Exhibit 2
AGREEMENT AND PLAN OF REORGANIZATION
among
STAR BANC CORPORATION,
FIRSTAR CORPORATION
and
FOXTROT (DE) CORPORATION
Dated as of June 30, 1998
TABLE OF CONTENTS
Page
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ARTICLE I
THE REINCORPORATION MERGER
1.1 The Reincorporation Merger..........................................2
1.2 First Effective Time................................................2
1.3 Effects of the Reincorporation Merger...............................2
1.4 Conversion of Securities............................................2
1.5 Foxtrot (DE) Common Stock...........................................3
1.6 Options.............................................................3
1.7 Certificate of Incorporation........................................3
1.8 By-Laws.............................................................4
1.9 Board of Directors; Management......................................4
ARTICLE II
THE SECOND STEP MERGER
2.1 The Second Step Merger..............................................4
2.2 Effective Time......................................................4
2.3 Effects of the Second Step Merger...................................5
2.4 Conversion of Star Common Stock.....................................5
2.5 Dissenting Shares...................................................6
2.6 Options.............................................................6
2.7 Foxtrot (DE) Common Stock...........................................6
2.8 Certificate of Incorporation........................................6
2.9 By-Laws.............................................................7
2.10 Management..........................................................7
2.11 Board of Directors..................................................7
2.12 Headquarters of Surviving Corporation...............................7
2.13 Tax and Accounting Consequences.....................................7
ARTICLE III
EXCHANGE OF SHARES
3.1 Exchange Procedures.................................................8
3.2 No Fractional Shares...............................................10
3.3 Anti-Dilution Adjustments..........................................10
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
4.1 Disclosure Schedules...............................................11
4.2 Standard...........................................................11
4.3 Representations and Warranties.....................................11
ARTICLE V
CONDUCT OF BUSINESSES PRIOR TO THE EFFECTIVE TIME
5.1 Conduct of Businesses Prior to the Effective Time..................22
5.2 Forbearances.......................................................22
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Access and Information.............................................25
6.2 Registration Statement; Regulatory Matters.........................25
6.3 Stockholder Approval...............................................27
6.4 Current Information................................................27
6.5 Agreements of Affiliates...........................................27
6.6 Expenses...........................................................28
6.7 Securities Act and Exchange Act Filings............................28
6.8 Miscellaneous Agreements and Consents..............................28
6.9 Employee Benefit Plans.............................................29
6.10 D&O Indemnification................................................30
6.11 Press Releases.....................................................31
6.12 Pooling of Interests...............................................31
6.13 Insurance..........................................................32
6.14 Conforming Entries.................................................32
6.15 Additional Actions.................................................32
6.16 Dividends..........................................................33
6.17 Issuance of Shares.................................................33
6.18 Changes in Structure...............................................33
6.19 Amending Governance Documents......................................31
ARTICLE VII
CONDITIONS
7.1 Conditions to Each Party's Obligation to Effect the Merger.........34
7.2 Conditions to Obligations of Firstar to Effect the Merger..........35
7.3 Conditions to Obligations of Star To Effect the Merger.............36
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ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination........................................................36
8.2 Effect of Termination..............................................37
8.3 Amendment..........................................................37
8.4 Severability.......................................................37
8.5 Waiver.............................................................38
ARTICLE IX
GENERAL PROVISIONS
9.1 Closing............................................................38
9.2 Non-Survival of Representations, Warranties and Agreements.........38
9.3 Notices............................................................38
9.4 Interpretation.....................................................39
9.5 Miscellaneous......................................................39
EXHIBITS
Exhibit A Form of Stock Option Agreement with respect to option issued by
Firstar Corporation
Exhibit B Form of Stock Option Agreement with respect to
option issued by Star Banc Corporation
Exhibit C Form of Foxtrot (DE) Restated
Certificate of Incorporation
Exhibit D Form of Foxtrot (DE) Restated By-laws
Exhibit E Form of Firstar Affiliate Letter
Exhibit F Form of Star Affiliate Letter
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INDEX OF DEFINED TERMS
Affiliate..........................26 Holding Company Act.............11
Agreement...........................1 HSR Act.........................13
Audited Financial Statements.......14 incentive stock options..........3
Banks..............................11 Indemnified Parties.............28
Benefit Plans......................17 Insurance Amount................29
Board..............................11 Lien............................11
Certificate of Merger...............4 Material Adverse Effect.........10
Certificates........................7 Meeting.........................25
Claim..............................29 Merger...........................1
Closing............................35 New Benefit Plans...............27
Closing Date.......................35 NYSE............................10
Code................................3 OGCL.............................4
DGCL................................2 Option Agreements................1
Disclosure Schedule................10 Proxy Statement.................15
Dissenting Shares...................5 Registration Statement..........15
DPC Shares..........................5 Regulatory Authority............14
ERISA..............................17 Regulatory Authorities..........14
ERISA Affiliate....................17 Reincorporation Merger...........1
Exchange Act.......................13 Returns.........................16
Exchange Agent......................7 SEC.............................14
Exchange Fund.......................7 Second Merger Exchange Ratio.....5
Exchange Ratio......................2 Second Step Merger...............1
FDIC...............................11 Star Banc........................1
Financial Statements...............14 Star Common Certificate..........5
First Effective Time................2 Star Common Stock................4
Reincorporation Merger..............1 Star Meeting....................16
Firstar.............................1 Star Preferred Stock............11
Firstar Common Certificate..........2 Star Rights Agreement...........12
Firstar Common Stock................2 Star Stock Option Agreement......1
Foxtrot (DE)........................1 Star Stock Options..............12
Firstar Meeting....................16 Star Stock Plans.................6
Firstar Preferred Stock............12 Subsidiary......................11
Firstar Rights Agreement...........12 Subsidiaries....................11
Firstar Stock Option Agreement......1 Surviving Corporation............1
Firstar Stock Options..............12 Trust Account Shares.............5
Firstar Stock Plans.................3 Unaudited Financial Statements..14
GAAP................................7 WBCL.............................2
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement")
is made and entered into on June 30, 1998 by and among Star Banc Corporation, an
Ohio corporation ("Star"), Firstar Corporation, a Wisconsin corporation
("Firstar") and Foxtrot (DE) Corporation ("Foxtrot (DE)"), a Delaware
corporation and a wholly-owned subsidiary of Firstar.
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Star, Firstar and Foxtrot
(DE) have determined that it is in the best interests of their respective
companies and their stockholders to consummate the business combination
transaction provided for herein in which (i) Firstar will, subject to the terms
and conditions set forth herein, merge with and into Foxtrot (DE) (the
"Reincorporation Merger") so that Foxtrot (DE) is the surviving corporation in
the Reincorporation Merger, and (ii) immediately thereafter Star will, subject
to the terms and conditions set forth herein, merge with and into Foxtrot (DE)
(the "Second Step Merger" and, together with the Reincorporation Merger, the
"Merger"), so that Foxtrot (DE) is the surviving corporation (hereinafter
sometimes referred to in such capacity as the "Surviving Corporation") in the
Second Step Merger; and
WHEREAS, it is the intent of the respective Boards of
Directors of Star and Firstar that the Merger be structured as a "merger of
equals" of Star and Firstar in accordance with the terms and conditions of this
Agreement; and
WHEREAS, as a condition to, and simultaneously with the
execution of, this Agreement, Star and Firstar will enter into a Firstar stock
option agreement (the "Firstar Stock Option Agreement") in the form attached
hereto as Exhibit A; and
WHEREAS, as a condition to, and simultaneously with the
execution of, this Agreement, Star and Firstar will enter into a Star stock
option agreement (the "Star Stock Option Agreement" and, together with the
Firstar Stock Option Agreement, the "Option Agreements") in the form attached
hereto as Exhibit B; and
WHEREAS, the parties desire to provide for certain conditions,
representations, warranties and covenants in connection with the transactions
contemplated by this Agreement.
NOW THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements herein contained, and intending to be
legally bound thereby, the parties agree as follows:
ARTICLE I
THE REINCORPORATION MERGER
Section 1.1. The Reincorporation Merger. Subject to the terms
and conditions of this Agreement, Firstar shall be merged with and into Foxtrot
(DE) in accordance with the Wisconsin Business Corporation Law (the "WBCL") and
the Delaware General Corporation Law ("DGCL") and the separate corporate
existence of Firstar shall cease. Foxtrot (DE) shall be the surviving
corporation of the Reincorporation Merger, shall continue its corporate
existence under the name "Firstar Corporation" and shall be governed by the laws
of the State of Delaware.
Section 1.2. First Effective Time. The Reincorporation Merger
shall become effective on the date and at the time (the "First Effective Time")
specified in the appropriate documents in respect of the Reincorporation Merger
which are filed with the Secretary of State of the State of Delaware and the
Department of Financial Institutions of the State of Wisconsin in such form as
required by, and in accordance with, the relevant provisions of the DGCL and the
WBCL. The First Effective Time shall occur on the same date and immediately
prior to the Effective Time as specified in Section 2.2.
Section 1.3. Effects of the Reincorporation Merger. At and
after the First Effective Time, the Reincorporation Merger shall have the
effects set forth in Sections 259 and 261 of the DGCL and Section 180.1107 of
the WBCL.
Section 1.4. Conversion of Securities. (a) At the First
Effective Time, by virtue of the Reincorporation Merger and without any action
on the part of Star, Firstar, Foxtrot (DE) or the holders of any capital stock
of Firstar, Star or Foxtrot (DE), each share of the common stock, par value
$1.25, of Firstar ("Firstar Common Stock") issued and outstanding immediately
prior to the First Effective Time shall cease to be outstanding and (other than
any shares of Firstar Common Stock held by Firstar or any of its wholly owned
Subsidiaries (as defined herein), except for Trust Account Shares (as defined
herein) and DPC Shares (as defined herein)), shall be converted into the right
to receive 0.76 (the "Exchange Ratio") shares of Foxtrot (DE) Common Stock (as
defined herein).
(b) All of the shares of Firstar Common Stock converted
into the right to receive Foxtrot (DE) Common Stock pursuant to this Article I
shall no longer be outstanding and shall automatically be cancelled and shall
cease to exist as of the First Effective Time, and each certificate (each a
"Firstar Common Certificate") previously representing any such shares of Firstar
Common Stock shall thereafter represent only the right to receive (i) a
certificate representing the number of whole shares of Foxtrot (DE) Common Stock
and (ii) cash in lieu of any fractional shares otherwise issuable pursuant to
Section 1.4(a), in accordance with Section 3.2. Firstar Common Certificates
previously representing shares of Firstar Common Stock shall be exchanged for
certificates representing whole shares of Foxtrot (DE) Common Stock and cash in
lieu of fractional shares issued in consideration therefor upon the surrender of
such Firstar Common Certificates in accordance with Section 3.1 without any
interest thereon.
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(c) At the First Effective Time, all shares of Firstar
Common Stock that are owned by Firstar as treasury stock and all shares of
Firstar Common Stock that are owned, directly or indirectly, by Firstar or any
of its wholly owned Subsidiaries (other than Trust Account Shares and DPC
Shares) shall be cancelled and shall cease to exist and no stock of Foxtrot (DE)
or other consideration shall be delivered in exchange therefor.
Section 1.5. Foxtrot (DE) Common Stock. At and after the
First Effective Time, each share of Foxtrot (DE) Common Stock issued and
outstanding immediately prior to the First Effective Time shall be cancelled and
retired and shall resume the status of authorized and unissued shares of Foxtrot
(DE) Common Stock, and no shares of Foxtrot (DE) Common Stock or other
securities of Foxtrot (DE) shall be issued in respect thereof.
Section 1.6. Options. Firstar shall take action to amend the
Firstar Stock Plans (as defined herein) so that, at the Effective Time, each
option granted by Firstar to purchase shares of Firstar Common Stock which is
outstanding and unexercised immediately prior thereto shall cease to represent a
right to acquire shares of Firstar Common Stock and shall be converted
automatically into an option to purchase shares of Foxtrot (DE) Common Stock in
an amount and at an exercise price determined as follows (and otherwise subject
to the terms of the appropriate Firstar Benefit Plan (as defined herein)
pursuant to which such options have been granted (such plans collectively the
"Firstar Stock Plans") and the agreements evidencing grants thereunder): (i) the
number of shares of Foxtrot (DE) Common Stock to be subject to the new option
shall be equal to the product of the number of shares of Firstar Common Stock
subject to the original option and the Exchange Ratio, provided that any
fractional shares of Foxtrot (DE) Common Stock resulting from such
multiplication shall be rounded down to the nearest whole share and (ii) the
exercise price per share of Foxtrot (DE) Common Stock under the new option shall
be equal to the exercise price per share of Firstar Common Stock under the
original option divided by the Exchange Ratio, provided that such exercise price
shall be rounded down to the nearest whole cent. The adjustment provided herein
with respect to any options which are "incentive stock options" (as defined in
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code")) shall
be and is intended to be effected in a manner which is consistent with Section
424(a) of the Code. The duration and other terms of the new option shall be the
same as the original option except that all references to Firstar shall be
deemed to be references to Foxtrot (DE).
Section 1.7. Certificate of Incorporation. Subject to the
terms and conditions of this Agreement, at the First Effective Time, the
Certificate of Incorporation of Foxtrot (DE) shall be substantially in the form
attached hereto as Exhibit C, with such changes thereto as shall be mutually
agreed upon by Star and Firstar, until thereafter amended in accordance with
applicable law.
