Exhibit 2.1
AGREEMENT
AND
PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") entered into as
of the 4th day of August, 1999, by and between FIRST PLACE FINANCIAL
CORPORATION ("First Place"), a New Mexico corporation, and XXXXX FARGO & COMPANY
("Xxxxx Fargo"), a Delaware corporation.
WHEREAS, the parties hereto desire to effect a reorganization whereby a
wholly-owned subsidiary of Xxxxx Fargo will merge with and into First Place (the
"Merger") pursuant to an agreement and plan of merger (the "Merger Agreement")
in substantially the form attached hereto as Exhibit A, which provides, among
other things, for the exchange of the shares of Common Stock of First Place, no
par value ("First Place Common Stock") outstanding immediately prior to the time
the Merger becomes effective in accordance with the provisions of the Merger
Agreement, into shares of voting Common Stock of Xxxxx Fargo of the par value of
$1-2/3 per share ("Xxxxx Fargo Common Stock"),
NOW, THEREFORE, to effect such reorganization and in consideration of
the premises and the mutual covenants and agreements contained herein, the
parties hereto do hereby represent, warrant, covenant and agree as follows:
1. BASIC PLAN OF REORGANIZATION
(a) Merger. Subject to the terms and conditions contained herein, a
wholly-owned subsidiary of Xxxxx Fargo (the "Merger Co.") will be merged by
statutory merger with and into First Place pursuant to the Merger Agreement,
with First Place as the surviving corporation, in which Merger each share of
First Place Common Stock outstanding immediately prior to the Effective Time of
the Merger (as defined below) (other than shares as to which statutory
dissenters' appraisal rights have been exercised) will be exchanged for the
number of shares of Xxxxx Fargo Common Stock determined by dividing 4,600,000 by
the number of shares of First Place Common Stock then outstanding.
(b) Xxxxx Fargo Common Stock Adjustments. If, between the date hereof
and the Effective Time of the Merger, shares of Xxxxx Fargo Common Stock shall
be changed into a different number of shares or a different class of shares by
reason of any reclassification, recapitalization, split-up, combination,
exchange of shares or readjustment, or if a stock dividend thereon shall be
declared with a record date within such period (a "Common Stock Adjustment"),
then the number of shares of Xxxxx Fargo Common Stock into which a share of
First Place Common Stock shall be converted pursuant to subparagraph (a), above,
will be appropriately and proportionately adjusted so that the number of such
shares of Xxxxx Fargo Common Stock into which a share of First Place Common
Stock shall be converted will equal the number of shares of Xxxxx Fargo Common
Stock which holders of shares of First Place Common Stock would have received
pursuant to such Common Stock Adjustment had the record date therefor been
immediately following the Effective Time of the Merger.
(c) Fractional Shares. No fractional shares of Xxxxx Fargo Common Stock
and no certificates or scrip certificates therefor shall be issued to represent
any such fractional interest, and any holder thereof shall be paid an amount of
cash equal to the product obtained by multiplying the fractional share interest
to which such holder is entitled by the average of the closing prices of a share
of Xxxxx Fargo Common Stock as reported by the consolidated tape of the New York
Stock Exchange for each of the five (5) trading days ending on the day
immediately preceding the meeting of shareholders required by paragraph 4(c) of
this Agreement.
(d) Mechanics of Closing Merger. Subject to the terms and conditions
set forth herein, the Merger Agreement shall be executed and it or Articles of
Merger or a Certificate of Merger shall be filed with the Office of Public
Regulation Commission of the State of New Mexico within ten (10) business days
following the satisfaction or waiver of all conditions precedent set forth in
Sections 6 and 7 of this Agreement or on such other date as may be agreed to by
the parties (the "Closing Date"); provided, however, that the Closing Date shall
not occur prior to January 15, 2000. Each of the parties agrees to use its best
efforts to cause the Merger to be completed as soon as practicable after the
receipt of final regulatory approval of the Merger and the expiration of all
required waiting periods. The time that the filing referred to in the first
sentence of this paragraph is made is herein referred to as the "Time of
Filing." The day on which such filing is made and accepted is herein referred to
as the "Effective Date of the Merger." The "Effective Time of the Merger" shall
be 11:59 p.m. Farmington, New Mexico time on the Effective Date of the Merger.
At the Effective Time of the Merger on the Effective Date of the Merger, the
separate existence of Merger Co. shall cease and Merger Co. will be merged with
and into First Place pursuant to the Merger Agreement.
The closing of the transactions contemplated by this Agreement and the
Merger Agreement (the "Closing") shall take place on the Closing Date at the
offices of Xxxxx Fargo, Norwest Center, Sixth and Marquette, Minneapolis,
Minnesota.
2. REPRESENTATIONS AND WARRANTIES OF FIRST PLACE. First Place
represents and warrants to Xxxxx Fargo as follows:
(a) Organization and Authority. First Place is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Mexico, is duly qualified to do business and is in good standing in all
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified and failure to be so qualified would
have a material adverse effect on First Place and the First Place Subsidiaries
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(as defined below) taken as a whole and has corporate power and authority to own
its properties and assets and to carry on its business as it is now being
conducted. First Place is registered as a bank holding company with the Federal
Reserve Board under the Bank Holding Company Act of 1956, as amended (the "BHC
Act"). First Place has furnished Xxxxx Fargo true and correct copies of its
articles of incorporation and by-laws, as amended.
(b) First Place's Subsidiaries. As used in this Agreement, "Schedule"
means the confidential schedule set forth in the separate disclosure schedule.
Schedule 2(b) sets forth a complete and correct list of all of First Place's
subsidiaries as of the date hereof (individually a "First Place Subsidiary" and
collectively the "First Place Subsidiaries"), all shares of the outstanding
capital stock of each of which, except as set forth on Schedule 2(b), are owned
directly or indirectly by First Place. No equity security of any First Place
Subsidiary is or may be required to be issued by reason of any option, warrant,
scrip, preemptive right, right to subscribe to, call or commitment of any
character whatsoever relating to, or security or right convertible into, shares
of any capital stock of such subsidiary, and there are no contracts,
commitments, understandings or arrangements by which any First Place Subsidiary
is bound to issue additional shares of its capital stock, or any option, warrant
or right to purchase or acquire any additional shares of its capital stock.
Except as set forth on Schedule 2(b) and subject to 12 U.S.C. ss. 55 (1982) with
respect to the national bank subsidiaries of First Place and the New Mexico
Business Corporation Act, all of such shares so owned by First Place are fully
paid and nonassessable and are owned by it free and clear of any lien, claim,
charge, option, encumbrance or agreement with respect thereto. Each First Place
Subsidiary is a corporation or national banking association duly organized,
validly existing, duly qualified to do business and in good standing under the
laws of its jurisdiction of incorporation, and has corporate power and authority
to own or lease its properties and assets and to carry on its business as it is
now being conducted. Except as set forth on Schedule 2(b), First Place does not
own beneficially, directly or indirectly, more than 5% of any class of equity
securities or similar interests of any corporation, bank, business trust,
association or similar organization, and is not, directly or indirectly, a
partner in any partnership or party to any joint venture.
(c) Capitalization. The authorized capital stock of First Place
consists of 5,000,000 shares of common stock, no par value, of which as of the
close of business on March 31, 1999, 2,170,397 shares were outstanding and no
shares were held in the treasury. The maximum number of shares of First Place
Common Stock (assuming for this purpose that phantom shares and other
share-equivalents, excluding stock appreciation rights, constitute First Place
Common Stock) that would be outstanding as of the Effective Date of the Merger
if all options, warrants, conversion rights and other rights with respect
thereto were exercised is 2,307,869. All of the outstanding shares of capital
stock of First Place have been duly and validly authorized and issued and are
fully paid and nonassessable. Except as set forth in Schedule 2(c), there are no
outstanding subscriptions, contracts, conversion privileges, options, warrants,
calls, preemptive rights or other rights obligating First Place or any First
Place Subsidiary to issue, sell or otherwise dispose of, or to purchase, redeem
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or otherwise acquire, any shares of capital stock of First Place or any First
Place Subsidiary. Since March 31, 1999, no shares of First Place capital stock
have been purchased, redeemed or otherwise acquired, directly or indirectly, by
First Place or any First Place Subsidiary and, except as set forth on Schedule
2(c), no dividends or other distributions have been declared, set aside, made or
paid to the shareholders of First Place.
(d) Authorization. First Place has the corporate power and authority to
enter into this Agreement and the Merger Agreement and, subject to any required
approvals of its shareholders, to carry out its obligations hereunder and
thereunder. The execution, delivery and performance of this Agreement and the
Merger Agreement by First Place and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by at least eighty
percent (80%) of the entire Board of Directors of First Place. Subject to such
approvals of shareholders and of government agencies and other governing boards
having regulatory authority over First Place as may be required by statute or
regulation, this Agreement and the Merger Agreement are valid and binding
obligations of First Place enforceable against First Place in accordance with
their respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors and contracting parties generally and except as
enforceability may be subject to general principles of equity.
Except as set forth on Schedule 2(d), neither the execution, delivery
and performance by First Place of this Agreement or the Merger Agreement, nor
the consummation of the transactions contemplated hereby and thereby, nor
compliance by First Place with any of the provisions hereof or thereof, will (i)
violate, conflict with, or result in a breach of any provision of, or constitute
a default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration of,
or result in the creation of, any lien, security interest, charge or encumbrance
upon any of the properties or assets of First Place or any First Place
Subsidiary under any of the terms, conditions or provisions of (x) its articles
of incorporation or by-laws or (y) any material note, bond, mortgage, indenture,
deed of trust, license, lease, agreement or other instrument or obligation to
which First Place or any First Place Subsidiary is a party or by which it may be
bound, or to which First Place or any First Place Subsidiary or any of the
properties or assets of First Place or any First Place Subsidiary may be
subject, or (ii) subject to compliance with the statutes and regulations
referred to in the next paragraph, to the best knowledge of First Place, violate
any judgment, ruling, order, writ, injunction, decree, statute, rule or
regulation applicable to First Place or any First Place Subsidiary or any of
their respective properties or assets.
Other than in connection or in compliance with the provisions of the
Securities Act of 1933 and the rules and regulations thereunder (the "Securities
Act"), the Securities Exchange Act of 1934 and the rules and regulations
thereunder (the "Exchange Act"), the securities or blue sky laws of the various
states or filings, consents, reviews, authorizations, approvals or exemptions
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required under the BHC Act or the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976 ("HSR Act"), and filings required to effect the Merger under New Mexico
law, no notice to, filing with, exemption or review by, or authorization,
consent or approval of, any public body or authority is necessary for the
consummation by First Place of the transactions contemplated by this Agreement
and the Merger Agreement.
(e) First Place Financial Statements. The consolidated balance sheets
of First Place and First Place's Subsidiaries as of December 31, 1998 and 1997
and related consolidated statements of income, shareholders' equity and cash
flows for the three years ended December 31, 1998, together with the notes
thereto, certified by KPMG LLP ("KPMG") and included in First Place's Annual
Report on Form 10-K for the fiscal year ended December 31, 0000 (xxx "Xxxxx
Xxxxx 00-X") as filed with the Securities and Exchange Commission (the "SEC"),
and the unaudited consolidated statements of financial condition of First Place
and First Place's Subsidiaries as of March 31, 1999 and the related unaudited
consolidated statements of income, shareholders' equity and cash flows for the
three (3) months then ended included in First Place's Quarterly Report on Form
10-Q for the fiscal quarter ended March 31, 1999 as filed with the SEC
(collectively, the "First Place Financial Statements"), have been prepared in
accordance with generally accepted accounting principles ("GAAP") applied on a
consistent basis and present fairly (subject, in the case of financial
statements for interim periods, to normal recurring adjustments) the
consolidated financial position of First Place and First Place's Subsidiaries at
the dates and the consolidated results of operations and cash flows of First
Place and First Place's Subsidiaries for the periods stated therein.
(f) Reports. Since December 31, 0000, Xxxxx Xxxxx and each First Place
Subsidiary has filed all reports, registrations and statements, together with
any required amendments thereto, that it was required to file, if any, with (i)
the SEC, including, but not limited to, Forms 10-K, Forms 10-Q and proxy
statements, (ii) the Federal Reserve Board, (iii) the Federal Deposit Insurance
Corporation (the "FDIC"), (iv) the United States Comptroller of the Currency
(the "Comptroller") and (v) any applicable state securities or banking
authorities. All such reports and statements filed with any such regulatory body
or authority are collectively referred to herein as the "First Place Reports."
As of their respective dates, the First Place Reports complied in all material
respects with all the rules and regulations promulgated by the SEC, the Federal
Reserve Board, the FDIC, the Comptroller and applicable state securities or
banking authorities, as the case may be, and did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Copies of all the
First Place Reports have been made available to Xxxxx Fargo by First Place.
(g) Properties and Leases. Except as may be reflected in the First
Place Financial Statements and except for any lien for current taxes not yet
delinquent, First Place and each First Place Subsidiary has good title free and
clear of any material liens, claims, charges, options, encumbrances or similar
restrictions to all the real and personal property reflected in First Place's
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consolidated balance sheet as of March 31, 1999 included in First Place's
Quarterly Report on Form 10-Q for the period then ended, and all real and
personal property acquired since such date, except such real and personal
property as has been disposed of in the ordinary course of business. All leases
of real property and all other leases material to First Place or any First Place
Subsidiary pursuant to which First Place or such First Place Subsidiary, as
lessee, leases real or personal property, which leases are described on Schedule
2(g), are valid and effective in accordance with their respective terms, and
there is not, under any such lease, any material existing default by First Place
or such First Place Subsidiary or any event which, with notice or lapse of time
or both, would constitute such a material default. Substantially all First
Place's and each First Place Subsidiary's buildings and equipment in regular use
have been well maintained and are in good and serviceable condition, reasonable
wear and tear excepted.
(h) Taxes. First Place and each First Place Subsidiary has filed all
federal, state, county, local and foreign tax returns, including information
returns, required to be filed by it, and paid all taxes owed by it, including
those with respect to income, withholding, social security, unemployment,
workers compensation, franchise, ad valorem, premium, excise and sales taxes,
and no taxes shown on such returns to be owed by it or assessments received by
it are delinquent. The federal income tax returns of First Place and the First
Place Subsidiaries for the fiscal year ended December 31, 1995, and for all
fiscal years prior thereto, are for the purposes of routine audit by the
Internal Revenue Service closed because of the statute of limitations, and no
claims for additional taxes for such fiscal years are pending. Neither First
Place nor any First Place Subsidiary is a party to any pending action or
proceeding, nor to our knowledge is any such action or proceeding threatened by
any governmental authority, for the assessment or collection of taxes, interest,
penalties, assessments or deficiencies. No issue has been raised by any federal,
state, local or foreign taxing authority in connection with an audit or
examination of the tax returns, business or properties of First Place or any
First Place Subsidiary which has not been settled, resolved and fully satisfied.
