EXHIBIT 2
THIRD AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
THIS THIRD AMENDMENT entered into this 26th day of July, 1999, by and among
Xxxxxx Financial Corporation, a Minnesota corporation ("BFC"), Xxxxxx
Acquisition Corporation, a Wisconsin corporation ("Merger Sub" and,
collectively, with BFC, the "Buyers"), and Northwest Equity Corp., a Wisconsin
corporation ("Seller").
WITNESSETH:
WHEREAS, BFC, Merger Sub and Seller previously entered into that certain
Agreement and Plan of Merger dated February 16, 1999, that certain First
Amendment to Agreement and Plan of Merger dated April 21, 1999 and that certain
Second Amendment to Agreement and Plan of Merger dated May 11, 1999
(collectively, the "Merger Agreement");
WHEREAS, the Merger Agreement provides that Merger Sub shall merge with and into
the Seller (the "Merger") pursuant to the terms and subject to the conditions
contained in the Merger Agreement; and
WHEREAS, the parties have determined that it is in their best interest to modify
certain provisions of the Merger Agreement as specified herein.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained, the parties agree as follows:
1. Paragraph (b) of Section 1.7 of the Merger Agreement is hereby amended
to read in its entirety as follows:
(b) Subject to Section 1.10, each share of common stock, $1.00
par value, of Seller ("Seller Common Stock") issued and
outstanding immediately prior to the Effective Time, other
than Dissenting Shares, if any (as defined in Section 1.10
hereof), shall cease to be outstanding, and shall be converted
into and become the right to receive cash in the amount of
$24.00 per share (the "Merger Per Share Consideration") in the
manner and form, and on the terms and conditions, set forth in
this Agreement; provided, however, if the closing occurs after
August 31, 1999, the Merger Per Share Consideration shall be
increased or decreased by an amount equal to the sum of the
Earnings (as hereinafter defined) of Seller from September 1,
1999 through the date of the Determination Date Financial
Statements, less the amount of any dividends declared by
Seller after August 31, 1999 and prior to the Closing, divided
by the sum of the number of issued and outstanding shares of
Seller Common Stock immediately prior to the Effective Time
plus the number of shares of Seller Common Stock issuable upon
the exercise of the Options. For purposes of this Agreement,
Earnings shall mean the consolidated net earnings or losses
after tax for the Seller and the Seller Subsidiaries as
determined by and in accordance with generally accepted
accounting principles applied on a consistent basis, except as
set forth on Schedule 1.7(b). Earnings shall be calculated and
determined based upon the Determination Date Financial
Statements. For purposes of determining the earnings of the
Seller from September 1, 1999 through September 30, 1999, the
Earnings for the Seller from July 1, 1999 through September
30, 1999 shall be determined the "1999 Third Quarter
Earnings") and the Earnings for the period from September 1,
1999 through September 30, 1999 shall be deemed to equal 33.3%
of the 1999 Third Quarter Earnings. The Merger Per Share
Consideration shall be rounded to the nearest whole cent. All
such shares of Seller Common Stock shall no longer be
outstanding and shall automatically be canceled and retired
and shall cease to exist, and each certificate previously
representing and such shares shall thereafter represent the
right to receive cash at the rate of the Merger Per Share
Consideration. Each share of Seller Common Stock held in the
treasury of Seller or owned by Seller or any Seller Subsidiary
(as hereinafter defined) for its own account (other than
shares of Seller Common Stock held directly or indirectly in
trust accounts, managed accounts, and the like, or otherwise
held in a fiduciary capacity beneficially owned by third
parties) immediately prior to the Effective Time shall be
canceled and extinguished without any conversion thereof, and
no payment shall be made with respect thereto.
2. Section 1.15 of the Merger Agreement is hereby amended to read in its
entirety as follows:
1.15 Determination Date Financial Statements. For purposes of
this Agreement, the Determination Date shall be the last day
of the calendar month prior to the Closing Date, unless the
Closing Date occurs on or before the 12th day of any month, in
which case the Determination Date will be the last day of the
calendar month prior to the most recent month end prior to the
Closing Date. For example, if the Closing Date occurs on May
1, 1999, the Determination Date would be March 31, 1999. The
Seller shall prepare and deliver consolidated financial
statements of the Seller (including, without limitation, a
balance sheet and income statement of the Seller) as of the
Determination Date that have been reviewed by the Seller's
regularly employed accountants in accordance with the
requirements for a review contained in the Statements on
Standards for Accounting and Review Services of the American
Institute of Certified Public Accountants (the "Determination
Date Financial Statements"). The Determination Date Financial
Statements shall be prepared in accordance with generally
accepted accounting principles and consistent with past
practices. A copy of the Determination Date Financial
Statements shall be provided to BFC as soon as available and
in no event less than four (4) days prior to the Closing Date.
Any disputes regarding the Determination Date Financial
Statements shall be submitted to an independent accounting
firm mutually agreeable to BFC and the Seller for a binding
resolution. The cost of retaining the independent accounting
firm shall be borne 50 percent by Buyers and 50 percent by the
Seller.