Section 1.8. By-Laws. Subject to the terms and conditions of
this Agreement, at the First Effective Time, the By-Laws of Foxtrot (DE) shall
be amended so as to read in their entirety substantially in the form attached
hereto as Exhibit D, with such changes thereto as shall be mutually agreed upon
by Star and Firstar, until thereafter amended in accordance with applicable law.
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Section 1.9. Board of Directors; Management. Prior to the
First Effective Time, Firstar shall elect a board of directors of Foxtrot (DE)
to be comprised of 14 persons, all of whom shall be named by Firstar, and prior
to the Effective Time Firstar shall elect a board of directors of Foxtrot (DE)
to be comprised of 32 persons, 18 of whom shall be named by the Board of
Directors of Star and 14 of whom shall be named by the Board of Directors of
Firstar, and such directors shall be allocated among the three classes of
directors in a proportionate manner. From and after the First Effective Time,
until duly changed pursuant hereto or in accordance with applicable law, the
officers of Foxtrot (DE) shall be the officers of Foxtrot (DE).
ARTICLE II
THE SECOND STEP MERGER
Section 2.1. The Second Step Merger. Subject to the terms and
conditions of this Agreement, in accordance with the Ohio General Corporation
Law (the "OGCL") and the DGCL, at the Effective Time Star shall merge with and
into Foxtrot (DE). Foxtrot (DE) shall be the surviving corporation in the Second
Step Merger, and shall continue its corporate existence under the name "Firstar
Corporation" and be governed by the laws of the State of Delaware. Upon
consummation of the Second Step Merger, the separate corporate existence of Star
shall terminate.
Section 2.2. Effective Time. The Second Step Merger shall
become effective as set forth in the certificate of merger (the "Certificate of
Merger") which shall be filed with the Secretary of State of the State of
Delaware and the Secretary of State of the State of Ohio on the Closing Date (as
defined herein). The term "Effective Time" shall be the date and time when the
Second Step Merger becomes effective, as set forth in the Certificate of Merger.
Subject to the terms and conditions of this Agreement, the Effective Time shall
occur on a date to be specified by the parties, which shall be the first day
which is (i) the last business day of a month and (ii) at least two business
days after satisfaction or waiver (subject to applicable law) of the conditions
(excluding conditions that, by their terms, cannot be satisfied until the
Closing Date) set forth in Article VII, unless another time or date is agreed to
in writing by the parties hereto.
Section 2.3. Effects of the Second Step Merger. At and after
the Effective Time, the Second Step Merger shall have the effects set forth in
Sections 259 and 261 of the DGCL and Section 1701.82 of the OGCL.
Section 2.4. Conversion of Star Common Stock. (a) At the
Effective Time, by virtue of the Second Step Merger and without any action on
the part of Star, Foxtrot (DE) or the holders of capital stock of Star or
Foxtrot (DE) , each share of the common stock, par value $5.00 per share, of
Star (the "Star Common Stock") issued and outstanding immediately prior to the
Effective Time (other than Dissenting Shares (as defined herein) and shares of
Star Common Stock held in Star's treasury or directly or indirectly by Star or
any of its wholly owned Subsidiaries or Foxtrot (DE) (except for Trust Account
Shares and DPC Shares)) shall be converted into the right to receive one share
(the "Second Merger Exchange Ratio") of the common stock, par value $0.01, of
Foxtrot (DE) (the "Foxtrot (DE) Common Stock").
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(b) All of the shares of Star Common Stock converted
into the right to receive Foxtrot (DE) Common Stock pursuant to this Article II
shall no longer be outstanding and shall automatically be cancelled and shall
cease to exist as of the Effective Time, and each certificate (each a "Star
Common Certificate") previously representing any such shares of Star Common
Stock shall thereafter represent only the right to receive (i) a certificate
representing the number of whole shares of Foxtrot (DE) Common Stock and (ii)
cash in lieu of any fractional shares otherwise issuable pursuant to Section
2.4(a), in accordance with Section 3.2. Star Common Certificates previously
representing shares of Star Common Stock shall be exchanged for certificates
representing whole shares of Foxtrot (DE) Common Stock and cash in lieu of
fractional shares issued in consideration therefor upon the surrender of such
Star Common Certificates in accordance with Section 3.1 without any interest
thereon.
(c) At the Effective Time, all shares of Star Common
Stock that are owned by Star as treasury stock and all shares of Star Common
Stock that are owned, directly or indirectly, by Star or any of its wholly owned
Subsidiaries or Foxtrot (DE) (other than shares of Star Common Stock held,
directly or indirectly, in trust accounts, managed accounts and the like or
otherwise held in a fiduciary capacity that are beneficially owned by third
parties (any such shares, and shares of Firstar Common Stock which are similarly
held, whether held directly or indirectly by Star, Foxtrot (DE) or Firstar, as
the case may be, or any of their respective Subsidiaries being referred to
herein as "Trust Account Shares") and other than any shares of Star Common Stock
held by Star or Firstar or any of their respective Subsidiaries or Foxtrot (DE)
in respect of a debt previously contracted (any such shares of Star Common Stock
and shares of Firstar Common Stock which are similarly held, whether held
directly or indirectly by Star, Foxtrot (DE) or Firstar, as the case may be, or
any of their respective Subsidiaries, being referred to herein as "DPC Shares"))
shall be cancelled and shall cease to exist and no stock of Foxtrot (DE) or
other consideration shall be delivered in exchange therefor.
Section 2.5. Dissenting Shares. Notwithstanding anything in
this Agreement to the contrary, shares of Star Common Stock which are
outstanding immediately prior to the Effective Time and with respect to which
dissenters' rights shall have been properly demanded in accordance with Section
1701.85 of the OGCL ("Dissenting Shares") shall not be converted into the right
to receive Foxtrot (DE) Common Stock; instead, the holders thereof shall be
entitled to payment of the appraised value of such Dissenting Shares in
accordance with the provisions of Section 1701.85 of the OGCL; provided,
however, that (i) if any holder of Dissenting Shares shall subsequently deliver
a written withdrawal of his demand for appraisal of such shares, or (ii) if any
holder fails to establish his entitlement to dissenters' rights as provided in
Section 1701.85 of the OGCL, such holder or holders (as the case may be) shall
forfeit the right to appraisal of such shares of Star Common Stock and each of
such shares shall thereupon be deemed to have been converted into the right to
receive, and to have become exchangeable for, as of the Effective Time, Foxtrot
(DE) Common Stock, as provided in Section 2.4(a) hereof.
Section 2.6. Options. Star shall take action to amend the
Star Stock Plans (as defined herein) so that, at the First Effective Time, each
option granted by Star to purchase shares of Star Common Stock which is
outstanding and unexercised immediately prior thereto shall cease to represent a
right to acquire shares of Star Common Stock and shall be converted
auto-
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matically into an option to purchase a number of shares of Foxtrot (DE) Common
Stock equal to the number of shares of Star Common Stock subject to such option
immediately prior to the First Effective Time at an exercise price per share of
Foxtrot (DE) Common Stock equal to the exercise price per share of Star Common
Stock in effect immediately prior to the Effective Time and otherwise subject to
the terms of the appropriate Star Benefit Plans pursuant to which such options
have been granted (such plans collectively the "Star Stock Plans") and the
agreements evidencing grants thereunder. The adjustment provided herein with
respect to any options which are "incentive stock options" (as defined in
Section 422 of the Code) shall be and is intended to be effected in a manner
which is consistent with Section 424(a) of the Code. The duration and other
terms of the new option shall be the same as the original option except that all
references to Star shall be deemed to be references to Foxtrot (DE).
Section 2.7. Foxtrot (DE) Common Stock. At and after the
Effective Time, each share of Foxtrot (DE) Common Stock issued and outstanding
immediately prior to the Effective Time shall remain an issued and outstanding
share of common stock of the Surviving Corporation and shall not be affected by
the Second Step Merger.
Section 2.8. Certificate of Incorporation. Subject to the
terms and conditions of this Agreement, at the Effective Time, the Certificate
of Incorporation of the Surviving Corporation shall be the Certificate of
Incorporation of Foxtrot (DE), until thereafter amended in accordance with
applicable law.
Section 2.9. By-Laws. Subject to the terms and conditions of
this Agreement, at the Effective Time, the By-Laws of the Surviving Corporation
shall be the By-Laws of Foxtrot (DE), until thereafter amended in accordance
with applicable law.
Section 2.10. Management. (a) From and after the Effective
Time, Xxxxx X. Xxxxxxxxxxx shall be Chairman of the Board of the Surviving
Corporation (and shall continue in such position until he becomes 62 years old)
and Xxxxx X. Xxxxxxxxxx shall be the President and Chief Executive Officer of
the Surviving Corporation, and Xx. Xxxxxxxxxx shall be designated to succeed Xx.
Xxxxxxxxxxx as Chairman.
Section 2.11. Board of Directors. (a) From and after the
Effective Time, until duly changed in compliance with applicable law and the
Certificate of Incorporation and By-Laws of the Surviving Corporation, the Board
of Directors of the Surviving Corporation shall be the Board of Directors of
Foxtrot (DE) as specified in Section 1.9. The majority of the meetings of the
Board of Directors of the Surviving Corporation in any calendar year shall be
held in Milwaukee, Wisconsin.
(b) Firstar shall cause all requisite action to be taken
so that, at the Effective Time, directors of the Surviving Corporation elected
pursuant to Section 1.9 at the designation of Star and Firstar shall be
represented in proportion to the aggregate representation set forth in Section
1.9 on all committees of the Board of Directors of the Surviving Corporation,
except that seven designees of Star and five designees of Firstar shall be
included on the Executive Committee.
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Section 2.12. Headquarters of Surviving Corporation. After
the Effective Time, the location of the headquarters and principal executive
offices of the Surviving Corporation shall be that of the headquarters and
principal executive offices of Firstar as of the date of this Agreement located
in Milwaukee, Wisconsin. After the Effective Time, the banking Subsidiaries of
the Surviving Corporation shall be merged into a single bank, the name of which
shall be Firstar and the headquarters of which shall be in Milwaukee, Wisconsin.
Section 2.13. Tax and Accounting Consequences. It is intended
that the Reincorporation Merger and the Second Step Merger shall each constitute
a reorganization within the meaning of Section 368(a) of the Code, that this
Agreement shall constitute a "plan of reorganization" for the purposes of
Sections 354 and 361 of the Code and that the Merger be accounted for as a
"pooling of interests" under generally accepted accounting principles ("GAAP").
ARTICLE III
EXCHANGE OF SHARES
Section 3.1. Exchange Procedures. (a) At or prior to the
First Effective Time, the parties shall deposit, or shall cause to be deposited,
with a bank or trust company agreed to by each of Star and Firstar (the
"Exchange Agent"), for the benefit of the holders of Certificates (as defined
herein), for exchange in accordance with this Article III, certificates
representing the shares of Foxtrot (DE) Common Stock, and cash in lieu of any
fractional shares (such cash and certificates for shares of Foxtrot (DE) Common
Stock, together with any dividends or distributions with respect thereto, being
hereinafter referred to as the "Exchange Fund"), to be issued pursuant to
Sections 1.4 and 2.4 and paid pursuant to Section 3.2 in exchange for
outstanding shares of Firstar Common Stock and Star Common Stock. Firstar and
Star shall deliver to Foxtrot (DE) a complete list of their respective
shareholders (including their respective names, addresses and TINs to the extent
reflected in the records maintained by such party or its transfer agent) as of
the record date for the shareholder meetings to be called by the parties as
provided for herein and as of the First Effective Time for Firstar and the
Effective Time for Star, in each case which delivery shall be made as soon as
practicable after the respective date.
(b) As soon as practicable after the Effective Time, the
Exchange Agent shall mail to each holder of record immediately prior to the
First Effective Time or the Effective Time, as applicable, of one or more
Firstar Common Certificates or Star Common Certificates (collectively, the
"Certificates") a letter of transmittal (which shall specify that delivery shall
be effected, and risk of loss and title to the Certificates shall pass, only
upon delivery of the Certificates to the Exchange Agent) and instructions for
use in effecting the surrender of the Certificates in exchange for certificates
representing the shares of Foxtrot (DE) Common Stock issuable and any cash in
lieu of fractional shares payable pursuant to this Agreement. Upon proper
surrender of a Certificate for exchange and cancellation to the Exchange Agent,
together with such properly completed letter of transmittal, duly executed, the
holder of such Certificate shall be entitled to receive in exchange therefor, as
applicable, (i) a certificate representing that number of whole shares of
Foxtrot (DE) Common Stock to which such holder of Star Common Stock or Firstar
Common Stock shall have become entitled pursuant to the provisions of Articles I
and II, as ap-
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plicable, and (ii) a check representing the amount of any cash in lieu of
fractional shares which such holder has the right to receive in respect of the
Certificate surrendered pursuant to the provisions of this Article III and any
dividend or distribution theretofore declared and not yet paid on such shares of
Foxtrot (DE) Common Stock, and the Certificate so surrendered shall forthwith be
cancelled. No interest will be paid or accrued on any cash in lieu of fractional
shares or on any unpaid dividends and distributions payable to holders of
Certificates.