First Place and each First Place Subsidiary has paid all taxes owed or which it
is required to withhold from amounts owing to employees, creditors or other
third parties. The consolidated balance sheet as of March 31, 1999, referred to
in paragraph 2(e) hereof, includes adequate provision for all accrued but unpaid
federal, state, county, local and foreign taxes, interest, penalties,
assessments or deficiencies of First Place and the First Place Subsidiaries with
respect to all periods through the date thereof.
(i) Absence of Certain Changes. Since December 31, 1998 there has been
no change in the business, financial condition or results of operations of First
Place or any First Place Subsidiary, which has had, or may reasonably be
expected to have, a material adverse effect on the business, financial condition
or results of operations of First Place and the First Place Subsidiaries taken
as a whole.
(j) Commitments and Contracts. Except as set forth on Schedule 2(j),
neither First Place nor any First Place Subsidiary is a party or subject to any
of the following (whether written or oral, express or implied):
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(i) any employment contract or understanding (including any
understandings or obligations with respect to severance or termination
pay liabilities or fringe benefits) with any present or former officer,
director, employee or consultant (other than those which are terminable
at will by First Place or such First Place Subsidiary);
(ii) any plan, contract or understanding providing for any
bonus, pension, option, deferred compensation, retirement payment,
profit sharing or similar arrangement with respect to any present or
former officer, director, employee or consultant;
(iii) any labor contract or agreement with any labor union;
(iv) any contract not made in the ordinary course of business
containing covenants which limit the ability of First Place or any
First Place Subsidiary to compete in any line of business or with any
person or which involve any restriction of the geographical area in
which, or method by which, First Place or any First Place Subsidiary
may carry on its business (other than as may be required by law or
applicable regulatory authorities);
(v) any other contract or agreement which is a "material
contract" within the meaning of Item 601(b)(10) of Regulation S-K; or
(vi) any lease with annual rental payments aggregating $10,000
or more; or
(vii) any agreement or commitment with respect to the
Community Reinvestment Act with any state or federal bank regulatory
authority or any other party; or
(viii) any current or past agreement, contract or
understanding with any current or former director, officer, employee,
consultant, financial adviser, broker, dealer, or agent providing for
any rights of indemnification in favor of such person or entity.
(k) Litigation and Other Proceedings. First Place has furnished Xxxxx
Fargo copies of (i) all attorney responses to the request of the independent
auditors for First Place with respect to loss contingencies as of December 31,
1998 in connection with the First Place Financial Statements, and (ii) a written
list of legal and regulatory proceedings filed against First Place or any First
Place Subsidiary since December 31, 1998. Neither First Place nor any First
Place Subsidiary is a party to any pending or, to the best knowledge of First
Place, threatened, claim, action, suit, investigation or proceeding, or is
subject to any order, judgment or decree, except for matters which, in the
aggregate, will not have, or cannot reasonably be expected to have, a material
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adverse effect on the business, financial condition or results of operations of
First Place and the First Place Subsidiaries taken as a whole.
(l) Insurance. First Place and each First Place Subsidiary is presently
insured as set forth on Schedule 2(l), and during each of the past five calendar
years (or during such lesser period of time as First Place has owned such First
Place Subsidiary) has been insured.
(m) Compliance with Laws. First Place and each First Place Subsidiary
has all permits, licenses, authorizations, orders and approvals of, and has made
all filings, applications and registrations with, federal, state, local or
foreign governmental or regulatory bodies that are required in order to permit
it to own or lease its properties and assets and to carry on its business as
presently conducted and that are material to the business of First Place or such
First Place Subsidiary; all such permits, licenses, certificates of authority,
orders and approvals are in full force and effect and, to the best knowledge of
First Place, no suspension or cancellation of any of them is threatened; and all
such filings, applications and registrations are current. The conduct by First
Place and each First Place Subsidiary of its business and the condition and use
of its properties does not violate or infringe, in any respect material to any
such business, any applicable domestic (federal, state or local) or foreign law,
statute, ordinance, license or regulation. Neither First Place nor any First
Place Subsidiary is in default under any order, license, regulation or demand of
any federal, state, municipal or other governmental agency or with respect to
any order, writ, injunction or decree of any court. Except for statutory or
regulatory restrictions of general application, no federal, state, municipal or
other governmental authority has placed any restriction on the business or
properties of First Place or any First Place Subsidiary which reasonably could
be expected to have a material adverse effect on the business or properties of
First Place and the First Place Subsidiaries taken as a whole.
(n) Labor. No work stoppage involving First Place or any First Place
Subsidiary is pending or, to the best knowledge of First Place, threatened.
Neither First Place nor any First Place Subsidiary is involved in, or threatened
with or affected by, any labor dispute, arbitration, lawsuit or administrative
proceeding which could materially and adversely affect the business of First
Place or such First Place Subsidiary. Employees of First Place and the First
Place Subsidiaries are not represented by any labor union nor are any collective
bargaining agreements otherwise in effect with respect to such employees.
(o) Material Interests of Certain Persons. Except as set forth on
Schedule 2(o), to the best knowledge of First Place no officer or director of
First Place or any First Place Subsidiary, or any "associate" (as such term is
defined in Rule l4a-1 under the Exchange Act) of any such officer or director,
has any interest in any material contract or property (real or personal),
tangible or intangible, used in or pertaining to the business of First Place or
any First Place Subsidiary.
Schedule 2(o) sets forth a correct and complete list of any loan from
First Place or any First Place Subsidiary to any present officer, director,
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employee or any associate or related interest of any such person and which was
required under Regulation O of the Federal Reserve Board to be approved by or
reported to First Place's or such First Place Subsidiary's Board of Directors.
(p) First Place Benefit Plans.
(i) Schedule 2(p)(i) sets forth each employee benefit plan
with respect to which First Place or any First Place Subsidiary
contributes, sponsors or otherwise has any obligation (the "Plans").
For purposes of this Section 2(p) and Schedule 2(p)(i), "ERISA" means
the Employee Retirement Income Security Act of 1974, as amended, and
the term "Plan" or "Plans" means all employee benefit plans as defined
in Section 3(3) of ERISA, and all other benefit arrangements including,
without limitation, any plan, program, agreement, policy or commitment
providing for insurance coverage of employees, workers' compensation,
disability benefits, supplemental unemployment benefits, vacation
benefits, retirement benefits, severance or termination of employment
benefits, life, health, death, disability or accidental benefits.
(ii) Except as disclosed on Schedule 2(p)(ii), no Plan is a
"multiemployer plan" within the meaning of Section 3(37) of ERISA.
(iii) Except as disclosed on Schedule 2(p)(iii), no Plan
promises or provides health or life benefits to retirees or former
employees except as required by federal continuation of coverage laws
or similar state laws.
(iv) Except as disclosed on Schedule 2(p)(iv), (a) each Plan
is and has been in all material respects operated and administered in
accordance with its provisions and applicable law including, if
applicable, ERISA and the Code; (b) all reports and filings with
governmental agencies (including but not limited to the Department of
Labor, Internal Revenue Service, Pension Benefit Guaranty Corporation
and the Securities and Exchange Commission) required in connection with
each Plan have been timely made; (c) all disclosures and notices
required by law or Plan provisions to be given to participants and
beneficiaries in connection with each Plan have been properly and
timely made; (d) there are no actions, suits or claims pending, other
than routine uncontested claims for benefits with respect to each Plan;
and (e) each Plan intended to be qualified under Section 401(a) of the
Code has received a favorable determination letter from the Internal
Revenue Service stating that the Plan (including all amendments) is tax
qualified under Section 401(a) of the Code and First Place knows of no
reason that any such Plan is not qualified within the meaning of
Section 401(a) of the Code and knows of no reason that each related
Plan trust is not exempt from taxation under Section 501(a) of the
Code.
(v) Except as disclosed on Schedule 2(p)(v), (a) all
contributions, premium payments and other payments required to be made
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in connection with the Plans as of the date of this Agreement have been
made; (b) a proper accrual has been made on the books of First Place
for all contributions, premium payments and other payments due in the
current fiscal year but not made as of the date of this Agreement; (c)
no contribution, premium payment or other payment has been made in
support of any Plan that is in excess of the allowable deduction for
federal income tax purposes for the year with respect to which the
contribution was made (whether under Sections 162, 280G, 404, 419, 419A
of the Code or otherwise); and (d) with respect to each Plan that is
subject to Section 301 of ERISA or Section 412 of the Code, First Place
is not liable for any accumulated funding deficiency as that term is
defined in Section 412 of the Code and the projected benefit
obligations determined as of the date of this Agreement do not exceed
the assets of the Plan.
(vi) Except as disclosed in Schedule 2(p)(vi) and to best
knowledge of First Place, no Plan or any trust created thereunder, nor
any trustee, fiduciary or administrator thereof, has engaged in a
"prohibited transaction," as such term is defined in Section 4975 of
the Code or Section 406 of ERISA or violated any of the fiduciary
standards under Part 4 of Title 1 of ERISA which could subject such
Plan or trust, or any trustee, fiduciary or administrator thereof, or
any party dealing with any such Plan or trust, to a tax penalty or
prohibited transactions imposed by Section 4975 of the Code or would
result in material liability to First Place and the First Place
Subsidiaries as a whole.
(vii) No Plan subject to Title IV of ERISA or any trust
created thereunder has been terminated, nor have there been any
"reportable events" as that term is defined in Section 4043 of ERISA,
with respect to any Plan, other than those events which may result from
the transactions contemplated by this Agreement and the Merger
Agreement.
(viii) Except as disclosed in Schedule 2(p)(viii), neither the
execution and delivery of this Agreement and the Merger Agreement nor
the consummation of the transactions contemplated hereby and thereby
will (a) result in any material payment (including, without limitation,
severance, unemployment compensation, golden parachute or otherwise)
becoming due to any director or employee or former employee of First
Place under any Plan or otherwise, (b) materially increase any benefits
otherwise payable under any Plan, or (c) result in the acceleration of
the time of payment or vesting of any such benefits to any material
extent.
(q) Proxy Statement, etc. None of the information regarding First Place
and the First Place Subsidiaries supplied or to be supplied by First Place for
inclusion in (i) a Registration Statement on Form S-4 to be filed with the SEC
by Xxxxx Fargo for the purpose of registering the shares of Xxxxx Fargo Common
Stock to be exchanged for shares of First Place Common Stock pursuant to the
provisions of the Merger Agreement (the "Registration Statement"), (ii) the
proxy statement to be mailed to First Place's shareholders in connection with
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the meeting to be called to consider the Merger (the "Proxy Statement") and
(iii) any other documents to be filed with the SEC or any regulatory authority
in connection with the transactions contemplated hereby or by the Merger
Agreement will, at the respective times such documents are filed with the SEC or
any regulatory authority and, in the case of the Registration Statement, when it
becomes effective and, with respect to the Proxy Statement, when mailed, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary in order to make the statements therein not misleading
or, in the case of the Proxy Statement or any amendment thereof or supplement
thereto, at the time of the meeting of shareholders referred to in paragraph
4(c), be false or misleading with respect to any material fact, or omit to state
any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of any proxy for such meeting.
All documents which First Place and the First Place Subsidiaries are responsible
for filing with the SEC and any other regulatory authority in connection with
the Merger will comply as to form in all material respects with the provisions
of applicable law.
(r) Registration Obligations. Neither First Place nor any First Place
Subsidiary is under any obligation, contingent or otherwise, which will survive
the Merger by reason of any agreement to register any of its securities under
the Securities Act.
(s) Brokers and Finders. Except for Xxxxx Financial, Inc. and The Bank
Advisory Group, Inc., neither First Place nor any First Place Subsidiary nor any
of their respective officers, directors or employees has employed any broker or
finder or incurred any liability for any financial advisory fees, brokerage
fees, commissions or finder's fees, and no broker or finder has acted directly
or indirectly for First Place or any First Place Subsidiary in connection with
this Agreement and the Merger Agreement or the transactions contemplated hereby
and thereby.
(t) Administration of Trust Accounts. First Place and each First Place
Subsidiary has properly administered in all respects material and which could
reasonably be expected to be material to the financial condition of First Place
and the First Place Subsidiaries taken as a whole all accounts for which it acts
as a fiduciary, including but not limited to accounts for which it serves as a
trustee, agent, custodian, personal representative, guardian, conservator or
investment advisor, in accordance with the terms of the governing documents and
applicable state and federal law and regulation and common law. Neither First
Place, any First Place Subsidiary, nor any director, officer or employee of
First Place or any First Place Subsidiary has committed any breach of trust with
respect to any such fiduciary account which is material to or could reasonably
be expected to be material to the financial condition of First Place and the
First Place Subsidiaries taken as a whole, and the accountings for each such
fiduciary account are true and correct in all material respects and accurately
reflect the assets of such fiduciary account.
(u) No Defaults. Except as set forth in Schedule 2(u), First Place nor
any First Place Subsidiary is in default, nor has any event occurred which, with
the passage of time or the giving of notice, or both, would constitute a
default, under any material agreement, indenture, loan agreement or other
instrument to which it is a party or by which it or any of its assets is bound
-11-
or to which any of its assets is subject, the result of which has had or could
reasonably be expected to have a material adverse effect upon First Place and
the First Place Subsidiaries, taken as a whole. To the best of First Place's
knowledge, all parties with whom First Place or any First Place Subsidiary has
material leases, agreements or contracts or who owe to First Place or any First
Place Subsidiary material obligations other than with respect to those arising
in the ordinary course of the banking business of the First Place Subsidiaries
are in compliance therewith in all material respects.
(v) Environmental Liability. There is no legal, administrative, or
other proceeding, claim, or action of any nature seeking to impose, or that
could result in the imposition, on First Place or any First Place Subsidiary, of
any liability relating to the release of hazardous substances as defined under
any local, state or federal environmental statute, regulation or ordinance
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), pending or to the
best of First Place's knowledge, threatened against First Place or any First
Place Subsidiary the result of which has had or could reasonably be expected to
have a material adverse effect upon First Place and First Place's Subsidiaries
taken as a whole; to the best of First Place's knowledge there is no reasonable
basis for any such proceeding, claim or action; and to the best of First Place's
knowledge neither First Place nor any First Place Subsidiary is subject to any
agreement, order, judgment, or decree by or with any court, governmental
authority or third party imposing any such environmental liability. First Place
has provided Xxxxx Fargo with copies of all environmental assessments, reports,
studies and other related information in its possession with respect to each
bank facility and each non-residential OREO property.
(w) Compliance with Year 2000 Requirements. First Place is in full
compliance with its Year 2000 project management process as set forth in the May
5, 1997 Federal Financial Institutions Examination Council ("FFIEC") Interagency
Statement on the Year 2000 and subsequent guidance documents (the "FFIEC
Requirements"). First Place has made its Year 2000 project assessment and
remediation plan available to Xxxxx Fargo for review and has furnished Xxxxx
Fargo with copies of all communications between First Place or any First Place
Subsidiary and regulators having responsibility for overseeing compliance with
such FFIEC Requirements.
