EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
by and between
TCF FINANCIAL CORPORATION
and
STANDARD FINANCIAL, INC.
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March 16, 1997
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TABLE OF CONTENTS
Page
ARTICLE 1 - THE MERGER . . . . . . . . . . . . . . . 2
1.1 The Merger . . . . . . . . . . . . . . . 2
1.2 Effects of the Merger . . . . . . . . . . 3
1.3 Effect on Outstanding Shares of New
Bank Common Stock and Stock Plans . . . . 3
1.4 Merger Consideration Election . . . . . . 6
1.5 No Fractional Shares . . . . . . . . . . 10
1.6 Procedure for Exchange of New Bank
Common Stock . . . . . . . . . . . . . . 10
1.7 Dissenting Shares . . . . . . . . . . . . 12
1.8 Effect on Common Stock of Merger Sub . . 13
1.9 Corporate Matters . . . . . . . . . . . . 13
1.10 Tax Consequences . . . . . . . . . . . . 14
1.11 Alternative Structure . . . . . . . . . . 14
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES OF TCF . . 14
2.1 Organization and Qualification . . . . . 14
2.2 Authority Relative to this Agreement;
Non-Contravention . . . . . . . . . . . . 15
2.3 Capitalization . . . . . . . . . . . . . 17
2.4 1934 Act Reports . . . . . . . . . . . . 17
2.5 Financial Statements . . . . . . . . . . 18
2.6 Subsidiaries . . . . . . . . . . . . . . 19
2.7 Absence of Undisclosed Liabilities . . . 19
2.8 No Material Adverse Changes . . . . . . . 20
2.9 Absence of Certain Developments . . . . . 20
2.10 Litigation . . . . . . . . . . . . . . . 21
2.11 No Brokers or Finders . . . . . . . . . . 22
2.12 Compliance with Laws; Permits . . . . . . 22
2.13 Prospectus/Proxy Statement . . . . . . . 23
2.14 Validity of TCF Common Stock . . . . . . 23
2.15 Reports and Filings . . . . . . . . . . . 24
2.16 Employee Benefit Plans . . . . . . . . . 24
2.17 Properties . . . . . . . . . . . . . . . 24
2.18 Interest Rate Risk Management
Instruments . . . . . . . . . . . . . . . 25
2.19 Fairness Opinion . . . . . . . . . . . . 25
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF STANDARD
3.1 Organization and Qualification . . . . . 25
3.2 Authority Relative to this Agreement;
Non-Contravention . . . . . . . . . . . . 26
3.3 Capitalization . . . . . . . . . . . . . 27
3.4 1934 Act Reports and Regulatory
Reports . . . . . . . . . . . . . . . . . 27
3.5 Financial Statements . . . . . . . . . . 28
3.6 Loans . . . . . . . . . . . . . . . . . . 29
3.7 Subsidiaries . . . . . . . . . . . . . . 30
3.8 Absence of Undisclosed Liabilities . . . 30
3.9 No Material Adverse Changes . . . . . . . 31
3.10 Absence of Certain Developments . . . . . 31
3.11 Properties . . . . . . . . . . . . . . . 33
3.12 Tax Matters . . . . . . . . . . . . . . . 35
3.13 Contracts and Commitments . . . . . . . . 36
3.14 Litigation . . . . . . . . . . . . . . . 36
3.15 No Brokers or Finders . . . . . . . . . . 36
3.16 Employee Benefit Plans . . . . . . . . . 37
3.17 Insurance . . . . . . . . . . . . . . . . 41
3.18 Affiliate Transactions . . . . . . . . . 41
3.19 Compliance with Laws; Permits . . . . . . 42
3.20 Administration of Fiduciary Accounts . . 42
3.21 Prospectus/Proxy Statement . . . . . . . 43
3.22 Interest Rate Risk Management
Instruments . . . . . . . . . . . . . . 43
3.23 State Takeover Laws; Shareholder
Rights Plan . . . . . . . . . . . . . . . 43
3.24 Fairness Opinion . . . . . . . . . . . . 43
ARTICLE 4 - CONDUCT OF BUSINESS PENDING THE MERGER . 44
4.1 Conduct of Business by Standard and the
Standard Subsidiaries . . . . . . . . . . 44
4.2 Conduct of Business by TCF . . . . . . . 48
ARTICLE 5 - ADDITIONAL COVENANTS AND AGREEMENTS . . . 50
5.1 Filings and Approvals . . . . . . . . . . 50
5.2 Certain Loans and Related Matters . . . . 50
5.3 Monthly Financial Statements . . . . . . 51
5.4 Expenses . . . . . . . . . . . . . . . . 51
5.5 No Negotiations, etc. . . . . . . . . . . 51
5.6 Notification of Certain Matters . . . . . 52
5.7 Access to Information; Confidentiality. . 53
5.8 Filing of Tax Returns and Adjustments . . 54
5.9 Registration Statement . . . . . . . . . 55
5.10 Affiliate Letters . . . . . . . . . . . . 57
5.11 Establishment of Accruals . . . . . . . . 57
5.12 Employee Benefit Plans . . . . . . . . . 58
5.13 Tax Treatment . . . . . . . . . . . . . . 59
5.14 Press Releases . . . . . . . . . . . . . 59
5.15 Indemnification and Insurance . . . . . . 59
5.16 TCF SEC Reports . . . . . . . . . . . . . 61
5.17 Securities Reports . . . . . . . . . . . 61
5.18 Stock Exchange Listing . . . . . . . . . 61
5.19 Shareholder Approval . . . . . . . . . . 61
5.20 Failure to Fulfill Conditions . . . . . . 62
5.21 Standard Severance/Change in Control . . 62
5.22 Headquarters of Resulting Institution . . 62
5.23 Conversion/Reincorporation . . . . . . . 62
5.24 Private Letter Ruling . . . . . . . . . . 62
ARTICLE 6 - CONDITIONS . . . . . . . . . . . . . . . 63
6.1 Conditions to Obligations of Each
Party . . . . . . . . . . . . . . . . . . 63
6.2 Additional Conditions to Obligation of
Standard . . . . . . . . . . . . . . . . 64
6.3 Additional Conditions to Obligation of
TCF. . . . . . . . . . . . . . . . . . . 67
ARTICLE 7 - TERMINATION, AMENDMENT AND WAIVER . . . . 71
7.1 Termination . . . . . . . . . . . . . . . 71
7.2 Effect of Termination . . . . . . . . . . 73
7.3 Amendment . . . . . . . . . . . . . . . . 74
7.4 Waiver . . . . . . . . . . . . . . . . . 74
ARTICLE 8 - GENERAL PROVISIONS . . . . . . . . . . . 75
8.1 Public Statements . . . . . . . . . . . . 75
8.2 Notices . . . . . . . . . . . . . . . . . 75
8.3 Interpretation . . . . . . . . . . . . . 76
8.4 Severability . . . . . . . . . . . . . . 76
8.5 Miscellaneous . . . . . . . . . . . . . . 77
8.6 Survival of Representations, Warranties
and Covenants . . . . . . . . . . . . . . 77
8.7 Schedules . . . . . . . . . . . . . . . . 77
8.8 Descriptive Headings . . . . . . . . . . 77
8.9 Parties in Interest . . . . . . . . . . . 77
8.10 Counterparts . . . . . . . . . . . . . . 77
EXHIBITS:
A Form of Standard Affiliate Letter
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this
"Agreement") is made and entered into as of March 16,
1997, by and between TCF FINANCIAL CORPORATION, a
Delaware corporation ("TCF"), and STANDARD FINANCIAL,
INC., a Delaware corporation ("Standard").
W I T N E S S E T H:
WHEREAS, Standard Federal Bank for savings, a
federal savings bank (the "Bank"), is a wholly-owned
first tier subsidiary of Standard;
WHEREAS, the Boards of Directors of TCF and Standard
have determined that it is in the best interests of TCF
and Standard and their respective shareholders to
consummate a strategic combination of the companies;
WHEREAS, the strategic combination contemplated by
this Agreement will be effected as follows: first,
Standard will cause a new interim savings association to
be formed ("New Bank"); second, Standard will contribute
all of its assets to New Bank and New Bank will assume
all of Standard's liabilities and obligations (including
Standard's obligations under this Agreement); third,
Standard will dissolve and as a result thereof,
certificates representing the shares of common stock, par
value $.01 per share, of Standard ("Standard Common
Stock") will be converted into the right to receive an
equal number of shares of common stock, par value $.01
per share, of New Bank ("New Bank Common Stock") (the
transactions referred to in clauses first through third
hereof is herein referred to as the
"Conversion/Reincorporation" and, after the
Conversion/Reincorporation, the term "Standard" as used
in this Agreement shall also mean New Bank); fourth, New
Bank will merge with and into a wholly-owned bank
subsidiary of TCF ("Merger Sub") as provided in this
Agreement (the "Merger"); and fifth, Bank will,
immediately after the Merger, be merged (the "Subsequent
Merger") with and into Merger Sub which shall be the
surviving institution (the "Resulting Institution");
WHEREAS, TCF and Standard desire that the
Conversion/Reincorporation, the Merger and Subsequent
Merger be made on the terms and subject to the conditions
set forth in this Agreement and qualify as a
reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the
"Code").
NOW, THEREFORE, in consideration of the
representations, warranties and covenants contained
herein, the parties hereto agree as follows:
ARTICLE 1
THE MERGER
1.1 The Merger.
(a) Subject to the terms and conditions
of this Agreement, New Bank shall, at the Effective Time
(as defined herein), merge with and into Merger Sub, and
the separate existence of New Bank shall cease. Merger
Sub shall be the resulting institution in the Merger and
shall continue its corporate existence. Immediately
after the Merger, Bank shall be merged into Merger Sub,
and Merger Sub will be the Resulting Institution of the
Subsequent Merger.
(b) The Merger and the Subsequent Merger
will be effected pursuant to the provisions of, and with
the effect provided in, the applicable provisions of the
rules and regulations of the offices of the Comptroller
of the Currency (the "OCC"), the Office of Thrift
Supervision ("OTS") and any other applicable authority,
as may be applicable (such applicable regulatory
authority is hereinafter referred to as the "Bank
Authority"), including the execution by Merger Sub and
New Bank of articles of merger in the form required by
the Bank Authority setting forth the terms of this
Agreement (the "Articles of Merger") and the filing
thereof with the Bank Authority.
(c) Subject to the provisions of Articles
6 and 7 hereof, the closing of the transactions
contemplated hereby shall take place at such location, on
such date, and at such time as TCF and Standard mutually
agree, at the earliest practicable time after the
expiration of all applicable waiting periods, in
connection with approvals of governmental authorities and
the satisfaction or waiver of all conditions to the
Merger, but in no event later than ten business days
after all such waiting periods have expired and all such
conditions have been satisfied or waived, or on such
other date as the parties hereto may mutually agree upon.
On the closing date, to effect the Merger, the parties
hereto will cause the Articles of Merger to be executed
and filed with the Bank Authority and the Merger shall be
effective upon the filing of the Articles of Merger with
the Bank Authority in accordance with the rules and
regulations of the Bank Authority (the "Effective Time").
The term "Effective Date" shall mean the day on which the
Merger becomes effective.
1.2 Effects of the Merger. At the Effective
Time, the Resulting Institution shall thereupon and
thereafter (a) be responsible and liable for all the
liabilities, debts, penalties and obligations of each of
Merger Sub and New Bank, and (b) possess all the rights,
privileges, immunities and franchises, of a public as
well as of a private nature, of each of Merger Sub and
New Bank; all property, real, personal and mixed, and all
debts due on any account, including subscriptions to
shares and all causes in action, and all and every other
interest, of or belonging to or due to each of Merger Sub
and New Bank shall be taken and deemed to be transferred
to and vested in the Resulting Institution without
further act or deed; and the title to any real estate or
any interest therein, vested in Merger Sub and New Bank
shall not revert or be in any way impaired by reason of
the Merger.
1.3 Effect on Outstanding Shares of New Bank
Common Stock and Stock Plans. To effectuate the Merger,
and subject to the terms and conditions of this
Agreement, at the Effective Time:
(a) New Bank Common Stock. Each issued
and outstanding share of New Bank Common Stock on the
Effective Date (other than the following shares of New
Bank Common Stock which shall be cancelled, retired and
cease to exist, and no exchange or payment shall be made
with respect thereto: (i) Dissenting Shares (as defined
in Section 1.7), if any, (ii) shares of New Bank Common
Stock held as treasury stock of New Bank, and (iii)
shares of New Bank Common Stock held directly or
indirectly by TCF except for such shares held in a
fiduciary capacity or in satisfaction of a debt
previously contracted), shall be converted into and
exchangeable for the Merger Consideration. The aggregate
number of shares of New Bank Common Stock entitled to
receive the Merger Consideration is referred to as the
"Outstanding New Bank Shares." The "Merger
Consideration" shall consist of the amount of cash and/or
shares of TCF Common Stock (valued at the Average TCF
Stock Price (as defined below)) which, when combined,
equals the value per share set forth in the chart below
opposite the appropriate Average TCF Stock Price, as may
be determined not later than the Effective Time pursuant
to the provisions of this Section 1.3(a). Such amount
shall be allocated among the holders of New Bank Common
Stock in accordance with Section 1.4. The amount of
Merger Consideration payable with respect to each share
of New Bank Common Stock entitled to Merger Consideration
is referred to as the "Merger Consideration Value Per
Share." The "Merger Consideration Value Per Share" shall
be determined as follows:
Average TCF Stock Price Merger Consideration Value Per Share
----------------------- ------------------------------------
Greater than $54.00 $12.50 + 0.24643 x Average TCF
Stock Price
Greater than $47.75 and $25.81
less than or equal to
$54.00
Greater than or equal to $12.50 + 0.27869 x Average TCF
$43.75 and less than or Stock Price
equal to $47.75
Greater than or equal to $24.69
$37.50 and less than
$43.75
Less than $37.50 $12.50 + 0.32514 x Average TCF
Stock Price
The term "Aggregate Cash" shall mean the sum of: (i)
the number of Dissenting Shares multiplied by the Merger
Consideration Value Per Share (the "Dissenting Shares
Cash"), (ii) the amount payable with respect to the Stock
Options outstanding at the Effective Time pursuant to
Section 1.3(b) ("Option Cash") and (iii) the aggregate
amount of the cash portion of the Merger Consideration
for the Outstanding New Bank Shares (the "Aggregate Cash
Merger Consideration").
If the Average TCF Stock Price is equal to or less
than $47.75 and equal to or greater than $43.75, then the
aggregate Merger Consideration shall consist of (i) cash
equal to the number of Outstanding New Bank Shares
multiplied by $12.50, and (ii) a number of shares of TCF
Common Stock equal to 0.27869 multiplied by the number of
Outstanding New Bank Shares.
If the Average TCF Stock Price is less than $43.75
or greater than $47.75, TCF shall notify Standard and the
Exchange Agent not later than the Effective Time as to
the amount of the Aggregate Cash Merger Consideration
which shall be part of the Merger Consideration and the
balance of the Merger Consideration shall be paid in
shares of TCF Common Stock based on the value of such
shares at the Average TCF Stock Price; provided, however,
the Aggregate Cash shall not be less than 44.5% of the
Aggregate Merger Transaction Amount (as defined below)
unless the Average TCF Stock Price is greater than $54.00
in which case the Aggregate Cash Merger Consideration
shall not be less than $10.76 multiplied by the
Outstanding New Bank Shares and, provided further, in no
event will the Aggregate Cash less Option Cash exceed the
maximum amount permitted without preventing the Merger
and the Conversion/Reincorporation from qualifying as a
reorganization with the meaning of Section 368(a) of the
Code as determined by the tax advisors of TCF and
Standard.
The "Average TCF Stock Price" shall be the average
of the daily closing sales prices of TCF Common Stock as
reported on the New York Stock Exchange Composite
Transactions reporting system (as reported by The Wall
Street Journal or, if not reported thereby, another
authoritative source as mutually agreed by TCF and
Standard) for the 30 consecutive full trading days ending
on the Determination Date. The "Determination Date"
shall be the third business day immediately prior to
either (x) the date (as originally scheduled in the
notice mailed to the shareholders and without giving
effect to any adjournments or postponements) of the
special meeting of the Standard stockholders to obtain
the approvals referred to in Section 5.19 hereof or (y)
the date on which the last regulatory approval required
to consummate the Merger has been obtained and all
statutory or regulatory waiting periods in respect
thereof have expired, whichever date is closest to the
Effective Date. The "Aggregate Merger Transaction
Amount" is an amount equal to (i) the Aggregate Cash,
plus (ii) the aggregate number of shares of TCF Common
Stock included as part of the Merger Consideration
multiplied by the Average TCF Stock Price.
All of the shares of New Bank Common Stock converted
into and exchangeable for the Merger Consideration
pursuant to this Article 1 shall no longer be outstanding
and shall automatically be cancelled and cease to exist
as of the Effective Time. Each certificate previously
representing any such shares of New Bank Common Stock
shall thereafter represent the right to receive the
Merger Consideration pursuant to this Section 1.3(a), as
allocated among the holders of Outstanding New Bank
Shares in accordance with Section 1.4. On and after the
Effective Date and until surrendered for exchange, each
stock certificate which immediately prior to the
Effective Date represented Outstanding New Bank Shares
shall be deemed for all purposes, except as provided in
Section 1.6(b) hereof, to evidence ownership of and to
represent the number of whole shares of TCF Common Stock,
if any, into which such Outstanding New Bank Shares shall
have been converted pursuant to this Section 1.3(a) as
allocated among the holders of Outstanding New Bank
Shares in accordance with Section 1.4. The record holder
of such outstanding certificate shall, after the
Effective Date, be entitled to vote the shares of TCF
Common Stock into which the shares of Outstanding New
Bank Shares evidenced by such certificate shall have been
so converted on any matters on which the holders of
record of TCF Common Stock, as of any date subsequent to
the Effective Date, shall be entitled to vote. In any
matters relating to such certificates of New Bank Common
Stock, TCF may rely conclusively upon the record of
stockholders maintained by New Bank or New Bank's stock
transfer agent containing the names and addresses of the
holders of record of New Bank Common Stock on the
Effective Date.
(b) Stock Options. At the Effective Time,
each outstanding stock option to purchase shares of
Standard Common Stock (a "Stock Option") granted under
either the Standard Financial, Inc. Stock Option Plan or
the Standard Financial, Inc. Stock Option Plan for
Outside Directors (together, the "Standard Stock Option
Plans") shall, pursuant to the terms of such plans,
become immediately exercisable and fully vested.
Immediately prior to the Effective Time, all outstanding
Stock Options shall be cancelled, and Standard shall pay
to each holder, for each Stock Option held, an amount in
cash equal to the Market Value of the Stock Option on the
Effective Date, less the Exercise Price of the option (as
those terms are defined in the Standard Stock Option
Plans). Standard confirms that it is the intent of the
Standard Stock Option Plans to provide that the "Market
Value of the Common Stock" (as used in the Standard Stock
Option Plans) per share for the purposes of computing the
amount payable to the holders of the Stock Options
pursuant to this Section 1.3(b) shall be the Merger
Consideration Value Per Share.
(c) Management Recognition and Retention
Plan. At the Effective Time, pursuant to the Standard
Financial, Inc. Management Recognition and Retention Plan
(the "MRRP"), the Plan Shares subject to Plan Share
Awards held by Participants in the MRRP (as such terms
are defined in the MRRP) shall become 100% vested, such
shares shall be Outstanding New Bank Shares, and holders
of such shares shall be entitled to receive Merger
Consideration and to make cash elections as provided in
Sections 1.3 and 1.4. Pursuant to the representations in
Section 3.3, all of such Plan Shares subject to Plan
Share Awards are included in the number of outstanding
shares of Standard Common Stock stated in Schedule 3.3.
1.4 Merger Consideration Election.
(a) Subject to the limitations set forth
in this Section 1.4, holders of Outstanding New Bank
Shares shall be provided with an opportunity to elect to
receive cash consideration in lieu of TCF Common Stock in
the Merger for any or all such shares of New Bank Common
Stock, in accordance with the election procedures set
forth in this Section 1.4. An election form (an
"Election Form") and other appropriate and customary
transmittal materials (which shall specify that delivery
shall be effected, and risk of loss and title to the
certificates theretofore representing New Bank Common
Stock ("Old Certificates") shall pass, only upon proper
delivery of such Old Certificates to an exchange agent
designated by TCF (the "Exchange Agent") in such form as
Standard and TCF shall mutually agree) shall be mailed
immediately after the Effective Time ("Mailing Date") to
each holder of record of Standard Common Stock as of the
Effective Time.
