Exhibit 2
NON-COMPETE, STANDSTILL AND
SALE OF PERSONAL GOODWILL AGREEMENT
THIS NON-COMPETE, STANDSTILL AND SALE OF PERSONAL GOODWILL AGREEMENT
("Agreement") is made by and between ILLINI CORPORATION ("Illini"), an Illinois
corporation, and XXXXXX X. XXXX ("Xxxx") as of the 19th day of November, 1999.
WHEREAS, Illini and Farmers State Bank of Camp Point have entered into
an Agreement and Plan of Reorganization (the "Merger Agreement") dated as of
March 2, 1999, whereby Illini will acquire Farmers State Bank of Camp Point and
whereby Xxxx will become a shareholder of Illini; and
WHEREAS, Section 5.1(o) of the Merger Agreement requires that Illini
and Xxxx enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto
agree as follows:
ARTICLE I
REPRESENTATIONS
1.1 Representations of Illini. Illini represents that it has full legal
right, power and authority to enter into and perform this Agreement.
1.2 Representations of Xxxx. Xxxx represents that (i) he has full legal
right, power and authority to enter into and perform this Agreement, (ii) upon
consummation of the transactions contemplated by the Merger Agreement (the
"Closing Date"), Xxxx will be the beneficial owner (within the meaning of Rule
13(d)-3 (as such rules are currently in effect) under the Securities and
Exchange Act of 1934, as amended) of 123,333 shares of Illini Common Stock (the
"Xxxx Illini Stock"), and (iii) Xxxx does not have any agreements, arrangements
or understanding with any other persons regarding the Xxxx Illini Stock.
ARTICLE II
SALE OF PERSONAL GOODWILL
2.1 Personal Goodwill. Xxxx acknowledges that he has been actively
involved with the Farmers State Bank of Camp Point since 1969 and that during
this period he has developed close relationships with customers, employees,
correspondent bankers and vendors of Farmers State Bank of Camp Point. These
relationships are attributable to Xxxx' own personal goodwill and are being sold
separate and apart from Farmers State Bank of Camp Point.
ARTICLE III
STANDSTILL AND VOTING
Exhibit 2-1
3.1 Standstill Provisions. For a period ending on the fifth anniversary
of the Closing Date, Xxxx and his affiliates will not, alone or in concert with
others, directly or indirectly, unless specifically requested in writing in
advance by Illini: (i) purchase or otherwise acquire, or agree to acquire,
ownership (including, but not limited to, beneficial ownership) of any Illini
Common Stock, or direct or indirect rights (including convertible securities) or
options to acquire such ownership other than as specifically contemplated by the
Merger Agreement and other than as may be acquired by virtue of any stock
dividend, stock split or similar distribution of Illini Common Stock; (ii) make
any public announcement with respect to, or submit any proposal for, the
acquisition of beneficial ownership of Illini Common Stock (or direct or
indirect rights, including convertible securities, or options to acquire such
beneficial ownership) or for or with respect to any merger, consolidation, sale
of substantial assets or business combination involving Illini or any of its
affiliates; (iii) initiate or propose any shareholder proposals for submission
to a vote of shareholders with respect to Illini or any of its affiliates or
propose any person for election to the Board of Directors of Illini or any of
its affiliates; or (iv) otherwise seek to control the management or policies of
Illini or any of its affiliates.
3.2 Voting. For a period ending on the fifth anniversary of the Closing
Date, Xxxx will vote (whether by proxy or otherwise) all shares of Illini Common
Stock then beneficially owned by Xxxx in the manner recommended by Illini in the
election of directors of Illini and on all other matters submitted to a vote of
shareholders.
3.3 Binding Nature of Restrictions. Xxxx hereby agrees that the
requirements contained in this Article III shall be binding on any transferee of
the Xxxx Illini Stock and that the Xxxx Illini Stock will not be transferred to
any person unless prior to the transfer, the transferee agrees in writing to be
bound by the terms of this Article III. Xxxx further agrees that a restrictive
legend will be placed on the certificate(s) representing Xxxx Illini Stock which
will set forth the requirements of this Article III.
ARTICLE IV
NON-COMPETE
4.1 Non-Compete Agreement. For a period ending on the third anniversary
date of the Closing Date, Xxxx will not engage in the business of banking or in
any other manner compete with the business of Illini and its affiliates in Xxxxx
County, Illinois or any county in Illinois contiguous to Xxxxx County (the
"Non-Compete Area") or own stock in any bank or bank holding company (other than
Illini) or any savings association or savings association holding company which
has an office in the Non-Compete Area, except that Xxxx may own not more than
five percent (5%) of the stock of a bank or bank holding company or a savings
association or savings association holding company whose stock is listed on a
national securities exchange.
ARTICLE V
CONSIDERATION
5.1 Consideration. In consideration of the foregoing, Illini shall pay
Xxxx the sum of Fifty Thousand and 00/100 ($50,000.00) Dollars on the Closing
Date and shall pay Xxxx three (3) successive annual installments of Fifty
Thousand and 00/100 ($50,000.00) Dollars each on
Exhibit 2-2
each anniversary date of the Closing Date ($200,000.00 in the aggregate).
5.2 Allocation. The parties hereby agree that the Consideration shall
be allocated for tax purposes as follows: One Hundred Ninety Thousand and 00/100
($190,000.00) Dollars to the Sale of Personal Goodwill and Ten Thousand and
00/100 ($10,000.00) Dollars to the Non- Compete Agreement. Each party further
agrees that they will file all tax returns in a manner which is consistent with
such allocation.
ARTICLE VI
GENERAL PROVISIONS
6.1 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the respective successors, heirs, devisees and the like
of the parties hereto.
6.2 Termination. This Agreement will terminate in the event that the
Merger Agreement is terminated.
6.3 Notices. All notices and other communications hereunder shall be
delivered in writing and shall be deemed given (i) when delivered personally;
(ii) on the second business day after being deposited in the United States mail,
registered or certified (return receipt requested) postage prepaid; (iii) on the
first business day after being deposited with Federal Express or any other
recognized national overnight courier service for overnight deliver; or (iv) on
the business day on which it is sent and received by facsimile, in each case to
the parties at the following address or facsimile number (or at such other
address or facsimile number for a party as shall be specified by like notice):
If addressed to Illini:
Illini Corporation
000 Xxxxx Xxxxxxx Xxxx
X.X. Xxx 00000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. XxXxxx, President and Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx X. Xxxxxxxxx
Xxxxxx & Xxxxxx Attorneys, P.C.
One Technology Plaza
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Exhibit 2-3
If to Xxxx:
Xxxxxx X. Xxxx
0000 Xxxx Xxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxx, Xxxxxxxxxx & Xxxxxxx
Xxx Xxxxx Xxx Xxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
6.4 Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the internal laws of the State of Illinois,
without giving affect to the conflict of laws principles thereof.
6.5 Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart will be an original instrument.
IN WITNESS WHEREOF, Illini and Xxxx have executed this Agreement as of
the day and year first above written.
ILLINI CORPORATION
By:/s/ Xxxxxxx X. XxXxxx
-----------------------------------------
Xxxxxxx X. XxXxxx
Its: President and Chief Executive Officer
/s/ Xxxxxx X. Xxxx
--------------------------------------------
Xxxxxx X. Xxxx
Exhibit 2-4