-12-
3. REPRESENTATIONS AND WARRANTIES OF XXXXX FARGO. Xxxxx Fargo
represents and warrants to First Place as follows:
(a) Organization and Authority. Xxxxx Fargo is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, is duly qualified to do business and is in good standing in all
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified and failure to be so qualified would
have a material adverse effect on Xxxxx Fargo and its subsidiaries taken as a
whole and has corporate power and authority to own its properties and assets and
to carry on its business as it is now being conducted. Xxxxx Fargo is registered
as a bank holding company with the Federal Reserve Board under the BHC Act.
(b) Xxxxx Fargo Subsidiaries. Schedule 3(b) sets forth a complete and
correct list as of December 31, 1998, of Xxxxx Fargo's Significant Subsidiaries
(as defined in Regulation S-X promulgated by the SEC) (individually a "Xxxxx
Fargo Subsidiary" and collectively the "Xxxxx Fargo Subsidiaries"), all shares
of the outstanding capital stock of each of which, except as set forth in
Schedule 3(b), are owned directly or indirectly by Xxxxx Fargo. No equity
security of any Xxxxx Fargo Subsidiary is or may be required to be issued to any
person or entity other than Xxxxx Fargo by reason of any option, warrant, scrip,
right to subscribe to, call or commitment of any character whatsoever relating
to, or security or right convertible into, shares of any capital stock of such
subsidiary, and there are no contracts, commitments, understandings or
arrangements by which any Xxxxx Fargo Subsidiary is bound to issue additional
shares of its capital stock, or options, warrants or rights to purchase or
acquire any additional shares of its capital stock. Subject to 12 U.S.C. ss. 55
(1982), all of such shares so owned by Xxxxx Fargo are fully paid and
nonassessable and are owned by it free and clear of any lien, claim, charge,
option, encumbrance or agreement with respect thereto. Each Xxxxx Fargo
Subsidiary is a corporation or national banking association duly organized,
validly existing, duly qualified to do business and in good standing under the
laws of its jurisdiction of incorporation, and has corporate power and authority
to own or lease its properties and assets and to carry on its business as it is
now being conducted.
(c) Xxxxx Fargo Capitalization. As of December 31, 1998, the authorized
capital stock of Xxxxx Fargo consists of (i) 5,000,000 shares of Preferred
Stock, without par value, of which as of the close of business on December 31,
1998, 980,000 shares of Cumulative Tracking Preferred Stock, at $200 stated
value, 9,726 shares of ESOP Cumulative Convertible Preferred Stock, at $1,000
stated value, 20,130 shares of 1995 ESOP Cumulative Convertible Preferred Stock,
at $1,000 stated value, 22,068 shares of 1996 ESOP Cumulative Convertible
Preferred Stock, at $1,000 stated value, 19,698 shares of 1997 ESOP Cumulative
Convertible Preferred Stock, at $1,000 stated value, and 8,740 shares of 1998
ESOP Cumulative Convertible Preferred Stock, $1,000 stated value, were
outstanding; (ii) 4,000,000 shares of Preference Stock, without par value, of
which as of the close of business on December 31, 1998, no shares were
outstanding; and (iii) 4,000,000,000 shares of Common Stock, $1-2/3 par value,
of which as of the close of business on December 31, 1998, 1,661,392,590 shares
were outstanding and 17,334,787 shares were held in the treasury. All of the
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outstanding shares of capital stock of Xxxxx Fargo have been duly and validly
authorized and issued and are fully paid and nonassessable.
(d) Authorization. Xxxxx Fargo has the corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder. The
execution, delivery and performance of this Agreement by Xxxxx Fargo and the
consummation of the transactions contemplated hereby have been duly authorized
by the Board of Directors of Xxxxx Fargo. No approval or consent by the
stockholders of Xxxxx Fargo is necessary for the execution and delivery of this
Agreement and the Merger Agreement and the consummation of the transactions
contemplated hereby and thereby. Subject to such approvals of government
agencies and other governing boards having regulatory authority over Xxxxx Fargo
as may be required by statute or regulation, this Agreement is a valid and
binding obligation of Xxxxx Fargo enforceable against Xxxxx Fargo in accordance
with its terms.
Neither the execution, delivery and performance by Xxxxx Fargo of this
Agreement or the Merger Agreement, nor the consummation of the transactions
contemplated hereby and thereby, nor compliance by Xxxxx Fargo with any of the
provisions hereof or thereof, will (i) violate, conflict with, or result in a
breach of any provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in a
right of termination or acceleration of, or result in the creation of, any lien,
security interest, charge or encumbrance upon any of the properties or assets of
Xxxxx Fargo or any Xxxxx Fargo Subsidiary under any of the terms, conditions or
provisions of (x) its certificate of incorporation or by-laws or (y) any
material note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which Xxxxx Fargo or any Xxxxx
Fargo Subsidiary is a party or by which it may be bound, or to which Xxxxx Fargo
or any Xxxxx Fargo Subsidiary or any of the properties or assets of Xxxxx Fargo
or any Xxxxx Fargo Subsidiary may be subject, or (ii) subject to compliance with
the statutes and regulations referred to in the next paragraph, to the best
knowledge of Xxxxx Fargo, violate any judgment, ruling, order, writ, injunction,
decree, statute, rule or regulation applicable to Xxxxx Fargo or any Xxxxx Fargo
Subsidiary or any of their respective properties or assets.
Other than in connection with or in compliance with the provisions of
the Securities Act, the Exchange Act, the securities or blue sky laws of the
various states or filings, consents, reviews, authorizations, approvals or
exemptions required under the BHC Act or the HSR Act, and filings required to
effect the Merger under New Mexico law, no notice to, filing with, exemption or
review by, or authorization, consent or approval of, any public body or
authority is necessary for the consummation by Xxxxx Fargo of the transactions
contemplated by this Agreement and the Merger Agreement.
(e) Xxxxx Fargo Financial Statements. The consolidated balance sheets
of Xxxxx Fargo and Xxxxx Fargo's subsidiaries as of December 31, 1998 and 1997
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and related consolidated statements of income, changes in stockholders' equity
and comprehensive income, and cash flows for the three years ended December 31,
1998, together with the notes thereto, certified by KPMG and included in Xxxxx
Fargo's Annual Report on Form 10-K for the fiscal year ended December 31, 1998
(the "Xxxxx Fargo 10-K") as filed with the SEC, and the unaudited consolidated
balance sheets of Xxxxx Fargo and its subsidiaries as of March 31, 1999 and the
related unaudited consolidated statements of income, changes in stockholders'
equity and comprehensive income, and cash flows for the three (3) months then
ended included in Xxxxx Fargo's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1999, as filed with the SEC (collectively, the "Xxxxx
Fargo Financial Statements"), have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis and present fairly
(subject, in the case of financial statements for interim periods, to normal
recurring adjustments) the consolidated financial position of Xxxxx Fargo and
its subsidiaries at the dates and the consolidated results of operations,
changes in financial position and cash flows of Xxxxx Fargo and its subsidiaries
for the periods stated therein. The Year 2000 disclosure contained in Xxxxx
Fargo's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
1999, as filed with the SEC and designated as the Year 2000 Readiness
Disclosures related to the Year 2000 Information and Readiness Disclosure Act,
is true and correct in all material respects as of the date hereof.
(f) Reports. Since December 31, 1993, Xxxxx Fargo and each Xxxxx Fargo
Subsidiary has filed all reports, registrations and statements, together with
any required amendments thereto, that it was required to file with (i) the SEC,
including, but not limited to, Forms 10-K, Forms 10-Q and proxy statements, (ii)
the Federal Reserve Board, (iii) the FDIC, (iv) the Comptroller and (v) any
applicable state securities or banking authorities. All such reports and
statements filed with any such regulatory body or authority are collectively
referred to herein as the "Xxxxx Fargo Reports." As of their respective dates,
the Xxxxx Fargo Reports complied in all material respects with all the rules and
regulations promulgated by the SEC, the Federal Reserve Board, the FDIC, the
Comptroller and any applicable state securities or banking authorities, as the
case may be, and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(g) Properties and Leases. Except as may be reflected in the Xxxxx
Fargo Financial Statements and except for any lien for current taxes not yet
delinquent, Xxxxx Fargo and each Xxxxx Fargo Subsidiary has good title free and
clear of any material liens, claims, charges, options, encumbrances or similar
restrictions to all the real and personal property reflected in Xxxxx Fargo's
consolidated balance sheet as of March 31, 1999 included in Xxxxx Fargo's
Quarterly Report on Form 10-Q for the period then ended, and all real and
personal property acquired since such date, except such real and personal
property as has been disposed of in the ordinary course of business. All leases
of real property and all other leases material to Xxxxx Fargo or any Xxxxx Fargo
Subsidiary pursuant to which Xxxxx Fargo or such Xxxxx Fargo Subsidiary, as
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lessee, leases real or personal property, are valid and effective in accordance
with their respective terms, and there is not, under any such lease, any
material existing default by Xxxxx Fargo or such Xxxxx Fargo Subsidiary or any
event which, with notice or lapse of time or both, would constitute such a
material default. Substantially all Xxxxx Fargo's and each Xxxxx Fargo
Subsidiary's buildings and equipment in regular use have been well maintained
and are in good and serviceable condition, reasonable wear and tear excepted.
(h) Taxes. Each of Xxxxx Fargo and the Xxxxx Fargo Subsidiaries has
filed all material federal, state, county, local and foreign tax returns,
including information returns, required to be filed by it, and paid or made
adequate provision for the payment of all taxes owed by it, including those with
respect to income, withholding, social security, unemployment, workers
compensation, franchise, ad valorem, premium, excise and sales taxes, and no
taxes shown on such returns to be owed by it or assessments received by it are
delinquent. The federal income tax returns of Xxxxx Fargo and the Xxxxx Fargo
Subsidiaries for the fiscal year ended December 31, 1982, and for all fiscal
years prior thereto, are for the purposes of routine audit by the Internal
Revenue Service closed because of the statute of limitations, and no claims for
additional taxes for such fiscal years are pending. Except only as set forth on
Schedule 3(h), (i) neither Xxxxx Fargo nor any Xxxxx Fargo Subsidiary is a party
to any pending action or proceeding, nor to Xxxxx Fargo's knowledge is any such
action or proceeding threatened by any governmental authority, for the
assessment or collection of taxes, interest, penalties, assessments or
deficiencies which could reasonably be expected to have any material adverse
effect on Xxxxx Fargo and its subsidiaries taken as a whole, and (ii) no issue
has been raised by any federal, state, local or foreign taxing authority in
connection with an audit or examination of the tax returns, business or
properties of Xxxxx Fargo or any Xxxxx Fargo Subsidiary which has not been
settled, resolved and fully satisfied, or adequately reserved for. Each of Xxxxx
Fargo and the Xxxxx Fargo Subsidiaries has paid all taxes owed or which it is
required to withhold from amounts owing to employees, creditors or other third
parties.
(i) Absence of Certain Changes. Since December 31, 1998, there has been
no change in the business, financial condition or results of operations of Xxxxx
Fargo or any Xxxxx Fargo Subsidiary which has had, or may reasonably be expected
to have, a material adverse effect on the business, financial condition or
results of operations of Xxxxx Fargo and its subsidiaries taken as a whole.
(j) Commitments and Contracts. Except as set forth on Schedule 3(j), as
of December 31, 1998 neither Xxxxx Fargo nor any Xxxxx Fargo Subsidiary is a
party or subject to any of the following (whether written or oral, express or
implied):
(i) any labor contract or agreement with any labor union;
(ii) any contract not made in the ordinary course of business
containing covenants which materially limit the ability of Xxxxx Fargo
or any Xxxxx Fargo Subsidiary to compete in any line of business or
with any person or which involve any material restriction of the
geographical area in which, or method by which, Xxxxx Fargo or any
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Xxxxx Fargo Subsidiary may carry on its business (other than as may be
required by law or applicable regulatory authorities);
(iii) any other contract or agreement which is a "material
contract" within the meaning of Item 601(b)(10) of Regulation S-K.
(k) Litigation and Other Proceedings. Neither Xxxxx Fargo nor any Xxxxx
Fargo Subsidiary is a party to any pending or, to the best knowledge of Xxxxx
Fargo, threatened, claim, action, suit, investigation or proceeding, or is
subject to any order, judgment or decree, except for matters which, in the
aggregate, will not have, or cannot reasonably be expected to have, a material
adverse effect on the business, financial condition or results of operations of
Xxxxx Fargo and its subsidiaries taken as a whole.
(l) Insurance. Xxxxx Fargo and each Xxxxx Fargo Subsidiary is presently
insured or self insured, and during each of the past five calendar years (or
during such lesser period of time as Xxxxx Fargo has owned such Xxxxx Fargo
Subsidiary) has been insured or self-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 and has maintained all insurance required by
applicable law and regulation.
(m) Compliance with Laws. Xxxxx Fargo and each Xxxxx Fargo Subsidiary
has all permits, licenses, authorizations, orders and approvals of, and has made
all filings, applications and registrations with, federal, state, local or
foreign governmental or regulatory bodies that are required in order to permit
it to own or lease its properties or assets and to carry on its business as
presently conducted and that are material to the business of Xxxxx Fargo or such
Subsidiary; all such permits, licenses, certificates of authority, orders and
approvals are in full force and effect, and to the best knowledge of Xxxxx
Fargo, no suspension or cancellation of any of them is threatened; and all such
filings, applications and registrations are current. The conduct by Xxxxx Fargo
and each Xxxxx Fargo Subsidiary of its business and the condition and use of its
properties does not violate or infringe, in any respect material to any such
business, any applicable domestic (federal, state or local) or foreign law,
statute, ordinance, license or regulation. Neither Xxxxx Fargo nor any Xxxxx
Fargo Subsidiary is in default under any order, license, regulation or demand of
any federal, state, municipal or other governmental agency or with respect to
any order, writ, injunction or decree of any court. Except for statutory or
regulatory restrictions of general application, no federal, state, municipal or
other governmental authority has placed any restrictions on the business or
properties of Xxxxx Fargo or any Xxxxx Fargo Subsidiary which reasonably could
be expected to have a material adverse effect on the business or properties of
Xxxxx Fargo and its subsidiaries taken as a whole.
(n) Labor. No work stoppage involving Xxxxx Fargo or any Xxxxx Fargo
Subsidiary is pending or, to the best knowledge of Xxxxx Fargo, threatened.
Neither Xxxxx Fargo nor any Xxxxx Fargo Subsidiary is involved in, or threatened
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with or affected by, any labor dispute, arbitration, lawsuit or administrative
proceeding which could materially and adversely affect the business of Xxxxx
Fargo or such Xxxxx Fargo Subsidiary. Except as set forth on Schedule 3(j),
employees of Xxxxx Fargo and the Xxxxx Fargo Subsidiaries are not represented by
any labor union nor are any collective bargaining agreements otherwise in effect
with respect to such employees.
(o) Xxxxx Fargo Benefit Plans.
(i) For purposes of this Section 3(o), the term "Xxxxx Fargo
Plan" or "Xxxxx Fargo Plans" means all employee benefit plans as
defined in Section 3(3) of ERISA, to which Xxxxx Fargo contributes,
sponsors, or otherwise has any obligations.
(ii) No Xxxxx Fargo Plan is a "multiemployer plan" within the
meaning of Section 3(37) of ERISA.
