Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
DATED AS OF THE 19TH DAY OF JUNE, 2002
BY AND BETWEEN
SHAY INVESTMENT SERVICES, INC.,
AND
IBL BANCORP, INC.
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TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER
Section 1.01 Structure of the Merger 1
Section 1.02 Effect on Outstanding Shares 2
Section 1.03 Exchange Procedures 3
Section 1.04 Dissenters' Rights 4
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01 Standards 4
Section 2.02 Representations and Warranties of Seller 5
Section 2.03 Representations and Warranties of Purchaser 17
ARTICLE III
CONDUCT PENDING THE MERGER
Section 3.01 Conduct of Seller's Business Prior to the
Effective Time 21
Section 3.02 Conduct of Purchaser's Business Prior to the
Effective Time 24
Section 3.03 Cooperation 24
ARTICLE IV
COVENANTS
Section 4.01 Acquisition Proposals 24
Section 4.02 Certain Policies of Seller 25
Section 4.03 Employees and Directors. 26
Section 4.04 Access and Information. 28
Section 4.05 Certain Filings, Consents and Arrangements. 28
Section 4.06 Antitakeover Provisions. 29
Section 4.07 Additional Agreements. 29
Section 4.08 Publicity. 29
Section 4.09 Stockholders' Meeting. 29
Section 4.10 Proxy Statement. 29
Section 4.11 Notification of Certain Matters. 30
Section 4.12 Indemnification. 30
Section 4.13 Exemption from Liability Under Section 16(b). 31
Section 4.14 Organization of Shay Acquisition Sub I, Inc. 31
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Section 4.15 Officers and Employees of the Trust 32
ARTICLE V
CONDITIONS TO CONSUMMATION
Section 5.01 Conditions to Each Party's Obligations 32
Section 5.02 Conditions to the Obligations of Purchaser
Under this Agreement 33
Section 5.03 Conditions to the Obligations of Seller. 34
ARTICLE VI
TERMINATION
Section 6.01 Termination. 35
Section 6.02 Effect of Termination; Expenses. 36
Section 6.03 Third Party Termination. 36
ARTICLE VII
CLOSING, EFFECTIVE DATE AND EFFECTIVE TIME
Section 7.01 Effective Date and Effective Time. 38
Section 7.02 Deliveries at the Closing. 38
ARTICLE VIII
OTHER MATTERS
Section 8.01 Certain Definitions; Interpretation. 38
Section 8.02 Non-Survival of Representations and Warranties. 38
Section 8.03 Waiver; Amendment. 39
Section 8.04 Counterparts. 39
Section 8.05 Governing Law. 39
Section 8.06 Expenses. 39
Section 8.07 Notices. 39
Section 8.08 Entire Agreement; Etc. 40
Section 8.09 Assignment. 40
Annex A Voting Agreements
Annex B Plan of Merger
Annex C Employment Agreement - G. Xxxxx Xxxxxxxxxx, Xx.
Annex D Employment Agreement - Xxxxx X. Xxxxxxxxxx
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This is an Agreement and Plan of Merger, dated as of the
19th day of June, 2002 (this "Agreement"), by and between Shay
Investment Services, Inc., a Florida corporation, having its
principal offices in Miami, Florida ("Purchaser"), and IBL
Bancorp, Inc., a Louisiana corporation with its principal office
located in Plaquemine, Louisiana ("Seller").
INTRODUCTORY STATEMENT
Each of Purchaser and Seller (i) has determined that this
Agreement and the business combination and related transactions
contemplated hereby are in the best interests of Purchaser and
Seller, respectively, and in the best interests of their
respective stockholders, (ii) has determined that this Agreement
and the transactions contemplated hereby are consistent with, and
in furtherance of, the respective business strategies of
Purchaser and Seller and (iii) has approved this Agreement.
Concurrently with the execution and delivery of this
Agreement, and as a condition and inducement to Purchaser's
willingness to enter into this Agreement, certain of Seller's
affiliates have executed Voting Agreements, in the form attached
hereto as Annex A (the "Voting Agreements"). Pursuant to the
Voting Agreements, Seller and certain of its affiliates are
willing to agree not to transfer or otherwise dispose of any of
the Seller's common stock par value $.01, per share (the "Seller
Common Stock"), or any other shares of capital stock of the
Seller, upon the terms and conditions therein contained.
Purchaser and Seller desire to make certain representations,
warranties and agreements in connection with the business
combination transaction provided for herein and to prescribe
various conditions to such transaction.
In consideration of their mutual promises and obligations
hereunder, the parties hereto adopt and make this Agreement and
prescribe the terms and conditions hereof and the manner and
basis of carrying it into effect, which shall be as follows:
ARTICLE I
THE MERGER
SECTION 1.01 Structure of the Merger. Purchaser will cause
Shay Acquisition Sub I, Inc., to be organized as a Louisiana
wholly-owned special purpose subsidiary of Purchaser ("Merger
Sub"). On the Effective Date (as defined in Section 7.01), Merger
Sub will merge (the "Merger") with and into Seller, with Seller
being the surviving entity (the "Surviving Corporation"),
pursuant to the provisions of, and with the effect provided in,
the Louisiana Business Corporation Law ("LBCL") and pursuant to
the terms and conditions of an agreement and plan of merger to be
entered into between Merger Sub and Seller in the form attached
hereto as Annex B. The separate corporate existence of Merger Sub
shall thereupon cease. The Surviving Corporation shall continue
to be governed by the laws of the State of Louisiana and its
separate corporate existence with all of its rights, privileges,
immunities, powers and franchises shall continue unaffected by
the Merger. At the Effective Time (as defined in Section 7.01),
the articles of incorporation and bylaws of Seller shall be
amended in their entirety to conform to the articles of
incorporation and bylaws of Merger Sub in effect immediately
prior to the Effective
Time and shall become the articles of incorporation and bylaws of
the Surviving Corporation. At the Effective Time, the directors
and officers of Merger Sub shall become the directors and officers
of the Surviving Corporation.
Immediately thereafter, the board of directors of the
Surviving Corporation shall adopt a plan of dissolution (which
shall be a plan of complete liquidation and dissolution of the
Surviving Corporation for purposes of Section 332(a) and 337(a)
of the Internal Revenue Code of 1986, as amended (the "Code"),
and shall cause articles of dissolution authorized in accordance
with Section 12:142 of the LBCL to be filed with the Secretary of
State of the State of Louisiana.
Upon the certificate of dissolution of the Surviving
Corporation becoming effective (the "Dissolution"), Purchaser
will own all the outstanding shares of the common stock, par
value $1.00 of Iberville Building and Loan Association, a
Louisiana-chartered stock savings association (the
"Association"). Immediately upon the Dissolution, the
Association will exchange its charter for a federally-chartered
stock savings bank charter with limited trust powers. Promptly
hereafter, Purchaser will transfer shares representing 100% of
common stock, par value $1.00 per share of First Financial Trust
(the "Trust"), a Texas chartered trust subsidiary of the
Purchaser to the Association, whereupon the Trust will function
as an operating subsidiary of the Association.
Section 1.02 Effect on Outstanding Shares. By virtue of the
Merger, automatically and without any action on the part of the
holder thereof, each share of Seller Common Stock, issued and
outstanding at the Effective Time (other than (i) shares the
holder of which (the "Dissenting Stockholder") pursuant to any
applicable law providing for dissenters' or appraisal rights is
entitled to receive payment in accordance with the provisions of
any such law, such holder to have only the rights provided in any
such law (the "Dissenters' Shares"), (ii) shares held directly or
indirectly by Purchaser (other than (A) shares held in a
fiduciary capacity or (B) shares held in satisfaction of a debt
previously contracted), or (iii) unallocated shares held in the
IBL Bancorp, Inc. 1999 Recognition and Retention Plan (the
"Seller RRP") (the shares referred to in clauses (i), (ii) and
(iii) are hereinafter collectively referred to as the "Excluded
Shares")) shall become and be converted into the right to receive
$24.00 in cash without interest (the "Merger Consideration").
(a) As of the Effective Time, each Excluded Share, other than
Dissenters' Shares, shall be canceled and retired and cease to
exist, and no exchange or payment shall be made with respect
thereto.
(b) As of the Effective Time, all shares of Seller Common Stock
other than Excluded Shares shall no longer be outstanding and
shall be automatically cancelled and retired and shall cease to
exist, and each holder of a certificate formerly representing any
such share of Seller Common Stock shall cease to have any rights
with respect thereto, except the right to receive the Merger
Consideration. After the Effective Time, there shall be no
transfers on the stock transfer books of Seller.
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Section 1.03 Exchange Procedures. (a) At and after the
Effective Time, each certificate (each a "Certificate")
previously representing shares of Seller Common Stock (except as
specifically set forth in Section 1.02) shall represent only the
right to receive the Merger Consideration.
(b) As of the Effective Time, Purchaser shall deposit, or shall
cause to be deposited, with a bank or trust company selected by
Purchaser and reasonably satisfactory to Seller to act as
exchange agent (the "Paying Agent") pursuant to the terms of an
agreement (the "Paying Agent Agreement") in form and substance
reasonably satisfactory to Purchaser and Seller, for the benefit
of the holders of shares of Seller Common Stock, for exchange in
accordance with this Section 1.03, an amount sufficient to pay
the aggregate Merger Consideration.
(c) As soon as practicable after the Effective Time, but no
later than five (5) business days after the Effective Time,
Purchaser shall cause the Paying Agent to mail to each holder of
record of a Certificate or Certificates the following (i) a
letter of transmittal specifying that delivery shall be effected,
only upon the delivery and surrender of the Certificates to the
Paying Agent, which shall be in a form and contain any other
provisions as Purchaser may reasonably determine; and (ii)
instructions in effecting the delivery and surrender of the
Certificates in exchange for the Merger Consideration. On the
Effective Date, each stockholder of Seller that upon proper
delivery and surrender of a Certificate or Certificates to the
Paying Agent, together with a properly completed and duly
executed letter of transmittal, shall be entitled to receive in
exchange therefore a check in an amount equal to the product of
the Merger Consideration and the number of shares of Seller
Common Stock represented by the Certificate or Certificates
delivered and surrendered pursuant to the provisions hereof, and
the Certificate or Certificates so surrendered shall forthwith be
canceled. If all required documentation for a stockholder is
received by the Paying Agent within one hundred twenty (120) days
after the Effective Time, Purchaser shall direct the Paying Agent
to make payment of the Merger Consideration to such stockholder,
with respect to the Certificates so delivered and surrendered,
within three (3) business days of the receipt of such
documentation. No interest will be paid or accrued on the Merger
Consideration. In the event of a transfer of ownership of any
shares of Seller Common Stock not registered in the transfer
records of Seller prior to the Effective Date, a check for the
Merger Consideration may be issued to the transferee if the
Certificate representing such Seller Common Stock is presented to
the Paying Agent, accompanied by documents sufficient, in the
reasonable discretion of Purchaser and the Paying Agent, (i) to
evidence and effect such transfer and (ii) to evidence that all
applicable stock transfer taxes have been paid.
(d) From and after the Effective Time, there shall be no
transfers on the stock transfer records of Seller of any shares
of Seller Common Stock that were outstanding immediately prior to
the Effective Time. If after the Effective Time Certificates are
presented to Purchaser or the Surviving Corporation, they shall
be canceled and exchanged for the Merger Consideration
deliverable in respect thereof pursuant to this Agreement in
accordance with the procedures set forth in this Section 1.03.
(e) Any portion of the aggregate Merger Consideration or the
proceeds of any investments thereof that remains unclaimed by the
stockholders of Seller for one hundred twenty (120) days after
the Effective Time shall be repaid by the Paying Agent to
Purchaser. Any stockholders of Seller who have not theretofore
complied with this Section 1.03 shall thereafter
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look only to Purchaser for payment of the Merger Consideration of
their shares without any interest thereon. Notwithstanding any other
provisions of this Agreement, none of Purchaser, the Surviving
Corporation, the Paying Agent or any other person shall be liable
to any former holder of Seller Common Stock for any amount
delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(f) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed
and, if required by the Paying Agent, the posting by such person
of a bond in such amount as the Paying Agent may direct as
indemnity against any claim that may be made against it with
respect to such Certificate, the Paying Agent will issue in
exchange for such lost, stolen or destroyed Certificate the
Merger Consideration deliverable in respect thereof pursuant to
this Agreement.
Section 1.04 Dissenters' Rights. Notwithstanding anything in
this Agreement to the contrary, any shares of Seller Common Stock
that are issued and outstanding as of the Effective Time and that
are held by a stockholder who has properly exercised his or her
appraisal rights under Section 12:130 et seq. of the LBCL shall
not be converted into the right to receive the Merger
Consideration unless and until the holder shall have failed to
perfect, or shall have effectively withdrawn or lost, his or her
right to dissent from the Merger under the LBCL and to receive
such consideration as may be determined to be due with respect to
such Dissenters' Shares pursuant to and subject to the
requirements of the LBCL. If any such Dissenting Stockholder
shall have failed to perfect or shall have effectively withdrawn
or lost the right to dissent, the Dissenters' Shares held by the
holder shall thereupon be treated as though such Dissenters'
Shares had been converted into the right to receive the Merger
Consideration pursuant to Section 1.02. Seller shall give
Purchaser (i) prompt notice of any notice or demands for
appraisal or payment for shares of Seller Common Stock, attempted
withdrawals of any such demands and any other instruments served
pursuant to the LBCL and received by Seller relating to
stockholders' rights of appraisal and (ii) the opportunity to
participate in and direct all negotiations and proceedings with
respect to any such demands or notices. Seller shall not,
without the prior written consent of Purchaser, make any payment
with respect to, or settle, offer to settle or otherwise
negotiate, any such demands.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 Standards. (a) No representation or warranty of
Seller or Purchaser contained in Section 2.02 or 2.03,
respectively, shall be deemed untrue or incorrect, and no party
hereto shall be deemed to have breached a representation or
warranty, on account of the existence of any fact, circumstance
or event unless, as a direct or indirect consequence of such
fact, circumstance or event, individually or taken together with
all other facts, circumstances or events inconsistent with any
paragraph of Section 2.02 or 2.03, as applicable, there is a
Material Adverse Effect (as defined below). Seller's
representations, warranties and covenants contained in this
Agreement shall not be deemed to be untrue or breached as a
result of effects arising solely from actions taken in compliance
with this Agreement or a written request of Purchaser.
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(b) As used in this Agreement, the term "Material Adverse
Effect" means an effect which (i) is material and adverse to the
business, assets, liabilities, financial condition or results of
operations of Seller and the Association, or Purchaser, as the
context may dictate, taken as a whole, other than any such effect
attributable to or resulting from (A) any change in banking or
similar laws, rules or regulations of general applicability or
interpretations thereof by courts or governmental authorities,
(B) any change in generally accepted accounting principles
("GAAP") or regulatory accounting principles, in each case which
affects thrifts or their holding companies generally, (C) any
change in economic or other conditions affecting thrifts or their
holding companies generally, including changes in the prevailing
level of interest rates, (D) actions or omissions of Seller and
the Association, or Purchaser, taken with the prior informed
written consent of the other party in contemplation of the
transactions contemplated hereby, or (E) the Merger and
compliance with the provisions of this Agreement on the operating
performance of Seller and the Association, or Purchaser,
including expenses incurred in connection with this Agreement and
the transactions contemplated hereby; or (ii) materially and
adversely affects the ability of Seller or Purchaser, as the
context may dictate, to perform its material obligations
hereunder or (iii) materially and adversely affects the timely
consummation of the transactions contemplated hereby.
(c) For purposes of this Agreement, "knowledge" shall mean, with
respect to a party hereto, actual knowledge of the members of the
Board of Directors of that party, its counsel, any officer of
that party or any person acting in a representative capacity.
Section 2.02 Representations and Warranties of Seller. Subject
to Section 2.01, Seller represents and warrants to Purchaser
that:
(a) Organization. (i) Seller is a corporation duly organized
and validly existing under the laws of the State of Louisiana,
and is a savings and loan holding company duly registered with
the Office of Thrift Supervision ("OTS") under the Home Owners'
Loan Act, as amended ("HOLA"). Seller has all requisite power
and authority to own, lease and operate its properties and to
carry on its business as now being conducted. Seller owns
beneficially and of record all of the shares of capital stock of
the Association.
(ii) The Association is a stock savings and loan association
duly organized and validly existing under the laws of the State of
Louisiana. The deposit accounts of the Association are insured by
the Federal Deposit Insurance Corporation (the "FDIC") through
the Savings Association Insurance Fund to the fullest extent
permitted by law, and all premiums and assessments required to be
paid in connection therewith have been paid when due. The
Association has all requisite power and authority to own, lease
and operate its properties and to carry on its business as now
being conducted.
(iii) Seller is duly qualified to do business in each
jurisdiction in which the nature of its business or the ownership
or leasing of its properties makes such qualification necessary.
(iv) Other than Seller's ownership of the Association, neither
Seller nor the Association owns, directly or indirectly, 5% or
more of the ownership interests in any corporation, partnership,
or similar organization, as of the date of this Agreement. All of the
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shares of capital stock of the Association held by Seller are
validly issued, fully paid, nonassessable and not subject to any
preemptive rights and are owned by Seller free and clear of any
claims, liens, encumbrances or restrictions (other than those
imposed by applicable federal and state securities laws) and
there are no agreements or understandings with respect to the
voting or disposition of any such shares.
(b) Capital Structure. (i) The authorized capital stock of
Seller consists of 7,000,000 shares of Seller Common Stock and
2,000,000 shares of preferred stock of Seller, par value $.01 per
share ("Seller Preferred Stock"). As of the date of this
Agreement: (A) 210,870 shares of Seller Common Stock were issued
and outstanding, (B) 11,387 shares of unallocated Seller Common
Stock are owned by the IBL Bancorp, Inc. Employee Stock Ownership
Plan and Trust (the "ESOP"), including 421.73 shares released for
allocation but not yet allocated; (C) no shares of Seller
Preferred Stock were issued and outstanding, or reserved for
issuance, (D) 3,162 shares of ungranted Seller Common Stock are
reserved for future issuance pursuant to the IBL Bancorp, Inc.
1999 Stock Option Plan (the "Seller Option Plan"), and (E) 1,265
shares remain unawarded under the Seller RRP. All outstanding
shares of Seller Common Stock are validly issued, fully paid and
nonassessable and not subject to any preemptive rights and there
are no agreements or understandings with respect to the voting or
disposition of any such shares, other than the Employer ESOP
Voting Policy. Schedule 2.02(b)(i) sets forth a complete and
accurate list of all options to purchase Seller Common Stock that
have been granted and are outstanding pursuant to the Seller
Option Plan (each a "Seller Option") and all currently
outstanding restricted stock grants under the Seller RRP
including the dates of grant, exercise prices, dates of vesting,
dates of termination and shares subject to each grant. Seller
has not, since December 31, 2001 adopted or modified the terms of
any stock option plan or restricted stock or any grants under the
Seller Option Plan.
The authorized capital stock of the Association consists of
1,000,000 shares of common stock, par value $1.00 per share (the
"Association Common Stock"), and 500,000 shares of preferred
stock, par value $1.00 per share (the "Association Preferred
Stock"). As of the date of this Agreement, 1,000 shares of the
Association Common Stock were outstanding, no shares of the
Association Preferred Stock were outstanding and all outstanding
shares of the Association Common Stock were, and as of the
Effective Time will be, owned by Seller. All of the outstanding
shares of the Association Common Stock are validly issued, fully
paid and nonassessable.
(ii) No bonds, debentures, notes or other indebtedness
having the right to vote on any matters on which stockholders of
Seller may vote are issued or outstanding.
(iii) As of the date of this Agreement and, except for
this Agreement, the Seller Option Agreement, the ESOP, the Seller
Option Plan and the Seller RRP, neither Seller nor the
Association has or is bound by any outstanding options, warrants,
calls, rights, convertible securities, commitments or agreements
of any character obligating Seller or the Association to issue,
deliver or sell, or cause to be issued, delivered or sold, any
additional shares of capital stock of Seller or the Association
or obligating Seller or the Association to grant, extend or enter
into any such option, warrant, call, right, convertible security,
commitment or agreement. As of the date hereof, except as
provided in the ESOP, and Seller Options issued under the Seller
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Option Plan, there are no outstanding contractual obligations of
Seller or the Association to repurchase, redeem or otherwise
acquire any shares of capital stock of Seller or the Association.
(c) Authority. Seller has all requisite corporate power and
authority to enter into this Agreement and, subject to approval
of this Agreement by the requisite vote of the stockholders of
Seller and the receipt of all required regulatory or government
approvals, to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement, and
subject to the approval of this Agreement by the stockholders of
Seller, the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary corporate actions on
the part of Seller and the Association. This Agreement has been
duly executed and delivered by Seller and constitutes a valid and
binding obligation of Seller, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability,
to general principles of equity, whether applied in a court of
law or a court of equity, and except that the availability of the
equitable remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any
proceeding may be brought.
(d) Stockholder Approval; Fairness Opinion. As to Seller, the
affirmative vote of at least two-thirds of the shares of Seller
Common Stock present at the meeting to vote on this Agreement is
the only remaining stockholder vote required for approval of this
Agreement and consummation of the Merger and the other
transactions contemplated hereby. Seller has approved this
Agreement and consummation of the Merger and the other
transactions contemplated hereby in its capacity as the sole
stockholder of the Association. Seller has received the opinion
of Trident Securities, Inc. ("Trident Securities") to the effect
that, as of the date hereof, the Merger Consideration to be
received by the stockholders of Seller is fair, from a financial
point of view, to such stockholders.