(c) If any certificate representing shares of Foxtrot
(DE) Common Stock is to be issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it shall be a
condition of the issuance thereof that the Certificate so surrendered shall be
properly endorsed (or accompanied by an appropriate instrument of transfer) and
otherwise in proper form for transfer, and that the person requesting such
exchange shall pay to the Exchange Agent in advance any transfer or other taxes
required by reason of the issuance of a certificate representing shares of
Foxtrot (DE) Common Stock in any name other than that of the registered holder
of the Certificate surrendered, or required for any other reason, or shall
establish to the satisfaction of the Exchange Agent that such tax has been paid
or is not payable. The Surviving Corporation or the Exchange Agent shall accept
Certificates upon compliance with such other reasonable terms and conditions as
the Surviving Corporation or the Exchange Agent may impose to effect an orderly
exchange thereof in accordance with customary exchange practices. Certificates
shall be appropriately endorsed or accompanied by such instruments of transfer
as the Surviving Corporation or the Exchange Agent may require.
(d) Any portion of the Exchange Fund, including any
earnings thereon, which remains undistributed to the holders of Certificates for
six months after the Effective Time shall be delivered to the Surviving
Corporation, upon demand, and any holders of Certificates who have not
theretofore complied with this Section 3.1 shall thereafter look only to the
Surviving Corporation for payment of their claim for the consideration provided
for herein and any unpaid dividends and distributions on the Foxtrot (DE) Common
Stock deliverable in respect of such Certificates.
(e) After the Effective Time, holders of Certificates
shall cease to have any rights with respect to the stock previously represented
by such Certificates, and their sole rights shall be to exchange such
Certificates for the consideration provided for in this Agreement. After the
Effective Time, there shall be no further transfers on the records of Firstar of
Firstar Common Certificates and no further transfers on the records of Star of
Star Common Certificates, and if such Certificates are presented to Firstar or
Star, as applicable, for transfer, they shall be cancelled against delivery of
the consideration provided therefor in this Agreement. Foxtrot (DE) shall not be
obligated to deliver the consideration to which any former holder of securities
is entitled as a result of the Merger until such holder surrenders the
Certificates as provided herein. No dividends declared on Foxtrot (DE) Common
Stock will be remitted to any holder of Firstar Common Stock or the Star Common
Stock entitled to receive Foxtrot (DE) Common Stock under this Agreement until
such person surrenders the Certificate representing the right to receive such
Foxtrot (DE) Common Stock, at which time such dividends shall be remitted to
such person, without interest and less any taxes that may have been imposed
thereon. Neither the Exchange Agent nor any party to this Agreement nor any
affiliate thereof shall be
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liable to any holder of stock represented by any Certificate for any
consideration paid to a public official pursuant to applicable abandoned
property, escheat or similar laws. The Surviving Corporation and the Exchange
Agent shall be entitled to rely upon the stock transfer books of Firstar and
Star to establish the identity of those persons entitled to receive
consideration specified in this Agreement, which books shall be conclusive with
respect thereto. In the event of a dispute with respect to ownership of stock
represented by any Certificate, the Surviving Corporation and the Exchange Agent
shall be entitled to deposit any consideration represented thereby in escrow
with an independent third party and thereafter be relieved with respect to any
claims thereto.
(f) In the event any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if reasonably
required by Foxtrot (DE), the posting by such person of a bond in such amount as
Foxtrot (DE) may determine is reasonably necessary as indemnity against any
claim that may be made against it with respect to such Certificate, the Exchange
Agent will issue in exchange for such lost, stolen or destroyed Certificate the
shares of Foxtrot (DE) Common Stock and any cash in lieu of fractional shares
deliverable in respect thereof pursuant to this Agreement.
(g) Former holders of record as of the First Effective
Time of shares of Firstar Common Stock and as of the Effective Time of Star
Common Stock shall not be entitled, at and after the First Effective Time and
the Effective Time, respectively, to vote any shares of the Foxtrot (DE) Common
Stock until their Certificates shall have been surrendered in accordance with
this Article III and certificates evidencing such Foxtrot (DE) Common Stock
shall have been issued in exchange therefor.
Section 3.2. No Fractional Shares. Notwithstanding any other
provision of this Agreement, neither certificates nor scrip for fractional
shares of Foxtrot (DE) Common Stock shall be issued in the Merger. Each holder
who otherwise would have been entitled to a fraction of a share of Foxtrot (DE)
Common Stock shall receive in lieu thereof cash (without interest) in an amount
determined by multiplying the fractional share interest to which such holder
would otherwise be entitled by the closing sale price of a share of Star Common
Stock on the New York Stock Exchange, Inc. ("NYSE") composite tape on the last
full trading day prior to the Effective Time. No such holder shall be entitled
to dividends, voting rights or any other rights in respect of any fractional
share.
Section 3.3. Anti-Dilution Adjustments. If, prior to the
Effective Time, the outstanding shares of Star Common Stock or Firstar Common
Stock shall have been increased, decreased, changed into or exchanged for a
different number or kind of shares or securities as a result of a
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split, or other similar change in capitalization (other than
solely as a result of the Reincorporation Merger), appropriate adjustment or
adjustments will be made to the Exchange Ratio or the Second Merger Exchange
Ratio, as applicable.
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ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 4.1. Disclosure Schedules. On or prior to the date
hereof, each of Star and Firstar has delivered to the other a schedule
(respectively, its "Disclosure Schedule") setting forth, among other things,
items the disclosure of which is necessary or appropriate in relation to any or
all of its representations and warranties set forth in this Agreement; provided,
that (i) no such item is required to be set forth in a Disclosure Schedule as an
exception to a representation or warranty if its absence is not reasonably
likely to result in the related representation or warranty being deemed untrue
or incorrect under the standard established by Section 4.2, and (ii) the mere
inclusion of an item in a Disclosure Schedule shall not be deemed an admission
by a party that such item represents a material exception or fact, event or
circumstance or that such item would reasonably be expected to result in a
material adverse effect on the financial condition, results of operations or
business of such party and its Subsidiaries taken as a whole, except as may have
resulted or may result from changes to laws and regulations or changes in
economic conditions applicable to banking institutions generally or in general
levels of interest rates affecting banking institutions generally (a "Material
Adverse Effect").
Section 4.2. Standard. No representation or warranty of Star
or Firstar contained in Section 4.3 shall be deemed untrue or incorrect, and no
party hereto shall be deemed to have breached any such representation or
warranty, as a consequence of the existence of any fact, circumstance or event
unless such fact, circumstance or event which constitutes a breach of any such
representation or warranty after giving effect to any materiality standards
contained in any representation or warranty, individually or taken together with
all other facts, circumstances or events constituting such breaches, has had or
would reasonably be expected to have a Material Adverse Effect on such party.
Section 4.3. Representations and Warranties. Subject to
Sections 4.1 and 4.2 and except as previously disclosed in its Disclosure
Schedule, Firstar hereby represents and warrants to Star, and Star hereby
represents and warrants to Firstar, to the extent applicable, in each case with
respect to itself and its Subsidiaries, as follows:
(a) Organization and Authority. Such party and each of
its respective Subsidiaries is a corporation, bank, trust company or other
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of organization, is duly qualified to do business and is in
good standing in all jurisdictions where its ownership or leasing of property or
the conduct of its business requires it to be so qualified and has corporate
power and authority to own its properties and assets and to carry on its
business as it is now being conducted except, in each case, where the failure to
do so would not either individually or in the aggregate reasonably be expected
to have a Material Adverse Effect on such party. Such party is duly registered
as a bank holding company with the Board of Governors of the Federal Reserve
System (the "Board") under the Bank Holding Company Act of 1956, as amended (the
"Holding Company Act"). True and complete copies of the Articles of
Incorporation and By-laws or Code of Regu-
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lation as applicable, of such party, each in effect on the date of this
Agreement, have been provided to the other party.
(b) Subsidiaries. Such party's Disclosure Schedule sets
forth, among other things, a complete and correct list of all of such party's
direct or indirect subsidiaries (each a "Subsidiary" and collectively the
"Subsidiaries") including such party's banks (the "Banks"), all outstanding
Equity Securities of each of which are owned directly or indirectly by such
party. "Equity Securities" of an issuer means capital stock or other equity
securities of such issuer, options, warrants, scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or
rights convertible into, shares of any capital stock or other Equity Securities
of such issuer, or contracts, commitments, understandings or arrangements by
which such issuer is or may become bound to issue additional shares of its
capital stock or other Equity Securities. All of the outstanding shares of
capital stock of the Subsidiaries of such party are validly issued, fully paid
and nonassessable (subject to Section 180.0622(2)(6) of the WBCL), and those
shares owned by such party are owned free and clear of any lien, claim, charge,
option, encumbrance, agreement, mortgage, pledge, security interest or
restriction (a "Lien") with respect thereto. Except for the Equity Securities of
such party's Subsidiaries and except for Equity Interests held in a fiduciary
capacity, such party does not own beneficially, directly or indirectly, more
than 5% of any class of Equity Securities or similar interests of any
corporation, bank, business trust, association or similar organization. The
Banks of such party are chartered by the Office of the Comptroller of the
Currency. The deposits of the Banks of such party are insured by the Federal
Deposit Insurance Corporation ("FDIC"). Neither such party nor any Subsidiary
thereof holds any interest in a partnership or joint venture of any kind.
(c) Capitalization. (i) The authorized capital stock of
Star consists of (A) 400,000,000 shares of Star Common Stock, of which, as of
June 29, 1998, 95,778,921 shares were issued and outstanding and (B) 1,000,000
shares of preferred stock, no par value ("Star Preferred Stock"), issuable in
series, none of which, as of June 29, 1998, is issued or outstanding. Star has
designated (Y) 500,000 shares of Star Preferred Stock as "Series A Preferred
Stock" and has reserved such shares for issuance upon exercise of Preferred
Stock Purchase Rights under a Rights Agreement dated October 27, 1989 (the "Star
Rights Agreement"), between Star and Star Bank, N.A., as Rights Agent and (Z)
218,000 shares of Star Preferred Stock as "Series B Cumulative Preferred Stock."
Pursuant to the Star Rights Agreement, each certificate representing one share
of Star Common Stock also represents one Right (as defined in the Star Rights
Agreement). As of June 29, 1998 Star had options outstanding for 7,020,988
shares of Star Common Stock for issuance under various employee stock option and
incentive plans ("Star Stock Options"). From June 29, 1998 through the date of
this Agreement, no shares of Star Common Stock have been issued excluding not
more than 500 shares which may have been issued pursuant to stock-based,
director or employee benefit or incentive plans and programs. Except as set
forth above and except pursuant to the Star Rights Agreement, there are no other
Equity Securities of Star outstanding. All of the issued and outstanding shares
of Star Common Stock are validly issued, fully paid, and nonassessable, and have
not been issued in violation of any preemptive right of any stockholder of Star.
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(ii) The authorized capital stock of Firstar consists of
(A) 240,000,000 shares of Firstar Common Stock, of which, as of June 29, 1998,
145,546,889 shares were issued and outstanding and (B) 2,500,000 shares of
preferred stock ("Firstar Preferred Stock"), issuable in series. Firstar has
designated (Y) 600,000 shares of Firstar Preferred Stock as "Series C Preferred
Stock" and has reserved such shares for issuance upon exercise of Preferred
Stock Purchase Rights under a Rights Agreement dated January 19, 1989 (the
"Firstar Rights Agreement"), between Firstar and Firstar Trust Company (formerly
known as First Wisconsin Trust Company), as Rights Agent and (Z) certain shares
of Firstar Preferred Stock as "Series A Preferred Stock," "Series B Preferred
Stock" and "Series D Preferred Stock" all of which have been redeemed. Pursuant
to the Firstar Rights Agreement, each certificate representing one share of
Firstar Common Stock also represents one-quarter Right (as defined in the
Firstar Rights Agreement). As of June 29, 1998 Firstar had options outstanding
for 6,037,093 shares of Firstar Common Stock for issuance under various employee
stock option and incentive plans ("Firstar Stock Options"). From June 29, 1998
through the date of this Agreement, no shares of Firstar Common Stock have been
issued excluding not more than 500 shares which may have been issued pursuant to
stock-based, director or employee benefit or incentive plans and programs.
Except as set forth above and except pursuant to the Firstar Rights Agreement,
there are no other Equity Securities of Firstar outstanding. All of the issued
and outstanding shares of Firstar Common Stock are validly issued, fully paid,
and nonassessable (subject to Section 180.0622(2)(b) of the WBCL), and have not
been issued in violation of any preemptive right of any stockholder of Firstar.
(d) Authorization. (i) Such party has the corporate
power and authority to execute and deliver this Agreement and to carry out its
obligations hereunder. The execution, delivery and performance of this Agreement
by such party and the consummation by such party of the transactions
contemplated hereby have been duly authorized by all requisite corporate action
of the Board of Directors of such party. The Board of Directors of such party
has directed that this Agreement and the transactions contemplated hereby be
submitted to its stockholders for approval at a meeting of such stockholders
and, except for the adoption of this Agreement by the affirmative vote of
holders of a majority of its outstanding shares, no other corporate proceedings
on the part of such party are necessary to approve this Agreement and to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by such party and (assuming due
authorization, execution and delivery by the other party) constitutes a valid
and binding obligation of such party, enforceable against such party in
accordance with its terms (except as may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the rights of creditors
generally and the availability of equitable remedies). Firstar represents and
warrants that each of Firstar, as the sole stockholder of Foxtrot (DE), and the
Board of Directors of Foxtrot (DE) has approved this Agreement and the
transactions contemplated hereby by written consent and no other corporate
proceedings on the part of Foxtrot (DE) are necessary to approve this Agreement
and to consummate the transactions contemplated hereby.