(iii) Each Xxxxx Fargo Plan is and has been in all material
respects operated and administered in accordance with its provisions
and applicable law, including, if applicable, ERISA and the Code.
(iv) Each Xxxxx Fargo Plan intended to be qualified under
Section 401(a) of the Code has received a favorable determination
letter from the Internal Revenue Service stating that the Xxxxx Fargo
Plan (including all amendments) is tax qualified under Section 401(a)
of the Code and Xxxxx Fargo knows of no reason that any such Xxxxx
Fargo Plan is not qualified within the meaning of Section 401(a) of the
Code and knows of no reason that each related Xxxxx Fargo Plan trust is
not exempt from taxation under Section 501(a) of the Code.
(v) All contributions, premium payments, and other payments
required to be made in connection with the Xxxxx Fargo Plans as of the
date of this Agreement have been made.
(vi) With respect to each Xxxxx Fargo Plan that is subject to
Section 301 of ERISA or Section 412 of the Code, neither Xxxxx Fargo
nor any Xxxxx Fargo Subsidiary is liable for any accumulated funding
deficiency as that term is defined in Section 412 of the Code.
(vii) The present value of all benefits vested and all
benefits accrued under each Xxxxx Fargo Plan that is subject to Title
IV of ERISA does not, in each case, exceed the value of the assets of
the Xxxxx Fargo Plans allocable to such vested or accrued benefits as
of the end of the most recent Plan Year.
(p) Registration Statement, etc. None of the information regarding
Xxxxx Fargo and its subsidiaries supplied or to be supplied by Xxxxx Fargo for
inclusion in (i) the Registration Statement, (ii) the Proxy Statement, or (iii)
any other documents to be filed with the SEC or any regulatory authority in
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connection with the transactions contemplated hereby or by the Merger Agreement
will, at the respective times such documents are filed with the SEC or any
regulatory authority and, in the case of the Registration Statement, when it
becomes effective and, with respect to the Proxy Statement, when mailed, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary in order to make the statements therein not misleading
or, in the case of the Proxy Statement or any amendment thereof or supplement
thereto, at the time of the meeting of shareholders referred to in paragraph
4(c), be false or misleading with respect to any material fact, or omit to state
any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of any proxy for such meeting.
All documents which Xxxxx Fargo and the Xxxxx Fargo Subsidiaries are responsible
for filing with the SEC and any other regulatory authority in connection with
the Merger will comply as to form in all material respects with the provisions
of applicable law.
(q) Brokers and Finders. Neither Xxxxx Fargo nor any Xxxxx Fargo
Subsidiary nor any of their respective officers, directors or employees has
employed any broker or finder or incurred any liability for any financial
advisory fees, brokerage fees, commissions or finder's fees, and no broker or
finder has acted directly or indirectly for Xxxxx Fargo or any Xxxxx Fargo
Subsidiary in connection with this Agreement and the Merger Agreement or the
transactions contemplated hereby and thereby.
(r) No Defaults. Neither Xxxxx Fargo nor any Xxxxx Fargo Subsidiary is
in default, nor has any event occurred which, with the passage of time or the
giving of notice, or both, would constitute a default under any material
agreement, indenture, loan agreement or other instrument to which it is a party
or by which it or any of its assets is bound or to which any of its assets is
subject, the result of which has had or could reasonably be expected to have a
material adverse effect upon Xxxxx Fargo and its subsidiaries taken as a whole.
To the best of Xxxxx Fargo's knowledge, all parties with whom Xxxxx Fargo or any
Xxxxx Fargo Subsidiary has material leases, agreements or contracts or who owe
to Xxxxx Fargo or any Xxxxx Fargo Subsidiary material obligations other than
with respect to those arising in the ordinary course of the banking business of
the Xxxxx Fargo Subsidiaries are in compliance therewith in all material
respects.
(s) Environmental Liability. There is no legal, administrative, or
other proceeding, claim, or action of any nature seeking to impose, or that
could result in the imposition, on Xxxxx Fargo or any Xxxxx Fargo Subsidiary of
any liability relating to the release of hazardous substances as defined under
any local, state or federal environmental statute, regulation or ordinance
including, without limitation, CERCLA, pending or to the best of Xxxxx Fargo's
knowledge, threatened against Xxxxx Fargo or any Xxxxx Fargo Subsidiary, the
result of which has had or could reasonably be expected to have a material
adverse effect upon Xxxxx Fargo and its subsidiaries taken as a whole; to the
best of Xxxxx Fargo's knowledge there is no reasonable basis for any such
proceeding, claim or action; and to the best of Xxxxx Fargo's knowledge neither
Xxxxx Fargo nor any Xxxxx Fargo Subsidiary is subject to any agreement, order,
judgment, or decree by or with any court, governmental authority or third party
imposing any such environmental liability.
-19-
(t) Merger Co. As of the Closing Date, Merger Co. will be a corporation
duly organized, validly existing, duly qualified to do business and in good
standing under the laws of its jurisdiction of incorporation, and will have
corporate power and authority to own or lease its properties and assets and to
carry on its business. As of the Closing Date, Merger Co. will have the
corporate power and authority to enter into the Merger Agreement and to carry
out its obligations hereunder. As of the Closing Date, the execution, delivery
and performance of the Merger Agreement by Merger Co. and the consummation of
the transactions contemplated thereby will have been duly authorized by the
Board of Directors and by the sole shareholder of Merger Co. Subject to such
approvals of government agencies and other governing boards having regulatory
authority over Xxxxx Fargo and Merger Co. as may be required by statute or
regulation, the Merger Agreement will be a valid and binding obligation of
Merger Co. as of the Closing Date, enforceable against Merger Co. in accordance
with its terms.
(u) Regulatory Approval. Xxxxx Fargo is aware of no circumstance, in
existence as of the date hereof, which would prevent the transactions
contemplated by this Agreement and the Merger Agreement from being approved by
the Federal Reserve Board.
4. COVENANTS OF FIRST PLACE. First Place covenants and agrees with
Xxxxx Fargo as follows:
(a) Except as otherwise permitted or required by this Agreement, from
the date hereof until the Effective Time of the Merger, First Place, and each
First Place Subsidiary will: maintain its corporate existence in good standing;
maintain the general character of its business and conduct its business in its
ordinary and usual manner; extend credit in accordance with existing lending
policies, except that it shall not, without the prior written consent of Xxxxx
Fargo (which consent requirement shall be deemed to be waived as to any loan
approval request to which Xxxxx Fargo has made no response by the end of the
second complete business day following the receipt of the request by a Xxxxx
Fargo representative designated in writing),(A) make any extensions of credit
aggregating in excess of $250,000 to a person or entity that is not a borrower
as of the date hereof, or (B) engage in any loan transaction or series of
contemporaneous loan transactions involving an aggregate of more than $250,000
with any existing borrower; maintain proper business and accounting records in
accordance with generally accepted principles; maintain its properties regularly
used in the conduct of its business in good repair and condition, ordinary wear
and tear excepted; maintain in all material respects presently existing
insurance coverage; use its best efforts to preserve its business organization
intact, to keep the services of its present principal employees and to preserve
its good will and the good will of its suppliers, customers and others having
business relationships with it; use its best efforts to obtain any approvals or
consents required to maintain existing leases and other contracts in effect
following the Merger; comply in all material respects with all laws,
regulations, ordinances, codes, orders, licenses and permits applicable to the
properties and operations of First Place and each First Place Subsidiary the
non-compliance with which reasonably could be expected to have a material
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adverse effect on First Place and the First Place Subsidiaries taken as a whole;
and permit Xxxxx Fargo and its representatives (including KPMG) upon prior
notice to First Place to conduct reasonable examination of First Place's and
each of its Subsidiaries' books, records and properties and to interview
officers, employees and agents at all reasonable times when it is open for
business; provided, however, that such examination is conducted in a manner
designed to be least disruptive to First Place's operations. No such examination
by Xxxxx Fargo or its representatives either before or after the date of this
Agreement shall in any way affect, diminish or terminate any of the
representations, warranties or covenants of First Place herein expressed.
(b) Except as otherwise contemplated or required by this Agreement,
from the date hereof until the Effective Time of the Merger, First Place and
each First Place Subsidiary will not (without the prior written consent of Xxxxx
Fargo): amend or otherwise change its articles of incorporation or association
or by-laws; issue or sell or authorize for issuance or sale, or grant any
options or make other agreements with respect to the issuance or sale or
conversion of, any shares of its capital stock, phantom shares or other
share-equivalents, or any other of its securities, except that First Place may
(i) grant options to acquire up to 9,525 shares of First Place Common Stock, and
(ii) issue shares of First Place Common Stock upon the exercise of outstanding
stock options (including any options granted under clause (i) above) described
in Schedule 4(b); authorize or incur any long-term debt (other than deposit
liabilities); mortgage, pledge or subject to lien or other encumbrance any of
its properties, except in the ordinary course of business; enter into any
material agreement, contract or commitment in excess of $25,000 except banking
transactions in the ordinary course of business and in accordance with policies
and procedures in effect on the date hereof; make any investments except
investments made by bank subsidiaries in the ordinary course of business for
terms of up to one year and in amounts of $100,000 or less; amend or terminate
any Plan except as required by law except that First Place may take such action
as is necessary to amend the First Place Financial Corporation Nonstatutory
Stock Option Plan, the Second Nonstatutory Stock Option Plan, and the Third
Nonqualified Stock Option Plan (the "Stock Option Plans") to permit the
acceleration of vesting of options and stock appreciation rights outstanding
thereunder and to permit such options to be exercisable prior to the Effective
Date of the Merger otherwise upon and subject to the conditions set forth
therein upon a change in control; make any contributions to any Plan except as
required by the terms of such Plan in effect as of the date hereof or requested
by Xxxxx Fargo; declare, set aside, make or pay any dividend or other
distribution with respect to its capital stock except any dividend declared by a
subsidiary's Board of Directors in accordance with applicable law and
regulation, provided, however, that the Board of Directors of First Place may
declare and pay cash dividends to the First Place shareholders as set forth on
Schedule 2(e) out of the net earnings of First Place between January 1, 1999 and
the Effective Time of the Merger in accordance with applicable law and
regulation and in accordance with past practice in an amount not to exceed an
annualized rate of $1.85 per share and, provided further, however, that First
Place shareholders shall be entitled to have a dividend declared on First Place
Common Stock in the event the Closing Date does not occur prior to the record
date for the dividend, if any, payable on Xxxxx Fargo Common Stock in the
calendar quarter in which the Closing shall occur; redeem, purchase or otherwise
-21-
acquire, directly or indirectly, any of the capital stock of First Place;
increase the compensation of any officers, directors or executive employees,
except pursuant to existing compensation plans and practices (including bonus
plans), provided, however, that First Place may, in addition, accrue and pay
bonuses and deferred compensation obligations in accordance with Schedule 4(b)
attached hereto; sell or otherwise dispose of any shares of the capital stock of
any First Place Subsidiary; or sell or otherwise dispose of any of its assets or
properties other than in the ordinary course of business.
(c) The Board of Directors of First Place will duly call, and will
cause to be held not later than twenty-five (25) business days following the
effective date of the Registration Statement referred to in paragraph 5(c)
hereof, a meeting of its shareholders and will direct that this Agreement and
the Merger Agreement be submitted to a vote at such meeting. The Board of
Directors of First Place will (i) cause proper notice of such meeting to be
given to its shareholders in compliance with the New Mexico Business Corporation
Act and other applicable law and regulation, (ii) except to the extent that the
Board of Directors of First Place shall conclude in good faith, after taking
into account the advice of its outside counsel, that to do so would violate its
fiduciary obligations under applicable law, (A) recommend by the affirmative
vote of at least eighty percent (80%) of the entire Board of Directors a vote in
favor of approval of this Agreement and the Merger Agreement, and (B) use its
best efforts to solicit from its shareholders proxies in favor thereof.
(d) First Place will furnish or cause to be furnished to Xxxxx Fargo
all the information concerning First Place and its subsidiaries required for
inclusion in the Registration Statement referred to in paragraph 5(c) hereof, or
any statement or application made by Xxxxx Fargo to any governmental body in
connection with the transactions contemplated by this Agreement. Any financial
statement for any fiscal year provided under this paragraph must include the
audit opinion and the consent of KPMG to use such opinion in such Registration
Statement.
(e) First Place will take all necessary corporate and other action and
use its best efforts to obtain all approvals of regulatory authorities, consents
and other approvals required of First Place to carry out the transactions
contemplated by this Agreement and will cooperate with Xxxxx Fargo to obtain all
such approvals and consents required of Xxxxx Fargo.
(f) First Place will use its best efforts to deliver to the Closing all
opinions, certificates and other documents required to be delivered by it at the
Closing.
(g) First Place will hold in confidence all documents and information
concerning Xxxxx Fargo and its subsidiaries furnished to First Place and its
representatives in connection with the transactions contemplated by this
Agreement and will not release or disclose such information to any other person,
except as required by law and except to First Place's outside professional
advisers in connection with this Agreement, with the same undertaking from such
-22-
professional advisers. If the transactions contemplated by this Agreement shall
not be consummated, such confidence shall be maintained and such information
shall not be used in competition with Xxxxx Fargo (except to the extent that
such information can be shown to be previously known to First Place, in the
public domain, or later acquired by First Place from other legitimate sources)
and, upon request, all such documents, any copies thereof and extracts therefrom
shall immediately thereafter be returned to Xxxxx Fargo.
(h) Neither First Place, nor any First Place Subsidiary, except as
permitted by this Agreement, nor any director, officer, representative or agent
thereof, will, directly or indirectly, solicit, authorize the solicitation of or
except to the extent that the Board of Directors of First Place shall conclude
in good faith, after taking into account the written advice of its outside
counsel, that to fail to do so could reasonably be determined to violate its
fiduciary obligations under applicable law, enter into any negotiations with any
corporation, partnership, person or other entity or group (other than Xxxxx
Fargo) concerning any offer or possible offer (i) to purchase any shares of
common stock, any option or warrant to purchase any shares of common stock, any
securities convertible into any shares of such common stock, or any other equity
security of First Place or any First Place Subsidiary, (ii) to make a tender or
exchange offer for any shares of such common stock or other equity security,
(iii) to purchase, lease or otherwise acquire the assets of First Place or any
First Place Subsidiary except in the ordinary course of business, or (iv) to
merge, consolidate or otherwise combine with First Place or any First Place
Subsidiary. If any corporation, partnership, person or other entity or group
makes an offer or inquiry to First Place or any First Place Subsidiary
concerning any of the foregoing, First Place or such First Place Subsidiary will
promptly disclose such offer or inquiry, including the terms thereof, to Xxxxx
Fargo.
(i) First Place shall consult with Xxxxx Fargo as to the form and
substance of any proposed press release or other proposed public disclosure of
matters related to this Agreement or any of the transactions contemplated
hereby.
