EXHIBIT 2
SECOND AMENDMENT TO
AGREEMENT TO MERGE
AND PLAN OF REORGANIZATION
THIS SECOND AMENDMENT TO THE AGREEMENT TO MERGE AND PLAN OF REORGANIZATION
(the "Second Amendment") is entered into as of August 3, 2001, among Mid-State
Bank & Trust, a banking company organized under the laws of California ("BANK"),
being located in Arroyo Grande, California, Mid-State Bancshares, a corporation
and registered bank holding company organized under the laws of California
("ACQUIROR") located in Arroyo Grande, California, Americorp, a corporation and
registered bank holding company organized under the laws of California
("TARGET") located in Ventura, California, and American Commercial Bank, a
banking company organized under the laws of California ("TARGET BANK"), located
in Ventura, California.
WHEREAS, Acquiror, Bank, Target and Target Bank entered into an Agreement
to Merge and Plan of Reorganization dated as of April 9, 2001 as subsequently
amended on May 24, 2001 (as so amended, the "Agreement");
WHEREAS, the Parties wish to make certain changes and amendments to the
Agreement which they believe to be in the best interest of their respective
shareholders;
NOW, THEREFORE, in consideration of the premises and mutual promises of the
parties, the Parties hereto agree as follows:
1. The following definitions are hereby added to Section 1.1 or, in the event
that the definition is already contained in the Agreement, amended in full
as follows:
"`CASH PRORATION FACTOR' shall have the meaning given such term in Section
2.7(d)."
"`EXCHANGE RATIO' means the number of shares of Acquiror Stock into which a
share of Target Stock shall be converted which shall be equal to the amount
(to the nearest ten thousandth) as set forth herein below:
(i) If the Average Closing Price is not less than $15.15 and is not more
than $17.61, the Exchange Ratio shall be calculated by dividing $28.75 by
the Average Closing Price;
(ii) If the Average Closing Price is more than $17.61, but not more than
$18.42, the Exchange Ratio shall be 1.6335;
(iii) If the Average Closing Price is more than $18.42, the Exchange Ratio
shall be calculated by dividing $30.09 by the Average Closing Price;
provided, however, that if Acquiror shall have entered into a definitive
agreement for a
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Change of Control (which definitive agreement shall not have terminated at
the Effective Time) and the Average Closing Price is more than $18.42, the
Exchange Ratio shall be 1.6335;
(iv) If the Average Closing Price is less than $15.15 but not less than
$14.00, the Exchange Ratio shall be 1.8977;
(v) If the Average Closing Price is less than $14.00, the Exchange Ratio
shall be calculated by dividing $26.57 by the Average Closing Price subject
to Acquiror's right to terminate the Agreement as set forth in Section
10.1(g).
"`MAXIMUM STOCK AMOUNT' shall have the meaning given such term in Section
2.7(c)."
"STOCK PRORATION FACTOR' shall have the meaning given such term in Section
2.7(d)."
2. The definitions of "Litigation Contingencies" and "Litigation Expenses" are
hereby eliminated.
3. Section 2.7 is hereby amended to read as follows:
"2.7 ELECTION AND PRORATION PROCEDURES.
(a) An election form and other appropriate and customary transmittal
materials in such form as Acquiror and Target shall mutually agree
("Election Form") shall be mailed no less than 35 days prior to the
anticipated Effective Time or on such other date as Target and Acquiror
shall mutually agree ("Mailing Date") to each holder of record of Target
Stock as of five Business Days prior to the Mailing Date ("Election Form
Record Date"). Acquiror shall make available one or more Election Forms as
maybe reasonably requested by all persons who become holders (or beneficial
owners) of Target Stock after the Election Form Record Date and prior to
the Election Deadline (as defined below), and Target shall provide to the
Exchange Agent all information reasonably necessary for it to perform its
obligations as specified herein. Each Election Form shall permit the holder
(or the beneficial owner through appropriate and customary documentation
and instructions) to elect (an "Election") to receive either (i) Acquiror
Stock (a "Stock Election") with respect to all of such holder's Target
Stock, (ii) cash (a "Cash Election") with respect to all of such holder's
Target Stock, or (iii) a specified number of shares of Target Stock to
receive Acquiror Stock (a "Combination Stock Election") and a specified
number of shares of Target Stock to receive cash (a "Combination Cash
Election"), subject to the provisions contained in this Agreement. Any
Target Stock (other than Target Dissenting Shares) with respect to which
the holder (or the beneficial owner, as the case may
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be) shall not have submitted to the Exchange Agent, an effective, properly
completed Election Form received prior to the Election Deadline shall be
deemed to be "Undesignated Shares" hereunder.
