its
commercially reasonable efforts to obtain all required regulatory and
legal approvals and to file any required notices as promptly as
practicable in order to accomplish such repurchase), Holder or Owner
may revoke its notice of repurchase of the Option or the Option Shares
either in whole or to the extent of the prohibition, whereupon, in the
latter case, Issuer shall promptly: (i) deliver to Holder and/or
Owner, as appropriate, that portion of the Option Repurchase Price or
the Option Share Repurchase Price that Issuer is not prohibited from
delivering; and (ii) deliver, as appropriate, either (A) to Holder, a
new Agreement evidencing the right of Holder to purchase that number
of shares of Common Stock obtained by multiplying the number of shares
of Common Stock for which the surrendered Agreement was exercisable at
the time of delivery of the notice of repurchase by a fraction, the
numerator of which is the Option Repurchase Price less the portion of
the Option Repurchase Price previously delivered to Holder and the
denominator of which is the Option Repurchase Price, and/or (B) to
Owner, a certificate for the Option Shares it is then so prohibited
from repurchasing. If an Exercise Termination Event shall have
occurred prior to the date of the notice by Issuer described in the
first sentence of this Section 7(c), or shall be scheduled to occur at
any time before the expiration of a period ending on the thirtieth day
after such date, Holder shall nonetheless have the right to exercise
the Option until the expiration of such 30-day period.
(d) For purposes of this Section 7, a "Repurchase
Event" shall be considered to have occurred upon the occurrence of any
of the following events or transactions after the date of this
Agreement and prior to the occurrence of an Exercise Termination Event
(or such later date as provided in Section 10):
(i) the acquisition by any person (other than
Grantee or any Grantee Subsidiary) of beneficial ownership of 50%
or more of the then outstanding Common Stock; PROVIDED, that this
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Section 7(d)(i) shall not be triggered (and it shall not
constitute a Repurchase Event) by any acquisition of Issuer
Common Stock by any person or entity specifically identified as
being excluded (under certain circumstances) from becoming an
"Acquiring Person" in Section 1(b) of the Rights Agreement dated
as of July 8, 1996, between Issuer and Grand Premier Trust and
Investment, Inc., N.A., as successor to Premier Trust Services,
Inc., as Rights Agent (the "Rights Agreement") (before any
relettering of the subsections of the Rights Agreement
contemplated by the amendment of the Rights Agreement executed as
of the date hereof) if such acquisition of Issuer Common Stock by
such person or entity would not cause such person or entity to
become an "Acquiring Person" under the terms of the Rights
Agreement; or
(ii) the consummation of any Acquisition
Transaction described in clause (i) of Section 2(c), except that
the percentage referred to for purposes of defining "Acquisition
Transaction" in clause (c) of that definition shall be 50%.
8. SUBSTITUTE OPTION.
(a) If, prior to an Exercise Termination Event, Issuer
shall enter into an agreement to (i) consolidate with or merge into
any person, other than Grantee or any Grantee Subsidiary, or engage in
a plan of exchange with any person, other than Grantee or any Grantee
Subsidiary, and Issuer shall not be the continuing or surviving
corporation of such consolidation or merger or the acquiror in such
plan of exchange, (ii) permit any person, other than Grantee or any
Grantee Subsidiary, to merge into Issuer or be acquired by Issuer in a
plan of exchange and Issuer shall be the continuing or surviving
corporation, but, in connection with such merger or plan of exchange,
the then outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other person or cash or
any other property or the then outstanding shares of Common Stock
shall after such merger or plan of exchange represent less than 50% of
the outstanding shares and share equivalents of the merged or
acquiring company, or (iii) sell or otherwise transfer all or a
substantial part of its or any Issuer Subsidiary's assets or deposits
to any person, other than Grantee or any Grantee Subsidiary, then, and
in each such case, the agreement governing such transaction shall make
proper provision so that the Option shall, upon the consummation of
any such transaction and upon the terms and conditions set forth in
this Agreement, be converted into, or exchanged for, an option (the
"Substitute Option"), at the election of Holder, to acquire capital
stock of either (x) the Acquiring Corporation (as defined below) or
(y) any person that controls the Acquiring Corporation.
(b) The following terms have the following meanings:
(i) "Acquiring Corporation" means: (i) the
continuing or surviving person of a consolidation or merger with
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Issuer (if other than Issuer); (ii) the acquiring person in a
plan of exchange in which Issuer is acquired; (iii) Issuer in a
merger or plan of exchange in which Issuer is the continuing or
surviving or acquiring person; and (iv) the transferee of all or
a substantial part of Issuer's or any Issuer Subsidiary's assets
or deposits.