(j) First Place and each First Place Subsidiary will take all action
necessary or required (i) to terminate or amend, if requested by Xxxxx Fargo,
all qualified pension and welfare benefit plans and all non-qualified benefit
plans and compensation arrangements as of the Effective Date of the Merger to
facilitate the merger of such plans with Xxxxx Fargo plans without gaps in
coverage for participants in the plans and without duplication of costs caused
by the continuation of such plans after coverage is available under Xxxxx Fargo
plans, (ii) to submit application to the Internal Revenue Service for a
favorable determination letter for each of the Plans which is subject to the
qualification requirements of Section 401(a) of the Code prior to the Effective
Date of the Merger, and (iii) authorize and delegate the power to vote First
Place Common Stock held in the First Place Financial Corporation 401(k) Plan to
an independent third party fiduciary.
(k) [Intentionally omitted.]
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(l) First Place shall use its best efforts to obtain and deliver prior
to the Effective Date of the Merger signed representations substantially in the
form attached hereto as Exhibit B to Xxxxx Fargo by each executive officer,
director or shareholder of First Place who may reasonably be deemed an
"affiliate" of First Place within the meaning of such term as used in Rule 145
under the Securities Act.
(m) First Place shall establish such additional accruals and reserves
as may be necessary to conform First Place's accounting and credit loss reserve
practices and methods to those of Xxxxx Fargo and Xxxxx Fargo's plans with
respect to the conduct of First Place's business following the Merger and to
provide for the costs and expenses relating to the consummation by First Place
of the Merger and the other transactions contemplated by this Agreement. Xxxxx
Fargo acknowledges that the establishment of such accruals and reserves and
provision for such costs and expenses shall not be deemed to cause the First
Place Financial Statements to have been prepared other than in accordance with
GAAP.
(n) First Place shall obtain, at its sole expense, Phase I
environmental assessments for each bank facility and each non-residential OREO
property. Oral reports of such environmental assessments shall be delivered to
Xxxxx Fargo no later than four (4) weeks and written reports shall be delivered
to Xxxxx Fargo no later than eight (8) weeks from the date of this Agreement.
First Place shall obtain, at its sole expense, Phase II environmental
assessments for properties identified by Xxxxx Fargo on the basis of the results
of such Phase I environmental assessments. First Place shall obtain a survey and
assessment of all potential asbestos containing material in owned or leased
properties (other than OREO property) and a written report of the results shall
be delivered to Xxxxx Fargo within four (4) weeks of execution of the definitive
agreement.
(o) First Place shall obtain, at its sole expense, commitments for
title insurance and boundary surveys for each bank facility which shall be
delivered to Xxxxx Fargo no later than four (4) weeks from the date of this
Agreement.
(p) First Place and Xxxxx Fargo will work together to assess the impact
of the transactions contemplated by this Agreement on First Place's continued
compliance with the FFIEC Requirements and First Place will take such action, in
consultation with Xxxxx Fargo, as may be necessary to amend First Place's Year
2000 project assessment and remediation plan so as to ensure continued
compliance with the FFIEC Requirements. First Place will continue its current
preparations for compliance with the FFIEC Requirements and will not rely on the
consummation of the transactions contemplated by this Agreement to satisfy its
FFIEC requirements.
(q) First Place shall take such action as is necessary under the Stock
Option Plans to (i) terminate such Stock Option Plans as of immediately prior to
the Effective Date of the Merger, and (ii) to cancel, effective as of
immediately prior to the Effective Date of the Merger, all options, awards and
stock appreciation rights granted under such Plans that are unexercised as of
immediately prior to the Effective Date of the Merger. First Place shall collect
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in cash (and timely pay) all applicable withholding and payroll taxes with
respect to such options, awards and stock appreciation rights, and shall comply
with all payroll reporting requirements with respect thereto.
(r) In anticipation of conditions reasonably expected to be imposed by
the Federal Reserve Board in approving the Merger ("Board Approval"), First
Place agrees to enter into and agrees to cause two of its subsidiary banks, The
Xxxxx National Bank of Durango and Western Bank, Gallup (the "Banks"), to enter
into such agreements prior to Closing for the divestiture of each of such Banks
("Divestitures") and to take such other actions prior to the Closing as may be
necessary (or may reasonably be expected to be necessary) to be taken in
connection therewith and in order to satisfy any requirements related thereto to
be imposed by the Federal Reserve Board as a condition to the Board Approval.
First Place shall use, and shall cause the Banks to use their respective
commercially reasonable best efforts to cooperate with Xxxxx Fargo in
identifying prospective bidders for the Banks, allowing prospective bidders to
conduct due diligence on the Banks, and in negotiating the terms of the
Divestitures; provided that neither First Place nor the Banks shall enter into
definitive agreements for the Divestitures without the prior consent of Xxxxx
Fargo, which consent shall not be unreasonably withheld; provided further that
the consummation of the Divestitures contemplated by this Paragraph 4(r) will be
subject to and contingent upon Closing of the Merger and will not occur prior to
the Effective Time of the Merger; provided further that the actions taken to
implement the Divestiture shall not impair or unduly burden the operations of
business of First Place and the First Place Subsidiaries. Nothing contained in
this Paragraph 4(r) shall diminish the agreements, covenants, and obligations of
the parties otherwise set forth in Articles 4 and 5 of the Agreement.
(s) First Place shall take such action as is necessary to repay the
loan from Frost National Bank, made March 12, 1998 in the original principal
amount of $10,000,000 (the "Bank Stock Loan"), and to have the lien on shares of
Xxxxx National Bank of Durango which are held as collateral for the Bank Stock
Loan released.
(t) First Place shall use its best efforts to cause its subsidiary,
FPFC Management LLC, to transfer its interest as a 5% managing member in Xxxxx
Village Associates, Ltd. Co. to an independent third party, effective as of the
Effective Time of the Merger.
(u) First Place shall take such action as is necessary under the
Executive Supplemental Income Plan ("ESI Plan"), on or before the Effective Date
of the Merger, to (i) freeze such ESI Plan to limit participation in such ESI
Plan to its current participants and current benefit payment schedules, (ii)
satisfy all pre-retirement obligations under such ESI Plan by making
present-value lump sum payments to participants or purchasing life insurance
policies on the lives of the participants, and (iii) (A) offer to satisfy all
post-retirement obligations for retired or disabled participants under such ESI
Plan by making present-value lump sum payments or purchasing deferred annuity
contracts, and (B) purchasing a deferred annuity contract to fund the future
post-retirement obligations under such ESI Plan for participants who are active
employees.
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(v) First Place shall take such action as is necessary under the
Deferred Directors Income Plan ("DDI Plan"), on or before the Effective Date of
the Merger, to (i) freeze such DDI Plan to limit participation in such DDI Plan
to its current participants and to cease deferrals, and (ii) (A) offer to
satisfy all benefit obligations under such DDI Plan by making lump sum payments
to participants or purchasing deferred annuity contracts, or (B) purchase a
deferred annuity contract to fund the scheduled benefit payments under DDI Plan.
(w) First Place shall use its best efforts to take such action as is
necessary to amend all existing employment agreements between First Place or the
First Place Subsidiaries and their respective officers and employees to provide
that amounts payable under each of such agreements accelerated solely as a
result of the Merger shall be capped at an amount which, when aggregated with
all other payments to such officer or employee (whether pursuant to other
employment agreements, non-qualified compensation plans, salary continuation
arrangements, options or stock appreciation rights or otherwise), would not
exceed the applicable "golden parachute" limitations under Section 280(G) of the
Code.
5. COVENANTS OF XXXXX FARGO. Xxxxx Fargo covenants and agrees with
First Place as follows:
(a) From the date hereof until the Effective Time of the Merger, Xxxxx
Fargo will maintain its corporate existence in good standing; conduct, and cause
the Xxxxx Fargo Subsidiaries to conduct, their respective businesses in
compliance with all material obligations and duties imposed on them by all laws,
governmental regulations, rules and ordinances, and judicial orders, judgments
and decrees applicable to Xxxxx Fargo or the Xxxxx Fargo Subsidiaries, their
businesses or their properties; maintain all books and records of it and the
Xxxxx Fargo Subsidiaries, including all financial statements, in accordance with
the accounting principles and practices consistent with those used for the Xxxxx
Fargo Financial Statements, except for changes in such principles and practices
required under generally accepted accounting principles.
(b) Xxxxx Fargo will furnish to First Place all the information
concerning Xxxxx Fargo required for inclusion in a proxy statement or statements
to be sent to the shareholders of First Place, or in any statement or
application made by First Place to any governmental body in connection with the
transactions contemplated by this Agreement.
(c) As promptly as practicable after the execution of this Agreement,
Xxxxx Fargo will file with the SEC the Registration Statement and any other
applicable documents, relating to the shares of Xxxxx Fargo Common Stock to be
delivered to the shareholders of First Place pursuant to the Merger Agreement,
and will use its best efforts to cause the Registration Statement to become
effective. At the time the Registration Statement becomes effective, the
Registration Statement will comply in all material respects with the provisions
of the Securities Act and the published rules and regulations thereunder, and
-26-
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not false or misleading, and at the time of mailing thereof to the First
Place shareholders, at the time of the First Place shareholders' meeting
referred to in paragraph 4(c) hereof and at the Effective Time of the Merger the
prospectus included as part of the Registration Statement, as amended or
supplemented by any amendment or supplement filed by Xxxxx Fargo (hereinafter
the "Prospectus"), will not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein not
false or misleading; provided, however, that none of the provisions of this
subparagraph shall apply to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information furnished by First Place or any First Place Subsidiary for use in
the Registration Statement or the Prospectus.
(d) Xxxxx Fargo will file all documents required to be filed to list
the Xxxxx Fargo Common Stock to be issued pursuant to the Merger Agreement on
the New York Stock Exchange and the Chicago Stock Exchange and use its best
efforts to effect said listings as of on or before the Effective Time of the
Merger.
(e) The shares of Xxxxx Fargo Common Stock to be issued by Xxxxx Fargo
to the shareholders of First Place pursuant to this Agreement and the Merger
Agreement will, upon such issuance and delivery to said shareholders pursuant to
the Merger Agreement, be duly authorized, validly issued, fully paid and
nonassessable. The shares of Xxxxx Fargo Common Stock to be delivered to the
shareholders of First Place pursuant to the Merger Agreement are and will be
free of any preemptive rights of the stockholders of Xxxxx Fargo.
(f) Xxxxx Fargo will file all documents required to obtain, prior to
the Effective Time of the Merger, all necessary Blue Sky permits and approvals,
if any, required to carry out the transactions contemplated by this Agreement,
will pay all expenses incident thereto and will use its best efforts to obtain
such permits and approvals on or before the Effective Time of the Merger.
(g) Xxxxx Fargo will take all necessary corporate and other action and
file all documents required to obtain and will use its best efforts to obtain
all approvals of regulatory authorities, consents and approvals required of it
to carry out the transactions contemplated by this Agreement and will cooperate
with First Place to obtain all such approvals and consents required by First
Place.
(h) Xxxxx Fargo will hold in confidence all documents and information
concerning First Place and First Place's Subsidiaries furnished to it and its
representatives in connection with the transactions contemplated by this
Agreement and will not release or disclose such information to any other person,
except as required by law and except to its outside professional advisers in
connection with this Agreement, with the same undertaking from such professional
advisers. If the transactions contemplated by this Agreement shall not be
consummated, such confidence shall be maintained and such information shall not
-27-
be used in competition with First Place (except to the extent that such
information can be shown to be previously known to Xxxxx Fargo, in the public
domain, or later acquired by Xxxxx Fargo from other legitimate sources) and,
upon request, all such documents, copies thereof or extracts therefrom shall
immediately thereafter be returned to First Place.
(i) Xxxxx Fargo will file any documents or agreements required to be
filed in connection with the Merger under the New Mexico Business Corporation
Act.
(j) Xxxxx Fargo will use its best efforts to deliver to the Closing all
opinions, certificates and other documents required to be delivered by it at the
Closing.
(k) Xxxxx Fargo shall consult with First Place as to the form and
substance of any proposed press release or other proposed public disclosure of
matters related to this Agreement or any of the transactions contemplated
hereby.
(l) Xxxxx Fargo shall furnish First Place with copies, prior to filing,
of the nonconfidential portions of the applications referred to in paragraph
7(e) hereof and shall give First Place notice of receipt of the regulatory
approvals referred to in paragraph 7(e).
(m) [Intentionally omitted.]
(n) With respect to the indemnification of directors and officers and
with respect to directors' and officers' insurance, Xxxxx Fargo agrees as
follows:
(i) Xxxxx Fargo shall ensure that all rights to
indemnification and all limitations of liability existing in favor of
any person who is now, or has been at any time prior to the date
hereof, or who becomes prior to the Effective Time of the Merger, a
director or officer of First Place or any First Place Subsidiary, (an
"Indemnified Party" and, collectively, the "Indemnified Parties") in
First Place's Articles of Incorporation or By-laws or similar governing
documents of any First Place Subsidiary, as applicable in the
particular case and as in effect on the date hereof, shall, with
respect to claims arising from (A) facts or events that occurred before
the Effective Time of the Merger, or (B) this Agreement or any of the
transactions contemplated by this Agreement, whether in any case
asserted or arising before or after the Effective Time of the Merger,
survive the Merger and shall continue in full force and effect. Nothing
contained in this paragraph 5(n)(i) shall be deemed to preclude the
liquidation, consolidation or merger of First Place or any First Place
Subsidiary, in which case all of such rights to indemnification and
limitations on liability shall be deemed to survive and continue as
contractual rights notwithstanding any such liquidation or
consolidation or merger; provided, however, that in the event of
liquidation or sale of substantially all of the assets of First Place,
Xxxxx Fargo shall guarantee, to the extent of the net asset value of
First Place or any First Place Subsidiary as of the Effective Date of
the Merger, the indemnification obligations of First Place or any First
Place Subsidiary to the extent of indemnification obligations of First
Place and the First Place Subsidiaries described above. Notwithstanding
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anything to the contrary contained in this paragraph 5(n)(i), nothing
contained herein shall require Xxxxx Fargo to indemnify any person who
was a director or officer of First Place or any First Place Subsidiary
to a greater extent than First Place or any First Place Subsidiary is,
as of the date of this Agreement, required to indemnify any such
person;
(ii) any Indemnified Party wishing to claim indemnification
under paragraph 5(n)(i), upon learning of any such claim, action, suit,
proceeding or investigation, shall promptly notify Xxxxx Fargo thereof,
but the failure to so notify shall not relieve Xxxxx Fargo of any
liability it may have to such Indemnified Party. In the event of any
such claim, action, suit, proceeding or investigation (whether arising
before or after the Effective Time of the Merger), (A) Xxxxx Fargo
shall have the right to assume the defense thereof and Xxxxx Fargo
shall not be liable to any Indemnified Party for any legal expenses of
other counsel or any other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof, except that
if Xxxxx Fargo elects not to assume such defense or counsel for the
Indemnified Party advises that there are issues which raise conflicts
of interest between Xxxxx Fargo and the Indemnified Party, the
Indemnified Party may retain counsel satisfactory to them, and Xxxxx
Fargo shall pay the reasonable fees and expenses of such counsel for
the Indemnified Party promptly as statements therefor are received;
provided, however, that Xxxxx Fargo shall be obligated pursuant to this
subparagraph (ii) to pay for only one firm of counsel for all
Indemnified Parties in any jurisdiction unless the use of one counsel
for such Indemnified Parties would present such counsel with a conflict
of interest and (B) such Indemnified Party shall cooperate in the
defense of any such matter;
(iii) for a period of three years after the Effective Time of
the Merger, Xxxxx Fargo shall use its best efforts to cause to be
maintained in effect the current policies of directors' and officers'
liability insurance maintained by First Place (provided that Xxxxx
Fargo may substitute therefor policies of at least the same coverage
and amount containing terms and conditions which are substantially no
less advantageous) with respect to claims arising from facts or events
which occurred before the Effective Time of the Merger; provided,
however, that Xxxxx Fargo shall not be required to maintain coverage
for employees (other than directors and officers) which may currently
be included in the directors' and officers' liability policies
maintained by First Place; and provided, further, however, that in no
event shall Xxxxx Fargo be obligated to expend, in order to maintain or
provide insurance coverage pursuant to this paragraph 5(n)(iii), any
amount per annum in excess of 125% of the amount of the annual premiums
paid as of the date hereof by First Place for such insurance (the
"Maximum Amount") and provided further that, prior to the Effective
Time of the Merger, First Place shall notify the appropriate directors'
and officers' liability insurers of the Merger and of all pending or
threatened claims, actions, suits, proceedings or investigations
asserted or claimed against any Indemnified Party, or circumstances
-29-
likely to give rise thereto, in accordance with terms and conditions of
the applicable policies. If the amount of the annual premiums necessary
to maintain or procure such insurance coverage exceeds the Maximum
Amount, Xxxxx Fargo shall use reasonable efforts to maintain the most
advantageous policies of directors' and officers' insurance obtainable
for an annual premium equal to the Maximum Amount;
(iv) if Xxxxx Fargo or any of its successors or assigns (A)
shall consolidate with or merge into any other corporation or entity
and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (B) shall transfer all or substantially
all of its properties and assets to any individual, corporation or
other entity, then and in each such case, proper provision shall be
made so that the successors and assigns of Xxxxx Fargo shall assume the
obligations set forth in this paragraph 5(n); and
(v) the provisions of this paragraph 5(n) are intended to be
for the benefit of, and shall be enforceable by, each Indemnified Party
and his or her heirs and representatives.