(e) No Violations. Except as set forth on Schedule 2.02(e),
subject to approval of this Agreement by Seller's stockholders
and the obtaining of the approvals, consents and waivers referred
to in Section 2.02(f), the execution, delivery and performance of
this Agreement by Seller will not, and the consummation of the
transactions contemplated hereby by Seller will not, constitute
(i) a breach or violation of, or a default under, any law,
including any Environmental Law (as defined in Section 2.02(r)),
rule or regulation or any judgment, decree, order, governmental
permit or license, or agreement, indenture or instrument of
Seller or the Association or to which Seller or the Association
is subject, or enable any person to enjoin the Merger or the
other transactions contemplated hereby, (ii) a breach or
violation of, or a default under, the articles of incorporation
or bylaws of Seller or the Association or (iii) a breach or
violation of, or a default under (or an event which with due
notice or lapse of time or both would constitute a default
under), or result in the termination of, accelerate the
performance required by, or result in the creation of any lien,
pledge, security interest, charge or other encumbrance upon any
of the properties or assets of Seller or the Association under,
any of the terms, conditions or provisions of any note, bond,
indenture, deed of trust, loan agreement or other agreement,
instrument or obligation to which Seller or the Association is a
party, or to which any of their respective properties or assets
may be bound or affected (other than under the employment
agreements and employee benefit plans to which the Seller and the
Association are a party), and the consummation of the
transactions contemplated hereby will not require any
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approval, consent or waiver under any such law, rule, regulation,
judgment, decree, order, governmental permit or license or the
approval, consent or waiver of any other party to any such agreement,
indenture or instrument, other than (A) the required approvals,
consents and waivers referred to in Section 5.01(b) and (B) the
approval of the stockholders of Seller referred to in Section
2.02(d).
(f) Consents. Except as referred to herein or in connection,
or in compliance, with the provisions of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 0000 (xxx "XXX Xxx"), the
Securities Act of 1933, as amended (the "Securities Act"), the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
the HOLA, the Bank Merger Act, as amended (the "BMA"), the FDIA,
the LBCL, the rules and regulations of the OTS, the banking law
of the State of Louisiana, and the environmental, corporation,
securities or "blue sky" laws or regulations of the various
states, no filing or registration with, or authorization, consent
or approval of, any other party is necessary for the consummation
by Seller or the Association of the Merger or the other
transactions contemplated by this Agreement. As of the date
hereof, Seller knows of no reason why the approvals, consents and
waivers of governmental authorities referred to in this Section
2.02(f) or in Section 4.05 that are required to be obtained
should not be obtained without the imposition of any material
condition or restriction.
(g) Reports. (i) As of their respective dates, neither
Seller's Annual Report on Form 10-KSB of the Securities and
Exchange Commission (the "SEC") for the fiscal year ended December
31, 2001 nor any other document filed subsequent to December 31,
2001 under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act,
each in the form (including exhibits and any documents
specifically incorporated by reference therein) filed with the SEC
(collectively, "Seller Reports"), contained or will contain any
untrue statement of a material fact or omitted or will omit to
state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the
circumstances under which they were made, not misleading. Each
of the financial statements of Seller included in Seller Reports
complied as to form, as of their respective dates of filing with
the SEC, in all material respects with applicable accounting
requirements and with the published rules and regulations of the
SEC with respect thereto and have been prepared in accordance
with GAAP applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto or, in
the case of the unaudited financial statements, as permitted by
Form 10-QSB of the SEC). Each of the consolidated statements of
financial condition contained or incorporated by reference in
Seller Reports (including in each case any related notes and
schedules) fairly presented the consolidated financial position
of the entity or entities to which it relates as of its date and
each of the consolidated statements of income and of changes in
shareholders' equity and of cash flows, contained or incorporated
by reference in Seller Reports (including in each case any
related notes and schedules), fairly presented the consolidated
results of operations, shareholders' equity and cash flows, as
the case may be, of the entity or entities to which it relates
for the periods set forth therein (subject, in the case of
unaudited interim statements, to normal year-end audit
adjustments that are not material in amount or effect), in each
case in accordance with GAAP consistently applied during the
periods involved, except as may be noted therein. No event has
occurred that would cause a normal year-end adjustment to the
unaudited interim financial statements prepared prior to the date
hereof that would be material in amount or effect and no such
adjustment is reasonably likely to occur. Seller has made
available to Purchaser a true and complete copy of each Seller
Report filed with the SEC since December 31, 2001.
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(ii) Seller and the Association have each timely filed all
material reports, registrations and statements, together with any
amendments required to be made with respect thereto, that they
were required to file since December 31, 1998 with (A) the OTS,
(B) the FDIC, (C) any state banking commission, (D) any other
state or federal regulatory authority having jurisdiction over
insured depository institutions or their holding companies, (E)
the SEC, (F) the National Association of Securities Dealers,
Inc., and (G) any other self-regulatory organization ("SRO"), and
have paid all fees and assessments due and payable in connection
therewith.
(h) Absence of Certain Changes or Events. Schedule 2.02(h) sets
forth the reasonable out of pocket fees and disbursements of
Seller incurred in connection with the negotiation of this
Agreement through May 31, 2002, plus a good faith reasonable
estimate of reasonable attorney's fees of Seller and the fees of
Seller's financial advisor anticipated to be incurred subsequent
to May 31, 2002 in connection with the negotiation of this
Agreement and the completion of the transactions contemplated
hereby. Since March 31, 2002 (i) Seller and the Association have
not incurred any liability, except in the ordinary course of
their business consistent with past practice or in connection
with this Agreement and the transactions contemplated hereby,
(ii) Seller and the Association have conducted their respective
businesses only in the ordinary and usual course of such
businesses and (iii) there has not been any condition, event,
change or occurrence that, individually or in the aggregate, has
had, or is reasonably likely to have, a Material Adverse Effect
on Seller.
(i) Taxes. All federal, state, local and foreign tax returns
required to be filed by or on behalf of Seller or the Association
have been timely filed or requests for extensions have been
timely filed and any such extension shall have been granted and
not have expired, and all such filed returns are complete and
accurate in all material respects. All taxes shown on such
returns, all taxes required to be shown on returns for which
extensions have been granted, and all other taxes required to be
paid by Seller or the Association, have been paid in full or
adequate provision has been made for any such taxes on Seller's
balance sheet (in accordance with GAAP), except those that are
being contested in good faith and are set forth in Schedule
2.02(i). For purposes of this Section 2.02(i), the term "taxes"
shall include all income, sales, franchise, gross receipts, real
and personal property, real property transfer and gains, wage and
employment taxes. As of the date of this Agreement, there is no
audit examination, deficiency, or refund litigation pending with
respect to any taxes of Seller or the Association, and no claim
has been made by any authority in a jurisdiction where Seller or
the Association do not file tax returns that Seller or the
Association is subject to taxation in that jurisdiction. All
taxes, interest, additions, and penalties due with respect to
completed and settled examinations or concluded litigation
relating to Seller or the Association have been paid in full or
adequate provision has been made for any such taxes on Seller's
balance sheet (in accordance with GAAP). Seller and the
Association have not executed an extension or waiver of any
statute of limitations on the assessment or collection of any
material tax due that is currently in effect. Seller and the
Association have withheld and paid all taxes required to have
been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder or
other third party, and Seller and the Association have timely
complied with all applicable information reporting requirements
under Part III, Subchapter A of Chapter 61 of the Code and
similar applicable state and local information reporting
requirements. Neither Seller nor the Association (i) has made an
election under Section 341(f) of the Code, (ii) has made any
payment, is obligated to make any payment, or is a party to any
agreement that could obligate it
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to make any payment that would be nondeductible under Section 280G
of the Code, (iii) has issued or assumed any obligation under
Section 279 of the Code, any high yield discount obligation as
described in Section 163(i) of the Code or any registration-required
obligation within the meaning of Section 163(f)(2) of the Code that is
not in registered form, or (iv) is or has been a United States real
property holding corporation within the meaning of Section 897(c)(2)
of the Code.
(j) Absence of Claims. No litigation, proceeding or controversy
before any court or governmental agency is pending against Seller
or the Association, and there is no pending claim, action or pro
ceeding against Seller or the Association and, to the best of
Seller's knowledge, no such litigation, proceeding, controversy,
claim or action has been threatened.
(k) Absence of Regulatory Actions. Neither Seller nor the
Association is a party to any cease and desist order, written
agreement or memorandum of understanding with, or a party to any
commitment letter or similar undertaking to, or is subject to any
order or directive by, or is a recipient of any extraordinary
supervisory letter from, federal or state governmental
authorities charged with the supervision or regulation of
depository institutions or depository institution holding
companies or engaged in the insurance of bank and/or savings and
loan deposits or trust activities ("Government Regulators"), nor
has it been advised by any Government Regulator that it is
contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order,
directive, written agreement, memorandum of understanding,
extraordinary supervisory letter, commitment letter or similar
undertaking.
(l) Agreements. (i) Except arrangements made in the ordinary
course of business, Seller and the Association are not bound by
any material contract (as defined in Item 601(b)(10) of
Regulation S-K of the Securities Act) to be performed after the
date hereof. Except as set forth in Schedule 2.02(l), neither
Seller nor the Association is a party to an oral or written (A)
agreement with any executive officer or other key employee of
Seller or the Association the benefits of which are contingent,
or the terms of which are materially altered, upon the occurrence
of a transaction involving Seller or the Association of the
nature contemplated by this Agreement, (B) agreement with respect
to any employee or director of Seller or the Association
providing any term of employment or compensation guarantee, (C)
agreement or plan, including any stock option plan, stock
appreciation rights plan, restricted stock plan or stock purchase
plan, any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated
by this Agreement or (D) agreement containing covenants that
limit the ability of Seller or the Association to compete in any
line of business or with any person, or that involve any
restriction on the geographic area in which, or method by which,
Seller (including any successor thereof) may carry on its
business (other than as may be required by law or any regulatory
agency). Neither Seller nor the Association has entered into,
adopted or modified the terms of any of the foregoing since March
31, 2002.
(ii) Neither Seller nor the Association is in default
under or in violation of any provision, and is not aware of any fact
or circumstance that has been or could be alleged to constitute a
default or violation, of any note, bond, indenture, mortgage,
deed of trust, loan
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agreement or other agreement to which it is a party or by which it
is bound or to which any of its respective properties or assets is
subject.
(iii) Schedule 2.02(l)(iii) sets forth all trade names,
service marks, trademarks and copyrights pertaining to computer
software used by Seller or the Association in connection with any
of its businesses, together (if applicable) with all licenses,
pursuant to which Seller or the Association enjoys the right to
use any of such items of intellectual property. Seller and the
Association own or possess valid and binding license and other
rights to use without payment all patents, copyrights, trade
secrets, trade names, servicemarks and trademarks used in its
businesses and neither Seller nor the Association has received
any notice of conflict with respect thereto that asserts the
right of others. Each of Seller and the Association has
performed all the obligations required to be performed by it and
are not in default under any contract, agreement, arrangement or
commitment relating to any of the foregoing.
(m) Labor Matters. Neither Seller nor the Association is or has
ever been a party to, or is or has ever been bound by, any
collective bargaining agreement, contract, or other agreement or
understanding with a labor union or labor organization with
respect to its employees, nor is Seller or the Association the
subject of any proceeding asserting that it has committed an
unfair labor practice or seeking to compel it or the Association
to bargain with any labor organization as to wages and conditions
of employment, nor is the management of Seller aware of any
strike, other labor dispute or organizational effort involving
Seller or the Association pending or threatened. Seller and the
Association are in compliance with applicable laws regarding
employment of employees and retention of independent contractors,
and are in compliance with applicable employment tax laws.
(n) Employee Benefit Plans. Schedule 2.02(n) contains a
complete and accurate list of all pension, retirement, stock
option, stock purchase, stock ownership, savings, stock
appreciation right, profit sharing, deferred compensation,
consulting, bonus, group insurance, severance and other benefit
plans, contracts, agreements, arrangements, including, but not
limited to, "employee benefit plans" as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and all trust agreements related thereto, with
respect to any current or former directors, officers, or other
employees of Seller or the Association (hereinafter referred to
collectively as the "Employee Plans"). All of the Employee Plans
comply in all material respects with all applicable requirements
of ERISA, the Code and other applicable laws; and neither Seller
nor the Association has engaged in a "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code)
which is likely to result in any penalties or taxes under
Sections 502(i) or 502(l) of ERISA or Section 4975 of the Code.
Neither Seller, the Association, nor any entity which is
considered one employer with Seller under Section 4001 of ERISA
or Section 414 of the Code (an "ERISA Affiliate") has contributed
to any "multiemployer plan", as defined in Section 3(37) of
ERISA, on or after September 26, 1980. Neither Seller, the
Association, nor any ERISA Affiliate maintains or has ever
maintained any Employer Plan subject to Title IV of ERISA or any
"single-employer plan" as defined in Section 4001(a)(15) of
ERISA. Each Employee Plan of Seller or the Association which is
an "employee pension benefit plan" (as defined in Section 3(2) of
ERISA) and which is intended to be qualified under Section 401(a)
of the Code (a "Qualified Plan") has received a favorable
determination letter from the Internal Revenue Service (the
"IRS") and Seller and the Association are not aware of any
circumstances likely to result in revocation of any such
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favorable determination letter. Each Qualified Plan which is an
"employee stock ownership plan" (as defined in Section 4975(e)(7)
of the Code) has satisfied all of the applicable requirements of
Sections 409 and 4975(e)(7) of the Code and the regulations
thereunder in all material respects and any assets of any such
Qualified Plan that are not allocated to participants' individual
accounts are pledged as security for, and may be applied to
satisfy, any securities acquisition indebtedness. There is no
pending or threatened litigation, administrative action or
proceeding relating to any Employee Plan. Since December 31,
2001, there has been no announcement or commitment by Seller or
the Association to create an additional Employee Plan, or to
amend an Employee Plan after the date hereof except for
amendments required by applicable law or the express terms of
this Agreement or which do not materially increase the cost of
such Employee Plan; Seller and the Association do not have any
obligations for post-retirement or post-employment benefits under
any Employee Plan that cannot be amended or terminated upon no
more than sixty (60) days' notice without incurring any liability
thereunder, other than pursuant to existing employment agreements
disclosed in Schedule 2.02(n). With respect to Seller or the
Association, except as specifically identified in Schedule
2.02(n), the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not
result in any payment or series of payments by Seller or the
Association to any person which is an "excess parachute payment"
(as defined in Section 280G of the Code), will not increase or
secure (by way of a trust or other vehicle) any benefits payable
under any Employee Plan other than a Qualified Plan and not, by
itself, accelerate the time of payment or vesting of any such
benefit. With respect to each Employee Plan, if applicable,
Seller has supplied to Purchaser a true and correct copy of (A)
the annual report on the applicable form of the Form 5500 series
filed with the IRS for the three most recent plan years, (B) such
Employee Plan, including amendments thereto, (C) each trust
agreement, insurance contract or other funding arrangement
relating to such Employee Plan, including amendments thereto, (D)
the most recent summary plan description and material employee
communication for such Employee Plan, including amendments
thereto, if the Employee Plan is subject to Title I of ERISA, and
(E) the most recent determination letter issued by the IRS if
such Employee Plan is a Qualified Plan. Seller has not, since
December 31, 2001, adopted or amended any of the Employee Plans.
The cost of any post-retirement benefits that were deemed to be
too immaterial to be included in Seller Reports under Statement
of Financial Accounting Standards No. 106 "Employers Accounting
for Postretirement Benefits Other than Pensions" are set forth in
Schedule 2.02(n).
(o) Title to Assets. Seller and the Association have good and
marketable title to their properties and assets other than
property as to which (i) it is lessee, in which case the related
lease is valid and in full force and effect or (ii) it is
licensee or sub-licensee, in which case the related license
and/or sublicense, as applicable, is valid and in full force and
effect. Additionally, with respect to any properties in which
Seller and any the Association is a sub-licensee, the master
license agreement is valid and in full force and effect. Each
lease pursuant to which Seller or the Association is lessor is
valid and in full force and effect and no lessee under any such
lease is in default or in violation of any provisions of any such
lease. All material tangible properties of Seller and the
Association are in a good state of maintenance and repair,
conform in all material respects with all applicable ordinances,
regulations and zoning laws and are considered by Seller to be
adequate for the current business of Seller and the Association.
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(p) Compliance with Laws. Seller and the Association have
all permits, licenses, certificates of authority, orders and
approvals of, and have made all filings, applications and
registrations with, federal, state, local and foreign
governmental or regulatory bodies that are required in order to
permit them to carry on their business as they are presently
conducted; all such permits, licenses, certificates of authority,
orders and approvals are in full force and effect, and, to the
best knowledge of Seller, no suspension or cancellation of any of
them is threatened. Since the date of its incorporation, the
corporate affairs of Seller have not been conducted in violation
of any law, ordinance, regulation, order, writ, rule, decree or
approval of any federal or state regulatory authority having
jurisdiction over insured depositary institutions or their
holding companies, the SEC, the NASD, or any other SRO (each, a
"Governmental Entity"). The business of Seller and the
Association are not being conducted in violation of any law,
ordinance, regulation, order, writ, rule, decree or approval of
any Governmental Entity.
(q) Fees. Except for Trident Securities, neither Seller
nor the Association, nor any of their respective officers, directors,
employees or agents, has employed any broker or finder or
incurred any liability for any financial advisory fees, brokerage
fees, commissions, or finder's fees in connection with this
Agreement or the transactions contemplated hereby.
(r) Environmental Matters. Except as set forth in Schedule
2.02(r), neither Seller nor the Association nor to the knowledge
of each of Seller and the Association, any previous or current
owner or operator of any properties at any time owned (including
any properties owned or subsequently resold), leased, or occupied
by Seller or the Association or used by Seller or the Association
in its respective business ("Seller Properties") used, generated,
treated, stored, or disposed of any Hazardous Materials (as
defined below) on, under, or about Seller Properties except in
compliance with all applicable federal, state, and local laws
pertaining to air and water quality, environmental contamination
Hazardous Materials, waste disposal, air emissions, health and
safety and other environmental matters including but not limited
to Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. 9601-9675 and the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. 6901-6992k,
each as amended ("Environmental Laws"). Seller has not received
any notice of noncompliance with Environmental Laws, applicable
laws, orders, or regulations of any governmental authorities
relating to any environmental condition generated by any such
party or otherwise or notice that any such party is liable or
responsible for the remediation, removal, or cleanup of any of
the Seller Properties, other than matters set forth on Schedule
2.02(r). Neither Seller nor the Association has knowledge of any
contamination by Hazardous Materials on any Seller Properties,
other than matters set forth in Schedule 2.02(r). There are no
legal, administrative, arbitral or other proceedings, claims,
actions, causes of action, private environmental investigations
or remediation activities or governmental investigations of any
nature seeking to impose, or that could reasonably result in the
imposition, on Seller or the Association of any liability or
obligation arising under any Environmental Laws, pending or
threatened to the knowledge of Seller or the Association against
Seller or the Association, which liability or obligation would,
either individually or in the aggregate, have a Material Adverse
Effect on either Seller or the Association. Neither Seller nor
the Association is subject to any agreement, order, judgment,
decree, letter or memorandum by or with any court, governmental
authority, regulatory agency or third party imposing any
liability or obligation with respect to the foregoing that will
have, either individually or in the aggregate, a Material Adverse
Effect on either Seller or the Association.
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For purposes of this Agreement, Hazardous Materials shall
mean: (a) any hazardous or toxic wastes, materials or substances,
and other pollutants or contaminants, which are or hereafter
become regulated by or under any Environmental Laws; (b)
petroleum, petroleum products, petroleum byproducts, crude oil or
any fraction thereof; (c) asbestos; (d) polychlorinated
biphenyls; (e) radioactive materials; (f) any other substance
requiring special handling under any Environmental Laws; (g) any
materials which cause a nuisance upon a waste to any property;
and (h) any other material or substance displaying toxic,
reactive, ignitable or corrosive characteristics, as all such
terms are used in their broadest sense, and are defined or become
defined by or under any Environmental Law.
(s) Loan Portfolio; Allowance; Asset Quality. (i) With respect
to each loan owned by Seller or the Association in whole or in
part (each, a "Loan"), to the best knowledge of Seller:
(A) each Loan was issued or originated and is in compliance with
all applicable loan policies of the Seller and the Association;
(B) the note and the related security documents are each legal,
valid and binding obligations of the maker or obligor thereof,
enforceable against such maker or obligor in accordance with
their terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights and remedies generally
and subject to general principals of equity;
(C) neither Seller nor the Association nor any prior holder of a
Loan has modified the note or any of the related security
documents in any material respect or satisfied (other than the
ordinary amortization of principal or prepayment of principal as
permitted by the applicable loan documents), canceled or
subordinated the note or any of the related security documents,
in each case except as otherwise disclosed by documents in the
applicable Loan file;
(D) Seller or the Association is the sole holder of legal and
beneficial title to each Loan (or Seller's or the Association's
applicable participation interest, as applicable);
(E) the note and the related security documents, copies of which
are included in the Loan files, are true and correct copies of
the documents they purport to be and have not been suspended,
amended, modified, canceled or otherwise changed except as
otherwise disclosed by documents in the applicable Loan file;
(F) there is no pending or threatened condemnation proceeding or
similar proceeding affecting the property which serves as
security for a Loan;
(G) there is no litigation or proceeding pending or threatened,
relating to the property which serves as security for a Loan that
would have a material adverse effect upon the related Loan;
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(H) with respect to a Loan held in the form of a participation,
the participation documentation is legal, valid, binding and
enforceable and the interest in such Loan of Seller or the
Association created by such participation would not be a part of
the insolvency estate of the Loan originator or other third party
upon the insolvency thereof; and
(I) each Loan secured by a mortgage on residential property
(except for construction loans) was originated by a bank, thrift,
other HUD-approved lender, licensed mortgage broker or insurance
company.
(ii) The allowance for loan losses reflected in Seller's audited
statement of condition at December 31, 2001 was, and the
allowance for loan losses shown on the balance sheets in Seller
Reports has been and will be, adequate, as of the dates thereof,
under GAAP applicable to savings and loan associations and
savings and loan holding companies consistently applied.
