EXHIBIT 2
EXECUTION COPY
AMENDED AND RESTATED
AGREEMENT AND PLAN OF REORGANIZATION
by and among
STAR BANC CORPORATION,
FIRSTAR CORPORATION,
FIRSTAR (WI) CORPORATION
and
FIRSTAR MERGER CORPORATION
Dated as of June 30, 1998, as amended and restated on September 17, 1998
TABLE OF CONTENTS
Page
ARTICLE I
THE FIRST STEP MERGER
1.1. The First Step Merger..................................................2
1.2. First Effective Time...................................................2
1.3. Effects of the First Step Merger.......................................2
1.4. Conversion of Securities...............................................2
1.5. Firstar(WI)Common Stock................................................3
1.6. Options................................................................3
1.7. Articles of Incorporation..............................................4
1.8. By-Laws................................................................4
ARTICLE II
THE SECOND STEP MERGER
2.1. The Second Step Merger.................................................4
2.2. Effective Time.........................................................4
2.3. Effects of the Second Step Merger......................................4
2.4. Conversion of Star Common Stock........................................4
2.5. Dissenting Shares......................................................5
2.6. Options................................................................6
2.7. Firstar (WI) Common Stock..............................................6
2.8. Articles of Incorporation..............................................6
2.9. By-Laws................................................................6
2.10. Management.............................................................6
2.11. Board of Directors.....................................................6
2.12. Headquarters of Firstar(WI)............................................7
2.13. Tax and Accounting Consequences........................................7
ARTICLE III
EXCHANGE OF SHARES
3.1. Exchange Procedures....................................................7
3.2. No Fractional Shares...................................................9
3.3. Anti-Dilution Adjustments..............................................9
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
4.1. Disclosure Schedules..................................................10
4.2. Standard..............................................................10
4.3. Representations and Warranties........................................10
ARTICLE V
CONDUCT OF BUSINESSES PRIOR TO THE EFFECTIVE TIME
5.1. Conduct of Businesses Prior to the Effective Time.....................21
5.2. Forbearances..........................................................21
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1. Access and Information................................................23
6.2. Registration Statement; Regulatory Matters............................24
6.3. Stockholder Approval..................................................25
6.4. Current Information...................................................25
6.5. Agreements of Affiliates..............................................25
6.6. Expenses..............................................................26
6.7. Securities Act and Exchange Act Filings...............................26
6.8. Miscellaneous Agreements and Consents.................................26
6.9. Employee Benefit Plans................................................27
6.10. D&O Indemnification...................................................28
6.11. Press Releases........................................................29
6.12. Pooling of Interests..................................................29
6.13. Insurance.............................................................30
6.14. Conforming Entries....................................................30
6.15. Additional Actions....................................................30
6.16. Dividends.............................................................30
6.17. Issuance of Shares....................................................31
6.18. Changes in Structure..................................................31
6.19. Amending Governance Documents.........................................31
6.20. Board of Directors; Management........................................31
ARTICLE VII
CONDITIONS
7.1. Conditions to Each Party's Obligation to Effect the Merger.............32
7.2. Conditions to Obligations of Firstar to Effect the Merger..............33
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7.3. Conditions to Obligations of Star To Effect the Merger.................34
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1. Termination............................................................34
8.2. Effect of Termination..................................................35
8.3. Amendment..............................................................35
8.4. Severability...........................................................35
8.5. Waiver.................................................................36
ARTICLE IX
GENERAL PROVISIONS
9.1. Closing................................................................36
9.2. Non-Survival of Representations, Warranties and Agreements.............36
9.3. Notices................................................................36
9.4. Interpretation.........................................................37
9.5. Miscellaneous..........................................................37
EXHIBITS
Exhibit A Form of Stock Option Agreement with respect to option issued
by Firstar Corporation
Exhibit B Form of Stock Option Agreement with respect to option issued by
Star Banc Corporation
Exhibit C Form of Firstar (WI) Restated Articles of Incorporation
Exhibit D Form of Firstar (WI) Restated By-laws
Exhibit E Form of Firstar Affiliate Letter
Exhibit F Form of Star Affiliate Letter
Exhibit 6.18 Form of Revised Articles I and II
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INDEX OF DEFINED TERMS
Affiliate.........................25 HSR Act...........................13
Agreement..........................1 Indemnified Parties...............27
Audited Financial Statements......13 Insurance Amount..................28
Banks.............................10 Lien..............................10
Benefit Plans.....................16 Material Adverse Effect...........10
Board.............................10 Meeting...........................24
Certificate of Merger..............4 Merger.............................1
Certificates.......................7 Merger Sub.........................1
Claim.............................28 Merger Sub Common Stock............2
Closing...........................35 New Benefit Plans.................26
Closing Date......................35 NYSE...............................9
Code...............................3 OGCL...............................4
Disclosure Schedule................9 Option Agreements..................1
Dissenting Shares..................5 Property..........................14
DPC Shares.........................5 Proxy Statement...................15
Equity Securities.................10 Registration Statement............15
ERISA.............................16 Regulatory Authorities............13
ERISA Affiliate...................16 Regulatory Authority..............13
Exchange Act......................13 Returns...........................16
Exchange Agent.....................7 SEC...............................13
Exchange Fund......................7 Second Merger Exchange Ratio.......5
Exchange Ratio.....................2 Second Step Merger.................1
FDIC..............................11 Star...............................1
Financial Statements..............13 Star Common Certificate............5
First Effective Time...............2 Star Common Stock..................4
First Step Merger..................1 Star Meeting......................16
Firstar............................1 Star Preferred Stock..............11
Firstar Common Certificate.........2 Star Reports......................14
Firstar Common Stock...............2 Star Rights Agreement.............11
Firstar (WI).......................1 Star Stock Option Agreement........1
Firstar (WI) Common Stock..........4 Star Stock Options................11
Firstar Meeting...................16 Star Stock Plans...................6
Firstar Preferred Stock...........11 Subsidiaries......................10
Firstar Reports...................14 Subsidiary........................10
Firstar Rights Agreement..........11 Toxic Substance...................14
Firstar Stock Option Agreement.....1 Surviving Corporation..............1
Firstar Stock Options.............11 Trust Account Shares...............5
Firstar Stock Plans................3 Unaudited Financial Statements....13
GAAP...............................7 WBCL...............................2
Holding Company Act...............10
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF REORGANIZATION
This AMENDED AND RESTATED AGREEMENT AND PLAN OF REORGANIZATION,
constituting a plan of merger for purposes of the Wisconsin Business Corporation
Law, is made and entered into on June 30, 1998, as amended and restated on
September 17, 1998 (this "Agreement"), by and among Star Banc Corporation, an
Ohio corporation ("Star"), Firstar Corporation, a Wisconsin corporation
("Firstar"), Firstar (WI) Corporation ("Firstar (WI)"), a Wisconsin corporation
and a wholly-owned subsidiary of Firstar, and Firstar Merger Corporation, a
Wisconsin corporation and a wholly-owned subsidiary of Firstar (WI) ("Merger
Sub").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Star, Firstar, Firstar (WI) and
Merger Sub have determined that it is in the best interests of their respective
companies and their stockholders to consummate the business combination
transaction provided for herein in which (a) Merger Sub will, subject to the
terms and conditions set forth herein, merge with and into Firstar (the "First
Step Merger") so that (i) Firstar is the surviving corporation in the First Step
Merger and (ii) Firstar (WI) becomes the ultimate parent holding company for
Firstar after the First Step Merger, and (b) immediately thereafter Star will,
subject to the terms and conditions set forth herein, merge with and into
Firstar (the "Second Step Merger" and, together with the First Step Merger, the
"Merger"), so that (i) Firstar is the surviving corporation (hereinafter
sometimes referred to in such capacity as the "Surviving Corporation") in the
Second Step Merger and (ii) Firstar (WI) continues to be the ultimate parent
holding company for Firstar after the Second Step Merger; and
WHEREAS, it is the intent of the respective Boards of
Directors of Star and Firstar that the Merger be structured as a "merger of
equals" of Star and Firstar in accordance with the terms and conditions of this
Agreement; and
WHEREAS, as a condition to, and simultaneously with the execution of,
this Agreement, Star and Firstar will enter into a Firstar stock option
agreement (the "Firstar Stock Option Agreement") in the form attached hereto as
Exhibit A; and
WHEREAS, as a condition to, and simultaneously with the execution of,
this Agreement, Star and Firstar will enter into a Star stock option agreement
(the "Star Stock Option Agreement" and, together with the Firstar Stock Option
Agreement, the "Option Agreements") in the form attached hereto as Exhibit B;
and
WHEREAS, the parties desire to provide for certain conditions,
representations, warranties and covenants in connection with the transactions
contemplated by this Agreement.
NOW THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements herein contained, and intending to be
legally bound thereby, the parties agree as follows:
ARTICLE I
THE FIRST STEP MERGER
Section 1.1. THE FIRST STEP MERGER. Subject to the terms and
conditions of this Agreement, Merger Sub shall be merged with and into Firstar
in accordance with the Wisconsin Business Corporation Law (the "WBCL") and the
separate corporate existence of Merger Sub shall cease. Firstar shall be the
surviving corporation of the First Step Merger and shall continue its corporate
existence under the name "Firstar Holdings Corporation." Firstar (WI) shall
become the ultimate parent holding company for Firstar after the First Step
Merger and shall continue to be governed by the laws of the State of Wisconsin.
Section 1.2. FIRST EFFECTIVE TIME. The First Step Merger shall become
effective on the date and at the time (the "First Effective Time") specified in
the appropriate documents in respect of the First Step Merger which are filed
with the Department of Financial Institutions of the State of Wisconsin in such
form as required by, and in accordance with, the relevant provisions of the
WBCL. The First Effective Time shall occur on the same date and immediately
prior to the Effective Time as specified in Section 2.2.
Section 1.3. EFFECTS OF THE FIRST STEP MERGER. At and after the First
Effective Time, the First Step Merger shall have the effects set forth in
Section 180.1106 of the WBCL.
Section 1.4. CONVERSION OF SECURITIES. (a) At the First Effective
Time, by virtue of the First Step Merger and without any action on the part of
Star, Firstar, Firstar (WI), Merger Sub or the holders of any capital stock of
Firstar, Star, Firstar (WI) or Merger Sub, (i) each share of the common stock,
par value $1.25, of Firstar ("Firstar Common Stock") issued and outstanding
immediately prior to the First Effective Time shall cease to be outstanding and
(other than any shares of Firstar Common Stock held by Firstar or any of its
wholly owned Subsidiaries (as defined herein), except for Trust Account Shares
(as defined herein) and DPC Shares (as defined herein)), shall be converted into
the right to receive 0.76 (the "Exchange Ratio") shares of Firstar (WI) Common
Stock (as defined herein) and (ii) each share of the common stock, par value
$0.01, of Merger Sub ("Merger Sub Common Stock") issued and outstanding
immediately prior to the First Effective Time shall cease to be outstanding and
shall be converted into the right to receive one share of Firstar Common Stock.
(b) All of the shares of Firstar Common Stock converted into the right
to receive Firstar (WI) Common Stock pursuant to this Article I shall no longer
be outstanding and shall automatically be cancelled and shall cease to exist as
of the First Effective Time, and each certificate (each a "Firstar Common
Certificate") previously representing any such shares of Firstar Common Stock
shall thereafter represent only the right to receive (i) a certificate
representing the number of whole shares of Firstar (WI) Common Stock and (ii)
cash in lieu of any frac-
2
tional shares otherwise issuable pursuant to Section 1.4(a), in accordance with
Section 3.2. Firstar Common Certificates previously representing shares of
Firstar Common Stock shall be exchanged for certificates representing whole
shares of Firstar (WI) Common Stock and cash in lieu of fractional shares issued
in consideration therefor upon the surrender of such Firstar Common Certificates
in accordance with Section 3.1 without any interest thereon.
(c) All of the shares of Merger Sub Common Stock converted into the
right to receive Firstar Common Stock pursuant to this Article I shall no longer
be outstanding and shall automatically be cancelled and shall cease to exist as
of the First Effective Time, and each certificate previously representing any
such shares of Merger Sub Common Stock shall thereafter represent only the right
to receive a certificate representing the number of whole shares of Firstar
Common Stock.
(d) At the First Effective Time, all shares of Firstar Common Stock
that are owned by Firstar as treasury stock and all shares of Firstar Common
Stock that are owned, directly or indirectly, by Firstar or any of its wholly
owned Subsidiaries (other than Trust Account Shares and DPC Shares) shall be
cancelled and shall cease to exist and no stock of Firstar (WI) or other
consideration shall be delivered in exchange therefor.
Section 1.5. FIRSTAR (WI) COMMON STOCK. At and after the First
Effective Time, each share of Firstar (WI) Common Stock issued and outstanding
immediately prior to the First Effective Time shall be cancelled and retired and
shall resume the status of authorized and unissued shares of Firstar (WI) Common
Stock, and no shares of Firstar (WI) Common Stock or other securities of Firstar
(WI) shall be issued in respect thereof.
Section 1.6. OPTIONS. Firstar shall take action to amend the Firstar
Stock Plans (as defined herein) so that, at the Effective Time, each option
granted by Firstar to purchase shares of Firstar Common Stock which is
outstanding and unexercised immediately prior thereto shall cease to represent a
right to acquire shares of Firstar Common Stock and shall be converted
automatically into an option to purchase shares of Firstar (WI) Common Stock in
an amount and at an exercise price determined as follows (and otherwise subject
to the terms of the appropriate Firstar Benefit Plan (as defined herein)
pursuant to which such options have been granted (such plans collectively the
"Firstar Stock Plans") and the agreements evidencing grants thereunder): (i) the
number of shares of Firstar (WI) Common Stock to be subject to the new option
shall be equal to the product of the number of shares of Firstar Common Stock
subject to the original option and the Exchange Ratio, provided that any
fractional shares of Firstar (WI) Common Stock resulting from such
multiplication shall be rounded down to the nearest whole share and (ii) the
exercise price per share of Firstar (WI) Common Stock under the new option shall
be equal to the exercise price per share of Firstar Common Stock under the
original option divided by the Exchange Ratio, provided that such exercise price
shall be rounded down to the nearest whole cent. The adjustment provided herein
with respect to any options which are "incentive stock options" (as defined in
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code")) shall
be and is intended to be effected in a manner which is consistent with Section
424(a) of the Code. The duration and other terms of the new option shall be the
same as the original option except that all references to Firstar shall be
deemed to be references to Firstar (WI).
3
Section 1.7. ARTICLES OF INCORPORATION. At the First Effective Time,
the Articles of Incorporation of Firstar as in effect immediately prior to the
First Effective Time shall continue to be the Articles of Incorporation of
Firstar except that the name of the corporation shall be changed to "Firstar
Holdings Corporation," until thereafter amended in accordance with applicable
law.
Section 1.8. BY-LAWS. At the First Effective Time, the By-Laws of
Firstar as in effect immediately prior to the First Effective Time shall
continue to be the By-Laws of Firstar, until thereafter amended in accordance
with applicable law.
ARTICLE II
THE SECOND STEP MERGER
Section 2.1. THE SECOND STEP MERGER. Subject to the terms and
conditions of this Agreement, in accordance with the Ohio General Corporation
Law (the "OGCL") and the WBCL, at the Effective Time Star shall merge with and
into Firstar. Firstar shall be the surviving corporation in the Second Step
Merger and shall continue its corporate existence under the name "Firstar
Holdings Corporation." Firstar (WI) shall continue to be the ultimate parent
holding company for Firstar after the Second Step Merger and shall continue to
be governed by the laws of the State of Wisconsin. Upon consummation of the
Second Step Merger, the separate corporate existence of Star shall terminate.