Each Election Form shall permit a holder (or the
beneficial owner through appropriate and customary
documentation and instructions) of Outstanding New Bank
Shares to elect, subject to provisions of this Section
1.4, to receive, on a per share basis, with respect to
such holder's New Bank Common Stock (i) cash (shares as
to which such election is made, the "Cash Election
Shares") or (ii) TCF Common Stock (shares as to which
such election is made, the "Stock Election Shares"). To
be effective, a properly completed Election Form shall be
submitted to the Exchange Agent on or before 5:00 p.m. on
the 20th day following the Mailing Date (or such other
time and date as Standard and TCF may mutually agree)
(the "Election Deadline").
Standard shall provide to the Exchange Agent all
information reasonably necessary for it to perform as
specified herein. An election shall have been properly
made only if the Exchange Agent shall have actually
received a properly completed Election Form by the
Election Deadline. An Election Form shall be deemed
properly completed only if accompanied by one or more
certificates (or customary affidavits and indemnification
regarding the loss or destruction of such certificates or
the guaranteed delivery of such certificates)
representing all shares of New Bank Common Stock covered
by such Election Form, together with duly executed
transmittal materials included with the Election Form.
If a stockholder either (i) does not submit a properly
completed Election Form in a timely fashion, or (ii)
revokes its Election Form prior to the Election Deadline,
the shares of New Bank Common Stock held by such
stockholder shall be designated "No Election Shares."
TCF shall cause the certificates representing New Bank
Common Stock described in (ii) to be promptly returned
without charge to the person submitting the Election Form
upon written request to that effect from the person who
submitted the Election Form. Subject to the terms of
this Agreement and of the Election Form, the Exchange
Agent shall have reasonable discretion to determine
whether any election, revocation or change has been
properly or timely made and to disregard immaterial
defects in any Election Form, and any good faith
decisions of the Exchange Agent regarding such matters
shall be binding and conclusive. Neither TCF nor the
Exchange Agent shall be under any obligation to notify
any person of any defect in an Election Form.
(b) The "Cash Election Amount" shall be
equal to the product of the Merger Consideration Value
Per Share multiplied by the total number of Cash Election
Shares. Based on the Cash Election Amount and subject to
the last paragraph of this Section 1.4(b), TCF shall
cause the Exchange Agent to allocate, within five
business days after the Election Deadline, to the holders
of Outstanding New Bank Shares, the right to receive,
with respect to each Outstanding New Bank Share, cash or
TCF Common Stock in the Merger as follows:
(i) If the Aggregate Cash
Merger Consideration is greater than the Cash
Election Amount, then
(A) all Cash Election
Shares shall be converted into the
right to receive cash,
(B) the Exchange
Agent will select, on a pro rata
basis, first from among the holders
of No Election Shares and then, if
necessary, from among the holders of
Stock Election Shares, a sufficient
number of such shares ("Cash Designee
Shares") such that the sum of Cash
Designee Shares and Cash Election
Shares multiplied by the Merger
Consideration Value equals as closely
as practicable the Aggregate Cash
Merger Consideration, and
(C) any Stock
Election Shares and any No Election
Shares, in each case, not so selected
as Cash Designee Shares shall be
converted into the right to receive
TCF Common Stock at the conversion
ratio (expressed as a decimal to the
fifth place and then rounded to the
nearest whole number at such fifth
place) of the Merger Consideration
Value Per Share divided by the
Average TCF Stock Price.
(ii) If the Aggregate Cash
Merger Consideration is less than the Cash
Election Amount, then
(A) all Stock
Election Shares shall be converted
into the right to receive TCF Common
Stock,
(B) the Exchange
Agent will select, on a pro rata
basis, first from among the holders
of No Election Shares and then, if
necessary, from among the holders of
Cash Election Shares, a sufficient
number of such shares (collectively,
"Stock Designee Shares") such that
the sum of Stock Designee Shares
multiplied by the Merger
Consideration Value Per Share equals
as closely as practicable the
difference between the Cash Election
Amount and the Aggregate Cash Merger
Consideration. The Stock Designee
Shares shall be converted into the
right to receive TCF Common Stock at
the conversion ratio (expressed as a
decimal to the fifth place and then
rounded to the nearest whole number
at such fifth place) of the Merger
Consideration Value Per Share divided
by the Average TCF Stock Price, and
(C) any Cash Election
Shares and any No Election Shares, in
each case, not so selected as Stock
Designee Shares shall be converted
into the right to receive cash at the
Merger Consideration Value Per Share.
Notwithstanding the foregoing, if any holder of
Outstanding New Bank Shares shall either elect to receive
TCF Common Stock or fail to make an election pursuant to
this Section 1.4 and tax counsel to either TCF or
Standard believes that such election or failure to elect
will jeopardize the characterization of
Conversion/Reincorporation, the Merger or Subsequent
Merger as a reorganization within the meaning of Section
368 of the Code, then TCF will request that such holder
execute and deliver a shareholder tax certificate in the
form reasonably satisfactory to both such tax counsel
and, if such holder fails to execute such certificate,
such holder shall receive the Merger Consideration
relating to such shares entirely in cash without regard
to the holder's election or failure to elect, and the TCF
Common Stock that such holder would have received shall
be allocated to other holders of Outstanding New Bank
Shares (other than holders to which this paragraph
applies) to the extent and in lieu of cash that such
other holders would have received hereunder.
1.5 No Fractional Shares. No fractional
shares of TCF Common Stock, and no certificates
representing such fractional shares, shall be issued upon
the surrender for exchange of certificates representing
New Bank Common Stock. In lieu of any fractional share,
TCF shall pay to each holder of New Bank Common Stock who
otherwise would be entitled to receive a fractional share
of TCF Common Stock an amount of cash (without interest)
equal to (a) the Average TCF Stock Price multiplied by
(b) the fractional share interest to which such holder
would otherwise be entitled.
1.6 Procedure for Exchange of New Bank Common
Stock.
(a) On the Effective Date, TCF shall
deposit, or shall cause to be deposited, with the
Exchange Agent, for exchange in accordance with this
Section 1.6, certificates representing the aggregate
number of shares of TCF Common Stock into which the
Outstanding New Bank Shares shall be converted pursuant
to Section 1.3, and TCF shall cause the Resulting
Institution to deposit with the Exchange Agent cash in
the amount of the Aggregate Cash Merger Consideration
(such cash and certificates are hereinafter referred to
as the "Exchange Fund"). After the Effective Date, TCF
shall, on the payment or distribution date, tender to the
Exchange Agent as an addition to the Exchange Fund all
dividends and other distributions applicable to shares of
TCF Common Stock held in the Exchange Fund.
(b) Until outstanding certificates
formerly representing Standard Common Stock or New Bank
Common Stock are surrendered as provided in Section 1.4
hereof, no dividend or distribution payable to holders of
record of TCF Common Stock shall be paid to any holder of
such outstanding certificates, but upon surrender of such
outstanding certificates by such holder there shall be
paid to such holder the amount of any dividends or
distributions (without interest) theretofore paid with
respect to such whole shares of TCF Common Stock, but not
paid to such holder, and which dividends or distributions
had a record date occurring subsequent to the Effective
Date.
(c) After the Effective Date, there shall
be no further registration of transfers on the records of
New Bank of outstanding certificates formerly
representing shares of Standard Common Stock or New Bank
Common Stock and, if a certificate formerly representing
such shares is presented to New Bank, Standard or TCF, it
shall be forwarded to the Exchange Agent for cancellation
and exchange for Merger Consideration as herein provided.
(d) Any portion of the Exchange Fund
consisting of shares of TCF Common Stock or the cash
dividends paid on TCF Common Stock deposited by TCF into
the Exchange Fund pursuant to Section 1.6(a) (including
the proceeds of any investments thereof) that remains
unclaimed by the holders of New Bank Common Stock for six
months after the Effective Date shall be returned to TCF.
Any portion of the Exchange Fund consisting of cash
deposited by the Resulting Institution into the Exchange
Fund pursuant to Section 1.6(a) (including the proceeds
of any investments thereof) that remains unclaimed by the
holders of New Bank Common Stock for six months after the
Effective Date shall be returned to the Resulting
Institution. Any holders of New Bank Common Stock who
have not theretofore complied with Sections 1.4 and 1.6
shall thereafter look only to (i) TCF for delivery and
payment of the portions of the Merger Consideration that
includes shares of TCF Common Stock, the cash in lieu of
fractional shares of TCF Common Stock as provided in
Section 1.5, and any unpaid dividends and distributions
on the TCF Common Stock deliverable in respect of such
shares of New Bank Common Stock that such holder holds as
determined pursuant to this Agreement, in each case,
without any interest thereon, and (ii) to Resulting
Institution for payment of the cash portion of the Merger
Consideration in respect of each share of New Bank Common
Stock that such holder holds as determined pursuant to
this Agreement without any interest thereon. If
outstanding certificates for shares of New Bank Common
Stock are not surrendered or the payment for them not
claimed immediately prior to the date on which such
payments would otherwise escheat to or become the
property of any governmental unit or agency, the
unclaimed items shall, to the extent not prohibited by
abandoned property law and any other applicable law,
become the property of TCF or the Resulting Institution,
as the case may be, (and to the extent not in such
respective party's possession shall be paid over to it),
free and clear of all claims or interest of any person
previously entitled to such claims. Notwithstanding the
foregoing, none of TCF, the Resulting Institution, the
Exchange Agent or any other person shall be liable to any
former holder of New Bank Common Stock for any amount
delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
(e) In the event any certificate for New
Bank Common Stock shall have been lost, stolen or
destroyed, the Exchange Agent shall issue and pay in
exchange for such lost, stolen or destroyed certificate,
upon the making of an affidavit of that fact by the
holder thereof, the Merger Consideration required
pursuant to this Agreement, provided, however, that TCF,
in its discretion and as a condition precedent to the
issuance and payment thereof, may require the owner of
such lost, stolen or destroyed certificate to deliver a
bond in such sum as it may direct as indemnity against
any claim that may be made against TCF, the Resulting
Institution, the Exchange Agent or any other party with
respect to the certificate alleged to have been lost,
stolen or destroyed.
1.7 Dissenting Shares.
(a) Notwithstanding any provision of this
Agreement to the contrary, the holder (a "Dissenting
Shareholder") of any shares of Standard Common Stock who
has demanded and perfected such holder's demand for
appraisal of said shares (the "Dissenting Shares") in
accordance with the provisions of applicable law (if
applicable law provides such rights) and at the time of
the dissolution of Standard (immediately prior to the
Merger) (the "Dissolution Time") has neither effectively
withdrawn nor lost his or her right to such appraisal
shall not have a right to receive the Merger
Consideration for such Dissenting Shares pursuant to
Section 1.3 above and shall only be entitled to such
rights as are granted by applicable law. The Resulting
Institution shall make any and all payments due to
holders of Dissenting Shares.
(b) Notwithstanding the provisions of
Section 1.7(a) above, if any Dissenting Shareholder
demanding appraisal of such Dissenting Shareholder's
Dissenting Shares under applicable law shall effectively
withdraw or lose (through failure to perfect or
otherwise) his or her right to appraisal, then as of the
Dissolution Time or the occurrence of such event,
whichever later occurs, such Dissenting Shares shall
automatically be converted into and represent only the
right to receive the Merger Consideration as provided in
Section 1.3 and as allocated pursuant to Section 1.4 upon
surrender of the certificate or certificates representing
such Dissenting Shares.
(c) Standard shall give TCF prompt notice
of any demands by a Dissenting Shareholder for payment,
or notices of intent to demand payment received by
Standard, and TCF shall have the right to participate in
all negotiations and proceedings with respect to such
demands. Standard shall not, except with the prior
written consent of TCF (which will not be unreasonably
withheld or delayed) or as otherwise required by law,
make any payment with respect to, or settle, or offer to
settle, any such demands.
1.8 Effect on Common Stock of Merger Sub. To
effectuate the Merger, and subject to the terms and
conditions of this Agreement, at the Effective Time all
issued and outstanding shares of Merger Sub held by TCF
will remain issued and outstanding and shall constitute
all of the issued and outstanding shares of the Resulting
Institution.
1.9 Corporate Matters. At the Effective Time:
(a) Charter. The Charter (as defined in
Section 2.1) of Merger Sub, as in effect at the Effective
Time, shall be the Charter of the Resulting Institution
until thereafter amended in accordance with applicable
law.
(b) Bylaws. The Bylaws of Merger Sub as
in effect immediately prior to the Effective Time, shall
be the Bylaws of the Resulting Institution until
thereafter amended in accordance with applicable law.
(c) Board of Directors. Subject to
obtaining any requisite approval of the Bank Authority,
the number of directors on the Board of Directors of the
Resulting Institution shall be increased to the number of
directors of Merger Sub immediately prior to the
Effective Time (not to exceed ten) plus the number of
directors of Standard (not to exceed nine) immediately
prior to the Effective Time. Upon consummation of the
Merger and subject to receipt of any requisite approvals
of the Bank Authority, the directors on the Board of
Directors of the Resulting Institution shall consist of
the directors on the Boards of Directors of Merger Sub
and Standard immediately prior to the Dissolution Time
and the Effective Time, subject to the right of the
shareholders of the Resulting Institution to remove and
elect directors of the Resulting Institution. On the
Effective Date, Standard shall cause to be delivered to
TCF the resignations of the directors of Standard, Bank,
and New Bank and the other Standard Subsidiaries (as
defined in Section 3.7) who are not to continue as a
director on the Board of Directors of the Resulting
Institution. In addition, TCF shall cause its Board of
Directors to be expanded by one (1) seat as of the
Effective Time and such directorship shall, as of such
time, be filled by one director of Standard mutually
acceptable to TCF and Standard; it being the intention of
the parties that such director will be Xxxxx X.
Xxxxxxxxxx.
(d) Officers. The officers of the
Resulting Institution immediately after the Effective
Time will be as follows: (i) the Executive Chairman
shall be Xxxxx X. Xxxxxxxxxx; (ii) the President shall be
designated by TCF; and (iii) the other officers shall be
the officers of the Resulting Institution immediately
prior to the Effective Time designated by TCF, the
officers of Standard who choose to continue with the
Resulting Institution on the Effective Date as approved
by TCF, and such other officers as the Board of Directors
of the Resulting Institution may elect on the Effective
Date until their successors are elected and qualified and
subject to the right of the Board of Directors of the
Resulting Institution to remove and elect officers after
the Effective Date.
1.10 Tax Consequences. It is intended that
the Conversion/Reincorporation, the Merger and Subsequent
Merger shall constitute a reorganization within the
meaning of Section 368(a) of the Code, and that this
Agreement shall constitute a "plan of reorganization" for
purposes of the Code.
1.11 Alternative Structure. TCF may structure
the acquisition of Standard contemplated by this
Agreement in any other form of reorganization or
combination as TCF may direct; provided that (i) there
are no material adverse federal income tax consequences
to Standard, TCF, Merger Sub or any other relevant
entities or to the shareholders of Standard, TCF, Merger
Sub or the Resulting Institution as a result of such
modification and counsel to each party delivers an
opinion to such effect, (ii) the consideration to be
received by the shareholders of Standard is not changed
or altered and (iii) such modification will not
materially delay or jeopardize receipt of any required
regulatory approvals.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF TCF
TCF hereby represents and warrants to Standard as
follows:
2.1 Organization and Qualification. TCF is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has
the requisite corporate power to carry on its business as
now conducted. TCF is registered as a savings and loan
holding company with the Office of Thrift Supervision
("OTS") under the Home Owners' Loan Act (the "HOLA") and
is authorized under the HOLA to carry on its business as
now conducted. Each of the Material TCF Subsidiaries (as
defined in Section 2.6 and identified on Schedule 2.6) is
a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
incorporation. TCF has filed an application with the
Federal Reserve Board to become a bank holding company
under the Bank Holding Company Act (the "BHCA"), and the
foregoing representation is subject to modification upon
approval of such application and consummation of the
conversion of TCF's savings bank subsidiaries to national
banks to the effect that TCF will then be a bank holding
company under the BHCA. The copies of the Charter (as
defined below) and Bylaws of TCF and each Material TCF
Subsidiary which have been made available to Standard
prior to the date of this Agreement are correct and
complete copies of such documents as in effect as of the
date of this Agreement. As used in this Agreement, the
term "Charter" with respect to any corporation or
depository institution shall mean those instruments that
at that time constitute its charter as filed or recorded
under the general corporation or other applicable law of
the jurisdiction of its incorporation or organization,
including the articles or certificate of incorporation or
association and any and all amendments thereto. TCF and
each of the TCF Subsidiaries is licensed or qualified to
do business in every jurisdiction in which the nature of
its business or its ownership of property requires it to
be licensed or qualified, except where the failure to be
so licensed or qualified would not have a Material
Adverse Effect on TCF. As used in this Agreement, the
term "Material Adverse Effect" with respect to an entity
means any condition, event, change or occurrence that has
or may reasonably be expected to have a material adverse
effect on the business, operations, results of operations
or financial condition of such entity on a consolidated
basis, it being understood that a Material Adverse Effect
shall not include a change with respect to, or effect on,
such entity resulting from a change in law, rule,
regulation, generally accepted accounting principles
("GAAP") or regulatory accounting principles, as such
would apply to the financial statements of such entity, a
change with respect to, or effect on, such entity
resulting from expenses incurred in connection with this
Agreement or the transactions contemplated by this
Agreement, or a change with respect to, or effect on,
such entity resulting from any other matter affecting
depository institutions generally (including without
limitation, savings and loan holding companies and
thrifts), including, without limitation, changes in
general economic conditions and changes in prevailing
interest and deposit rates. At the Effective Time,
Merger Sub will be duly organized and validly existing
and will have the requisite corporate power and authority
to carry on its business. The Charter and Bylaws of
Merger Sub as in effect on the date hereof are included
in Schedule 2.1; provided that such Charter and Bylaws
will be modified as TCF may determine in connection with
its conversion to a national bank.
2.2 Authority Relative to this Agreement; Non-
Contravention. TCF has the requisite corporate power and
authority to enter into this Agreement and to carry out
its obligations hereunder. The execution and delivery of
this Agreement by TCF and the Articles of Merger by
Merger Sub and the consummation by TCF and Merger Sub of
the transactions contemplated hereby have been duly
authorized by the Board of Directors of TCF and, in the
case of Merger Sub, will be duly authorized by the Board
of Directors of Merger Sub and by the Board of Directors
of TCF, acting on behalf of TCF as the sole shareholder
of Merger Sub, and no other corporate proceedings on the
part of TCF are necessary to authorize this Agreement and
the consummation of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by
TCF and, assuming it is a valid and binding obligation of
Standard, constitutes the valid and binding obligation of
TCF enforceable in accordance with its terms, except as
enforcement may be limited by general principles of
equity, whether applied in a court of law or a court of
equity and by bankruptcy, insolvency and similar laws
affecting creditors' rights and remedies generally.
Except as set forth in Schedule 2.2, none of TCF or the
TCF Subsidiaries is subject to, or obligated under, any
provision of (a) its Charter or Bylaws, (b) any
agreement, arrangement or understanding, (c) any license,
franchise or permit or (d) subject to obtaining the
approvals referred to in the next sentence, any law,
regulation, order, judgment or decree, which would be
breached or violated, or in respect of which a right of
termination or acceleration or any encumbrance on any of
its assets would be created, by the execution, delivery
or performance of this Agreement, the Articles of Merger
or the consummation of the transactions contemplated
hereby, other than any such breaches, violations, rights
of termination or acceleration or encumbrances which will
not, in the aggregate, have a Material Adverse Effect on
the TCF. Except for (a) the filing of applications and
notices with the OCC under the Bank Merger Act, the
Federal Reserve Board under the BHCA, the OTS under the
HOLA and the Federal Deposit Insurance Act ("FDIA"), and
approval of such applications and notices, (b) the
filings required under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976 ("HSR"), (c) the filing and
effectiveness with the Securities and Exchange Commission
(the "SEC") of a Registration Statement on Form S-4
relating to the TCF Common Stock to be issued in
connection with this Agreement and the transactions
contemplated hereby, and effectiveness of such
Registration Statement, (d) requisite approvals under
applicable blue sky laws, (e) the filing of the Articles
of Merger with the Bank Authority, and (f) such filings,
authorizations or approvals as may be set forth in
Schedule 2.2, no authorization, consent or approval of,
or filing with, any public body, court or authority is
necessary on the part of TCF, any of the TCF Subsidiaries
or Merger Sub for the consummation by TCF and Merger Sub
of the transactions contemplated by this Agreement,
except for such authorizations, consents, approvals and
filings as to which the failure to obtain or make the
same will not, in the aggregate, have a Material Adverse
Effect on TCF or materially adversely affect the
consummation of the transactions contemplated hereby.