(b) Any Election shall have been properly made and effective only if the
Exchange Agent shall have actually received a properly completed Election
Form by 5:00 P.M. Pacific Time on or before the 30th day following the
Mailing Date, or such other time and date as Acquiror and Target may
mutually agree (the "Election Deadline"). An Election Form shall be deemed
properly completed only if an Election is indicated for each share of
Target Stock covered by such Election Form and if accompanied by one or
more certificates (or customary affidavits and indemnification regarding
the loss or destruction of such certificates or the guaranteed delivery of
such certificates) representing all shares of Target Stock covered by such
Election Form, together with duly executed transmittal materials included
in or required by the Election Form. Any Election Form may be revoked or
changed by the person submitting such Election Form at or prior to the
Election Deadline. In the event an Election Form is revoked prior to the
Election Deadline, the shares of Target Stock represented by such Election
Form shall automatically become Undesignated Shares unless and until a new
Election is properly completed and made with respect to such shares on or
before the Election Deadline, and Acquiror shall cause the certificates
representing such shares of Target Stock to be promptly returned without
charge to the person submitting the revoked Election Form upon written
request to that effect from the holder who submitted such Election Form.
Subject to the terms of this Agreement and of the Election Form, the
Exchange Agent shall have reasonable discretion to determine whether any
election, revocation or change has been properly or timely made and to
disregard immaterial defects in the Election Forms, and any decisions of
Acquiror and Target required by the Exchange Agent and made in good faith
in determining such matters shall be binding and conclusive. Neither
Acquiror nor the Exchange Agent shall be under any obligation to notify any
person of any defect in an Election Form.
(c) For purposes of this Section 2.7, the following definitions shall
apply:
(i) "Total Consideration" shall mean the SUM of (A) the product of (1) the
Average Closing Price and (2) the number of shares of Acquiror Stock
actually issued to holders of Target Stock in the Merger, (B) the amount of
cash actually issued to holders of Target Stock in the Merger pursuant to
Cash Elections, Combination Cash Elections or as the Cash Proration Factor
(as hereinafter defined), (C) the amount of cash actually issued to holders
of Target Stock in the Merger in lieu of fractional shares of Acquiror
Stock, and (D) an amount equal to the number of shares of Target Dissenting
Shares (as to which the holder's demand to exercise dissenter's rights
shall not have been withdrawn as of the Effective Time) MULTIPLIED by the
greater of (1) the product of the Exchange Ratio and the Average Closing
Price and (2) the Per Share Cash Consideration. The
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term "Total Consideration" shall not include, nor shall any effect be given
to, substitute options granted pursuant to section 7.4 (b) or any cash
payments pursuant to section 7.4 (c).
(ii) "Minimum Stock Amount" shall mean the lowest whole number of shares of
Acquiror Stock which, if multiplied by the Average Closing Price, results
in a dollar amount at least equal to 60 percent of the Total Consideration.
(iii) "Maximum Stock Amount" shall mean the lowest whole number of shares
of Acquiror Stock which, if multiplied by the Average Closing Price,
results in a dollar amount equal to 70 percent of the Total Consideration.
(d) As promptly as practicable after the Effective Time, but not later than
10 days after the Effective Time, Acquiror shall use its best efforts to
cause the Exchange Agent to effect the allocation among the holders of
Target Stock of rights to receive Acquiror Stock or cash in the Merger as
follows:
(i) If the product of (A) the aggregate number of shares of Target Stock
for which Stock Elections and Combination Stock Elections shall have
effectively been made, and (B) the Exchange Ratio, exceeds the Maximum
Stock Amount, then, to the extent necessary so that the number of shares of
Acquiror Stock to be issued in the Merger shall be not greater than the
Maximum Stock Amount and the number of shares of Acquiror Stock to be
issued in the Merger shall be at least equal to the Minimum Stock Amount,
the Exchange Agent shall make the following allocations and adjustments in
the following order:
(1) shares of Target Stock for which effective Cash Elections or
Combination Cash Elections have been made and all Undesignated Shares
shall be converted into the right to receive cash in an amount equal
to the Per Share Cash Consideration;
(2) if after applying the allocation in (1), the Maximum Stock Amount
is still exceeded, then a stock proration factor (the "Stock Proration
Factor") shall be determined by dividing (x) the Maximum Stock Amount
by (y) the product of the total number of shares of Target Stock with
respect to which effective Stock Elections and Combination Stock
Elections were made multiplied by (z) the Exchange Ratio. Each holder
of Target Stock who made an effective Stock Election or Combination
Stock Election shall be entitled to:
(a) the number of shares of Acquiror Stock equal to the product
of (x) the Exchange Ratio, multiplied by (y) the number of
shares of Target Stock covered by such Stock Election or
Combination Stock Election, multiplied by (z) the Stock
Proration Factor; and
(b) cash in an amount equal to the product of (x) the Per Share
Cash
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Consideration, multiplied by (y) the number of shares Target
Stock covered by such Stock Election or Combination Stock
Election, multiplied by (z) one minus the Stock Proration
Factor.