(ii) "Substitute Common Stock" means the voting
common stock to be issued by the issuer of the Substitute Option
upon exercise of the Substitute Option.
(iii) "Assigned Value" means the market/offer
price, as defined in Section 7.
(iv) "Average Price" means the average closing
price of a share of the Substitute Common Stock for the one year
immediately preceding the consolidation, merger or sale in
question, but in no event higher than the closing price of the
shares of Substitute Common Stock on the day preceding such
consolidation, merger or sale; PROVIDED, that if Issuer is the
issuer of the Substitute Option, the Average Price shall be
computed with respect to a share of common stock issued by the
person merging into Issuer or by any company that controls or is
controlled by such person, as Holder may elect.
(c) The Substitute Option shall have the same terms as
the Option; PROVIDED, that if the terms of the Substitute Option
cannot, for legal reasons, be the same as the Option, such terms shall
be as similar as possible and in no event less advantageous to Holder.
The issuer of the Substitute Option shall also enter into an agreement
with the then Holder or Holders of the Substitute Option in
substantially the same form as this Agreement (after giving effect for
such purpose to the provisions of Section 9), which agreement shall be
applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for
such number of shares of Substitute Common Stock as is equal to the
Assigned Value multiplied by the number of shares of Common Stock for
which the Option was exercisable immediately prior to the event
described in the first sentence of Section 8(a), divided by the
Average Price. The exercise price of the Substitute Option per share
of Substitute Common Stock shall then be equal to the Option Price
multiplied by a fraction, the numerator of which shall be the number
of shares of Common Stock for which the Option was exercisable
immediately prior to the event described in the first sentence of
Section 8(a) and the denominator of which shall be the number of
shares of Substitute Common Stock for which the Substitute Option is
exercisable.
(e) In no event, pursuant to any of the subsections
above, shall the Substitute Option be exercisable for a number of
shares that, together with the number of shares owned by Grantee other
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than Fiduciary Shares, is more than 19.99% of the shares of Substitute
Common Stock outstanding prior to exercise of the Substitute Option.
In the event that the Substitute Option would be exercisable for more
than 19.99% of the shares of Substitute Common Stock outstanding prior
to exercise but for this Section 8(e), the issuer of the Substitute
Option (the "Substitute Option Issuer") shall make a cash payment to
Holder equal to the excess of (i) the value of the Substitute Option
without giving effect to the limitation in this Section 8(e) over (ii)
the value of the Substitute Option after giving effect to the
limitation in this Section 8(e). This difference in value shall be
determined by a nationally recognized investment banking firm selected
by Holder and reasonably acceptable to the Substitute Option Issuer.
(f) Issuer shall not enter into any transaction
described in Section 8(a) unless the Acquiring Corporation and any
person that controls the Acquiring Corporation assume in writing all
the obligations of Issuer under this Agreement.
9. REPURCHASE OF SUBSTITUTE OPTION.
(a) At the request of a holder of the Substitute
Option (a "Substitute Option Holder"), the Substitute Option Issuer
shall repurchase the Substitute Option from the Substitute Option
Holder at a price (the "Substitute Option Repurchase Price") equal to
the amount by which (i) the Highest Closing Price (as defined below)
exceeds (ii) the exercise price of the Substitute Option, multiplied
by the number of shares of Substitute Common Stock for which the
Substitute Option may then be exercised. In addition, at the request
of the owner (the "Substitute Share Owner") of shares of Substitute
Common Stock, the Substitute Option Issuer shall repurchase the
Substitute Common Stock at a price (the "Substitute Share Repurchase
Price") equal to the Highest Closing Price multiplied by the number of
shares of Substitute Common Stock so designated. The term "Highest
Closing Price" shall mean the highest closing price for shares of
Substitute Common Stock within the six-month period immediately
preceding the date the Substitute Option Holder gives notice of the
required repurchase of the Substitute Option or the Substitute Share
Owner gives notice of the required repurchase of the Substitute Common
Stock, as applicable.