2.3 Capitalization. The authorized, issued
and outstanding shares of capital stock of TCF as of the
date hereof is correctly set forth on Schedule 2.3. The
issued and outstanding shares of capital stock of each of
TCF and the Material TCF Subsidiaries are duly
authorized, validly issued, fully paid and nonassessable
and have not been issued in violation of any preemptive
rights. Except as disclosed on Schedule 2.3, there are
as of the date hereof, no options, warrants, conversion
privileges or other rights, agreements, arrangements or
commitments obligating TCF or any Material TCF Subsidiary
to issue, sell, purchase or redeem any shares of its
capital stock or securities or obligations of any kind
convertible into or exchangeable for any shares of its
capital stock or of any of its affiliates, nor are there
any stock appreciation, phantom or similar rights
outstanding based upon the book value or any other
attribute of any of the capital stock of TCF or any
Material TCF Subsidiary or the earnings or other
attributes of TCF or any Material TCF Subsidiary. TCF
has made available to Standard true and correct copies of
all such agreements, arrangements (including all stock
plans, but excluding individual stock option or
restricted stock agreements) or commitments. No bonds,
debentures, notes or other indebtedness having the right
to vote (or convertible into or exercisable for
securities having the right to vote) on any matters on
which shareholders of TCF or any TCF Subsidiary may vote
are issued or outstanding except as set forth in Schedule
2.3.
2.4 1934 Act Reports. Prior to the execution
of this Agreement, TCF has delivered or made available to
Standard complete and accurate copies of (a) TCF's Annual
Reports on Form 10-K for the years ended December 31,
1993, 1994 and 1995 (the "TCF 10-K Reports") as filed
with the SEC, (b) all TCF proxy statements and annual
reports to shareholders used in connection with meetings
of TCF shareholders held since January 1, 1994 and (c)
TCF's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996, June 30, 1996 and September 30,
1996 (the "TCF 10-Q Reports," and together with the TCF
10-K Reports, the "TCF SEC Reports") as filed with the
SEC. As of their respective dates or as subsequently
amended prior to the date hereof, such documents (i) did
not contain any untrue statement of a material fact or
omit to state a material fact required to be stated
therein or necessary to make the statements therein, in
light of the circumstances under which they were made,
not misleading, and (ii) complied as to form in all
material respects with the applicable rules and
regulations of the SEC. Since January 1, 1994, TCF has
filed in a timely manner all reports that it was required
to file with the SEC pursuant to the Securities and
Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (the "1934 Act").
2.5 Financial Statements.
(a) Attached hereto as Schedule 2.5(a) is
a copy of TCF's audited financial statements for the year
ended December 31, 1996 (the "1996 TCF Financial
Statements"). The TCF financial statements (including
any footnotes thereto) contained in the TCF SEC Reports
and the 1996 TCF Financial Statements have been prepared
in accordance with GAAP applied on a consistent basis
during the periods involved, except as indicated in the
notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q, and fairly present the
consolidated financial position of TCF and the TCF
Subsidiaries as of the dates thereof and the consolidated
results of operations, changes in stockholders' equity
and cash flows for the periods then ended (subject, in
the case of the unaudited statements, to recurring year
end adjustments normal in nature and amount and the
absence of footnotes).
(b) In TCF's reasonable judgment, the
allowance for loan losses reflected in TCF's financial
statements (including footnotes thereto) contained in the
TCF SEC Reports and the 1996 TCF Financial Statements is
and will be, in the case of the financial statements
delivered by TCF to Standard pursuant to Section 5.16
hereof, adequate in all material respects as of their
respective dates under GAAP consistently applied except
for the adoption of SFAS No. 114 for periods prior to
January 1, 1995. The real estate acquired through
foreclosure or deed in lieu of foreclosure ("REO")
reflected in TCF's financial statements (including
footnotes thereto) contained in the TCF SEC Reports and
the 1996 TCF Financial Statements is and will be, in the
case of the financial statements delivered by TCF to
Standard pursuant to Section 5.16 hereof, carried at the
lower of cost or fair value, or the lower of cost or net
realizable value, in accordance with GAAP consistently
applied.
(c) TCF has furnished Standard with
copies of the balance sheets of each Material TCF
Subsidiary as of December 31, 1993, 1994 and 1995 and as
of March 31, 1996, June 30, 1996 and September 30, 1996
and the related statements of income, changes in
stockholders' equity and cash flows for the years and
periods then ended (collectively, together with footnotes
thereof, if any, the "TCF Subsidiaries Financial
Statements"). The TCF Subsidiaries Financial Statements
have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved and fairly
present the financial position of the respective Material
TCF Subsidiary (subject, in the case of unaudited
statements, to recurring year-end adjustments normal in
nature and amount and the absence of footnotes).
(d) The books and records of TCF and the
Material TCF Subsidiaries have been, and are being,
maintained in material compliance with applicable legal
and accounting requirements, and such books and records
accurately reflect in all material respects all material
transactions customarily reflected in such books and
records in respect of the business, assets, liabilities
and affairs of TCF on a consolidated basis.
2.6 Subsidiaries. Schedule 2.6 correctly sets
forth the name and jurisdiction of incorporation of each
corporation, fifty percent or more of the voting
securities of which is owned directly or indirectly by
TCF (each a "TCF Subsidiary" and collectively the "TCF
Subsidiaries") and identifies the Material TCF
Subsidiaries. All of the issued and outstanding shares
of capital stock of each TCF Subsidiary are owned
directly or indirectly by TCF free and clear of any lien,
pledge, security interest, encumbrance or charge of any
kind. Except for the stock of the TCF Subsidiaries
directly or indirectly owned by TCF or as otherwise
disclosed on Schedule 2.6, neither TCF nor any TCF
Subsidiary owns any stock, partnership interest, joint
venture interest or any other security issued by any
other corporation, organization or entity which is
material to the operations, assets or liabilities of TCF
on a consolidated basis, except Federal Home Loan Bank
stock and readily marketable securities owned by TCF or a
TCF Subsidiary in the ordinary course of business.
2.7 Absence of Undisclosed Liabilities. All
of the obligations or liabilities (whether accrued,
absolute, contingent, unliquidated or otherwise, whether
due or to become due, and regardless of when asserted)
arising out of transactions or events heretofore entered
into, or any action or inaction, including Taxes (as
defined in Section 3.12) with respect to or based upon
transactions or events heretofore occurring that are
required to be reflected, disclosed or reserved against
in audited consolidated financial statements in
accordance with GAAP ("Liabilities") have, in the case of
TCF and the TCF Subsidiaries, been so reflected,
disclosed or reserved against in the audited balance
sheet as of December 31, 1996 (the "Latest TCF Balance
Sheet Date") included in the 1996 TCF Financial
Statements, and TCF and the TCF Subsidiaries have no
other Liabilities except (a) Liabilities incurred since
the Latest TCF Balance Sheet Date in the ordinary course
of business, (b) as otherwise disclosed on Schedule 2.7,
(c) Liabilities incurred pursuant to this Agreement or in
connection with the transactions contemplated hereunder,
(d) other Liabilities which, in aggregate, are not
material or (e) matters disclosed in any Form 8-K filings
by TCF after December 31, 1996. As of December 31,
1996, there were no agreements or commitments binding TCF
or any TCF Subsidiary to extend credit to any person in
the amount of $1,000,000 or more, except (A) as set forth
on Schedule 2.7, and (B) one to four family residential
mortgages.
2.8 No Material Adverse Changes. Since
December 31, 1996, there has been no event, occurrence or
development in the business of TCF or the TCF
Subsidiaries that, taken together with other events,
occurrences and developments with respect to such
business, has had or would reasonably be expected to have
a Material Adverse Effect on TCF or materially adversely
affect the ability of TCF to consummate the transactions
contemplated hereby.
2.9 Absence of Certain Developments. Except
as disclosed in any Current Reports of TCF on Form 8-K
filed prior to the date of this Agreement, or on Schedule
2.9 unless otherwise expressly contemplated or permitted
by this Agreement, since December 31, 1996 to the date
hereof, TCF has not:
(a) issued or sold any of its equity
securities, securities convertible into or exchangeable
for its equity securities, warrants, options or other
rights to acquire its equity securities, except (i)
deposit and other bank obligations in the ordinary course
of business, (ii) pursuant to the exercise of stock
options and warrants issued under, or otherwise pursuant
to, the agreements, arrangements or commitments
identified on Schedule 2.3, or (iii) the grant to
employees and directors of stock options and restricted
stock under TCF's 1995 Incentive Stock Program and
Director Stock Program (the "TCF Stock Plans") in the
ordinary course of business;
(b) redeemed, purchased, acquired or
offered to acquire, directly or indirectly, any shares of
capital stock of TCF or any of the TCF Subsidiaries or
other securities of TCF or any of the TCF Subsidiaries,
except pursuant to the exercise of stock options and
warrants issued under, or otherwise pursuant to, the
agreements, arrangements or commitments identified on
Schedule 2.3, or stock options issued in the ordinary
course of business after the date hereof;
(c) split, combined or reclassified any
of its outstanding shares of capital stock or declared,
set aside or paid any dividends or other distribution
payable in cash, property or otherwise with respect to
any shares of its capital stock or other securities,
except (i) dividends paid in cash by the TCF Subsidiaries
which are wholly owned by TCF to TCF or to another wholly
owned TCF Subsidiary and (ii) the regular quarterly cash
dividend of $.1875 for each share of TCF Common Stock;
(d) borrowed any amount or incurred or
became subject to any material liability in excess of
$1,000,000 except borrowings or liabilities incurred in
the ordinary course of business;
(e) sold, assigned or transferred any
assets with an aggregate market value in excess of
$150,000 for less than fair consideration, except (i) in
the ordinary course of business, (ii) liens and
encumbrances for current property taxes not yet due and
payable or being contested in good faith, and (iii) liens
and encumbrances which do not materially affect the value
of, or materially interfere with, the current use or
ability to convey, the property subject thereof or
affected thereby;
(f) cancelled any material debts or
claims or waived any rights of material value, except in
the ordinary course of business or upon payment in full;
(g) suffered any theft, damage,
destruction or loss of or to any property or properties
owned or used by it, whether or not covered by insurance,
which would, individually or in the aggregate, have a
Material Adverse Effect on TCF;
(h) acquired (by merger, exchange,
consolidation, acquisition of stock or assets or
otherwise) any corporation, partnership, joint venture or
other business organization or division or material
assets thereof, or assets or deposits that are material
to TCF on a consolidated basis, except in exchange for
debt previously contracted, including REO;
(i) taken any other material action or
entered into any material transaction other than in the
ordinary course of business; or
(j) agreed to do any of the foregoing.
2.10 Litigation. Except as set forth on
Schedule 2.10 as of the date hereof, there are no
actions, suits, proceedings, orders, audits or
investigations pending or, to the Knowledge of TCF,
threatened against TCF or any of the TCF Subsidiaries, at
law or in equity, or before or by any federal, state or
other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign in which
the adverse party or parties seeks or could be reasonably
expected to receive recovery from TCF or any TCF
Subsidiary, or their respective properties or assets, of
an amount or value in excess of $350,000 or injunctive or
other equitable relief. As used in this Agreement, the
terms "Knowledge" or "Known" with respect to an entity
means the knowledge of management officials of such
entity having responsibility for the matter in question.
2.11 No Brokers or Finders. Except as
disclosed on Schedule 2.11, there are no claims for
brokerage commissions, finders' fees, investment advisory
fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any
arrangement, understanding, commitment or agreement made
by or on behalf of TCF or any of the TCF Subsidiaries.
2.12 Compliance with Laws; Permits. Each of
TCF and the TCF Subsidiaries has complied with all
applicable laws and regulations of foreign, federal,
state and local governments and all agencies thereof
which affect the business or any owned or leased
properties or employee benefit plans of TCF or any of the
TCF Subsidiaries and to which TCF or any of the TCF
Subsidiaries may be subject (including, without
limitation, the Occupational Safety and Health Act of
1970, the Employee Retirement Income Security Act of 1974
("ERISA"), the HOLA (if applicable), the BHCA (if
applicable), the National Bank Act (if applicable), the
Federal Deposit Insurance Act (the "FDIA"), the Real
Estate Settlement Procedures Act, the Home Mortgage
Disclosure Act of 1975, the Fair Housing Act and the
Equal Credit Opportunity Act, each as amended, and any
other state or federal acts (including rules and
regulations thereunder) regulating or otherwise affecting
employee health and safety or the environment), except
where failure to so comply would not, individually or in
the aggregate, have a Material Adverse Effect on TCF or
adversely affect TCF's ability to consummate the
transactions contemplated hereby; and, to the Knowledge
of TCF, no claims have been filed by any such governments
or agencies against TCF or any of the TCF Subsidiaries
alleging such a violation of any such law or regulation
which have not been resolved to the satisfaction of such
governments or agencies which would, individually or in
the aggregate, have a Material Adverse Effect on TCF or
adversely affect TCF's ability to consummate the
transactions contemplated hereby. Each of TCF and the
TCF Subsidiaries holds all of the permits, licenses,
certificates and other authorizations of foreign,
federal, state and local governmental agencies required
for the conduct of its business as currently conducted,
except where failure to obtain such authorizations would
not, individually or in the aggregate, have a Material
Adverse Effect on TCF or adversely affect the ability of
TCF to consummate the transactions contemplated hereby.
Neither TCF nor any of the TCF Subsidiaries is subject to
any cease and desist order, written agreement or
memorandum of understanding with, or is 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 supervisory agreement letter from, or has adopted
any board resolutions at the request of, any Bank
Regulator (as defined herein) which would have a Material
Adverse Effect on TCF nor have any of TCF or any of the
TCF Subsidiaries been advised by any Bank Regulator that
it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting)
any such order, directive, written agreement, memorandum
of understanding, supervisory letter, commitment letter,
board resolutions or similar undertaking. A "Bank
Regulator" means any federal or state governmental
authorities charged with the supervision or regulation of
the person or persons with respect to which such term is
used (individually, a "Bank Regulator" and collectively,
the "Bank Regulators").
2.13 Prospectus/Proxy Statement. At the time
the Registration Statement (as defined in Section 5.9(a)
hereof) becomes effective and at the time the
Prospectus/Proxy Statement (as defined in Section 5.9(a)
hereof) is mailed to the shareholders of Standard in
order to obtain approvals referred to in Section 5.19 and
at all times subsequent to such mailing up to and
including the times of such approval, the Registration
Statement and the Prospectus/Proxy Statement (including
any amendments or supplements thereto), with respect to
all information set forth therein relating to TCF
(including the TCF Subsidiaries) and its shareholders,
TCF Common Stock, this Agreement, the Articles of Merger,
the Merger and all other transactions contemplated
hereby, will (a) comply in all material respects with
applicable provisions of the Securities Act of 1933, as
amended, and the rules and regulations promulgated
thereunder ("1933 Act") and the 1934 Act, and (b) not
contain any untrue statement of material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements contained therein, in
light of the circumstances under which they are made, not
misleading, except that, in each case, no such
representations shall apply to any written information or
representations under this Agreement, including financial
statements, of or provided by Standard for such
Prospectus/Proxy Statement.
2.14 Validity of TCF Common Stock. The shares
of TCF Common Stock to be issued pursuant to this
Agreement and the transactions contemplated hereby will
be, when issued, duly authorized, validly issued, fully
paid and nonassessable.
2.15 Reports and Filings. Since January 1,
1994, each of the TCF and the TCF Subsidiaries have filed
each report or other filing it was required to file with
any Banking Regulator having jurisdiction over it
(together with all exhibits thereto, the "TCF Regulatory
Reports"), except for such reports and filings which the
failure to so file would not have a Material Adverse
Effect on TCF or adversely affect the ability of the TCF
to consummate the transactions contemplated hereby. As
of their respective dates or as subsequently amended
prior to the date hereof, each of the TCF Regulatory
Reports was true and correct in all material respects and
complied in all material respects with applicable laws,
rules and regulations.
2.16 Employee Benefit Plans. TCF is not aware
of any facts or circumstances with respect to any TCF
Employee Benefit Plan, as defined herein, that could
reasonably be expected to have a Material Adverse Effect
on TCF. For purposes of this Section 2.16, a "TCF
Employee Benefit Plan" is any plan, policy, practice,
arrangement or agreement providing for benefits,
compensation (other than current cash compensation) or
perquisites to any current or former employee or
independent contractor, or the dependents or family
members of any such current or former employee or
independent contractor, with respect to which TCF, any
TCF Subsidiary or any other person who under applicable
law would, together with TCF, be deemed to be a single
employer, could have any liability.
2.17 Properties. Neither TCF nor any TCF
Subsidiary nor any of the real property owned by TCF or
any TCF Subsidiary is in violation of any applicable
zoning ordinance or other law, regulation or requirement
relating to the operation of any properties used in the
operation of its business, including applicable
environmental protection laws and regulations, which
violation would, individually or in the aggregate, have a
Material Adverse Effect on TCF, and neither TCF nor any
TCF Subsidiary has received any notice of any such
violation which has not been remedied or cured, or of the
existence of any condemnation proceeding with respect to
any material real properties owned or leased by TCF or
any TCF Subsidiary. To the Knowledge of TCF, no
hazardous substances, hazardous wastes, pollutants or
contaminants have been deposited or disposed of in, on or
under any real properties currently owned, managed or
controlled by TCF or any TCF Subsidiary, except in
compliance with applicable law or where such deposit or
disposal is not reasonably likely to result in a Material
Adverse Effect on TCF.
2.18 Interest Rate Risk Management
Instruments.
(a) Schedule 2.18 contains true, correct
and complete copies of all interest rate swaps, caps and
floors agreements, and any similar interest rate risk
management agreements to which TCF or any TCF Subsidiary
is a party or by which any of their properties or assets
may be bound.
(b) All interest rate swaps, floors, and
option agreements and other interest rate risk management
arrangements to which TCF or any TCF Subsidiary is a
party or by which any of their properties or assets may
be bound, were entered into in the ordinary course of
business, and, to TCF's Knowledge, in accordance with
prudent banking practice and applicable rules,
regulations, and policies of any Bank Regulator in all
material respects and with financially responsible
counterparties and are legal, valid and binding
obligations 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.
TCF and each TCF Subsidiary has duly performed in all
material respects all of its obligations thereunder to
the extent that such obligations to perform have accrued.
To TCF's Knowledge, there are no material breaches,
violations, or defaults or allegations or assertions of
such by any party thereunder.
2.19 Fairness Opinion. TCF has received a
written opinion in a form reasonably acceptable to TCF
from Xxxxx Xxxxxxx, Inc. to the effect that the Merger is
fair from a financial point of view to holders of TCF
Common Stock.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF STANDARD
Standard hereby represents and warrants to TCF as
follows:
3.1 Organization and Qualification. Standard
is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware,
and has the requisite corporate power to carry on its
business as now conducted. Bank is a federally chartered
savings bank duly organized, validly existing and in good
standing under the laws of the United States and has the
requisite corporate power to carry on its business as now
conducted. Each of Standard Subsidiaries (as defined in
Section 3.7 hereof) is a corporation duly organized,
validly existing and in good standing under the laws of
the state of its incorporation. The copies of the
Charter and Bylaws of Standard and each Standard
Subsidiary which have been made available to TCF prior to
the date of this Agreement are correct and complete
copies of such documents as in effect as of the date of
this Agreement. Each of Standard and each Standard
Subsidiary is licensed or qualified to do business in
every jurisdiction in which the nature of its business or
its ownership of property requires it to be licensed or
qualified, except where the failure to be so licensed or
qualified would not have a Material Adverse Effect on
Standard.
3.2 Authority Relative to this Agreement; Non-
Contravention. Standard has the requisite corporate
power and authority to enter into this Agreement and to
carry out its obligations hereunder. New Bank will have
the requisite corporate power and authority to enter into
the Articles of Merger and to carry out its obligations
thereunder. The execution and delivery of (i) this
Agreement by Standard and the consummation by Standard of
the transactions contemplated hereby have been duly
authorized by the Board of Directors of Standard and (ii)
the Articles of Merger by New Bank and the transactions
contemplated thereby will, as of the Effective Date, be
duly authorized by the Board of Directors of New Bank,
and except for approval of this Agreement, the
Conversion/Reincorporation and the Merger by the
requisite vote of Standard's shareholders, no other
corporate proceedings on the part of Standard or any
Standard Subsidiaries are necessary to authorize this
Agreement and the consummation of the transactions
contemplated hereby. This Agreement has been duly
executed and delivered by Standard and, assuming it is a
valid and binding obligation of TCF, constitutes a valid
and binding obligation of Standard enforceable in
accordance with its terms except as enforcement may be
limited by general principles of equity whether applied
in a court of law or a court of equity and by bankruptcy,
insolvency and similar laws affecting creditors' rights
and remedies generally. Except as set forth in Schedule
3.2, none of Standard or any of the Standard Subsidiaries
is subject to, or obligated under, any provision of (a)
its Charter or Bylaws, (b) any agreement, arrangement or
understanding, (c) any license, franchise or permit or
(d) subject to obtaining the approvals referred to in the
next sentence, any law, regulation, order, judgment or
decree, which would be breached or violated, or in
respect of which a right of termination or acceleration
or any encumbrance on any of its assets would be created,
by the execution, delivery or performance of this
Agreement, the Articles of Merger or the
Conversion/Reincorporation or the consummation of the
transactions contemplated hereby or thereby, other than
any such breaches, violations, rights of termination or
acceleration or encumbrances which will not, in the
aggregate, have a Material Adverse Effect on Standard.