The parties shall take all necessary action such that, upon consummation of the
Second Step Merger, Firstar (WI) shall continue its corporate existence under
the name "Firstar Corporation."
Section 2.2. EFFECTIVE TIME. The Second Step Merger shall become
effective as set forth in the appropriate documents (the "Certificate of
Merger") which shall be filed with the Department of Financial Institutions of
the State of Wisconsin and the Secretary of State of the State of Ohio on the
Closing Date (as defined herein). The term "Effective Time" shall be the date
and time when the Second Step Merger becomes effective, as set forth in the
Certificate of Merger. Subject to the terms and conditions of this Agreement,
the Effective Time shall occur on a date to be specified by the parties, which
shall be the first day which is (i) the last business day of a month and (ii) at
least two business days after satisfaction or waiver (subject to applicable law)
of the conditions (excluding conditions that, by their terms, cannot be
satisfied until the Closing Date) set forth in Article VII, unless another time
or date is agreed to in writing by the parties hereto.
Section 2.3. EFFECTS OF THE SECOND STEP MERGER. At and after the
Effective Time, the Second Step Merger shall have the effects set forth in
Sections 180.1106 and 180.1107 of the WBCL and Section 1701.82 of the OGCL.
Section 2.4. CONVERSION OF STAR COMMON STOCK. (a) At the Effective
Time, by virtue of the Second Step Merger and without any action on the part of
Star, Firstar or Firstar (WI) or the holders of capital stock of Star, Firstar
or Firstar (WI), each share of the common stock, par value $5.00 per share, of
Star (the "Star Common Stock") issued and outstanding im-
4
mediately prior to the Effective Time (other than Dissenting Shares (as
defined herein) and shares of Star Common Stock held in Star's treasury or
directly or indirectly by Star or any of its wholly owned Subsidiaries or
Firstar (WI) (except for Trust Account Shares and DPC Shares)) shall be
converted into the right to receive one share (the "Second Merger Exchange
Ratio") of the common stock, par value $0.01, of Firstar (WI) (the "Firstar (WI)
Common Stock").
(b) All of the shares of Star Common Stock converted into the right to
receive Firstar (WI) Common Stock pursuant to this Article II shall no longer be
outstanding and shall automatically be cancelled and shall cease to exist as of
the Effective Time, and each certificate (each a "Star Common Certificate")
previously representing any such shares of Star Common Stock shall thereafter
represent only the right to receive (i) a certificate representing the number of
whole shares of Firstar (WI) Common Stock and (ii) cash in lieu of any
fractional shares otherwise issuable pursuant to Section 2.4(a), in accordance
with Section 3.2. Star Common Certificates previously representing shares of
Star Common Stock shall be exchanged for certificates representing whole shares
of Firstar (WI) Common Stock and cash in lieu of fractional shares issued in
consideration therefor upon the surrender of such Star Common Certificates in
accordance with Section 3.1 without any interest thereon.
(c) At the Effective Time, all shares of Star Common Stock that
are owned by Star as treasury stock and all shares of Star Common Stock that are
owned, directly or indirectly, by Star or any of its wholly owned Subsidiaries
or Firstar (WI) (other than shares of Star Common Stock held, directly or
indirectly, in trust accounts, managed accounts and the like or otherwise held
in a fiduciary capacity that are beneficially owned by third parties (any such
shares, and shares of Firstar Common Stock which are similarly held, whether
held directly or indirectly by Star, Firstar (WI) or Firstar, as the case may
be, or any of their respective Subsidiaries being referred to herein as "Trust
Account Shares") and other than any shares of Star Common Stock held by Star or
Firstar or any of their respective Subsidiaries or Firstar (WI) in respect of a
debt previously contracted (any such shares of Star Common Stock and shares of
Firstar Common Stock which are similarly held, whether held directly or
indirectly by Star, Firstar (WI) or Firstar, as the case may be, or any of their
respective Subsidiaries, being referred to herein as "DPC Shares")) shall be
cancelled and shall cease to exist and no stock of Firstar (WI) or other
consideration shall be delivered in exchange therefor.
Section 2.5. DISSENTING SHARES. Notwithstanding anything in this
Agreement to the contrary, shares of Star Common Stock which are outstanding
immediately prior to the Effective Time and with respect to which dissenters'
rights shall have been properly demanded in accordance with Section 1701.85 of
the OGCL ("Dissenting Shares") shall not be converted into the right to receive
Firstar (WI) Common Stock; instead, the holders thereof shall be entitled to
payment of the appraised value of such Dissenting Shares in accordance with the
provisions of Section 1701.85 of the OGCL; provided, however, that (i) if any
holder of Dissenting Shares shall subsequently deliver a written withdrawal of
his demand for appraisal of such shares, or (ii) if any holder fails to
establish his entitlement to dissenters' rights as provided in Section 1701.85
of the OGCL, such holder or holders (as the case may be) shall forfeit the right
to appraisal of such shares of Star Common Stock and each of such shares shall
thereupon be deemed to have
5
been converted into the right to receive, and to have become exchangeable for,
as of the Effective Time, Firstar (WI) Common Stock, as provided in Section
2.4(a) hereof.
Section 2.6. OPTIONS. Star shall take action to amend the Star Stock
Plans (as defined herein) so that, at the First Effective Time, each option
granted by Star to purchase shares of Star Common Stock which is outstanding and
unexercised immediately prior thereto shall cease to represent a right to
acquire shares of Star Common Stock and shall be converted automatically into an
option to purchase a number of shares of Firstar (WI) Common Stock equal to the
number of shares of Star Common Stock subject to such option immediately prior
to the First Effective Time at an exercise price per share of Firstar (WI)
Common Stock equal to the exercise price per share of Star Common Stock in
effect immediately prior to the Effective Time and otherwise subject to the
terms of the appropriate Star Benefit Plans pursuant to which such options have
been granted (such plans collectively the "Star Stock Plans") and the agreements
evidencing grants thereunder. The adjustment provided herein with respect to any
options which are "incentive stock options" (as defined in Section 422 of the
Code) shall be and is intended to be effected in a manner which is consistent
with Section 424(a) of the Code. The duration and other terms of the new option
shall be the same as the original option except that all references to Star
shall be deemed to be references to Firstar (WI).
Section 2.7. FIRSTAR (WI) COMMON STOCK. At and after the
Effective Time, each share of Firstar (WI) Common Stock issued and outstanding
immediately prior to the Effective Time shall remain an issued and outstanding
share of common stock of Firstar (WI) and shall not be affected by the Second
Step Merger.
Section 2.8. ARTICLES OF INCORPORATION. At the Effective Time, the
Articles of Incorporation of Firstar as in effect immediately prior to the
Effective Time shall continue to be the Articles of Incorporation of the
Surviving Corporation, until thereafter amended in accordance with applicable
law.
Section 2.9. BY-LAWS. At the Effective Time, the By-Laws of Firstar as
in effect immediately prior to the Effective Time shall continue to be the
By-Laws of the Surviving Corporation, until thereafter amended in accordance
with applicable law.
Section 2.10. MANAGEMENT. (a) From and after the Effective Time, Xxxxx
X. Xxxxxxxxxxx shall be Chairman of the Board of Firstar (WI) (and shall
continue in such position until he becomes 62 years old) and Xxxxx X. Xxxxxxxxxx
shall be the President and Chief Executive Officer of Firstar (WI), and Xx.
Xxxxxxxxxx shall be designated to succeed Xx. Xxxxxxxxxxx as Chairman.
Section 2.11. BOARD OF DIRECTORS. From and after the Effective Time,
until duly changed in compliance with applicable law and the Articles of
Incorporation and By-Laws of Firstar (WI), the Board of Directors of Firstar
(WI) shall be as specified in Section 6.20(a). From and after the Effective
Time, until duly changed in compliance with applicable law and the Articles of
Incorporation and By-Laws of the Surviving Corporation, the Board of Directors
of the Surviving Corporation shall be the Board of Dirctors of Firstar. The
majority of the meetings of
6
the Board of Directors of Firstar (WI) and the Surviving Corporation in any
calendar year shall be held in Milwaukee, Wisconsin.
Section 2.12. HEADQUARTERS OF FIRSTAR (WI). After the Effective Time,
the location of the headquarters and principal executive offices of Firstar (WI)
and the Surviving Corporation shall be that of the headquarters and principal
executive offices of Firstar as of the date of this Agreement located in
Milwaukee, Wisconsin. After the Effective Time, the banking Subsidiaries of
Firstar (WI) shall be merged into a single bank, the name of which shall be
Firstar and the headquarters of which shall be in Milwaukee, Wisconsin.
Section 2.13. TAX AND ACCOUNTING CONSEQUENCES. It is intended that the
First Step Merger and the Second Step Merger shall each constitute a
reorganization within the meaning of Section 368(a) of the Code, that this
Agreement shall constitute a "plan of reorganization" for the purposes of
Sections 354 and 361 of the Code and that the Merger be accounted for as a
"pooling of interests" under generally accepted accounting principles ("GAAP").
ARTICLE III
EXCHANGE OF SHARES
Section 3.1. EXCHANGE PROCEDURES. (a) At or prior to the First
Effective Time, the parties shall deposit, or shall cause to be deposited, with
a bank or trust company agreed to by each of Star and Firstar (the "Exchange
Agent"), for the benefit of the holders of Certificates (as defined herein), for
exchange in accordance with this Article III, certificates representing the
shares of Firstar (WI) Common Stock, and cash in lieu of any fractional shares
(such cash and certificates for shares of Firstar (WI) Common Stock, together
with any dividends or distributions with respect thereto, being hereinafter
referred to as the "Exchange Fund"), to be issued pursuant to Sections 1.4 and
2.4 and paid pursuant to Section 3.2 in exchange for outstanding shares of
Firstar Common Stock and Star Common Stock. Firstar and Star shall deliver to
Firstar (WI) a complete list of their respective shareholders (including their
respective names, addresses and TINs to the extent reflected in the records
maintained by such party or its transfer agent) as of the record date for the
shareholder meetings to be called by the parties as provided for herein and as
of the First Effective Time for Firstar and the Effective Time for Star, in each
case which delivery shall be made as soon as practicable after the respective
date.
(b) As soon as practicable after the Effective Time, the Exchange
Agent shall mail to each holder of record immediately prior to the First
Effective Time or the Effective Time, as applicable, of one or more Firstar
Common Certificates or Star Common Certificates (collectively, the
"Certificates") a letter of transmittal (which shall specify that delivery shall
be effected, and risk of loss and title to the Certificates shall pass, only
upon delivery of the Certificates to the Exchange Agent) and instructions for
use in effecting the surrender of the Certificates in exchange for certificates
representing the shares of Firstar (WI) Common Stock issuable and any cash in
lieu of fractional shares payable pursuant to this Agreement. Upon proper
surrender of a Certificate for exchange and cancellation to the Exchange Agent,
together with such properly completed letter of transmittal, duly executed, the
holder of such Certificate shall be entitled to receive in exchange therefor, as
applicable, (i) a certificate representing that number of whole
7
shares of Firstar (WI) Common Stock to which such holder of Star Common Stock or
Firstar Common Stock shall have become entitled pursuant to the provisions of
Articles I and II, as applicable, and (ii) a check representing the amount of
any cash in lieu of fractional shares which such holder has the right to receive
in respect of the Certificate surrendered pursuant to the provisions of this
Article III and any dividend or distribution theretofore declared and not yet
paid on such shares of Firstar (WI) Common Stock, and the Certificate so
surrendered shall forthwith be cancelled. No interest will be paid or accrued on
any cash in lieu of fractional shares or on any unpaid dividends and
distributions payable to holders of Certificates.
(c) If any certificate representing shares of Firstar (WI) Common
Stock is to be issued in a name other than that in which the Certificate
surrendered in exchange therefor is registered, it shall be a condition of the
issuance thereof that the Certificate so surrendered shall be properly endorsed
(or accompanied by an appropriate instrument of transfer) and otherwise in
proper form for transfer, and that the person requesting such exchange shall pay
to the Exchange Agent in advance any transfer or other taxes required by reason
of the issuance of a certificate representing shares of Firstar (WI) Common
Stock in any name other than that of the registered holder of the Certificate
surrendered, or required for any other reason, or shall establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
payable. The Surviving Corporation or the Exchange Agent shall accept
Certificates upon compliance with such other reasonable terms and conditions as
the Surviving Corporation or the Exchange Agent may impose to effect an orderly
exchange thereof in accordance with customary exchange practices. Certificates
shall be appropriately endorsed or accompanied by such instruments of transfer
as the Surviving Corporation or the Exchange Agent may require.
(d) Any portion of the Exchange Fund, including any earnings thereon,
which remains undistributed to the holders of Certificates for six months after
the Effective Time shall be delivered to the Surviving Corporation, upon demand,
and any holders of Certificates who have not theretofore complied with this
Section 3.1 shall thereafter look only to the Surviving Corporation for payment
of their claim for the consideration provided for herein and any unpaid
dividends and distributions on the Firstar (WI) Common Stock deliverable in
respect of such Certificates.
(e) After the Effective Time, holders of Certificates shall cease to
have any rights with respect to the stock previously represented by such
Certificates, and their sole rights shall be to exchange such Certificates for
the consideration provided for in this Agreement. After the Effective Time,
there shall be no further transfers on the records of Firstar of Firstar Common
Certificates and no further transfers on the records of Star of Star Common
Certificates, and if such Certificates are presented to Firstar or Star, as
applicable, for transfer, they shall be cancelled against delivery of the
consideration provided therefor in this Agreement. Firstar (WI) shall not be
obligated to deliver the consideration to which any former holder of securities
is entitled as a result of the Merger until such holder surrenders the
Certificates as provided herein. No dividends declared on Firstar (WI) Common
Stock will be remitted to any holder of Firstar Common Stock or the Star Common
Stock entitled to receive Firstar (WI) Common Stock under this Agreement until
such person surrenders the Certificate representing the right to receive such
Firstar (WI) Common Stock, at which time such dividends shall be remitted to
such person,
8
without interest and less any taxes that may have been imposed thereon. Neither
the Exchange Agent nor any party to this Agreement nor any affiliate thereof
shall be liable to any holder of stock represented by any Certificate for any
consideration paid to a public official pursuant to applicable abandoned
property, escheat or similar laws. The Surviving Corporation and the Exchange
Agent shall be entitled to rely upon the stock transfer books of Firstar and
Star to establish the identity of those persons entitled to receive
consideration specified in this Agreement, which books shall be conclusive with
respect thereto. In the event of a dispute with respect to ownership of stock
represented by any Certificate, the Surviving Corporation and the Exchange Agent
shall be entitled to deposit any consideration represented thereby in escrow
with an independent third party and thereafter be relieved with respect to any
claims thereto.
(f) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if reasonably required by
Firstar (WI), the posting by such person of a bond in such amount as Firstar
(WI) may determine is reasonably necessary as indemnity against any claim that
may be made against it with respect to such Certificate, the Exchange Agent will
issue in exchange for such lost, stolen or destroyed Certificate the shares of
Firstar (WI) Common Stock and any cash in lieu of fractional shares deliverable
in respect thereof pursuant to this Agreement.
(g) Former holders of record as of the First Effective Time of shares
of Firstar Common Stock and as of the Effective Time of Star Common Stock shall
not be entitled, at and after the First Effective Time and the Effective Time,
respectively, to vote any shares of the Firstar (WI) Common Stock until their
Certificates shall have been surrendered in accordance with this Article III and
certificates evidencing such Firstar (WI) Common Stock shall have been issued in
exchange therefor.