(o) For a period not exceeding fifteen (15) days prior to the meeting
of shareholders required by paragraph 4(c) of this Agreement, subject to
applicable securities laws and regulations and any obligations of
confidentiality to which Xxxxx Fargo may be subject, Xxxxx Fargo will permit
First Place and its representatives upon prior notice to Xxxxx Fargo to conduct
reasonable examination of its books, records and properties and interview
officers, employees and agents of Xxxxx Fargo at all reasonable times when it is
open for business; provided, however, that such examination is conducted in a
manner designed to be least disruptive to Xxxxx Fargo's operations. No such
examination by First Place or its representatives shall in any way affect,
diminish or terminate any of the representations, warranties or covenants of
Xxxxx Fargo herein expressed.
(p) Xxxxx Fargo agrees to take such actions prior to the Closing as may
be necessary (or may reasonably be expected to be necessary) to be taken in
connection with the Divestitures and in order to satisfy any requirements
related thereto to be imposed by the Federal Reserve Board as a condition to the
Board Approval. Xxxxx Fargo shall use commercially reasonable best efforts to
cooperate with First Place in identifying prospective bidders for the Banks,
allowing prospective bidders to conduct due diligence on the Banks, and in
negotiating the terms of the Divestitures.
6. CONDITIONS PRECEDENT TO OBLIGATION OF FIRST PLACE. The obligation of
First Place to effect the Merger shall be subject to the satisfaction at or
before the Time of Filing of the following conditions, which may be waived in
writing by First Place:
(a) Except as they may be affected by transactions contemplated hereby
and except to the extent such representations and warranties are by their
express provisions made as of a specified date and except for activities or
transactions after the date of this Agreement made in the ordinary course of
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business and not expressly prohibited by this Agreement, the representations and
warranties contained in paragraph 3 hereof shall be true and correct in all
respects material to Xxxxx Fargo and its subsidiaries taken as a whole as if
made at the Time of Filing.
(b) Xxxxx Fargo shall have, or shall have caused to be, performed and
observed in all material respects all covenants, agreements and conditions
hereof to be performed or observed by it and Merger Co. at or before the Time of
Filing.
(c) First Place shall have received a favorable certificate, dated as
of the Effective Date of the Merger, signed by the Chairman, the President or
any Executive Vice President or Senior Vice President and by the Secretary or
Assistant Secretary of Xxxxx Fargo, as to the matters set forth in subparagraphs
(a) and (b) of this paragraph 6.
(d) This Agreement and the Merger Agreement shall have been approved by
the affirmative vote of the holders of the percentage of the outstanding shares
of First Place required for approval of a plan of merger in accordance with the
provisions of First Place's Articles of Incorporation and the New Mexico
Business Corporation Act.
(e) Xxxxx Fargo shall have received approval by the Federal Reserve
Board and by such other governmental agencies as may be required by law of the
transactions contemplated by this Agreement and the Merger Agreement and all
waiting and appeal periods prescribed by applicable law or regulation shall have
expired.
(f) No court or governmental authority of competent jurisdiction shall
have issued an order restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement.
(g) The shares of Xxxxx Fargo Common Stock to be delivered to the
stockholders of First Place pursuant to this Agreement and the Merger Agreement
shall have been authorized for listing on the New York Stock Exchange and the
Chicago Stock Exchange.
(h) First Place shall have received an opinion, dated the Closing Date,
of counsel to First Place, substantially to the effect that, for federal income
tax purposes: (i) the Merger will constitute a reorganization within the meaning
of Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code; (ii) no gain or loss will
be recognized by the holders of First Place Common Stock upon receipt of Xxxxx
Fargo Common Stock except for cash received in lieu of fractional shares; (iii)
the basis of the Xxxxx Fargo Common Stock received by the shareholders of First
Place will be the same as the basis of First Place Common Stock exchanged
therefor; and (iv) the holding period of the shares of Xxxxx Fargo Common Stock
received by the shareholders of First Place will include the holding period of
the First Place Common Stock, provided such shares of First Place Common Stock
were held as a capital asset as of the Effective Time of the Merger.
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(i) The Registration Statement (as amended or supplemented) shall have
become effective under the Securities Act and shall not be subject to any stop
order, and no action, suit, proceeding or investigation by the SEC to suspend
the effectiveness of the Registration Statement shall have been initiated and be
continuing, or have been threatened and be unresolved. Xxxxx Fargo shall have
received all state securities law or blue sky authorizations necessary to carry
out the transactions contemplated by this Agreement.
(j) Prior to the mailing of the Proxy Statement referred to in
paragraph 4(c), First Place and the Board of Directors of First Place shall have
received an opinion of The Bank Advisory Group, Inc. addressed to First Place
and the Board of Directors of First Place, and for their exclusive benefit, for
inclusion in said Proxy Statement and dated effective as of the date of mailing
of such Proxy Statement, based on such matters as of The Bank Advisory Group,
Inc. deems appropriate or necessary, to the effect that the consideration to be
received by stockholders of First Place pursuant to the Merger is fair from a
financial point of view. First Place shall promptly provide a copy of such
opinion to Xxxxx Fargo upon receipt.
7. CONDITIONS PRECEDENT TO OBLIGATION OF XXXXX FARGO. The obligation of
Xxxxx Fargo to effect the Merger shall be subject to the satisfaction at or
before the Time of Filing of the following conditions, which may be waived in
writing by Xxxxx Fargo:
(a) Except as they may be affected by transactions contemplated hereby
and except to the extent such representations and warranties are by their
express provisions made as of a specified date and except for activities or
transactions or events occurring after the date of this Agreement made in the
ordinary course of business and not expressly prohibited by this Agreement, the
representations and warranties contained in paragraph 2 hereof shall be true and
correct in all respects material to First Place and the First Place Subsidiaries
taken as a whole as if made at the Time of Filing.
(b) First Place shall have, or shall have caused to be, performed and
observed in all material respects all covenants, agreements and conditions
hereof to be performed or observed by it at or before the Time of Filing.
(c) This Agreement and the Merger Agreement shall have been approved by
the affirmative vote of the holders of the percentage of the outstanding shares
of First Place required for approval of a plan of merger in accordance with the
provisions of First Place's Articles of Incorporation and the New Mexico
Business Corporation Act.
(d) Xxxxx Fargo shall have received a favorable certificate dated as of
the Effective Date of the Merger signed by the Chairman or President and by the
Secretary or Assistant Secretary of First Place, as to the matters set forth in
subparagraphs (a) through (c) of this paragraph 7.
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(e) Xxxxx Fargo shall have received approval by all governmental
agencies as may be required by law of the transactions contemplated by this
Agreement and the Merger Agreement and all waiting and appeal periods prescribed
by applicable law or regulation shall have expired. No approvals, licenses or
consents granted by any regulatory authority shall contain any condition or
requirement relating to First Place or any First Place Subsidiary that, in the
good faith judgment of Xxxxx Fargo, is unreasonably burdensome to Xxxxx Fargo.
The parties agree that any condition to Board Approval that requires the
Divestitures of the Banks, as contemplated by paragraph 4(r) hereof, shall not
be considered to be unreasonably burdensome to Xxxxx Fargo.
(f) First Place and each First Place Subsidiary shall have obtained any
and all material consents or waivers from other parties to loan agreements,
leases or other contracts material to First Place's or such Subsidiary's
business required for the consummation of the Merger, and First Place and each
First Place Subsidiary shall have obtained any and all material permits,
authorizations, consents, waivers and approvals required to be obtained by it
for the lawful consummation by it of the Merger.
(g) No court or governmental authority of competent jurisdiction shall
have issued an order restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement.
(h) [Intentionally omitted.]
(i) At any time since the date hereof the total number of shares of
First Place Common Stock outstanding and subject to issuance upon exercise
(assuming for this purpose that phantom shares and other share-equivalents,
excluding stock appreciation rights, constitute First Place Common Stock) of all
warrants, options, conversion rights, phantom shares or other share-equivalents,
other than any option held by Xxxxx Fargo, shall not have exceeded 2,307,869.
(j) The Registration Statement (as amended or supplemented) shall have
become effective under the Securities Act and shall not be subject to any stop
order, and no action, suit, proceeding or investigation by the SEC to suspend
the effectiveness of the Registration Statement shall have been initiated and be
continuing, or have been threatened or be unresolved. Xxxxx Fargo shall have
received all state securities law or Blue Sky authorizations necessary to carry
out the transactions contemplated by this Agreement.
(k) Xxxxx Fargo shall have received from the Chief Executive Officer
and President of First Place a letter, dated as of the effective date of the
Registration Statement and updated through the date of Closing, in form and
substance satisfactory to Xxxxx Fargo, to the effect that:
(i) the interim quarterly financial statements of First Place
included or incorporated by reference in the Registration Statement are
prepared in accordance with generally accepted accounting principles
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applied on a basis consistent with the audited financial statements of
First Place;
(ii) the amounts reported in the interim quarterly financial
statements of First Place agree with the general ledger of First Place;
(iii) the annual and quarterly financial statements of First
Place and the First Place Subsidiaries included in, or incorporated by
reference in, the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of the
Securities Act and the published rules and regulations thereunder;
(iv) from the date of the most recent unaudited consolidated
financial statements of First Place and the First Place Subsidiaries as
may be included in the Registration Statement to a date 5 days prior to
the effective date of the Registration Statement or 5 days prior to the
Closing, there are no increases in long-term debt, changes in the
capital stock or decreases in stockholders' equity of First Place and
the First Place Subsidiaries, except in each case for changes,
increases or decreases which the Registration Statement discloses have
occurred or may occur or which are described in such letters. For the
same period, there have been no decreases in consolidated net interest
income, consolidated net interest income after provision for credit
losses, consolidated income before income taxes, consolidated net
income and net income per share amounts of First Place and the First
Place Subsidiaries, or in income before equity in undistributed income
of subsidiaries, in each case as compared with the comparable period of
the preceding year, except in each case for changes, increases or
decreases which the Registration Statement discloses have occurred or
may occur or which are described in such letters;
(v) they have reviewed certain amounts, percentages, numbers
of shares and financial information which are derived from the general
accounting records of First Place and the First Place Subsidiaries,
which appear in the Registration Statement under the certain captions
to be specified by Xxxxx Fargo, and have compared certain of such
amounts, percentages, numbers and financial information with the
accounting records of First Place and the First Place Subsidiaries and
have found them to be in agreement with financial records and analyses
prepared by First Place included in the annual and quarterly financial
statements, except as disclosed in such letters.
(l) First Place and the First Place Subsidiaries considered as a whole
shall not have sustained since December 31, 1998 any material loss or
interference with their business from any civil disturbance or any fire,
explosion, flood or other calamity, whether or not covered by insurance.
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(m) There shall be no reasonable basis for any proceeding, claim or
action of any nature seeking to impose, or that could result in the imposition
on First Place or any First Place Subsidiary of, any liability relating to the
release of hazardous substances as defined under any local, state or federal
environmental statute, regulation or ordinance including, without limitation,
CERCLA, which has had or could reasonably be expected to have a material adverse
effect upon First Place and its subsidiaries taken as a whole.
(n) Since March 31, 1999, no change shall have occurred and no
circumstances shall exist which has had or might reasonably be expected to have
a material adverse effect on the financial condition, results of operations, or
business of First Place and the First Place Subsidiaries taken as a whole (other
than changes in banking laws or regulations, or interpretations thereof, that
affect the banking industry generally or changes in the general level of
interest rates). No action taken by First Place solely in order to comply with
the requirements of Paragraph 4(m) hereof shall be deemed to have a material
adverse effect for purposes of this paragraph 7(n).
(o) First Place shall be in full compliance with current FFIEC
Requirements. There shall be no feature of First Place's data processing,
operating or platform systems that would prevent those systems from continuing
to run independently after December 31, 1999 until such time as a subsequent
conversion to Xxxxx Fargo systems can be completed. First Place's computer
hardware and software used in the receipt, transmission, processing,
manipulation, storage, retrieval, retransmission, or other utilization of data
or in the operation of mechanical or electrical systems of any kind will
function at least as effectively in all material respects after December 31,
1999 as in the case of dates or time periods occurring prior to January 1, 2000.
(p) First Place shall have taken the actions required by paragraph
4(q), and the Plans and any unexercised options or awards shall have been
terminated as of immediately prior to the Effective Date of the Merger.
(q) First Place shall have taken the actions required by paragraph
4(u).
(r) First Place shall have taken the actions required by paragraph
4(v).
(s) First Place shall have taken the actions required by paragraph
4(w).