Except for (a) the filings, notices, consents and
approvals described in Section 2.2 hereof and (b) such
filings, authorizations or approvals as may be set forth
in Schedule 3.2, no authorization, consent or approval
of, or filing with, any public body, court or authority
is necessary on the part of Standard or any of the
Standard Subsidiaries for the consummation by Standard or
any of the Standard Subsidiaries of the transactions
contemplated by this Agreement, except for such
authorizations, consents, approvals and filings as to
which the failure to obtain or make the same will not, in
the aggregate, have a Material Adverse Effect on Standard
or materially adversely affect the consummation of the
transactions contemplated hereby.
3.3 Capitalization. The authorized, issued
and outstanding shares of capital stock of each of
Standard and the Standard Subsidiaries as of the date
hereof is correctly set forth on Schedule 3.3. The
number of outstanding shares of Standard Common Stock
identified in Schedule 3.3 includes (i) the aggregate
number of shares of Standard Common Stock under the MRRP
which have been granted (as set forth on Schedule 3.3)
and which vest upon consummation of the Merger as
provided in Section 1.3(c), and (ii) all allocated and
unallocated shares of Standard Common Stock held by the
ESOP (as defined in Section 5.12 below). The issued and
outstanding shares of capital stock of each of Standard
and the Standard Subsidiaries are duly authorized,
validly issued, fully paid and nonassessable and have not
been issued in violation of any preemptive rights.
Except as disclosed on Schedule 3.3, there are no
options, warrants, conversion privileges or other rights,
agreements, arrangements or commitments obligating
Standard or any Standard Subsidiary to issue, sell,
purchase or redeem any shares of its capital stock or
securities or obligations of any kind convertible into or
exchangeable for any shares of its capital stock or of
any of its subsidiaries or affiliates, nor are there any
stock appreciation, phantom or similar rights outstanding
based upon the book value or any other attribute of any
of the capital stock of Standard or any of the Standard
Subsidiaries, or the earnings or other attributes of
Standard or any of the Standard Subsidiaries. Schedule
3.3 contains true and correct copies of all such
agreements, arrangements (including all stock plans, but
excluding individual stock option or restricted stock
agreements) or commitments. No bonds, debentures, notes
or other indebtedness having the right to vote (or
convertible into or exercisable for securities having the
right to vote) on any matters on which shareholders of
Standard or any Standard Subsidiary may vote are issued
or outstanding except as set forth in Schedule 3.3.
3.4 1934 Act Reports and Regulatory Reports.
Prior to the execution of this Agreement, Standard has
delivered or made available to TCF complete and accurate
copies of (a) Standard's Annual Reports on Form 10-K for
the years ended December 31, 1994 and 1995 (the "Standard
10-K Reports") as filed with the SEC, (b) all Standard
proxy statements and annual reports to shareholders used
in connection with meetings of Standard shareholders held
since January 1, 1994 and (c) Standard's Quarterly
Reports on Form 10-Q for the quarters ended March 31,
1996, June 30, 1996 and September 30, 1996 (the "Standard
10-Q Reports," and together with the Standard 10-K
Reports, the "Standard SEC Reports") as filed with the
SEC. As of their respective dates or as subsequently
amended prior to the date hereof, such documents (i) did
not contain any untrue statement of a material fact or
omit to state a material fact required to be stated
therein or necessary to make the statement therein, in
light of the circumstances under which they were made,
not misleading and (ii) complied as to form in all
material respects with the applicable rules and
regulations of the SEC. Prior to the execution of this
Agreement, Standard has delivered or made available to
TCF complete and accurate copies of all reports that Bank
was required to file with the OTS (the "Bank Regulatory
Reports") since January 1, 1994. Since January 1, 1994,
Bank has filed in a timely manner all Bank Regulatory
Reports that it was required to file with the OTS. As of
their respective dates or as subsequently amended prior
to the date hereof, each of the Bank Regulatory Reports
(i) was true and correct in all material respects, and
(ii) complied as to form in all material respects with
applicable rules and regulations of the OTS.
3.5 Financial Statements.
(a) Attached hereto as Schedule 3.5(a) is
a copy of Standard's audited financial statements for the
year ended December 31, 1996 (the "Standard 1996
Financial Statements"). The financial statements
(including any footnotes thereto) contained in the
Standard SEC Reports, the Standard 1996 Financial
Statements and the Bank Regulatory Reports have been
prepared in accordance with GAAP or, in the case of the
Bank Regulatory Statements, the rules and regulations of
the OTS, applied on a consistent basis during the periods
involved, except as indicated in the notes thereto or, in
the case of unaudited statements, as permitted by Form
10-Q, and fairly present the financial position of
Standard or Bank, as the case may be, as of the dates
thereof and the results of operations, changes in
stockholders' equity and cash flows for the periods then
ended (subject, in the case of the unaudited statements,
to recurring year end adjustments normal in nature and
amount and the absence of footnotes).
(b) In Standard's reasonable judgment,
the allowance for loan losses reflected in the financial
statements (including footnotes thereto) contained in the
Standard SEC Reports, the Standard 1996 Financial
Statements and the Bank Regulatory Reports is and will
be, in the case of the financial statements delivered by
Standard or Bank to TCF pursuant to Section 5.3 hereof,
adequate in all material respects as of their respective
dates under GAAP consistently applied except for the
adoption of SFAS No. 114 for periods prior to January 1,
1995. The REO reflected in the financial statements
(including footnotes thereto) contained in the Standard
SEC Reports, the Standard 1996 Financial Statements and
the Bank Regulatory Reports is and will be, in the case
of the financial statements delivered by Standard or Bank
to TCF pursuant to Section 5.3 hereof, carried at the
lower of cost or fair value, or the lower of cost or net
realizable value, in accordance with GAAP consistently
applied.
(c) Standard has furnished TCF with
copies of the balance sheets of Bank as of December 31,
1994, 1995 and 1996, and the related statements of
income, changes in shareholder's equity and cash flows
for the years and periods then ended (collectively,
together with any footnotes thereto, the "Bank Financial
Statements"). The Bank Financial Statements have been
prepared in accordance with GAAP applied on a consistent
basis during the periods involved and fairly present the
financial position of Bank (subject, in the case of
interim statements, to recurring year end adjustments
normal in nature and amount and the absence of
footnotes).
(d) The books and records of Standard and
the Standard Subsidiaries have been, and are being,
maintained in material compliance with applicable legal
and accounting requirements, and such books and records
accurately reflect in all material respects all material
transactions customarily reflected in such books and
records in respect of the business, assets, liabilities
and affairs of Standard on a consolidated basis.
3.6 Loans.
(a) The documentation relating to each
loan made and owned by Bank and the other Standard
Subsidiaries (i) with an outstanding principal balance of
$500,000 or more and relating to all security interests,
mortgages and other liens with respect to all collateral
for each such loan, taken as a whole, are adequate for
the enforcement of the material terms of each such loan
and of the related security interests, mortgages and
other liens and (ii) with respect to all other loans and
relating to the security interests, mortgages, and other
liens with respect to such loans are adequate for the
enforcement of the material terms of such loans and of
the related security interests, mortgages and other liens
except where the lack of enforceability would not,
individually or in the aggregate, have a Material Adverse
Effect on Standard. The terms of each such loan and of
the related security interests, mortgages and other liens
comply in all material respects with all applicable laws,
rules and regulations (including, without limitation,
laws, rules and regulations relating to the extension of
credit).
(b) Except as set forth in Schedule 3.6,
as of December 31, 1996, there are no loans, leases,
other extensions of credit or commitments to extend
credit of Bank or any other Standard Subsidiary that have
been or, to Standard's Knowledge, should have been
classified as non-accrual, as restructured, as 90 days
past due, as still accruing and doubtful of collection or
any comparable classification.
3.7 Subsidiaries. Schedule 3.7 correctly sets
forth the name and jurisdiction of incorporation of each
corporation, fifty percent or more of the voting
securities of which is owned directly or indirectly by
Standard, including Bank, (each a "Standard Subsidiary"
and collectively the "Standard Subsidiaries"). All of
the issued and outstanding shares of capital stock of
each Standard Subsidiary are owned directly or indirectly
by Standard free and clear of any lien, pledge, security
interest, encumbrance or charge of any kind. Except for
the stock of the Standard Subsidiaries directly or
indirectly owned by Standard or as otherwise disclosed on
Schedule 3.7, neither Standard nor any of the Standard
Subsidiaries owns any stock, partnership interest, joint
venture interest or any other security issued by any
other corporation, organization or entity, except Federal
Home Loan Bank stock and readily marketable securities
owned by Standard or a Standard Subsidiary in the
ordinary course of its business.
3.8 Absence of Undisclosed Liabilities. All
of the Liabilities of Standard and the Standard
Subsidiaries are reflected, disclosed or reserved against
in the audited consolidated balance sheet (the "Standard
Latest Balance Sheet") of Standard as at December 31,
1996 (the "Latest Standard Balance Sheet Date") included
in the 1996 Standard Financial Statements or in the notes
thereto, except (a) Liabilities incurred since December
31, 1996 in the ordinary course of business, (b) as
otherwise disclosed on Schedule 3.8, (c) Liabilities
incurred pursuant to this Agreement or in connection with
the transactions contemplated hereunder, or (d) other
Liabilities which, in the aggregate, are not material.
As of the date hereof, there are no agreements or
commitments binding Standard or any Standard Subsidiary
to extend credit to any person in the amount of $500,000
or more, except (i) as set forth on Schedule 3.8 or (ii)
one to four family residential mortgages.
3.9 No Material Adverse Changes. Since
December 31, 1996 to the date hereof, there has been no
event, occurrence or development in the business of
Standard or the Standard Subsidiaries that, taken
together with other events, occurrences and developments
with respect to such business, has had or would
reasonably be expected to have a Material Adverse Effect
on Standard or that materially adversely affects the
ability of Standard or any of the Standard Subsidiaries
to consummate the transactions contemplated hereby.
3.10 Absence of Certain Developments. Except
as disclosed in the Standard SEC Reports or in any
Current Reports of Standard on Form 8-K filed prior to
the date of this Agreement, or on Schedule 3.10 unless
otherwise expressly contemplated or permitted by this
Agreement, since December 31, 1996 to the date hereof,
neither Standard nor any of the Standard Subsidiaries
has:
(a) issued or sold any of its equity
securities, securities convertible into or exchangeable
for its equity securities, warrants, options or other
rights to acquire its equity securities, except (i) in
the case of Bank, deposit and other bank obligations in
the ordinary course of business or (ii) pursuant to the
exercise of stock options and warrants issued under, or
otherwise pursuant to, the agreements, arrangements or
commitments identified on Schedule 3.3;
(b) redeemed, purchased, acquired or
offered to acquire, directly or indirectly, any shares of
capital stock of Standard or any of the Standard
Subsidiaries or other securities of Standard or any of
the Standard Subsidiaries, except pursuant to the
exercise of stock options and warrants issued under, or
otherwise pursuant to, the agreements, arrangements or
commitments identified on Schedule 3.3;
(c) split, combined or reclassified any
of its outstanding shares of capital stock or declared,
set aside or paid any dividends or other distribution
payable in cash, property or otherwise with respect to
any shares of its capital stock or other securities,
except (i) dividends paid in cash by the Standard
Subsidiaries to Standard or any other Standard
Subsidiary, and (ii) the regular quarterly cash dividend
of $.10 per share, payable to holders of Standard Common
Stock of record in January, 1997 and paid in April, 1997;
(d) borrowed any amount or incurred or
became subject to any material liability, except
borrowing or liabilities (x) incurred in the ordinary
course of business or (y) incurred under the contracts
and commitments disclosed in Schedule 3.13, but in no
event has Standard or any Standard Subsidiary entered
into any borrowings with terms greater than one year
except as set forth in Schedule 3.10;
(e) discharged or satisfied any material
lien or encumbrance on the properties or assets of
Standard or any of the Standard Subsidiaries or paid any
material liability other than in the ordinary course of
business, other than reverse repurchase agreements or
Federal Home Loan Bank borrowings by Standard or any of
the Standard Subsidiaries;
(f) sold, assigned, transferred,
mortgaged, pledged or subjected to any lien or other
encumbrance any of its assets with an aggregate market
value in excess of $250,000 except (i) in the ordinary
course of business, including REO, (ii) liens and
encumbrances for current property taxes not yet due and
payable or being contested in good faith and (iii) liens
and encumbrances which do not materially affect the value
of, or materially interfere with, the current use or
ability to convey, the property subject thereto or
affected thereby;
(g) canceled any material debts or claims
or waived any rights of material value, except in the
ordinary course of business or upon payment in full;
(h) suffered any theft, damage,
destruction or loss of or to any property or properties
owned or used by it, whether or not covered by insurance,
which would, individually or in the aggregate, have a
Material Adverse Effect on Standard;
(i) made or granted any bonus or any
wage, salary or compensation increase or severance or
termination payment to, or promoted, any director,
officer, employee, group of employees or consultant, or
entered into any employment contract or hired any
employee with an annual salary in excess of $100,000
other than bonuses, compensation increases, promotions or
new hires in the ordinary course and in a manner
consistent with past practices as previously disclosed to
TCF;
(j) made or granted any increase in
the benefits payable under any employee benefit plan
or arrangement, amended or terminated any existing
employee benefit plan or arrangement or adopted any
new employee benefit plan or arrangement;
(k) made any single or group of
related capital expenditures or commitment therefor
in excess of $250,000 or entered into any lease or
group of related leases with the same party which
involves aggregate lease payments payable of more
than $250,000 for any group of related leases in the
aggregate;
(l) acquired (by merger, exchange,
consolidation, acquisition of stock or assets or
otherwise) any corporation, partnership, joint
venture or other business organization or division
or material assets thereof, or assets or deposits
that are material to Standard on a consolidated
basis, except in exchange for debt previously
contracted, including REO;
(m) taken any other material action
or entered into any material transaction other than
in the ordinary course of business; or
(n) agreed to do any of the
foregoing.
3.11 Properties.
(a) Each of Standard and the Standard
Subsidiaries owns good and marketable title to all
of the real property and all of the personal
property, fixtures, furniture and equipment
reflected on the consolidated balance sheet as of
December 31, 1996 of Standard included in the
Standard 1996 Financial Statements or acquired since
the date thereof, free and clear of all liens and
encumbrances, except for (i) mortgages on real
property set forth on Schedule 3.11(a), (ii) utility
and other easements, encumbrances and restrictions
that do not materially interfere with the present
use of the property for the business being conducted
thereon, (iii) liens for current taxes and special
assessments not delinquent or being contested in
good faith, (iv) leasehold estates with respect to
multi-tenant buildings owned by Standard or any of
the Standard Subsidiaries, which leases are
identified on Schedule 3.11(a), (v) landlords' and
statutory liens, and (vi) property disposed of since
the Latest Standard Balance Sheet Date in the
ordinary course of business.
(b) Schedule 3.11(b) contains
complete and correct copies of (i) all leases
relating to real property leased by Standard and the
Standard Subsidiaries, and (ii) each lease or
license for personal property to which Standard or
any Standard Subsidiary is a party as lessee or
licensee and which (A) has a remaining term of one
year or more and which involves annual payments of
more than $250,000, has a term of less than one year
and which involves remaining payments in excess of
$250,000 or any group of leases or licenses with the
same party which have remaining terms of one year or
more and which involve annual payments of more than
$250,000 in the aggregate or which have remaining
terms of less than one year and which involve
remaining payments in excess of $250,000 in the
aggregate, (B) is a "material contract" within the
meaning of Item 601(b)(10) of Regulation S-K
promulgated by the SEC, or (C) was not entered into
in the ordinary course of business. The leases and
licenses contained in Schedule 3.11(b) are in full
force and effect. Standard or a Standard Subsidiary
(if a lessee under such lease or licensee under such
license) has a valid and existing interest under
each such lease or license for the term set forth
therein. With respect to such leases and licenses,
neither Standard nor any of the Standard
Subsidiaries is in default, nor, to the Knowledge of
Standard, are any of the other parties to any of
such leases and licenses in default, except for
defaults which, individually or in the aggregate,
would not have a Material Adverse Effect on
Standard.
(c) Except as set forth in Schedule
3.11(c), neither Standard nor any of the Standard
Subsidiaries nor any of the real property owned by
Standard or any of the Standard Subsidiaries is in
violation of any applicable zoning ordinance or
other law, regulation or requirement relating to the
operation of any properties used in the operation of
its business, including applicable environmental
protection laws and regulations, except for
violations which would, individually or in the
aggregate, not have a Material Adverse Effect on
Standard; and neither Standard nor any of the
Standard Subsidiaries has received any written
notice of any such violation which has not been
remedied or cured, or of the existence of any
condemnation proceeding with respect to any material
real properties owned or leased by Standard, Bank or
any of the Standard Subsidiaries. Except as set
forth in Schedule 3.11(c), to the Knowledge of
Standard, no hazardous substances, hazardous wastes,
pollutants or contaminants have been deposited or
disposed of in, on or under any real properties
currently owned, managed or controlled by Standard
or any of the Standard Subsidiaries, except in
compliance with applicable law or where such deposit
or disposal is not reasonably likely to result in a
Material Adverse Effect on Standard. Except as set
forth in Schedule 3.11(c), to the Knowledge of
Standard: (i) there are no aboveground or
underground tanks (excluding hot water storage or
propane tanks) located under or in any properties
currently owned by Standard or any of the Standard
Subsidiaries, and (ii) no prior owners, occupants or
operators of any real property currently owned by
Standard or any Standard Subsidiary used such
properties as a garbage dump or gasoline service
station.
3.12 Tax Matters. Standard, each of the
Standard Subsidiaries and all members of any
consolidated, affiliated, combined or unitary group of
which Standard or any of the Standard Subsidiaries is a
member have filed or will file all Tax and Tax
information returns or reports required to be filed
(taking into account permissible extensions) by them on
or prior to the Effective Date, except for such returns
or reports where the failure to file would not have a
Material Adverse Effect on Standard, and have paid (or
have accrued or reserved or will accrue or reserve,
prior to the Effective Date, amounts for the payment
of) all material Taxes shown to be due on such returns
and reports relating to the time periods covered
thereby. The accrued taxes payable accounts for Taxes
and provision for deferred income taxes, specifically
identified as such, on the Standard Latest Balance
Sheet are sufficient in all material respects for the
payment of all unpaid Taxes of Standard and the
Standard Subsidiaries accrued for all periods ended on
or prior to the date of the Standard Latest Balance
Sheet. Except as disclosed on Schedule 3.12, neither
Standard nor any of the Standard Subsidiaries has
waived any statute of limitations with respect to Taxes
or agreed to any extension of time with respect to an
assessment or deficiency for Taxes. All material Taxes
which will be due and payable, whether now or
hereafter, for any period ending on, prior to or
including the Effective Date shall have been paid by or
on behalf of Standard and the Standard Subsidiaries or
shall be reflected on the books of Standard and the
Standard Subsidiaries as an accrued Tax liability
determined in a manner which is consistent with past
practices. No Tax returns of Standard or any of the
Standard Subsidiaries have, during the past five (5)
years, been audited by any governmental authority other
than as disclosed on Schedule 3.12; and, except as set
forth on Schedule 3.12, there are no unresolved
questions, claims or disputes asserted in writing by
any relevant taxing authority concerning the liability
for material Taxes of Standard or any of the Standard
Subsidiaries. None of Standard or any Standard
Subsidiary (i) has been a member of an affiliated group
filing a consolidated federal income tax return (other
than a group, the common parent of which was Standard),
or (ii) has liability for Taxes of any person under
Section 1.1502-6 of the Treasury Regulations. For
purposes of this Agreement, the term "Tax" shall mean
any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, property or
windfall profits tax, environmental tax, customs duty,
capital stock, franchise, employees' income
withholding, foreign or domestic withholding, social
security, unemployment, disability, workers'
compensation, employment-related insurance, real
property, personal property, sales, use, transfer,
value added, alternative or add-on minimum or other
tax, fee or assessment imposed by a taxing
jurisdiction, including any interest, penalties or
additions to, or additional amounts in respect of the
foregoing, for each party hereto and its commonly
controlled entities and all members of any
consolidated, affiliated, combined or unitary group of
which any of them is a member.