(ii) Neither the execution, delivery and performance by
such party of this Agreement, nor the consummation by such party of the
transactions contemplated hereby, nor compliance by such party with any of the
provisions hereof, will (A) violate, conflict with or re-
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xxxx in a breach of any provisions of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) or
result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration of, or result in the creation
of, any Lien upon any of the properties or assets of such party or any
Subsidiary of such party under any of the terms, conditions or provisions of (I)
its articles or certificate of incorporation or bylaws or code of regulations,
or (II) any note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which such party or any of the
properties or assets of such party is a party or by which it may be bound, or to
which such party may be subject (assuming no default thereunder at the time of
the Merger), except (in the case of this clause (II)) for such violations,
conflicts, breaches or defaults which, either individually or in the aggregate,
will not have a Material Adverse Effect on such party or (B) subject to
compliance with the statutes and regulations referred to in paragraph (iii) of
this Section 4.3(d), to the best knowledge of such party, violate any judgment,
ruling, order, writ, injunction, decree, statute, rule or regulation applicable
to such party or any of its Subsidiaries or any of their respective properties
or assets except for such violations which, either individually or in the
aggregate will not have a Material Adverse Effect on such party.
(iii) Other than in connection with or in compliance with
the provisions of the WBCL, the OGCL, the DGCL, the Securities Act, the Exchange
Act of 1934, as amended, and the rules and regulations thereunder (the "Exchange
Act"), the securities or blue sky laws of the various states or filings,
consents, reviews, authorizations, approvals or exemptions required under the
Holding Company Act, and the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
0000 (xxx "XXX Xxx"), or any required approvals of the Office of the Controller
of Currency, the Small Business Administration or any state or foreign
Regulatory Authority (as defined herein), no notice to, filing with, exemption
or review by, or authorization, consent or approval of, any public body or
authority is necessary in connection with the execution and delivery by such
party of this Agreement or the consummation by such party of the transactions
contemplated by this Agreement.
(e) Financial Statements. The consolidated balance sheets of
such party and its Subsidiaries as of December 31, 1997, 1996 and 1995 and
related consolidated statements of income, cash flows and changes in
stockholders' equity for each of the three years in the three-year period ended
December 31, 1997, together with the notes thereto, audited by such party's
independent auditors and included in an annual report on Form 10-K as filed with
the Securities and Exchange Commission (the "SEC") (collectively, the "Audited
Financial Statements"), and the consolidated balance sheet of such party and its
Subsidiaries as of March 31, 1998 and related consolidated statements of income,
cash flows and changes in stockholders' equity for the three-month period ended
March 31, 1998 included in a quarterly report on Form 10-Q as filed with the SEC
(collectively, the "Unaudited Financial Statements", and together with the
Audited Financial Statements, the "Financial Statements") have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis ("GAAP"), present fairly the consolidated financial position of such party
and its Subsidiaries at the dates and the consolidated results of operations,
changes in stockholders' equity and cash flows of such party and its
Subsidiaries for the periods stated therein, subject, in the case of the
Unaudited Financial Statements, to normal year-end audit adjustments, and are
derived from the books and records of such party
-13-
and its Subsidiaries, which are complete and accurate in all material respects
and have been maintained in all material respects in accordance with applicable
laws and regulations. Neither such party nor any of its Subsidiaries has any
material contingent liabilities that are not described in the financial
statements described above other than liabilities incurred in the ordinary
course of such party's business consistent with past practice, or in connection
with this Agreement and the transactions contemplated hereby.
(f) Reports. Since January 1, 1995, such party and its
Subsidiaries have timely filed all material reports, registrations and
statements, together with any required material amendments thereto, that it was
required to file with (i) the SEC, including, but not limited to, Forms 10-K,
Forms 10-Q, Forms 8-K and proxy statements, (ii) the Board, (iii) the FDIC, (iv)
the Office of the Controller of the Currency, (v) the Small Business
Administration and (vi) any other federal, state, municipal, local or foreign
government, securities, banking, savings and loan, insurance and other
governmental or regulatory authority and the agencies and staffs thereof (the
entities in the foregoing clauses (i) through (vi) being referred to herein
collectively as the "Regulatory Authorities" and individually as a "Regulatory
Authority") and all other reports and statements required to be filed by such
party, including, without limitation, any report or statement required to be
filed pursuant to laws, rules or regulations of the United States, any state, or
any Regulatory Authority, and have paid all fees and assessments due and payable
in connection therewith, except where the failure to file such report,
registration or statement or to pay such fees and assessments, either
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on such party. All such reports and statements filed
with any such Regulatory Authority are collectively referred to herein as the
"Star Reports" and the "Firstar Reports," as applicable. As of its respective
date, each of the Star Reports and the Firstar Reports, as applicable, of such
party complied in all material respects with all the rules and regulations
promulgated by the applicable Regulatory Authority and did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(g) Material Adverse Change. Since December 31, 1997, no
event has occurred or circumstances arisen that, individually or taken together
with all other events and circumstances, has had or is reasonably expected to
have a Material Adverse Effect on such party.
(h) Compliance with Laws. Such party and its Subsidiaries
have complied with all laws, regulations, and orders (including without
limitation zoning ordinances, building codes, ERISA (as defined herein), and
securities, tax, environmental, civil rights, and occupational health and safety
laws and regulations and including without limitation in the case of any
Subsidiary of such party that is a bank, banking organization, banking
corporation or trust company, all statutes, rules and regulations pertaining to
the conduct of a banking, deposit-taking or lending or related business or to
the exercise of trust powers) and governing instruments applicable to them and
to the conduct of their business, and to the knowledge of such party all
applicable listing requirements and policies of the NYSE, except where such
failure to comply would not have a Material Adverse Effect on such party, and
neither such party nor any Subsidiary of such party is in default under, and no
event has occurred which, with the lapse of time or notice or both,
-14-
could result in the default under, the terms of any judgment, order, writ,
decree, permit, or license of any Regulatory Authority or court, whether
federal, state, municipal, or local and whether at law or in equity, except
where such default would not reasonably be expected to have a Material Adverse
Effect on such party. Neither such party nor any Subsidiary of such party is
subject to or reasonably likely to incur a liability as a result of its
ownership, operation, or use of any Property (as defined herein) of such party
(whether directly or, to the best knowledge of such party, as a consequence of
such Property being part of the investment portfolio of such party or any
Subsidiary of such party) (i) that is contaminated by or contains any Toxic
Substance (as defined herein) or (ii) on which any Toxic Substance has been
stored, disposed of, placed, or used in the construction thereof; and which, in
each case, reasonably could be expected to have a Material Adverse Effect on
such party. "Property" of a person shall include all property (real or personal,
tangible or intangible) owned or controlled by such person, including, without
limitation, property under foreclosure, property held by such person or any
subsidiary of such person in its capacity as a trustee and property in which any
venture capital or similar unit of such person or any subsidiary of such person
has an interest. A "Toxic Substance" is anything that is contaminated by or
contains any hazardous waste, toxic substance, or related materials, including,
without limitation, asbestos, PCBs, pesticides, herbicides and any other
substance or waste that is hazardous to human health or the environment. Except
for statutory or regulatory restrictions of general application, no Regulatory
Authority has placed any restriction on the business of such party or any
Subsidiary of such party which reasonably could be expected to have a Material
Adverse Effect on such party.
(i) Registration Statement, etc. None of the information
regarding such party or any of its Subsidiaries supplied or to be supplied by
such party for inclusion or included in (i) the registration statement on Form
S-4 to be filed with the SEC for the purposes of registering the shares of
Foxtrot (DE) Common Stock to be issued pursuant to this Agreement (the
"Registration Statement"), (ii) the proxy or information statement to be mailed
to Star's stockholders and Firstar's stockholders in connection with the
transactions contemplated by this Agreement (the "Proxy Statement"), or (iii)
any other documents to be filed with any Regulatory Authority in connection with
the transactions contemplated hereby will, at the respective times such
documents are filed with any Regulatory Authority and, in the case of the
Registration Statement, when it becomes effective and, with respect to the Proxy
Statement, when mailed, be false or misleading with respect to any material
fact, or omit to state any material fact necessary in order to make the
statements therein not misleading or, in the case of the Proxy Statement or any
amendment thereof or supplement thereto, at the time of the meeting of Star's
stockholders (the "Star Meeting") and the meeting of Firstar's stockholders (the
"Firstar Meeting") referred to in Section 6.3, be false or misleading with
respect to any material fact, or omit to state any material fact necessary to
correct any statement in any earlier communication with respect to the
solicitation of any proxy for the Meeting. All documents which such party or any
of its Subsidiaries are responsible for filing with any Regulatory Authority in
connection with the Merger will comply as to form in all material respects with
the provisions of applicable law.
(j) Brokers and Finders. Except as set forth in the
engagement letter agreement between Firstar and Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated, a true and complete copy of which has been provided to Star
prior to the date hereof, and the engagement letter
-15-
agreement between Star and CS First Boston, a true and complete copy of which
has been provided to Firstar prior to the date hereof, neither such party nor
any of its Subsidiaries nor any of their respective officers, directors or
employees has employed any broker or finder or incurred any liability for any
financial advisory fees, brokerage fees, commissions or finder's fees, and no
broker or finder has acted directly or indirectly for such party or any of its
Subsidiaries in connection with this Agreement or the transactions contemplated
hereby.
(k) Litigation and Other Proceedings. (i) Neither such
party nor any of its Subsidiaries is a party to any, and there are no pending
or, to the knowledge of such party, threatened, legal, administrative, arbitral
or other proceedings, claims, actions or governmental or regulatory
investigations of any nature against such party or any of its Subsidiaries or
challenging the validity or propriety of the transactions contemplated by this
Agreement as to which, in any such case, there is a reasonable probability of an
adverse determination and which, if adversely determined either individually or
in the aggregate, would reasonably be expected to have a Material Adverse Effect
on such party.
(ii) There is no injunction, order, judgment, decree or
regulatory restriction (other than those that apply to similarly situated bank
holding companies or banks) imposed upon such party, any of its Subsidiaries or
the assets of such party or any of its Subsidiaries that has had or would
reasonably be expected to have a Material Adverse Effect on such party or the
Surviving Corporation.
(l) Taxes. Such party and each Subsidiary have timely filed
or will timely file (including extensions) all material tax returns required to
be filed at or prior to the Closing Date ("Returns"). Each of such party and its
Subsidiaries has paid, or set up adequate reserves on its respective Financial
Statements for the payment of, all taxes required to be paid in respect of the
periods covered by the Financial Statements and has paid or set up adequate
reserves on the most recent financial statements such party has filed under the
Exchange Act for the payment of all taxes anticipated to be payable in respect
of the periods covered by such financial statements. No material deficiencies
for any tax, assessment or governmental charge have been proposed, asserted or
assessed in writing by any governmental or taxing authority against such party
or any Subsidiary of such party which have not been settled or would not be
covered by existing reserves. To the knowledge of such party, neither such party
nor any Subsidiary of such party is delinquent in the payment of any material
tax, assessment or governmental charge shown to be due on any Return (taking
into account extensions properly obtained), and no waiver of the time to assess
or collect any tax granted in writing by such party or any Subsidiary of such
party is pending. The federal and state income tax returns of such party and the
Subsidiaries of such party have been audited and finally settled by the IRS or
appropriate state tax authorities or the relevant statute of limitations has
expired for all periods ended through December 31, 1991, or the period for
assessment of taxes in respect of such periods has expired.
(m) Employee Benefit Plans; ERISA (i) Such party's Disclosure
Schedule sets forth a true and complete list of each material employee or
director benefit plan, arrangement or agreement (including, without limitation,
stock purchase, stock option, severance, employment, change in control, fringe
benefit, collective bargaining, bonus, incentive, deferred compensation
-16-
and all other employee benefit plans, agreements, programs, policies or other
arrangements, whether or not subject to ERISA) that is maintained, or
contributed to, as of the date of this Agreement (the "Benefit Plans") by such
party or any of its Subsidiaries or by any trade or business, whether or not
incorporated (an "ERISA Affiliate"), all of which together with such party would
be deemed a "single employer" within the meaning of Section 4001 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
(ii) Such party has made available to the other party
true and complete copies of each of such party's Benefit Plans and certain
related documents, including, but not limited to, (A) the actuarial report for
such party's Benefit Plans (if applicable) for each of the last two years, and
(B) the most recent determination letter from the IRS (as defined herein) (if
applicable) for such plan.