(b) The Substitute Option Holder and the Substitute
Share Owner, as the case may be, may exercise their respective rights
to require the Substitute Option Issuer to repurchase the Substitute
Option and the Substitute Common Stock pursuant to this Section 9 by
surrendering for such purpose to the Substitute Option Issuer, at its
principal office, the agreement for such Substitute Option (or, in the
absence of such an agreement, a copy of this Agreement) and
certificates for Substitute Common Stock accompanied by a written
notice or notices stating that the Substitute Option Holder or the
Substitute Share Owner, as the case may be, elects to require the
Substitute Option Issuer to repurchase the Substitute Option and/or
the Substitute Common Stock in accordance with the provisions of this
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Section 9. As promptly as practicable, and in any event within five
business days after the surrender of the Substitute Option and/or
certificates representing Substitute Common Stock and the receipt of
such notice or notices relating thereto, the Substitute Option Issuer
shall deliver or cause to be delivered in immediately available funds
to the Substitute Option Holder the Substitute Option Repurchase Price
and/or to the Substitute Share Owner the Substitute Share Repurchase
Price therefor or the portion thereof that the Substitute Option
Issuer is not then prohibited under applicable law and regulation from
so delivering.
(c) To the extent that the Substitute Option Issuer is
prohibited under applicable law or regulation, or as a consequence of
administrative policy, from repurchasing the Substitute Option and/or
the Substitute Common Stock in part or in full, the Substitute Option
Issuer shall immediately so notify the Substitute Option Holder and/or
the Substitute Share Owner and thereafter deliver or cause to be
delivered, from time to time, to the Substitute Option Holder and/or
the Substitute Share Owner, as appropriate, the portion of the
Substitute Option Repurchase Price and the Substitute Share Repurchase
Price, respectively, which it is no longer prohibited from delivering,
within five business days after the date on which the Substitute
Option Issuer is no longer so prohibited; PROVIDED, that if the
Substitute Option Issuer is at any time after delivery of a notice of
repurchase pursuant to Section 9(b) prohibited under applicable law or
regulation, or as a consequence of administrative policy, from
delivering to the Substitute Option Holder and/or the Substitute Share
Owner, as appropriate, the Substitute Option Repurchase Price and the
Substitute Share Repurchase Price, respectively, in full (and the
Substitute Option Issuer shall use its commercially reasonable efforts
to obtain all required regulatory and legal approvals as promptly as
practicable to accomplish such repurchase), the Substitute Option
Holder or Substitute Share Owner may revoke its notice of repurchase
of the Substitute Option or the Substitute Common Stock either in
whole or to the extent of the prohibition, whereupon, in the latter
case, the Substitute Option Issuer shall promptly: (i) deliver to the
Substitute Option Holder or Substitute Share Owner, as appropriate,
that portion of the Substitute Option Repurchase Price or the
Substitute Share Repurchase Price that the Substitute Option Issuer is
not prohibited from delivering; and (ii) deliver, as appropriate,
either (x) to the Substitute Option Holder, a new Substitute Option
evidencing the right of the Substitute Option Holder to purchase that
number of shares of Substitute Common Stock obtained by multiplying
the number of shares of Substitute Common Stock for which the
surrendered Substitute Option was exercisable at the time of delivery
of the notice of repurchase by a fraction, the numerator of which is
the Substitute Option Repurchase Price less the portion of the
Substitute Option Repurchase Price previously delivered to the
Substitute Option Holder and the denominator of which is the
Substitute Option Repurchase Price, and/or (y) to the Substitute Share
Owner, a certificate for the Substitute Common Stock it is then so
prohibited from repurchasing. If an Exercise Termination Event shall
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have occurred prior to the date of the notice by the Substitute Option
Issuer described in the first sentence of Section 9(c), or shall be
scheduled to occur at any time before the expiration of a period
ending on the thirtieth day after such date, the Substitute Option
Holder shall nevertheless have the right to exercise the Substitute
Option until the expiration of such 30-day period
10. EXTENSION OF EXERCISE PROVISIONS. The 30-day,
six-month, 12-month, 18-month or 24-month time periods for the
exercise of certain rights under Sections 2, 6, 7, 9, 12 and 14 shall
be extended: (i) to the extent necessary to obtain all regulatory
approvals for the exercise of such rights (for so long as the Holder,
Owner, Substitute Option Holder or Substitute Share Owner, as the case
may be, is using commercially reasonable efforts to obtain such
regulatory approvals), and for the expiration of all statutory waiting
periods; (ii) to the extent necessary to avoid liability under Section
16(b) of the Exchange Act by reason of such exercise; and (iii) for a
period of time equal to any notice or cure periods provided to Issuer
in connection with any breach that would permit Grantee to terminate
the Plan of Merger pursuant to Section 2(c)(vii) of this Agreement.