3.13 Contracts and Commitments. Except as set
forth on Schedule 3.13 or in Standard SEC Reports,
neither Standard nor any of the Standard Subsidiaries
(i) is a party to any collective bargaining agreement
or contract with any labor union, (ii) is a party to
any written or oral contract for the employment of any
officer, individual employee or other person on a full-
time or consulting basis, or relating to severance pay
for any such person, (iii) is a party to any written or
oral agreement or understanding to repurchase assets
previously sold (or to indemnify or otherwise
compensate the purchaser in respect of such assets),
except for securities sold under a repurchase
agreement, (iv) is a party as of the date hereof to any
(A) contract with a remaining term in excess of one
year which is not terminable, without penalty, on 60 or
fewer days notice at any time before or after the
expiration of such one- year period for the purchase or
sale of assets, products or services, under which the
undelivered balance of such assets, products and
services has a purchase price in excess of $250,000 for
any individual contract or $250,000 in the aggregate
for any group of contracts with the same party, (B)
other contract which is a "material contract" within
the meaning of Item 601(b)(10) of Regulation S-K, to be
performed after the date of this Agreement, or (C)
other material agreement or contract which was not
entered into in the ordinary course of business and
which is not disclosed on Schedules 3.11(a) or 3.11(b),
or (v) has any commitment for a capital expenditures in
excess of $250,000.
3.14 Litigation. Except as set forth on
Schedule 3.14 as of the date hereof, there are no
actions, suits, claims, proceedings, orders or
investigations pending or, to the Knowledge of
Standard, threatened against Standard or any of the
Standard Subsidiaries, at law or in equity, or before
or by any federal, state or other governmental
department, commission, board, bureau, agency or
instrumentality, domestic or foreign in which the
adverse party or parties seeks recovery from Standard
or any Standard Subsidiary, or their respective
properties or assets, of an unspecified amount, an
amount or value in excess of $100,000 or injunctive or
other equitable relief.
3.15 No Brokers or Finders. Except as
disclosed on Schedule 3.15, there are no claims for
brokerage commissions, finders' fees, investment
advisory fees or similar compensation in connection
with the transactions contemplated by this Agreement
based on any arrangement, understanding, commitment or
agreement made by or on behalf of Standard or any of
the Standard Subsidiaries.
3.16 Employee Benefit Plans.
(a) Definitions. For the purposes of
this Agreement, unless the context clearly requires
otherwise, the term "Plan" or "Plans" includes all
material employee benefit plans as defined in Section
3(3) of ERISA, and all other benefit arrangements
(including, without limitation, any employment
agreement or any program, agreement, policy or
commitment providing for severance payments, insurance
coverage of employees, workers' compensation,
disability benefits, supplemental unemployment
benefits, vacation benefits, retirement benefits, life,
health, disability or accident benefits) applicable to
the employees of Standard or any of the Standard
Subsidiaries, to which Standard or any of the Standard
Subsidiaries contribute, or which Standard or any of
the Standard Subsidiaries have committed to implement
for their employees prior to the date of this
Agreement. Unless the context clearly requires
otherwise, "Plan" or "Plans" shall also include any
similar program or arrangement maintained by any
organization affiliated by ownership with Standard or
any of the Standard Subsidiaries for which Standard or
any of the Standard Subsidiaries are or would be
completely or partially liable for the funding or the
administration either as a matter of law or by
agreement but excluding customers of the trust
departments of affiliates of Bank where there is no
ownership affiliation between such customers and Bank.
For the purposes of this Section 3.16, a Plan is
material if the liability, payments or commitments
under such Plan by or for Standard or any Standard
Subsidiaries exceeds $100,000 annually. Schedule 3.16
lists the Plans of Standard and each Standard
Subsidiary.
(b) Except as disclosed on Schedule
3.16:
(i) Full Disclosure of All
Plans. With respect to all employees and
former employees of Standard and the Standard
Subsidiaries (and all dependents and
beneficiaries of such employees and former
employees):
(A) Neither Standard
nor any of the Standard Subsidiaries
maintains or contributes to any
nonqualified deferred compensation or
retirement plans, contracts or
arrangements;
(B) Neither Standard
nor any of the Standard Subsidiaries
maintains or contributes to any
qualified defined contribution plans
(as defined in Section 3(34) of ERISA
or Section 414(i) of the Code);
(C) Neither Standard
nor any of the Standard Subsidiaries
maintains or contributes to any
qualified defined benefit plans (as
defined in Section 3(35) of ERISA or
Section 414(j) of the Code) ("Defined
Benefit Plans");
(D) Neither Standard
nor any of the Standard Subsidiaries
maintains or contributes to any
employee welfare benefit plans (as
defined in Section 3(1) of ERISA);
(E) Neither Standard
nor any of the Standard Subsidiaries
maintains or contributes to any
retiree medical program; and
(F) Neither Standard
nor any of the Standard Subsidiaries
maintains or is obligated under any
severance policy or other severance
arrangement for employees.
(ii) Funding. With respect to
the Plans, (A) all required contributions which
are due have either been made or properly
accrued and (B) neither Standard nor any of the
Standard Subsidiaries is liable for any
accumulated funding deficiency as that term is
defined in Section 412 of the Code.
(iii) Plan Documents. With
respect to all Plans sponsored, maintained or
administered by Standard or any Standard
Subsidiary and all Plans to which Standard or
any Standard Subsidiary is or may be obligated
to contribute, Standard has provided true and
complete copies of (A) the most recent
determination letter, if any, received by
Standard or any of the Standard Subsidiaries
from the Internal Revenue Service regarding
each qualified Plan, (B) the Form 5500 and all
schedules and accompanying financial
statements, if any, for each Plan for which
such form is required to be filed for the three
most recent fiscal Plan years, (C) the most
recently prepared actuarial valuation report,
if any, for each Plan, and (D) copies of the
current Plan documents, trust agreements,
insurance contracts and all related contracts
and documents (including summary plan
descriptions and any other material employee
communications) with respect to each Plan.
(iv) Defined Benefit Plans. As
of the Effective Date, no unfunded liability
under Title IV of ERISA has been incurred by
Standard or any of the Standard Subsidiaries,
or any affiliate of Standard or any of the
Standard Subsidiaries, that has not been
satisfied in full and, to the Knowledge of
Standard, no condition exists that presents a
material risk to Standard or any of the
Standard Subsidiaries or TCF of incurring any
such liability. There are no unfunded vested
liabilities (determined using the assumptions
used by the Plan for funding and without regard
to future salary increases) with respect to
Defined Benefit Plans sponsored by Standard or
any Standard Subsidiary. There have been no
reportable events under Section 4043 of ERISA
(with respect to which the 30-day notice
requirement has not been waived by regulation)
with respect to any Defined Benefit Plan
maintained by Standard or any of the Standard
Subsidiaries. No Defined Benefit Plan has been
terminated that will result in a material
liability by Standard or any of the Standard
Subsidiaries to the Pension Benefit Guaranty
Corporation.
(v) Multiemployer Plans. As of
the Effective Date, neither Standard nor any of
the Standard Subsidiaries has any actual or
potential liabilities under Sections 4201 or
4205 of ERISA for any complete or partial
withdrawal from any multiemployer plan and, to
the Knowledge of Standard, no condition exists
that presents a material risk to Standard or
any of the Standard Subsidiaries of incurring
any such liability.
(vi) Fiduciary Breach; Claims.
Neither Standard nor any of the Standard
Subsidiaries nor any of their respective
directors, officers, employees or other
fiduciaries has committed any breach of
fiduciary duty imposed by ERISA or any other
applicable law with respect to the Plans which
would subject Standard or any of the Standard
Subsidiaries, directly or indirectly, to any
material liability under ERISA or any
applicable law. There are no actions, suits or
claims pending against Standard or any Standard
Subsidiary relating to benefits other than
routine claims for benefits.
(vii) Prohibited Transactions.
Neither Standard nor any of the Standard
Subsidiaries nor any of their respective
officers, directors, employees, or any other
fiduciaries of any Plan has incurred any
material liability for any civil penalty
imposed by Section 4975 of the Code or Section
502(i) of ERISA.
(viii) Material Compliance With
Law. All Plans have been administered in
accordance with their terms in all material
respects. To the extent required either as a
matter of law or to obtain the intended tax
treatment and tax benefits, all Plans comply in
all material respects with the requirements of
ERISA and the Code. All material Tax
information returns or reports and all other
material required filings, disclosures and
contributions have been made with respect to
all Plans. To the Knowledge of Standard, no
condition exists that limits the right of
Standard or any of the Standard Subsidiaries to
amend or terminate any such Plan (except as
provided in such Plans or limited under ERISA
or the Code).
(ix) VEBA Funding. No Plan is
funded in whole or in part through a voluntary
employees' beneficiary association exempt from
tax under Section 501(c)(9) of the Code. To
the extent applicable, the limitations under
Sections 419 and 419A of the Code have been
computed, all unrelated business income tax
returns have been filed and appropriate
adjustments have been made on all other Tax
returns.
(x) Retirement and COBRA
Benefits. Neither Standard nor any of the
Standard Subsidiaries has incurred a material
liability under current law for benefits after
separation from employment other than (i)
benefits under Plans listed on Schedule 3.16 or
described in Section 3.16(b)(i) hereof, and
(ii) health care continuation benefits
described in Section 4980B of the Code or Part
G of Subtitle B of Title I of ERISA or any
comparable provisions under the laws of any
state.
(xi) Collective Bargaining. No
Plan is maintained in whole or in part pursuant
to collective bargaining.
(xii) Employee Status. Except as
otherwise disclosed in other Sections of this
Agreement or the Schedules thereto, all
employees of Standard or any of the Standard
Subsidiaries are "at will" employees.
(c) Employees. Except as set forth on
Schedule 3.16, Standard and the Standard Subsidiaries
have complied with all laws relating to the employment
of labor, including provisions thereof relating to
wages, hours, equal opportunity, collective bargaining,
non- discrimination and the payment of social security
and other taxes, except where failure to comply would
not, individually or in the aggregate, have a Material
Adverse Effect on Standard.
3.17 Insurance. Schedule 3.17 lists the
material insurance policies maintained by Standard or
any of the Standard Subsidiaries with respect to its
business, operations, properties and assets. All such
insurance policies are in full force and effect, and
neither Standard nor any of the Standard Subsidiaries
is in default with respect to its obligations under any
of such insurance policies, except where such default
would not result in the loss of any material coverage.
3.18 Affiliate Transactions. Except as set
forth on Schedule 3.18, or in the Standard SEC Reports,
neither Standard nor any of the Standard Subsidiaries,
nor any executive officer or director of Standard or
any of the Standard Subsidiaries, nor any member of the
immediate family of any such officer or director (which
for the purposes hereof shall mean a spouse, minor
child or adult child living at the home of any such
officer or director), nor any entity which any of such
persons "controls" (within the meaning of Regulation O
of the Federal Reserve Board ("FRB")), has any loan
agreement, note or borrowing arrangement or any other
agreement with Standard or any of the Standard
Subsidiaries (other than normal employment
arrangements), any interest in any material property,
real, personal or mixed, tangible or intangible, used
in or pertaining to the business of Standard or any of
the Standard Subsidiaries or any other interest or
transaction that would be required to be disclosed
under Regulation S-K of the SEC.
3.19 Compliance with Laws; Permits. Each of
Standard and the Standard Subsidiaries has complied
with all applicable laws and regulations of foreign,
federal, state and local governments and all agencies
thereof which affect the business or any of the
Standard Subsidiaries or to which Standard or any of
the Standard Subsidiaries may be subject (including,
without limitation, the Occupational Safety and Health
Act of 1970, the HOLA, the FDIA, the Real Estate
Settlement Procedures Act, the Home Mortgage Disclosure
Act of 1975, the Fair Housing Act and the Equal Credit
Opportunity Act, each as amended, and any other state
or federal acts (including rules and regulations
thereunder) regulating or otherwise affecting employee
health and safety or the environment), except where
failure to so comply would not, individually or in the
aggregate, have a Material Adverse Effect on Standard
or materially adversely affect Standard's ability to
consummate the transactions contemplated hereby. Each
of Standard and the Standard Subsidiaries holds all of
the permits, licenses, certificates and other
authorizations of foreign, federal, state and local
governmental agencies required for the conduct of its
business as currently conducted, except where failure
to obtain such permits, licenses, certificates or
authorizations would not, individually or in the
aggregate, have an Material Adverse Effect on Standard
or materially adversely affect the ability of Standard
to consummate the transactions contemplated hereby.
Except as disclosed in Schedule 3.19, neither Standard
nor any of the Standard Subsidiaries is subject to any
cease and desist order, written agreement or memorandum
of understanding with, or is 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
supervisory agreement letter from, or has adopted any
board resolutions at the request of any Bank Regulator,
which would have a Material Adverse Effect on Standard,
nor has Standard or any of the Standard Subsidiaries
been advised by any Bank Regulator that it is
contemplating issuing or requesting (or is considering
the appropriateness of issuing or requesting) any such
order, directive, written agreement, memorandum of
understanding, supervisory letter, commitment letter,
board resolutions or similar undertaking.
3.20 Administration of Fiduciary Accounts.
Bank has properly administered all accounts for which
it acts as a fiduciary, including but not limited to
accounts for which it serves as a trustee, agent,
custodian, personal representative, guardian,
conservator or investment advisor, in accordance with
the terms of the government documents and applicable
state and federal law and regulation and common law
except where failure to so administer such accounts,
individually or in the aggregate, would not have a
Material Adverse Effect on Standard. Neither Standard
nor any director, officer or employee of Standard or
any Standard Subsidiary has committed any breach of
trust with respect to any such fiduciary account which,
individually or in the aggregate, would have a Material
Adverse Effect on Standard and the accountings for each
such fiduciary account are true and correct in all
material respects and accurately reflect the assets of
such fiduciary account in all material respects.
3.21 Prospectus/Proxy Statement. At the time
the Prospectus/Proxy Statement is mailed to the
shareholders of Standard in order to obtain approvals
referred to in Section 5.19 hereof and at the time of
such meeting of Standard's shareholders, such
Prospectus/Proxy Statement (including any supplements
thereto), with respect to all information furnished by
Standard (as provided in Section 5.9(c) hereof) for
inclusion in the Prospectus/Proxy Statement will (a)
comply in all material respects with applicable
provisions of the 1933 Act and the 1934 Act, and (b)
not contain any untrue statement of material fact or
omit to state a material fact required to be stated
therein or necessary to make the statements contained
therein, in light of the circumstances under which they
are made, not misleading.
3.22 Interest Rate Risk Management
Instruments. There are no interest rate swaps, caps,
floors, option agreements or any similar interest rate
risk management agreements to which Standard or any of
the Standard Subsidiaries is a party or by which any of
their properties or assets may be bound.
3.23 State Takeover Laws; Shareholder Rights
Plan. The Board of Directors of Standard approved the
execution of this Agreement and authorized and approved
the Conversion/Reincorporation and Merger prior to the
execution by Standard of this Agreement in accordance
with Section 203 of the Delaware General Corporation
Law so that such section will not apply to this
Agreement or the transactions contemplated hereby. The
Board of Directors of Standard has taken all such
action required to be taken by it to provide that this
Agreement and the transactions contemplated hereby
shall be exempt from (i) the requirements of any
"business combination", "moratorium", "control share,"
"fair price" or other antitakeover laws or regulations
of any state or the United States and (ii) any
shareholder rights plan or similar plan of Standard or
any Standard Subsidiary.
3.24 Fairness Opinion. Standard has received
a written opinion in a form reasonably acceptable to
Standard from Xxxxxxxxxxx Xxxxxxx & Co., Inc. to the
effect that the Merger is fair from a financial point
of view to the holders of Standard Common Stock.
ARTICLE 4
CONDUCT OF BUSINESS PENDING THE MERGER
4.1 Conduct of Business by Standard and the
Standard Subsidiaries. From the date of this Agreement
to the Effective Date, unless TCF shall otherwise agree
in writing or as otherwise expressly contemplated or
permitted by other provisions of this Agreement,
including but not limited to, this Section 4.1:
(a) the business of Standard and the
Standard Subsidiaries shall be conducted only in, and
neither Standard nor any Standard Subsidiary shall take
any action except in, the ordinary course, on an arms-
length basis and in accordance, in all material
respects, with all applicable laws, rules and
regulations and with prudent banking practices;
(b) neither Standard nor any Standard
Subsidiary shall directly or indirectly:
(i) amend or propose to amend
its Charter or Bylaws;
(ii) issue or sell any of its
equity securities, securities convertible into
or exchangeable for its equity securities,
warrants, options or other rights to acquire
its equity securities, or any bonds or other
securities, except (A) in the case of Bank,
deposits and other bank obligations in the
ordinary course of business and (B) pursuant to
the exercise of the options set forth on
Schedule 3.3 on the date of this Agreement;
(iii) redeem, purchase, acquire
or offer to acquire, directly or indirectly,
any shares of capital stock of Standard or any
Standard Subsidiary or other securities of
Standard, or any Standard Subsidiary, except
pursuant to the agreements, arrangements or
commitments identified on Schedule 3.3;
(iv) split, combine or
reclassify any outstanding shares of capital
stock of Standard or any Standard Subsidiary,
or declare, set aside or pay any dividend or
other distribution payable in cash, stock,
property or otherwise with respect to shares of
capital stock of Standard or any Standard
Subsidiary except (A) regular quarterly cash
dividends of not more than $.10 per share
payable to holders of Standard Common Stock or
(B) dividends paid in cash by any Standard
Subsidiary to Standard or another Standard
Subsidiary;
(v) borrow any amount or incur
or become subject to any material liability,
except borrowings and liabilities incurred in
the ordinary course of business, but in no
event will Standard or any Standard Subsidiary
enter into any borrowings with a term of
greater than one (1) year or any other
borrowings (other than intercompany or Federal
Home Loan Bank borrowings) in excess of
$250,000 without prior consultation with TCF,
other than as set forth on Schedule 4.1(b);
(vi) discharge or satisfy any
material lien or encumbrance on the properties
or assets of Standard or any Standard
Subsidiary or pay any material liability,
except (A) in the ordinary course of business
and (B) in the case of Bank and Standard
Subsidiaries, reverse repurchase agreements for
Federal Home Loan Bank borrowings;
(vii) sell, assign, transfer,
mortgage, pledge or subject to any lien or
other encumbrance any of its assets with an
aggregate market value in excess of $250,000,
except (A) in the ordinary course of business,
including REO; (B) liens and encumbrances for
current property taxes not yet due and payable
or being contested in good faith and (C) liens
and encumbrances which do not materially affect
the value of, or materially interfere with the
current use or ability to convey, the property
subject thereto or affected thereby;
(viii) cancel any material debt or
claims or waive any rights of material value,
except in the ordinary course of business or
upon payment in full;
(ix) acquire (by merger,
exchange, consolidation, acquisition of stock
or assets or otherwise) any corporation,
partnership, joint venture or other business
organization or division or material assets
thereof, or assets or deposits that are
material to Standard on a consolidated basis,
except in exchange for debt previously
contracted, including REO;
(x) other than as set forth on
Schedule 3.10 on the date of this Agreement,
make any single or group of related capital
expenditures or commitments therefor in excess
of $250,000 (other than pursuant to binding
commitments existing on the date hereof and
other than expenditures necessary to maintain
assets in good repair) or enter into any lease
or group of leases as lessee with the same
party which involves aggregate lease payments
payable of more than $250,000 for any
individual lease or involves more than $250,000
for any group of leases with the same party in
the aggregate;
(xi) enter into or propose to
enter into, or modify or propose to modify, any
agreement, arrangement, or understanding with
respect to any of the matters set forth in this
Section 4.1(b) except in the ordinary course of
business;
(xii) without prior consultation
with TCF, purchase or otherwise acquire any
investments, direct or indirect, in any
derivative securities other than occasional
overnight investments of excess cash; or
(xiii) without prior consultation
with TCF, enter into any interest rate swap,
floors and option agreements or other similar
interest rate management agreements;
(c) neither Standard nor any Standard
Subsidiary shall directly or indirectly enter into,
modify or terminate any employment, severance or
similar agreements or arrangements with, or grant any
bonuses, wage, salary or compensation increases, or
severance or termination pay to, or promote, any
director, officer, employee, group of employees or
consultant or hire any employee with an annual salary
over $100,000 other than (i) in the ordinary course and
in a manner consistent with past practices or (ii) as
contemplated by this Agreement, and shall promptly
notify TCF of any termination or resignation of any
officer or key employee;
(d) neither Standard nor any Standard
Subsidiary shall adopt or amend any profit sharing,
stock option, pension, retirement, deferred
compensation, or other employee benefit plan, trust,
fund, contract or arrangement for the benefit or
welfare of any employees, except as required by law or
to consummate any of the transactions contemplated
hereby in accordance with applicable law, provided that
any such arrangement or amendment is approved by TCF
which approval shall not be unreasonably withheld by
TCF;
(e) each of Standard and the Standard
Subsidiaries shall use reasonable efforts to cause its
current insurance policies not to be canceled or
terminated or any of the coverage thereunder to lapse,
unless simultaneously with such termination,
cancellation or lapse, replacement policies providing
coverage substantially equal to the coverage under the
canceled, terminated or lapsed policies are in full
force and effect;
(f) neither Standard nor any Standard
Subsidiary shall enter into any settlement or similar
agreement with respect to, or take any other
significant action with respect to the conduct of, any
action, suit, proceeding, order or investigation which
is required to be set forth on Schedule 3.14 or to
which Standard or any Standard Subsidiary becomes a
party after the date of this Agreement which is
required to be disclosed in an updated Schedule 3.14,
without prior consultation with TCF's General Counsel;
(g) each of Standard and the Standard
Subsidiaries shall use commercially reasonable efforts
to preserve intact in all material respects the
business organization and the goodwill of Standard and
the Standard Subsidiaries and to keep available the
services of its officers and employees as a group and
preserve intact material agreements, and Standard shall
establish a committee of senior management personnel
which will confer on a regular and frequent basis with
a committee of senior management personnel of TCF, as
reasonably requested by TCF, to report on operational
matters and the general status of ongoing operations
and to plan for the operations of the Resulting
Institution upon consummation of the Merger;
(h) neither Standard nor any Standard
Subsidiary shall take any significant action with
respect to investment securities held or controlled by
them inconsistent with past practices or then current
prudent practices, materially alter its investment
portfolio duration policy or, without prior
consultation with TCF, voluntarily take any action that
will have or can reasonably be expected to have a
material adverse effect on Bank's asset/liability
position;
(i) without prior consultation with TCF,
Standard and the Standard Subsidiaries shall not make
any agreements or commitments binding it to extend
credit to any person in an amount in excess of
$500,000;
(j) with respect to real properties
leased by Standard and any material personal property
leased or licensed by Standard or any Standard
Subsidiary for its use, neither Standard nor any
Standard Subsidiary shall fail to renew, exercise an
option to extend, cancel or surrender any such lease or
license nor allow any such lease or license to lapse
without prior consultation with TCF; and
(k) neither Standard nor any Standard
Subsidiary shall agree to any action prohibited by any
of the foregoing;
provided, however, that in the event Standard would be
prohibited from taking any action by reason of this
Section 4.1 without the prior written consent of TCF,
such action may nevertheless be taken if Standard is
expressly required to do so by law or by the OTS and
Standard, as the case may be, promptly informs TCF of
such action. For purposes of this Agreement, the words
"prior consultation" with respect to any action means
advance notice of such proposed action and a reasonable
opportunity to discuss such action in good faith prior
to taking such action.