(iii) Schedule 2.02(s)(iii) sets forth, by category the
amounts of all loans, leases, advances, credit enhancements,
other extensions of credit, commitments and interest-bearing
assets of Seller and the Association that have been classified by
any officer of the Association responsible for loan review or by
any bank examiner as "Other Loans Specially Mentioned," "Special
Mention," "Substandard," "Doubtful," "Loss," "Classified,"
"Criticized," "Credit Risk Assets," "Concerned Loans" (in the
latter two cases, to the extent available) or words of similar
import, and Seller and the Association shall promptly after the
end of any month inform Purchaser of any such classification
arrived at any time after the date hereof.
(t) Deposits. None of the deposits of Seller or the Association
is a "brokered" deposit or subject to any encumbrance, legal
restraint or other legal process except to the extent any such
deposits serve as collateral for any Loan or are subject to legal
restraint in the ordinary course of the banking business due to
the action of the depositor or a third party.
(u) Antitakeover Provisions Inapplicable. Seller and the
Association have taken all actions required to exempt Seller, the
Association, this Agreement and the Merger from any provisions of
an antitakeover nature in their charters and bylaws and the
provisions of any federal or state "antitakeover," "fair price,"
"moratorium," "control share acquisition" or similar laws or
regulations.
(v) Material Interests of Certain Persons. No officer or
director of Seller, or any "associate" (as such term is defined
in Rule 12b-2 under the Exchange Act) of any such officer or
director, has any material interest in any material contract or
property (real or personal), tangible or intangible, used in or
pertaining to the business of Seller or the Association,
excluding loans made by the Association. No such interest has
been created or modified since the date of the last regulatory
examination of the Association.
(w) Insurance. Seller and the Association are presently
insured, and since December 31, 1998, have been insured, for
reasonable amounts with financially sound and reputable insurance
companies, against such risks as companies engaged in a similar
business would, in accordance with good business practice,
customarily be insured. All of the insurance policies and
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bonds maintained by Seller and the Association are in full force
and effect, Seller and the Association are not in default thereunder
and all material claims thereunder have been filed in due and
timely fashion. In the best judgment of Seller's management, such
insurance coverage is adequate.
(x) Investment Securities. (i) Except investments in Federal
Home Loan Bank ("FHLB") stock and pledges to secure municipal
deposits and FHLB borrowings pursuant to normal commercial terms
and conditions and entered into in the ordinary course or
business and restrictions applicable to securities held to
maturity and securities available for sale under GAAP, none of
the investments made by Seller or any the Association as
reflected in the Seller Reports is subject to any restriction
(contractual, statutory or otherwise) that would materially
impair the ability of the entity holding such investment freely
to dispose of such investment at any time.
(ii) Neither Seller nor the Association is a party to or has
agreed to enter into an exchange-traded or over-the-counter
equity, interest rate, foreign exchange or other swap, forward,
future, option, cap, floor or collar or any other contract that
is not included on the consolidated statements of condition and
is a derivative contract (including various combinations thereof)
(each, a "Derivatives Contract") or owns securities that (A) are
referred to generically as "structured notes," "high risk
mortgage derivatives," "capped floating rate notes" or "capped
floating rate mortgage derivatives" or (B) are likely to have
changes in value as a result of interest or exchange rate changes
that significantly exceed normal changes in value attributable to
interest or exchange rate changes.
(y) Registration Obligations. Neither Seller nor the
Association is under any obligation, contingent or otherwise, to
register any of its securities under the Securities Act or any
banking regulations, except that the Seller Common Stock which
may be issued pursuant to the Seller Option Plan has not been
registered under the Securities Act.
(z) Indemnification. Except as provided in Seller's employment
agreements or the articles of incorporation or bylaws of Seller
or the Association, neither Seller nor the Association is a party
to any indemnification agreement with any of its present or
future directors, officers, employees, agents or other persons
who serve or served in any other capacity with any other
enterprise at the request of Seller (a "Covered Person"), and, to
the best knowledge of Seller, there are no claims for which any
Covered Person would be entitled to indemnification under the
articles of incorporation or bylaws of Seller or the Association,
applicable law regulation or any indemnification agreement.
(aa) Books and Records. The books and records of Seller and the
Association have been, and are being, maintained in accordance
with applicable legal and accounting requirements and reflect in
all material respects the substance of events and transactions
that should be included therein.
(bb) Corporate Documents. Seller has delivered to Purchaser true
and complete copies of its and the Association's articles of
incorporation and bylaws. The minute books of Seller and the
Association constitute a complete and correct record of all
actions taken by the
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respective boards of directors (and each committee thereof) and
the stockholders of Seller and the Association.
(cc) Liquidation Account. The Merger will not result in any
payment or distribution payable out of the liquidation account of
the Association.
(dd) Disclosure. To the knowledge of Seller, all material facts
relating to the business, results of operations, financial
condition, properties, assets and liabilities (contingent or
otherwise) of Seller have been disclosed to Purchaser in, or in
connection with, this Agreement. No representation or warranty
contained in this Agreement, and no statement contained in any
certificate, annex, list, letter or other writing furnished to
the Purchaser pursuant to the provisions hereof, contains any
untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements herein or therein
not misleading. No information material to the Merger and which
is necessary to make the representations and warranties herein
contained not misleading, has been withheld from, or has not been
make available, to the Purchaser.
Section 2.03 Representations and Warranties of Purchaser.
Subject to Section 2.01, Purchaser represents and warrants to
Seller that:
(a) Corporate Organization and Qualification. (i) Purchaser is
a Florida corporation duly incorporated, validly existing and in
good standing under the laws of the State of Florida. Purchaser
is in good standing and is qualified to do business as a foreign
corporation in each jurisdiction where the properties owned,
leased or operated, or the business conducted, by it requires
such qualification. Purchaser has the requisite corporate and
other power and authority (including all federal, state, local
and foreign government authorizations) to carry on its businesses
as they are now being conducted and to own its properties and
assets.
(ii) Merger Sub. Merger Sub will, at the Effective Time, be a
corporation duly incorporated and validly existing under the laws
of the State of Louisiana. At the Effective Time, Purchaser will
have received all requisite approvals of government authorities
to own, and Purchaser will own beneficially and of record, all of
the outstanding capital stock of Merger Sub.
(iii) Trust. The Trust is a Texas trust company duly
incorporated, validly existing and in good standing under the laws
of the State of Texas. The Trust is in good standing and is
qualified to do business as a foreign corporation in each
jurisdiction where the properties owned, leased or operated, or
the business conducted, by it requires such qualification. The
Trust has the requisite corporate and other power and authority
(including all federal, state, local and foreign government
authorizations) to carry on its businesses as they are now being
conducted and to own its properties and assets.
(b) Authority. Purchaser has the requisite corporate power and
authority and has taken all corporate action necessary in order
to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly
executed and delivered by Purchaser and is a valid and binding
agreement of Purchaser enforceable against Purchaser in
accordance with its terms.
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(c) No Violations. The execution, delivery and performance of
this Agreement by Purchaser does not, and the consummation of the
transactions contemplated hereby will not, constitute (i) a
breach or violation of, or a default under, any law, rule or
regulation or any judgment, decree, order, governmental permit or
license, or agreement, indenture or instrument of Purchaser or to
which Purchaser (or any of its properties) or Merger Sub is
subject, or enable any person to enjoin the Merger or the other
transactions contemplated hereby, (ii) a breach or violation of,
or a default under, the charter or bylaws of Purchaser or Merger
Sub or (iii) a breach or violation of, or a default under (or an
event which with due notice or lapse of time or both would
constitute a default under), or result in the termination of,
accelerate the performance required by, or result in the creation
of any lien, pledge, security interest, charge or other
encumbrance upon any of the properties or assets of Purchaser or
Merger Sub under, any of the terms, conditions or provisions of
any note, bond, indenture, deed of trust, loan agreement or other
agreement, instrument or obligation to which Purchaser or Merger
Sub is a party, or to which any of their respective properties or
assets may be bound or affected; and the consummation of the
transactions contemplated hereby will not require any approval,
consent or waiver under any such law, rule, regulation, judgment,
decree, order, governmental permit or license or the approval,
consent or waiver of any other party to any such agreement,
indenture or instrument, other than the required approvals,
consents and waivers of governmental authorities referred to in
Section 5.01(b). Purchaser knows of no reason why the approvals,
consents and waivers of governmental authorities referred to in
Section 5.01(b) should not be obtained without the imposition of
any material conditions or restrictions.
(d) Consents. Except as referred to herein or in connection,
or in compliance, with the provisions of the HSR Act, the Securities
Act, the Exchange Act, the HOLA, the BMA, the FDIA, the rules and
regulations of the OTS, the LBCL, the banking laws of the State
of Louisiana, the banking laws of the State of Texas, the Florida
Business Corporation Act, and the environmental, corporation,
securities or blue sky laws or regulations of the various states,
no filing or registration with, or authorization, consent or
approval of, any other party is necessary for the consummation by
Purchaser, Merger Sub or the Trust of the Merger or the other
transactions contemplated by this Agreement. Purchaser, Merger
Sub and the Trust know of no reason why the approvals, consents
and waivers of governmental authorities referred to in this
Section 2.03(d) or in Section 4.05 should not be obtained without
the imposition of any material condition or restriction.
(e) Financial Statements. The audited financial statements
of Purchaser as of December 31, 2001 and 2000 and the years then
ended complied as to form in all material respects with
applicable accounting requirements and have been prepared in
accordance with GAAP applied on a consistent basis during the
periods involved (except as many be indicated in the notes
thereto). Each of the balance sheets contained in the above
reference audited financial statements and in the unaudited
statements as of April 30, 2002 and the four months then ended
(collectively, "Purchaser Financial Statements") (including in
each case any related notes and schedules) fairly presented the
financial position of the entity or entities to which it relates
as of its date and each of the statements of income and of
changes in stockholders' equity and of cash flows, contained in
Purchaser Financial Statements (including in each case any
related notes and schedules), fairly presented the results of
operations, stockholders' equity and cash flows, as the case may
be, of the entity or entities to which it relates for the periods
set forth therein (subject, in the case of unaudited interim
statements, to normal year-end audit adjustments that are not
-18-
material in amount or effect), in each case in accordance with
GAAP consistently applied during the periods involved, except as
may be noted therein. No event has occurred that would cause a
normal year-end adjustment to the unaudited interim financial
statements prepared prior to the date hereof that would be
material in amount or effect and no such adjustment is reasonably
likely to occur.
(f) Absence of Certain Changes or Events. Since March 31, 2002
(i) Purchaser and the Trust have not incurred any liability,
except in the ordinary course of their respective business
consistent with past practice, (ii) Purchaser and the Trust have
conducted their respective businesses only in the ordinary and
usual course of such businesses and (iii) there has not been any
condition, event, change or occurrence that, individually or in
the aggregate, has had, or is reasonably likely to have, a
Material Adverse Effect on Purchaser or the Trust.
(g) Absence of Claims. No litigation, proceeding or controversy
before any court or governmental agency is pending, and there is
no pending claim, action or proceeding against Purchaser or any
of its Subsidiaries (as defined below), or against the directors,
officers or employees of the Trust which is reasonably likely,
individually or in the aggregate, to materially hinder or delay
consummation of the transactions contemplated hereby or to have a
Material Adverse Effect, and, to the best of Purchaser's
knowledge, no such litigation, proceeding, controversy, claim or
action has been threatened.
As used in this Agreement, unless the context requires
otherwise, the term "Subsidiary" when used with respect to any
party means any corporation or other organization, whether
incorporated or unincorporated, which is consolidated with such
party for financial reporting purposes or which is controlled,
directly or indirectly, by such party.
(h) Absence of Regulatory Actions. Neither Purchaser nor any of
its Subsidiaries is a party to any cease and desist order,
written agreement or memorandum of understanding with, or a party
to any commitment letter or similar undertaking to, or is subject
to any order or directive by, or is a recipient of any
extraordinary supervisory letter from any Government Regulator,
nor has it been advised by any Government Regulator that it is
contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order,
directive, written agreement, memorandum of understanding,
extraordinary supervisory letter, commitment letter or similar
undertaking.
(i) Access to Funds. As of the date of this Agreement,
Purchaser has, and on the Closing Date (as defined in Section
7.01) will have, access to all funds necessary to consummate the
Merger and pay the aggregate Merger Consideration, Purchaser will
enter into the Paying Agent Agreement with Paying Agent on the
Closing Date and will meet its obligations to pay the aggregate
Merger Consideration. Purchaser does not need to incur
borrowings for the express purpose of funding all or part of the
aggregate Merger Consideration, and Purchaser does not need to
raise additional capital to consummate the transactions
contemplated by this Agreement.
(j) Fees. Other than the financial advisory services performed
for Purchaser by RP Financial, LC., neither Purchaser nor any of
its Subsidiaries, nor any of their respective officers, directors,
employees or agents, has employed any broker or finder or incurred
any liability for any financial advisory fees, brokerage fees,
commissions, or finder's fee, and no broker or finder
-19-
has acted directly or indirectly for the purchase of any
Subsidiary of Purchaser, in connection with this Agreement or the
transactions contemplated hereby. Purchaser shall not be liable
for any financial services advisory fees incurred by Seller.
Purchaser shall pay RP Financial its fees for services performed
prior to the Effective Date.
(k) Compliance with Laws. Purchaser and its Subsidiaries have
all permits, licenses, certificates of authority, orders and
approvals of, and have made all filings, applications and
registrations with, federal, state, local and foreign
governmental or regulatory bodies that are required in order to
permit them to carry on their business as they are presently
conducted; all such permits, licenses, certificates of authority,
orders and approvals are in full force and effect, and, to the
best knowledge of Purchaser, no suspension or cancellation of any
of them is threatened. The corporate affairs of Purchaser and
its Subsidiaries have not been conducted in violation of any law,
ordinance, regulation, order, writ, rule, decree or approval of
any federal or state regulatory authority or any other
Governmental Entity for the past three (3) years. The businesses
of Purchaser and its Subsidiaries are not being conducted in
violation of any law, ordinance, regulation, order, writ, rule,
decree or approval of any Governmental Entity.
(l) Ownership of Seller Common Stock. Other than as set forth
in Schedule 2.03(l), neither Purchaser nor any of its
Subsidiaries, affiliates or controlling stockholders own any
shares of Seller Common Stock.
(m) First Financial Trust Company. (i) The Trust engages only
in, and will continue to engage only in, activities that federal
savings associations may undertake directly. The Trust currently
serves only as custodian for certificates of deposit for
customers of Purchaser and its Subsidiaries and through the
Effective Time will continue to only serve in such capacity. The
Trust does not, and through the Effective Time will not, perform
any asset management duties or responsibilities, make investment
decisions or administer discretionary accounts. Appropriate
policies addressing custodial responsibilities of safekeeping
assets are maintained. The capital of the Trust fully complies
with the Trust's capital plan and with the Texas Finance Code,
and the Trust's liquidity ratio exceeds the requirements of the
Texas Finance Code. The activities and policies of the Trust
comply in all material respects with the requirements of the
Texas Finance Code. The Trust's Statement of Principles of Trust
Management ("Statement") has been approved by its Board annually,
and the activities of the Trust fully comply with such Statement.
The Trust and its activities are in compliance with all
applicable laws, regulations and industry standards. While the
Trust is not currently subject to the jurisdiction of the OTS,
its current operations are in compliance with the provisions of
Subpart E of 12 C.F.R. Part 550.
(ii) The officers and employees of the Trust have performed
their duties in material compliance with the Trust's policies and
the Statement, the Texas Finance Code and all applicable laws,
regulations and industry standards. Adequate bond coverage is
maintained for the Trust's officers and employees.
(iii) The Trust is presently insured in accordance
with Section 183.112 of the Texas Trust Company Act. Schedule
2.03(m)(iii) sets forth all of the insurance policies and bonds
maintained by the Trust. These insurance policies and bonds are
in full force and effect, the Trust is not in default thereunder,
and all material claims thereunder have been filed in due
-20-
and timely fashion. In the best judgment of the Trust's management,
such insurance coverage is adequate.
(iv) The books and records for the Trust have been, and are
being, maintained in accordance with applicable legal and
accounting requirements and reflect in all material respects the
substance of events and transactions that should be included
therein.
(n) Tax Opinion. Purchaser has received an opinion of
Xxxxxxx Xxxxxxxx & Xxxx, counsel to Purchaser, in form and
substance satisfactory to Purchaser, covering the matters set
forth in Section 5.02(g) hereof based on the current Code and
federal tax laws and regulations.
ARTICLE III
CONDUCT PENDING THE MERGER
SECTION 3.01 Conduct of Seller's Business Prior to the
Effective Time.
(a) General. Except as expressly provided in this Agreement,
during the period from the date of this Agreement to the
Effective Time, Seller shall, and shall cause the Association to,
(i) conduct its business in the usual, regular and ordinary
course consistent with prudent banking practice; (ii) maintain
and preserve intact its business organization, properties, leases
and advantageous business relationships and use its best efforts
to retain the services of its officers and key employees, (iii)
take no action which would adversely affect or delay the ability
of Seller, the Association or Purchaser to perform their
covenants and agreements on a timely basis under this Agreement,
(iv) take no action which would materially adversely affect or
delay the ability of Seller, the Association or Purchaser to
obtain any necessary approvals, consents or waivers of any
governmental authority required for the transactions contemplated
hereby or which would reasonably be expected to result in any
such approvals, consents or waivers containing any material, non-
standard condition or restriction, and (v) take no action that
results in or is reasonably likely to have a Material Adverse
Effect on Seller, except that any actions taken by Seller or the
Association pursuant to this Agreement, at the written request of
Purchaser or with the written consent of Purchaser shall not be
deemed to have a Material Adverse Effect on Seller.
(b) Forbearance by Seller. Without limiting the covenants set
forth in Section 3.01(a) hereof, during the period from the date
of this Agreement to the Effective Time, Seller shall not, and
shall not permit the Association, without the prior written
consent of Purchaser, which consent shall not be unreasonably
withheld, to:
(i) change any provisions of the articles of incorporation
or bylaws of Seller or Association;
(ii) except pursuant to the exercise of stock options
outstanding as of the date hereof to purchase Seller Common Stock,
issue, deliver, sell, pledge, dispose of, grant, encumber, or
authorize the issuance, delivery, sale, pledge, disposition, grant
or encumbrance of, any shares of capital stock of any class of the
Seller or the Association, or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of
such currently reserved for grant under the Seller RRP or any
other ownership interest, of the Seller or the Association,
-21-
or enter into any agreement with respect to any of the foregoing
other than as contemplated herein;
(iii) sell, transfer, mortgage, encumber or otherwise
dispose of any of its material properties, leases or assets to
any individual, corporation or other entity or cancel, release
or assign any indebtedness of any such person, except in the
ordinary course of business or in amounts less than $15,000;
(iv) increase in any manner the compensation or fringe
benefits of any of its employees or directors, except as set
forth in Schedule 3.01(b)(iv), or pay any pension or retirement
allowance not required by any existing plan or agreement to any
such employees, or become a party to, amend or commit itself to
or fund or otherwise establish any trust or account related to
any Employee Plan with or for the benefit of any employee or
director; terminate or increase the costs to Seller or the
Association of any Employee Plan, other than as set forth in this
Agreement; hire any employee (other than to replace an existing
employee at a comparable salary); enter into or amend any
employment, commission or bonus contract; make any discretionary
contributions to any Employee Plan, except that amounts may be
contributed to the Association's Profit Sharing Plan in an amount
up to 15% of total compensation in 2002; or amend any Employee
Plan other than as required by applicable laws or regulations and
other than as may be necessary or advisable, in the opinion of
Seller's counsel, to maintain the tax qualified status of any
such plan, provided that no such amendment shall increase the
benefits payable under such plan or increase Purchaser's
obligations thereunder.
(v) except as contemplated by Section 4.02, change its method
of accounting as in effect at March 31, 2002, except as required by
changes in GAAP as concurred in writing by Seller's independent
auditors;
(vi) make any investment in any debt security, purchase of
stock or securities, property transfers, or purchase of any property
or assets of any other individual, corporation or other entity, in
each case other than in the ordinary course of business and other
than the purchase of FHLB common stock necessary to maintain
Seller's membership status with the FHLB of Dallas;
(vii) enter into any contract or agreement that is not
terminable without liability within 30 days, or make any change
in, or terminate, any of its leases or contracts, other than with
respect to those involving aggregate payments of less than, or
the provision of goods or services with a market value of less
than, $10,000 per annum, and other than as specifically provided
for in this Agreement;
(viii) pay, discharge or satisfy any claim, liability or
obligation, other than payment, discharge or satisfaction in the
ordinary course of business and consistent with past practice of
the Seller or the Association;
(ix) except in the ordinary course of business, or in amounts
less than $15,000, waive or release any material right or
collateral or cancel or compromise any extension of credit or
other debt or claim;
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(x) enter into any new line of business or materially expand
the business currently conducted by the Seller and the Association or
file any application to relocate or terminate the operations of
any banking office of the Association;
(xi) except to the extent required by applicable law or
regulation, adopt or implement any new policy or practice or
procedure with respect to its loan origination activities, the
delegation of loan underwriting functions, the delegation of loan
processing functions or alter the loan approval levels for any
officer or employee of Seller with authority to approve loan
originations or grant such authority to any person who does not
have such authority as of the date hereof;
(xii) acquire or agree to acquire, by merging or
consolidating with, or by purchasing an equity interest in or a
portion of the assets of, or by any other manner, any business or
any corporation, partnership, association or other business
organization or division thereof or otherwise acquire or agree to
acquire any assets, in each case which are material, individually
or in the aggregate, to Seller;
(xiii) incur any additional borrowings other than non-
callable short-term (one year or less) FHLB borrowings consistent
with past practice, or pledge any of its assets to secure any
borrowings other than as required pursuant to the terms of
borrowings of Seller or the Association in effect at the date
hereof or in connection with borrowings permitted hereunder.