Section 3.2. NO FRACTIONAL SHARES. Notwithstanding any other provision
of this Agreement, neither certificates nor scrip for fractional shares of
Firstar (WI) Common Stock shall be issued in the Merger. Each holder who
otherwise would have been entitled to a fraction of a share of Firstar (WI)
Common Stock shall receive in lieu thereof cash (without interest) in an amount
determined by multiplying the fractional share interest to which such holder
would otherwise be entitled by the closing sale price of a share of Star Common
Stock on the New York Stock Exchange, Inc. ("NYSE") composite tape on the last
full trading day prior to the Effective Time. No such holder shall be entitled
to dividends, voting rights or any other rights in respect of any fractional
share.
Section 3.3. ANTI-DILUTION ADJUSTMENTS. If, prior to the Effective
Time, the outstanding shares of Star Common Stock or Firstar Common Stock shall
have been increased, decreased, changed into or exchanged for a different number
or kind of shares or securities as a result of a reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, or other similar change in capitalization (other than solely as a result
of the First Step Merger), appropriate adjustment or adjustments will be made to
the Exchange Ratio or the Second Merger Exchange Ratio, as applicable.
9
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 4.1. DISCLOSURE SCHEDULES. On or prior to the date hereof,
each of Star and Firstar has delivered to the other a schedule (respectively,
its "Disclosure Schedule") setting forth, among other things, items the
disclosure of which is necessary or appropriate in relation to any or all of its
representations and warranties set forth in this Agreement; PROVIDED, that (i)
no such item is required to be set forth in a Disclosure Schedule as an
exception to a representation or warranty if its absence is not reasonably
likely to result in the related representation or warranty being deemed untrue
or incorrect under the standard established by Section 4.2, and (ii) the mere
inclusion of an item in a Disclosure Schedule shall not be deemed an admission
by a party that such item represents a material exception or fact, event or
circumstance or that such item would reasonably be expected to result in a
material adverse effect on the financial condition, results of operations or
business of such party and its Subsidiaries taken as a whole, except as may have
resulted or may result from changes to laws and regulations or changes in
economic conditions applicable to banking institutions generally or in general
levels of interest rates affecting banking institutions generally (a "Material
Adverse Effect").
Section 4.2. STANDARD. No representation or warranty of Star or
Firstar contained in Section 4.3 shall be deemed untrue or incorrect, and no
party hereto shall be deemed to have breached any such representation or
warranty, as a consequence of the existence of any fact, circumstance or event
unless such fact, circumstance or event which constitutes a breach of any such
representation or warranty after giving effect to any materiality standards
contained in any representation or warranty, individually or taken together with
all other facts, circumstances or events constituting such breaches, has had or
would reasonably be expected to have a Material Adverse Effect on such party.
Section 4.3. REPRESENTATIONS AND WARRANTIES. Subject to Sections 4.1
and 4.2 and except as previously disclosed in its Disclosure Schedule, Firstar
hereby represents and warrants to Star, and Star hereby represents and warrants
to Firstar, to the extent applicable, in each case with respect to itself and
its Subsidiaries, as follows:
(a) ORGANIZATION AND AUTHORITY. Such party and each of its respective
Subsidiaries is a corporation, bank, trust company or other entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of organization, 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 has corporate power
and authority to own its properties and assets and to carry on its business as
it is now being conducted except, in each case, where the failure to do so would
not either individually or in the aggregate reasonably be expected to have a
Material Adverse Effect on such party. Such party is duly registered as a bank
holding company with the Board of Governors of the Federal Reserve System (the
"Board") under the Bank Holding Company Act of 1956, as amended (the "Holding
Company Act"). True and complete copies of the Articles of Incorporation and
By-laws or Code of Regu-
10
lation as applicable, of such party, each in effect on the date of this
Agreement, have been provided to the other party.
(b) SUBSIDIARIES. Such party's Disclosure Schedule sets forth, among
other things, a complete and correct list of all of such party's direct or
indirect subsidiaries (each a "Subsidiary" and collectively the "Subsidiaries")
including such party's banks (the "Banks"), all outstanding Equity Securities of
each of which are owned directly or indirectly by such party. "Equity
Securities" of an issuer means capital stock or other equity securities of such
issuer, options, warrants, scrip, rights to subscribe to, calls or commitments
of any character whatsoever relating to, or securities or rights convertible
into, shares of any capital stock or other Equity Securities of such issuer, or
contracts, commitments, understandings or arrangements by which such issuer is
or may become bound to issue additional shares of its capital stock or other
Equity Securities. All of the outstanding shares of capital stock of the
Subsidiaries of such party are validly issued, fully paid and nonassessable
(subject to Section 180.0622(2)(6) of the WBCL), and those shares owned by such
party are owned free and clear of any lien, claim, charge, option, encumbrance,
agreement, mortgage, pledge, security interest or restriction (a "Lien") with
respect thereto. Except for the Equity Securities of such party's Subsidiaries
and except for Equity Interests held in a fiduciary capacity, such party 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. The Banks of such party are chartered by
the Office of the Comptroller of the Currency. The deposits of the Banks of such
party are insured by the Federal Deposit Insurance Corporation ("FDIC"). Neither
such party nor any Subsidiary thereof holds any interest in a partnership or
joint venture of any kind.
(c) CAPITALIZATION. (i) The authorized capital stock of Star consists
of (A) 400,000,000 shares of Star Common Stock, of which, as of June 29, 1998,
95,778,921 shares were issued and outstanding and (B) 1,000,000 shares of
preferred stock, no par value ("Star Preferred Stock"), issuable in series, none
of which, as of June 29, 1998, is issued or outstanding. Star has designated (Y)
500,000 shares of Star Preferred Stock as "Series A Preferred Stock" and has
reserved such shares for issuance upon exercise of Preferred Stock Purchase
Rights under a Rights Agreement dated October 27, 1989 (the "Star Rights
Agreement"), between Star and Star Bank, N.A., as Rights Agent and (Z) 218,000
shares of Star Preferred Stock as "Series B Cumulative Preferred Stock."
Pursuant to the Star Rights Agreement, each certificate representing one share
of Star Common Stock also represents one Right (as defined in the Star Rights
Agreement). As of June 29, 1998 Star had options outstanding for 7,020,988
shares of Star Common Stock for issuance under various employee stock option and
incentive plans ("Star Stock Options"). From June 29, 1998 through the date of
this Agreement, no shares of Star Common Stock have been issued excluding not
more than 500 shares which may have been issued pursuant to stock-based,
director or employee benefit or incentive plans and programs. Except as set
forth above and except pursuant to the Star Rights Agreement, there are no other
Equity Securities of Star outstanding. All of the issued and outstanding shares
of Star Common Stock are validly issued, fully paid, and nonassessable, and have
not been issued in violation of any preemptive right of any stockholder of Star.
11
(ii) The authorized capital stock of Firstar consists of (A)
240,000,000 shares of Firstar Common Stock, of which, as of June 29, 1998,
145,546,889 shares were issued and outstanding and (B) 2,500,000 shares of
preferred stock ("Firstar Preferred Stock"), issuable in series. Firstar has
designated (Y) 600,000 shares of Firstar Preferred Stock as "Series C Preferred
Stock" and has reserved such shares for issuance upon exercise of Preferred
Stock Purchase Rights under a Rights Agreement dated January 19, 1989 (the
"Firstar Rights Agreement"), between Firstar and Firstar Trust Company (formerly
known as First Wisconsin Trust Company), as Rights Agent and (Z) certain shares
of Firstar Preferred Stock as "Series A Preferred Stock," "Series B Preferred
Stock" and "Series D Preferred Stock" all of which have been redeemed. Pursuant
to the Firstar Rights Agreement, each certificate representing one share of
Firstar Common Stock also represents one-quarter Right (as defined in the
Firstar Rights Agreement). As of June 29, 1998 Firstar had options outstanding
for 6,037,093 shares of Firstar Common Stock for issuance under various employee
stock option and incentive plans ("Firstar Stock Options"). From June 29, 1998
through the date of this Agreement, no shares of Firstar Common Stock have been
issued excluding not more than 500 shares which may have been issued pursuant to
stock-based, director or employee benefit or incentive plans and programs.
Except as set forth above and except pursuant to the Firstar Rights Agreement,
there are no other Equity Securities of Firstar outstanding. All of the issued
and outstanding shares of Firstar Common Stock are validly issued, fully paid,
and nonassessable (subject to Section 180.0622(2)(b) of the WBCL), and have not
been issued in violation of any preemptive right of any stockholder of Firstar.
(d) AUTHORIZATION. (i) Such party has the corporate power and
authority to execute and deliver this Agreement and to carry out its obligations
hereunder. The execution, delivery and performance of this Agreement by such
party and the consummation by such party of the transactions contemplated hereby
have been duly authorized by all requisite corporate action of the Board of
Directors of such party. The Board of Directors of such party has directed that
this Agreement and the transactions contemplated hereby be submitted to its
stockholders for approval at a meeting of such stockholders and, except for the
adoption of this Agreement by the affirmative vote of holders of a majority of
its outstanding shares, no other corporate proceedings on the part of such party
are necessary to approve this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by such party and (assuming due authorization, execution and delivery
by the other party) constitutes a valid and binding obligation of such party,
enforceable against such party in accordance with its terms (except as may be
limited by bankruptcy, insolvency, moratorium, reorganization or similar laws
affecting the rights of creditors generally and the availability of equitable
remedies). Firstar represents and warrants that each of Firstar, as the sole
stockholder of Firstar (WI), and Firstar (WI), as the sole stockholder of Merger
Sub, and the respective Board of Directors of Merger Sub and Firstar (WI), has
approved this Agreement and the transactions contemplated hereby by written
consent and no other corporate proceedings on the part of Merger Sub or Firstar
(WI) are necessary to approve this Agreement and to consummate the transactions
contemplated hereby.
(ii) Neither the execution, delivery and performance by such party of
this Agreement, nor the consummation by such party of the transactions
contemplated hereby, nor
12
compliance by such party with any of the provisions hereof, will (A) violate,
conflict with or result in a breach of any provisions of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) 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 upon any of the properties or assets of
such party or any Subsidiary of such party under any of the terms, conditions or
provisions of (I) its articles or certificate of incorporation or bylaws or code
of regulations, or (II) any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which such party
or any of the properties or assets of such party is a party or by which it may
be bound, or to which such party may be subject (assuming no default thereunder
at the time of the Merger), except (in the case of this clause (II)) for such
violations, conflicts, breaches or defaults which, either individually or in the
aggregate, will not have a Material Adverse Effect on such party or (B) subject
to compliance with the statutes and regulations referred to in paragraph (iii)
of this Section 4.3(d), to the best knowledge of such party, violate any
judgment, ruling, order, writ, injunction, decree, statute, rule or regulation
applicable to such party or any of its Subsidiaries or any of their respective
properties or assets except for such violations which, either individually or in
the aggregate will not have a Material Adverse Effect on such party.
(iii) Other than in connection with or in compliance with the
provisions of the WBCL, the Securities Act, the Exchange Act of 1934, as
amended, 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 required under the Holding Company Act,
and the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX Xxx"), or
any required approvals of the Office of the Controller of Currency, the Small
Business Administration or any state or foreign Regulatory Authority (as defined
herein), no notice to, filing with, exemption or review by, or authorization,
consent or approval of, any public body or authority is necessary in connection
with the execution and delivery by such party of this Agreement or the
consummation by such party of the transactions contemplated by this Agreement.
(e) FINANCIAL STATEMENTS. The consolidated balance sheets of such
party and its Subsidiaries as of December 31, 1997, 1996 and 1995 and related
consolidated statements of income, cash flows and changes in stockholders'
equity for each of the three years in the three-year period ended December 31,
1997, together with the notes thereto, audited by such party's independent
auditors and included in an annual report on Form 10-K as filed with the
Securities and Exchange Commission (the "SEC") (collectively, the "Audited
Financial Statements"), and the consolidated balance sheet of such party and its
Subsidiaries as of March 31, 1998 and related consolidated statements of income,
cash flows and changes in stockholders' equity for the three-month period ended
March 31, 1998 included in a quarterly report on Form 10-Q as filed with the SEC
(collectively, the "Unaudited Financial Statements", and together with the
Audited Financial Statements, the "Financial Statements") have been prepared in
accordance with GAAP, present fairly the consolidated financial position of such
party and its Subsidiaries at the dates and the consolidated results of
operations, changes in stockholders' equity and cash flows of such party and its
Subsidiaries for the periods stated therein, subject, in the case of the
Unaudited Financial Statements, to normal year-end audit adjustments, and are
derived from the books and records of such party and its Subsidiaries, which are
complete and accurate in all material re-
13
spects and have been maintained in all material respects in accordance with
applicable laws and regulations. Neither such party nor any of its Subsidiaries
has any material contingent liabilities that are not described in the financial
statements described above other than liabilities incurred in the ordinary
course of such party's business consistent with past practice, or in connection
with this Agreement and the transactions contemplated hereby.
(f) REPORTS. Since January 1, 1995, such party and its Subsidiaries
have timely filed all material reports, registrations and statements, together
with any required material amendments thereto, that it was required to file with
(i) the SEC, including, but not limited to, Forms 10-K, Forms 10-Q, Forms 8-K
and proxy statements, (ii) the Board, (iii) the FDIC, (iv) the Office of the
Controller of the Currency, (v) the Small Business Administration and (vi) any
other federal, state, municipal, local or foreign government, securities,
banking, savings and loan, insurance and other governmental or regulatory
authority and the agencies and staffs thereof (the entities in the foregoing
clauses (i) through (vi) being referred to herein collectively as the
"Regulatory Authorities" and individually as a "Regulatory Authority") and all
other reports and statements required to be filed by such party, including,
without limitation, any report or statement required to be filed pursuant to
laws, rules or regulations of the United States, any state, or any Regulatory
Authority, and have paid all fees and assessments due and payable in connection
therewith, except where the failure to file such report, registration or
statement or to pay such fees and assessments, either individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on
such party. All such reports and statements filed with any such Regulatory
Authority are collectively referred to herein as the "Star Reports" and the
"Firstar Reports," as applicable. As of its respective date, each of the Star
Reports and the Firstar Reports, as applicable, of such party complied in all
material respects with all the rules and regulations promulgated by the
applicable Regulatory Authority 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) MATERIAL ADVERSE CHANGE. Since December 31, 1997, no event has
occurred or circumstances arisen that, individually or taken together with all
other events and circumstances, has had or is reasonably expected to have a
Material Adverse Effect on such party.