4.2 Conduct of Business by TCF. From the date
of this Agreement to the Effective Date, unless
Standard shall otherwise agree in writing or as
otherwise expressly contemplated or permitted by other
provisions of this Agreement, including but not limited
to, this Section 4.2:
(a) TCF shall not issue or sell any of
its equity securities, securities convertible into or
exchangeable for its equity securities, warrants,
options or other rights to acquire its equity
securities, or any bonds or other securities, except
(i) pursuant to the exercise of the options or warrants
or the conversion of convertible securities set forth
on Schedule 2.3 and pursuant to the exercise of options
granted under clause (iii) below, (ii) issuances of TCF
Common Stock to satisfy the employer matching
obligations under the TCF's 401(k) Plan for the
participants in such plan who elect to invest in TCF
Common Stock, (iii) grants of options and restricted
stock under the TCF Stock Plans in the ordinary course
of business, (iv) pursuant to TCF's dividend
reinvestment plan, or (v) as set forth in Schedule 4.2.
(b) TCF shall not redeem, purchase,
acquire or offer to acquire, directly or indirectly,
any shares of capital stock of TCF or other securities
of TCF, except pursuant to the agreements, arrangements
or commitments identified on Schedule 2.3 and any
redemption of redeemable debt, including but not
limited to TCF's outstanding convertible debentures;
(c) TCF shall not split, combine or
reclassify any outstanding shares of capital stock of
TCF or declare, set aside or pay any dividend or other
distribution payable in cash, stock, property or
otherwise with respect to shares of capital stock of
TCF except the regular quarterly cash dividends of not
more than $.32 per share;
(d) TCF shall not borrow any amount or
incur or become subject to any material liability,
except borrowings and liabilities incurred in the
ordinary course of business or borrowings to redeem
outstanding debentures, borrowings to effect the
transactions contemplated by this Agreement, or as set
forth in Schedule 4.2;
(e) neither TCF nor any TCF Subsidiary
shall amend its Charter or Bylaws in a manner which
would adversely affect in any manner the terms of the
TCF Common Stock, or materially adversely affect the
ability of TCF to consummate the transactions
contemplated hereby in a timely manner;
(f) neither TCF or any TCF Subsidiary
shall sell, assign, transfer, mortgage, pledge or
subject to any lien or other encumbrance any of its
assets with an aggregate market value in excess of
$250,000, except (A) in the ordinary course of
business, including REO; (B) liens and encumbrances for
current property taxes not yet due and payable or being
contested in good faith; (C) liens and encumbrances
which do not materially affect the value of, or
materially interfere with the current use or ability to
convey, the property subject thereto or affected
thereby; and (D) sales of bank branches;
(g) neither TCF nor any TCF Subsidiary
shall acquire (by merger, exchange, consolidation,
acquisition of stock or assets or otherwise) any
corporation, partnership, joint venture or other
business organization or division or material assets
thereof, or assets or deposits that are material to TCF
on a consolidated basis, except (A) in exchange for
debt previously contracted, including REO, (B) the
pending merger transaction with Winthrop Resources
Corporation, or (C) the transactions contemplated by
the conversions of the TCF Subsidiaries which are banks
into national banks, the chartering of new national
banks in Colorado and Ohio, and the registration of TCF
as a bank holding company under BHCA; or
(h) TCF shall not agree to do any of the
foregoing.
ARTICLE 5
ADDITIONAL COVENANTS AND AGREEMENTS
5.1 Filings and Approvals. Each party will use all
reasonable efforts and will cooperate with the other party
in the preparation and filing, as soon as practicable, of
all applications or other documents required to comply with
applicable laws and regulatory requirements in connection
with the Conversion/Reincorporation, the Merger and the
Subsequent Merger contemplated by this Agreement, and
provide copies of such applications, filings and related
correspondence to the other party, including causing any of
its subsidiaries to execute and deliver such agreements and
documents as may be necessary to effect the transactions
contemplated hereby. Prior to filing each application,
registration statement or other document with the applicable
regulatory authority, each party will provide the other
party with an opportunity to review and comment on each such
application, registration statement or other document. Each
party will use all reasonable efforts and will cooperate
with the other party in making such filings and taking any
other actions necessary to obtain such regulatory or other
approvals and consents at the earliest practicable time,
including participating in any required hearings or
proceedings. Subject to the terms and conditions herein
provided, each party will use all reasonable efforts to
take, or cause to be taken, all actions and to do, or cause
to be done, all things necessary, proper or advisable to
consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement.
5.2 Certain Loans and Related Matters. Standard
will furnish to TCF a complete and accurate list within 10
days of the date hereof as of the most recent date the
reports referred to below have been prepared and, within 15
business days after the end of its reporting cycle (which
shall be no less frequently than quarterly), of (a) all of
Bank's periodic internal credit quality reports prepared
during such reporting period (which reports will be prepared
in a manner consistent with past practice), (b) all loans of
Bank classified as non-accrual, as restructured, as 90 days
past due, and still accruing and doubtful of collection or
any comparable classification, (c) all non-residential REO,
including in-substance foreclosures and real estate in
judgment, (d) any current repurchase obligations of Bank
with respect to any loans, loan participation or state or
municipal obligations or revenue bonds and (e) any standby
letters of credit issued by Bank.
5.3 Monthly Financial Statements. Standard shall
furnish TCF with Standard's (and if prepared in the ordinary
course of business, each Standard Subsidiary's) balance
sheet as of the end of each calendar month after January,
1997 and the related statements of income, within fifteen
(15) business days after the end of each such calendar
month. Such financial statements shall be prepared on a
basis consistent with current practice and shall fairly
present the financial positions of Standard or the Standard
Subsidiary as of the dates thereof and the results of
operations of Standard or the Standard Subsidiary for the
periods then ended.
5.4 Expenses. Except as otherwise provided in this
Agreement, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby
shall be paid by the party incurring such costs and
expenses.
5.5 No Negotiations, etc. Standard will not and
will use its best efforts to cause the Standard Subsidiaries
and officers, directors, employees, agents and affiliates of
Standard and each Standard Subsidiary not to, directly or
indirectly, solicit, authorize, initiate or encourage
submission of, any proposal, offer, tender offer or exchange
offer from any person or entity (including any of its or
their officers or employees) relating to any liquidation,
dissolution, recapitalization, merger, consolidation or
acquisition or purchase of all or a material portion of the
assets or deposits of, or any equity interest in, Standard
or any of the Standard Subsidiaries or other similar
transaction or business combination involving Standard or
any of the Standard Subsidiaries (the "Acquisition
Proposal") or, unless the Board of Directors of Standard
shall have determined, after consultation with Standard's
counsel, that there is a reasonable likelihood that the
Board of Directors of Standard has a fiduciary duty to do
so, (a) participate in any negotiations in connection with
or in furtherance of any of the foregoing or (b) permit any
person other than TCF and its representatives to have any
access to the facilities of, or furnish to any person other
than TCF and its representatives any non-public information
with respect to, Standard or any of the Standard
Subsidiaries in connection with or in furtherance of any of
the foregoing. Standard shall promptly notify TCF if any
such proposal or offer, or any inquiry from or contact with
any person with respect thereto, is made, and shall promptly
provide TCF with such information regarding such proposal,
offer, inquiry or contact as TCF may request.
5.6 Notification of Certain Matters.
(a) Each party shall give prompt notice to
the other party of (i) the occurrence or failure to occur of
any event or the discovery of any information, which
occurrence, failure or discovery would be likely to cause
any representation or warranty on its part contained in this
Agreement to be untrue, inaccurate or incomplete after the
date hereof or, in case of any representation or warranty
given as of a specific date, would be likely to cause any
such representation on its part contained in this Agreement
to be untrue, inaccurate or incomplete in any material
respect as of such specific date and (ii) any material
failure of such party to comply with or satisfy any covenant
or agreement to be complied with or satisfied by it
hereunder.
(b) From time to time prior to the Effective
Time, each party shall promptly supplement or amend any of
its representations and warranties which apply to the period
after the date hereof by delivering an updated Schedule to
the other party pursuant hereto with respect to any matter
hereafter arising which would render any such representation
or warranty after the date of this Agreement materially
inaccurate or incomplete as a result of such matter arising.
Such supplement or amendment to a party's representations
and warranties contained in an updated Schedule shall be
deemed to have modified the representations and warranties
of the disclosing party, and no such supplement or
amendment, or the information contained in an updated
Schedule, shall constitute a breach of a representation or
warranty of the disclosing party; provided that no such
supplement or amendment may cure any breach of a covenant or
agreement of any party under Articles 4 or 5. Within 20 days
after receipt of such supplement or amendment (or if cure is
promptly commenced by the disclosing party, but is not
effected within the Cure Period (as defined below)), the
receiving party may exercise its right to terminate this
Agreement pursuant to Section 7.1(i) hereof if the
information in such supplement or amendment together with
the information in any or all of the supplements or
amendments previously provided by the disclosing party
indicate that the disclosing party has suffered or is
reasonably likely to suffer a Material Adverse Effect which
either has not or cannot be cured within 30 days after
disclosure to the receiving party (the "Cure Period").
5.7 Access to Information; Confidentiality.
(a) Standard shall and shall cause each of
the Standard Subsidiaries to permit TCF full access on
reasonable notice and at reasonable hours to its properties
and shall disclose and make available (together with the
right to copy) to TCF and to the internal auditors, loan
review officers, employees, attorneys, accountants and other
representatives of TCF all books, papers and records
relating to the assets, stock, properties, operations,
obligations and liabilities of Standard and the Standard
Subsidiaries, including, without limitation, all books of
account (including, without limitation, the general ledger),
tax records, minute books of directors' and shareholders'
meetings, organizational documents, Bylaws, contracts and
agreements, filings with any regulatory authority,
accountants' work papers, litigation files (including,
without limitation, legal research memoranda), documents
relating to assets and title thereto (including, without
limitation, abstracts, title insurance policies, surveys,
environmental reports, opinions of title and other
information relating to real or personal property), plans
affecting employees, securities transfer records and
shareholder lists, and any books, papers and records
relating to other assets or business activities in which TCF
may have a reasonable interest, including, without
limitation, its interest in planning for integration and
transition with respect to the business of Standard and the
Standard Subsidiaries; provided, however, that the foregoing
rights granted to TCF shall, whether or not and regardless
of the extent to which the same are exercised, in no way
affect the nature or scope of the representations,
warranties and covenants of Standard set forth herein. In
addition, Standard shall instruct its officers, employees,
counsel and accountants to be available for, and respond to
any questions of, such TCF representatives, as arranged
through the committee described in Section 4.1(g) hereof, at
reasonable hours and with reasonable notice by TCF to such
individuals, and to cooperate fully with TCF in planning for
the integration of the business of Standard and the Standard
Subsidiaries with the business of TCF and the TCF
Subsidiaries.
(b) TCF shall, and shall cause each of the
TCF Subsidiaries to, provide to Standard and its officers,
employees and representatives the same rights being granted
by Standard and to TCF pursuant to Section 5.7(a); provided,
however, that the foregoing rights granted to Standard
shall, whether or not and regardless of the extent to which
the same are exercised, in no way affect the nature or scope
of the representations, warranties and covenants of TCF set
forth herein. In addition, TCF shall instruct its officers,
employees, counsel and accountants to be available for, and
respond to reasonable questions of, representatives of
Standard at reasonable hours and with reasonable notice by
Standard to such individuals.
(c) All information furnished by Standard or
TCF pursuant hereto shall be treated as the sole property of
the party furnishing the information until the Effective
Date, and, if the Effective Date shall not occur, the
receiving party shall return to the party which furnished
such information, or destroy, all documents or other
materials (including copies thereof) containing, reflecting
or referring to such information. In addition, the receiving
party shall keep confidential all such information and shall
not directly or indirectly use such information for any
competitive or other commercial purpose. The obligation to
keep such information confidential shall not apply to (i)
any information which (A) was already in the receiving
party's possession prior to the disclosure thereof to the
receiving party by the party furnishing the information, (B)
was then generally known to the public, (C) became known to
the public through no fault of the receiving party or its
representatives or (D) was disclosed to the receiving party
by a third party not bound by an obligation of
confidentiality or (ii) disclosures required by law or by
governmental or regulatory authority.
5.8 Filing of Tax Returns and Adjustments.
(a) Standard, on its behalf and on behalf of
each of the Standard Subsidiaries, shall file (or cause to
be filed) at its own expense, on or prior to the due date,
all Tax returns, including all Plan returns and reports, for
all Tax periods ending on or before the Effective Date where
the due date for such returns or reports (taking into
account valid extensions of the respective due dates) falls
on or before the Effective Date; provided, however, that
neither Standard nor any of the Standard Subsidiaries shall
amend any Tax returns, or other returns, elections or
information statements which reflects an additional
liability for Taxes, or consent to any material adjustment
or otherwise compromise or settle any material matters with
respect to Taxes, without prior consultation with TCF;
provided, further, that neither Standard nor any of the
Standard Subsidiaries shall make any election or take any
other discretionary position with respect to any material
amount of Taxes in a manner inconsistent with past
practices, without the prior written approval of TCF, which
approval shall not be unreasonably withheld. In the event
the granting or withholding of such approval by TCF results
in additional Taxes owing for any Tax period ending on or
before the Effective Date, the liability for such additional
Taxes shall not constitute or be deemed to be a breach,
violation of or failure to satisfy any representation,
warranty, covenant, condition or other provision of this
Agreement or otherwise be considered in determining whether
any such breach, violation or failure to satisfy shall have
occurred. Standard shall provide TCF with a copy of
appropriate workpapers, schedules, drafts and final copies
of each material federal and state income Tax return or
election of Standard and each of the Standard Subsidiaries
(including returns of all Plans) as soon as practicable
before filing such return or election and the parties shall
reasonably cooperate with each other in connection
therewith.
(b) TCF, in its sole and absolute discretion,
will file (or cause to be filed) all Tax returns of Bank due
after the Effective Date. After the Effective Date, TCF, in
its sole and absolute discretion and to the extent permitted
by law, shall have the right to amend, modify or otherwise
change all Tax returns of Standard and each Standard
Subsidiary for all Tax periods.
5.9 Registration Statement.
(a) For the purpose (i) of holding meetings
of shareholders of Standard to approve this Agreement and
the transactions contemplated hereby, including the
Conversion/Reincorporation, the Merger and the Subsequent
Merger, and (ii) of registering with the SEC and with
applicable state securities authorities the TCF Common Stock
to be issued as contemplated by this Agreement, the parties
hereto shall cooperate in the preparation of an appropriate
registration statement (such registration statement,
together with all and any amendments and supplements
thereto, being herein referred to as the "Registration
Statement"), which shall include a prospectus/proxy
statement satisfying all applicable requirements of the 1933
Act, the 1934 Act, applicable state securities laws and the
rules and regulations thereunder (such prospectus/proxy
statement, together with any and all amendments or
supplements thereto, being herein referred to as the
"Prospectus/Proxy Statement").
(b) TCF shall furnish such information
concerning TCF and the TCF Subsidiaries as is necessary in
order to cause the Prospectus/Proxy Statement, insofar as it
relates to TCF, the TCF Subsidiaries and TCF Common Stock,
to be prepared in accordance with Section 5.9(a). TCF agrees
promptly to advise Standard if at any time prior to the
meeting of Standard's shareholders any information provided
by TCF in the Prospectus/Proxy Statement becomes incorrect
or incomplete in any material respect, and to share with
Standard the information needed to correct such inaccuracy
or omission.
(c) Standard shall furnish TCF with such
information concerning Standard and the Standard
Subsidiaries as is necessary in order to cause the
Prospectus/Proxy Statement, insofar as it relates to
Standard or the Standard Subsidiaries to be prepared in
accordance with Section 5.9(a). TCF agrees to provide
Standard with reasonable opportunity to review and comment
on the Prospectus/Proxy Statement. Standard agrees promptly
to advise TCF if at any time prior to the meeting of
Standard's shareholders any information provided by Standard
in the Prospectus/Proxy Statement becomes incorrect or
incomplete in any material respect, and to provide TCF with
the information needed to correct such inaccuracy or
omission.
(d) TCF shall promptly file the Registration
Statement with the SEC and applicable state securities
agencies. TCF shall use reasonable efforts to cause the
Registration Statement to become effective under the 1933
Act and applicable state securities laws at the earliest
practicable date. Standard authorizes TCF to utilize in the
Registration Statement the information concerning Standard
and the Standard Subsidiaries provided to TCF for the
purpose of inclusion in the Prospectus/Proxy Statement. TCF
shall advise Standard promptly when the Registration
Statement has become effective and of any supplements or
amendments thereto, and TCF shall furnish Standard with
copies of all such documents. Prior to the Effective Date or
the termination of this Agreement, each party shall consult
with the other with respect to any material (other than the
Prospectus/Proxy Statement) that might constitute a
"prospectus" relating to the Merger within the meaning of
the 1933 Act prior to using or disseminating such
prospectus.
(e) TCF shall use reasonable efforts to cause
to be delivered to Standard a letter relating to the
Registration Statement from KPMG Peat Marwick LLP, TCF's
independent auditors, dated a date within two business days
before the date on which the Registration Statement shall
become effective and addressed to Standard, in form and
substance reasonably satisfactory to Standard and customary
in scope and substance for letters delivered by independent
public accountants in connection with registration
statements similar to the Registration Statement.
(f) Standard shall use reasonable efforts to
cause to be delivered to TCF a letter relating to the
Registration Statement from Ernst & Young LLP, Standard's
independent auditors, dated a date within two business days
before the date on which the Registration Statement shall
become effective and addressed to TCF, in form and substance
reasonably satisfactory to TCF and customary in scope and
substance for letters delivered by independent public
accountants in connection with registration statements
similar to the Registration Statement.