(iii) Except as would not reasonably be expected to have a
Material Adverse Effect (A) each of such party's Benefit Plans has been operated
and administered in all material respects in accordance with their terms and
with applicable laws, including, but not limited to, ERISA and the Code, (B)
each of such party's Benefit Plans intended to be "qualified" within the meaning
of Section 401(a) of the Code has received a favorable determination letter with
respect to such qualified status, or such Benefit Plans shall be submitted for
such determination in a timely fashion and there are no existing circumstances
or events that have occurred that could reasonably be expected to adversely
affect the qualified status of any such plan, (C) with respect to each Benefit
Plan of such party which is subject to Title IV of ERISA, the present value of
accrued benefits under such Plan, based upon the actuarial assumptions used for
funding purposes in the most recent actuarial report prepared by such Plan's
actuary with respect to such Plan, did not, as of its latest valuation date,
exceed the then current value of the assets of such Plan allocable to such
secured benefits, (D) no Benefit Plan of such party provides benefits,
including, without limitation, death or medical benefits (whether or not
insured), with respect to current or former employees or directors of such party
or its Subsidiaries beyond their retirement or other termination of service,
other than (1) coverage mandated by applicable law, (2) death benefits or
retirement benefits under any "employee pension plan" (as such term is defined
in Section 3(2) of ERISA), (3) deferred compensation benefits accrued as
liabilities on the books of such party or its Subsidiaries or (4) benefits the
full cost of which is borne by the current or former employee or director (or
his beneficiary), (E) no material liability under Title IV of ERISA has been
incurred by such party, its Subsidiaries or any ERISA Affiliate that has not
been satisfied in full, and no condition exists that could reasonably be
expected to present a material risk to such party, its Subsidiaries or any ERISA
Affiliate of such party incurring a material liability thereunder (other than
the payment of premiums and funding obligations in the ordinary course of
business), (F) no Benefit Plan is a "multiemployer pension plan" (as such term
is defined in Section 3(37) of ERISA), (G) all contributions or other amounts
payable by such party or its Subsidiaries as of the Effective Time with respect
to each Benefit Plan in respect of current or prior plan years have been paid or
accrued in accordance with GAAP and Section 412 of the Code, (H) neither such
party nor its Subsidiaries has engaged in a transaction with respect to such
party's Benefit Plans in connection with which such party or its Subsidiaries
reasonably could be subject to either a material civil penalty accessed pursuant
to Section 409 or 502(i) of ERISA or a material tax imposed pursuant to Section
4975 or 4976 of the Code, and (I) to the best knowledge of such party,
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there are no pending, threatened or anticipated claims (other than routine
claims for benefits) by, on behalf of or against any of the Benefit Plans of
such party or any trusts related thereto.
(iv) Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will (A) result in
any material payment (including, without limitation, severance, unemployment
compensation, "excess parachute payment" (within the meaning of Section 280G of
the Code), forgiveness of indebtedness or otherwise) becoming due to any
director or any employee of such party or any of its Subsidiaries under any
Benefit Plan of such party or otherwise, (B) materially increase any benefits
otherwise payable under any Benefit Plan of such party or (C) result in any
acceleration of the time of payment or vesting of any such benefits to any
material extent. Notwithstanding the foregoing, neither the execution of this
Agreement nor the consummation of the transactions contemplated hereby will
constitute or be deemed a "Change of Control" within the meaning of the Firstar
Supplemental Retirement Plan for Key Executives and the Firstar Corporation
Pension Plan.
(n) Accounting, Tax and Regulatory Matters. Neither such
party nor any Subsidiary of such party has taken or agreed to take any action or
has any knowledge of any fact or circumstance that would (i) prevent the
Reincorporation Merger or the Second Step Merger from qualifying as a
"reorganization" within the meaning of Section 368(a) of the Code, (ii) prevent
the transactions contemplated hereby from qualifying as a "pooling of interests"
for accounting and financial reporting purposes or (iii) materially impede or
delay receipt of any approval referred to in Section 7.1(b) or the consummation
of the transactions contemplated by this Agreement.
(o) State Takeover Statutes; Articles of Incorporation;
Rights Agreement. (i) The transactions contemplated by this Agreement are not
subject to, or have been exempted from, any applicable state law which purports
to limit or restrict business combinations or the ability to acquire or to vote
shares.
(ii) The transactions contemplated by this Agreement and
the agreements contemplated hereby are not, and will not be, prohibited by, or
have been exempted from, such party's Articles of Incorporation.
(iii) Such party has taken all necessary steps (A) to render
the Star Rights Agreement or the Firstar Rights Agreement, as applicable,
inapplicable to the Merger and the transactions contemplated by this Agreement
and by the Star Stock Option Agreement and the Firstar Stock Option Agreement,
as applicable (including, such that the Rights related thereto will not be
distributed, become exercisable or be triggered in any way as a result of the
execution of this Agreement or the applicable stock option agreement or the
consummation of the transactions contemplated hereby or thereby) and (B) to
cause the Rights issued under the applicable Rights Agreement to expire
immediately prior to the First Effective Time.
(p) Conduct of Such Party to Date. From and after January 1,
1998 through the date of this Agreement, except as would not reasonably be
expected to have a Material Adverse Effect on such party or as reflected in such
party's Financial Statements: (i) such party and its Subsidiaries have conducted
their respective businesses in the ordinary and usual course consis-
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tent with past practices; (ii) such party has not issued, sold, granted,
conferred or awarded any of its Equity Securities, or any corporate debt
securities which would be classified under GAAP as long-term debt on the balance
sheets of such party; (iii) such party has not effected any stock split or
adjusted, combined, reclassified or otherwise changed its capitalization (other
than, with respect to Firstar, the redemption of its Series D Preferred Stock);
(iv) such party has not declared, set aside or paid any dividend (other than its
regular quarterly or regular semi-annual common dividends or, with respect to
Firstar, regular dividends paid on its Series D Preferred Stock prior to the
redemption thereof) or other distribution in respect of its capital stock, or
purchased, redeemed, retired, repurchased, or exchanged, or otherwise acquired
or disposed of, directly or indirectly, any of its Equity Securities, whether
pursuant to the terms of such Equity Securities or otherwise (other than, with
respect to Firstar, the redemption of its Series D Preferred Stock); (v) neither
such party nor any Subsidiary has incurred any obligation or liability (absolute
or contingent), except normal trade or business obligations or liabilities
incurred in the ordinary course of business, or subjected to Lien any of its
assets or properties other than in the ordinary course of business consistent
with past practice; (vi) neither such party nor any Subsidiary has discharged or
satisfied any Lien or paid any obligation or liability (absolute or contingent),
other than in the ordinary course of business; (vii) neither such party nor any
Subsidiary has sold, assigned, transferred, leased, exchanged, or otherwise
disposed of any of its properties or assets other than for a fair consideration
in the ordinary course of business; (viii) except as required by contract or
law, neither such party nor any Subsidiary has (A) increased the rate of
compensation of, or paid any bonus to, any of its directors, officers, or other
employees, except merit or promotion increases in accordance with existing
policy, (B) entered into any new, or amended or supplemented any existing,
employment, management, consulting, deferred compensation, severance, or other
similar contract, (C) entered into, terminated, or substantially modified any of
its Benefit Plans or (D) agreed to do any of the foregoing; (ix) neither such
party nor any Subsidiary has suffered any damage, destruction, or loss, whether
as the result of fire, explosion, earthquake, accident, casualty, labor trouble,
requisition, or taking of property by any Regulatory Authority, flood,
windstorm, embargo, riot, act of God or the enemy, or other casualty or event,
and whether or not covered by insurance; (x) neither such party nor any
Subsidiary has cancelled or compromised any debt, except for debts charged off
or compromised in accordance with the past practice of such party and its
Subsidiaries; and (xi) neither such party nor any Subsidiary of such party has
entered into any transaction, contract or commitment outside the ordinary course
of its business.
(q) Year 2000 Compliant. None of such party or any of its
Subsidiaries has received, or reasonably expects to receive, a "Year 2000
Deficiency Notification Letter" (as such term is employed in the Federal
Reserve's Supervision and Regulation Letter No. SR 98-3(SUP), dated March 4,
1998). Such party has disclosed to the other party a complete and accurate copy
of such party's plan for addressing the issues set forth in the statements of
the Federal Financial Institutions Examination Council, dated May 5, 1997,
entitled "Year 2000 Project Management Awareness," and December 1997, entitled
"Safety and Soundness Guidelines Concerning the Year 2000 Business Risk," as
such issues affect such party and its Subsidiaries. Between the date of this
Agreement and the Effective Time, such party shall use commercially practicable
efforts to implement such plan.
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(r) Investment Securities. Except as would not reasonably be
expected to have a Material Adverse Effect on such party, each of such party and
its Subsidiaries has good and marketable title to all securities held by it
(except securities sold under repurchase agreements or held in a fiduciary or
agency capacity), free and clear of any Lien, except to the extent such
securities are pledged in the ordinary course of business consistent with
prudent banking practices to secure obligations of such party or any of its
Subsidiaries. Such securities are valued on the books of such party in
accordance with GAAP.
(s) Interest Rate Risk Management Instruments. Except as
would not reasonably be expected to have a Material Adverse Effect on such
party, all interest rate swaps, caps, floors and option agreements and other
interest rate risk management arrangements, whether entered into for the account
of such party or for the account of a customer of such party or one of its
Subsidiaries, were entered into in the ordinary course of business and, to such
party's knowledge, in accordance with prudent banking practice and applicable
rules, regulations and policies of any Regulatory Authority and with
counterparties believed to be financially responsible at the time and are legal,
valid and binding obligations of such party or one of its Subsidiaries
enforceable in accordance with their terms (except as may be limited by
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the
rights of creditors generally and the availability of equitable remedies), and
are in full force and effect. Except as would not reasonably be expected to have
a Material Adverse Effect on such party, such party and each of its Subsidiaries
have duly performed in all respects all of their obligations thereunder to the
extent that such obligations to perform have accrued; and, to such party's
knowledge, there are no breaches, violations or defaults or allegations or
assertions of such by any party thereunder.
(t) Insurance. Except as would not reasonably be expected to
have a Material Adverse Effect on such party, such party and its Subsidiaries
have in effect insurance coverage with reputable insurers which, in respect of
amounts, premiums, types and risks insured, constitutes reasonably adequate
coverage against all risks customarily insured against by bank holding companies
and their subsidiaries comparable in size and operations to such party and its
Subsidiaries.
(u) Agreements with Bank Regulators. Neither such party nor
any of its Subsidiaries is a party to any written agreement or memorandum of
understanding with, or a party to any commitment letter or similar undertaking
to, or is subject to any order or directive by, or is a recipient of any
extraordinary supervisory letter from, or has adopted any board resolutions at
the request of, any Regulatory Authority which restricts materially the conduct
of its business, or in any manner relates to its capital adequacy, its credit
policies or its management, nor has such party been advised by any Regulatory
Authority that is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree, agreement,
memorandum of understanding, extraordinary supervisory letter, commitment letter
or similar submission, or any such board resolutions.
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ARTICLE V
CONDUCT OF BUSINESSES PRIOR TO THE EFFECTIVE TIME
Section 5.1. Conduct of Businesses Prior to the Effective
Time. Except as provided for in Section 5.2 of this Agreement, during the period
from the date of this Agreement to the Effective Time, each of Star and Firstar
shall, and shall cause each of their respective Subsidiaries to, conduct its
business according to the ordinary and usual course consistent with past
practices and shall, and shall cause each such Subsidiary to, use its reasonable
best efforts to maintain and preserve its business organization, employees and
advantageous business relationships and retain the services of its officers and
key employees.