(h) COMPLIANCE WITH LAWS. Such party and its Subsidiaries have
complied with all laws, regulations, and orders (including without limitation
zoning ordinances, building codes, ERISA (as defined herein), and securities,
tax, environmental, civil rights, and occupational health and safety laws and
regulations and including without limitation in the case of any Subsidiary of
such party that is a bank, banking organization, banking corporation or trust
company, all statutes, rules and regulations pertaining to the conduct of a
banking, deposit-taking or lending or related business or to the exercise of
trust powers) and governing instruments applicable to them and to the conduct of
their business, and to the knowledge of such party all applicable listing
requirements and policies of the NYSE, except where such failure to comply would
not have a Material Adverse Effect on such party, and neither such party nor any
Subsidiary of such party is in default under, and no event has occurred which,
with the lapse of time or notice or both, could result in the default under, the
terms of any judgment, order, writ, decree, permit, or license
14
of any Regulatory Authority or court, whether federal, state, municipal, or
local and whether at law or in equity, except where such default would not
reasonably be expected to have a Material Adverse Effect on such party. Neither
such party nor any Subsidiary of such party is subject to or reasonably likely
to incur a liability as a result of its ownership, operation, or use of any
Property (as defined herein) of such party (whether directly or, to the best
knowledge of such party, as a consequence of such Property being part of the
investment portfolio of such party or any Subsidiary of such party) (i) that is
contaminated by or contains any Toxic Substance (as defined herein) or (ii) on
which any Toxic Substance has been stored, disposed of, placed, or used in the
construction thereof; and which, in each case, reasonably could be expected to
have a Material Adverse Effect on such party. "Property" of a person shall
include all property (real or personal, tangible or intangible) owned or
controlled by such person, including, without limitation, property under
foreclosure, property held by such person or any subsidiary of such person in
its capacity as a trustee and property in which any venture capital or similar
unit of such person or any subsidiary of such person has an interest. A "Toxic
Substance" is anything that is contaminated by or contains any hazardous waste,
toxic substance, or related materials, including, without limitation, asbestos,
PCBs, pesticides, herbicides and any other substance or waste that is hazardous
to human health or the environment. Except for statutory or regulatory
restrictions of general application, no Regulatory Authority has placed any
restriction on the business of such party or any Subsidiary of such party which
reasonably could be expected to have a Material Adverse Effect on such party.
(i) REGISTRATION STATEMENT, ETC. None of the information regarding
such party or any of its Subsidiaries supplied or to be supplied by such party
for inclusion or included in (i) the registration statement on Form S-4 to be
filed with the SEC for the purposes of registering the shares of Firstar (WI)
Common Stock to be issued pursuant to this Agreement (the "Registration
Statement"), (ii) the proxy or information statement to be mailed to Star's
stockholders and Firstar's stockholders in connection with the transactions
contemplated by this Agreement (the "Proxy Statement"), or (iii) any other
documents to be filed with any Regulatory Authority in connection with the
transactions contemplated hereby will, at the respective times such documents
are filed with 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 Star's stockholders (the "Star
Meeting") and the meeting of Firstar's stockholders (the "Firstar Meeting")
referred to in Section 6.3, 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 the
Meeting. All documents which such party or any of its Subsidiaries are
responsible for filing with any Regulatory Authority in connection with the
Merger will comply as to form in all material respects with the provisions of
applicable law.
(j) BROKERS AND FINDERS. Except as set forth in the engagement letter
agreement between Firstar and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, a true and complete copy of which has been provided to Star prior
to the date hereof, and the engagement letter agreement between Star and CS
First Boston, a true and complete copy of which has been pro-
15
vided to Firstar prior to the date hereof, neither such party nor any of its
Subsidiaries 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 such party or any of its
Subsidiaries in connection with this Agreement or the transactions contemplated
hereby.
(k) LITIGATION AND OTHER PROCEEDINGS. (i) Neither such party nor any
of its Subsidiaries is a party to any, and there are no pending or, to the
knowledge of such party, threatened, legal, administrative, arbitral or other
proceedings, claims, actions or governmental or regulatory investigations of any
nature against such party or any of its Subsidiaries or challenging the validity
or propriety of the transactions contemplated by this Agreement as to which, in
any such case, there is a reasonable probability of an adverse determination and
which, if adversely determined either individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on such party.
(ii) There is no injunction, order, judgment, decree or regulatory
restriction (other than those that apply to similarly situated bank holding
companies or banks) imposed upon such party, any of its Subsidiaries or the
assets of such party or any of its Subsidiaries that has had or would reasonably
be expected to have a Material Adverse Effect on such party or the Surviving
Corporation.
(l) TAXES. Such party and each Subsidiary have timely filed or will
timely file (including extensions) all material tax returns required to be filed
at or prior to the Closing Date ("Returns"). Each of such party and its
Subsidiaries has paid, or set up adequate reserves on its respective Financial
Statements for the payment of, all taxes required to be paid in respect of the
periods covered by the Financial Statements and has paid or set up adequate
reserves on the most recent financial statements such party has filed under the
Exchange Act for the payment of all taxes anticipated to be payable in respect
of the periods covered by such financial statements. No material deficiencies
for any tax, assessment or governmental charge have been proposed, asserted or
assessed in writing by any governmental or taxing authority against such party
or any Subsidiary of such party which have not been settled or would not be
covered by existing reserves. To the knowledge of such party, neither such party
nor any Subsidiary of such party is delinquent in the payment of any material
tax, assessment or governmental charge shown to be due on any Return (taking
into account extensions properly obtained), and no waiver of the time to assess
or collect any tax granted in writing by such party or any Subsidiary of such
party is pending. The federal and state income tax returns of such party and the
Subsidiaries of such party have been audited and finally settled by the IRS or
appropriate state tax authorities or the relevant statute of limitations has
expired for all periods ended through December 31, 1991, or the period for
assessment of taxes in respect of such periods has expired.
(m) EMPLOYEE BENEFIT PLANS; ERISA. (i) Such party's Disclosure
Schedule sets forth a true and complete list of each material employee or
director benefit plan, arrangement or agreement (including, without limitation,
stock purchase, stock option, severance, employment, change in control, fringe
benefit, collective bargaining, bonus, incentive, deferred compensation and all
other employee benefit plans, agreements, programs, policies or other
arrangements,
16
whether or not subject to ERISA) that is maintained, or contributed to, as of
the date of this Agreement (the "Benefit Plans") by such party or any of its
Subsidiaries or by any trade or business, whether or not incorporated (an "ERISA
Affiliate"), all of which together with such party would be deemed a "single
employer" within the meaning of Section 4001 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
(ii) Such party has made available to the other party true and
complete copies of each of such party's Benefit Plans and certain related
documents, including, but not limited to, (A) the actuarial report for such
party's Benefit Plans (if applicable) for each of the last two years, and (B)
the most recent determination letter from the IRS (as defined herein) (if
applicable) for such plan.
(iii)Except as would not reasonably be expected to have a Material
Adverse Effect (A) each of such party's Benefit Plans has been operated and
administered in all material respects in accordance with their terms and with
applicable laws, including, but not limited to, ERISA and the Code, (B) each of
such party's Benefit Plans intended to be "qualified" within the meaning of
Section 401(a) of the Code has received a favorable determination letter with
respect to such qualified status, or such Benefit Plans shall be submitted for
such determination in a timely fashion and there are no existing circumstances
or events that have occurred that could reasonably be expected to adversely
affect the qualified status of any such plan, (C) with respect to each Benefit
Plan of such party which is subject to Title IV of ERISA, the present value of
accrued benefits under such Plan, based upon the actuarial assumptions used for
funding purposes in the most recent actuarial report prepared by such Plan's
actuary with respect to such Plan, did not, as of its latest valuation date,
exceed the then current value of the assets of such Plan allocable to such
secured benefits, (D) no Benefit Plan of such party provides benefits,
including, without limitation, death or medical benefits (whether or not
insured), with respect to current or former employees or directors of such party
or its Subsidiaries beyond their retirement or other termination of service,
other than (1) coverage mandated by applicable law, (2) death benefits or
retirement benefits under any "employee pension plan" (as such term is defined
in Section 3(2) of ERISA), (3) deferred compensation benefits accrued as
liabilities on the books of such party or its Subsidiaries or (4) benefits the
full cost of which is borne by the current or former employee or director (or
his beneficiary), (E) no material liability under Title IV of ERISA has been
incurred by such party, its Subsidiaries or any ERISA Affiliate that has not
been satisfied in full, and no condition exists that could reasonably be
expected to present a material risk to such party, its Subsidiaries or any ERISA
Affiliate of such party incurring a material liability thereunder (other than
the payment of premiums and funding obligations in the ordinary course of
business), (F) no Benefit Plan is a "multiemployer pension plan" (as such term
is defined in Section 3(37) of ERISA), (G) all contributions or other amounts
payable by such party or its Subsidiaries as of the Effective Time with respect
to each Benefit Plan in respect of current or prior plan years have been paid or
accrued in accordance with GAAP and Section 412 of the Code, (H) neither such
party nor its Subsidiaries has engaged in a transaction with respect to such
party's Benefit Plans in connection with which such party or its Subsidiaries
reasonably could be subject to either a material civil penalty accessed pursuant
to Section 409 or 502(i) of ERISA or a material tax imposed pursuant to Section
4975 or 4976 of the Code, and (I) to the best knowledge of such party,
17
there are no pending, threatened or anticipated claims (other than routine
claims for benefits) by, on behalf of or against any of the Benefit Plans of
such party or any trusts related thereto.
(iv) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (A) result in any
material payment (including, without limitation, severance, unemployment
compensation, "excess parachute payment" (within the meaning of Section 280G of
the Code), forgiveness of indebtedness or otherwise) becoming due to any
director or any employee of such party or any of its Subsidiaries under any
Benefit Plan of such party or otherwise, (B) materially increase any benefits
otherwise payable under any Benefit Plan of such party or (C) result in any
acceleration of the time of payment or vesting of any such benefits to any
material extent. Notwithstanding the foregoing, neither the execution of this
Agreement nor the consummation of the transactions contemplated hereby will
constitute or be deemed a "Change of Control" within the meaning of the Firstar
Supplemental Retirement Plan for Key Executives and the Firstar Corporation
Pension Plan.
(n) ACCOUNTING, TAX AND REGULATORY MATTERS. Neither such party nor any
Subsidiary of such party has taken or agreed to take any action or has any
knowledge of any fact or circumstance that would (i) prevent the First Step
Merger or the Second Step Merger from qualifying as a "reorganization" within
the meaning of Section 368(a) of the Code, (ii) prevent the transactions
contemplated hereby from qualifying as a "pooling of interests" for accounting
and financial reporting purposes or (iii) materially impede or delay receipt of
any approval referred to in Section 7.1(b) or the consummation of the
transactions contemplated by this Agreement.
(o) STATE TAKEOVER STATUTES; ARTICLES OF INCORPORATION; RIGHTS
AGREEMENT. (i) The transactions contemplated by this Agreement are not subject
to, or have been exempted from, any applicable state law which purports to limit
or restrict business combinations or the ability to acquire or to vote shares.
(ii) The transactions contemplated by this Agreement and the
agreements contemplated hereby are not, and will not be, prohibited by, or have
been exempted from, such party's Articles of Incorporation.
(iii) Such party has taken all necessary steps (A) to render the Star
Rights Agreement or the Firstar Rights Agreement, as applicable, inapplicable to
the Merger and the transactions contemplated by this Agreement and by the Star
Stock Option Agreement and the Firstar Stock Option Agreement, as applicable
(including, such that the Rights related thereto will not be distributed, become
exercisable or be triggered in any way as a result of the execution of this
Agreement or the applicable stock option agreement or the consummation of the
transactions contemplated hereby or thereby) and (B) to cause the Rights issued
under the applicable Rights Agreement to expire immediately prior to the First
Effective Time.
(p) CONDUCT OF SUCH PARTY TO DATE. From and after January 1, 1998
through the date of this Agreement, except as would not reasonably be expected
to have a Material Adverse Effect on such party or as reflected in such party's
Financial Statements: (i) such party and its Subsidiaries have conducted their
respective businesses in the ordinary and usual course consistent with past
practices; (ii) such party has not issued, sold, granted, conferred or awarded
any of
18
its Equity Securities, or any corporate debt securities which would be
classified under GAAP as long-term debt on the balance sheets of such party;
(iii) such party has not effected any stock split or adjusted, combined,
reclassified or otherwise changed its capitalization (other than, with respect
to Firstar, the redemption of its Series D Preferred Stock); (iv) such party has
not declared, set aside or paid any dividend (other than its regular quarterly
or regular semi-annual common dividends or, with respect to Firstar, regular
dividends paid on its Series D Preferred Stock prior to the redemption thereof)
or other distribution in respect of its capital stock, or purchased, redeemed,
retired, repurchased, or exchanged, or otherwise acquired or disposed of,
directly or indirectly, any of its Equity Securities, whether pursuant to the
terms of such Equity Securities or otherwise (other than, with respect to
Firstar, the redemption of its Series D Preferred Stock); (v) neither such party
nor any Subsidiary has incurred any obligation or liability (absolute or
contingent), except normal trade or business obligations or liabilities incurred
in the ordinary course of business, or subjected to Lien any of its assets or
properties other than in the ordinary course of business consistent with past
practice; (vi) neither such party nor any Subsidiary has discharged or satisfied
any Lien or paid any obligation or liability (absolute or contingent), other
than in the ordinary course of business; (vii) neither such party nor any
Subsidiary has sold, assigned, transferred, leased, exchanged, or otherwise
disposed of any of its properties or assets other than for a fair consideration
in the ordinary course of business; (viii) except as required by contract or
law, neither such party nor any Subsidiary has (A) increased the rate of
compensation of, or paid any bonus to, any of its directors, officers, or other
employees, except merit or promotion increases in accordance with existing
policy, (B) entered into any new, or amended or supplemented any existing,
employment, management, consulting, deferred compensation, severance, or other
similar contract, (C) entered into, terminated, or substantially modified any of
its Benefit Plans or (D) agreed to do any of the foregoing; (ix) neither such
party nor any Subsidiary has suffered any damage, destruction, or loss, whether
as the result of fire, explosion, earthquake, accident, casualty, labor trouble,
requisition, or taking of property by any Regulatory Authority, flood,
windstorm, embargo, riot, act of God or the enemy, or other casualty or event,
and whether or not covered by insurance; (x) neither such party nor any
Subsidiary has cancelled or compromised any debt, except for debts charged off
or compromised in accordance with the past practice of such party and its
Subsidiaries; and (xi) neither such party nor any Subsidiary of such party has
entered into any transaction, contract or commitment outside the ordinary course
of its business.
(q) YEAR 2000 COMPLIANT. None of such party or any of its Subsidiaries
has received, or reasonably expects to receive, a "Year 2000 Deficiency
Notification Letter" (as such term is employed in the Federal Reserve's
Supervision and Regulation Letter No. SR 98-3(SUP), dated March 4, 1998). Such
party has disclosed to the other party a complete and accurate copy of such
party's plan for addressing the issues set forth in the statements of the
Federal Financial Institutions Examination Council, dated May 5, 1997, entitled
"Year 2000 Project Management Awareness," and December 1997, entitled "Safety
and Soundness Guidelines Concerning the Year 2000 Business Risk," as such issues
affect such party and its Subsidiaries. Between the date of this Agreement and
the Effective Time, such party shall use commercially practicable efforts to
implement such plan.
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(r) INVESTMENT SECURITIES. Except as would not reasonably be expected
to have a Material Adverse Effect on such party, each of such party and its
Subsidiaries has good and marketable title to all securities held by it (except
securities sold under repurchase agreements or held in a fiduciary or agency
capacity), free and clear of any Lien, except to the extent such securities are
pledged in the ordinary course of business consistent with prudent banking
practices to secure obligations of such party or any of its Subsidiaries. Such
securities are valued on the books of such party in accordance with GAAP.
(s) INTEREST RATE RISK MANAGEMENT INSTRUMENTS. Except as would not
reasonably be expected to have a Material Adverse Effect on such party, all
interest rate swaps, caps, floors and option agreements and other interest rate
risk management arrangements, whether entered into for the account of such party
or for the account of a customer of such party or one of its Subsidiaries, were
entered into in the ordinary course of business and, to such party's knowledge,
in accordance with prudent banking practice and applicable rules, regulations
and policies of any Regulatory Authority and with counterparties believed to be
financially responsible at the time and are legal, valid and binding obligations
of such party or one of its Subsidiaries enforceable in accordance with their
terms (except as may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the rights of creditors generally and
the availability of equitable remedies), and are in full force and effect.