(g) TCF shall bear the costs of all SEC
filing fees with respect to the Registration Statement and
the costs of qualifying the TCF Common Stock to be issued in
connection with the transactions contemplated by this
Agreement under state blue sky laws to the extent necessary.
Standard shall bear all printing and mailing costs in
connection with the preparation and mailing of the
Prospectus/Proxy Statement to Standard's shareholders. TCF
and Standard shall each bear their own legal and accounting
expenses in connection with the Registration Statement.
5.10 Affiliate Letters. Standard shall obtain and
deliver to TCF as promptly as practicable after (and shall
use its reasonable best efforts to obtain and deliver within
five days after) the date hereof a signed representation
letter substantially in the form of Exhibit A hereto from
each executive officer and director of Standard and each
shareholder of Standard who may reasonably be deemed an
"affiliate" of Standard within the meaning of such term as
used in Rule 145 under the 1933 Act, and shall obtain and
deliver to TCF a signed representation letter substantially
in the form of Exhibit A from any person who becomes an
executive officer or director of Standard or any shareholder
who becomes such an "affiliate" after the date hereof as
promptly as practicable after (and shall use its reasonable
best efforts to obtain and deliver within five days after)
such person achieves such status. TCF may place appropriate
legends on the stock certificates of affiliates of Standard.
5.11 Establishment of Accruals. If requested by
TCF immediately prior to the Effective Date, Standard shall
establish, or shall cause the Bank to establish, consistent
with GAAP, such additional accruals and reserves as may be
necessary to conform Bank's accounting and credit loss
reserve practices and methods to those of TCF (as such
practices and methods are to be applied to Bank from and
after the Effective Date) and reflect TCF's plans with
respect to the conduct of Bank's business following the
Merger and to provide for the costs and expenses relating to
the consummation by Bank of the transactions contemplated by
this Agreement; provided, however, that Bank shall not be
required to take such action unless (i) TCF certifies in
writing that it has no reason to believe that all conditions
to TCF's obligation to consummate the transactions
contemplated by this Agreement will not be satisfied, and
(ii) Bank shall have no reasonable basis for believing that
all the conditions to Bank's obligation to consummate the
transactions contemplated by this Agreement will not be
satisfied. Notwithstanding anything to the contrary
contained in this Agreement, no accrual or reserve made by
Bank pursuant to this Section 5.11, or any litigation or
regulatory proceeding arising out of any such accrual or
reserve, or any other effect on Bank resulting from Bank's
compliance with this Section 5.11, shall constitute or be
deemed to be a breach, violation of or failure to satisfy
any representation, warranty, covenant, condition or other
provision of this Agreement or otherwise be considered in
determining whether any such breach, violation or failure to
satisfy shall have occurred.
5.12 Employee Benefit Plans.
(a) General. Any transfer of employment from
Standard or any of Standard Subsidiaries to TCF or any of
the TCF Subsidiaries effected by or in connection with the
Merger or the Subsequent Merger shall not be considered a
termination of employment for purposes of any of the
employee benefit plans of Standard or TCF, including any
severance plans or arrangements. It is the parties'
intention that the employee plans of Standard or any of the
Standard Subsidiaries will be merged with applicable TCF
plans or discontinued as soon as practicable after the
Merger and the employee plans of TCF will be made available
to employees of Standard as soon as practicable after the
Merger, with employees of Standard of any of the Standard
Subsidiaries receiving credit for their pre-Effective Time
service with Standard under the TCF benefit plans for
eligibility and vesting purposes, but not for purposes of
benefit accrual.
(b) Medical Plans. TCF intends that employees
of Standard and the Standard Subsidiaries who are
participating in medical plans of Standard or any Standard
Subsidiary at the time of any replacement of such medical
plans with the TCF medical plans will not be subject to any
exclusion or penalty for pre-existing conditions that were
covered under the applicable plans of Standard or any
Standard Subsidiary and will receive full credit for prior
service with Standard or any Standard Subsidiary toward any
waiting periods under the TCF plans and full credit for
payment of current and past premiums, co-payments and
deductibles under the medical plans of Standard or any
Standard Subsidiary toward such items under the TCF medical
coverage, and that employees of Standard or any Standard
Subsidiary not participating in such plans at the time of
their replacement by TCF's medical plans will receive full
credit for their pre- Effective Time service with Standard
or any Standard Subsidiary toward any waiting period or
other service requirements generally applicable under TCF's
medical plans.
(c) ESOP. The Bank has established an
employee stock ownership plan (the "ESOP") for the benefit
of its employees which is a tax-qualified plan. As of
December 31, 1996, the ESOP had purchased an aggregate of
961,070 shares of Standard Common Stock from Standard which
had not been allocated to participant accounts or earned by
participants and owed Standard an aggregate of $9,610,700
with respect to such shares. The parties intend that, as
soon as practicable, to take the actions set forth on
Schedule 5.12.
(d) No Third Party Beneficiaries; Reservation
of Rights. Notwithstanding the foregoing provisions of this
Section 5.12, nothing in this Section 5.12 or in this
Agreement shall be deemed to confer upon any employee or
former employee of Standard or any Standard Subsidiary, or
any other individual, any rights or entitlement to any
particular benefits, benefit plans, payments or
distributions. Except as expressly provided herein, TCF
reserves, on behalf of itself and the boards of directors of
any and all of TCF Subsidiaries (including Standard and any
Standard Subsidiary after the Effective Date), full
authority to amend, terminate, discontinue or otherwise
revise their respective employee plans and/or to adopt new
plans from time to time subject solely to the discretion of
the boards of directors of the entities involved.
5.13 Tax Treatment. Each of TCF and Standard shall
not take or fail to take, and shall cause their respective
affiliates not to take or fail to take, any action which
action or failure to act would prevent, or be likely to
prevent, the Conversion/Reincorporation or the Merger from
qualifying as a "reorganization" within the meaning of
Section 368(a) of the Code.
5.14 Press Releases. TCF and Standard shall agree
with each other as to the form and substance of any press
release related to this Agreement or the transactions
contemplated hereby, and shall consult with each other as to
the form and substance of other public disclosures which may
relate to the transactions contemplated by this Agreement,
provided, however, that nothing contained herein shall
prohibit either party, following notification to the other
party, from making any disclosure which is required by law
or regulation.
5.15 Indemnification and Insurance.
(a) From and after the Effective Date, TCF
shall indemnify, defend and hold harmless each person who is
now, or has been at any time prior to the date hereof or who
becomes prior to the Effective Date, an officer, director,
employee or agent of Standard or any Standard Subsidiary
(the "Indemnified Parties") against all losses, claims,
damages, costs, expenses (including attorney's fees),
liabilities or judgments or amounts that are paid in
settlement (which settlement shall require the prior written
consent of TCF, which consent shall not be unreasonably
withheld) of or in connection with any claim, action, suit,
proceeding or investigation (a "Claim") in which an
Indemnified Party is, or is threatened to be made, a party
or a witness based in whole or in part on or arising in
whole or in part out of the fact that such person is or was
a director, officer, employee or agent of Standard or any
Standard Subsidiary if such Claim pertains to any matter or
fact arising, existing or occurring on or prior to the
Effective Date (including, without limitation, the
Conversion/Reincorporation, the Merger and other
transactions contemplated by this Agreement), regardless of
whether such Claim is asserted or claimed prior to, at or
after the Effective Date (the "Indemnified Liabilities") to
the fullest extent permitted by TCF's Charter and Bylaws and
applicable Delaware law. Any Indemnified Party wishing to
claim indemnification under this Section 5.15(a), upon
learning of any Claim, shall notify TCF (but the failure so
to notify TCF shall not relieve it from any liability which
TCF may have under this Section 5.15(a) except to the extent
such failure prejudices TCF) and shall deliver to TCF any
undertaking required by Delaware law. The obligations of TCF
described in this Section 5.15(a) shall continue in full
force and effect, without any amendment thereto, for a
period of not less than six years from the Effective Date;
provided, however, that all rights to indemnification in
respect of any Claim asserted or made within such period
shall continue until the final disposition of such Claim;
and provided further that nothing in this Section 5.15(a)
shall be deemed to modify applicable Delaware law regarding
indemnification of former officers and directors. The
foregoing indemnification shall not apply to any actions,
suits proceedings, orders or investigations which at the
date hereof are pending or, to the Knowledge of Standard or
its directors, threatened unless disclosed on Schedule
5.15(a).
(b) From and after the Effective Date, the
directors, officers and employees of Standard or any
Standard Subsidiary who become directors, officers or
employees of TCF, the Resulting Institution or any other of
the TCF Subsidiaries, shall also have indemnification rights
with prospective application. The prospective
indemnification rights shall consist of such rights to which
directors, officers and employees of TCF are entitled under
the provisions of the Charter, Bylaws or similar governing
documents of TCF, the Resulting Institution and the other
TCF Subsidiaries, as in effect from time to time after the
Effective Date, as applicable, and provisions of applicable
law as in effect from time to time after the Effective Date.
(c) TCF shall cause the Resulting Institution
and any successor thereto to maintain directors and officers
liability insurance comparable to that being maintained by
TCF on the date hereof, or continue the existing insurance
being maintained by Standard, for the benefit of the current
and former directors and officers of Standard or any
Standard Subsidiary for a period of three years after the
Effective Time, which insurance shall provide coverage for
acts and omissions occurring on or prior to the Effective
Date; provided, further, that officers and directors of
Standard or any Standard Subsidiary may be required to make
application and provide customary representations and
warranties to TCF's or the Resulting Institution's insurance
carrier for the purpose of obtaining such insurance; and
provided, further, that such coverage will be in an amount
not less than the annual aggregate of such coverage
currently provided by Standard.
(d) The contractual obligations of TCF
provided under Sections 5.15(a) through 5.15(c) hereof are
intended to benefit, and be enforceable against TCF directly
by, the Indemnified Parties, and shall be binding on all
respective successors of TCF.
5.16 TCF SEC Reports. TCF shall continue to file
all reports with the SEC necessary to permit the
shareholders of Standard who are "affiliates" of Standard
(within the meaning of such term as used in Rule 145 under
the 0000 Xxx) to sell the TCF Common Stock received by them
in connection with the Merger pursuant to Rules 144 and
145(d) under the 1933 Act if they would otherwise be so
permitted. After the Effective Date, TCF will file with the
SEC such reports and other materials required to be filed by
TCF under the federal securities laws on a timely basis.
5.17 Securities Reports. Each of TCF and Standard
agree to provide to the other party copies of all reports
and other documents filed under the 1933 Act or 1934 Act
with the SEC by it between the date hereof and the Effective
Date within five days after the date such reports or other
documents are filed with the SEC.
5.18 Stock Exchange Listing. TCF shall use its
best efforts to list on the NYSE, subject to official notice
of issuance, the shares of TCF Common Stock to be issued in
the Merger.
5.19 Shareholder Approval. Standard shall call a
meeting of its shareholders for the purpose of voting upon
this Agreement, the Conversion/Reincorporation and the
Merger and shall schedule the date of such meeting after
consultation with TCF. The Board of Directors of Standard
shall recommend approval of this Agreement, the
Conversion/Reincorporation and the Merger, and use its best
efforts (including, without limitation, soliciting proxies
for such approvals) to obtain approvals from its
shareholders; provided, however, that the Board of Directors
of Standard may fail to make the recommendation, and/or to
seek to obtain the shareholder approval, referred to above,
or withdraw, modify or change any such recommendation, if
such Board of Directors determines, after consultation with
counsel to Standard, that the making of such recommendation,
the seeking to obtain such shareholder approval, or the
failure to so withdraw, modify or change its recommendation,
is reasonably likely to constitute a breach of the fiduciary
or legal obligations of Standard's Board of Directors.
5.20 Failure to Fulfill Conditions. In the event
that either of the parties hereto determines that a
condition to its respective obligations to consummate the
transactions contemplated hereby cannot be fulfilled on or
prior to the termination of this Agreement, it will promptly
notify the other party. Each party will promptly inform the
other party of any facts applicable to it that would be
likely to prevent or materially delay approval of the Merger
by any governmental or regulatory authority or third party
or which would otherwise prevent or materially delay
completion of the Merger.
5.21 Standard Severance/Change in Control
Arrangements. TCF agrees to perform, or, as applicable,
cause the Resulting Institution or any of its controlled
subsidiaries to perform, the terms of any contractual
arrangements, including severance and change of control
arrangements, as disclosed in Schedule 3.13 as in effect on
the date hereof. TCF agrees that the transactions
contemplated by this Agreement constitute a change of
control of Standard for purposes of any severance
arrangements referred to above.
5.22 Headquarters of Resulting Institution. It is
TCF's current intention to maintain the headquarters of the
Resulting Institution in the current location of Bank's
headquarters.
5.23 Conversion/Reincorporation. Standard shall
use its best efforts to effect the
Conversion/Reincorporation in a manner reasonably acceptable
to TCF immediately prior to the Effective Time.
5.24 Private Letter Ruling. If TCF and Standard
mutually agree to apply for an Internal Revenue Service
private letter ruling to the effect that the
Conversion/Reincorporation, the Merger and the Subsequent
Merger constitute a reorganization within the meaning of
Section 368(a) of the Code, the parties will reasonably
cooperate with each other in connection with such ruling
request, including TCF providing Standard's tax counsel a
reasonable opportunity to review and comment on submissions
to the IRS and to participate in conferences with the IRS.
In event a favorable ruling is received from the IRS prior
to the Effective Date, the conditions to closing in Sections
6.2(g) and 6.3(h) shall be deemed satisfied.
ARTICLE 6
CONDITIONS
6.1 Conditions to Obligations of Each Party. The
respective obligations of each party to effect the
transactions contemplated hereby shall be subject to the
fulfillment at or prior to the Effective Date of the
following conditions:
(a) Regulatory Approval. Regulatory approval
for the consummation of the transactions contemplated
hereby, including the Conversion/Reincorporation, the Merger
and the Subsequent Merger, shall have been obtained from the
applicable Bank Authority or Bank Authorities and all
applicable statutory or regulatory waiting periods shall
have lapsed.
(b) No Injunction. No injunction or other
order entered by a state or federal court of competent
jurisdiction shall have been issued and remain in effect
which would prohibit or make illegal the consummation of the
transactions contemplated hereby.
(c) No Prohibitive Change of Law. There shall
have been no law, statute, rule or regulation, domestic or
foreign, enacted or promulgated which would prohibit or make
illegal the consummation of the transactions contemplated
hereby.
(d) Registration Statement. The Registration
Statement shall have been declared effective and shall not
be subject to a stop order of the SEC, and, if the offer and
sale of TCF Common Stock in the Merger pursuant to this
Agreement is required to be registered under the securities
laws of any state, the Registration Statement shall not be
subject to a stop order of the securities commission in such
state.
(e) Listing. The TCF Common Stock to be
issued to holders of Standard Common Stock shall have been
approved for listing on the NYSE subject to official notice
of issuance.
(f) Adverse Proceedings. There shall not be
instituted or pending any action or proceeding before any
court by any governmental authority or agency, domestic or
foreign, (i) challenging or seeking to make illegal, or to
delay or otherwise directly or indirectly to restrain or
prohibit, the consummation of the transactions contemplated
hereby or seeking to obtain material damages in connection
with the transactions contemplated hereby, (ii) seeking to
prohibit direct or indirect ownership or operation by TCF of
all or a material portion of the business or assets of
Standard and the Standard Subsidiaries, or to compel TCF or
any of the TCF Subsidiaries or Standard or any of the
Standard Subsidiaries to dispose of all or a material
portion of the business or assets of TCF or Standard and the
Standard Subsidiaries, as a result of the transactions
contemplated hereby, or (iii) seeking to require direct or
indirect divestiture by TCF of any material portion of its
business or assets or of the business or assets of Standard
and the Standard Subsidiaries.
(g) Governmental Action. After the date
hereof, there shall not be any action taken, or any statute,
rule, regulation, judgment, order or injunction enacted,
entered, enforced, promulgated, issued or deemed applicable
to the transactions contemplated by this Agreement by any
federal, state or other court, government or governmental
authority or agency, which could reasonably be expected to
result, directly or indirectly, in any of the consequences
referred to in Section 6.1(f).
6.2 Additional Conditions to Obligation of
Standard. The obligation of Standard to consummate the
transactions contemplated hereby in accordance with the
terms of this Agreement is also subject to the following
conditions:
(a) Representations and Compliance. The
representations and warranties of TCF set forth in Article 2
shall have been true and correct as of the date hereof, and
shall be true and correct as of the Effective Date as
updated pursuant to Section 5.6(b) if made at and as of the
Effective Date, except where the failure to be true and
correct would not have, or would not reasonably be expected
to have, a Material Adverse Effect on TCF. TCF shall in all
material respects have performed each obligation and
agreement and complied with each covenant to be performed
and complied with by it hereunder at or prior to the
Effective Date.
(b) Officers' Certificate of TCF. TCF shall
have furnished to Standard a certificate of the Chief
Executive Officer or the President and the Chief Financial
Officer of TCF, dated as of the Effective Date, in which
such officers shall certify to their best Knowledge that
they have no reason to believe that the conditions set forth
in Section 6.2(a) have not been fulfilled.
(c) TCF's Secretary's Certificate. TCF shall
have furnished to Standard (i) copies of the text of the
resolutions by which the corporate action on the part of TCF
and Merger Sub necessary to approve this Agreement, the
Articles of Merger and the transactions contemplated hereby
and thereby were taken, (ii) a certificate dated as of the
Effective Date executed on behalf of TCF by its corporate
secretary or one of its assistant corporate secretaries
certifying to Standard that such copies are true, correct
and complete copies of such resolutions and that such
resolutions were duly adopted and have not been amended or
rescinded and (iii) an incumbency certificate dated as of
the Effective Date executed on behalf of each of TCF and
Merger Sub by its corporate secretary or one of its
assistant corporate secretaries certifying the signature and
office of each officer of TCF or Merger Sub executing this
Agreement, the Articles of Merger or any other agreement,
certificate or other instrument executed pursuant hereto by
TCF or Merger Sub, as the case may be.
(d) Opinion of Counsel to TCF. Standard shall
have received an opinion letter dated as of the Effective
Date addressed to Bank from Xxxxxxx X. Xxxxxx, Esq., General
Counsel and Secretary of TCF, based on customary reliance
and subject to customary qualifications to the effect that:
(i) TCF is a corporation duly
incorporated, validly existing and in good
standing under the laws of the State of
Delaware. Merger Sub is a validly existing and
in good standing under the laws of the United
States of America.
(ii) TCF has the corporate power
to consummate the transactions on its part
contemplated by this Agreement. TCF has taken
all requisite corporate action to authorize
this Agreement and the Merger, and Merger Sub
has taken all requisite corporate action to
authorize the Merger and the Articles of
Merger. This Agreement has been duly executed
and delivered by TCF and the Articles of Merger
have been duly executed by Merger Sub and,
assuming they are the valid and binding
obligation of Standard, constitute the valid
and binding obligations of TCF and Merger Sub
to which it is a party enforceable in
accordance with their terms, subject as to the
enforcement of remedies to applicable
bankruptcy, insolvency, moratorium and other
laws affecting the rights of creditors
generally and to judicial limitations on the
enforcement of the remedy of specific
performance.
(iii) The execution and delivery
of this Agreement by TCF and the Articles of
Merger by Merger Sub and the consummation of
the transactions contemplated hereby and
thereby will not constitute a breach, default
or violation under their respective Charter or
Bylaws or, to his Knowledge, (A) any material
agreement, arrangement or understanding to
which TCF or Merger Sub is a party, (B) any
material license, franchise or permit affecting
TCF or Merger Sub, or (C) any law, regulation,
order, judgment or decree applicable to TCF or
Merger Sub.
(iv) No authorization, consent
or approval of, or filing with, any public
body, court or authority is necessary for the
consummation by TCF or Merger Sub of the
transactions contemplated hereby which has not
been obtained or made.
(v) The authorized capital of
TCF consists of (A) ____________ shares of TCF
Common Stock of which ______ shares are duly
issued and outstanding and _____ shares are
reserved for issuance upon exercise of the TCF
Stock Plans, and (B) ____________ shares of
preferred stock, of which _________ shares are
outstanding.
(vi) The shares of TCF Common
Stock to be issued pursuant to this Agreement
will be, when issued, duly authorized, validly
issued, fully paid and nonassessable.
(e) Standard Shareholder Approval. This
Agreement, the Conversion/Reincorporation and the Merger
shall have been approved by the affirmative vote of the
holders of the percentage of Standard capital stock
required for such approval under Delaware law and the
provisions of Standard's Charter and bylaws.