(ii) If the conversion of the shares of Target Stock for which Stock
Elections and Combination Stock Elections shall have effectively been
made (based upon the Exchange Ratio) would not result in a number of
shares of Acquiror Stock being issued that is at least equal to the
Minimum Stock Amount (which shall be determined for this purpose on
the assumption that all shares of Target Stock [other than (A) those
for which Stock Elections or Combination Stock Elections have been
made or (B) are Undesignated Shares] would be entitled to receive the
Per Share Cash Consideration), then, to the extent necessary so that
the number of shares of Acquiror Stock to be issued in the Merger
shall be at least equal to the Minimum Stock Amount, the Exchange
Agent shall make the following allocations and adjustments in the
following order:
(1) each holder of Target Stock who made an effective Stock Election
or Combination Stock Election shall receive the number of shares of
Acquiror Stock equal to the product of the Exchange Ratio multiplied
by the number of shares of Target Stock covered by such Stock Election
or Combination Stock Election;
(2) the Exchange Agent shall select by lot such number of holders of
Undesignated Shares to receive Acquiror Stock as shall be necessary so
that the shares of Acquiror Stock to be received by those holders,
when combined with the number of shares of Acquiror Stock for which a
Stock Election or Combination Stock Election has been made shall be
equal to at least the Minimum Stock Amount. If all Undesignated Shares
plus all shares as to which Stock Elections and Combination Stock
Elections have been made together are less than, and not approximately
equal to, the Minimum Stock Amount, then;
(3) a cash proration factor (the "Cash Proration Factor") shall be
determined by dividing (x) the Minimum Stock Amount (less the shares
for which an effective Stock Election and Combination Stock Election
has been made, plus all the Undesignated Shares) by (y) the product of
(i) the sum of the total number of shares of Target Stock with respect
to which effective Cash Elections and Combination Cash Elections were
made multiplied by (ii) the Exchange Ratio. Each holder of Target
Stock who made an effective Cash Election or Combination Cash Election
shall be entitled to:
(a) cash equal to the product of (x) the Per Share Cash
Consideration, multiplied by (y) the number of shares of
Target Stock covered by such Cash Election or Combination
Cash Election, multiplied by (z) one minus the Cash Proration
Factor; and
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(b) the number of shares of Acquiror Stock equal to the product
of (x) the Exchange Ratio, multiplied by (y) the number of
shares of Target Stock covered by such Cash Election or
Combination Cash Election, multiplied by (z) the Cash
Proration Factor.
(iii) If the aggregate number of shares of Target Stock for which
Stock Elections and Combination Stock Elections shall have effectively
been made would result in a number of shares of Acquiror Stock being
issued that is at least equal to the Minimum Stock Amount but does not
exceed the Maximum Stock Amount,
(1) the shares of Target Stock for which effective Stock Elections and
Combination Stock Elections have been made shall be converted into the
right to receive Acquiror Stock equal to the product of the Exchange
Ratio multiplied by the number of shares of Target Stock covered by
such Stock Elections and Combination of Stock Elections;
(2) the shares of Target Stock for which effective Cash Elections and
Combination Cash Elections have been made shall be converted into the
right to receive the Per Share Cash Consideration; and
(3) the Undesignated Shares shall be converted into the right to
receive the Per Share Cash Consideration.