3. Paragraph (a) of Section 4.2 of the Merger Agreement is hereby amended
to read in its entirety as follows:
(a) declare, set aside or pay any dividends or other
distributions, directly or indirectly, in respect of its
capital stock (other than dividends from any of the Seller
Subsidiaries to Seller or to another of the Seller
Subsidiaries), except that between the date of this Agreement
and the Closing Date, Seller may declare and pay regular cash
dividends or not more than $0.17 per share on the Seller
Common Stock on each of January 28, 1999, April 22, 1999, July
29, 1999, October 29, 1999 and January 28, 2000 (but only on
such dates occurring before the Closing Date);
4. Paragraph (a) of Section 5.2 of the Merger Agreement is hereby amended
to read in its entirety as follows:
(a) As soon as practicable (as determined by BFC in its
discretion), but in no event later than December 31, 1999, BFC
shall file an application for approval of the Merger with the
Federal Reserve Board and such additional or alternative
regulatory authorities as may require an application.
5. Paragraph (a) of Section 5.3 of the Merger Agreement is hereby amended
to read in its entirety as follows:
(a) As promptly as practical after receipt of the requisite
approval of the Federal Reserve Board and /or federal or state
regulatory agencies required under Section 6.1(b) of this
Agreement, Seller shall prepare and file with the SEC the
Proxy Statement under the Exchange Act, and it then shall use
its reasonable best efforts to have the Proxy Statement
cleared by the SEC as soon as practical after such filing. The
Buyers and Seller shall cooperate with each other in preparing
the Proxy Statement, and Seller shall promptly notify BFC of
the receipt of any comments of the SEC with respect to the
Proxy Statement and of any requests by the SEC for any
amendment or supplement thereto or for additional information
and shall promptly provide to BFC copies of all correspondence
between the Seller or any representative of the Seller and the
SEC. Seller shall give BFC and its counsel the opportunity to
review the Proxy Statement prior to its being filed with the
SEC and shall give BFC and its counsel the opportunity to
review all amendments and supplements to the Proxy Statement
and all responses to request for additional information and
replies to comments prior to their being filed with, or sent
to, the SEC. Each of the Buyers and Seller agrees to use all
reasonable best efforts, after consultation with the other
parties hereto, to respond promptly to any and all such
comments of and requests by the SEC and to cause the Proxy
Statement and all required amendments and supplements thereto
to be mailed to the holders of shares of Seller Common Stock
entitled to vote at the Special Meeting.
6. Paragraph (f) of Section 6.3 of the Merger Agreement is hereby amended
to read in its entirety as follows:
(f) Minimum Financial Requirements. The Determination Date
Financial Statements shall reflect that Seller has (i) stockholders'
equity in an amount equal to or greater than $11,700,000 (exclusive of
any accrual for payment of Option Settlement Amounts and the financial
advisory fee paid or due to ABN AMRO, Inc.); (ii) loans receivable in
an amount equal to or greater than $65,000,000 and (iii) savings
accounts in an amount equal to or greater than $55,000,000.
7. Paragraph (b) of Section 7.1 of the Merger Agreement is hereby amended
to read in its entirety as follows:
(b) by either BFC or Seller if the Merger shall not have been
consummated by March 31, 2000 (provided that (i) if the Merger
shall not have been consummated because the requisite approval
of the Federal Reserve Board and/or federal or state
regulatory agencies required under Section 6.1(b) of this
Agreement shall not have been obtained and are still being
pursued, either BFC or Seller may extend such date to April
30, 2000 by providing written notice thereof to the party on
or prior to March 31, 2000 and (ii) the right to terminate
this Agreement under this Section 7.1(b) shall not be
available to any party whose failure to fulfill any obligation
within that party's reasonable control under this Agreement
has been the cause of or resulted in the failure of the Merger
to occur on or before such date);
8. Section 7.1(e)(iv) of the Merger Agreement is hereby amended to read in
its entirety as follows:
(iv) for any reason Seller fails to call and hold the Special
Meeting (which shall be deemed to include the Seller's Annual
Shareholder Meeting, assuming the requirements of Section 5.3 of this
Agreement are met with respect to said Annual meeting) within 45 after
days after receipt by BFC of approval of the Merger from the Federal
Reserve Board (provided that BFC's right to terminate this Agreement
under this clause (iv) shall not be available if as such xxxx Xxxxxx
would be entitled to terminate this Agreement under Section 7.1(b) or
(g));
9. The parties agree that the form, content and timing of any announcement
or notice regarding this Third Amendment Agreement shall be subject to
and conducted in accordance with the provisions of Section 5.9 of the
Merger Agreement.
10. Except as otherwise amended herein, the terms and conditions of the
Merger Agreement shall remain unchanged and shall remain in full force
and effect.
11. This Third Amendment may be executed in any one or more counterparts,
each of which shall be deemed an original, but all of which will
constitute one and the same instrument.
12. All capitalized terms not specifically defined herein shall have the meaning
specified in the Merger Agreement.
THE REMAINDER OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK
IN WITNESS WHEREOF, the parties have caused this Third Amendment to be
signed by their respective officers thereunto duly authorized, all as
of he date first written above.
XXXXXX FINANCIAL CORPORATION
/s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
Its President and CEO
XXXXXX ACQUISITION CORPORATION
/s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
Its President and CEO
NORTHWEST EQUITY CORP.
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Its President
Schedule 1.7(b)
Northwest has capitalized certain expenses in connection with this
Agreement including legal fees, investment banking fees, and the costs of
certain environmental work. It is understood that these types of expenses
associated with the Agreement will continue to be capitalized and will not be
expensed prior to the date of the Determination Date Financial Statements.
To the extent that this method of handling expenses is noted as an
exception to generally accepted accounting principles, it will be deemed a
permissible exception for purposes of the Agreement. The earnings of Seller
after September 1, 1999 determined in connection with Section 1.7(b) will not be
impacted by these expenses.