8. EMPLOYEE BENEFIT PLANS. Each person who is an employee of First
Place or any First Place Subsidiary as of the Effective Date of the Merger
("First Place Employees") shall be eligible for participation in the employee
welfare and retirement plans of Xxxxx Fargo, as in effect from time to time, as
follows:
(a) Employee Welfare Benefit Plans. Each First Place Employee shall be
eligible for participation in the employee welfare benefit plans of Xxxxx Fargo
listed below subject to any eligibility requirements applicable to such plans
(and not subject to pre-existing condition exclusions, except with respect to
the Xxxxx Fargo Long Term Disability Plan and the Xxxxx Fargo Long Term Care
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Plan) and shall enter each plan no later than the first day of the calendar
quarter which begins at least thirty-two (32) days after the Effective Date of
the Merger ("Benefits Conversion Date") (provided that the transition from First
Place's Plans to the Xxxxx Fargo Plans will be facilitated without gaps in
coverage to the participants and without duplication of costs to Xxxxx Fargo):
Medical Plan
Dental Plan
Vision Plan
Short Term Disability Plan Long Term Disability Plan Long Term
Care Plan Flexible Benefits Plan Basic Group Life Insurance
Plan Group Universal Life Insurance Plan Dependent Group Life
Insurance Plan Business Travel Accident Insurance Plan
Accidental Death and Dismemberment Plan Salary Continuation
Pay Plan Paid Time Off Program
For purposes of the foregoing, "Medical Plan" means any medical plan sponsored
by Xxxxx Fargo that is available to similarly situated Xxxxx Fargo employees.
First Place Employees shall receive credit for years of service to First Place,
the First Place Subsidiaries and any predecessors of First Place or the First
Place Subsidiaries (to the extent credited under the vacation and short-term
disability programs of First Place) for the purpose of determining benefits
under the Xxxxx Fargo Paid Time Off Program, Salary Continuation Pay Plan, and
Short Term Disability Plan. No First Place Employee who is a participant in any
First Place severance or salary continuation plan or who has an employment
agreement with First Place or any First Place Subsidiary on the date of this
Agreement shall be eligible to participate in the Xxxxx Fargo Salary
Continuation Pay Plan; provided, however, that in the event that Xxxxx Fargo
terminates the First Place Financial Corporation Officer Severance Plan (the
"First Place Severance Plan") after the Effective Time of the Merger, then the
participants in the First Place Severance Plan shall be eligible to participate
in the Xxxxx Fargo Salary Continuation Plan.
(b) Employee Retirement Benefit Plans. Each First Place Employee shall
be eligible to participate in the Xxxxx Fargo 401(k) Plan (the "401(k) Plan"),
subject to any eligibility requirements applicable to the 401(k) Plan (with full
credit for years of past service to First Place and the First Place Subsidiaries
for the purpose of satisfying any eligibility and vesting periods applicable to
the 401(k)Plan ), and shall enter the 401(k) Plan no later than the Benefits
Conversion Date.
Each First Place Employee shall be eligible for participation in the
Xxxxx Fargo Cash Balance Plan subject to any eligibility requirements applicable
to the Cash Balance Plan. Xxxxx Fargo shall recognize a First Place Employee's
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past service with First Place and any First Place Subsidiary for all purposes
under the Cash Balance Plan.
Each First Place Employee shall be eligible for access to Xxxxx Fargo's
retiree medical benefit, subject to any eligibility requirements applicable to
such benefit. Xxxxx Fargo shall recognize years of past service with First Place
and the First Place Subsidiaries for the purpose of eligibility to access Xxxxx
Fargo's retiree medical benefit.
9. TERMINATION OF AGREEMENT.
(a) This Agreement may be terminated at any time prior to the Time of
Filing:
(i) by mutual written consent of the parties hereto; or
(ii) by either of the parties hereto upon written notice to
the other party if the Merger shall not have been consummated by
February 29, 2000 unless such failure of consummation shall be due to
the failure of the party seeking to terminate to perform or observe in
all material respects the covenants and agreements hereof to be
performed or observed by such party; or
(iii) by First Place or Xxxxx Fargo upon written notice to the
other party if any court or governmental authority of competent
jurisdiction shall have issued a final order restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated
by this Agreement; or
(iv) by First Place, within five business days after the end
of the Index Measurement Period (as defined in subparagraph (c)(ii)
below), if both of the following conditions are satisfied:
(A) the Xxxxx Fargo Measurement Price is less than
$37.00; and
(B) the number obtained by dividing the Xxxxx Fargo
Measurement Price by the closing price of Xxxxx Fargo Common
Stock on the trading day immediately preceding the date of
this Agreement is less than the number obtained by dividing
the Final Index Price (as defined in subparagraph (c) below)
by the Initial Index Price (as defined in subparagraph (c)
below) and subtracting 0.15 from such quotient.
(v) by either Xxxxx Fargo or First Place upon written notice
to the other party if the Board of Directors of First Place shall in
good faith determine that a Takeover Proposal constitutes a Superior
Proposal; provided, however, that First Place shall not be permitted to
terminate this Agreement pursuant to this paragraph (a)(v) unless (i)
it has not breached any covenant contained in paragraph 4(h) and (ii)
it delivers to Xxxxx Fargo simultaneously with such notice of
termination the fee referred to in paragraph 9(d) below. As used in
this Agreement; (i) "Takeover Proposal" means a bona fide proposal or
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offer by a person to make a tender or exchange offer, or to engage in a
merger, consolidation or other business combination involving First
Place or to acquire in any manner a substantial equity interest in, or
all or substantially all of the assets of, First Place, and (ii)
"Superior Proposal" means a bona fide proposal or offer made by a
person to acquire First Place pursuant to a tender or exchange offer, a
merger, consolidation or other business combination or an acquisition
of all or substantially all of the assets of First Place and the First
Place Subsidiaries on terms which the Board of Directors of First Place
shall determine in good faith, after taking into account the advice of
counsel, to be more favorable to First Place and its shareholders than
the transactions contemplated hereby.
(vi) by Xxxxx Fargo upon written notice to First Place if (A)
the Board of Directors of First Place fails to recommend, withdraws, or
modifies in a manner materially adverse to Xxxxx Fargo, its approval or
recommendation of this Agreement, or the transactions contemplated
hereby, (B) after an agreement to engage in or the occurrence of an
Acquisition Event (as defined below) or after a third party shall have
made a proposal to First Place or First Place's shareholders to engage
in an Acquisition Event, the transactions contemplated hereby are not
approved at the meeting of First Place shareholders contemplated by
paragraph 4(c), or (C) the meeting of First Place shareholders
contemplated by paragraph 4(c) is not held prior to March 15, 2000 and
First Place has failed to comply with its obligations under paragraph
4(c). "Acquisition Event" means any of the following: (i) a merger,
consolidation or similar transaction involving First Place or First
National Bank of Farmington (the "Bank") or any successor to First
Place or the Bank, (ii) a purchase, lease or other acquisition in one
or a series of related transactions of assets of First Place or any of
the First Place Subsidiaries representing 25% or more of the
consolidated assets of First Place and the First Place Subsidiaries or
(iii) a purchase or other acquisition (including by way of merger,
consolidation, share exchange or any similar transaction) in one or a
series of related transactions of beneficial ownership of securities
representing 25% or more of the voting power of First Place or the Bank
in each case with or by a person or entity other than Xxxxx Fargo or an
affiliate of Xxxxx Fargo.
(b) Termination of this Agreement under this paragraph 9 shall not
release, or be construed as so releasing, either party hereto from any liability
or damage to the other party hereto arising out of the breaching party's willful
and material breach of the warranties and representations made by it, or willful
and material failure in performance of any of its covenants, agreements, duties
or obligations arising hereunder, and the obligations under paragraphs 4(g),
5(h) and 10 shall survive such termination.
(c) For purposes of this paragraph 9:
(i) The "Company Market Capitalization" shall mean (a) the
price of one share of the common stock of a given company at the close
of the trading day immediately preceding the date of this Agreement
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multiplied by (b) the number of shares of common stock of such company
outstanding as of March 31, 1999 (adjusted for any stock dividend,
reclassification, recapitalization, exchange of shares or similar
transaction between March 31, 1999 and the close of the trading day
immediately preceding the date of this Agreement).
(ii) The "Index Group" shall mean all of those companies
listed on Exhibit C the common stock of which is publicly traded and as
to which there is, during the period of 20 trading days ending on the
day immediately preceding the meeting of the shareholders of First
Place held to vote on this Agreement and the Merger Agreement (the
"Index Measurement Period"), no pending publicly announced proposal for
such company to be acquired, nor has there been any proposal by such
company publicly announced subsequent to the day before the date of
this Agreement to acquire another company in exchange for stock where,
if the company to be acquired were to become a subsidiary of the
acquiring company, the company to be acquired would be a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X promulgated by
the SEC nor has there been any program publicly announced subsequent to
the day before the date of this Agreement to repurchase 5% or more of
the outstanding shares of such company's common stock.
(iii) The "Initial Index Price" shall mean the sum of the
following, calculated for each of the companies in the Index Group: (a)
the closing price per share of common stock of each such company on the
trading day immediately preceding the date of this Agreement multiplied
by (b) the Weighting Factor (as defined below) for each such company.
(iv) The "Final Index Price" shall mean the sum of the
following, calculated for each of the companies in the Index Group: (a)
the Final Price for each such company multiplied by (b) the Weighting
Factor (as defined below) for each such company.
(v) The "Final Price" of any company in the Index Group shall
mean the average of the daily closing prices of a share of common stock
of such company, as reported on the consolidated transaction reporting
system for the market or exchange on which such common stock is
principally traded, during the Index Measurement Period.
(vi) The "Total Market Capitalization" shall mean the sum of
the Company Market Capitalization for each of the companies in the
Index Group.
(vii) The "Weighting Factor" for any given company shall mean
the Company Market Capitalization for such company divided by the Total
Market Capitalization.
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(viii) The "Xxxxx Fargo Measurement Price" means the average
closing price of a share of Xxxxx Fargo Common Stock as reported on the
composite tape of the New York Stock Exchange during the Index
Measurement Period.
If a Common Stock Adjustment occurs with respect to the shares
of Xxxxx Fargo or any company in the Index Group between the date of
this Agreement and the First Place shareholder meeting date, the
closing prices for the common stock of such company shall be
appropriately and proportionately adjusted for the purposes of the
definitions above so as to be comparable to what the price would have
been if the record date of the Common Stock Adjustment had been
immediately following the Effective Time of the Merger.
(d) If this Agreement is terminated pursuant to paragraphs 9(a)(v) or
9(a)(vi), and if terminated pursuant to paragraph 9(a)(vi) and prior thereto or
within 12 months after such termination:
(i) First Place, the Holding Company or the Bank or any
successor to First Place or the Bank shall have entered into an
agreement to engage in an Acquisition Event (as defined above) or an
Acquisition Event shall have occurred; or
(ii) the Board of Directors of First Place shall have
authorized or approved an Acquisition Event or shall have publicly
announced an intention to authorize or approve or shall have
recommended that the shareholders of First Place approve or accept any
Acquisition Event,
then First Place shall promptly, but in no event later than five business days
after the first of such events shall have occurred, pay Xxxxx Fargo a fee equal
to $6,000,000.
(e) If this Agreement is terminated pursuant to this paragraph 9, Xxxxx
Fargo shall immediately pay to First Place an amount equal to First Place's
actual expenses in connection with obtaining the environmental assessments,
asbestos surveys, title commitments and boundary surveys required by paragraphs
4(n) and 4(o) hereof.
10. EXPENSES. Except as otherwise provided in paragraph 9 hereof, all
expenses in connection with this Agreement and the transactions contemplated
hereby, including without limitation legal and accounting fees, incurred by
First Place and First Place Subsidiaries shall be borne by First Place, and all
such expenses incurred by Xxxxx Fargo shall be borne by Xxxxx Fargo.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, but shall not be assignable by either party hereto without the prior
written consent of the other party hereto.
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12. THIRD PARTY BENEFICIARIES. Except as contemplated by paragraphs
4(u), 4(v) and 5(n), each party hereto intends that this Agreement shall not
benefit or create any right or cause of action in or on behalf of any person
other than the parties hereto.
13. NOTICES. Any notice or other communication provided for herein or
given hereunder to a party hereto shall be in writing and shall be delivered in
person or shall be mailed by first class registered or certified mail, postage
prepaid, addressed as follows:
If to Xxxxx Fargo:
Xxxxx Fargo & Company
Sixth and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Secretary
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If to First Place:
First Place Financial Corporation
000 Xxxx Xxxxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
With a copy to:
Jenkens & Xxxxxxxxx
0000 Xxxx Xxxxxx - Xxxxx 0000
Xxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxxxx, Esq.
or to such other address with respect to a party as such party shall notify the
other in writing as above provided.
14. COMPLETE AGREEMENT. This Agreement and the Merger Agreement contain
the complete agreement between the parties hereto with respect to the Merger and
other transactions contemplated hereby and supersede all prior agreements and
understandings between the parties hereto with respect thereto.
15. CAPTIONS. The captions contained in this Agreement are for
convenience of reference only and do not form a part of this Agreement.
16. WAIVER AND OTHER ACTION. Either party hereto may, by a signed
writing, give any consent, take any action pursuant to paragraph 9 hereof or
otherwise, or waive any inaccuracies in the representations and warranties by
the other party and compliance by the other party with any of the covenants and
conditions herein.
17. AMENDMENT. At any time before the Time of Filing, the parties
hereto, by action taken by their respective Boards of Directors or pursuant to
authority delegated by their respective Boards of Directors, may amend this
Agreement; provided, however, that no amendment after approval by the
shareholders of First Place shall be made which changes in a manner adverse to
such shareholders the consideration to be provided to said shareholders pursuant
to this Agreement and the Merger Agreement.
18. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of New Mexico.
19. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. No representation
or warranty contained in the Agreement or the Merger Agreement shall survive the
Merger or except as set forth in paragraph 9(b), the termination of this
Agreement. Paragraph 10 shall survive the Merger.