Deposits shall not be deemed to be borrowings within the meaning
of this paragraph;
(xiv) make any single capital expenditure in excess of
$10,000 or capital expenditures which are in the aggregate in
excess of $15,000 for the Seller and the Association taken as a
whole;
(xv) fail to maintain all its properties in repair, order
and condition no worse than on the date of this Agreement or
fail to maintain insurance until the Effective Date upon all its
properties and with respect to the conduct of its business in
amount and kind as now in existence and, if not available at
rates presently paid by it, in such amount and kind as would be
appropriate in the exercise of good business judgment;
(xvi) make any investment or commitment to invest in real
estate or in any real estate development project, other than real
estate acquired in satisfaction of defaulted mortgage loans;
(xvii) establish or make any commitment relating to the
establishment of any new branch or other office facilities;
(xviii) capitalize, lend to or otherwise invest in the
Association, or invest in or acquire any equity or voting
interest in any firm, corporation or business enterprise;
(xix) nominate to the board of directors of Seller or the
Association any person who is not a member of the board of
directors of Seller as of the date of this Agreement;
(xx) agree or make any commitment to take any action that
is prohibited by this Section 3.01(b); or
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(xxi) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to its capital stock, except for each calendar quarter in
which the record date for dividends on Seller Common Stock
precedes the Effective Date, Seller may declare regular quarterly
dividends in the amount of $0.0575 per share, provided that the
Seller may pay a pro rated dividend based on the anticipated
Closing Date (as defined in Section 7.01 hereof), it being
understood that the Seller's normal dividend payment dates relate
to the preceding calendar quarter.
Seller's representations, warranties and covenants contained
in this Agreement shall not be deemed to be untrue or breached in
any respect for any purpose as a consequence of Seller's
compliance with this Section 3.01.
Section 3.02 Conduct of Purchaser's Business Prior to the
Effective Time. Except as expressly provided in this Agreement,
during the period from the date of this Agreement to the
Effective Time, Purchaser shall not, and shall cause its other
Subsidiaries not to, (i) take any action that would cause the
representation in Section 2.03(i) to fail to be true and accurate
or that would materially adversely affect the ability of
Purchaser to perform its covenants and agreements on a timely
basis under this Agreement or to consummate the transactions
contemplated hereby or (ii) knowingly take any action, other than
action consistent with acting in the ordinary course of business,
which would materially adversely affect or delay the ability of
Seller, the Association or Purchaser to obtain any necessary
stockholder approvals or approvals, consents or waivers of any
governmental authority required for the transactions contemplated
hereby or which would reasonably be expected to result in any
such approvals, consents or waivers containing any material, non-
standard condition or restriction. Except as expressly provided
in this Agreement, Merger Sub shall not conduct any business
prior to the Effective Time.
Section 3.03 Cooperation. Seller shall cooperate with
Purchaser and Merger Sub and Purchaser and Merger Sub shall
cooperate with Seller in completing the transactions contemplated
hereby and shall not take, cause to be taken or agree or make any
commitment to take any action: (i) that is reasonably likely to
cause any of the representations or warranties of it that are set
forth in Article II hereof not to be true and correct, or (ii)
that is inconsistent with or prohibited by Section 3.01 or
Section 3.02.
ARTICLE IV
COVENANTS
SECTION 4.01 Acquisition Proposals. Seller agrees that
neither it nor the Association nor any of the respective officers
and directors of Seller or the Association shall, and Seller shall
direct and use its best efforts to cause its employees, agents
and representatives (including, without limitation, any investment
banker, attorney or accountant retained by it or the Association) not
to:
(a) initiate, solicit or encourage, directly or indirectly,
any inquiries or the making of any proposal or offer (including,
without limitation, any proposal or offer to stockholders of
Seller) with respect to a merger, consolidation or similar
transaction involving, or any purchase
-24-
of all or 25% or more of the assets or equity securities of,
Seller or the Association, other than the transactions
contemplated by this Agreement (any such proposal or offer
being hereinafter referred to as an "Acquisition Proposal"); or
(b) engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions
with, any person relating to an Acquisition Proposal, or
otherwise facilitate any effort or attempt to make or implement
an Acquisition Proposal; provided, however, that nothing
contained in this Agreement shall prevent Seller or its board of
directors from (i) complying with Rule 14e-2 promulgated under
the Exchange Act with regard to an Acquisition Proposal or (ii)
(A) providing information in response to a request therefore by a
person who has made an unsolicited bona fide written Acquisition
Proposal if the board of directors receives from such person so
requesting such information an executed confidentiality agreement
on terms no more favorable to such person than the
confidentiality agreement between Purchaser and Seller, or (B)
engaging in any negotiations or discussions with any person who
has made an unsolicited bona fide written Acquisition Proposal,
if and only to the extent that, in each such case referred to in
clause (A) and (B) above, (x) the board of directors of Seller,
after consultation with outside legal counsel, in good xxxxx
xxxxx such action to be legally advisable for the proper
discharge of its fiduciary duties under applicable law and (y)
the board of directors of Seller determines in good faith (after
consultation with its financial advisor) that such Acquisition
Proposal, if accepted, is reasonably likely to be consummated,
taking into account all legal, financial and regulatory aspects
of the proposal and the person making the proposal and would, if
consummated, result in a more favorable transaction than the
transaction contemplated by this Agreement.
(c) Seller will notify Purchaser promptly if any such
inquiries, proposals or offers are received by, any such
information is requested from, or any such negotiations or
discussions are sought to be initiated or continued with Seller
after the date hereof, and the identity of the person making such
inquiry, proposal or offer and the substance thereof and will keep
Purchaser informed of any material developments with respect
thereto immediately upon occurrence thereof. Subject to the
foregoing, Seller will immediately cease and cause to be
terminated any existing activities, discussions or negotiations
with any parties conducted heretofore with respect to any of the
foregoing. Seller will take the necessary steps to inform the
appropriate individuals or entities referred to in the first
sentence hereof, with whom Seller or the Association, employees,
agents or representatives have had any contact with respect to
the activities described in clause (a) of such sentence within
the preceding six (6) months, of the obligations undertaken in
this Section 4.01. Seller will promptly request each such person
(other than Purchaser) that has previously executed a
confidentiality agreement in connection with its consideration of
a business combination with Seller or the Association to return
or destroy all confidential information previously furnished to
such person by or on behalf of Seller or the Association. By
virtue of the execution of this Agreement, Seller acknowledges
that Purchaser is a third party beneficiary of any and all
confidentiality agreements entered into by Seller in the past six
(6) months similar to the confidentiality agreement between the
parties hereto, and Seller hereby agrees to enforce such
agreements and to permit Purchaser to assist in such enforcement.
Section 4.02 Certain Policies of Seller. (a) At the written
request of Purchaser, Seller shall, and shall cause the
Association to, modify and change its loan, litigation, real
estate valuation policies and practices (including loan
classifications and levels of reserves), investment
-25-
and asset/liability management policies and practices and operating
and internal control procedures after the date on which all
required regulatory and stockholder approvals are received and
prior to the Effective Time so as to be consistent on a mutually
satisfactory basis with those of Purchaser; provided, that such
policies and procedures are consistent with GAAP and all
applicable laws and regulations; provided, however, that before
Seller or the Association makes any such modifications or
changes, Purchaser shall certify to Seller that all conditions to
Purchaser's obligations to consummate the transactions
contemplated by this Agreement set forth in Sections 5.01 and
5.02 hereof (other than the delivery of documents to be delivered
by Seller on the Closing Date) have been satisfied.
(b) Seller's representations, warranties and covenants contained
in this Agreement shall not be deemed to be untrue or breached in
any respect for any purpose as a consequence of any modifications
or changes undertaken solely on account of this Section 4.02.
(c) Purchaser agrees to hold harmless, indemnify and defend
Seller and the Association and their respective directors,
officers and employees, from any loss, claim, liability or other
damage caused by or resulting from compliance with this
Section 4.02.
Section 4.03 Employees and Directors. (a) Further Employment.
Purchaser shall not have any duty or obligation to continue to
employ any of the employees of the Seller or the Association
("Seller's Employees") beyond the Effective Time, other than as
set forth in Section 4.03(h) hereof; provided, however, that
Purchaser currently intends to retain all of Seller's Employees
and will use reasonable efforts under the circumstances to retain
such persons after the Effective Time in positions for which they
are qualified.
(b) Employee Benefits. As soon as practicable after the
Effective Time, the Purchaser agrees to provide Seller's
Employees who remain employed after the Effective Time
(collectively, the "Transferred Seller Employees") with similar
types and levels of employee benefits maintained by the Purchaser
for its similarly situated employees.
Transferred Seller Employees will be granted credit for
years of service with the Seller or the Association for
eligibility and vesting purposes in connection with Purchaser's
benefit plans, including vacation policy. The Purchaser will
treat, and cause all of its benefit plans to treat, the service
of Transferred Seller Employees with Seller or the Association as
service rendered to the Purchaser for purposes of eligibility to
participate, vesting and for all other benefits, including
applicability of minimum waiting periods for participating, but
in no event for purposes of benefit accrual (including minimum
pension amount) attributable to any period before the Effective
Time. Without limiting the foregoing, the Purchaser shall make
reasonable efforts within the parameters of its existing plans
not to treat any employee of the Seller or the Association as a
"new employee" for purposes of any exclusions under any health or
similar plans of the Purchaser for a pre-existing medical
condition, and will make appropriate arrangements with its
insurance carrier(s) to ensure such result. The Purchaser shall
make responsible efforts within the parameters of its health
insurance plans to honor any deductible or out-of-pocket expenses
incurred under the applicable health insurance plans maintained
by Seller and the Association as of the Effective Time. In
addition, at the Effective Time the retention payments specified
in Schedule 4.03(b) shall be made by Seller to those persons set
forth in Schedule 4.03(b).
-26-
(c) ESOP. Seller shall take all necessary action to cause the
Seller's ESOP to be terminated as of the Effective Time. The
Merger Consideration received by the ESOP trustees in connection
with the Merger with respect to the unallocated shares of Seller
Common Stock shall be first applied by the ESOP trustees to the
full repayment of the ESOP loan. The balance of the Merger
Consideration received by the ESOP trustees with respect to the
unallocated shares of Seller Common Stock shall be allocated as
earnings to the accounts of all participants in the ESOP who have
accounts remaining under the ESOP (whether or not such
participants are then actively employed) and beneficiaries in
proportion to the account balances of such participants and
beneficiaries, to the maximum extent permitted under the Code and
applicable law. The accounts of all participants and
beneficiaries in the ESOP immediately prior to the Effective Time
shall become fully vested as of the Effective Time. As soon as
practicable after the date hereof, Seller shall file or cause to
be filed all necessary documents with the IRS for a determination
letter for termination of the ESOP as of the Effective Time. As
soon as practicable after the later of the Effective Time or the
receipt of a favorable determination letter for termination from
the IRS, the account balances in the ESOP shall be distributed to
participants and beneficiaries or transferred to an eligible
individual retirement account or plan as a participant or
beneficiary may direct. Prior to the Effective Time, no
prepayments shall be made on the ESOP loan and contributions to
the ESOP and payments on the ESOP loan shall be made consistent
with past practices on the regularly scheduled payment dates.
(d) Seller RRP. On the Effective Date, Purchaser shall cause
the RRP Trust to be terminated and Purchaser will pay Merger
Consideration for each awarded and vested share held in the RRP
trust to the Paying Agent. The Merger Consideration will
thereafter be distributed among RRP participants in accordance
with their participation interests.
(e) Seller Option Plan. At the Effective Time, each Seller
Option, which is outstanding and unexercised immediately prior
thereto, whether or not then vested or exercisable, shall be
cancelled and all rights thereunder shall be extinguished. As
consideration for such cancellation, Seller shall enter into an
agreement with each holder of a Seller Option to make a payment
immediately prior to the Effective Time to each such holder of a
Seller Option of an amount determined by multiplying (x) the
number of shares of Seller Common Stock subject to such holder's
Seller Option by (y) an amount equal to the excess (if any) of
(i) the Merger Consideration, over (ii) the exercise price per
share of such Seller Option; provided, however, that no such
payment shall be made to such holder unless and until such holder
has agreed to such payment and has executed and delivered to
Seller an instrument in such form prescribed by Purchaser and
reasonably satisfactory to Seller accepting such payment in full
settlement of his or her rights relative to Seller Option.
(f) Continuation of Other Plans. The Purchaser shall have sole
discretion with respect to determining whether or when to
terminate, merge or continue any other employee benefit plans and
programs of the Seller or the Association not covered by this
Section 4.03; provided, however, that the Purchaser shall
continue to maintain such plans (other than stock based or
incentive plans or the Seller's ESOP) until the Seller Employees
are permitted to participate in the Purchaser's plan.
-27-
(g) Profit Sharing Plan. Upon the request of Purchaser at
least 60 days prior to the Closing Date, Seller shall take all such
action as is necessary to terminate the Seller's Profit Sharing
Plan on a date on or before the Effective Date.
(h) Settlement of Employment Agreements. Concurrently with
the execution of this Agreement, Messrs. G. Xxxxx Xxxxxxxxxx and
Xxxxx X. Xxxxxxxxxx will enter into employment agreements,
effective as of the Effective Time, with the Purchaser and the
Association ("New Employment Agreements") in the form attached
hereto as Annexes C and D, respectively, in full settlement of
the payments and any other rights due under the employment
agreements entered into by Messrs. Xxxxxxxxxx and Xxxxxxxxxx with
Seller and the Association, respectively ("Seller's Employment
Agreements"), and effective immediately prior to the Effective
Time. Upon the effectiveness of the New Employment Agreements,
Purchaser, Seller or the Association shall have no further
liability to Messrs. Xxxxxxxxxx and Xxxxxxxxxx under the Seller's
Employment Agreements.
(i) Directors of the Association. At the Effective Time,
the board of directors of the Association shall consist of those
persons who served as members of the board of directors of the
Association immediately prior to the Effective Time and 2 other
individuals who will be designated by Purchaser. Each former
director of the Seller or the Association shall be entitled to
the director and officer indemnification insurance provision
referenced in Section 4.12(c) of this Agreement pursuant to the
terms contained therein.
Section 4.04 Access and Information. Upon reasonable
notice, Seller shall (and shall cause the Association to) afford
to Purchaser and its representatives (including, without
limitation, directors, officers and employees of Purchaser and
its affiliates, and counsel, accountants and other professionals
retained) such access during normal business hours and in a
manner calculated to minimize any disruption of Seller's
operations 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 Purchaser may reasonably
request; provided, however, that no investigation pursuant to
this Section 4.04 shall affect or be deemed to modify any
representation or warranty made herein. Purchaser will not, and
will cause its representatives not to, use any information
obtained pursuant to this Section 4.04 for any purpose unrelated
to the consummation of the transactions contemplated by this
Agreement. Subject to the requirements of law, Purchaser will
keep confidential, and will cause its representatives to keep
confidential, all information and documents obtained pursuant to
this Section 4.04 in accordance with the confidentiality
agreement between the Seller and the Purchaser and previously
executed by the Purchaser. 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 (or an affiliate
of any party hereto) to be returned to the party which furnished
the same.
Section 4.05 Certain Filings, Consents and Arrangements.
Purchaser and Seller shall, and Purchaser shall cause Merger Sub
and Seller shall cause the Association to, (i) as soon as
practicable (and in any event within forty-five (45) days after
the date hereof) make (or cause to be made) any filings and
applications and provide any notices, required to be filed or
provided in order to obtain all approvals, consents and waivers
of governmental authorities and third parties
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necessary or appropriate for the consummation of the transactions
contemplated hereby, (ii) cooperate with one another (A) in promptly
determining what filings and notices are required to be made or
approvals, consents or waivers are required to be obtained under
any relevant federal, state or foreign law or regulation or under
any relevant agreement or other document and (B) in promptly
making any such filings and notices, furnishing information
required in connection therewith and seeking timely to obtain any
such approvals, consents or waivers and (iii) deliver to the
other copies of the publicly available portions of all such
filings, notices and applications promptly after they are filed.
The application for trust powers and the application for the
Trust to become an operating subsidiary of the Association shall
be limited to the activities currently engaged in by the Trust.
Section 4.06 Antitakeover Provisions. Seller shall (and shall
cause the Association to) take all steps (i) to exempt or
continue to exempt Seller, this Agreement, and the Merger from
any provisions of an antitakeover nature in Seller's or the
Association's articles of incorporation and bylaws and the
provisions of any federal or state antitakeover laws, and (ii)
upon the request of Purchaser, to assist in any challenge by
Purchaser to the applicability to this Agreement and the Merger
of any federal or state antitakeover law.
Section 4.07 Additional Agreements. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to
use all reasonable efforts to take promptly, or cause to be taken
promptly, all actions and to do promptly, or cause to be done
promptly, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement as promptly as
practicable, including using efforts to obtain all necessary
actions or non-actions, extensions, waivers, consents and
approvals from all applicable governmental entities, effecting
all necessary registrations, applications and filings (including,
without limitation, filings under any applicable state securities
laws) and obtaining any required contractual consents and
regulatory approvals.
Section 4.08 Publicity. Seller and Purchaser shall consult
with each other in issuing any press releases or otherwise making
public statements with respect to the acquisition contemplated
hereby and in making any filings with any governmental entity or
with any national securities exchange with respect thereto.
Section 4.09 Stockholders' Meeting. Seller shall use its
best efforts, in accordance with applicable law and its articles of
incorporation and bylaws, to convene a meeting of the holders of
Seller Common Stock (the "Stockholder Meeting") as promptly as
practicable for the purpose of considering and voting on approval
and adoption of the transactions provided for in this Agreement,
no later than October 15, 2002. The board of directors of Seller
shall (i) recommend that the holders of Seller Common Stock vote
in favor of and approve the Merger and adopt this Agreement, and
(ii) use its best efforts to solicit such approvals, in each case
subject to its fiduciary duties if an Acquisition Proposal is
received and Section 4.01(b) is applicable. Seller shall consult
Purchaser with respect to the timing of the Stockholder Meeting.
Section 4.10 Proxy Statement. As soon as practicable after
the date hereof, Seller shall prepare a Proxy Statement, which shall
be reasonably acceptable to counsel to Purchaser, for the purpose
of taking stockholder action on the Merger and this Agreement and
file the Proxy Statement with the SEC and respond to comments of
the staff of the SEC and promptly mail the
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Proxy Statement to the holders of record (as of the applicable
record date) of shares of voting stock of Seller. Seller represents
and covenants that the Proxy Statement and any amendment or supplement
thereto, with respect to the information pertaining to it or the
Association at the date of mailing to its stockholders and the date
of the Stockholder Meeting to be held in connection with the Merger,
will be in compliance with the Exchange Act and all relevant
rules and regulations of the SEC and will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated or necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
Section 4.11 Notification of Certain Matters. Each party
shall give prompt notice to the others of: (i) any event or notice
of, or other communication relating to, a default or event that,
with notice or lapse of time or both, would become a default,
received by it or the Association subsequent to the date of this
Agreement and prior to the Effective Time, under any contract
material to the financial condition, properties, businesses or
results of operations of each party and its Subsidiaries taken as
a whole to which each party or any Subsidiary is a party or is
subject; and (ii) any event, condition, change or occurrence which
individually or in the aggregate has, or which, so far as
reasonably can be foreseen at the time of its occurrence, is
reasonably likely to result in a Material Adverse Event. Each of
Seller and Purchaser shall give prompt notice to the other party
of any notice or other communication from any third party
alleging that the consent of such third party is or may be
required in connection with any of the transactions contemplated
by this Agreement.
Section 4.12 Indemnification. (a) From and after the Effective
Time, Purchaser agrees to indemnify and hold harmless each person
who is now or has been at any time prior to the date hereof or
who becomes prior to the Effective Date, a director, officer,
employee or agent of Seller or the Association or a director,
officer, employee or agent of another entity at Seller's request
or direction (each, an "Indemnified Party"), against any costs or
expenses (including reasonable attorneys' fees), judgments,
fines, losses, claims, damages or liabilities (collectively,
"Costs") incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of matters existing
or occurring at or prior to the Effective Time (including the
transactions contemplated by this Agreement), whether asserted or
claimed prior to, at or after the Effective Time, to the fullest
extent permitted under Seller's current Articles of
Incorporation, and to advance any such Costs to each Indemnified
Party as they are from time to time incurred (subject to receipt
of an undertaking to repay such advances if it is ultimately
judicially determined that such Indemnified Party is not entitled
to indemnification).
(b) Any Indemnified Party wishing to claim indemnification
under Section 4.12(a), upon learning of any such claim, action,
suit, proceeding or investigation, shall promptly notify Purchaser
thereof, but the failure to so notify shall not relieve Purchaser
of any liability it may have hereunder to such Indemnified Party
if such failure does not materially and substantially prejudice
the indemnifying party. In the event of any such claim, action,
suit, proceeding or investigation, (i) Purchaser shall have the
right to assume the defense thereof with counsel reasonably
acceptable to the Indemnified Party and Purchaser shall not be
liable to such Indemnified Party for any legal expenses of other
counsel subsequently incurred by such Indemnified Party in
connection with the defense thereof, except that if Purchaser
does not elect to assume such defense within a reasonable time or
counsel for the Indemnified Party at any time
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advises that there are issues which raise conflicts of interest
between Purchaser and the Indemnified Party (and counsel for Purchaser
in its reasonable judgment does not disagree), the Indemnified Party
may retain counsel satisfactory to such Indemnified Party, and
Purchaser shall remain responsible for the reasonable fees and
expenses of such counsel as set forth above, to be paid promptly
as statements therefore are received; (ii) the Indemnified Party
will reasonably cooperate in the defense of any such matter; and
(iii) Purchaser shall not be liable for any settlement effected
by an Indemnified Party without its prior written consent, which
consent may be withheld unless such settlement is reasonable in
light of such claims, actions, suits, proceedings or
investigations against, and defenses available to, such
Indemnified Party.