Except as would not reasonably be expected to have a Material Adverse Effect on
such party, such party and each of its Subsidiaries have duly performed in all
respects all of their obligations thereunder to the extent that such obligations
to perform have accrued; and, to such party's knowledge, there are no breaches,
violations or defaults or allegations or assertions of such by any party
thereunder.
(t) INSURANCE. Except as would not reasonably be expected to have a
Material Adverse Effect on such party, such party and its Subsidiaries have in
effect insurance coverage with reputable insurers which, in respect of amounts,
premiums, types and risks insured, constitutes reasonably adequate coverage
against all risks customarily insured against by bank holding companies and
their subsidiaries comparable in size and operations to such party and its
Subsidiaries.
(u) AGREEMENTS WITH BANK REGULATORS. Neither such party nor any of its
Subsidiaries is a party to any written agreement or memorandum of understanding
with, or a party to any commitment letter or similar undertaking to, or is
subject to any order or directive by, or is a recipient of any extraordinary
supervisory letter from, or has adopted any board resolutions at the request of,
any Regulatory Authority which restricts materially the conduct of its business,
or in any manner relates to its capital adequacy, its credit policies or its
management, nor has such party been advised by any Regulatory Authority that is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, decree, agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter or similar
submission, or any such board resolutions.
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ARTICLE V
CONDUCT OF BUSINESSES PRIOR TO THE EFFECTIVE TIME
Section 5.1. CONDUCT OF BUSINESSES PRIOR TO THE EFFECTIVE TIME. Except
as provided for in Section 5.2 of this Agreement, during the period from the
date of this Agreement to the Effective Time, each of Star and Firstar shall,
and shall cause each of their respective Subsidiaries to, conduct its business
according to the ordinary and usual course consistent with past practices and
shall, and shall cause each such Subsidiary to, use its reasonable best efforts
to maintain and preserve its business organization, employees and advantageous
business relationships and retain the services of its officers and key
employees.
Section 5.2. FORBEARANCES. Except as set forth on Schedule 5.2, as
otherwise contemplated or permitted by this Agreement (including the Disclosure
Schedules) and the Option Agreements or as referred to in any Star Reports or
Firstar Reports publicly filed with the SEC prior to the date hereof, during the
period from the date of this Agreement to the Effective Time, Firstar shall not
and shall not permit its Subsidiaries to, without the prior written consent of
Star (which consent shall not be unreasonably withheld), and Star shall not and
shall not permit any of its Subsidiaries to, without the prior written consent
of Firstar (which consent shall not be unreasonably withheld):
(a) declare, set aside or pay any dividends or other distributions,
directly or indirectly, in respect of its capital stock (other than dividends
from a wholly owned Subsidiary of such party to such party or another wholly
owned Subsidiary of such party), except that (i) Star may pay quarterly cash
dividends on Star Common Stock in an amount not to exceed the rate payable on
such Star Common Stock as of the date hereof, and (ii) Firstar may pay quarterly
cash dividends on Firstar Common Stock in an amount not to exceed the rate
payable on such Firstar Common Stock as of the date hereof (together with any
rate increase consistent with past practice); or
(b) except as disclosed on such party's Disclosure Schedule, enter
into or amend any employment, severance or similar agreement or arrangement with
any director or officer or employee or collective bargaining agreement, or
materially modify any of its Benefit Plans or grant any salary or wage increase
or materially increase any employee benefit (including incentive or bonus
payments), except normal individual increases in compensation to employees
consistent with past practice or (ii) as required by law or contract; or
(c) authorize, recommend, propose, or announce an intention to
authorize, so recommend or propose, or enter into an agreement in principle with
respect to, any merger, consolidation or business combination, any acquisition
or disposition of a material amount of assets, including mortgage servicing
rights, loans or securities as well as any release or relinquishment of any
material contract rights (except in the usual course of business consistent with
past practices) provided, however, that the foregoing shall not prohibit
internal reorganizations or consolidations involving existing Subsidiaries; or
21
(d) except for transactions in the ordinary course of business
consistent with past practice, enter into or terminate any material contract or
agreement, or make any change in any of its material leases or contracts, other
than renewals of contracts and leases without material adverse changes of terms;
or
(e) settle any material claim, action or proceeding involving money
damages, except in the ordinary course of business consistent with past
practice; or
(f) propose or adopt any amendments to its articles of incorporation,
association or other charter document or bylaws or code of regulations; or
(g) issue, sell, grant, confer or award any of its Equity Securities
or any debt securities having the right to vote on matters on which stockholders
may vote or purchase, redeem, retire, repurchase, or exchange, or otherwise
acquire or dispose of, directly or indirectly, any of its Equity Securities,
whether pursuant to the terms of such Equity Securities or otherwise (except for
(i) shares of Firstar Common Stock or Star Common Stock, as applicable, issued
upon exercise of Firstar Stock Options or Star Stock Options, respectively,
outstanding on the date of this Agreement or issued in accordance with this
paragraph (g), (ii) pursuant to the Option Agreements, (iii) any such
transactions between a wholly-owned Subsidiary and its parent, (iv) in
accordance with the Firstar and Star Stock Plans consistent with past practice,
(v) as agent for stockholders reinvesting dividends pursuant to a dividend
reinvestment plan in accordance with the terms thereof as in effect on the date
of this Agreement, (vi) for the acquisition of Trust Account Shares and DPC
Shares, (vii) with respect to Firstar, any repurchases of Firstar Common Stock
to maintain a pool of up to 500,000 shares in the form of treasury shares for
the purpose of reissuing upon the exercise of Firstar Stock Options, or (viii)
in the ordinary course of business consistent with past practice (such party
agreeing to promptly notify the other party of any such transactions)) or effect
any stock split or adjust, combine, reclassify or otherwise change its equity
capitalization as it existed on the date of this Agreement; or
(h) solicit, encourage or authorize any individual, corporation or
other entity to solicit or encourage from any third party any inquiries or
proposals relating to the disposition of its business or assets, or the
acquisition of its voting securities, or the merger of it or any of its
Subsidiaries with any corporation or other entity other than as provided by this
Agreement (and each party shall promptly notify the other of all of the relevant
details relating to all inquiries and proposals which it may receive relating to
any of such matters); or
(i) take any action that would (i) materially adversely affect, impede
or delay the consummation of the transactions contemplated by this Agreement and
the Option Agreements or the ability of Star or Firstar to obtain any approval
of any Regulatory Authority required for the transactions contemplated by this
Agreement and the Option Agreements or to perform its covenants and agreements
under this Agreement and the Option Agreements, (ii) prevent the First Step
Merger or the Second Step Merger from qualifying as a "reorganization" within
the meaning of Section 368(a) of the Code or (iii) prevent the transactions
contemplated hereby from qualifying as a "pooling of interests" for accounting
and financial reporting purposes; or
22
(j) other than in the ordinary course of business consistent with past
practice and other than indebtedness of up to $800 million incurred by Firstar
and its Subsidiaries to fund Firstar's purchase from Cargill Corporation of
Cargill Leasing and to redeem Firstar's $100 million aggregate principal amount
of 7.15% Notes due September 1, 2000, and indebtedness of up to $100 million
under Firstar's bank facilities for liquidity purposes incur any indebtedness
for borrowed money (other than short-term indebtedness incurred to refinance
short-term indebtedness and indebtedness of Star or any of its wholly-owned
Subsidiaries to Star or any of its wholly-owned Subsidiaries, on the one hand,
or of Firstar or any of its wholly-owned Subsidiaries to Firstar or any of its
wholly-owned Subsidiaries, on the other hand), assume, guarantee, endorse or
otherwise as an accommodation become responsible or liable for the obligations
of any other individual, corporation or other entity (it being understood and
agreed that incurrence of indebtedness in the ordinary course of business shall
include, without limitation, the creation of deposit liabilities, purchases of
Federal funds, sales of certificates of deposit and entering into repurchase
agreements); or
(k) implement or adopt any change in its accounting principles,
practices or methods, other than as may be required by GAAP or regulatory
guidelines; or
(l) other than the sale of up to $250 million of treasury securities
by Firstar and its Subsidiaries, materially restructure or materially change its
investment securities portfolio, through purchases, sales or otherwise, or the
manner in which the portfolio is classified or reported as of the date of the
Agreement; or
(m) except as required by applicable law or regulation, (i) implement
or adopt, any material change in its interest rate and other risk management
policies, procedures or practices, (ii) fail to follow in any material respect
its existing policies or practices with respect to managing its exposure to
interest rate and other risk or (iii) fail to use commercially reasonable means
to avoid any material increase in its aggregate exposure to interest rate risk;
or
(n) take any action or make any determination the effect of which
would result in the transactions contemplated by this Agreement constituting or
being deemed to be a "Change in Control" within the meaning of the Firstar
Supplemental Retirement Plan for Key Executives and the Firstar Corporation
Pension Plan; or
(o) agree in writing or otherwise to take any of the foregoing
actions.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1. ACCESS AND INFORMATION. Upon reasonable notice and
subject to applicable laws relating to the exchange of information, Star and its
Subsidiaries, on the one hand, and Firstar and its Subsidiaries, on the other
hand, shall each afford to each other, and to the other's accountants, counsel
and other representatives, access during normal business hours, during the
period prior to the Effective Time, to all their respective employees,
properties, books, contracts, commitments and records and, during such period,
each shall furnish reasonably
23
promptly to the other (i) a copy of each report, schedule and other document
filed or received by it during such period pursuant to the requirements of
federal and state securities and banking laws (other than any such documents
which such party is not permitted to disclose under applicable laws) and
including, but not limited to, copies of internal quarterly reserve analyses,
credit quality assessments and credit information as set forth in Schedule 6.1
(ii) all other existing or regularly produced information concerning its
business, properties and personnel, in the case of (i) and (ii) as such other
party may reasonably request. Neither Star nor Firstar nor any of their
respective Subsidiaries shall be required to provide access to or to disclose
information where such access or disclosure would violate or prejudice the
rights of Star's or Firstar's, as the case may be, customers, jeopardize the
attorney-client privilege of the institution in possession or control of such
information or contravene any law, rule, regulation, order, judgment, decree,
fiduciary duty or binding agreement entered into prior to the date of this
Agreement. The parties hereto will make appropriate substitute disclosure
arrangements under circumstances in which the restrictions of the preceding
sentence apply.
Section 6.2. REGISTRATION STATEMENT; REGULATORY MATTERS. (a) The
parties shall prepare and file with the SEC as soon as is reasonably practicable
the Registration Statement (or the equivalent in the form of preliminary proxy
material) with respect to the shares of Firstar (WI) Common Stock to be issued
in the First Step Merger and the Second Step Merger and shall apply to the NYSE
to list the shares of Firstar (WI) Common Stock to be issued in connection with
the transactions contemplated by this Agreement. The parties shall prepare and
file a notice with the Board as soon as reasonably practicable. The parties
shall use all reasonable efforts to cause the Registration Statement to become
effective. The parties shall also take any action required to be taken under any
applicable state blue sky or securities laws in connection with the issuance of
such shares, and Firstar and Star shall furnish all information concerning their
respective Subsidiaries and the stockholders thereof as may reasonably be
requested in connection with any such action.
(b) The parties hereto shall cooperate with each other and use their
reasonable best efforts to promptly prepare and file all necessary
documentation, to effect all applications, notices, petitions and filings, to
obtain as promptly as practicable all permits, consents, approvals and
authorizations of all third parties and Regulatory Authorities which are
necessary or advisable to consummate the transactions contemplated by this
Agreement (including, without limitation, the First Step Merger and the Second
Step Merger), and to comply with the terms and conditions of all such permits,
consents, approvals and authorizations of all such Regulatory Authorities. Star
and Firstar shall have the right to review in advance, and, to the extent
practicable, each will consult with the other on, in each case subject to
applicable laws relating to the exchange of information, all the information
relating to Star or Firstar, as the case may be, and any of their respective
Subsidiaries, which appear in any filing made with, or written materials
submitted to, any third party or any Regulatory Authority in connection with the
transactions contemplated by this Agreement. In exercising the foregoing right,
each of the parties hereto shall act reasonably and as promptly as practicable.
The parties hereto agree that they will consult with each other with respect to
the obtaining of all permits, consents, approvals and authorizations of all
third parties and Regulatory Authorities necessary or advisable to consummate
the
24
transactions contemplated by this Agreement and each party will keep the other
apprised of the status of matters relating to the completion of the transactions
contemplated herein.
(c) Star and Firstar shall, upon request, furnish each other with all
information concerning themselves, their Subsidiaries, directors, officers and
stockholders and such other matters as may be reasonably necessary or advisable
in connection with the Proxy Statement, the Registration Statement or any other
statement, filing, notice or application made by or on behalf of Star, Firstar
or any of their respective Subsidiaries to any Regulatory Authority in
connection with the First Step Merger and the Second Step Merger and the other
transactions contemplated by this Agreement.
(d) Star and Firstar shall promptly advise each other upon receiving
any communication from any Regulatory Authority whose consent or approval is
required for consummation of the transactions contemplated by this Agreement
which causes such party to believe that there is a reasonable likelihood that
any requisite approval of any Regulatory Authority will be denied or materially
delayed.
Section 6.3. STOCKHOLDER APPROVAL. In accordance with applicable law
and stock exchange rules and its respective Articles of Incorporation and
By-Laws or Code of Regulations, each of the parties shall call a meeting of
their respective stockholders to be held as soon as practicable after the
Registration Statement is declared effective for the purpose of voting upon the
First Step Merger and the Second Step Merger, as applicable, and to take any
other action for stockholders to authorize the transactions contemplated by this
Agreement (each, a "Meeting"). In connection therewith, the parties shall
prepare the Proxy Statement and, with the approval of each of Star and Firstar,
the Proxy Statement shall be filed with the SEC and mailed to the respective
stockholders of the parties. The parties' respective Boards of Directors shall
submit for approval of their respective stockholders the matters to be voted
upon in order to authorize the Merger. The respective Board of Directors of the
parties shall use their reasonable best efforts to obtain any vote of their
respective stockholders that is necessary for the approval and adoption of this
Agreement and consummation of the transactions contemplated hereby.
Section 6.4. CURRENT INFORMATION. During the period from the date of
this Agreement to the Effective Time, each party shall promptly furnish the
other with copies of all monthly and other interim financial statements as the
same become available and shall cause one or more of its designated
representatives to confer on a regular and frequent basis with representatives
of the other party. Each party shall promptly notify the other party of any
material change in its business or operations and of any governmental
complaints, investigations or hearings (or communications indicating that the
same may be contemplated), or the institution or, to its knowledge, the threat
of material litigation involving such party, and shall keep the other party
fully informed of such events.
Section 6.5. AGREEMENTS OF AFFILIATES. (a) Not later than the 15th day
prior to the mailing of the Proxy Statement, Firstar shall deliver to Star and
Star shall deliver to Firstar, a schedule of each person that, to the best of
its knowledge, is or is reasonably likely to be, as of the date of the relevant
Meeting, deemed to be an "affiliate" of it (each, an "Affiliate") as that
25
term is used in SEC Accounting Series Releases 130 and 135 and Rule 145 under
the Securities Act.
(b) Firstar and Star shall each use its respective reasonable best
efforts to cause each person who may be deemed to be an Affiliate of Firstar or
Star, as the case may be, to execute and deliver to Firstar and Star on or
before the date of their respective Meetings an agreement to comply with SEC
Accounting Series Releases 130 and 135 and with Rule 145 under the Securities
Act. Such agreements shall be in the forms set forth in Exhibit E (in the case
of Firstar) and Exhibit F (in the case of Star).