11. REPRESENTATIONS AND WARRANTIES.
(a) Issuer hereby represents and warrants to Grantee
as follows:
(i) Issuer has full corporate power and authority
to execute and deliver this Agreement and to consummate the
transactions contemplated by this Agreement. The execution and
delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement have been duly and
validly authorized by the board of directors of Issuer prior to
the date of this Agreement and no other corporate proceedings on
the part of Issuer are necessary to authorize this Agreement or
to consummate the transactions so contemplated. This Agreement
has been duly and validly executed and delivered by Issuer. This
Agreement is the valid and legally binding obligation of Issuer.
(ii) Issuer has taken all necessary corporate
action to authorize, reserve and permit it to issue, and at all
times from the date of this Agreement through the termination of
this Agreement in accordance with its terms will have reserved
for issuance upon the exercise of the Option, that number of
shares of Common Stock equal to the maximum number of shares of
Common Stock at any time and from time to time issuable under
this Agreement, and all such shares, upon issuance pursuant to
this Agreement, will be duly authorized, validly issued, fully
paid, nonassessable and will be delivered free and clear of all
claims, liens, encumbrances and security interests and not
subject to any preemptive rights.
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(b) Grantee hereby represents and warrants to Issuer
as follows:
(i) Grantee has full corporate power and
authority to execute and deliver this Agreement and, subject to
any approvals or consents referred to herein, to consummate the
transactions contemplated by this Agreement. The execution and
delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of
Grantee. This Agreement has been duly executed and delivered by
Grantee.
(ii) The Option is not being, and any shares of
Common Stock or other securities acquired by Grantee upon
exercise of the Option will not be, acquired with a view to the
public distribution thereof and will not be transferred or
otherwise disposed of except in a transaction registered or
exempt from registration under the Securities Act of 1933, as
amended.
12. ASSIGNMENT. Neither party to this Agreement may assign
any of its rights or obligations under this Agreement or the Option
created under this Agreement to any other person without the express
written consent of the other party, except that if a Subsequent
Triggering Event shall have occurred prior to an Exercise Termination
Event, Grantee, subject to the express provisions of this Agreement,
may assign in whole or in part its rights and obligations under this
Agreement; PROVIDED, that until the date 15 days following the date on
which the last of all applicable Governmental Entities has approved an
application by Grantee to acquire the shares of Common Stock subject
to the Option, Grantee may not assign its rights under the Option
except in: (i) a widely dispersed public distribution; (ii) a private
placement in which no one party acquires the right to purchase in
excess of 2% of the voting shares of Issuer; (iii) an assignment to a
single party (such as a broker or investment banker) for the purpose
of conducting a widely dispersed public distribution on Grantee's
behalf; or (iv) any other manner approved by all applicable
Governmental Entities.
13. COOPERATION. Grantee and Issuer each will use its
commercially reasonable efforts to make all filings with, and to
obtain consents of, all third parties and Governmental Entities
necessary to the consummation of the transactions contemplated by this
Agreement, but Grantee shall not be obligated to apply to state
banking authorities for approval to acquire the shares of Common Stock
issuable under this Agreement until such time, if ever, as it
considers appropriate to do so.
14. MINIMUM REPURCHASE PROCEEDS.
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(a) Grantee may, at any time following a Repurchase
Event that occurs prior to the occurrence of an Exercise Termination
Event (or such later period as provided in Section 10), relinquish the
Option (together with any Option Shares issued to and then owned by
Grantee) to Issuer in exchange for a cash fee equal to the Surrender
Price; PROVIDED, that Grantee may not exercise its rights pursuant to
this Section 14 if Issuer has repurchased the Option (or any portion
thereof) or any Option Shares pursuant to Section 7. The "Surrender
Price" shall be equal to $15,763,040.00 (i) plus, if applicable,
Grantee's purchase price with respect to any Option Shares and (ii)
minus, if applicable, the excess of (A) the net cash amounts, if any,
received by Grantee pursuant to the arms' length sale of Option Shares
(or any other securities into which such Option Shares were converted
or exchanged) to any unaffiliated party, over (B) the Option Price.