(c) For a period of six years after the Effective Time,
Purchaser shall cause to be maintained in effect for the former
directors and officers of Seller coverage under a policy of
directors' and officers' liability insurance no less advantageous
to the beneficiaries thereof than the current policies of
directors' and officers' liability insurance maintained by
Seller; provided, however, that in no event shall Purchaser be
obligated to expend, in order to maintain or provide insurance
coverage pursuant to this Subsection 4.12(c), more than 250% of
the current cost ("Maximum Amount"); provided, further, that if
the amount of the premium necessary to maintain or procure such
insurance coverage exceeds the Maximum Amount, Purchaser shall
obtain the most advantageous coverage of directors' and officers'
insurance obtainable for an aggregate premium equal to the
Maximum Amount; and provided, further, that officers and
directors of Seller may be required to make application and
provide customary representations and warranties to Purchaser's
insurance carrier for the purpose of obtaining such insurance.
Section 4.13 Exemption from Liability Under Section 16(b).
Schedule 4.13 sets forth the names of Seller Insiders (as defined
below) and their corresponding shares of Seller Common Stock and
Seller Options that such individuals are entitled to receive cash
in exchange for their respective shares of Seller Common Stock
and Seller Options. The Board of Directors of Purchaser, or a
committee of "Non-Employee Directors" thereof (as such term is
defined for purposes of Rule 16b-3(d) under the 1934 Act), shall
adopt a resolution providing that the receipt by Seller Insiders
of cash in exchange for their respective shares of Seller Common
Stock and Seller Options as set forth in Schedule 4.13, in each
case pursuant to the transactions contemplated hereby and to the
extent such securities are listed in the Section 16 Information,
is intended to be exempt from liability pursuant to Section 16(b)
under the 1934 Act. "Section 16 Information" shall mean
information accurate in all material respects regarding Seller
Insiders, the number of shares of Seller Common Stock held by
each such Seller Insider and expected to be exchanged for cash in
the Merger, and the number and description of the Seller Options
held by each such Seller Insider. "Seller Insiders" shall mean
those officers and directors of Seller who are subject to the
reporting requirements of Section 16(a) of the 1934 Act and who
are listed in the Section 16 Information.
Section 4.14 Organization of Shay Acquisition Sub I, Inc.
Purchaser shall cause Merger Sub to be organized under the laws
of Louisiana. The Board of Merger Sub shall approve this
Agreement and the Merger, whereupon Merger Sub shall become a
party to, and be bound by, this Agreement, and Purchaser shall
adopt and ratify this Agreement in its capacity as the sole
shareholder of Merger Sub.
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Section 4.15 Officers and Employees of the Trust. If the
employment of one or more of the officers and employees of the
Trust is terminated for any reason and if such termination(s) is
reasonably likely to result, or does result, in either the
application for trust powers or the application for the Trust to
become an operating subsidiary of the Association not being
approved in a timely manner, then the Purchaser will either (a)
promptly replace the terminated officer(s) or employee(s) with
persons having skills and experience reasonably acceptable to the
Government Regulators or (b) waive the approval of such
applications as a condition to its obligation to complete the
Merger.
ARTICLE V
CONDITIONS TO CONSUMMATION
SECTION 5.01 Conditions to Each Party's Obligations. The
respective obligations of each party to effect the Merger shall
be subject to the fulfillment of the following conditions, none
of which may be waived:
(a) Stockholder Approval. This Agreement and the transactions
contemplated hereby shall have been approved by the requisite
vote of Seller's stockholders in accordance with applicable law
and regulations.
(b) Regulatory Approvals. All necessary regulatory or
governmental approvals, consents or waivers required to
consummate the transactions contemplated hereby shall have been
obtained and shall remain in full force and effect and all
statutory waiting periods in respect thereof shall have expired;
and all other permits, consents, waivers, clearances, approvals,
authorizations of and filings with regulatory or governmental
bodies and any third parties which are necessary to permit the
consummation of the Merger and the other transactions
contemplated hereby shall have been obtained or made. None of
the approvals or waivers referred to herein shall contain any non-
standard term or condition which would have a Material Adverse
Effect on (i) Seller and the Association taken as a whole or (ii)
Purchaser and its Subsidiaries taken as a whole; provided,
however, that none of the "frequently seen nonstandard
conditions" set forth in Section 620 of the OTS Applications
Handbook shall be deemed to have a Material Adverse Effect, and
provided further that any limits imposed on the amount that the
Association may invest in the Trust or on the activities of the
Trust for supervisory, legal, or safety and soundness reasons
shall not be deemed to have a Material Adverse Effect.
(c) No Orders, Injunctions or Restraints. No party hereto
shall be subject to any order, decree or injunction of a court or
agency of competent jurisdiction which enjoins or prohibits the
consummation of the Merger or any other transaction contemplated
by this Agreement.
(d) Illegality. No statute, rule, regulation, order
injunction or decree shall have been enacted, entered, promulgated,
interpreted, applied or enforced by any governmental authority
which prohibits, restricts or makes illegal consummation of the
Merger, the Seller Option Agreement, the Voting Agreements or any
other transaction contemplated by this Agreement.
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Section 5.02 Conditions to the Obligations of Purchaser
Under this Agreement. The obligations of Purchaser to effect the
Merger shall be further subject to the satisfaction of the
following conditions, any one or more of which may be waived in
writing by Purchaser:
(a) Representations and Warranties. Each of the obligations of
Seller required to be performed by it at or prior to the Closing
Date pursuant to the terms of this Agreement shall have been duly
performed and complied with in all material respects and the
representations and warranties of Seller contained in this
Agreement shall be true and correct as of the date of this
Agreement and as of the Effective Time as though made at and as
of the Effective Time (except as to any representation or
warranty which specifically relates to an earlier date), in each
case subject to the standards of Section 2.01 of this Agreement.
Purchaser shall have received a certificate to the foregoing
effect signed by the president and the chief financial officer of
Seller.
(b) Agreements and Covenants. All action required to be taken
by, or on the part of, Seller and the Association to authorize
the execution, delivery and performance of this Agreement and the
consummation by Seller and the Association of the transactions
contemplated hereby shall have been duly and validly taken by the
board of directors and stockholders of Seller, and Purchaser
shall have received certified copies of the resolutions
evidencing such authorization.
(c) Material Adverse Effect. There shall not have occurred,
after the date of this Agreement, any change or event concerning
the Seller or the Association which has had or which is
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect. For purposes of this Section 5.02(c)
only, a Material Adverse Effect shall include a decline in the
Seller's net worth as of the most recent calendar month end
preceding the Closing Date below its net worth as of March 31,
2002, less One Hundred Thousand Dollars ($100,000), provided that
the Seller's net worth as of the most recent calendar month end
preceding the Closing Date shall be calculated in a manner which
excludes the adverse effects of (i) each of the items excluded
from the definition of Material Adverse Effect set forth in
Section 2.01(b) hereof, and (ii) any actions taken by Seller or
the Association pursuant to this Agreement, at the written
request of Purchaser or with the written consent of Purchaser.
(d) Update of Disclosure Schedules. From time to time prior
to the Effective Time, the Seller will promptly supplement or
amend its disclosure schedules to reflect any matter which, if
existing, occurring or known at the date of this Agreement, would
have been required to be set forth or described in its disclosure
schedules or which is necessary to correct any information in its
disclosure schedules which has been rendered inaccurate thereby.
No supplement or amendment to its disclosure schedules shall have
any effect for the purpose of determining satisfaction of the
conditions set forth in Section 5.02(a) hereof, as the case may
be, or the compliance by the Seller with the covenants set forth
in Article IV hereof.
(e) Good Standing Certificates. Purchaser shall have received
certificates (such certificates to be dated as of a day as close
as practicable to the Closing Date) from appropriate authorities
as to the good standing or corporate existence, as applicable, of
Seller and the Association.
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(f) Corporate Approvals. Purchaser shall have obtained the
consent or approval of each person (other than the governmental
approvals or consents referred to in Section 5.01(b)) whose
consent or approval shall be required in connection with the
transactions contemplated hereby under any loan or credit
agreement, note, mortgage, indenture, lease, license or other
agreement or instrument to which Purchaser or any of its
Subsidiaries is a party or is otherwise bound, except those for
which failure to obtain such consents and approvals would not,
individually or in the aggregate, have a Material Adverse Effect
on Purchaser (after giving effect to the transactions
contemplated hereby) or upon the consummation of the transactions
contemplated hereby.
(g) Tax Opinion. Purchaser shall have received an update to
the previously delivered opinion of Xxxxxxx Xxxxxxxx & Xxxx, counsel
to Purchaser, in form and substance reasonably satisfactory to
Purchaser substantially to the effect that:
(i) for federal income tax purposes, the Merger will be
treated as a purchase by Purchaser of all the outstanding shares
of Seller Common Stock held by stockholders of Seller (except
Dissenters' Shares); the purchase of shares of Seller Common
Stock by Purchaser will be treated as a "qualified stock
purchase" within the meaning of Section 338(d)(3) of the Code;
(ii) none of Purchaser, Merger Sub, Seller or the Association
will recognize gain or loss as a result of Purchaser's purchase
of shares of Seller Common Stock from the stockholders of Seller;
(iii) neither the Purchaser nor the Association will
recognize gain or loss as a result of the transfer by the
Purchaser of 100% of the common stock of the Trust to the
Association; and
(iv) the Merger shall not cause the Association to restore
to gross income any of its bad debt reserves previously deducted
pursuant to Section 593 of the Code.
Such opinion may be based on, in addition to the review
of such matters of fact and law as Xxxxxxx Xxxxxxxx & Xxxx
considers appropriate, (i) representations made at the request of
Xxxxxxx Xxxxxxxx & Wood by Purchaser, Seller or both and (ii)
certificates provided at the request of Xxxxxxx Xxxxxxxx & Xxxx
by officers of Purchaser, Seller and other appropriate persons).
(h) Other Certificates. Seller shall have furnished Purchaser
with such certificates of its officers or others and such other
documents to evidence fulfillment of the conditions set forth in
this Section 5.02 as Purchaser may reasonably request.
Section 5.03 Conditions to the Obligations of Seller. The
obligations of Seller to effect the Merger shall be further
subject to the satisfaction of the following conditions, any one
or more of which may be waived in writing by Seller:
(a) Representations and Warranties. Each of the obligations of
Purchaser required to be performed by it at or prior to the
Closing Date pursuant to the terms of this Agreement shall have
been duly performed and complied with in all material respects
and the representations and
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warranties of Purchaser contained in this Agreement shall be true
and correct, subject to Section 2.01, as of the date of this
Agreement and as of the Effective Time as though made at and as of
the Effective Time (except as to any representation or warranty which
specifically relates to an earlier date). Seller shall have received
a certificate to the foregoing effect signed by the president and the
chief financial officer of Purchaser.
(b) Agreements and Covenants. All action required to be taken
by, or on the part of, Purchaser or Merger Sub to authorize the
execution, delivery and performance of this Agreement and the
consummation by Purchaser and Merger Sub of the transactions
contemplated hereby shall have been duly and validly taken by the
board of directors and stockholders of Purchaser and Merger Sub,
and Seller shall have received certified copies of the
resolutions evidencing such authorization.
ARTICLE VI
TERMINATION
SECTION 6.01 Termination. This Agreement may be terminated,
and the Merger abandoned, prior to the Effective Date, either
before or after its approval by the stockholders of Seller:
(a) by the mutual consent of Purchaser and Seller, if the board
of directors of each so determines by vote of a majority of the
members of its entire board;
(b) by Purchaser or Seller, if its board of directors so
determines by vote of a majority of the members of its entire
board, in the event of the failure of the stockholders of Seller
to approve this Agreement at its meeting called to consider such
approval; provided, however, that Seller shall only be entitled
to terminate this Agreement pursuant to this clause if it has
complied with its obligations under Sections 4.09 and 4.10;
(c) by Purchaser or Seller by written notice to the other
party if either (i) any approval, consent or waiver of a
governmental authority required to permit consummation of the
transactions contemplated hereby shall have been denied and such
denial is final and non-appealable or (ii) any governmental
authority of competent jurisdiction shall have issued a final,
unappealable order enjoining or otherwise prohibiting consummation
of the transactions contemplated by this Agreement;
(d) by Purchaser or Seller, if its board of directors so
determines by vote of a majority of the members of its entire
board, in the event that the Merger is not consummated by
February 28, 2003, unless the failure to so consummate by such
time is due to the breach of any representation, warranty or
covenant contained in this Agreement by the party seeking to
terminate;
(e) by Purchaser or Seller (providing that the terminating party
is not then in material breach of any representation, warranty,
covenant, or other agreement contained in this Agreement) in the
event of a material breach by the other party of any
representation or warranty contained in this Agreement which
cannot be or has not been cured within 20 business days after the
giving of written notice to the breaching party of such breach,
such that the conditions set
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forth in Sections 5.02(a) and 5.03(a), as applicable, would then not
be satisfied by the breaching party; or
(f) By the Board of Directors of Seller in connection with
Seller's acceptance of an Acquisition Proposal, provided that
Seller has complied with Section 4.01 hereof in all material
respects.
Section 6.02 Effect of Termination; Expenses. (a) In the event
of the termination of this Agreement by either Purchaser or
Seller pursuant to Section 6.01, this Agreement shall thereafter
become void and, subject to the provisions of Section 8.02, there
shall be no liability on the part of any party hereto or their
respective officers or directors, except that any such
termination shall be without prejudice to the rights of any party
hereto arising out of the willful breach by any other party of
any covenant, representation or obligation contained in this
Agreement as set forth in Section 6.02(b).
(b) If this Agreement is terminated at such time that this
Agreement is terminable pursuant to 6.01(e) due to a willful
breach by Purchaser or Seller of a representation, warranty or
covenant, the satisfaction or performance of which was within the
control of the breaching party, then the breaching party shall
promptly (but no later than five (5) business days after receipt
of notice from the non breaching party) pay to the non breaching
party in cash an amount equal to all documented out of pocket
expenses and fees incurred by the non breaching party (including,
without limitation, fees and expenses payable to all legal,
accounting, financial, public relations and other professional
advisors arising out of, in connection with or related to the
Merger or the transactions contemplated by this Agreement) not in
excess of $250,000. If one party fails to promptly pay to any
other party any amount due hereunder, the defaulting party shall
pay the costs and expenses (including legal fees and expenses) in
connection with any action, including the filing of any lawsuit
or other legal action, taken to collect payment, together with
interest on the amount of any unpaid fee at the publicly
announced prime rates as published in the Wall Street Journal
from the date such fee was required to be paid.
Payment of cash to either Seller or Purchaser pursuant to
this Section 6.02(b) shall constitute full payment and upon such
payment, Seller or Purchaser shall have no further liability to
the other party under this Agreement, including liability
pursuant to Section 6.03.
Section 6.03 Third Party Termination. In recognition of the
efforts and expenses incurred by Purchaser in negotiating and
executing this Agreement and in taking steps to effect the
transactions contemplated hereby, and the loss by it of other
opportunities, the parties agree that:
(a) Seller shall pay to Purchaser a termination fee of Three
Hundred Thousand dollars ($300,000) in cash on demand within five
business days after written demand for payment is made by
Purchaser if, during a period of eighteen (18) months after the
date hereof but prior to the termination of this Agreement in
accordance with its terms, either of the following occurs:
(i) without Purchaser's prior written consent, Seller shall
have entered into an agreement with any person (other than Purchaser
and its Subsidiaries) to effect (A) a merger, consolidation or
similar transaction involving Seller or the Association, (B) the
disposition, by
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sale, lease, exchange or otherwise, of assets or deposits of Seller
or the Association representing in either case 25% or more of the
consolidated assets or deposits of Seller and the Association or (C)
the issuance, sale or other disposition by Seller of (including by way
of merger, consolidation, share exchange or any similar transaction)
securities representing 25% or more of the voting power of Seller or
the Association (each of (A), (B) or (C), an "Acquisition Transaction");
or
(ii) any person shall have acquired beneficial ownership (as
such term is defined in Rule 13d-3 promulgated under the Exchange
Act) of, or the right to acquire beneficial ownership of, or any
"group" (as such term is defined in Section 13(d)(3) of the
Exchange Act), other than a group of which Purchaser or any
Subsidiary of Purchaser is a member, shall have been formed which
beneficially owns, or has the right to acquire beneficial
ownership of, 25% or more of the voting power of Seller or the
Association; and
(b) Seller shall pay to Purchaser a termination fee of Three
Hundred Thousand Dollars ($300,000) in cash on demand within five
business days after written demand for payment is made by
Purchaser if, after a bona fide proposal is made by a third party
to Seller or its stockholders to engage in an Acquisition
Transaction, any of the following occurs:
(i) Seller shall willfully breach any covenant or obligation
contained in this Agreement, and such breach would entitle
Purchaser to terminate this Agreement;
(ii) Seller's stockholder meeting, for the purpose of voting
on this Agreement, shall not have been held by October 15, 2002, or
shall have been canceled prior to termination of this Agreement;
or
(iii) Seller's board of directors shall have withdrawn or
modified in a manner adverse to Purchaser the recommendation of
Seller's board of directors with respect to this Agreement in
connection with a bona fide proposal made by a third party to
Seller.
Full payment pursuant to this Section 6.03 shall be deemed
to be liquidated damages and, upon such payment, Seller shall
have no further liability to Purchaser under this Agreement.
Notwithstanding the foregoing, Seller shall not be obligated to
pay to Purchaser any termination fee pursuant to this Section
6.03 in the event that (A) Seller or Purchaser validly terminates
this Agreement pursuant to Section 6.01(a) or 6.01(c), (B) Seller
terminates this Agreement pursuant to Section 6.01(e), or (C) the
Merger is terminated under Section 6.01(d) as a result of
Purchaser's failure to satisfy the conditions set forth in
Section 5.03. In addition, a termination fee shall not be due
and payable by Seller pursuant to both Section 6.03(a) and
Section 6.03(b).
If demand for payment of cash liquidated damages is made
pursuant to this Section 6.03 and payment is timely made, then
neither Purchaser nor any of its Subsidiaries will have any other
rights or claims against Seller, its Subsidiaries, and their
respective officers, directors, attorneys and financial advisors
under this Agreement, it being agreed that the acceptance of cash
liquidated damages under this Section 6.03 will constitute the
sole and exclusive remedy of Purchaser and its Subsidiaries
against Seller, its Subsidiaries and their respective officers,
directors, attorneys and financial advisors.
-37-
ARTICLE VII
CLOSING, EFFECTIVE DATE AND EFFECTIVE TIME
SECTION 7.01 Effective Date and Effective Time. Subject to
the provisions of Article V and VI, the closing of the transactions
contemplated hereby shall take place at the offices of Xxxxxxx
Xxxxxxxx & Wood, 0000 Xxxxxxxxxxxx Xxxxxx, XX, Xxxxx 000,
Xxxxxxxxxx, XX 00000, on such date (the "Closing Date") and such
time as Purchaser reasonably selects within ten business days
after the expiration of all applicable waiting periods in
connection with approvals of governmental authorities and all
conditions to the consummation of this Agreement are satisfied or
waived (other than the delivery of those documents to be
delivered on the Closing Date), or on such earlier or later date
as may be agreed by the parties, and in any event upon five
business days prior written notice to Seller. Prior to the
Closing Date, Purchaser and Seller shall execute a certificate of
merger in accordance with all appropriate legal requirements and
shall immediately thereafter be filed as required by the LBCL,
and the Merger provided for herein shall become effective upon
such filing or on such date as may be specified in such
certificate of merger which date is mutually satisfactory to
Seller and Purchaser. The date of such filing or such later
effective date is herein called the "Effective Date." The
"Effective Time" of the Merger shall be as set forth in such
certificate of merger.
Section 7.02 Deliveries at the Closing. Subject to the
provisions of Articles V and VI, on the Closing Date there shall
be delivered to Purchaser and Seller the documents and
instruments required to be delivered under Article V.
ARTICLE VIII
OTHER MATTERS
SECTION 8.01 Certain Definitions; Interpretation. As used
in this Agreement, the following terms shall have the meanings
indicated:
"material" means material to Purchaser or Seller (as the
case may be) and its respective subsidiaries, taken as a whole.
"person" includes an individual, corporation, limited
liability company, partnership, association, trust or
unincorporated organization.
When a reference is made in this Agreement to Sections,
Annexes, Exhibits or Schedules, such reference shall be to a
Section of, or Annex, Exhibit or Schedule to, this Agreement
unless otherwise indicated. The table of contents and headings
contained in this Agreement are for ease of reference only and
shall not affect the meaning or interpretation of this Agreement.
Whenever the words "include", "includes", or "including" are used
in this Agreement, they shall be deemed followed by the words
"without limitation." Any singular term in this Agreement shall
be deemed to include the plural, and any plural term the
singular. Any reference to gender in this Agreement shall be
deemed to include any other gender.
Section 8.02 Non-Survival of Representations and Warranties.
Only those agreements and covenants of those parties that are by
their terms applicable in whole or in part
-38-
after the Effective Time shall survive the Effective Time. All
other representations, warranties, agreements and covenants shall be
deemed to be conditions of this Agreement and shall not survive
the Effective Time. If this Agreement shall be terminated, the
agreements of the parties in the last two sentences of Section
4.04, Section 6.02 and Section 8.06 shall survive such
termination.