Section 5.2. Forbearances. Except as set forth on Schedule
5.2, as otherwise contemplated or permitted by this Agreement (including the
Disclosure Schedules) and the Option Agreements or as referred to in any Star
Reports or Firstar Reports publicly filed with the SEC prior to the date hereof,
during the period from the date of this Agreement to the Effective Time, Firstar
shall not and shall not permit its Subsidiaries to, without the prior written
consent of Star (which consent shall not be unreasonably withheld), and Star
shall not and shall not permit any of its Subsidiaries to, without the prior
written consent of Firstar (which consent shall not be unreasonably withheld):
(a) declare, set aside or pay any dividends or other
distributions, directly or indirectly, in respect of its capital stock (other
than dividends from a wholly owned Subsidiary of such party to such party or
another wholly owned Subsidiary of such party), except that (i) Star may pay
quarterly cash dividends on Star Common Stock in an amount not to exceed the
rate payable on such Star Common Stock as of the date hereof, and (ii) Firstar
may pay quarterly cash dividends on Firstar Common Stock in an amount not to
exceed the rate payable on such Firstar Common Stock as of the date hereof
(together with any rate increase consistent with past practice); or
(b) except as disclosed on such party's Disclosure
Schedule, enter into or amend any employment, severance or similar agreement or
arrangement with any director or officer or employee or collective bargaining
agreement, or materially modify any of its Benefit Plans or grant any salary or
wage increase or materially increase any employee benefit (including incentive
or bonus payments), except normal individual increases in compensation to
employees consistent with past practice or (ii) as required by law or contract;
or
(c) authorize, recommend, propose, or announce an
intention to authorize, so recommend or propose, or enter into an agreement in
principle with respect to, any merger, consolidation or business combination,
any acquisition or disposition of a material amount of assets, including
mortgage servicing rights, loans or securities as well as any release or
relinquishment of any material contract rights (except in the usual course of
business consistent with past practices) provided, however, that the foregoing
shall not prohibit internal reorganizations or consolidations involving existing
Subsidiaries; or
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(d) except for transactions in the ordinary course of
business consistent with past practice, enter into or terminate any material
contract or agreement, or make any change in any of its material leases or
contracts, other than renewals of contracts and leases without material adverse
changes of terms;
(e) settle any material claim, action or proceeding involving
money damages, except in the ordinary course of business consistent with past
practice;
(f) propose or adopt any amendments to its articles of
incorporation, association or other charter document or bylaws or code of
regulations; or
(g) issue, sell, grant, confer or award any of its Equity
Securities or any debt securities having the right to vote on matters on which
stockholders may vote or purchase, redeem, retire, repurchase, or exchange, or
otherwise acquire or dispose of, directly or indirectly, any of its Equity
Securities, whether pursuant to the terms of such Equity Securities or otherwise
(except for (i) shares of Firstar Common Stock or Star Common Stock, as
applicable, issued upon exercise of Firstar Stock Options or Star Stock Options,
respectively, outstanding on the date of this Agreement or issued in accordance
with this paragraph (g), (ii) pursuant to the Option Agreements, (iii) any such
transactions between a wholly-owned Subsidiary and its parent, (iv) in
accordance with the Firstar and Star Stock Plans consistent with past practice,
(v) as agent for stockholders reinvesting dividends pursuant to a dividend
reinvestment plan in accordance with the terms thereof as in effect on the date
of this Agreement, (vi) for the acquisition of Trust Account Shares and DPC
Shares, (vii) with respect to Firstar, any repurchases of Firstar Common Stock
to maintain a pool of up to 500,000 shares in the form of treasury shares for
the purpose of reissuing upon the exercise of Firstar Stock Options, or (viii)
in the ordinary course of business consistent with past practice (such party
agreeing to promptly notify the other party of any such transactions)) or effect
any stock split or adjust, combine, reclassify or otherwise change its equity
capitalization as it existed on the date of this Agreement; or
(h) solicit, encourage or authorize any individual,
corporation or other entity to solicit or encourage from any third party any
inquiries or proposals relating to the disposition of its business or assets, or
the acquisition of its voting securities, or the merger of it or any of its
Subsidiaries with any corporation or other entity other than as provided by this
Agreement (and each party shall promptly notify the other of all of the relevant
details relating to all inquiries and proposals which it may receive relating to
any of such matters); or
(i) take any action that would (i) materially adversely
affect, impede or delay the consummation of the transactions contemplated by
this Agreement and the Option Agreements or the ability of Star or Firstar to
obtain any approval of any Regulatory Authority required for the transactions
contemplated by this Agreement and the Option Agreements or to perform its
covenants and agreements under this Agreement and the Option Agreements, (ii)
prevent the Reincorporation Merger or the Second Step Merger from qualifying as
a "reorganization" within the meaning of Section 368(a) of the Code or (iii)
prevent the transactions contemplated hereby from qualifying as a "pooling of
interests" for accounting and financial reporting purposes; or
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(j) other than in the ordinary course of business consistent
with past practice and other than indebtedness of up to $800 million incurred by
Firstar and its Subsidiaries to fund Firstar's purchase from Cargill Corporation
of Cargill Leasing and to redeem Firstar's $100 million aggregate principal
amount of 7.15% Notes due September 1, 2000, and indebtedness of up to $100
million under Firstar's bank facilities for liquidity purposes incur any
indebtedness for borrowed money (other than short-term indebtedness incurred to
refinance short-term indebtedness and indebtedness of Star or any of its
wholly-owned Subsidiaries to Star or any of its wholly-owned Subsidiaries, on
the one hand, or of Firstar or any of its wholly-owned Subsidiaries to Firstar
or any of its wholly-owned Subsidiaries, on the other hand), assume, guarantee,
endorse or otherwise as an accommodation become responsible or liable for the
obligations of any other individual, corporation or other entity (it being
understood and agreed that incurrence of indebtedness in the ordinary course of
business shall include, without limitation, the creation of deposit liabilities,
purchases of Federal funds, sales of certificates of deposit and entering into
repurchase agreements); or
(k) implement or adopt any change in its accounting
principles, practices or methods, other than as may be required by GAAP or
regulatory guidelines; or
(l) other than the sale of up to $250 million of treasury
securities by Firstar and its Subsidiaries, materially restructure or materially
change its investment securities portfolio, through purchases, sales or
otherwise, or the manner in which the portfolio is classified or reported as of
the date of the Agreement; or
(m) except as required by applicable law or regulation, (i)
implement or adopt, any material change in its interest rate and other risk
management policies, procedures or practices, (ii) fail to follow in any
material respect its existing policies or practices with respect to managing its
exposure to interest rate and other risk or (iii) fail to use commercially
reasonable means to avoid any material increase in its aggregate exposure to
interest rate risk; or
(n) take any action or make any determination the effect of
which would result in the transactions contemplated by this Agreement
constituting or being deemed to be a "Change in Control" within the meaning of
the Firstar Supplemental Retirement Plan for Key Executives and the Firstar
Corporation Pension Plan or
(o) agree in writing or otherwise to take any of the
foregoing actions.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1. Access and Information. Upon reasonable notice
and subject to applicable laws relating to the exchange of information, Star and
its Subsidiaries, on the one hand, and Firstar and its Subsidiaries, on the
other hand, shall each afford to each other, and to the other's accountants,
counsel and other representatives, access during normal business hours, during
the period prior to the Effective Time, to all their respective employees,
properties, books, contracts, commitments and records and, during such period,
each shall furnish reasonably
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promptly to the other (i) a copy of each report, schedule and other document
filed or received by it during such period pursuant to the requirements of
federal and state securities and banking laws (other than any such documents
which such party is not permitted to disclose under applicable laws) and
including, but not limited to, copies of internal quarterly reserve analyses,
credit quality assessments and credit information as set forth in Schedule 6.1
(ii) all other existing or regularly produced information concerning its
business, properties and personnel, in the case of (i) and (ii) as such other
party may reasonably request. Neither Star nor Firstar nor any of their
respective Subsidiaries shall be required to provide access to or to disclose
information where such access or disclosure would violate or prejudice the
rights of Star's or Firstar's, as the case may be, customers, jeopardize the
attorney-client privilege of the institution in possession or control of such
information or contravene any law, rule, regulation, order, judgment, decree,
fiduciary duty or binding agreement entered into prior to the date of this
Agreement. The parties hereto will make appropriate substitute disclosure
arrangements under circumstances in which the restrictions of the preceding
sentence apply.
Section 6.2. Registration Statement; Regulatory Matters. (a)
The parties shall prepare and file with the SEC as soon as is reasonably
practicable the Registration Statement (or the equivalent in the form of
preliminary proxy material) with respect to the shares of Foxtrot (DE) Common
Stock to be issued in the Reincorporation Merger and the Second Step Merger and
shall apply to the NYSE to list the shares of Foxtrot (DE) Common Stock to be
issued in connection with the transactions contemplated by this Agreement. The
parties shall prepare and file a notice with the Board as soon as reasonably
practicable. The parties shall use all reasonable efforts to cause the
Registration Statement to become effective. The parties shall also take any
action required to be taken under any applicable state blue sky or securities
laws in connection with the issuance of such shares, and Firstar and Star shall
furnish all information concerning their respective Subsidiaries and the
stockholders thereof as may reasonably be requested in connection with any such
action.
(b) The parties hereto shall cooperate with each other and
use their reasonable best efforts to promptly prepare and file all necessary
documentation, to effect all applications, notices, petitions and filings, to
obtain as promptly as practicable all permits, consents, approvals and
authorizations of all third parties and Regulatory Authorities which are
necessary or advisable to consummate the transactions contemplated by this
Agreement (including, without limitation, the Reincorporation Merger and the
Second Step Merger), and to comply with the terms and conditions of all such
permits, consents, approvals and authorizations of all such Regulatory
Authorities. Star and Firstar shall have the right to review in advance, and, to
the extent practicable, each will consult with the other on, in each case
subject to applicable laws relating to the exchange of information, all the
information relating to Star or Firstar, as the case may be, and any of their
respective Subsidiaries, which appear in any filing made with, or written
materials submitted to, any third party or any Regulatory Authority in
connection with the transactions contemplated by this Agreement. In exercising
the foregoing right, each of the parties hereto shall act reasonably and as
promptly as practicable. The parties hereto agree that they will consult with
each other with respect to the obtaining of all permits, consents, approvals and
authorizations of all third parties and Regulatory Authorities necessary or
advisable to consummate the
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transactions contemplated by this Agreement and each party will keep the other
apprised of the status of matters relating to the completion of the transactions
contemplated herein.
(c) Star and Firstar shall, upon request, furnish each
other with all information concerning themselves, their Subsidiaries, directors,
officers and stockholders and such other matters as may be reasonably necessary
or advisable in connection with the Proxy Statement, the Registration Statement
or any other statement, filing, notice or application made by or on behalf of
Star, Firstar or any of their respective Subsidiaries to any Regulatory
Authority in connection with the Reincorporation Merger and the Second Step
Merger and the other transactions contemplated by this Agreement.
(d) Star and Firstar shall promptly advise each other upon
receiving any communication from any Regulatory Authority whose consent or
approval is required for consummation of the transactions contemplated by this
Agreement which causes such party to believe that there is a reasonable
likelihood that any requisite approval of any Regulatory Authority will be
denied or materially delayed.
Section 6.3. Stockholder Approval. In accordance with
applicable law and stock exchange rules and its respective Articles of
Incorporation and By-Laws or Code of Regulations, each of the parties shall call
a meeting of their respective stockholders to be held as soon as practicable
after the Registration Statement is declared effective for the purpose of voting
upon the Reincorporation Merger and the Second Step Merger, as applicable, and
to take any other action for stockholders to authorize the transactions
contemplated by this Agreement (each, a "Meeting"). In connection therewith, the
parties shall prepare the Proxy Statement and, with the approval of each of Star
and Firstar, the Proxy Statement shall be filed with the SEC and mailed to the
respective stockholders of the parties. The parties' respective Boards of
Directors shall submit for approval of their respective stockholders the matters
to be voted upon in order to authorize the Merger. The respective Board of
Directors of the parties shall use their reasonable best efforts to obtain any
vote of their respective stockholders that is necessary for the approval and
adoption of this Agreement and consummation of the transactions contemplated
hereby.
Section 6.4. Current Information. During the period from the
date of this Agreement to the Effective Time, each party shall promptly furnish
the other with copies of all monthly and other interim financial statements as
the same become available and shall cause one or more of its designated
representatives to confer on a regular and frequent basis with representatives
of the other party. Each party shall promptly notify the other party of any
material change in its business or operations and of any governmental
complaints, investigations or hearings (or communications indicating that the
same may be contemplated), or the institution or, to its knowledge, the threat
of material litigation involving such party, and shall keep the other party
fully informed of such events.
Section 6.5. Agreements of Affiliates. (a) Not later than the
15th day prior to the mailing of the Proxy Statement, Firstar shall deliver to
Star and Star shall deliver to Firstar, a schedule of each person that, to the
best of its knowledge, is or is reasonably likely to be, as of the date of the
relevant Meeting, deemed to be an "affiliate" of it (each, an "Affiliate") as
that
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term is used in SEC Accounting Series Releases 130 and 135 and Rule 145 under
the Securities Act.
(b) Firstar and Star shall each use its respective reasonable
best efforts to cause each person who may be deemed to be an Affiliate of
Firstar or Star, as the case may be, to execute and deliver to Firstar and Star
on or before the date of their respective Meetings an agreement to comply with
SEC Accounting Series Releases 130 and 135 and with Rule 145 under the
Securities Act. Such agreements shall be in the forms set forth in Exhibit E (in
the case of Firstar) and Exhibit F (in the case of Star).
(c) The Surviving Corporation shall use its reasonable best
efforts to publish as promptly as reasonably practical, but in no event later
than 45 days after the end of the first month after the Effective Time in which
there are at least 30 days of post-Merger combined operations (which month may
be the month in which the Effective Time occurs), combined sales and net income
figures as contemplated by and in accordance with the terms of SEC Accounting
Series Release No. 135.
Section 6.6. Expenses. Each party hereto shall bear its own
expenses incident to preparing, entering into and carrying out this Agreement
and to consummating the Merger provided that the expenses of Foxtrot (DE)
related to the preparation, filing and mailing of the Proxy Statement and the
Registration Statement shall be shared equally by the parties.
Section 6.7. Securities Act and Exchange Act Filings. (a) The
Surviving Corporation shall make all filings with the SEC that are described in
Section (c) of Rule 144 under the Securities Act for a period of two years
following the Effective Time.
(b) The parties shall cause Foxtrot (DE) to take all
corporate action necessary to reserve for issuance a sufficient number of shares
of Foxtrot (DE) Common Stock for delivery upon exercise of Star Stock Options
and Firstar Stock Options assumed by it in accordance with Sections 1.6 and 2.6.
As soon as practicable after the Effective Time, the parties shall cause Foxtrot
(DE) to file a registration statement on Form S-3 or Form S-8, as the case may
be (or any successor or other appropriate forms), or another appropriate form
with respect to the shares of Foxtrot (DE) Common Stock subject to such options
and to use its reasonable best efforts to maintain the effectiveness of such
registration statement or registration statements (and maintain the current
status of the prospectus or prospectuses contained therein) for so long as such
options remain outstanding. With respect to those individuals who subsequent to
the Merger will be subject to the reporting requirements under Section 16(a) of
the Exchange Act, where applicable, the parties shall cause Foxtrot (DE) to
administer the Star Stock Plans and Firstar Stock Plans assumed pursuant to
Sections 1.6 and 2.6 in a manner that complies with Rule 16b-3 promulgated under
the Exchange Act to the extent such plans complied with such rule prior to the
Merger.
Section 6.8. Miscellaneous Agreements and Consents. (a)
Subject to the terms and conditions herein provided, each of the parties hereto
agrees to use its respective reasonable best efforts to take, or cause to be
taken, all action, and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
ef-
-26-
fective the transactions contemplated by this Agreement as expeditiously as
possible, including, without limitation, using its respective reasonable best
efforts to lift or rescind any injunction or restraining order or other order
adversely affecting the ability of the parties to consummate the transactions
contemplated hereby. Each party shall, and shall cause each of its respective
Subsidiaries to, use its reasonable best efforts to obtain consents of all third
parties necessary or, as agreed to by the parties, desirable for the
consummation of the transactions contemplated by this Agreement.