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20. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute but one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXXXX FARGO & COMPANY FIRST PLACE FINANCIAL CORPORATION
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------- ----------------------------
Its: Executive Vice President Its: Chairman/Chief Executive Officer
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EXHIBIT A
AGREEMENT AND PLAN OF MERGER
BETWEEN
FIRST PLACE FINANCIAL CORPORATION
a New Mexico corporation
(the surviving corporation)
AND
[MERGER CO.]
a New Mexico corporation
(the merged corporation)
This Agreement and Plan of Merger dated as of __________, _____,
between FIRST PLACE FINANCIAL CORPORATION, a New Mexico corporation (hereinafter
sometimes called "First Place" and sometimes called the "surviving corporation")
and [MERGER CO.], a New Mexico corporation ("Merger Co.")(said corporations
being hereinafter sometimes referred to as the "constituent corporations"),
WHEREAS, Merger Co., a wholly-owned subsidiary of Xxxxx Fargo & Company
("Xxxxx Fargo"), was incorporated by Articles of Incorporation filed in the
office of the New Mexico Public Regulation Commission on _______, 19__, and said
corporation is now a corporation subject to and governed by the provisions of
the New Mexico Business Corporation Act. Merger Co. has authorized capital stock
of ________ shares of common stock having a par value of $_____ per share
("Merger Co. Common Stock"), of which _________ shares were outstanding as of
the date hereof; and
WHEREAS, First Place was incorporated by Articles of Incorporation
filed in the office of the New Mexico Public Regulation Commission on ________,
19__ and said corporation is now a corporation subject to and governed by the
provisions of the New Mexico Business Corporation Act. First Place has
authorized capital stock of ________ shares of Common Stock, par value $_____
per share ("First Place Common Stock") of which _______ shares were outstanding
and no shares were held in the treasury as of ___________ , 19__; and
WHEREAS, Xxxxx Fargo and First Place are parties to an Agreement and
Plan of Reorganization dated as of __________ , 1999 (the "Reorganization
Agreement"), setting forth certain representations, warranties and covenants in
connection with the merger provided for herein; and
WHEREAS, the directors, or a majority of them, of each of the
constituent corporations respectively deem it advisable for the welfare and
advantage of said corporations and for the best interests of the respective
shareholders of said corporations that said corporations merge and that Merger
Co. be merged with and into First Place, with First Place continuing as the
surviving corporation, on the terms and conditions hereinafter set forth in
accordance with the provisions of the New Mexico Business Corporation Act, which
statute permits such merger; and
WHEREAS, it is the intent of the parties to effect a merger which
qualifies as a tax-free reorganization pursuant to Sections 368(a)(1)(A) and
368(a)(2)(E) of the Internal Revenue Code of 1986, as amended;
NOW, THEREFORE, the parties hereto, subject to the approval of the
shareholders of Merger Co. and First Place, in consideration of the premises and
of the mutual covenants and agreements contained herein and of the benefits to
accrue to the parties hereto, have agreed and do hereby agree that Merger Co.
shall be merged with and into First Place pursuant to the laws of the State of
New Mexico, and do hereby agree upon, prescribe and set forth the terms and
conditions of the merger of Merger Co. with and into First Place, the mode of
carrying said merger into effect, the manner and basis of exchanging the shares
of First Place Common Stock for shares of common stock of Xxxxx Fargo of the par
value of $1-2/3 per share ("Xxxxx Fargo Common Stock"), and such other
provisions with respect to said merger as are deemed necessary or desirable, as
follows:
FIRST: At the time of merger, Merger Co. shall be merged with and into
First Place, one of the constituent corporations, which shall be the surviving
corporation, and the separate existence of Merger Co. shall cease and the name
of the surviving corporation shall be ________________.
SECOND: The Articles of Incorporation of First Place at the time of
merger shall be amended as set forth below and, as so amended, shall be the
Articles of Incorporation of the surviving corporation until further amended
according to law:
[Amend to change name, number of directors, etc.]
THIRD: The By-Laws of First Place at the time of merger shall be and
remain the By-Laws of the surviving corporation until amended according to the
provisions of the Articles of Incorporation of the surviving corporation or of
said By-Laws.
FOURTH: The directors of Merger Co. at the time of merger shall be and
remain the directors of the surviving corporation and shall hold office from the
time of merger until their respective successors are elected and qualify.
FIFTH: The officers of Merger Co. at the time of merger shall be and remain
the officers of the surviving corporation and shall hold office from the time of
merger until their respective successors are elected or appointed and qualify.
SIXTH: The manner and basis of converting the shares of First Place
Common Stock into whole shares of Xxxxx Fargo Common Stock (and cash in lieu of
fractional share interests) shall be as follows:
2
1. Each of the shares of First Place Common Stock outstanding
immediately prior to the time of merger (other than shares as to which
statutory dissenters' appraisal rights have been exercised) shall at
the time of merger, by virtue of the merger and without any action on
the part of the holder or holders thereof, be converted into the right
to receive the number of shares of Xxxxx Fargo Common Stock determined
by dividing 4,600,000 by the number of shares of First Place Common
Stock then outstanding.
2. As soon as practicable after the merger becomes effective, each
holder of a certificate which, prior to the effective time of the
merger, represented shares of First Place Common Stock outstanding
immediately prior to the time of merger shall be entitled, upon
surrender of such certificate for cancellation to the surviving
corporation or to Norwest Bank Minnesota, National Association, as the
designated agent of the surviving corporation (the "Agent"), to receive
a new certificate representing the number of whole shares of Xxxxx
Fargo Common Stock to which such holder shall be entitled on the basis
set forth in paragraph 1 above. Until so surrendered each certificate
which, immediately prior to the time of merger, represented shares of
First Place Common Stock shall not be transferable on the books of the
surviving corporation but shall be deemed to evidence only the right to
receive (except for the payment of dividends as provided below) the
number of whole shares of Xxxxx Fargo Common Stock issuable on the
basis above set forth; provided, however, until the holder of such
certificate for First Place Common Stock shall have surrendered the
same as above set forth, no dividend payable to holders of record of
Xxxxx Fargo Common Stock as of any date subsequent to the effective
date of merger shall be paid to such holder with respect to the shares
of Xxxxx Fargo Common Stock issuable in connection with the merger,
but, upon surrender and exchange thereof as herein provided, there
shall be paid by the surviving corporation or the Agent to the record
holder of such certificate representing Xxxxx Fargo Common Stock issued
in exchange therefor an amount with respect to such shares of Xxxxx
Fargo Common Stock equal to all dividends that shall have been paid or
become payable to holders of record of Xxxxx Fargo Common Stock between
the effective date of merger and the date of such exchange.
3. If between the date of the Reorganization Agreement and the time of
merger, shares of Xxxxx Fargo Common Stock shall be changed into a
different number of shares or a different class of shares by reason of
any reclassification, recapitalization, split-up, combination, exchange
of shares or readjustment, or if a stock dividend thereon shall be
declared with a record date within such period, then the number of
shares of Xxxxx Fargo Common Stock, if any, into which a share of First
Place Common Stock shall be converted on the basis above set forth,
will be appropriately and proportionately adjusted so that the number
of such shares of Xxxxx Fargo Common Stock into which a share of First
Place Common Stock shall be converted will equal the number of shares
of Xxxxx Fargo Common Stock which the holders of shares of First Place
3
Common Stock would have received pursuant to such reclassification,
recapitalization, split-up, combination, exchange of shares or
readjustment, or stock dividend had the record date therefor been
immediately following the time of merger.
4. No fractional shares of Xxxxx Fargo Common Stock and no certificates
or scrip certificates therefor shall be issued to represent any such
fractional interest, and any holder of a fractional interest shall be
paid an amount of cash equal to the product obtained by multiplying the
fractional share interest to which such holder is entitled by the
average of the closing prices of a share of Xxxxx Fargo Common Stock as
reported by the consolidated tape of the New York Stock Exchange for
each of the five (5) trading days immediately preceding the meeting of
shareholders of First Place held to vote on the plan of merger.
5. Each share of Merger Co. Common Stock issued and outstanding at the
time of merger shall be converted into and exchanged for shares of the
surviving corporation after the time of merger.
SEVENTH: The merger provided for by this Agreement shall be effective
as follows:
1. The effective date of merger shall be the date on which Articles of
Merger (as described in subparagraph 1(b) of this Article Seventh)
shall be delivered to and filed by the New Mexico Public Regulation
Commission; provided, however, that all of the following actions shall
have been taken in the following order:
a. This Agreement shall be approved and adopted on behalf of
Merger Co. and First Place in accordance with the New Mexico
Business Corporation Act; and
b. Articles of merger (with this Agreement attached as part
thereof) with respect to the merger, setting forth the
information required by the New Mexico Business Corporation
Act, shall be executed by the President or a Vice President of
Merger Co. and by the Secretary or an Assistant Secretary of
Merger Co., and by the President or a Vice President of First
Place and by the Secretary or an Assistant Secretary of First
Place, and shall be filed in the office of the New Mexico
Public Regulation Commission in accordance with the New Mexico
Business Corporation Act.
2. The merger shall become effective as of 11:59 p.m. (the "time of
merger") on the effective date of merger.
EIGHTH: At the time of merger:
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1. The separate existence of Merger Co. shall cease, and the corporate
existence and identity of First Place shall continue as the surviving
corporation.
2. The merger shall have the other effects prescribed by Section
53-14-6 of the New Mexico Business Corporation Act.
NINTH: The following provisions shall apply with respect to the merger
provided for by this Agreement:
1. The surviving corporation shall (i) file with the New Mexico Public
Regulation Commission an agreement that it may be served with process
within or without the State of New Mexico in the courts of the State of
New Mexico in any proceeding for the enforcement of any obligation of
Merger Co. and in any proceeding for the enforcement of the rights of a
dissenting shareholder of Merger Co. against First Place, and (ii) file
with said New Mexico Public Regulation Commission an agreement that it
will promptly pay to the dissenting shareholders of Merger Co. the
amount, if any, to which such dissenting shareholders will be entitled
under the provisions of the New Mexico Business Corporation Act with
respect to the rights of dissenting shareholders.
2. The registered office of the surviving corporation in the State of
New Mexico shall be _______________, and the name of the registered
agent of First Place at such address is Corporation Service Company.
3. If at any time the surviving corporation shall consider or be
advised that any further assignment or assurance in law or other action
is necessary or desirable to vest, perfect or confirm in the surviving
corporation the title to any property or rights of Merger Co. acquired
or to be acquired as a result of the merger provided for herein, the
proper officers and directors of First Place and Merger Co. may execute
and deliver such deeds, assignments and assurances in law and take such
other action as may be necessary or proper to vest, perfect or confirm
title to such property or right in the surviving corporation and
otherwise carry out the purposes of this Agreement.
4. For the convenience of the parties and to facilitate the filing of
this Agreement, any number of counterparts hereof may be executed and
each such counterpart shall be deemed to be an original instrument.
5. This Agreement and the legal relations among the parties hereto
shall be governed by and construed in accordance with the laws of the
State of New Mexico.
6. This Agreement cannot be altered or amended except pursuant to an
instrument in writing signed by both of the parties hereto.
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7. At any time prior to the filing of Articles of Merger with the New
Mexico Public Regulation Commission, subject to the provisions of the
Reorganization Agreement this Agreement may be terminated upon approval
by the Boards of Directors of either of the constituent corporations
notwithstanding the approval of the shareholders of either constituent
corporation.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement and
Plan of Merger to be signed in their respective corporate names by the
undersigned officers and their respective corporate seals to be affixed hereto,
pursuant to authority duly given by their respective Boards of Directors, all as
of the day and year first above written.
FIRST PLACE FINANCIAL CORPORATION
By: ________________________________
Its: ______________________________
(Corporate Seal)
Attest:
--------------------------
Secretary
6
[MERGER CO.]
By: ________________________________
Its: ______________________________
(Corporate Seal)
Attest:
---------------------------
Secretary
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Exhibit B
Xxxxx Fargo & Company
Norwest Center
Sixth and Marquette
Xxxxxxxxxxx, XX 00000-0000
Attn: Secretary
Gentlemen:
I have been advised that I might be considered to be an "affiliate," as
that term is defined for purposes of paragraphs (c) and (d) of Rule 145 ("Rule
145") promulgated by the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Securities Act"), of First
Place Financial Corporation, a New Mexico corporation ("First Place").
Pursuant to an Agreement and Plan of Reorganization, dated as of
________, 1999, (the "Reorganization Agreement"), between First Place and Xxxxx
Fargo & Company, a Delaware corporation ("Xxxxx Fargo"), it is contemplated that
a wholly-owned subsidiary of Xxxxx Fargo will merge with and into First Place
(the "Merger") and, as a result of such Merger, I will receive in exchange for
each share of Common Stock, no par value, of First Place ("First Place Common
Stock") owned by me immediately prior to the Effective Time of the Merger (as
defined in the Reorganization Agreement) a number of shares of Common Stock, par
value $1 2/3 per share, of Xxxxx Fargo ("Xxxxx Fargo Common Stock"), as more
specifically set forth in the Reorganization Agreement.
I hereby agree as follows:
I will not offer to sell, transfer or otherwise dispose of any of the
shares of Xxxxx Fargo Common Stock issued to me pursuant to the Merger (the
"Stock") except (a) in compliance with the applicable provisions of Rule 145,
(b) in a transaction that is otherwise exempt from the registration requirements
of the Securities Act, or (c) in an offering registered under the Securities
Act.
I consent to the endorsement of the certificates representing the Stock
issued to me pursuant to the Merger with a restrictive legend which will read
substantially as follows:
"The shares represented by this certificate were issued in a
transaction to which Rule 145 promulgated under the Securities Act of
1933, as amended (the "Act"), applies, and may be sold or otherwise
transferred only in compliance with the limitations of such Rule 145,
or upon receipt by Xxxxx Fargo & Company of an opinion of counsel
reasonably satisfactory to it that some other exemption from
registration under the Act is available, or pursuant to a registration
statement under the Act."
Xxxxx Fargo's transfer agent shall be given an appropriate stop
transfer order and shall not be required to register any attempted transfer of
the shares of the Stock unless the transfer has been effected in compliance with
the terms of this letter agreement.
It is understood and agreed that this letter agreement shall terminate
and be of no further force and effect and the restrictive legend set forth above
shall be removed by delivery of substitute certificates without such legend, and
the related stop transfer order shall be lifted forthwith, if (i) any such
shares of Stock shall have been registered under the Securities Act for sale,
transfer or other disposition by me or on my behalf and are sold, transferred or
otherwise disposed of, or (ii) any such shares of Stock are sold in accordance
with the provisions of paragraphs (c), (e), (f) and (g) of Rule 144 promulgated
under the Securities Act, or (iii) I am not at the time of such disposition an
affiliate of Xxxxx Fargo and have been the beneficial owner of the Stock for at
least one year (or such other period as may be prescribed by the Securities Act,
and the rules and regulations promulgated thereunder) and Xxxxx Fargo has filed
with the Commission all of the reports it is required to file under the
Securities Exchange Act of 1934, as amended, during the preceding twelve months,
or (iv) I am not and have not been for at least three months an affiliate of
Xxxxx Fargo and have been the beneficial owner of the Stock for at least two
years (or such other period as may be prescribed by the Securities Act, and the
rules and regulations promulgated thereunder), or (v) Xxxxx Fargo shall have
received an opinion of counsel acceptable to Xxxxx Fargo to the effect that the
stock transfer restrictions and the legend are not required.
I have carefully read this letter agreement and the Reorganization
Agreement and have discussed their requirements and other applicable limitations
upon my ability to offer to sell, transfer or otherwise dispose of shares of
First Place Common Stock, Xxxxx Fargo Common Stock or the Stock, to the extent I
felt necessary, with my counsel or counsel for First Place.
Sincerely,
-------------------------
EXHIBIT C
Bank of America Corporation
Bank One Corporation
First Union Corporation
U.S. Bancorp
Fleet Financial Group, Inc.
SunTrust Banks, Inc.
National City Corporation
Fifth Third Bancorp
Mellon Bank Corporation
PNC Bank Corp.
Wachovia Corporation
KeyCorp
State Street Corporation
BB&T Corporation
Northern Trust Corporation
Comerica Incorporated
Regions Financial Corporation
Huntington Bancshares Incorporated
Xxxxxxxx & Xxxxxx Corporation
Summit Bancorp