Section 8.03 Waiver; Amendment. Prior to the Effective Time,
any provision of this Agreement may be: (i) waived in writing by
the party benefited by the provision; or (ii) amended or modified
at any time (including the structure of the transaction) by an
agreement in writing between the parties hereto approved by their
respective boards of directors, except that no amendment may be
made (a) that would contravene any provision of the LBCL or
applicable federal and state banking laws, rules and regulations,
or (b) that would modify the form or decrease the amount of the
Merger Consideration or otherwise materially adversely affect the
stockholders of Seller after the adoption of this Agreement by
the stockholders of Seller, without the further approval of
Seller's stockholders to the extent required by applicable law.
Section 8.04 Counterparts. This Agreement may be executed in
counterparts each of which shall be deemed to constitute an
original, but all of which together shall constitute one and the
same instrument.
Section 8.05 Governing Law. This Agreement shall be governed
by, and interpreted in accordance with, the laws of the State of
Florida, without regard to conflicts of laws principles.
Section 8.06 Expenses. Each party hereto will bear all
expenses incurred by it in connection with this Agreement and the
transactions contemplated hereby.
Section 8.07 Notices. All notices, requests, acknowledgments
and other communications hereunder to a party shall be in writing
and shall be deemed to have been duly given when delivered by
hand, overnight courier or facsimile transmission (confirmed in
writing) to such party at its address or facsimile number set
forth below or such other address or facsimile transmission as
such party may specify by notice to the other party hereto.
If to Seller, to:
G. Xxxxx Xxxxxxxxxx, Xx., President
IBL Bancorp, Inc.
00000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
-39-
With copies to:
Xxxxxx X. Xxxxxx, Xx., Esq.
Elias, Matz, Xxxxxxx & Xxxxxxx, LLP
000 00xx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Purchaser, to:
Xxxxxx X. Xxxx
Xxxx Investment Services, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to:
Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx Xxxxxxxx & Xxxx
0000 Xxxxxxxxxxxx Xxxxxx, XX,
Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Section 8.08 Entire Agreement; Etc. This Agreement,
together with the Voting Agreements and the other Annexes hereto,
represents the entire understanding of the parties hereto with
reference to the transactions contemplated hereby and supersedes
any and all other oral or written agreements heretofore made. All
terms and provisions of this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their
respective successors and assigns. Nothing in this Agreement is
intended to confer upon any other person any rights or remedies
of any nature whatsoever under or by reason of this Agreement.
Section 8.09 Assignment. This Agreement may not be assigned by
any party hereto without the written consent of the other
parties.
-40-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of
the day and year first above written.
SHAY INVESTMENT SERVICES, INC.
By: /s/ Xxxxxx X. Xxxx
---------------------------------------------
Name: Xxxxxx X. Xxxx
Title: President and Chief Executive Officer
IBL BANCORP, INC.
By: /s/ G. Xxxxx Xxxxxxxxxx
---------------------------------------------
Name: G. Xxxxx Xxxxxxxxxx
Title: President and Chief Executive Officer
Shay Acquisition Sub I, Inc. has joined as a party to this Agreement on
this _____ day of ______________________, 2002.
SHAY ACQUISITION SUB I, INC.
By:
---------------------------------------------
Name: Xxxxxx X. Xxxx
Title: President and Chief Executive Officer
-2-
ANNEX A
June 19, 2002
Shay Investment Services, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, XX 00000
Ladies and Gentlemen:
Shay Investment Services, Inc. (the "Purchaser") and IBL
Bancorp, Inc. (the "Company") desire to enter into an agreement
dated June 19, 2002 (the "Agreement"), pursuant to which,
subject to the terms and conditions set forth therein, (a) the
Company will merge with and into a wholly-owned subsidiary of the
Purchaser with the Company surviving the merger as a wholly-owned
subsidiary of the Purchaser, and (b) shareholders of the Company
will receive cash in exchange for the outstanding common stock of
the Company (the foregoing, collectively referred to herein as
the "Merger"). Capitalized terms not defined herein shall have
the meanings as defined in the Agreement.
The Purchaser has required, as a condition to its execution
and delivery to the Company of the Agreement, that the
undersigned, being directors and executive officers of the
Company, execute and deliver to the Purchaser this Letter
Agreement. The undersigned hereby represents and warrants to the
Purchaser that the undersigned has the power to vote ____ shares
of the common stock of the Company.
Each of the undersigned, in order to induce the Purchaser to
execute and deliver to the Company the Agreement, hereby
irrevocably:
(a) Agrees to be present (in person or by proxy) at
all meetings of shareholders of the Company called to vote for
approval of the Merger so that all shares of common stock of the
Company then owned by the undersigned will be counted for the
purpose of determining the presence of a quorum at such meetings,
and to vote all such shares (i) in favor of approval and adoption
of the Agreement and the transactions contemplated thereby
(including any amendments or modifications of the terms thereof
approved by the Board of Directors of the Company), and (ii)
against approval or adoption of any other merger, business
combination, recapitalization, partial liquidation or similar
transaction involving the Company;
(b) As a shareholder of the Company, agrees not to
vote (with respect to any shares of common stock of the Company
then owned by the undersigned) to rescind or amend in any manner
any prior vote to approve or adopt the Agreement;
(c) Agrees to use best efforts to cause the Merger to
be consummated;
(d) Agrees not to sell, transfer or otherwise dispose
of any common stock of the Company on or prior to the voting
record date for the meeting of shareholders of the Company to be
called to vote for approval of the Merger;
Shay Investment Services, Inc.
June 19, 2002 Page 2.
(e) Agrees not to solicit, initiate or engage in any
negotiations or discussions with any party other than the
Purchaser and its affiliates with respect to any offer, sale,
transfer or other disposition of, any shares of common stock of
the Company now or hereafter owned by the undersigned;
(f) Agrees that any shares of common stock of the
Company purchased or otherwise acquired after the execution of
this Letter Agreement and prior to the voting record date for the
meeting of shareholders of the Company to be called to vote for
approval of the Merger shall be subject to the terms and
conditions of this Letter Agreement;
(g) Agrees to waive and not to assert, demand or
exercise rights of appraisal or dissenters in connection with the
Merger;
(h) Agrees to execute and deliver any additional
documents necessary or desirable, in the reasonable opinion of
the Purchaser, to carry out the intent of the Agreement;
(i) Represents that the undersigned has the capacity
to enter into this Letter Agreement and that it is a valid and
binding obligation enforceable against the undersigned in
accordance with its terms, subject to bankruptcy, insolvency and
other laws affecting creditors' rights;
(j) Agrees that a breach of this Letter Agreement by
the undersigned will cause irreparable harm to the Purchaser for
which there may be no adequate remedy at law, and agrees that the
Purchaser shall be entitled, in addition to its other remedies at
law, to specific performance of this Letter Agreement or any
provisions hereof; and
provided, however, that each of the agreements of the undersigned
set forth above is subject to the fiduciary duties of the
undersigned. Nothing contained in this Letter Agreement shall
require the undersigned to take any actions, or to refrain from
taking any action, where such action or failure to take action
would be inconsistent with the undersigned's fiduciary duties.
Shay Investment Services, Inc.
June 19, 2002 Page 3.
The obligations set forth herein shall terminate concurrently
with any termination of the Agreement or consummation of the
transactions contemplated by the Agreement.
_____________________________
This Letter Agreement may be executed in two or more
counterparts, each of which shall be deemed to constitute an
original, but all of which together shall constitute one and the
same Letter Agreement.
_____________________________
This Letter Agreement shall terminate concurrently with any
termination of the Agreement in accordance with its terms.
_____________________________
The undersigned stipulates that the restrictions set forth
herein are reasonable and intends to be legally bound hereby.
Sincerely,
___________________________________
Name:
ACCEPTED AND
ACKNOWLEDGED
By:_______________________________
Name:
Title:
ANNEX B
__________________________________________________________________________
AGREEMENT AND PLAN OF MERGER
DATED AS OF THE _____ DAY OF JUNE, 2002
BY AND BETWEEN
SHAY ACQUISITION SUB I, INC.
AND
IBL BANCORP, INC.
__________________________________________________________________________
This AGREEMENT AND PLAN OF MERGER dated as of June __,
2002 (the "Plan of Merger") is entered into by and between
SHAY ACQUISITION SUB I, INC. ("Acquisition Sub"), a
Louisiana corporation, and IBL BANCORP, INC., a Louisiana
corporation registered as a savings and loan association
holding company ("IBL"), pursuant to an Agreement and Plan
of Merger, dated as of June __, 2002 ("Merger Agreement"),
by and between Shay Investment Services, Inc. ("Shay") and
IBL. Acquisition Sub is a wholly-owned subsidiary of Shay.
Capitalized terms not otherwise defined herein shall have
the meanings set forth in the Merger Agreement.
In consideration of the mutual covenants and agreements
set forth herein and subject to the terms and conditions of
the Merger Agreement, the parties hereto agree as follows:
Section 1. The Merger. On the effective date,
Acquisition Sub shall be merged with and into IBL, with IBL
being the surviving entity (the "Merger"). The Merger shall
be subject to the terms and conditions of the Merger
Agreement. Upon completion of the Merger, the separate
corporate existence of Acquisition Sub shall thereupon
cease. IBL shall continue to be governed by the laws of the
State of Louisiana and its separate corporate existence with
all of its rights, privileges, immunities, powers and
franchises shall continue unaffected by the Merger.
Section 2. Name of Surviving Corporation. The name
of the surviving corporation in the Merger (the "Surviving
Corporation") shall be IBL Bancorp, Inc.
Section 3. Location of Office. The business of the
Surviving Corporation shall be conducted at its
administrative office at 00000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxx 00000.
Section 4. Effect on Outstanding Shares.
(a) By virtue of the Merger, automatically and without
any action on the part of the holder thereof, each share of
IBL Common Stock issued and outstanding at the effective
time of the Merger (the "Effective Time"), other than the
Excluded Shares, shall become and be converted into the
right to receive $24.00 in cash, without interest, as
provided in Section 1.02 of the Agreement. At the Effective
Time, each share of IBL Common Stock held as treasury stock
of IBL, unallocated shares held in IBL's 1999 Recognition
and Retention Plan and shares directly held by Purchaser,
shall be cancelled and retired and cease to exist, and no
exchange or payment shall be made with respect thereto.
(b) The shares of common stock of Acquisition Sub
issued and outstanding immediately prior to the Effective
Time shall become shares of the Surviving Corporation at the
Effective Time by virtue of the Merger, automatically and
without any action on the part of the holder thereof, and
shall thereafter constitute all of the issued and
outstanding shares of the capital stock of the Surviving
Corporation.
Section 5. Assets and Liabilities. At the
Effective Time, all assets and property (real, personal, and
mixed, tangible and intangible, rights, and credits) then
owned by IBL shall pass to and vest in the Surviving
Corporation without any conveyance or other transfer. The
Surviving Corporation shall be deemed to be a
continuation of IBL. The rights and obligations, including
liabilities, of IBL shall become the rights and obligations of
the Surviving Corporation.
Section 6. Directors and Officers of Acquisition
Sub. At the Effective Time, the directors and officers of
Merger Sub shall become directors and officers of the
Surviving Corporation.
Section 7. Articles of Incorporation and Bylaws.
At the Effective Time, the articles of incorporation and
bylaws of IBL shall be amended in their entirety to conform
to the articles of incorporation and bylaws of the Merger
Sub in effect immediately prior to the Effective Time and
shall become the articles of incorporation and bylaws of the
Surviving Corporation.
Section 8. Termination. This Plan of Merger shall
terminate automatically at such time as the Merger Agreement
is terminated.
Section 9. Stockholder Approval. The transactions
contemplated by this Plan of Merger have been approved by
the affirmative vote of two-thirds of the outstanding shares
of IBL and by Shay as sole shareholder of Acquisition Sub.
Section 10. Counterparts. This Plan of Merger may
be executed in one or more counterparts, each of which shall
be deemed to be an original and all of which taken together
shall constitute one instrument.
Section 11. Severability. Any provision of this
Plan of Merger which is prohibited or unenforceable shall be
ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining
provisions hereof.
Section 12. Captions and References. The captions
contained in this Plan of Merger are for convenience of
reference only and do not form a part of this Plan of
Merger.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement and Plan of Merger to be duly executed as of the
date first above written.
SHAY ACQUISITION SUB I, INC.
By:___________________________
Xxxxxx X. Xxxx
President and Chief Executive Officer
I, _______________________, the duly elected, qualified
and acting Corporate Secretary of Shay Acquisition Sub I,
Inc., hereby certify that this Agreement and Plan of Merger
has been approved and adopted by Shay Investment Services,
Inc., the sole stockholder of Shay Acquisition Sub I, Inc.,
as of June __, 2002.
_______________________
[ ]
Corporate Secretary
IBL BANCORP, INC.
By:__________________________
G. Xxxxx Xxxxxxxxxx, Xx.
President and Chief Executive Officer
I, Xxxx X. Xxxxxx, the duly elected, qualified and
acting Secretary of IBL Bancorp, Inc., hereby certify that
this Agreement and Plan of Merger has been approved and
adopted by IBL Bancorp, Inc., as of June __, 2002.
_________________________
Xxxx X. Xxxxxx
Secretary
ANNEX C
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement"), is made and
entered into as of June 19, 2002 and shall be effective as of the
Effective Time as defined in the Agreement and Plan of Merger
dated June 19, 2002 by and between Shay Investment Services, Inc.
and IBL Bancorp, Inc. (the "Merger Agreement"). This Agreement
is contingent upon the closing of the transaction contemplated by
the Merger Agreement and shall be void if such transaction is not
consummated. This Agreement is between Shay Investment Services,
Inc., a Florida corporation (the "Corporation"), Iberville
Building and Loan Association, FSB (formerly the Iberville
Building and Loan Association), a federal savings bank and a
wholly-owned subsidiary of the Corporation (the "Bank"), and G.
Xxxxx Xxxxxxxxxx, Xx. (the "Executive").
WITNESSETH
WHEREAS, the Executive is presently an officer of IBL
Bancorp, Inc. and The Iberville Building and Loan Association;
WHEREAS, the Corporation and the Bank (together the
"Employers") desire to be ensured of the Executive's continued
active participation in the business of the Employers after the
Effective Time;
WHEREAS, the Executive is willing to serve the Corporation
and the Bank on the terms and conditions hereinafter set forth;
and
WHEREAS, this Agreement is intended to supersede any and all
prior employment agreements between the Executive and the
Corporation, the Executive and the Bank, the Executive and IBL
Bancorp, Inc. or the Executive and The Iberville Building and
Loan Association;
NOW THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the parties hereby agree as
follows:
1. Definitions. The following words and terms shall have
the meanings set forth below for the purposes of this Agreement:
(a) Average Annual Compensation. The Executive's "Average
Annual Compensation" for purposes of this Agreement shall be deemed
to mean the average level of compensation paid to the Executive by
the Employers or any subsidiary thereof during the most recent
five taxable years preceding the Date of Termination (or such
shorter period as the Executive was employed), including Base
Salary and bonuses under any employee benefit plans of the
Employers but excluding any compensation resulting from the
exercise of stock options or the vesting of restricted stock
awards.
(b) Base Salary. "Base Salary" shall have the meaning set forth
in Section 3(a) hereof.
(c) Cause. Termination of the Executive's employment for
"Cause" shall mean termination because of personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or final
cease-and-desist order or material breach of any provision
of this Agreement. For purposes of this paragraph, no act or
failure to act on the Executive's part shall be considered
"willful" unless done, or omitted to be done, by the Executive
not in good faith and without reasonable belief that the
Executive's action or omission was in the best interest of the
Employers.
(d) Change in Control of the Corporation. A Change in
Control of the Corporation (Change in Control of the Corporation)
shall be deemed to have occurred upon the happening of any of the
following events:
(i) approval by the stockholders of the
Corporation of a transaction that would result in the
reorganization, merger or consolidation of the
Corporation, respectively, with one or more other
persons, other than a transaction following which:
(A) at least 51% of the equity ownership
interests of the entity resulting from such
transaction are beneficially owned (within the
meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended
Exchange Act) in substantially the same relative
proportions by persons who, immediately prior to
such transaction, beneficially owned (within the
meaning of Rule 13d-3 promulgated under the
Exchange Act) at least 51% of the outstanding
equity ownership interests in the Corporation; and
(B) at least 51% of the securities entitled
to vote generally in the election of directors of
the entity resulting from such transaction are
beneficially owned (within the meaning of Rule 13d-
3 promulgated under the Exchange Act) in
substantially the same relative proportions by
persons who, immediately prior to such transac
tion, beneficially owned (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) at
least 51% of the securities entitled to vote
generally in the election of directors of the
Corporation;
(ii) the acquisition of all or substantially all
of the assets of the Corporation or beneficial
ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 25% or more of the
outstanding securities of the Corporation entitled to
vote generally in the election of directors by any
person or by any persons acting in concert, or approval
by the stockholders of the Corporation of any
transaction which would result in such an acquisition;
(iii) a complete liquidation or dissolution of
the Corporation, or approval by the stockholders of the
Corporation of a plan for such liquidation or
dissolution;
(iv) the occurrence of any event if, immediately
following such event, at least 50% of the members of
the Board of the Corporation do not belong to any of
the following groups:
2
(A) individuals who were members of the
Board of the Corporation on the date of this
Agreement; or
(B) individuals who first became members of
the Board of the Corporation after the date of
this Agreement either:
(I) upon election to serve as a member
of the Board of the Corporation by
affirmative vote of three-quarters of the
members of such Board, or of a nominating
committee thereof, in office at the time of
such first election; or
(II) upon election by the stockholders
of the Corporation to serve as a member of
the Board of the Corporation, but only if
nominated for election by affirmative vote of
three-quarters of the members of the Board of
the Corporation, or of a nominating committee
thereof, in office at the time of such first
nomination;
provided, however, that such individual's election
or nomination did not result from an actual or
threatened election contest or other actual or
threatened solicitation of proxies or consents
other than by or on behalf of the Board of the
Corporation; or
(v) any event which would be described in Section
1(d)(i), (ii), (iii) or (iv) if the term Bank were
substituted for the term Corporation each time the term
appears therein.
In no event, however, shall a Change in Control of the
Corporation be deemed to have occurred as a result of any
acquisition of securities or assets of the Corporation, the Bank,
or a subsidiary of either of them, by the Corporation, the Bank,
or a subsidiary of either of them, or by any employee benefit
plan maintained by any of them. A Change in Control of the
Corporation shall not be deemed to have occurred due to the
Merger Agreement or any transactions contemplated by the Merger
Agreement. For purposes of this Section 1(d), the term person
shall have the meaning assigned to it under Sections 13(d)(3) or
14(d)(2) of the Exchange Act.
(e) Code. "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(f) Date of Termination. "Date of Termination" shall mean the
date specified in the Notice of Termination.
(g) Disability. Termination by the Employers of the
Executive's employment based on "Disability" shall mean termination
because of any physical or mental impairment which qualifies the
Executive for disability benefits under the applicable long-term
disability plan maintained by the Employers or any subsidiary or,
if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System.
Termination by the Employers of the Executive's employment based
on "Disability" shall also mean the termination of the
Executive's employment upon a determination, by vote of a
majority of the members of the Board of Directors of the
Corporation, acting in reliance on the written advice of
3
a medical professional acceptable to them, that the Executive is
suffering from a physical or mental impairment which, at the date
of the determination, has prevented the Executive from performing
his assigned duties on a substantially full-time basis for a
period of at least one hundred and eighty (180) days during the
period of one (1) year ending with the date of the determination
or is likely to result in death or prevent the Executive from
performing his assigned duties on a substantially full-time basis
for period of at least one hundred and eighty (180) days during
the period of one (1) year beginning with the date of the
determination.
(h) Good Reason. Termination by the Executive of the Executive's
employment for "Good Reason" shall mean termination by the
Executive following a Change in Control of the Corporation based
on:
(i) Without the Executive's express written consent, the failure
to elect or to re-elect or to appoint or to re-appoint the
Executive to the offices of President and Chief Executive Officer
of the Bank or a material adverse change made by the Bank in the
Executive's functions, duties or responsibilities as President
and Chief Executive Officer of the Bank;
(ii) Without the Executive's express written consent, a material
reduction by the Employers in the Executive's Base Salary as the
same may be increased from time to time or, except to the extent
permitted by Section 3(b) hereof, a material reduction in the
package of fringe benefits provided to the Executive, taken as a
whole;
(iii) Without the Executive's express written consent, the
Employers require the Executive to work in an office which is
more than 30 miles from the location of the Employers' current
principal executive office, except for required travel on
business of the Employers to an extent substantially consistent
with the Executive's present business travel obligations;
(iv) Any purported termination of the Executive's employment for
Cause, Disability or Retirement which is not effected pursuant to
a Notice of Termination satisfying the requirements of paragraph
(j) below; or
(v) The failure by the Employers to obtain the assumption of and
agreement to perform this Agreement by any successor as
contemplated in Section 10 hereof.
(i) IRS. IRS shall mean the Internal Revenue Service.
(j) Notice of Termination. Any purported termination of the
Executive's employment by the Employers for any reason, including
without limitation for Cause, Disability or Retirement, or by the
Executive for any reason, including without limitation for Good
Reason, shall be communicated by written "Notice of Termination"
to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated notice which (i)
indicates the specific termination provision in this Agreement
relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated, (iii)
specifies a Date of Termination,
4
which shall be not less than thirty (30) nor more than ninety (90)
days after such Notice of Termination is given, except in the case
of the Employers' termination of the Executive's employment for
Cause; and (iv) is given in the manner specified in Section 11 hereof.
(k) Retirement "Retirement" shall mean voluntary termination by
the Executive in accordance with the Employers' retirement
policies, including early retirement, generally applicable to the
Employers' salaried employees.