(c) Firstar (WI) shall use its reasonable best efforts to publish as
promptly as reasonably practical, but in no event later than 45 days after the
end of the first month after the Effective Time in which there are at least 30
days of post-Merger combined operations (which month may be the month in which
the Effective Time occurs), combined sales and net income figures as
contemplated by and in accordance with the terms of SEC Accounting Series
Release No. 135.
Section 6.6. EXPENSES. Each party hereto shall bear its own expenses
incident to preparing, entering into and carrying out this Agreement and to
consummating the Merger provided that the expenses of Firstar (WI) related to
the preparation, filing and mailing of the Proxy Statement and the Registration
Statement shall be shared equally by the parties.
Section 6.7. SECURITIES ACT AND EXCHANGE ACT FILINGS. (a) Firstar (WI)
shall make all filings with the SEC that are described in Section (c) of Rule
144 under the Securities Act for a period of two years following the Effective
Time.
(b) The parties shall cause Firstar (WI) to take all corporate action
necessary to reserve for issuance a sufficient number of shares of Firstar (WI)
Common Stock for delivery upon exercise of Star Stock Options and Firstar Stock
Options assumed by it in accordance with Sections 1.6 and 2.6. As soon as
practicable after the Effective Time, the parties shall cause Firstar (WI) to
file a registration statement on Form S-3 or Form S-8, as the case may be (or
any successor or other appropriate forms), or another appropriate form with
respect to the shares of Firstar (WI) Common Stock subject to such options and
to use its reasonable best efforts to maintain the effectiveness of such
registration statement or registration statements (and maintain the current
status of the prospectus or prospectuses contained therein) for so long as such
options remain outstanding. With respect to those individuals who subsequent to
the Merger will be subject to the reporting requirements under Section 16(a) of
the Exchange Act, where applicable, the parties shall cause Firstar (WI) to
administer the Star Stock Plans and Firstar Stock Plans assumed pursuant to
Sections 1.6 and 2.6 in a manner that complies with Rule 16b-3 promulgated under
the Exchange Act to the extent such plans complied with such rule prior to the
Merger.
Section 6.8. MISCELLANEOUS AGREEMENTS AND CONSENTS. (a) Subject to the
terms and conditions herein provided, each of the parties hereto agrees to use
its respective reasonable best efforts to take, or cause to be taken, all
action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement as expeditiously as possible,
including,
26
without limitation, using its respective reasonable best efforts to lift or
rescind any injunction or restraining order or other order adversely affecting
the ability of the parties to consummate the transactions contemplated hereby.
Each party shall, and shall cause each of its respective Subsidiaries to, use
its reasonable best efforts to obtain consents of all third parties necessary
or, as agreed to by the parties, desirable for the consummation of the
transactions contemplated by this Agreement.
(b) The parties shall, prior to the Effective Time, (i) consult and
cooperate with each other regarding the implementation of those policies and
procedures to be established by Firstar (WI) for its operations, including,
without limitation, policies and procedures pertaining to the accounting,
asset/liability management, audit, credit, human resources, treasury and legal
functions, and (ii) shall make such modifications or changes to their policies
and practices, if any, and at such date prior to or as of the Effective Time, as
may be mutually agreed upon. Star and Firstar shall also consult with respect to
the character, amount and timing of restructuring charges to be taken by each of
them in connection with the transactions contemplated hereby and shall take such
charges in accordance with GAAP, as may be mutually agreed upon. No party's
representations, warranties and covenants contained in this Agreement shall be
determined to be untrue or breached in any respect for any purpose as a
consequence of any modifications or changes to such policies and practices which
may be undertaken on account of this Section 6.8(b).
Section 6.9. EMPLOYEE BENEFIT PLANS. (a) From and after the Effective
Time, unless otherwise mutually determined, the Firstar Benefit Plans and Star
Benefit Plans in effect as of the date of this Agreement shall remain in effect
with respect to employees of Firstar or Star (or their Subsidiaries),
respectively, covered by such Plans at the Effective Time until such time as the
Surviving Corporation shall, subject to applicable law, the terms of this
Agreement and the terms of such Plans, adopt new benefits with respect to
employees of the Surviving Corporation and its Subsidiaries (the "New Benefit
Plans"). Prior to the Closing Date, Firstar and Star shall cooperate in
reviewing, evaluating and analyzing the Star Benefit Plans and Firstar Benefit
Plans with a view towards developing appropriate New Benefit Plans for the
employees covered thereby subsequent to the consummation of the Merger. It is
the intention of Firstar and Star to develop New Benefit Plans, as soon as
reasonably practicable after the Effective Time, which, among other things, (i)
treat similarly situated employees on a substantially equivalent basis, taking
into account all relevant factors, including, without limitation, duties,
geographic location, tenure, qualifications and abilities, and (ii) do not
discriminate between employees of the Surviving Corporation and its Subsidiaries
who were covered by Firstar Benefit Plans, on the one hand, and those covered by
Star Benefit Plans, on the other, at the Effective Time.
(b) The foregoing not withstanding, the Surviving Corporation agrees
to honor in accordance with their terms all benefits vested as of the date
hereof under the Star Benefit Plans or the Firstar Benefit Plans or under other
contracts, arrangements, commitments, or understandings described in the Star
Disclosure Schedule and the Firstar Disclosure Schedule.
(c) Nothing in this Section 6.9 shall be interpreted as preventing the
Surviving Corporation and its Subsidiaries from amending, modifying or
terminating any Star Benefit
27
Plans, Firstar Benefit Plans, or other contracts, arrangements, commitments or
understandings, in accordance with their terms and applicable law.
Section 6.10. D&O INDEMNIFICATION. (a) In the event of any threatened
or actual claim, action, suit, proceeding or investigation, whether civil,
criminal or administrative, including, without limitation, any such claim,
action, suit, proceeding or investigation in which any individual who is now, or
has been at any time prior to the date of this Agreement, or who becomes prior
to the Effective Time, a director or officer of Star, Firstar, Firstar (WI),
Merger Sub or any of their respective Subsidiaries, including any entity
specified in the Star Disclosure Schedule or the Firstar Disclosure Schedule
(the "Indemnified Parties"), is, or is threatened to be, made a party based in
whole or in part on, or arising in whole or in part out of, or pertaining to (i)
the fact that he is or was a director or officer of Star, Firstar, Firstar (WI),
Merger Sub or any of their respective Subsidiaries or any entity specified in
the Star Disclosure Schedule or the Firstar Disclosure Schedule or any of their
respective predecessors or (ii) this Agreement, the Option Agreements or any of
the transactions contemplated hereby or thereby, whether in any case asserted or
arising before or after the Effective Time, the parties hereto agree to
cooperate and use their best efforts to defend against and respond thereto. It
is understood and agreed that after the Effective Time, Firstar (WI) shall
indemnify and hold harmless, as and to the fullest extent permitted by law, each
such Indemnified Party against any losses, claims, damages, liabilities, costs,
expenses (including reasonable attorney's fees and expenses), judgments, fines
and amounts paid in settlement in connection with any such threatened or actual
claims, action, suit, proceeding or investigation; and in the event of any such
threatened or actual claim, action, suit, proceeding or investigation (whether
asserted or arising before or after the Effective Time); Firstar (WI), after
consultation with an Indemnified Party, shall retain counsel and direct the
defense thereof, PROVIDED, HOWEVER, that by virtue of the obligations herein set
forth, (A) Firstar (WI) shall not be liable to any Indemnified Party for any
legal expenses of other counsel or any other expenses incurred by any
Indemnified Party in connection with the defense thereof, except that if Firstar
(WI) fails or elects not to assume such defense or counsel for the Indemnified
Parties reasonably advises the Indemnified Parties that there are issues which
raise conflicts of interest between Firstar (WI) and the Indemnified Parties,
the Indemnified Parties may retain counsel reasonably satisfactory to them after
consultation with Firstar (WI), and Firstar (WI) shall pay the reasonable fees
and expenses of such counsel for the Indemnified Parties promptly as statements
therefor are received, (B) Firstar (WI) shall be obligated pursuant to this
paragraph to pay for only one firm of counsel (in addition to local counsel in
each applicable jurisdiction) for all Indemnified Parties, unless an Indemnified
Party shall have reasonably concluded, based on the advice of counsel and after
consultation with Firstar (WI), that in order to be adequately represented,
separate counsel is necessary for such Indemnified Party, in which case, Firstar
(WI) shall be obligated to pay for such separate counsel, (C) Firstar (WI) shall
not be liable for any settlement effected without its prior written consent
(which consent shall not be unreasonably withheld) and (D) Firstar (WI) shall
have no obligation hereunder to any Indemnified Party when and if a court of
competent jurisdiction shall ultimately determine, and such determination shall
have become final and nonappealable, that indemnification of such Indemnified
Party in the manner contemplated hereby is prohibited by applicable law. Firstar
(WI) shall, to the fullest extent permitted by law, advance expenses to such
Indemnified Parties prior to final disposition of any claim, suit, proceeding,
or investigation upon receipt of an undertaking to repay any such advances of
fees
28
and expenses if such person is ultimately found not to be entitled to
indemnification therefor. Any Indemnified Party wishing to claim Indemnification
under this Section 6.10, upon learning of any such claim, action, suit,
proceeding or investigation, shall notify Firstar (WI) thereof, provided that
the failure to so notify shall not affect the obligations of Firstar (WI) under
this Section 6.10 except to the extent such failure to notify materially
prejudices Firstar (WI). Firstar (WI)'s obligations under this Section 6.10
shall continue in full force and effect for a period of six years from the
Effective Time (or the period of the applicable statute of limitations, if
longer); PROVIDED, HOWEVER, that all rights to indemnification in respect of any
claim (a "Claim") asserted or made within such period shall continue until the
final disposition of such Claim.
(b) From and after the Effective Time, the parties shall cause Firstar
(WI) to cause the individuals serving as officers and directors of Star and
Firstar, their respective Subsidiaries or any entity specified in the Star
Disclosure Schedule or the Firstar Disclosure Schedule immediately prior to the
Effective Time to be covered for a period for six (6) years from the Effective
Time (or the period of the applicable statute of limitations, if longer) by the
directors' and officers' liability insurance policies maintained by Star and
Firstar, as applicable (PROVIDED that Firstar (WI) may substitute therefor
policies of at least the same coverage and amounts containing terms and
conditions which are not less advantageous than either of such policies) with
respect to acts or omissions occurring prior to the Effective Time which were
committed by such officers and directors in their capacity as such; PROVIDED,
HOWEVER, that in no event shall Firstar (WI) be required to expend more than
200% of the current amount expended by Star and Firstar (the "Insurance Amount")
to maintain or procure insurance coverage pursuant hereto and provided further
that if Firstar (WI) is unable to maintain or obtain the insurance called for in
this Section 6.10(b), Firstar (WI) shall use its reasonable best efforts to
obtain as much comparable insurance as available for the Insurance Amount).
(c) In the event Firstar (WI) or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger,
or (ii) transfers or conveys all or substantially all of its properties and
assets to any person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of Firstar
(WI) assume the obligations set forth in this section.
(d) The provisions of this Section 6.10 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and his or her
heirs and representatives.
Section 6.11. PRESS RELEASES. Except as may be required by law,
Firstar and Star shall consult and agree with each other as to the form,
substance and timing of any proposed press release relating to this Agreement or
any of the transactions contemplated hereby.
Section 6.12. POOLING OF INTERESTS. Each of Star, Firstar and Firstar
(WI) undertakes and agrees to use its reasonable best efforts to cause (i) each
of the First Step Merger and the Second Step Merger to qualify as a
"reorganization" within the meaning of Section 368(a) of the Code, (ii) the
Merger to qualify as a "pooling of interests" for accounting and financial
reporting purposes (in the case of both clause (i) and clause (ii), including,
if necessary, to take rea-
29
sonable steps to restructure the transactions contemplated by this Agreement to
so qualify and, in the case of qualification as a "pooling of interests,"
including, if necessary, seeking any necessary third party consents) and (iii)
the Merger to occur as soon as practicable.
Section 6.13. INSURANCE. Each of Star and Firstar shall, and each
shall cause its respective Subsidiaries to, use its reasonably best efforts to
maintain its existing insurance.
Section 6.14. CONFORMING ENTRIES. (a) From and after the date of this
Agreement, Firstar and Star shall consult and cooperate with each other with
respect to conforming the loan, accrual and reserve policies of Firstar and the
Firstar Subsidiaries and such policies of Star and the Star Subsidiaries to each
other.
(b) In addition, from and after the date of this Agreement to the
Effective Time, Firstar and Star shall consult and cooperate with each other
with respect to determining appropriate Firstar and Star accruals, reserves and
charges to establish and take in respect of excess equipment write-off or
write-down of various assets and other appropriate charges and accounting
adjustments taking into account the parties' business plans following the
Merger, based upon such consultation and as hereinafter provided.
(c) Firstar and Star shall consult and cooperate with each other with
respect to determining, based upon such consultation and as hereinafter
provided, the amount and the timing for recognizing for financial accounting
purposes each party's expenses of the Merger and the restructuring charges
relating to or to be incurred in connection with the Merger.
(d) To the extent permissible under applicable laws, regulations, and
requirements of Regulatory Authorities, and provided further, that neither
Firstar nor Star shall be required to take any such action that, in the opinion
of its independent auditors, is not consistent with GAAP and regulatory
accounting principles if after consultation Firstar and Star agree, Firstar and
Star shall (i) establish and take such reserves and accruals at such time as are
agreed to conform Firstar's and Star's loan, accrual and reserve policies to the
other party's policies, and (ii) establish and take such accruals, reserves and
charges in order to implement such policies in respect of excess facilities and
equipment capacity, severance costs, litigation matters, write-off or write-down
of various assets and other appropriate accounting adjustments, and to recognize
for financial accounting purposes such expenses of the Merger and restructuring
charges related to or to be incurred in connection with the Merger.
Section 6.15. ADDITIONAL ACTIONS. In case at any time after the First
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving Corporation with full title
to all properties, assets, rights, approvals, immunities and franchises of any
of the parties to the First Step Merger or the Second Step Merger, as the case
may be, the proper officers and directors of each party to this Agreement and
their respective Subsidiaries shall take all such action as may be reasonably
necessary.
Section 6.16. DIVIDENDS. (a) After the date of this Agreement, each of
Star and Firstar shall coordinate with the other the payment of dividends with
respect to the Star Common Stock and the Firstar Common Stock and the record
dates and payment dates relating thereto, it
30
being the intention of the parties hereto that holders of Star Common Stock and
Firstar Common Stock shall not receive two dividends, or fail to receive one
dividend, in any single calendar quarter with respect to their shares of Star
Common Stock and/or Firstar Common Stock or any shares of Firstar (WI) Common
Stock that any such holder receives in exchange for such shares of Star Common
Stock or Firstar Common Stock in the Merger.
(b) It is the intention of the parties that the initial post-closing
quarterly dividend rate per share of Firstar (WI) Common Stock shall be equal to
the quarterly dividend rate per share of Firstar immediately prior to Closing
divided by 0.76.
Section 6.17. ISSUANCE OF SHARES. If and to the extent necessary to
reduce the aggregate number of "tainted treasury shares" to a number that is
consistent with the accounting of the Merger as a "pooling of interests" under
GAAP each of Star and Firstar shall, prior to the First Effective Time,
coordinate with the other party with respect to the issuance of, and pursuant
thereto shall issue, shares of Star Common Stock or Firstar Common Stock, as may
be appropriate, in such manner, and limited to such number, as is necessary.