(b) The parties shall, prior to the Effective Time, (i)
consult and cooperate with each other regarding the implementation of those
policies and procedures to be established by Foxtrot (DE) for its operations,
including, without limitation, policies and procedures pertaining to the
accounting, asset/liability management, audit, credit, human resources, treasury
and legal functions, and (ii) shall make such modifications or changes to their
policies and practices, if any, and at such date prior to or as of the Effective
Time, as may be mutually agreed upon. Star and Firstar shall also consult with
respect to the character, amount and timing of restructuring charges to be taken
by each of them in connection with the transactions contemplated hereby and
shall take such charges in accordance with GAAP, as may be mutually agreed upon.
No party's representations, warranties and covenants contained in this Agreement
shall be determined to be untrue or breached in any respect for any purpose as a
consequence of any modifications or changes to such policies and practices which
may be undertaken on account of this Section 6.8(b).
Section 6.9. Employee Benefit Plans. (a) From and after the
Effective Time, unless otherwise mutually determined, the Firstar Benefit Plans
and Star Benefit Plans in effect as of the date of this Agreement shall remain
in effect with respect to employees of Firstar or Star (or their Subsidiaries),
respectively, covered by such Plans at the Effective Time until such time as the
Surviving Corporation shall, subject to applicable law, the terms of this
Agreement and the terms of such Plans, adopt new benefits with respect to
employees of the Surviving Corporation and its Subsidiaries (the "New Benefit
Plans"). Prior to the Closing Date, Firstar and Star shall cooperate in
reviewing, evaluating and analyzing the Star Benefit Plans and Firstar Benefit
Plans with a view towards developing appropriate New Benefit Plans for the
employees covered thereby subsequent to the consummation of the Merger. It is
the intention of Firstar and Star to develop New Benefit Plans, as soon as
reasonably practicable after the Effective Time, which, among other things, (i)
treat similarly situated employees on a substantially equivalent basis, taking
into account all relevant factors, including, without limitation, duties,
geographic location, tenure, qualifications and abilities, and (ii) do not
discriminate between employees of the Surviving Corporation who were covered by
Firstar Benefit Plans, on the one hand, and those covered by Star Benefit Plans,
on the other, at the Effective Time.
(b) The foregoing not withstanding, the Surviving
Corporation agrees to honor in accordance with their terms all benefits vested
as of the date hereof under the Star Benefit Plans or the Firstar Benefit Plans
or under other contracts, arrangements, commitments, or understandings described
in the Star Disclosure Schedule and the Firstar Disclosure Schedule.
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(c) Nothing in this Section 6.9 shall be interpreted as
preventing the Surviving Corporation from amending, modifying or terminating any
Star Benefit Plans, Firstar Benefit Plans, or other contracts, arrangements,
commitments or understandings, in accordance with their terms and applicable
law.
Section 6.10. D&O Indemnification. (a) In the event of any
threatened or actual claim, action, suit, proceeding or investigation, whether
civil, criminal or administrative, including, without limitation, any such
claim, action, suit, proceeding or investigation in which any individual who is
now, or has been at any time prior to the date of this Agreement, or who becomes
prior to the Effective Time, a director or officer of Star, Firstar, Foxtrot
(DE) or any of their respective Subsidiaries, including any entity specified in
the Star Disclosure Schedule or the Firstar Disclosure Schedule (the
"Indemnified Parties"), is, or is threatened to be, made a party based in whole
or in part on, or arising in whole or in part out of, or pertaining to (i) the
fact that he is or was a director or officer of Star, Firstar, Foxtrot (DE) or
any of their respective Subsidiaries or any entity specified in the Star
Disclosure Schedule or the Firstar Disclosure Schedule or any of their
respective predecessors or (ii) this Agreement, the Option Agreements or any of
the transactions contemplated hereby or thereby, whether in any case asserted or
arising before or after the Effective Time, the parties hereto agree to
cooperate and use their best efforts to defend against and respond thereto. It
is understood and agreed that after the Effective Time, Foxtrot (DE) shall
indemnify and hold harmless, as and to the fullest extent permitted by law, each
such Indemnified Party against any losses, claims, damages, liabilities, costs,
expenses (including reasonable attorney's fees and expenses), judgments, fines
and amounts paid in settlement in connection with any such threatened or actual
claims, action, suit, proceeding or investigation, and in the event of any such
threatened or actual claim, action, suit, proceeding or investigation (whether
asserted or arising before or after the Effective Time); and Foxtrot (DE), after
consultation with an Indemnified Party, shall retain counsel and direct the
defense thereof, provided, however, that by virtue of the obligations herein set
forth, (A) Foxtrot (DE) shall not be liable to any Indemnified Party for any
legal expenses of other counsel or any other expenses incurred by any
Indemnified Party in connection with the defense thereof, except that if Foxtrot
(DE) fails or elects not to assume such defense or counsel for the Indemnified
Parties reasonably advises the Indemnified Parties that there are issues which
raise conflicts of interest between Foxtrot (DE) and the Indemnified Parties,
the Indemnified Parties may retain counsel reasonably satisfactory to them after
consultation with Foxtrot (DE), and Foxtrot (DE) shall pay the reasonable fees
and expenses of such counsel for the Indemnified Parties promptly as statements
therefor are received, (B) Foxtrot (DE) shall be obligated pursuant to this
paragraph to pay for only one firm of counsel (in addition to local counsel in
each applicable jurisdiction) for all Indemnified Parties, unless an Indemnified
Party shall have reasonably concluded, based on the advice of counsel and after
consultation with Foxtrot (DE), that in order to be adequately represented,
separate counsel is necessary for such Indemnified Party, in which case, Foxtrot
(DE) shall be obligated to pay for such separate counsel, (C) Foxtrot (DE) shall
not be liable for any settlement effected without its prior written consent
(which consent shall not be unreasonably withheld) and (D) Foxtrot (DE) shall
have no obligation hereunder to any Indemnified Party when and if a court of
competent jurisdiction shall ultimately determine, and such determination shall
have become final and nonappealable, that indemnification of such Indemnified
Party in the manner contemplated hereby is prohibited by applicable law. Foxtrot
(DE) shall, to the fullest extent permitted by law, advance
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expenses to such Indemnified Parties prior to final disposition of any claim,
suit, proceeding, or investigation upon receipt of an undertaking to repay any
such advances of fees and expenses if such person is ultimately found not to be
entitled to indemnification therefor. Any Indemnified Party wishing to claim
Indemnification under this Section 6.10, upon learning of any such claim,
action, suit, proceeding or investigation, shall notify Foxtrot (DE) thereof,
provided that the failure to so notify shall not affect the obligations of
Foxtrot (DE) under this Section 6.10 except to the extent such failure to notify
materially prejudices Foxtrot (DE). Foxtrot (DE)'s obligations under this
Section 6.10 shall continue in full force and effect for a period of six years
from the Effective Time (or the period of the applicable statute of limitations,
if longer); provided, however, that all rights to indemnification in respect of
any claim (a "Claim") asserted or made within such period shall continue until
the final disposition of such Claim.
(b) From and after the Effective Time, the parties shall
cause Foxtrot (DE) to cause the individuals serving as officers and directors of
Star and Firstar, their respective Subsidiaries or any entity specified in the
Star Disclosure Schedule or the Firstar Disclosure Schedule immediately prior to
the Effective Time to be covered for a period for six (6) years from the
Effective Time (or the period of the applicable statute of limitations, if
longer) by the directors' and officers' liability insurance policies maintained
by Star and Firstar, as applicable (provided that Foxtrot (DE) may substitute
therefor policies of at least the same coverage and amounts containing terms and
conditions which are not less advantageous than either of such policies) with
respect to acts or omissions occurring prior to the Effective Time which were
committed by such officers and directors in their capacity as such; provided,
however, that in no event shall Foxtrot (DE) be required to expend more than
200% of the current amount expended by Star and Firstar (the "Insurance Amount")
to maintain or procure insurance coverage pursuant hereto and provided further
that if Foxtrot (DE) is unable to maintain or obtain the insurance called for in
this Section 6.10(b), Foxtrot (DE) shall use its reasonable best efforts to
obtain as much comparable insurance as available for the Insurance Amount).
(c) In the event Foxtrot (DE) or any of its successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its properties
and assets to any person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of Foxtrot
(DE) assume the obligations set forth in this section.
(d) The provisions of this Section 6.10 are intended to be
for the benefit of, and shall be enforceable by, each Indemnified Party and his
or her heirs and representatives.
Section 6.11. Press Releases. Except as may be required by
law, Firstar and Star shall consult and agree with each other as to the form,
substance and timing of any proposed press release relating to this Agreement or
any of the transactions contemplated hereby.
Section 6.12. Pooling of Interests. Each of Star and Firstar
undertakes and agrees to use its reasonable best efforts to cause (i) each of
the Reincorporation Merger and the Second Step Merger to qualify as a
"reorganization" within the meaning of Section 368(a) of the Code,
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(ii) the Merger to qualify as a "pooling of interests" for accounting and
financial reporting purposes (in the case of both clause (i) and clause (ii),
including, if necessary, to take reasonable steps to restructure the
transactions contemplated by this Agreement to so qualify and, in the case of
qualification as a "pooling of interests," including, if necessary, seeking any
necessary third party consents) and (iii) the Merger to occur as soon as
practicable.
Section 6.13. Insurance. Each of Star and shall, and Firstar
shall cause its respective Subsidiaries to, use its reasonably best efforts to
maintain its existing insurance.
Section 6.14. Conforming Entries. (a) From and after the date
of this Agreement, Firstar and Star shall consult and cooperate with each other
with respect to conforming the loan, accrual and reserve policies of Firstar and
the Firstar Subsidiaries and such policies of Star and the Star Subsidiaries to
each other.
(b) In addition, from and after the date of this Agreement to
the Effective Time, Firstar and Star shall consult and cooperate with each other
with respect to determining appropriate Firstar and Star accruals, reserves and
charges to establish and take in respect of excess equipment write-off or
write-down of various assets and other appropriate charges and accounting
adjustments taking into account the parties' business plans following the
Merger, based upon such consultation and as hereinafter provided.
(c) Firstar and Star shall consult and cooperate with each
other with respect to determining, based upon such consultation and as
hereinafter provided, the amount and the timing for recognizing for financial
accounting purposes each party's expenses of the Merger and the restructuring
charges relating to or to be incurred in connection with the Merger.
(d) To the extent permissible under applicable laws,
regulations, and requirements of Regulatory Authorities, and provided further,
that neither Firstar nor Star shall be required to take any such action that, in
the opinion of its independent auditors, is not consistent with GAAP and
regulatory accounting principles if after consultation Firstar and Star agree,
Firstar and Star shall (i) establish and take such reserves and accruals at such
time as are agreed to conform Firstar's and Star's loan, accrual and reserve
policies to the other party's policies, and (ii) establish and take such
accruals, reserves and charges in order to implement such policies in respect of
excess facilities and equipment capacity, severance costs, litigation matters,
write-off or write-down of various assets and other appropriate accounting
adjustments, and to recognize for financial accounting purposes such expenses of
the Merger and restructuring charges related to or to be incurred in connection
with the Merger.
Section 6.15. Additional Actions. In case at any time after
the First Effective Time any further action is necessary or desirable to carry
out the purposes of this Agreement or to vest the Surviving Corporation with
full title to all properties, assets, rights, approvals, immunities and
franchises of any of the parties to the Reincorporation Merger or the Second
Step Merger, as the case may be, the proper officers and directors of each party
to this Agreement and their respective Subsidiaries shall take all such action
as may be reasonably necessary.
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Section 6.16. Dividends. (a) After the date of this
Agreement, each of Star and Firstar shall coordinate with the other the payment
of dividends with respect to the Star Common Stock and the Firstar Common Stock
and the record dates and payment dates relating thereto, it being the intention
of the parties hereto that holders of Star Common Stock and Firstar Common Stock
shall not receive two dividends, or fail to receive one dividend, in any single
calendar quarter with respect to their shares of Star Common Stock and/or
Firstar Common Stock or any shares of Foxtrot (DE) Common Stock that any such
holder receives in exchange for such shares of Star Common Stock or Firstar
Common Stock in the Merger.
(b) It is the intention of the parties that the initial
post-closing quarterly dividend rate per share of Foxtrot (DE) Common Stock
shall be equal to the quarterly dividend rate per share of Firstar immediately
prior to Closing divided by 0.76.
Section 6.17. Issuance of Shares. If and to the extent
necessary to reduce the aggregate number of "tainted treasury shares" to a
number that is consistent with the accounting of the Merger as a "pooling of
interests" under GAAP each of Star and Firstar shall, prior to the First
Effective Time, coordinate with the other party with respect to the issuance of,
and pursuant thereto shall issue, shares of Star Common Stock or Firstar Common
Stock, as may be appropriate, in such manner, and limited to such number, as is
necessary.
Section 6.18. Changes in Structure. The parties agree to
revise the structure of the Reincorporation Merger at the request of either Star
or Firstar to provide for a merger of Foxtrot (DE) with and into Firstar, with
Firstar as the surviving corporation in such Merger continuing its corporate
existence under the name "Firstar Corporation" and to be governed by the laws of
the State of Wisconsin provided that such change in structure does not change
the Exchange Rate, the tax consequences or any of the other substantive terms of
the transactions contemplated by this Agreement. In the event of any such change
in structure appropriate adjustments shall be made to the terms of Exhibits C
and D to conform to the requirements of Wisconsin law.