(b) Grantee may exercise its right to relinquish the
Option and any Option Shares pursuant to this Section 14 by
surrendering to Issuer, at its principal office, a copy of this
Agreement together with certificates for Option Shares, if any,
accompanied by a written notice stating (i) that Grantee elects to
relinquish the Option and Option Shares, if any, in accordance with
the provisions of this Section 14 and (ii) the Surrender Price. The
Surrender Price shall be payable in immediately available funds on or
before the second business day following receipt of such notice by
Issuer.
(c) To the extent that Issuer is prohibited under
applicable law or regulation, or as a consequence of administrative
policy, from paying the Surrender Price to Grantee in full, Issuer
shall immediately so notify Grantee and thereafter deliver or cause to
be delivered, from time to time, to Grantee, the portion of the
Surrender Price that it is no longer prohibited from paying, within
five business days after the date on which Issuer is no longer so
prohibited; PROVIDED, that if Issuer at any time after delivery of a
notice of surrender pursuant to Section 14(b) is prohibited under
applicable law or regulation, or as a consequence of administrative
policy, from paying to Grantee the Surrender Price in full: (i) Issuer
shall (A) use its commercially reasonable efforts to obtain all
required regulatory and legal approvals and to file any required
notices as promptly as practicable in order to make such payments, (B)
within five days of the submission or receipt of any documents
relating to any such regulatory and legal approvals, provide Grantee
with copies of the same, and (C) keep Grantee advised of both the
status of any such request for regulatory and legal approvals, as well
as any discussions with any relevant regulatory or other third party
reasonably related to the same; and (ii) Grantee may revoke such
notice of surrender by delivery of a notice of revocation to Issuer
and, upon delivery of such notice of revocation, the date of any
Exercise Termination Event shall be extended to a date six months from
the date on which the Exercise Termination Event would have occurred
if not for the provisions of this Section 14(c) (during which period
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Grantee may exercise any of its rights under this Agreement, including
any and all rights pursuant to this Section 14).
15. REMEDIES. The parties acknowledge that damages would
be an inadequate remedy for a breach of this Agreement by either party
and that the obligations of the parties shall be enforceable by either
party through injunctive or other equitable relief. In connection
therewith, the parties waive the posting of any bond or similar
requirement.
16. SEVERABILITY. If any term, provision, covenant or
restriction contained in this Agreement is held by a court or a
federal or state regulatory agency of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions contained in this Agreement
shall remain in full force and effect and shall in no way be affected,
impaired or invalidated. If for any reason such court or regulatory
agency determines that Holder is not permitted to acquire, or Issuer
is not permitted to repurchase pursuant to Section 7, the full number
of shares of Common Stock provided in Section 1(a) (as adjusted
pursuant to Sections 1(b) or 5), it is the express intention of Issuer
to allow Holder to acquire or to require Issuer to repurchase such
lesser number of shares as may be permissible, without any amendment
or modification of this Agreement.
17. NOTICES. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and
shall be considered to have been duly given if delivered or sent and
received by a fax transmission (if receipt by the intended recipient
is confirmed by telephone and if hard copy is delivered by overnight
delivery service the next day), by hand delivery, or by a nationwide
overnight delivery service (all fees prepaid) to the respective
addresses of the parties set forth in the Plan of Merger.
18. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan,
regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws.
19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be considered to be an original, but
all of which shall constitute one and the same agreement.
20. FEES AND EXPENSES. Except as otherwise expressly
provided in this Agreement, each party shall bear and pay all costs
and expenses incurred by it or on its behalf in connection with the
transactions contemplated under this Agreement, including fees and
expenses of its own financial consultants, investment bankers,
accountants and counsel.
21. ENTIRE AGREEMENT. Except as otherwise expressly
provided in this Agreement or in the Plan of Merger, this Agreement
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contains the entire agreement between the parties with respect to the
transactions contemplated under this Agreement and supersedes all
prior arrangements or understandings with respect thereof, written or
oral. The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the parties to this Agreement and their
respective successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to confer upon any party,
other than the parties to this Agreement, and their respective
successors and permitted assignees, any rights, remedies, obligations
or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
[The remainder of this page intentionally blank]
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In Witness Whereof, the parties have caused this Stock Option
Agreement to be executed by their officers, thereunto duly authorized,
as of the date first written above.
OLD KENT FINANCIAL CORPORATION
By: /s/ Xxxx X. Xxxxxxx
------------------------------
Xxxx X. Xxxxxxx
Executive Vice President and
Chief Financial Officer
GRAND PREMIER FINANCIAL, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Xxxxxxx X. Xxxxx
Its: Chairman and Chief
Executive Officer
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