Section 6.18. CHANGES IN STRUCTURE. The structure of the Merger shall
be changed at the request of either Firstar or Star delivered prior to the First
Effective Time (without any further required action by the parties) to provide
for a merger of (i) Firstar with and into Firstar (WI) in the First Step Merger
and (ii) Star with and into Firstar (WI) in the Second Step Merger, with Firstar
(WI) as the surviving corporation in the Merger, continuing its corporate
existence under the name "Firstar Corporation" and continuing to be governed by
the laws of the State of Wisconsin (with corresponding changes to the
definitions set forth in the first recital to this Agreement), provided that
such change in structure does not change the Exchange Ratio, the tax
consequences or any of the other substantive terms of the transactions
contemplated by this Agreement. In the event that the structure of the Merger is
changed pursuant to the provisions of this Section 6.18, Articles I and II as
set forth in Exhibit 6.18 hereto shall become Articles I and II of this
Agreement, along with such other conforming changes to this Agreement as the
parties may agree in good faith are required, including the deletion of all
references to Merger Sub. If the structure of the Merger is revised in
accordance with this Section 6.18, then the appropriate documents filed in
respect of the First Step Merger with the Department of Financial Institutions
of the State of Wisconsin and the appropriate documents filed in respect of the
Second Step Merger with the Department of Financial Institutions of the State of
Wisconsin and the Secretary of State of the State of Ohio pursuant to Sections
1.2 and 2.2, respectively, shall reflect that the structure of the Merger has
been revised in accordance with this Section 6.18.
Section 6.19. AMENDING GOVERNANCE DOCUMENTS. The parties agree that
they will take whatever action is necessary to amend the Articles of
Incorporation and By-Laws of Firstar (WI) such that at the Effective Time such
Articles of Incorporation and Bylaws are substantially identical to the forms
attached hereto as Exhibit C and Exhibit D, respectively.
Section 6.20. BOARD OF DIRECTORS; MANAGEMENT. (a) Prior to the First
Effective Time, Firstar shall elect a board of directors of Firstar (WI) to be
comprised of 32 persons, 18 of whom shall be named by the Board of Directors of
Star and 14 of whom shall be named by the
31
Board of Directors of Firstar, and such directors shall be allocated among the
three classes of directors in a proportionate manner. From and after the First
Effective Time, until duly changed pursuant hereto or in accordance with
applicable law, the officers of Firstar shall be the officers of Firstar (WI).
(b) Firstar shall cause all requisite action to be taken so that, at
the Effective Time, directors of Firstar (WI) elected pursuant to this Section
at the designation of Star and Firstar shall be represented in proportion to the
aggregate representation set forth in this Section on all committees of the
Board of Directors of Firstar (WI), except that seven designees of Star and five
designees of Firstar shall be included on the Executive Committee.
ARTICLE VII
CONDITIONS
Section 7.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the First Effective Time of the
following conditions:
(a) This Agreement and the transactions contemplated hereby, including
the Second Step Merger, and, in the case of the holders of Firstar Common Stock,
the First Step Merger, shall have been approved and adopted by the respective
requisite affirmative votes of the holders of Star Common Stock and Firstar
Common Stock entitled to vote thereon.
(b) All requisite approvals of this Agreement and the transactions
contemplated hereby shall have been received from the Board and any other
Regulatory Authority, and all applicable waiting periods shall have expired
under applicable law (other than any such approvals or the expiration of any
such waiting periods which the failure to obtain or satisfy, individually or in
the aggregate, would not reasonably be expected to have a material adverse
effect on the consummation of the Merger or a Material Adverse Effect on the
Surviving Corporation).
(c) The Registration Statement shall have been declared effective and
shall not be subject to a stop order or any threatened stop order.
(d) None of Firstar, Star, Merger Sub nor Firstar (WI) shall be
subject to any order, decree injunction, of a court or agency of competent
jurisdiction which enjoins or prohibits the consummation of the Merger, the
First Step Merger, the Second Step Merger or any of the other transactions
contemplated by this Agreement. No statute, rule, regulation, order, injunction
or decree shall have been enacted, entered, promulgated or enforced by any
Regulatory Authority which prohibits, materially restricts or makes illegal
consummation of the First Step Merger or the Second Step Merger.
(e) Star shall have received an opinion of Wachtell, Lipton, Xxxxx &
Xxxx and Firstar shall have received an opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx,
in form and substance reasonably satisfactory to Star and Firstar, respectively,
dated the Closing Date, substantially to the
32
effect that, on the basis of facts, representations and assumptions set forth in
such opinion which are consistent with the state of facts existing at the
Effective Time:
(i) Each of the First Step Merger and the Second Step Merger will
constitute a reorganization under Section 368(a) of the Code; Firstar,
Merger Sub and Firstar (WI) will each be a party to the reorganization
in respect of the First Step Merger; and Firstar, Firstar (WI) and
Star will each be a party to the reorganization in respect of the
Second Step Merger;
(ii) No gain or loss will be recognized by Firstar, Firstar (WI) or
Merger Sub as a result of the First Step Merger or by Firstar, Firstar
(WI) or Star as a result of the Second Step Merger;
(iii) No gain or loss will be recognized by stockholders of Firstar
who exchange their Firstar Common Stock solely for Firstar (WI) Common
Stock pursuant to the First Step Merger (except with respect to cash
received in lieu of a fractional share interest in Firstar (WI) Common
Stock); and
(iv) No gain or loss will be recognized by the stockholders of Star
who exchange their Star Common Stock solely for Firstar (WI) Common
Stock pursuant to the Second Step Merger.
In rendering such opinion, counsel may require and rely upon
representations contained in certificates of officers of Firstar, Firstar (WI),
Star and others.
(f) The shares of Firstar (WI) Common Stock which shall be issued to
the holders of Star Common Stock and Firstar Common Stock (and, where
applicable, Firstar (WI) Stock Options) upon consummation of the Merger shall
have been authorized for listing on the NYSE, subject to official notice of
issuance.
(g) Star and Firstar shall have received letters, in form and
substance reasonably satisfactory to each, from Xxxxxx Xxxxxxxx LLP and KPMG
Peat Marwick LLP, respectively, dated the date of the Proxy Statement and
confirmed in writing at the Effective Time, stating that the First Step Merger
and Second Step Merger, taken together, will qualify as a "pooling of interests"
transaction under Opinion 16 of the Accounting Principles Board, the
interpretive releases issued pursuant thereto and the pronouncements of the SEC
thereon.
Section 7.2. CONDITIONS TO OBLIGATIONS OF FIRSTAR TO EFFECT THE
MERGER. The obligations of Firstar to effect the Merger shall be subject to the
fulfillment or waiver by Firstar at or prior to the First Effective Time of the
following additional conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Star set forth in Article IV of this Agreement shall be true and correct,
subject to the standard of Section 4.2, as of the date of this Agreement and as
of the Closing Date (as though made on and as of the Closing Date except (i) to
the extent such representations and warranties are by their express provisions
made as of a specified date or period and (ii) for the effect of transactions
con
33
templated by this Agreement) and Firstar shall have received a certificate of
the chairman or president of Star, on behalf of Star, to that effect.
(b) PERFORMANCE OF OBLIGATIONS. Star shall have performed, in all
material respects, all obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and Firstar shall have received a
certificate of the chairman or president of Star, on behalf of Star, to that
effect.
Section 7.3. CONDITIONS TO OBLIGATIONS OF STAR TO EFFECT THE MERGER.
The obligations of Star to effect the Merger shall be subject to the fulfillment
or waiver by Star at or prior to the First Effective Time of the following
additional conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Firstar set forth in Article IV of this Agreement shall be true and correct,
subject to the standard of Section 4.2, as of the date of this Agreement and as
of the Closing Date (as though made on and as of the Closing Date except (i) to
the extent such representations and warranties are by their express provisions
made as of a specific date or period and (ii) for the effect of transactions
contemplated by this Agreement) and Star shall have received a certificate of
the chairman or president of Firstar, on behalf of Firstar, to that effect.
(b) PERFORMANCE OF OBLIGATIONS. Firstar shall have performed, in all
material respects, all obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and Star shall have received a
certificate of the chairman or president of Firstar, on behalf of Firstar, to
that effect.
(c) CONSUMMATION OF THE FIRST STEP MERGER. The First Effective Time
shall have occurred and the First Step Merger shall have been consummated.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1. TERMINATION. This Agreement may be terminated at any time
prior to the First Effective Time, whether before or after any requisite
stockholder approval:
(a) by mutual written consent by the Board of Directors of Star, the
Board of Directors of Firstar, the Board of Directors of Merger Sub and the
Board of Directors of Firstar (WI);
(b) by the Board of Directors of Star or the Board of Directors of
Firstar at any time after the date that is twelve months after the date of this
Agreement if the Merger shall not theretofore have been consummated (provided
that the terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein which has resulted in the
delay in performance of this Agreement);
34
(c) by the Board of Directors of Star or the Board of Directors of
Firstar if (i) the Board has denied approval of the Merger and such denial has
become final and nonappealable, (ii) stockholders of Firstar shall not have
approved the Merger and the other actions contemplated by this Agreement at the
Meeting provided that Firstar has not breached its obligation under Section 6.3
or (iii) stockholders of Star shall not have approved the Merger and the other
transactions contemplated by this Agreement at the Meeting provided that Star
has not breached its obligation under Section 6.3;
(d) by the Board of Directors of Star in the event of a breach by
Firstar of any representation or warranty (subject to the standard of Section
4.2), or any covenant or other agreement (in any material respect), contained in
this Agreement which breach is not cured within 90 days after written notice
thereof to Firstar by Star; or
(e) by the Board of Directors of Firstar in the event of a breach by
Star of any representation or warranty (subject to the standard of Section 4.2),
or any covenant or other agreement (in any material respect), contained in this
Agreement which breach is not cured within 90 days after written notice thereof
is given to Star by Firstar.
Section 8.2. EFFECT OF TERMINATION. In the event of termination of
this Agreement pursuant to this Article VIII, this Agreement shall forthwith
become void and there shall be no liability or obligation of any nature
whatsoever hereunder, or in connection with the transactions contemplated
hereby, on the part of Star, Firstar or their respective Subsidiaries or their
respective officers or directors except (i) as set forth in the second sentence
of Section 6.1 and in Section 4.3(j), 6.6, 8.2 and 9.3, (ii) that termination
will not relieve a breaching party from liability for any willful breach of this
Agreement giving rise to such termination and (iii) each of the Option
Agreements shall be governed by its own terms as to termination.
Section 8.3. AMENDMENT. This Agreement and the Schedules hereto may be
amended by the parties hereto, by action taken by or on behalf of their
respective Boards of Directors, at any time before or after approval of this
Agreement by the stockholders of Firstar, Star, Merger Sub and Firstar (WI);
PROVIDED, HOWEVER, that after any such approval no such amendment which under
applicable law requires further stockholder approval may be made without such
stockholder approval. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of Star, Firstar, Merger Sub and Firstar
(WI).
Section 8.4. SEVERABILITY. Any term, provision, covenant or
restriction contained in this Agreement held by a court or a Regulatory
Authority of competent jurisdiction or the Board to be invalid, void or
unenforceable shall be ineffective to the extent of such invalidity, voidness or
unenforceability, but neither the remaining terms, provisions, covenants or
restrictions contained in this Agreement nor the validity or enforceability
thereof in any other jurisdiction shall be affected or impaired thereby. Any
term, provision, covenant or restriction contained in this Agreement that is so
found to be so broad as to be unenforceable shall be interpreted to be as broad
as is enforceable.
35
Section 8.5. WAIVER. Any term, condition or provision of this
Agreement may be waived in writing at any time by the party which is, or whose
stockholders are, entitled to the benefits thereof.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1. CLOSING. The closing (the "Closing") of the Merger shall
take place at 10:00 a.m., local time, on the date that the Effective Time (as
defined in Section 2.2) occurs, or at such other time, and at such place, as
Star and Firstar shall agree (the "Closing Date").
Section 9.2. NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. No investigation by the parties hereto made heretofore or hereafter
shall affect the representations and warranties of the parties which are
contained herein and each such representation and warranty shall survive such
investigation. Except as set forth below in this Section 9.2, all
representations, warranties and agreements in this Agreement of Star and Firstar
or in any instrument delivered by Star or Firstar pursuant to or in connection
with this Agreement shall expire at the Effective Time or upon termination of
this Agreement in accordance with its terms or, in the case of any other such
instrument, in accordance with the terms of such instrument; provided that, in
the event of consummation of the Merger, the covenants and agreements contained
in or referred to in Sections 6.6 and 6.10 and those covenants and agreements
contained herein which by their terms apply in whole or in part after the
Effective Time shall survive the Effective Time.
Section 9.3. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to be duly received (i) on the date
given if delivered personally, (ii) upon confirmation of receipt, if by
facsimile transmission, (iii) on the date received if mailed by registered or
certified mail (return receipt requested), or (iv) on the business date after
being delivered to a reputable overnight delivery service, if by such service,
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(i) if to Star:
Star Banc Corporation
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
ATTN: Xxxxx Xxxxxxx
Telecopier: (000) 000-0000
Copies to:
Xxxxx X. Xxxxxxxxx
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
36
(ii) if to Firstar, Firstar (WI) or Merger Sub:
Firstar Corporation
Firstar Center
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
ATTN: Xxxxxx X. Xxxxxxx, III
Telecopier: (000) 000-0000
Copies to:
Xxxx X. Xxxxxxxx
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Xxxxx X. Xxxxxxx, Xx.
Xxxxx & Xxxxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Telecopier: (000) 000-0000
Section 9.4. INTERPRETATION. When a reference is made in this
Agreement to Sections, Exhibits or Schedules, such reference shall be to a
Section of or Exhibit or Schedule to this Agreement, unless otherwise indicated.
The table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include," "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation". No provision of this Agreement shall be construed to require
Firstar, Star, Merger Sub, Firstar (WI) or any of their respective Subsidiaries
or affiliates to take or fail to take any action, including, without limitation,
the disclosure or non-disclosure by either party of any information to its
stockholders, which would (or its failure to have been taken would) reasonably
be expected to violate any applicable law, legal duty, rule or regulation.
Section 9.5. MISCELLANEOUS. This Agreement (including the Disclosure
Schedules and Schedules and other written documents referred to herein or
provided hereunder) (i) constitutes the entire agreement and supersedes all
other prior agreements and understandings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof, other than
any confidentiality agreement between the parties hereto, (ii) except with
respect to Section 6.10 is not intended to confer upon any person not a party
hereto any rights or remedies hereunder, (iii) shall not be assigned by
operation of law or otherwise, (iv) may be executed in counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each of the parities and delivered to the
other parties, it being understood that all parties need not sign the same
counterparts, and (v) shall be governed in all respects by the laws of the State
of New York, except as otherwise specifically
37
provided herein or required by the OGCL or the WBCL. This Agreement may be
delivered by facsimile. Subject to the preceding clause (iii), this Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns.
38
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
signed as of the date first written above.