Section 6.19. Amending Governance Documents. The parties
agree that they will take whatever action is necessary to amend the Certificate
of Incorporation and By-Laws of Foxtrot (DE) to conform such documents to the
requirements of the DGCL or the WBCL, as applicable.
ARTICLE VII
CONDITIONS
Section 7.1. Conditions to Each Party's Obligation to Effect
the Merger. The respective obligations of each party to effect the Merger shall
be subject to the fulfillment at or prior to the First Effective Time of the
following conditions:
(a) This Agreement and the transactions contemplated hereby,
including the Second Step Merger, and, in the case of the holders of Firstar
Common Stock, the Reincorpora-
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tion Merger, shall have been approved and adopted by the respective requisite
affirmative votes of the holders of Star Common Stock and Firstar Common Stock
entitled to vote thereon.
(b) All requisite approvals of this Agreement and the
transactions contemplated hereby shall have been received from the Board and any
other Regulatory Authority, and all applicable waiting periods shall have
expired under applicable law (other than any such approvals or the expiration of
any such waiting periods which the failure to obtain or satisfy, individually or
in the aggregate, would not reasonably be expected to have a material adverse
effect on the consummation of the Merger or a Material Adverse Effect on the
Surviving Corporation).
(c) The Registration Statement shall have been declared
effective and shall not be subject to a stop order or any threatened stop order.
(d) None of Firstar, Star nor Foxtrot (DE) shall be subject
to any order, decree injunction, of a court or agency of competent jurisdiction
which enjoins or prohibits the consummation of the Merger. Reincorporation
Merger, the Second Step Merger or any of the other transactions contemplated by
this Agreement. No statute, rule, regulation, order, injunction or decree shall
have been enacted, entered, promulgated or enforced by any Regulatory Authority
which prohibits, materially restricts or makes illegal consummation of the
Reincorporation Merger or the Second Step Merger.
(e) Star shall have received an opinion of Wachtell, Lipton,
Xxxxx & Xxxx and Firstar shall have received an opinion of Xxxxxxx Xxxxxxx &
Xxxxxxxx, in form and substance reasonably satisfactory to Star and Firstar,
respectively, dated the Closing Date, substantially to the effect that, on the
basis of facts, representations and assumptions set forth in such opinion which
are consistent with the state of facts existing at the Effective Time:
(i) Each of the Reincorporation Merger and the Second Step
Merger will constitute a reorganization under Section 368(a)
of the Code; Firstar and Foxtrot (DE) will each be a party to
the reorganization in respect of the Reincorporation Merger;
and Foxtrot (DE) and Star will each be a party to the
reorganization in respect of the Second Step Merger;
(ii) No gain or loss will be recognized by Firstar or Foxtrot
(DE) as a result of the Reincorporation Merger or by Foxtrot
(DE) or Star as a result of the Second Step Merger;
(iii) No gain or loss will be recognized by stockholders of
Firstar who receive solely Foxtrot (DE) Common Stock for their
Firstar Common Stock pursuant to the Reincorporation Merger
(except with respect to cash received in lieu of a fractional
share interest in Foxtrot (DE) Common Stock); and
(iv) No gain or loss will be recognized by the stockholders
of Star who exchange their Star Common Stock solely for
Foxtrot (DE) Common Stock pursuant to the Second Step Merger.
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In rendering such opinion, counsel may require and rely upon
representations contained in certificates of officers of Firstar, Foxtrot (DE),
Star and others.
(f) The shares of Foxtrot (DE) Common Stock which shall be
issued to the holders of Star Common Stock and Firstar Common Stock (and, where
applicable, Foxtrot (DE) Stock Options) upon consummation of the Merger shall
have been authorized for listing on the NYSE, subject to official notice of
issuance.
(g) Star and Firstar shall have received letters, in form and
substance reasonably satisfactory to each, from Xxxxxx Xxxxxxxx LLP and KPMG
Peat Marwick LLP, respectively, dated the date of the Proxy Statement and
confirmed in writing at the Effective Time, stating that the Reincorporation
Merger and Second Step Merger, taken together, will qualify as a "pooling of
interests" transaction under Opinion 16 of the Accounting Principles Board, the
interpretive releases issued pursuant thereto and the pronouncements of the SEC
thereon.
Section 7.2. Conditions to Obligations of Firstar to Effect
the Merger. The obligations of Firstar to effect the Merger shall be subject to
the fulfillment or waiver by Firstar at or prior to the First Effective Time of
the following additional conditions:
(a) Representations and Warranties. The representations and
warranties of Star set forth in Article IV of this Agreement shall be true and
correct, subject to the standard of Section 4.2, as of the date of this
Agreement and as of the Closing Date (as though made on and as of the Closing
Date except (i) to the extent such representations and warranties are by their
express provisions made as of a specified date or period and (ii) for the effect
of transactions contemplated by this Agreement) and Firstar shall have received
a certificate of the chairman or president of Star, on behalf of Star, to that
effect.
(b) Performance of Obligations. Star shall have performed, in
all material respects, all obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and Firstar shall have received a
certificate of the chairman or president of Star, on behalf of Star, to that
effect.
Section 7.3. Conditions to Obligations of Star to Effect the
Merger. The obligations of Star to effect the Merger shall be subject to the
fulfillment or waiver by Star at or prior to the First Effective Time of the
following additional conditions:
(a) Representations and Warranties. The representations and
warranties of Firstar set forth in Article IV of this Agreement shall be true
and correct, subject to the standard of Section 4.2, as of the date of this
Agreement and as of the Closing Date (as though made on and as of the Closing
Date except (i) to the extent such representations and warranties are by their
express provisions made as of a specific date or period and (ii) for the effect
of transactions contemplated by this Agreement) and Star shall have received a
certificate of the chairman or president of Firstar, on behalf of Firstar, to
that effect.
(b) Performance of Obligations. Firstar shall have performed,
in all material respects, all obligations required to be performed by it under
this Agreement at or prior to the
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Closing Date, and Star shall have received a certificate of the chairman or
president of Firstar, on behalf of Firstar, to that effect.
(c) Consummation of the Reincorporation Merger. The First
Effective Time shall have occurred and the Reincorporation Merger shall have
been consummated.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1. Termination. This Agreement may be terminated at
any time prior to the First Effective Time, whether before or after any
requisite stockholder approval:
(a) by mutual written consent by the Board of Directors of
Star, the Board of Directors of Firstar and the Board of Directors of Foxtrot
(DE);
(b) by the Board of Directors of Star or the Board of
Directors of Firstar at any time after the date that is twelve months after the
date of this Agreement if the Merger shall not theretofore have been consummated
(provided that the terminating party is not then in material breach of any
representation, warranty, covenant or other agreement contained herein which has
resulted in the delay in performance of this Agreement);
(c) by the Board of Directors of Star or the Board of
Directors of Firstar if (i) the Board has denied approval of the Merger and such
denial has become final and nonappealable, (ii) stockholders of Firstar shall
not have approved the Merger and the other actions contemplated by this
Agreement at the Meeting provided that Firstar has not breached its obligation
under Section 6.3 or (iii) stockholders of Star shall not have approved the
Merger and the other transactions contemplated by this Agreement at the Meeting
provided that Star has not breached its obligation under Section 6.3;
(d) by the Board of Directors of Star in the event of a
breach by Firstar of any representation or warranty (subject to the standard of
Section 4.2), or any covenant or other agreement (in any material respect),
contained in this Agreement which breach is not cured within 90 days after
written notice thereof to Firstar by Star; or
(e) by the Board of Directors of Firstar in the event of a
breach by Star of any representation or warranty (subject to the standard of
Section 4.2), or any covenant or other agreement (in any material respect),
contained in this Agreement which breach is not cured within 90 days after
written notice thereof is given to Star by Firstar.
Section 8.2. Effect of Termination. In the event of
termination of this Agreement pursuant to this Article VIII, this Agreement
shall forthwith become void and there shall be no liability or obligation of any
nature whatsoever hereunder, or in connection with the transactions contemplated
hereby, on the part of Star, Firstar or their respective Subsidiaries or their
respective officers or directors except (i) as set forth in the second sentence
of Section 6.1 and in Section 4.3(j), 6.6, 8.2 and 9.3, (ii) that termination
will not relieve a breaching party from liability
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for any willful breach of this Agreement giving rise to such termination and
(iii) each of the Option Agreements shall be governed by its own terms as to
termination.
Section 8.3. Amendment. This Agreement and the Schedules
hereto may be amended by the parties hereto, by action taken by or on behalf of
their respective Boards of Directors, at any time before or after approval of
this Agreement by the stockholders of Firstar, Star, and Foxtrot (DE); provided,
however, that after any such approval no such amendment which under applicable
law requires further stockholder approval may be made without such stockholder
approval. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of Star, Firstar and Foxtrot (DE).
Section 8.4. Severability. Any term, provision, covenant or
restriction contained in this Agreement held by a court or a Regulatory
Authority of competent jurisdiction or the Board to be invalid, void or
unenforceable shall be ineffective to the extent of such invalidity, voidness or
unenforceability, but neither the remaining terms, provisions, covenants or
restrictions contained in this Agreement nor the validity or enforceability
thereof in any other jurisdiction shall be affected or impaired thereby. Any
term, provision, covenant or restriction contained in this Agreement that is so
found to be so broad as to be unenforceable shall be interpreted to be as broad
as is enforceable.
Section 8.5. Waiver. Any term, condition or provision of this
Agreement may be waived in writing at any time by the party which is, or whose
stockholders are, entitled to the benefits thereof.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1. Closing. The closing (the "Closing") of the
Merger shall take place at 10:00 a.m., local time, on the date that the
Effective Time (as defined in Section 2.2) occurs, or at such other time, and at
such place, as Star and Firstar shall agree (the "Closing Date").
Section 9.2. Non-Survival of Representations, Warranties and
Agreements. No investigation by the parties hereto made heretofore or hereafter
shall affect the representations and warranties of the parties which are
contained herein and each such representation and warranty shall survive such
investigation. Except as set forth below in this Section 9.2, all
representations, warranties and agreements in this Agreement of Star and Firstar
or in any instrument delivered by Star or Firstar pursuant to or in connection
with this Agreement shall expire at the Effective Time or upon termination of
this Agreement in accordance with its terms or, in the case of any other such
instrument, in accordance with the terms of such instrument; provided that, in
the event of consummation of the Merger, the covenants and agreements contained
in or referred to in Sections 6.6 and 6.10 and those covenants and agreements
contained herein which by their terms apply in whole or in part after the
Effective Time shall survive the Effective Time.
Section 9.3. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to be duly received (i) on the
date given if delivered personally, (ii)
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upon confirmation of receipt, if by facsimile transmission, (iii) on the date
received if mailed by registered or certified mail (return receipt requested),
or (iv) on the business date after being delivered to a reputable overnight
delivery service, if by such service, to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
(i) if to Star:
Star Banc Corporation
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
ATTN: Xxxxx Xxxxxxx
Telecopier: (000) 0000-0000
Copies to:
Xxxxx X. Xxxxxxxxx
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
(ii) if to Firstar:
Firstar Corporation
Firstar Center
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
ATTN: Xxxxxx X. Xxxxxxx, III
Telecopier: (000) 000-0000
Copies to:
Xxxx X. Xxxxxxxx
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Xxxxx Xxxxxxx
Xxxxx & Lardner
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Telecopier: (000) 000-0000
Section 9.4. Interpretation. When a reference is made in this
Agreement to Sections, Exhibits or Schedules, such reference shall be to a
Section of or Exhibit or Schedule to this Agreement, unless otherwise indicated.
The table of contents and headings contained in this
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Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation". No provision of this Agreement shall
be construed to require Firstar, Star, Foxtrot (DE) or any of their respective
Subsidiaries or affiliates to take or fail to take any action, including,
without limitation, the disclosure or non-disclosure by either party of any
information to its stockholders, which would (or its failure to have been taken
would) reasonably be expected to violate any applicable law, legal duty, rule or
regulation.
Section 9.5. Miscellaneous. This Agreement (including the
Disclosure Schedules and Schedules and other written documents referred to
herein or provided hereunder) (i) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof,
other than any confidentiality agreement between the parties hereto, (ii) except
with respect to Section 6.10 is not intended to confer upon any person not a
party hereto any rights or remedies hereunder, (iii) shall not be assigned by
operation of law or otherwise, (iv) may be executed in counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each of the parities and delivered to the
other parties, it being understood that all parties need not sign the same
counterparts, and (v) shall be governed in all respects by the laws of the State
of New York, except as otherwise specifically provided herein or required by the
DGCL, the OGCL or the WBCL. This Agreement may be delivered by facsimile.
Subject to the preceding clause (iii), this Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns.
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IN WITNESS WHEREOF, Star, Firstar and Foxtrot (DE) have caused
this Agreement to be signed as of the date first written above.
STAR BANC CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxxx
Name: Xxxxx X. Xxxxxxxxxx
Title: Chairman of the Board, President and
Chief Executive Officer
FIRSTAR CORPORATION
By: /s/ Xxxxx Xxxxxxxxxxx
Name: Xxxxx X. Xxxxxxxxxxx
Title: Chairman and Chief Executive Officer
FOXTROT (DE) CORPORATION
By: /s/ Xxxxx Xxxxxxxxxxx
Name: Xxxxx X. Xxxxxxxxxxx
Title: Chairman and Chief Executive Officer
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