(f) Material Adverse Effect. Since the
date of this Agreement, TCF has not suffered or
experienced a Material Adverse Effect, except this
subsection shall not apply to matters properly disclosed
to Standard by TCF in any Schedule to this Agreement
delivered by TCF upon the execution of this Agreement or
in any supplement or amendment delivered by TCF pursuant
to Section 5.6(b) for which Standard has a specific right
of termination under Section 7.1(i) hereof.
(g) Tax Opinion. Standard shall have
received an opinion dated the Effective Date from
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois), counsel
to Standard, in form and substance reasonably
satisfactory to Standard, substantially to the effect
that, on the basis of facts, representations and
assumptions set forth in such opinion which are
consistent with the state of facts existing on the
Effective Date, (i) no gain or loss will be recognized
for federal income tax purposes as a result of the
Conversion/Reincorporation and (ii) the
Conversion/Reincorporation, the Merger and the Subsequent
Merger will be treated for federal income tax purposes as
a reorganization within the meaning of Section 368(a) of
the Code. In rendering such opinion, Skadden, Arps,
Slate, Xxxxxxx & Xxxx (Illinois) may require and rely
upon (and may incorporate by reference) representations
and covenants, including those contained in certificates
of officers of Standard, Bank, TCF, Merger Sub and
others.
6.3 Additional Conditions to Obligation of
TCF. The obligation of TCF to consummate the
transactions contemplated hereby in accordance with the
terms of this Agreement is also subject to the following
conditions:
(a) Representations and Compliance. The
representations and warranties of Standard in this
Agreement shall have been true and correct as of the date
hereof, and such representations and warranties shall be
true and correct as of the Effective Date as updated
pursuant to Section 5.6(b) as if made at and as of the
Effective Date, except where the failure to be true and
correct would not have, or would not reasonably be
expected to have, a Material Adverse Effect on Standard;
and Standard shall in all material respects have
performed each obligation and agreement and complied with
each covenant to be performed and complied with by it
hereunder at or prior to the Effective Date.
(b) Officers' Certificate of Standard.
Standard shall have furnished to TCF certificates of the
Chief Executive Officer and the Chief Financial Officer
of Standard, dated as of the Effective Date, in which
such officers shall certify to their best Knowledge that
they have no reason to believe that the conditions set
forth in Section 6.3(a) have not been fulfilled.
(c) Secretaries' Certificate. Standard
shall have furnished to TCF (i) copies of the text of the
resolutions by which the corporate action on the part of
Standard and the Standard Subsidiaries necessary to
approve this Agreement, the Articles of Merger and the
transactions contemplated hereby and thereby were taken,
(ii) certificates dated as of the Effective Date executed
on behalf of Standard by its corporate secretary or one
of its assistant corporate secretaries certifying to TCF
that such copies are true, correct and complete copies of
such resolutions and that such resolutions were duly
adopted and have not been amended or rescinded and (iii)
an incumbency certificate dated as of the Effective Date
executed on behalf of Standard by its corporate secretary
or one of its assistant corporate secretaries certifying
the signature and office of each officer executing this
Agreement, the Articles of Merger or any other agreement,
certificate or other instrument executed pursuant hereto
or thereto.
(d) Opinion of Counsel to Standard and
Bank. TCF shall have received an opinion letter dated as
of the Effective Date addressed to TCF from Xxxxxxx X.
Xxxxxxxx, Vice President and General Counsel of Standard,
based on customary reliance (including reliance on in-
house and/or local counsel as to matters other than
federal law) and subject to customary qualifications, to
the effect that:
(i) Standard is a corporation
duly incorporated, validly existing and in good
standing under the laws of the State of
Delaware. New Bank and Bank are each a
federally chartered savings bank duly organized
and validly existing under the laws of the
United States.
(ii) Each of [specified
principal Standard Subsidiaries] is a
corporation duly organized, validly existing
and in good standing under the laws of its
state of incorporation.
(iii) The execution and delivery
of this Agreement and the Articles of Merger by
Standard and New Bank to which each is a party
and the consummation of the transactions
contemplated hereby and thereby will not
constitute a breach, default or violation under
the respective Charter or Bylaws of Standard or
New Bank or any of [specified principal
Standard Subsidiaries] or, to the best of such
counsel's Knowledge, (A) any material
agreement, arrangement or understanding to
which Standard, New Bank or any of [specified
principal Standard Subsidiaries] is a party,
(B) any material license, franchise or permit
affecting Standard, New Bank or any of
[specified principal Standard Subsidiaries] or
(C) any material law, regulation, order,
judgment or decree applicable to Standard, New
Bank or any of [specified principal Standard
Subsidiaries].
(iv) The authorized capital of
New Bank consists of _____________ shares of
common stock of which shares are
duly issued and outstanding.
(v) No holder of the capital
stock of New Bank is entitled to any preemptive
or other similar rights with respect to the
capital stock of New Bank.
(vi) All of the issued and
outstanding shares of each the Standard
Subsidiaries are duly authorized, validly
issued, fully paid and nonassessable.
(vii) Each of Standard and the
Standard Subsidiaries has the corporate power
to consummate the transactions on its
respective part contemplated by this Agreement
and the Articles of Merger. Standard and New
Bank have duly taken all requisite corporate
action to authorize this Agreement and the
Articles of Merger and this Agreement and the
Articles of Merger have been duly executed and
delivered by Standard or New Bank, as the case
may be, and, assuming they are the valid and
binding obligations of TCF and Merger Sub under
this Agreement, constitute the valid and
binding obligations of Standard or New Bank
enforceable in accordance with their terms,
subject as to the enforcement of remedies to
applicable bankruptcy, insolvency, moratorium
and other laws affecting the rights of
creditors generally and to judicial limitations
on the enforcement of the remedy of specific
performance.
(viii) No authorization, consent
or approval of, or filing with any public body,
court or public authority by Standard, is
necessary for the consummation by Standard of
the transactions contemplated by this
Agreement, the Articles of Merger or the
Conversion/Reincorporation which has not been
obtained or made.
(e) Affiliate Letters. TCF shall have
received the letters referred to in Section 5.10 from all
executive officers and directors of Standard and all
shareholders who are affiliates of Standard.
(f) Material Adverse Effect. Since the
date of this Agreement, Standard shall not have suffered
or experienced a Material Adverse Effect, except this
subsection shall not apply to matters properly disclosed
to TCF by Standard in the Schedules delivered upon
execution of this Agreement or a supplement or amendment
delivered by Standard pursuant to Section 5.6(b) for
which TCF has a specific right of termination under
Section 7.1(i) hereof.
(g) Dissenting Shares. The aggregate
number of Dissenting Shares shall not exceed ten percent
(10%) of the outstanding shares of Standard Common Stock
on the Effective Date.
(h) Tax Opinion. TCF shall have received
an opinion dated the Effective Date from Fried, Frank,
Harris, Xxxxxxx & Xxxxxxxx, counsel to TCF, or KPMG Peat
Marwick LLP, TCF's independent auditors, in form and
substance reasonably satisfactory to TCF, substantially
to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion
which are consistent with the state of facts existing on
the Effective Date, (i) no gain or loss will be
recognized for federal income tax purposes as a result of
the Conversion/Reincorporation and (ii) the
Conversion/Reincorporation, the Merger and the Subsequent
Merger will be treated for federal income tax purposes as
a reorganization within the meaning of Section 368(a) of
the Code. In rendering such opinion, Fried, Frank,
Harris, Xxxxxxx & Xxxxxxxx or KPMG Peat Marwick LLP, may
require and rely upon (and may incorporate by reference)
representations and covenants, including those contained
in certificates of officers of Standard, Bank, TCF,
Merger Sub and others.
(i) Burdensome Condition. After the date
hereof, there shall not be any action taken, or any
statute, rule, regulation or order enacted, entered,
enforced or deemed applicable to the
Conversion/Reincorporation, the Merger or the Subsequent
Merger by any federal or state governmental entity which,
in connection with the grant of a requisite regulatory
approval, imposes any condition or restriction upon the
Resulting Institution, TCF or any other TCF Subsidiaries,
including, without limitation, any requirement to raise
additional capital, which would so materially adversely
impact the economic or business benefits of the
transactions contemplated by this Agreement as to
significantly change the advisability of the consummation
of the Merger.
(j) Conversion/Reincorporation. Standard
shall have consummated the Conversion/Reincorporation.
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be
terminated prior to the Effective Date:
(a) by mutual consent of TCF and
Standard, if the board of directors of each so determines
by vote of a majority of the members of its entire board;
(b) by either TCF or Standard, if any of
the conditions to such party's obligation to consummate
the transactions contemplated in this Agreement shall
have become impossible to satisfy (unless such
impossibility shall be due to the action or failure to
act in breach of this Agreement by the party seeking to
terminate this Agreement);
(c) by Standard, if this Agreement is not
duly approved by the shareholders of Standard at a
meeting of shareholders (or any adjournment thereof) duly
called and held for such purpose;
(d) by either TCF or Standard, if the
Effective Date is not on or before October 31, 1997
(unless the failure to consummate the Merger by such date
shall be due to the action or failure to act in breach of
this Agreement by the party seeking to terminate this
Agreement);
(e) by Standard, if the Average TCF Stock
Price is less than $37.50 subject, however, to the
following three sentences. If Standard makes an
election to terminate this Agreement under this Section
7.1(e), Standard shall give ten (10) days written notice
thereof to TCF (provided that such notice of election may
be withdrawn at any time within the aforementioned ten-
day period). During the seven-day period commencing with
its receipt of such notice, TCF shall have the option to
increase the value of the cash, the TCF Common Stock or a
combination thereof being offered to shareholders of New
Bank such that the per share value of the Merger
Consideration (valued at the Average TCF Stock Price in
the case of the stock portion of the Merger
Consideration) is equal to $24.69 per share (provided
that the Merger shall qualify as a reorganization within
the meaning of Section 368 of the Code). If TCF so
elects within such seven-day period, it shall give prompt
written notice to Standard of such election and the
increase in the Merger Consideration whereupon no
termination shall have occurred and this Agreement shall
remain in effect in accordance with its terms (except as
the amount of the Merger Consideration shall have been so
modified);
(f) by Standard, if (i) Standard has
complied with the provisions of Section 5.5, (ii) any
corporation, partnership, person, other entity or group,
as defined in the 1934 Act (other than TCF or any
affiliate of TCF) (a "Person"), shall have commenced (as
such term is used in Rule 14d-2(b) under the 0000 Xxx) a
bona fide tender offer for all outstanding shares of
Standard Common Stock or any Person shall have made a
bona fide written offer involving a merger or
consolidation of Standard or the acquisition of all or
substantially all of its assets or capital stock, (iii)
Standard's Board of Directors shall determine, in its
good faith judgment, after consultation with its
independent financial advisors, that such offer is more
favorable to Standard's shareholders when compared to the
transactions contemplated hereby, and (iv) Standard's
Board of Directors determines upon the advice of its
legal counsel that if they failed to recommend such offer
or accept such proposal then such failure would be likely
to result in a breach of the directors' fiduciary or
legal duties; provided, however, that Standard may not
terminate this Agreement pursuant to this Section 7.1(f)
until the expiration of five business days after written
notice of any such offer or proposal referenced in this
Section 7.1(f) has been delivered to TCF, together with a
summary of the terms of any such offer or proposal;
(g) by TCF, if, after the date hereof,
any Person shall have commenced (as such term is used in
Rule 14d-2(b) under the 0000 Xxx) a bona fide tender
offer or exchange offer to acquire at least 25% of the
then outstanding shares of Standard Common Stock, and
thereafter the Board of Directors of Standard shall have
withdrawn, or materially adversely modified or changed
its recommendation of this Agreement and the Merger;
(h) by (i) TCF if Standard commits a
willful breach of its obligations under this Agreement or
(ii) Standard if TCF commits a willful breach of its
obligations under this Agreement; and in each instance
such willful breach is not cured within ten days after
receipt by the breaching party of written demand for cure
by the non-breaching party. For purposes of this
Agreement, a "willful breach" means a knowing and
intentional violation by a party of any of its covenants,
agreements or obligations under this Agreement; or
(i) by TCF or Standard pursuant to
Section 5.6(b).
Any party desiring to terminate this Agreement shall
give written notice of such termination and the reasons
therefor to the other party.
7.2 Effect of Termination.
(a) In the event this Agreement is
terminated (i) by Standard as provided in Section 7.1(f);
or (ii) by TCF as provided in either Sections 7.1(g) or
7.1(h), then Standard shall pay to TCF, in immediately
available funds, an amount equal to $15,000,000 within
ten (10) business days after demand for payment by TCF
following such termination.
(b) If this Agreement is terminated (i)
by Standard as provided in Section 7.1(b) due to the
failure to satisfy the conditions of 6.2(e), or (ii) by
TCF pursuant to Section 7.1(b) due to the failure of any
condition under Section 6.3(a), (b), (c), (d) or (e),
Standard shall pay to TCF in immediately available funds,
an amount equal to $1,000,000 within ten (10) business
days after demand for payment by TCF following such
termination. In the event this Agreement is terminated
under the circumstances set forth in the first sentence
of this Section 7.2(b) and both of the following
conditions are satisfied:
(i) Standard has received an
Acquisition Proposal (as defined in Section
5.5) from a third party after the date hereof
and prior to the termination of this Agreement;
and
(ii) Standard and such third
party or an affiliate of such third party enter
into a definitive agreement for any Acquisition
Proposal (the "Signing Event") within twelve
months following the termination of this
Agreement,
then Standard shall pay to TCF, in immediately available
funds, an amount equal to $14,000,000 within ten (10)
business days after demand for payment by TCF following
the Signing Event.
(c) In the event this Agreement is
terminated by Standard pursuant to Section 7.1(b) due to
the failure of a condition under Section 6.2(a), (b), (c)
or (d), TCF shall pay to Standard, in immediately
available funds, an amount equal to $1,000,000 within ten
(10) business days after demand for payment by Standard
following such termination.
(d) In the event this Agreement is
terminated by Standard pursuant to Section 7.1(h), then
TCF shall pay to Standard, in immediately available
funds, an amount equal to $15,000,000 within ten (10)
business days after demand for payment by Standard
following such termination.
Notwithstanding anything contained in this Agreement
to the contrary, the payment of the termination fee
pursuant to the provision of this Section 7.2 shall be
liquidated damages and in lieu of any and all claims that
the party entitled to such fee has, or might have, and
the party entitled to such termination fee shall not have
any other rights or claims against the other party.
7.3 Amendment. This Agreement may not be
amended except by an instrument in writing approved by
the parties to this Agreement and signed on behalf of
each of the parties hereto; provided, however, that after
approval of this Agreement and the Merger by the
shareholders of Standard, no such amendment shall alter
or change (i) the amount or kind of consideration to be
received in exchange for shares of New Bank Common Stock
except as provided herein, or (ii) any of the terms or
conditions of this Agreement if such alteration or change
would adversely affect the holders of shares of Standard
Common Stock or New Bank Common Stock.
7.4 Waiver. At any time prior to the
Effective Date, any party hereto may (a) extend the time
for the performance of any of the obligations or other
acts of the other party hereto or (b) waive compliance
with any of the agreements of the other party or with any
conditions to its own obligations, in each case only to
the extent such obligations, agreements and conditions
are intended for its benefit.
ARTICLE 8
GENERAL PROVISIONS
8.1 Public Statements. Neither Standard nor
TCF shall make any public announcement or statement with
respect to the Merger, this Agreement or any related
transactions without the approval of the other party;
provided, however, that either TCF or Standard may, upon
reasonable notice to the other party, make any public
announcement or statement that it believes is required by
federal securities law. To the extent practicable,
Standard and TCF will consult with the other with respect
to any such public announcement or statement.
8.2 Notices. All notices and other
communications hereunder shall be in writing and shall be
sufficiently given if made by hand delivery, by fax, by
telecopier, by overnight delivery service, or by
registered or certified mail (postage prepaid and return
receipt requested) to the parties at the following
addresses (or at such other address for a party as shall
be specified by it by like notice):
If to TCF:
TCF Financial Corporation
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Chairman and Chief Executive Officer
with copies to:
TCF Financial Corporation
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, Vice Chairman and
General Counsel
and
Xxxxxx, Xxxxxxxx and Xxxxxx, P.A.
00 Xxxxx Xxxxxxx Xxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
If to Standard:
Standard Financial, Inc.
000 Xxxx Xxxxx Xxxxxxx
Xxxx Xxxxx, XX 00000
Attn: Chairman, President and Chief Executive
Officer
with copies to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 X. Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
All such notices and other communications shall be
deemed to have been duly given as follows: when
delivered by hand, if personally delivered; when
received, if delivered by registered or certified mail
(postage prepaid and return receipt requested); when
receipt acknowledged, if faxed or telecopied; and the
next day delivery after being timely delivered to a
recognized overnight delivery service.
8.3 Interpretation. The headings contained in
this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of
this Agreement. References to Sections and Articles
refer to Sections and Articles of this Agreement unless
otherwise stated. Words such as "herein," "hereinafter,"
"hereof," "hereto," "hereby" and "hereunder," and word of
like import, unless the context requires otherwise, refer
to this Agreement (including the Exhibits and Schedules
hereto). As used in this Agreement, the masculine,
feminine and neuter genders shall be deemed to include
the others if the context requires.
8.4 Severability. If any term, provision,
covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected,
impaired or invalidated.
8.5 Miscellaneous. This Agreement (together
with all other documents and instruments referred to
herein): (a) constitutes the entire agreement, and
supersedes all other prior agreements and undertakings,
both written and oral, among the parties, with respect to
the subject matter hereof; (b) shall be governed in all
respects, including validity, interpretation and effect,
by the internal laws of the State of Delaware, without
giving effect to the principles of conflict of laws
thereof; and (c) shall not be assigned by operation of
law or otherwise.
8.6 Survival of Representations, Warranties
and Covenants. The representations and warranties of the
parties set forth herein shall not survive the
consummation of the Merger, but covenants that
specifically relate to periods, activities or obligations
subsequent to the Merger shall survive the Merger. In
addition, if this Agreement is terminated pursuant to
Section 7.1, the covenants contained in Section 5.4,
5.7(c) and 7.2 shall survive such termination.
8.7 Schedules. The Schedules and other
disclosure referred to in this Agreement shall be
delivered as of the date hereof under cover of a letter
from the Chief Executive Officer, Vice Chairman, the
President or the Chief Financial Officer of Standard,
Bank or TCF, as the case may be.
8.8 Descriptive Headings. The descriptive
headings herein are inserted for convenience of reference
only and are not intended to be part of or to affect the
meaning or interpretation of this Agreement.
8.9 Parties in Interest. Except as expressly
provided in Section 5.15, this Agreement shall be binding
upon and inure solely to the benefit of each party hereto
and their respective successors, and nothing in this
Agreement, express or implied, is intended to confer upon
any other person, including but not limited to employees
of Standard or any Standard Subsidiary, any rights or
remedies of any nature whatsoever under or by reason of
this Agreement.
8.10 Counterparts. This Agreement may be
executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument,
but all such counterparts together shall constitute but
one agreement.
IN WITNESS WHEREOF, TCF and Standard have caused
this Agreement to be executed on the date first written
above by their respective officers.
TCF FINANCIAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
Vice Chairman and General Counsel
STANDARD FINANCIAL, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
-------------------------------
Xxxxx X. Xxxxxxxxxx
Chairman and President
EXHIBIT A
Form of Standard Affiliate Letter
---------------------------------
March __, 1997
TCF Financial Corporation
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Gentlemen:
Pursuant to Section 5.10 of the Agreement and Plan
of Reorganization dated as of March __, 1997 (the "Merger
Agreement") between TCF Financial Corporation ("TCF") and
Standard Financial, Inc. ("Standard"), I, as an affiliate
of Standard, acknowledge that I may transfer the shares
of TCF Common Stock received in the Merger contemplated
by the Merger Agreement only (i) in a registration under
the Securities Act of 1933, as amended (the "1933 Act"),
(ii) in compliance with the requirements of paragraphs
(c) and (d) of Rule 145 under the 1933 Act, as indicated
in the restrictive legend that will appear on my stock
certificate, or (iii) pursuant to another exemption from
registration under the 1933 Act for such offer and sale.
TCF's and Standard's transfer agent will be given an
appropriate stop transfer order and will not be required
to register any attempted transfer of the shares of TCF
Common Stock (as defined in the Merger Agreement) or
Standard Common Stock unless the transfer has been
effected in compliance with the terms of this letter
agreement.
Very truly yours,
----------------------------
[Name of Standard Affiliate]
Agreed and accepted this
day of March, 1997
TCF FINANCIAL CORPORATION
By
------------------------------
Xxxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