STAR BANC CORPORATION
By:/s/ XXXXX X. XXXXXXXXXX
Name: Xxxxx X. Xxxxxxxxxx
Title: Chairman of the Board, President and
Chief Executive Officer
FIRSTAR CORPORATION
By:/s/ XXXXX X. XXXXXXXXXXX
Name: Xxxxx X. Xxxxxxxxxxx
Title: Chairman and Chief Executive Officer
FIRSTAR (WI) CORPORATION
By:/s/ XXXXX X. XXXXXXXXXXX
Name: Xxxxx X. Xxxxxxxxxxx
Title: Chairman and Chief Executive Officer
FIRSTAR MERGER CORPORATION
By:/s/ XXXXX X. XXXXXXXXXXX
Name: Xxxxx X. Xxxxxxxxxxx
Title: Chairman and Chief Executive Officer
39
EXHIBIT 6.18
ARTICLE I
THE FIRST STEP MERGER
Section 1.1. THE FIRST STEP MERGER. Subject to the terms and
conditions of this Agreement, Firstar shall be merged with and into Firstar (WI)
in accordance with the Wisconsin Business Corporation Law (the "WBCL") and the
separate corporate existence of Firstar shall cease. Firstar (WI) shall be the
surviving corporation of the First Step Merger, shall continue its corporate
existence under the name "Firstar Corporation" and shall continue to be governed
by the laws of the State of Wisconsin.
Section 1.2. FIRST EFFECTIVE TIME. The First Step Merger shall become
effective on the date and at the time (the "First Effective Time") specified in
the appropriate documents in respect of the First Step Merger which are filed
with the Department of Financial Institutions of the State of Wisconsin in such
form as required by, and in accordance with, the relevant provisions of the
WBCL. The First Effective Time shall occur on the same date and immediately
prior to the Effective Time as specified in Section 2.2.
Section 1.3. EFFECTS OF THE FIRST STEP MERGER. At and after the First
Effective Time, the First Step Merger shall have the effects set forth in
Section 180.1107 of the WBCL.
Section 1.4. CONVERSION OF SECURITIES. (a) At the First Effective
Time, by virtue of the First Step Merger and without any action on the part of
Star, Firstar, Firstar (WI) or the holders of any capital stock of Firstar, Star
or Firstar (WI), each share of the common stock, par value $1.25, of Firstar
("Firstar Common Stock") issued and outstanding immediately prior to the First
Effective Time shall cease to be outstanding and (other than any shares of
Firstar Common Stock held by Firstar or any of its wholly owned Subsidiaries (as
defined herein), except for Trust Account Shares (as defined herein) and DPC
Shares (as defined herein)), shall be converted into the right to receive 0.76
(the "Exchange Ratio") shares of Firstar (WI) Common Stock (as defined herein).
(b) All of the shares of Firstar Common Stock converted into the right
to receive Firstar (WI) Common Stock pursuant to this Article I shall no longer
be outstanding and shall automatically be cancelled and shall cease to exist as
of the First Effective Time, and each certificate (each a "Firstar Common
Certificate") previously representing any such shares of Firstar Common Stock
shall thereafter represent only the right to receive (i) a certificate
representing the number of whole shares of Firstar (WI) Common Stock and (ii)
cash in lieu of any fractional shares otherwise issuable pursuant to Section
1.4(a), in accordance with Section 3.2. Firstar Common Certificates previously
representing shares of Firstar Common Stock shall be exchanged for certificates
representing whole shares of Firstar (WI) Common Stock and cash in lieu of
fractional shares issued in consideration therefor upon the surrender of such
Firstar Common Certificates in accordance with Section 3.1 without any interest
thereon.
1
(c) At the First Effective Time, all shares of Firstar Common Stock
that are owned by Firstar as treasury stock and all shares of Firstar Common
Stock that are owned, directly or indirectly, by Firstar or any of its wholly
owned Subsidiaries (other than Trust Account Shares and DPC Shares) shall be
cancelled and shall cease to exist and no stock of Firstar (WI) or other
consideration shall be delivered in exchange therefor.
Section 1.5. FIRSTAR (WI) COMMON STOCK. At and after the First
Effective Time, each share of Firstar (WI) Common Stock issued and outstanding
immediately prior to the First Effective Time shall be cancelled and retired and
shall resume the status of authorized and unissued shares of Firstar (WI) Common
Stock, and no shares of Firstar (WI) Common Stock or other securities of Firstar
(WI) shall be issued in respect thereof.
Section 1.6. OPTIONS. Firstar shall take action to amend the Firstar
Stock Plans (as defined herein) so that, at the Effective Time, each option
granted by Firstar to purchase shares of Firstar Common Stock which is
outstanding and unexercised immediately prior thereto shall cease to represent a
right to acquire shares of Firstar Common Stock and shall be converted
automatically into an option to purchase shares of Firstar (WI) Common Stock in
an amount and at an exercise price determined as follows (and otherwise subject
to the terms of the appropriate Firstar Benefit Plan (as defined herein)
pursuant to which such options have been granted (such plans collectively the
"Firstar Stock Plans") and the agreements evidencing grants thereunder): (i) the
number of shares of Firstar (WI) Common Stock to be subject to the new option
shall be equal to the product of the number of shares of Firstar Common Stock
subject to the original option and the Exchange Ratio, provided that any
fractional shares of Firstar (WI) Common Stock resulting from such
multiplication shall be rounded down to the nearest whole share and (ii) the
exercise price per share of Firstar (WI) Common Stock under the new option shall
be equal to the exercise price per share of Firstar Common Stock under the
original option divided by the Exchange Ratio, provided that such exercise price
shall be rounded down to the nearest whole cent. The adjustment provided herein
with respect to any options which are "incentive stock options" (as defined in
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code")) shall
be and is intended to be effected in a manner which is consistent with Section
424(a) of the Code. The duration and other terms of the new option shall be the
same as the original option except that all references to Firstar shall be
deemed to be references to Firstar (WI).
Section 1.7. ARTICLES OF INCORPORATION. At the First Effective Time,
the Articles of Incorporation of Firstar (WI) as in effect immediately prior to
the First Effective Time shall continue to be the Articles of Incorporation of
Firstar (WI) except that the name of the corporation shall be changed to
"Firstar Corporation," until thereafter amended in accordance with applicable
law.
Section 1.8. BY-LAWS. At the First Effective Time, the By-Laws of
Firstar (WI) as in effect immediately prior to the First Effective Time shall
continue to be the By-Laws of the Surviving Corporation, until thereafter
amended in accordance with applicable law.
2
ARTICLE II
THE SECOND STEP MERGER
Section 2.1. THE SECOND STEP MERGER. Subject to the terms and
conditions of this Agreement, in accordance with the Ohio General Corporation
Law (the "OGCL") and the WBCL, at the Effective Time Star shall merge with and
into Firstar (WI). Firstar (WI) shall be the surviving corporation in the Second
Step Merger and shall continue to be governed by the laws of the State of
Wisconsin. Upon consummation of the Second Step Merger, the separate corporate
existence of Star shall terminate. The parties shall take all necessary action
such that, upon consummation of the Second Step Merger, Firstar (WI) shall
continue its corporate existence under the name "Firstar Corporation."
Section 2.2. EFFECTIVE TIME. The Second Step Merger shall become
effective as set forth in the appropriate documents (the "Certificate of
Merger") in respect of the Second Step Merger which shall be filed with the
Department of Financial Institutions of the State of Wisconsin and the Secretary
of State of the State of Ohio on the Closing Date (as defined herein). The term
"Effective Time" shall be the date and time when the Second Step Merger becomes
effective, as set forth in the Certificate of Merger. Subject to the terms and
conditions of this Agreement, the Effective Time shall occur on a date to be
specified by the parties, which shall be the first day which is (i) the last
business day of a month and (ii) at least two business days after satisfaction
or waiver (subject to applicable law) of the conditions (excluding conditions
that, by their terms, cannot be satisfied until the Closing Date) set forth in
Article VII, unless another time or date is agreed to in writing by the parties
hereto.
Section 2.3. EFFECTS OF THE SECOND STEP MERGER. At and after the
Effective Time, the Second Step Merger shall have the effects set forth in
Sections 180.1106 and 180.1107 of the WBCL and Section 1701.82 of the OGCL.
Section 2.4. CONVERSION OF STAR COMMON STOCK. (a) At the Effective
Time, by virtue of the Second Step Merger and without any action on the part of
Star, Firstar (WI) or the holders of capital stock of Star or Firstar (WI),
each share of the common stock, par value $5.00 per share, of Star (the "Star
Common Stock") issued and outstanding immediately prior to the Effective Time
(other than Dissenting Shares (as defined herein) and shares of Star Common
Stock held in Star's treasury or directly or indirectly by Star or any of its
wholly owned Subsidiaries or Firstar (WI) (except for Trust Account Shares and
DPC Shares)) shall be converted into the right to receive one share (the "Second
Merger Exchange Ratio") of the common stock, par value $0.01, of Firstar (WI)
(the "Firstar (WI) Common Stock").
(b) All of the shares of Star Common Stock converted into the right to
receive Firstar (WI) Common Stock pursuant to this Article II shall no longer be
outstanding and shall automatically be cancelled and shall cease to exist as of
the Effective Time, and each certificate (each a "Star Common Certificate")
previously representing any such shares of Star Common Stock shall thereafter
represent only the right to receive (i) a certificate representing the number of
whole shares of Firstar (WI) Common Stock and (ii) cash in lieu of any
fractional shares otherwise issuable pursuant to Section 2.4(a), in accordance
with Section 3.2. Star Common Cer-
3
tificates previously representing shares of Star Common Stock shall be exchanged
for certificates representing whole shares of Firstar (WI) Common Stock and cash
in lieu of fractional shares issued in consideration therefor upon the surrender
of such Star Common Certificates in accordance with Section 3.1 without any
interest thereon.
(c) At the Effective Time, all shares of Star Common Stock that are
owned by Star as treasury stock and all shares of Star Common Stock that are
owned, directly or indirectly, by Star or any of its wholly owned Subsidiaries
or Firstar (WI)(other than shares of Star Common Stock held, directly or
indirectly, in trust accounts, managed accounts and the like or otherwise held
in a fiduciary capacity that are beneficially owned by third parties (any such
shares, and shares of Firstar Common Stock which are similarly held, whether
held directly or indirectly by Star, Firstar (WI) or Firstar, as the case may
be, or any of their respective Subsidiaries being referred to herein as "Trust
Account Shares") and other than any shares of Star Common Stock held by Star or
Firstar or any of their respective Subsidiaries or Firstar (WI) in respect of a
debt previously contracted (any such shares of Star Common Stock and shares of
Firstar Common Stock which are similarly held, whether held directly or
indirectly by Star, Firstar (WI) or Firstar, as the case may be, or any of their
respective Subsidiaries, being referred to herein as "DPC Shares")) shall be
cancelled and shall cease to exist and no stock of Firstar (WI) or other
consideration shall be delivered in exchange therefor.
Section 2.5. DISSENTING SHARES. Notwithstanding anything in this
Agreement to the contrary, shares of Star Common Stock which are outstanding
immediately prior to the Effective Time and with respect to which dissenters'
rights shall have been properly demanded in accordance with Section 1701.85 of
the OGCL ("Dissenting Shares") shall not be converted into the right to receive
Firstar (WI) Common Stock; instead, the holders thereof shall be entitled to
payment of the appraised value of such Dissenting Shares in accordance with the
provisions of Section 1701.85 of the OGCL; provided, however, that (i) if any
holder of Dissenting Shares shall subsequently deliver a written withdrawal of
his demand for appraisal of such shares, or (ii) if any holder fails to
establish his entitlement to dissenters' rights as provided in Section 1701.85
of the OGCL, such holder or holders (as the case may be) shall forfeit the right
to appraisal of such shares of Star Common Stock and each of such shares shall
thereupon be deemed to have been converted into the right to receive, and to
have become exchangeable for, as of the Effective Time, Firstar (WI) Common
Stock, as provided in Section 2.4(a) hereof.
Section 2.6. OPTIONS. Star shall take action to amend the Star Stock
Plans (as defined herein) so that, at the First Effective Time, each option
granted by Star to purchase shares of Star Common Stock which is outstanding and
unexercised immediately prior thereto shall cease to represent a right to
acquire shares of Star Common Stock and shall be converted automatically into an
option to purchase a number of shares of Firstar (WI) Common Stock equal to the
number of shares of Star Common Stock subject to such option immediately prior
to the First Effective Time at an exercise price per share of Firstar (WI)
Common Stock equal to the exercise price per share of Star Common Stock in
effect immediately prior to the Effective Time and otherwise subject to the
terms of the appropriate Star Benefit Plans pursuant to which such options have
been granted (such plans collectively the "Star Stock Plans") and the agreements
evidencing grants thereunder. The adjustment provided herein with respect to any
options which are
4
"incentive stock options" (as defined in Section 422 of the Code) shall be and
is intended to be effected in a manner which is consistent with Section 424(a)
of the Code. The duration and other terms of the new option shall be the same as
the original option except that all references to Star shall be deemed to be
references to Firstar (WI).
Section 2.7. FIRSTAR (WI) COMMON STOCK. At and after the Effective
Time, each share of Firstar (WI) Common Stock issued and outstanding immediately
prior to the Effective Time shall remain an issued and outstanding share of
common stock of the Surviving Corporation and shall not be affected by the
Second Step Merger.
Section 2.8. ARTICLES OF INCORPORATION. At the Effective Time, the
Articles of Incorporation of Firstar (WI) as in effect immediately prior to the
Effective Time shall continue to be the Articles of Incorporation of the
Surviving Corporation, until thereafter amended in accordance with applicable
law.
Section 2.9. BY-LAWS. At the Effective Time, the By-Laws of Firstar
(WI) as in effect immediately prior to the Effective Time shall continue to be
the By-Laws of the Surviving Corporation, until thereafter amended in accordance
with applicable law.
Section 2.10. MANAGEMENT. (a) From and after the Effective Time, Xxxxx
X. Xxxxxxxxxxx shall be Chairman of the Board of the Surviving Corporation (and
shall continue in such position until he becomes 62 years old) and Xxxxx X.
Xxxxxxxxxx shall be the President and Chief Executive Officer of the Surviving
Corporation, and Xx. Xxxxxxxxxx shall be designated to succeed Xx. Xxxxxxxxxxx
as Chairman.
Section 2.11. BOARD OF DIRECTORS. (a) From and after the Effective
Time, until duly changed in compliance with applicable law and the Articles of
Incorporation and By-Laws of the Surviving Corporation, the Board of Directors
of the Surviving Corporation shall be the Board of Directors of Firstar (WI) as
specified in Section 6.20(a). The majority of the meetings of the Board of
Directors of the Surviving Corporation in any calendar year shall be held in
Milwaukee, Wisconsin.
(b) Firstar shall cause all requisite action to be taken so that, at
the Effective Time, directors of the Surviving Corporation elected pursuant to
Section 6.20(a) at the designation of Star and Firstar shall be represented in
proportion to the aggregate representation set forth in Section 6.20(a) on all
committees of the Board of Directors of the Surviving Corporation, except that
seven designees of Star and five designees of Firstar shall be included on the
Executive Committee.
Section 2.12. HEADQUARTERS OF SURVIVING CORPORATION. After the
Effective Time, the location of the headquarters and principal executive offices
of the Surviving Corporation shall be that of the headquarters and principal
executive offices of Firstar as of the date of this Agreement located in
Milwaukee, Wisconsin. After the Effective Time, the banking Subsidiaries of the
Surviving Corporation shall be merged into a single bank, the name of which
shall be Firstar and the headquarters of which shall be in Milwaukee, Wisconsin.
5
Section 2.13. TAX AND ACCOUNTING CONSEQUENCES. It is intended that the
First Step Merger and the Second Step Merger shall each constitute a
reorganization within the meaning of Section 368(a) of the Code, that this
Agreement shall constitute a "plan of reorganization" for the purposes of
Sections 354 and 361 of the Code and that the Merger be accounted for as a
"pooling of interests" under generally accepted accounting principles ("GAAP").
6
