EXHIBIT 2
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AMENDMENT NO. 2 TO AGREEMENT OF AFFILIATION AND MERGER
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THIS AMENDMENT XX. 0 ("Xxxxxxxxx Xx. 0") to the Agreement of
Affiliation and Merger, as amended June 26, 2001 ("Agreement"), dated and
effective as of the 30th day of March, 2001, by and between First Financial
Corporation ("First Financial"), FFC Merger Corp ("Merger Corp"), and
Community Financial Corp. ("Community") is made and entered into as of the
20th day of November, 2001 by and among First Financial, Merger Corp and
Community. Except as otherwise amended by this Amendment No. 2, all
capitalized terms not herein defined shall have the meanings set forth in
the Agreement.
RECITALS
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A. First Financial, Merger Corp and Community desire to amend
certain provisions of the Agreement relating to (1) the Aggregate Purchase
Price, (2) the date by which First Financial will make its employee benefit
plans available to Community employees, (3) the nature of the "Agreement
Under the Bank Holding Company Act" proposed to First Financial by the Board
of Governors of the Federal Reserve System in connection with the Merger,
(4) the right of First Financial to terminate the Merger and (5) the date on
which the Agreement may be terminated if the Merger is not completed and in
certain other regards as herein stated.
B. Section 12.02(b) of the Agreement provides that the Agreement
may only be amended, modified or supplemented by the written agreement of First
Financial, Merger Corp and Community.
C. First Financial, Merger Corp and Community wish to amend, modify
and supplement the Agreement as provided herein.
NOW, THEREFORE, the Agreement is hereby amended, as of the date
written above, as follows:
1. Section 2.02(a) of the Agreement is hereby amended and replaced
in its entirety to read as follows:
(a) As consideration for the Merger, shareholders of Community,
other than those shareholders who have exercised their dissenter's
rights as set forth in Section 3, will be entitled to receive in
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cash for each share of Community common stock they own an amount
equal to:
(i) the Aggregate Purchase Price (as defined in Section
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2.02(b), and as may be amended or modified by Section
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2.02(c)) minus (A) the aggregate amount to be paid to the
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Community ESOP pursuant to Section 2.02(e), and (B) minus
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the aggregate amount to be paid to the holders of record
as of the Effective Time of the outstanding "in the money"
options of Community (as defined in Section 2.02(f))
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pursuant to Section 2.02(f),
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(ii) divided by 2,147,470 (which is the number of shares of
Community common stock which will be outstanding as of the
Effective Time);
provided, however, in no event shall such shareholders receive an amount
less than $15.14 for each share of Community common stock.
2. The initial clause of Section 2.02(b) of the Agreement is
hereby amended and replaced in its entirety to read as follows:
(b) First Financial shall pay an aggregate purchase price (the
"Aggregate Purchase Price"), determined as of five business days
prior to the Closing, equal to the sum of the following less any
liabilities of Community (computed on a parent company only basis):
3. The fourth sentence of Section 4.01 of the Agreement is hereby
amended and replaced in its entirety to read as follows:
Except as set forth in the Disclosure Schedule (for
purposes of this Agreement, "Disclosure Schedule" shall mean the
schedules referencing the applicable provisions of this Agreement
which are attached hereto and made a part of this Agreement, as
such schedules may be amended from time to time), Community's only
subsidiary is the Bank, and it has no other subsidiaries and owns
no voting stock or equity securities of any corporation,
partnership, association or other entity, except for stock held by
the Bank in the Federal Home Loan Bank of Chicago and the Federal
Reserve Bank of St. Louis.
4. Section 4.22(f) of the Agreement is hereby amended and replaced
in its entirety to read as follows:
(f) Except as disclosed in writing to First Financial, increased
the salary of any director, officer or employee or entered into any
employment contract, indemnity agreement or understanding with any
officer or employee or installed any employee welfare, pension,
retirement, stock option, stock appreciation, stock dividend,
profit sharing or other similar plan or arrangement;
5. Section 7.03(a) of the Agreement is hereby amended and replaced
in its entirety to read as follows:
(a) At such time as First Financial shall determine, in its sole
discretion, but in no event later than June 30, 2002, First
Financial will make available to the employees of Community who
continue as employees of any subsidiary of First Financial after
the Effective Time and, further, subject to Subsections 7.03(b),
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(c) and (d) hereof, substantially the same employee benefits on
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substantially the same terms and conditions that First Financial
may offer to similarly situated officers and employees of its
banking subsidiaries from time to time. Until such time as the
employees of Community become covered by the First Financial
welfare benefit plans, the employees of Community shall remain
covered by their respective welfare benefit plans, subject to the
terms of such plans.
6. Section 8.01(d) of the Agreement is hereby amended and replaced
in its entirety to read as follows:
(d) Regulatory Approvals. The appropriate banking regulators will
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have authorized and approved the Merger and agreed to an "Agreement
Under The Bank Holding Company Act" regarding First Financial's
status as a financial holding company (after considering the
preliminary results of the most recent regulatory examination of
Community Bank) on terms and conditions satisfactory to First
Financial. In addition, all appropriate orders, consents, approvals
and clearances from all other regulatory agencies and governmental
authorities whose orders, consents, approvals or clearances are
required by law for consummation of the Merger contemplated by this
Agreement will have been obtained on terms and conditions
satisfactory to First Financial.
7. Section 9.01(a)(i) of the Agreement is hereby amended and
replaced in its entirety to read as follows:
(i) the Merger contemplated by this Agreement has not been
consummated by January 31, 2002; or
8. Section 9.01(b)(viii) is hereby added to the Agreement to read
as follows:
(viii) the amount to be received by the shareholders of
Community, other than those shareholders who have exercised their
dissenter's rights as set forth in Section 3, for each of their
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shares of common stock pursuant to Section 2.02(a) is less than
$15.14.
9. An amendment to Schedule 4.09(a)(iv) to the Disclosure
Schedule is attached hereto as Annex A.
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10. Except as amended hereby, the Agreement shall continue in
full force and effect in accordance with its terms.
IN WITNESS WHEREOF, First Financial, Merger Corp and
Community have made and entered into this Amendment No. 2 as of the day and
year first above written and have caused this Amendment No. 2 to be executed
in counterparts by their duly authorized officers.
FIRST FINANCIAL CORPORATION
By /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx,
Chairman of the Board and President
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Secretary
FFC MERGER CORP
By /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx,
Chairman of the Board and President
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Secretary
COMMUNITY FINANCIAL CORP.
By /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, President
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx, Secretary