2. Term of Employment
(a) The Employers hereby employ the Executive as President and
Chief Executive Officer of the Bank and the Executive hereby
accepts said employment and agrees to render such services to the
Employers on the terms and conditions set forth in this
Agreement. Unless extended as provided in this Section 2, this
Agreement shall terminate on December 31, 2005 or such earlier
time as may be required by the Office of Thrift Supervision
("OTS"). The Board of Directors of the Corporation may consider,
review (taking into account all relevant factors, including the
Executive's performance) and, if appropriate, explicitly approve
a one-year extension of the remaining term of this Agreement
prior to December 31st of 2003 or any year thereafter during the
term of this Agreement. The term of this Agreement shall extend
each year if the Board of Directors so approve such extension
unless the Executive gives written notice to the Corporation of
the Executive's election not to extend the term, with such notice
to be given not less than thirty (30) days prior to any such
December 31st. If the Board of Directors elect not to extend the
term, they shall give written notice of such decision to the
Executive not less than thirty (30) days prior to any such
December 31st. If any party gives timely notice that the term
will not be extended, then this Agreement shall terminate at the
conclusion of its remaining term. References herein to the term
of this Agreement shall refer both to the initial term and
successive terms.
(b) During the term of this Agreement, the Executive shall
perform such executive services for the Bank as is consistent
with his title of President and Chief Executive Officer.
3. Compensation and Benefits.
(a) The Employers shall compensate and pay the Executive for his
services during the term of this Agreement at a minimum base
salary of $80,400 per year payable in twice monthly installments
("Base Salary"), which may be increased from time to time in such
amounts as may be determined by the Board of Directors of the
Corporation. In addition to his Base Salary, the Executive shall
be entitled to receive during the term of this Agreement such
bonus payments as may be determined by the Board of Directors of
the Corporation.
(b) During the term of the Agreement, the Executive shall
be entitled to participate in and receive the benefits of any
pension or other retirement benefit plan, profit sharing, stock
option, employee stock ownership, or other plans and benefits
given to all employees of the Employers, to the extent
commensurate with his then duties and responsibilities, as fixed
by the Board of Directors of the Corporation. The Employers
shall not make any changes in such plans or benefits which would
adversely affect the Executive's rights or benefits thereunder,
unless such change occurs pursuant to a program applicable to all
executive officers of the Employers and does not result in a
proportionately greater adverse change in the rights of or
benefits to the
5
Executive as compared with any other executive officer of the
Employers. Nothing paid to the Executive under any plan or arrangement
presently in effect or made available in the future shall be deemed to
be in lieu of the salary payable to the Executive pursuant to Section
3(a) hereof.
(c) During the term of this Agreement, the Executive shall be
entitled to paid annual vacation in accordance with the policies
as established from time to time by the Board of Directors of the
Corporation. The Executive shall not be entitled to receive any
additional compensation from the Employers for failure to take a
vacation, nor shall the Executive be able to accumulate unused
vacation time from one year to the next, except to the extent
authorized by the Board of Directors of the Corporation.
4. Expenses. The Employers shall reimburse the Executive
or otherwise provide for or pay for all reasonable expenses incurred
by the Executive in furtherance of, or in connection with the
business of the Employers, including, but not by way of limitation,
traveling expenses and all reasonable entertainment expenses
(whether incurred at the Executive's residence, while traveling
or otherwise), subject to such reasonable documentation and other
limitations as may be established by the Board of Directors of
the Corporation. If such expenses are paid in the first instance
by the Executive, the Employers shall reimburse the Executive
therefor.
5. Termination.
(a) The Employers shall have the right, at any time upon
prior Notice of Termination, to terminate the Executive's
employment hereunder for any reason, including without limitation
termination for Cause, Disability or Retirement, and the
Executive shall have the right, upon prior Notice of Termination,
to terminate his employment hereunder for any reason.
(b) In the event that (i) the Executive's employment is
terminated by the Employers for Cause, Disability or Retirement
or in the event of the Executive's death, or (ii) the Executive
terminates his employment hereunder other than for Good Reason,
the Executive shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the
applicable Date of Termination.
(c) In the event that (i) the Executive's employment is
terminated by the Employers for other than Cause, Disability,
Retirement or the Executive's death or (ii) such employment is
terminated by the Executive (a) due to a material breach of this
Agreement by the Employers, which breach has not been cured
within thirty (30) days after a written notice of non-compliance
has been given by the Executive to the Employers, or (b) for Good
Reason, then the Employers shall, subject to the provisions of
Section 6 hereof, if applicable, pay to the Executive: (i) a cash
severance amount equal to the Base Salary of the Executive as
determined in Section 3(a) hereof that would have been paid to
the Executive had his employment continued for the remaining
unexpired term of the Agreement as then determined under Section
2(a) hereof and (ii) a cash amount equal to the amount of bonus
paid to the Executive in the prior calendar year multiplied by a
fraction, the numerator of which is the remaining unexpired term
of the Agreement as then determined under Section 2(a) hereof
expressed in days and the denominator of which is 365, with all
such cash amounts payable in equal monthly installments beginning
with the first business day of the month following the Date of
Termination. If cash payment is to be made under this Section
5(c), the Employers shall also maintain and provide for a period
ending at the earlier of (i) the date of the Executive's
employment by another employer that offers health
6
insurance to the Executive or (ii) the date of expiration of the
applicable continuation coverage period for the Executive as
determined under Section 4980B(f)(2)(B) of the Code, at no cost to
the Executive, the Executive's continued participation in all group
health insurance plans, programs and arrangements in which the
Executive was entitled to participate immediately prior to the
Date of Termination.
6. Limitation of Benefits under Certain Circumstances.
If the payments and benefits pursuant to Section 5 hereof,
either alone or together with other payments and benefits which
the Executive has the right to receive from the Employers, would
constitute a "parachute payment" under Section 280G of the Code,
the payments and benefits pursuant to Section 5 hereof shall be
reduced, in the manner determined by the Executive, by the
amount, if any, which is the minimum necessary to result in no
portion of the payments and benefits under Section 5 being non-
deductible to either of the Employers pursuant to Section 280G of
the Code and subject to the excise tax imposed under Section 4999
of the Code. The determination of any reduction in the payments
and benefits to be made pursuant to Section 5 shall be based upon
the opinion of independent tax counsel selected by the Employers
and paid by the Employers. Such counsel shall be reasonably
acceptable to the Employers and the Executive; shall promptly
prepare the foregoing opinion, but in no event later than thirty
(30) days from the Date of Termination; and may use such
actuaries as such counsel deems necessary or advisable for the
purpose. The Employers shall pay to the Executive the maximum
amount of payments and benefits pursuant to Section 5, as
selected by the Executive, which such opinion indicates that
there is a high probability do not result in any of such payments
and benefits being non-deductible to the Employers and subject to
the imposition of the excise tax imposed under Section 4999 of
the Code. Nothing contained herein shall result in a reduction of
any payments or benefits to which the Executive may be entitled
upon termination of employment under any circumstances other than
as specified in this Section 6, or a reduction in the payments
and benefits specified in Section 5 below zero.
7. Protective Covenants.
(a) Non-Competition. The Executive hereby covenants
and agrees that, in the event of his termination of employment
with the Corporation prior to the expiration of the Term of
Employment as determined in Section 2, for a period of eighteen
(18) months following the date of his termination of employment
with the Corporation or the Bank, he shall not, without the
written consent of the Corporation, become an officer, employee,
consultant, director or trustee of any savings bank, savings and
loan association, savings and loan holding company, bank or bank
holding company, any other entity engaged in the business of
accepting deposits or making loans or any other business activity
of the Corporation, or any direct or indirect subsidiary or
affiliate of any such entity having its principal office located
in the parishes of Iberville or West Baton Rouge in Louisiana or
in Xxxx County, Illinois, Dallas County, Texas, Dade County,
Florida, Xxxxxx County, Indiana, New York County, New York,
Fairfield County, Connecticut, Union County, New Jersey or
Allegheny County, Pennsylvania; provided, however, that this
Section 7(a) shall not apply if the Executives employment is
terminated due to death, a voluntary or involuntary termination
following a Change in Control of the Corporation, or the
Executive's involuntary termination by the Employers without
Cause.
7
(b) Confidentiality. Unless he obtains the prior
written consent of the Corporation, the Executive shall keep
confidential and shall refrain from using for the benefit of
himself, or any person or entity other than the Corporation or
any entity which is a subsidiary of the Corporation or of which
the Corporation is a subsidiary, any material document or
information obtained from the Corporation, or from its parent or
subsidiaries, in the course of his employment with any of them
concerning their properties, operations or business (unless such
document or information is readily ascertainable from public or
published information or trade sources or has otherwise been made
available to the public through no fault of his own) until the
same ceases to be material (or becomes so ascertainable or
available); provided, however, that nothing in this Section 7(b)
shall prevent the Executive, with or without the Corporations
consent, from participating in or disclosing documents or
information in connection with any judicial, regulatory or
administrative investigation, inquiry or proceeding to the extent
that such participation or disclosure is required under
applicable law.
(c) Solicitation. The Executive hereby covenants and
agrees that, for a period of eighteen (18) months following his
termination of employment with the Corporation or the Bank, he
shall not, without the written consent of the Corporation and the
Bank, either directly or indirectly:
(i) solicit, offer employment to, or take any
other action intended, or that a reasonable person
acting in like circumstances would expect, to have the
effect of causing any officer or employee of the
Corporation, the Bank or any of their respective
subsidiaries or affiliates to terminate his or her
employment and accept employment or become affiliated
with, or provide services for compensation in any
capacity whatsoever to, any savings bank, savings and
loan association, bank, bank holding company, savings
and loan holding company, or other institution engaged
in the business of accepting deposits, making loans or
doing any other business activity of the Corporation
and having its principal office located in the parishes
of Iberville or West Baton Rouge in Louisiana or in
Xxxx County, Illinois, Dallas County, Texas, Dade
County, Florida, Xxxxxx County, Indiana, New York
County, New York, Fairfield County, Connecticut, Union
County, New Jersey or Allegheny County, Pennsylvania;
(ii) provide any information, advice or
recommendation with respect to any such officer or
employee of any savings bank, savings and loan
association, bank, bank holding company, savings and
loan holding company, or other institution engaged in
the business of accepting deposits, making loans or
doing any other business activity of the Corporation
within the parishes of Iberville or West Baton Rouge in
Louisiana or in Xxxx County, Illinois, Dallas County,
Texas, Dade County, Florida, Xxxxxx County, Indiana,
New York County, New York, Fairfield County,
Connecticut, Union County, New Jersey or Allegheny
County, Pennsylvania; that is intended, or that a
reasonable person acting in like circumstances would
expect, to have the effect of causing any officer or
employee of the Corporation, the Bank, or any of their
respective subsidiaries or affiliates to terminate his
employment and accept employment or become affiliated
with, or provide services for compensation in any
capacity whatsoever to, any savings bank, savings and
loan association, bank, bank holding company, savings
and loan holding company, or other institution engaged
in the business of accepting deposits, making loans or
doing any other business
8
activity of the Corporation and having its principal
office located in the parishes of Iberville or West
Baton Rouge in Louisiana or in Xxxx County, Illinois,
Dallas County, Texas, Dade County, Florida, Xxxxxx
County, Indiana, New York County, New York, Fairfield
County, Connecticut, Union County, New Jersey or
Allegheny County, Pennsylvania;
(iii) solicit, provide any information, advice
or recommendation or take any other action intended, or
that a reasonable person acting in like circumstances
would expect, to have the effect of causing any
customer of the Corporation to terminate an existing
business or commercial relationship with the
Corporation.
(d) Survival of the Section 7 Provisions. The provisions
of this Section 7 shall survive the termination or expiration of
this Agreement, and the existence of any claim or cause of action
of the Executive against the Corporation, whether predicated on
this Agreement or otherwise, shall not constitute a defense to
the enforcement by the Corporation of such covenant.
8. Mitigation; Exclusivity of Benefits.
(a) The Executive shall not be required to mitigate the
amount of any benefits hereunder by seeking other employment or
otherwise, nor shall the amount of any such benefits be reduced
by any compensation earned by the Executive as a result of
employment by another employer after the Date of Termination or
otherwise.
(b) The specific arrangements referred to herein are not
intended to exclude any other benefits which may be available to
the Executive upon a termination of employment with the Employers
pursuant to employee benefit plans of the Employers or otherwise.
9. Withholding. All payments required to be made by the
Employers hereunder to the Executive shall be subject to the
withholding of such amounts, if any, relating to tax and other
payroll deductions as the Employers may reasonably determine should
be withheld pursuant to any applicable law or regulation.
10. Assignability. The Employers may assign this Agreement
and its rights and obligations hereunder in whole, but not in part,
to any corporation, bank or other entity with or into which the
Employers may hereafter merge or consolidate or to which the
Employers may transfer all or substantially all of its assets, if
in any such case said corporation, bank or other entity shall by
operation of law or expressly in writing assume all obligations
of the Employers hereunder as fully as if it had been originally
made a party hereto, but may not otherwise assign this Agreement
or its rights and obligations hereunder. The Executive may not
assign or transfer this Agreement or any rights or obligations
hereunder.
11. Notice. For the purposes of this Agreement, notices and
all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when delivered or
mailed by certified or registered mail, return receipt requested,
postage prepaid, addressed to the respective addresses set forth
below:
9
To the Employers: Board of Directors
Shay Investment Services, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
To the Executive: G. Xxxxx Xxxxxxxxxx, Xx.
Iberville Building and Loan Association, FSB
00000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
12. Amendment; Waiver. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by the Executive and such
officer or officers as may be specifically designated by the Boards of
Directors of the Employers to sign on its behalf. No waiver by
any party hereto at any time of any breach by any other party
hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time.
13. Governing Law. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the
United States where applicable and otherwise by the substantive laws
of the State of Florida without giving effect to the conflict of law
principles thereof.
14. Nature of Obligations. Nothing contained herein shall create
or require the Employers to create a trust of any kind to fund any
benefits which may be payable hereunder, and to the extent that the
Executive acquires a right to receive benefits from the Employers
hereunder, such right shall be no greater than the right of any
unsecured general creditor of the Employers.
15. Interpretation and Headings. This agreement shall be
interpreted in order to achieve the purposes for which it was entered
into. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
16. Validity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any
other provisions of this Agreement, which shall remain in full
force and effect.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same instrument.
18. Regulatory Actions. The following provisions shall be applicable
to the parties to the extent that they are required to be included in
employment agreements between a savings association and its employees
pursuant to Section 563.39(b) of the regulations applicable to
all savings associations, 12 C.F.R. Section 563.39(b), or any successor
thereto, and shall be controlling in the event of a conflict with
any other provision of this Agreement, including without
limitation Section 5 hereof.
10
(a) If the Executive is suspended from office and/or temporarily
prohibited from participating in the conduct of the Employers'
affairs pursuant to notice served under Section 8(e)(3) or
Section 8(g)(1) of the Federal Deposit Insurance Act ("FDIA") (12
U.S.C. Sections 1818(e)(3) and 1818(g)(1)), the Employers' obligations
under this Agreement shall be suspended as of the date of
service, unless stayed by appropriate proceedings. If the charges
in the notice are dismissed, the Employers may, in their
discretion: (i) pay the Executive all or part of the compensation
withheld while its obligations under this Agreement were
suspended, and (ii) reinstate (in whole or in part) any of its
obligations which were suspended.
(b) If the Executive is removed from office and/or permanently
prohibited from participating in the conduct of the Employers'
affairs by an order issued under Section 8(e)(4) or Section
8(g)(1) of the FDIA (12 U.S.C. Sections 1818(e)(4) and (g)(1)), all
obligations of the Employers under this Agreement shall terminate
as of the effective date of the order, but vested rights of the
Executive and the Employers as of the date of termination shall
not be affected.
(c) If the Bank is in default, as defined in Section 3(x)(1) of
the FDIA (12 U.S.C. Section 1813(x)(1)), all obligations under this
Agreement shall terminate as of the date of default, but vested
rights of the Executive and the Employers as of the date of
termination shall not be affected.
(d) All obligations under this Agreement shall be terminated
pursuant to 12 C.F.R. Section 563.39(b)(5) (except to the extent
that it is determined that continuation of the Agreement for the
continued operation of the Employers is necessary): (i) by the
Director of the OTS, or his/her designee, at the time the Federal
Deposit Insurance Corporation ("FDIC") enters into an agreement
to provide assistance to or on behalf of the Bank under the
authority contained in Section 13(c) of the FDIA (12 U.S.C.
Section 1823(c)); or (ii) by the Director of the OTS, or his/her
designee, at the time the Director or his/her designee approves a
supervisory merger to resolve problems related to operation of
the Bank or when the Bank is determined by the Director of the
OTS to be in an unsafe or unsound condition, but vested rights of
the Executive and the Employers as of the date of termination
shall not be affected.
19. Regulatory Prohibition. Notwithstanding any other
provision of this Agreement to the contrary, any payments made to
the Executive pursuant to this Agreement, or otherwise, are subject
to and conditioned upon their compliance with Section 18(k) of the
FDIA (12 U.S.C. Section 1828(k)) and the regulations promulgated
thereunder.
11
IN WITNESS WHEREOF, this Agreement has been executed as of
the date first above written.
Attest:
SHAY INVESTMENT SERVICES, INC.
/s/ Xxxxxx X. Xxxxxxx By: Xxxxxx X. Xxxx
----------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxx
Title: Vice President Title: President
Attest:
IBERVILLE BUILDING AND LOAN
ASSOCIATION, FSB
/s/ Xxxxxx X. Xxxxxxx By: Xxxxxx X. Xxxx
----------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxx
Title: Vice President Title: President
EXECUTIVE
By: G. Xxxxx Xxxxxxxxxx, Xx.
-----------------------------
G. Xxxxx Xxxxxxxxxx, Xx.
12
ANNEX D
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement"), is made and
entered into as of June 19, 2002 and shall be effective as of the
Effective Time as defined in the Agreement and Plan of Merger
dated June 19, 2002 by and between Shay Investment Services, Inc.
and IBL Bancorp, Inc. (the "Merger Agreement"). This Agreement
is contingent upon the closing of the transaction contemplated by
the Merger Agreement and shall be void if such transaction is not
consummated. This Agreement is between Shay Investment Services,
Inc., a Florida corporation (the "Corporation"), Iberville
Building and Loan Association, FSB (formerly the Iberville
Building and Loan Association), a federal savings bank and a
wholly-owned subsidiary of the Corporation (the "Bank"), and Xxxxx
X. Xxxxxxxxxx (the "Executive").
WITNESSETH
WHEREAS, the Executive is presently an officer of IBL
Bancorp, Inc. and The Iberville Building and Loan Association;
WHEREAS, the Corporation and the Bank (together the
"Employers") desire to be ensured of the Executive's continued
active participation in the business of the Employers after the
Effective Time;
WHEREAS, the Executive is willing to serve the Corporation
and the Bank on the terms and conditions hereinafter set forth;
and
WHEREAS, this Agreement is intended to supersede any and all
prior employment agreements between the Executive and the
Corporation, the Executive and the Bank, the Executive and IBL
Bancorp, Inc. or the Executive and The Iberville Building and
Loan Association;
NOW THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the parties hereby agree as
follows:
1. Definitions. The following words and terms shall have
the meanings set forth below for the purposes of this Agreement:
(a) Average Annual Compensation. The Executive's "Average
Annual Compensation" for purposes of this Agreement shall be deemed
to mean the average level of compensation paid to the Executive by
the Employers or any subsidiary thereof during the most recent
five taxable years preceding the Date of Termination (or such
shorter period as the Executive was employed), including Base
Salary and bonuses under any employee benefit plans of the
Employers but excluding any compensation resulting from the
exercise of stock options or the vesting of restricted stock
awards.
(b) Base Salary. "Base Salary" shall have the meaning set forth
in Section 3(a) hereof.
(c) Cause. Termination of the Executive's employment for
"Cause" shall mean termination because of personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or final
cease-and-desist order or material breach of any provision
of this Agreement. For purposes of this paragraph, no act or
failure to act on the Executive's part shall be considered
"willful" unless done, or omitted to be done, by the Executive
not in good faith and without reasonable belief that the
Executive's action or omission was in the best interest of the
Employers.
(d) Change in Control of the Corporation. A Change in
Control of the Corporation (Change in Control of the Corporation)
shall be deemed to have occurred upon the happening of any of the
following events:
(i) approval by the stockholders of the
Corporation of a transaction that would result in the
reorganization, merger or consolidation of the
Corporation, respectively, with one or more other
persons, other than a transaction following which:
(A) at least 51% of the equity ownership
interests of the entity resulting from such
transaction are beneficially owned (within the
meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended
Exchange Act) in substantially the same relative
proportions by persons who, immediately prior to
such transaction, beneficially owned (within the
meaning of Rule 13d-3 promulgated under the
Exchange Act) at least 51% of the outstanding
equity ownership interests in the Corporation; and
(B) at least 51% of the securities entitled
to vote generally in the election of directors of
the entity resulting from such transaction are
beneficially owned (within the meaning of Rule 13d-
3 promulgated under the Exchange Act) in
substantially the same relative proportions by
persons who, immediately prior to such transac
tion, beneficially owned (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) at
least 51% of the securities entitled to vote
generally in the election of directors of the
Corporation;
(ii) the acquisition of all or substantially all
of the assets of the Corporation or beneficial
ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 25% or more of the
outstanding securities of the Corporation entitled to
vote generally in the election of directors by any
person or by any persons acting in concert, or approval
by the stockholders of the Corporation of any
transaction which would result in such an acquisition;
(iii) a complete liquidation or dissolution of
the Corporation, or approval by the stockholders of the
Corporation of a plan for such liquidation or
dissolution;
(iv) the occurrence of any event if, immediately
following such event, at least 50% of the members of
the Board of the Corporation do not belong to any of
the following groups:
2
(A) individuals who were members of the
Board of the Corporation on the date of this
Agreement; or
(B) individuals who first became members of
the Board of the Corporation after the date of
this Agreement either:
(I) upon election to serve as a member
of the Board of the Corporation by
affirmative vote of three-quarters of the
members of such Board, or of a nominating
committee thereof, in office at the time of
such first election; or
(II) upon election by the stockholders
of the Corporation to serve as a member of
the Board of the Corporation, but only if
nominated for election by affirmative vote of
three-quarters of the members of the Board of
the Corporation, or of a nominating committee
thereof, in office at the time of such first
nomination;
provided, however, that such individual's election
or nomination did not result from an actual or
threatened election contest or other actual or
threatened solicitation of proxies or consents
other than by or on behalf of the Board of the
Corporation; or
(v) any event which would be described in Section
1(d)(i), (ii), (iii) or (iv) if the term Bank were
substituted for the term Corporation each time the term
appears therein.