(iv) Notwithstanding any other provision of this Agreement, if, after
applying the allocation rules set forth in the preceding subsections
of this Section 2.7(d), the aggregate value of the shares of Acquiror
Stock that would be issued pursuant to the Merger (valued at the
Average Closing Price) is less than 60 percent of the Total
Consideration or more than 70 percent of the Total Consideration,
Acquiror and Target shall be authorized to reallocate shares of
Acquiror Stock and cash among the holders of the Target Stock in good
faith and in such a manner as they reasonably determine to be fair and
equitable, or to vary the number of shares of Acquiror Stock to be
issued in the Merger, in a manner such that the number of shares of
Acquiror Stock to be issued in the Merger shall be not less than the
Minimum Stock Amount nor more than the Maximum Stock Amount.
(v) Notwithstanding any other provision of this Agreement (other than
Section 2.7(d)(iv) hereof), if any share of Target Dissenting Shares
fails to become Target Perfected Dissenting Shares, such Target
Dissenting Shares shall automatically be converted into and represent
the right to receive the consideration for such shares provided in
this Agreement, without interest thereon. The consideration payable
for any such shares of Target Dissenting Stock shall be payable in
cash, in shares of Acquiror Stock, or in such combination of cash and
Acquiror Stock as shall be determined by Acquiror as being necessary
or appropriate to preserve the status of
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the Merger as a "reorganization" within the meaning of section 368(a)
of the Code.
(e) The calculations required by Section 2.7(d) shall be prepared by
Acquiror prior to the Effective Time and shall be set forth in a
certificate executed by the Chief Financial Officer of Acquiror and
furnished to Target at least two Business Days prior to the Effective
Time showing the manner of calculation in reasonable detail. Any
calculation of a portion of a share of Acquiror Stock shall be rounded
to the nearest ten-thousandth of a share, and any cash payment shall
be rounded to the nearest cent."
4. Subsection (c) is hereby added to Section 7.4 to read as follows:
"(c) In lieu of a substitute stock option provided in Subsection (b)
hereof, each optionee shall have the right to elect a cash payment
instead of such substitute stock option. Elections shall be in writing
and delivered to Acquiror no less than five Business Days prior to the
Effective Time. Upon a proper election, such electing optionee will be
entitled to receive, after the Effective Time, an amount of cash equal
to the product of (i) the Per Share Consideration minus then current
exercise price per share pertaining to such option multiplied by (ii)
the number of shares then currently exercisable pursuant to such
option. No election shall be permitted (and a substitute option shall
be granted) if the cash payment to result from such election would
result in the Merger and the other transactions contemplated hereby
being taxable to the Parties or to the shareholders of Target who
receive Acquiror Stock.).
5. All references to a "pooling of interest" are eliminated from the Agreement
with it being the intention of the Parties to account for the Merger as a
"purchase."
6. Capitalized terms used herein and not otherwise defined shall have the same
meaning as set forth in the Agreement.
7. This Second Amendment may be entered into in one or more counterparts, all
of which shall be considered one and the same instrument, and it shall
become effective when one or more counterparts have been signed by each of
the Parties and delivered to the other Parties, it being understood that
all Parties need not sign the same counterpart.
8. Except as herein amended, the Agreement shall remain in full force and
effect.
9. This Second Amendment shall be governed by and construed in accordance with
the laws of the State of California.
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WITNESS, the signature of Acquiror, as of the 3rd day of August 2001, set
by its Chairman and attested to by its Assistant Secretary, pursuant to a
resolution of its Board of Directors, acting by at least a majority:
MID-STATE BANCSHARES
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Attest: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman of the Board Assistant Secretary
WITNESS, the signature of Mid-State Bank & Trust, as of the 3rd day of
August, 2001 set by its President and attested to by its Assistant Secretary,
pursuant to a resolution of its Board of Directors, acting by at least a
majority:
MID-STATE BANK & TRUST
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ Attest: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------- ---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President Assistant Secretary
WITNESS, the signature of Americorp, as of the 3rd day of August, 2001 set
by its Chairman and attested to by its Secretary, pursuant to a resolution of
its Board of Directors, acting by at least a majority:
AMERICORP
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ Attest: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------- ---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Chairman of the Board Assistant Secretary
WITNESS, the signature of American Commercial Bank, as of the 3rd day of
August, 2001 set by its President and attested to by its Secretary, pursuant to
a resolution of its Board of Directors, acting by at least a majority:
AMERICAN COMMERCIAL BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Attest: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
President Assistant Secretary
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