In no event, however, shall a Change in Control of the
Corporation be deemed to have occurred as a result of any
acquisition of securities or assets of the Corporation, the Bank,
or a subsidiary of either of them, by the Corporation, the Bank,
or a subsidiary of either of them, or by any employee benefit
plan maintained by any of them. A Change in Control of the
Corporation shall not be deemed to have occurred due to the
Merger Agreement or any transactions contemplated by the Merger
Agreement. For purposes of this Section 1(d), the term person
shall have the meaning assigned to it under Sections 13(d)(3) or
14(d)(2) of the Exchange Act.
(e) Code. "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(f) Date of Termination. "Date of Termination" shall mean the
date specified in the Notice of Termination.
(g) Disability. Termination by the Employers of the
Executive's employment based on "Disability" shall mean termination
because of any physical or mental impairment which qualifies the
Executive for disability benefits under the applicable long-term
disability plan maintained by the Employers or any subsidiary or,
if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System.
Termination by the Employers of the Executive's employment based
on "Disability" shall also mean the termination of the
Executive's employment upon a determination, by vote of a
majority of the members of the Board of Directors of the
Corporation, acting in reliance on the written advice of
3
a medical professional acceptable to them, that the Executive is
suffering from a physical or mental impairment which, at the date
of the determination, has prevented the Executive from performing
his assigned duties on a substantially full-time basis for a
period of at least one hundred and eighty (180) days during the
period of one (1) year ending with the date of the determination
or is likely to result in death or prevent the Executive from
performing his assigned duties on a substantially full-time basis
for period of at least one hundred and eighty (180) days during
the period of one (1) year beginning with the date of the
determination.
(h) Good Reason. Termination by the Executive of the Executive's
employment for "Good Reason" shall mean termination by the
Executive following a Change in Control of the Corporation based
on:
(i) Without the Executive's express written consent, the failure
to elect or to re-elect or to appoint or to re-appoint the
Executive to the offices of Vice President of the Bank or a
material adverse change made by the Bank in the Executive's
functions, duties or responsibilities as Vice President
of the Bank;
(ii) Without the Executive's express written consent, a material
reduction by the Employers in the Executive's Base Salary as the
same may be increased from time to time or, except to the extent
permitted by Section 3(b) hereof, a material reduction in the
package of fringe benefits provided to the Executive, taken as a
whole;
(iii) Without the Executive's express written consent, the
Employers require the Executive to work in an office which is
more than 30 miles from the location of the Employers' current
principal executive office, except for required travel on
business of the Employers to an extent substantially consistent
with the Executive's present business travel obligations;
(iv) Any purported termination of the Executive's employment for
Cause, Disability or Retirement which is not effected pursuant to
a Notice of Termination satisfying the requirements of paragraph
(j) below; or
(v) The failure by the Employers to obtain the assumption of and
agreement to perform this Agreement by any successor as
contemplated in Section 10 hereof.
(i) IRS. IRS shall mean the Internal Revenue Service.
(j) Notice of Termination. Any purported termination of the
Executive's employment by the Employers for any reason, including
without limitation for Cause, Disability or Retirement, or by the
Executive for any reason, including without limitation for Good
Reason, shall be communicated by written "Notice of Termination"
to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated notice which (i)
indicates the specific termination provision in this Agreement
relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated, (iii)
specifies a Date of Termination,
4
which shall be not less than thirty (30) nor more than ninety (90)
days after such Notice of Termination is given, except in the case
of the Employers' termination of the Executive's employment for
Cause; and (iv) is given in the manner specified in Section 11 hereof.
(k) Retirement "Retirement" shall mean voluntary termination by
the Executive in accordance with the Employers' retirement
policies, including early retirement, generally applicable to the
Employers' salaried employees.
2. Term of Employment
(a) The Employers hereby employ the Executive as Vice
President of the Bank and the Executive hereby accepts said
employment and agrees to render such services to the Employers
on the terms and conditions set forth in this Agreement. Unless
extended as provided in this Section 2, this Agreement shall
terminate on December 31, 2005 or such earlier time as may be
required by the Office of Thrift Supervision ("OTS"). The Board
of Directors of the Corporation may consider, review (taking into
account all relevant factors, including the Executive's performance)
and, if appropriate, explicitly approve a one-year extension of the
remaining term of this Agreement prior to December 31st of 2003 or
any year thereafter during the term of this Agreement. The term of
this Agreement shall extend each year if the Board of Directors so
approve such extension unless the Executive gives written notice to
the Corporation of the Executive's election not to extend the term,
with such notice to be given not less than thirty (30) days prior to
any such December 31st. If the Board of Directors elect not to extend
the term, they shall give written notice of such decision to the
Executive not less than thirty (30) days prior to any such
December 31st. If any party gives timely notice that the term
will not be extended, then this Agreement shall terminate at the
conclusion of its remaining term. References herein to the term
of this Agreement shall refer both to the initial term and
successive terms.
(b) During the term of this Agreement, the Executive shall
perform such executive services for the Bank as is consistent
with his title of Vice President.
3. Compensation and Benefits.
(a) The Employers shall compensate and pay the Executive for his
services during the term of this Agreement at a minimum base
salary of $54,600 per year payable in twice monthly installments
("Base Salary"), which may be increased from time to time in such
amounts as may be determined by the Board of Directors of the
Corporation. In addition to his Base Salary, the Executive shall
be entitled to receive during the term of this Agreement such
bonus payments as may be determined by the Board of Directors of
the Corporation.
(b) During the term of the Agreement, the Executive shall
be entitled to participate in and receive the benefits of any
pension or other retirement benefit plan, profit sharing, stock
option, employee stock ownership, or other plans and benefits
given to all employees of the Employers, to the extent
commensurate with his then duties and responsibilities, as fixed
by the Board of Directors of the Corporation. The Employers
shall not make any changes in such plans or benefits which would
adversely affect the Executive's rights or benefits thereunder,
unless such change occurs pursuant to a program applicable to all
executive officers of the Employers and does not result in a
proportionately greater adverse change in the rights of or
benefits to the
5
Executive as compared with any other executive officer of the
Employers. Nothing paid to the Executive under any plan or arrangement
presently in effect or made available in the future shall be deemed to
be in lieu of the salary payable to the Executive pursuant to Section
3(a) hereof.
(c) During the term of this Agreement, the Executive shall be
entitled to paid annual vacation in accordance with the policies
as established from time to time by the Board of Directors of the
Corporation. The Executive shall not be entitled to receive any
additional compensation from the Employers for failure to take a
vacation, nor shall the Executive be able to accumulate unused
vacation time from one year to the next, except to the extent
authorized by the Board of Directors of the Corporation.
4. Expenses. The Employers shall reimburse the Executive
or otherwise provide for or pay for all reasonable expenses incurred
by the Executive in furtherance of, or in connection with the
business of the Employers, including, but not by way of limitation,
traveling expenses and all reasonable entertainment expenses
(whether incurred at the Executive's residence, while traveling
or otherwise), subject to such reasonable documentation and other
limitations as may be established by the Board of Directors of
the Corporation. If such expenses are paid in the first instance
by the Executive, the Employers shall reimburse the Executive
therefor.
5. Termination.
(a) The Employers shall have the right, at any time upon
prior Notice of Termination, to terminate the Executive's
employment hereunder for any reason, including without limitation
termination for Cause, Disability or Retirement, and the
Executive shall have the right, upon prior Notice of Termination,
to terminate his employment hereunder for any reason.
(b) In the event that (i) the Executive's employment is
terminated by the Employers for Cause, Disability or Retirement
or in the event of the Executive's death, or (ii) the Executive
terminates his employment hereunder other than for Good Reason,
the Executive shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the
applicable Date of Termination.
(c) In the event that (i) the Executive's employment is
terminated by the Employers for other than Cause, Disability,
Retirement or the Executive's death or (ii) such employment is
terminated by the Executive (a) due to a material breach of this
Agreement by the Employers, which breach has not been cured
within thirty (30) days after a written notice of non-compliance
has been given by the Executive to the Employers, or (b) for Good
Reason, then the Employers shall, subject to the provisions of
Section 6 hereof, if applicable, pay to the Executive: (i) a cash
severance amount equal to the Base Salary of the Executive as
determined in Section 3(a) hereof that would have been paid to
the Executive had his employment continued for the remaining
unexpired term of the Agreement as then determined under Section
2(a) hereof and (ii) a cash amount equal to the amount of bonus
paid to the Executive in the prior calendar year multiplied by a
fraction, the numerator of which is the remaining unexpired term
of the Agreement as then determined under Section 2(a) hereof
expressed in days and the denominator of which is 365, with all
such cash amounts payable in equal monthly installments beginning
with the first business day of the month following the Date of
Termination. If cash payment is to be made under this Section
5(c), the Employers shall also maintain and provide for a period
ending at the earlier of (i) the date of the Executive's
employment by another employer that offers health
6
insurance to the Executive or (ii) the date of expiration of the
applicable continuation coverage period for the Executive as
determined under Section 4980B(f)(2)(B) of the Code, at no cost to
the Executive, the Executive's continued participation in all group
health insurance plans, programs and arrangements in which the
Executive was entitled to participate immediately prior to the
Date of Termination.
6. Limitation of Benefits under Certain Circumstances.
If the payments and benefits pursuant to Section 5 hereof,
either alone or together with other payments and benefits which
the Executive has the right to receive from the Employers, would
constitute a "parachute payment" under Section 280G of the Code,
the payments and benefits pursuant to Section 5 hereof shall be
reduced, in the manner determined by the Executive, by the
amount, if any, which is the minimum necessary to result in no
portion of the payments and benefits under Section 5 being non-
deductible to either of the Employers pursuant to Section 280G of
the Code and subject to the excise tax imposed under Section 4999
of the Code. The determination of any reduction in the payments
and benefits to be made pursuant to Section 5 shall be based upon
the opinion of independent tax counsel selected by the Employers
and paid by the Employers. Such counsel shall be reasonably
acceptable to the Employers and the Executive; shall promptly
prepare the foregoing opinion, but in no event later than thirty
(30) days from the Date of Termination; and may use such
actuaries as such counsel deems necessary or advisable for the
purpose. The Employers shall pay to the Executive the maximum
amount of payments and benefits pursuant to Section 5, as
selected by the Executive, which such opinion indicates that
there is a high probability do not result in any of such payments
and benefits being non-deductible to the Employers and subject to
the imposition of the excise tax imposed under Section 4999 of
the Code. Nothing contained herein shall result in a reduction of
any payments or benefits to which the Executive may be entitled
upon termination of employment under any circumstances other than
as specified in this Section 6, or a reduction in the payments
and benefits specified in Section 5 below zero.
7. Protective Covenants.
(a) Non-Competition. The Executive hereby covenants
and agrees that, in the event of his termination of employment
with the Corporation prior to the expiration of the Term of
Employment as determined in Section 2, for a period of eighteen
(18) months following the date of his termination of employment
with the Corporation or the Bank, he shall not, without the
written consent of the Corporation, become an officer, employee,
consultant, director or trustee of any savings bank, savings and
loan association, savings and loan holding company, bank or bank
holding company, any other entity engaged in the business of
accepting deposits or making loans or any other business activity
of the Corporation, or any direct or indirect subsidiary or
affiliate of any such entity having its principal office located
in the parishes of Iberville or West Baton Rouge in Louisiana or
in Xxxx County, Illinois, Dallas County, Texas, Dade County,
Florida, Xxxxxx County, Indiana, New York County, New York,
Fairfield County, Connecticut, Union County, New Jersey or
Allegheny County, Pennsylvania; provided, however, that this
Section 7(a) shall not apply if the Executives employment is
terminated due to death, a voluntary or involuntary termination
following a Change in Control of the Corporation, or the
Executive's involuntary termination by the Employers without
Cause.
(b) Confidentiality. Unless he obtains the prior
written consent of the Corporation, the Executive shall keep
confidential and shall refrain from using for the benefit of
7
himself, or any person or entity other than the Corporation or
any entity which is a subsidiary of the Corporation or of which
the Corporation is a subsidiary, any material document or
information obtained from the Corporation, or from its parent or
subsidiaries, in the course of his employment with any of them
concerning their properties, operations or business (unless such
document or information is readily ascertainable from public or
published information or trade sources or has otherwise been made
available to the public through no fault of his own) until the
same ceases to be material (or becomes so ascertainable or
available); provided, however, that nothing in this Section 7(b)
shall prevent the Executive, with or without the Corporations
consent, from participating in or disclosing documents or
information in connection with any judicial, regulatory or
administrative investigation, inquiry or proceeding to the extent
that such participation or disclosure is required under
applicable law.
(c) Solicitation. The Executive hereby covenants and
agrees that, for a period of eighteen (18) months following his
termination of employment with the Corporation or the Bank, he
shall not, without the written consent of the Corporation and the
Bank, either directly or indirectly:
(i) solicit, offer employment to, or take any
other action intended, or that a reasonable person
acting in like circumstances would expect, to have the
effect of causing any officer or employee of the
Corporation, the Bank or any of their respective
subsidiaries or affiliates to terminate his or her
employment and accept employment or become affiliated
with, or provide services for compensation in any
capacity whatsoever to, any savings bank, savings and
loan association, bank, bank holding company, savings
and loan holding company, or other institution engaged
in the business of accepting deposits, making loans or
doing any other business activity of the Corporation
and having its principal office located in the parishes
of Iberville or West Baton Rouge in Louisiana or in
Xxxx County, Illinois, Dallas County, Texas, Dade
County, Florida, Xxxxxx County, Indiana, New York
County, New York, Fairfield County, Connecticut, Union
County, New Jersey or Allegheny County, Pennsylvania;
(ii) provide any information, advice or
recommendation with respect to any such officer or
employee of any savings bank, savings and loan
association, bank, bank holding company, savings and
loan holding company, or other institution engaged in
the business of accepting deposits, making loans or
doing any other business activity of the Corporation
within the parishes of Iberville or West Baton Rouge in
Louisiana or in Xxxx County, Illinois, Dallas County,
Texas, Dade County, Florida, Xxxxxx County, Indiana,
New York County, New York, Fairfield County,
Connecticut, Union County, New Jersey or Allegheny
County, Pennsylvania; that is intended, or that a
reasonable person acting in like circumstances would
expect, to have the effect of causing any officer or
employee of the Corporation, the Bank, or any of their
respective subsidiaries or affiliates to terminate his
employment and accept employment or become affiliated
with, or provide services for compensation in any
capacity whatsoever to, any savings bank, savings and
loan association, bank, bank holding company, savings
and loan holding company, or other institution engaged
in the business of accepting deposits, making loans or
doing any other business activity of the Corporation
and having its principal office located in the parishes
of Iberville or West Baton Rouge in Louisiana or in Xxxx
County, Illinois, Dallas
8
County, Texas, Dade County, Florida, Xxxxxx County,
Indiana, New York County, New York, Fairfield
County, Connecticut, Union County, New Jersey or
Allegheny County, Pennsylvania;
(iii) solicit, provide any information, advice
or recommendation or take any other action intended, or
that a reasonable person acting in like circumstances
would expect, to have the effect of causing any
customer of the Corporation to terminate an existing
business or commercial relationship with the
Corporation.
(d) Survival of the Section 7 Provisions. The provisions
of this Section 7 shall survive the termination or expiration of
this Agreement, and the existence of any claim or cause of action
of the Executive against the Corporation, whether predicated on
this Agreement or otherwise, shall not constitute a defense to
the enforcement by the Corporation of such covenant.
8. Mitigation; Exclusivity of Benefits.
(a) The Executive shall not be required to mitigate the
amount of any benefits hereunder by seeking other employment or
otherwise, nor shall the amount of any such benefits be reduced
by any compensation earned by the Executive as a result of
employment by another employer after the Date of Termination or
otherwise.
(b) The specific arrangements referred to herein are not
intended to exclude any other benefits which may be available to
the Executive upon a termination of employment with the Employers
pursuant to employee benefit plans of the Employers or otherwise.
9. Withholding. All payments required to be made by the
Employers hereunder to the Executive shall be subject to the
withholding of such amounts, if any, relating to tax and other
payroll deductions as the Employers may reasonably determine should
be withheld pursuant to any applicable law or regulation.
10. Assignability. The Employers may assign this Agreement
and its rights and obligations hereunder in whole, but not in part,
to any corporation, bank or other entity with or into which the
Employers may hereafter merge or consolidate or to which the
Employers may transfer all or substantially all of its assets, if
in any such case said corporation, bank or other entity shall by
operation of law or expressly in writing assume all obligations
of the Employers hereunder as fully as if it had been originally
made a party hereto, but may not otherwise assign this Agreement
or its rights and obligations hereunder. The Executive may not
assign or transfer this Agreement or any rights or obligations
hereunder.
11. Notice. For the purposes of this Agreement, notices and
all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when delivered or
mailed by certified or registered mail, return receipt requested,
postage prepaid, addressed to the respective addresses set forth
below:
To the Employers: Board of Directors
Shay Investment Services, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
9
To the Executive: Xxxxx X. Xxxxxxxxxx
Iberville Building and Loan Association, FSB
00000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
12. Amendment; Waiver. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by the Executive and such
officer or officers as may be specifically designated by the Boards of
Directors of the Employers to sign on its behalf. No waiver by
any party hereto at any time of any breach by any other party
hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time.
13. Governing Law. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the
United States where applicable and otherwise by the substantive laws
of the State of Florida without giving effect to the conflict of law
principles thereof.
14. Nature of Obligations. Nothing contained herein shall create
or require the Employers to create a trust of any kind to fund any
benefits which may be payable hereunder, and to the extent that the
Executive acquires a right to receive benefits from the Employers
hereunder, such right shall be no greater than the right of any
unsecured general creditor of the Employers.
15. Interpretation and Headings. This agreement shall be
interpreted in order to achieve the purposes for which it was entered
into. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
16. Validity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any
other provisions of this Agreement, which shall remain in full
force and effect.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same instrument.
18. Regulatory Actions. The following provisions shall be applicable
to the parties to the extent that they are required to be included in
employment agreements between a savings association and its employees
pursuant to Section 563.39(b) of the regulations applicable to
all savings associations, 12 C.F.R. Section 563.39(b), or any successor
thereto, and shall be controlling in the event of a conflict with
any other provision of this Agreement, including without
limitation Section 5 hereof.
(a) If the Executive is suspended from office and/or temporarily
prohibited from participating in the conduct of the Employers'
affairs pursuant to notice served under Section 8(e)(3) or
Section 8(g)(1) of the Federal Deposit Insurance Act ("FDIA") (12
U.S.C. Sections 1818(e)(3) and 1818(g)(1)), the Employers' obligations
under this Agreement shall be
10
suspended as of the date of service, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the Employers
may, in their discretion: (i) pay the Executive all or part of the
compensation withheld while its obligations under this Agreement were
suspended, and (ii) reinstate (in whole or in part) any of its
obligations which were suspended.
(b) If the Executive is removed from office and/or permanently
prohibited from participating in the conduct of the Employers'
affairs by an order issued under Section 8(e)(4) or Section
8(g)(1) of the FDIA (12 U.S.C. Sections 1818(e)(4) and (g)(1)), all
obligations of the Employers under this Agreement shall terminate
as of the effective date of the order, but vested rights of the
Executive and the Employers as of the date of termination shall
not be affected.
(c) If the Bank is in default, as defined in Section 3(x)(1) of
the FDIA (12 U.S.C. Section 1813(x)(1)), all obligations under this
Agreement shall terminate as of the date of default, but vested
rights of the Executive and the Employers as of the date of
termination shall not be affected.
(d) All obligations under this Agreement shall be terminated
pursuant to 12 C.F.R. Section 563.39(b)(5) (except to the extent
that it is determined that continuation of the Agreement for the
continued operation of the Employers is necessary): (i) by the
Director of the OTS, or his/her designee, at the time the Federal
Deposit Insurance Corporation ("FDIC") enters into an agreement
to provide assistance to or on behalf of the Bank under the
authority contained in Section 13(c) of the FDIA (12 U.S.C.
Section 1823(c)); or (ii) by the Director of the OTS, or his/her
designee, at the time the Director or his/her designee approves a
supervisory merger to resolve problems related to operation of
the Bank or when the Bank is determined by the Director of the
OTS to be in an unsafe or unsound condition, but vested rights of
the Executive and the Employers as of the date of termination
shall not be affected.
19. Regulatory Prohibition. Notwithstanding any other
provision of this Agreement to the contrary, any payments made to
the Executive pursuant to this Agreement, or otherwise, are subject
to and conditioned upon their compliance with Section 18(k) of the
FDIA (12 U.S.C. Section 1828(k)) and the regulations promulgated
thereunder.
11
IN WITNESS WHEREOF, this Agreement has been executed as of
the date first above written.
Attest:
SHAY INVESTMENT SERVICES, INC.
/s/ Xxxxxx X. Xxxxxxx By: Xxxxxx X. Xxxx
----------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxx
Title: Vice President Title: President
Attest:
IBERVILLE BUILDING AND LOAN
ASSOCIATION, FSB
/s/ Xxxxxx X. Xxxxxxx By: Xxxxxx X. Xxxx
----------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxx
Title: Vice President Title: President
EXECUTIVE
By: /s/ Xxxxx X. Xxxxxxxxxx
-----------------------------
Xxxxx X. Xxxxxxxxxx
12
