1
Exhibit 10.16
PLAN AND AGREEMENT OF MERGER AND REORGANIZATION
Plan and Agreement of Merger and Reorganization (hereinafter referred
to as "Agreement"), made as of the 19th day of March, 1997, by and between F &
M Bancorporation, Inc., a Wisconsin corporation, Wisconsin Ban Corp., a
Wisconsin corporation and F & M Merger Corporation, a Wisconsin corporation.
1. Definitions.
The following definitions shall apply in this Plan and Agreement of
Merger and Reorganization:
1.1 "Agreement" shall mean this Plan and Agreement of Merger and
Reorganization.
1.2 "BANK" shall mean Prairie City Bank, 000 Xxxx Xxxxxxxxx
Xxxxxx, X.X. Xxx 000, Xxxxxxx Xx Xxxxx, Xxxxxxxxx 00000.
1.3 "BANK Stock" shall mean BANK's voting capital stock $100.00
par value.
1.4 "Closing Date" shall mean the date set by mutual agreement of
WBC and F & M and will not occur prior to the satisfaction or the waiver of all
of the conditions to the transaction.
1.5 "Effective Time" shall mean the date on which the Articles of
Merger are filed with the State of Wisconsin Department of Financial
Institutions. A copy of the proposed Articles of Merger is attached as Exhibit
1.5 and is incorporated herein by reference. The Articles of Merger shall be
filed as soon as possible after the conditions precedent to this merger have
been met or waived by F & M and WBC, but not prior to the Closing Date.
1.6 "WBC" shall mean Wisconsin Ban Corp., 000 Xxxx Xxxxxxxxx
Xxxxxx, X.X. Xxx 000, Xxxxxxx Xx Xxxxx, Xxxxxxxxx 00000.
1.7 "WBC Common" shall mean WBC's voting common stock, no par
value.
1.8 "WBC Preferred" shall mean WBC's preferred stock, $100.00 par
value.
1.9 "Exchange Ratio" shall mean the ratio determined by dividing
the F & M Stock Consideration by the total number of shares of WBC Common
outstanding as of the Closing Date.
1.10 "WBC Counsel" shall mean Xxxxxxxx, Xxxxxxx & Xxxxxxxx SC,
Attn: Xxxxx Xxxxxxxx, 000 Xxxxx Xxx, Xxxx Xxxxx, XX 00000.
2
1.11 "WBC Shareholders" shall mean the shareholders of WBC shown on
the attached Exhibit 1.11.
1.12 "F & M" shall mean F & M Bancorporation, Inc., Xxx Xxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxx 00000.
1.13 "F & M Common" shall mean F & M's voting common stock, $1.00
par value.
1.14 "F & M Common Price" shall mean the average closing price, as
quoted on the NASDAQ National Market System ("NASDAQ"), for F & M Common for
the fifteen (15) trading days on which F & M Common is actually traded,
immediately preceding the five (5) calendar days prior to the Closing Date of
the transaction.
1.15 "F & M Counsel" shall mean McCarty, Curry, Xxxxxxx, Peeters &
Xxxx, 000 Xxxx Xxxxxx Xxxxxx, X.X. Xxx 000, Xxxxxxxx, Xxxxxxxxx 00000-0000,
Attn: Xxxxxxx X. Xxxx, Esq.
1.16 "Securities Counsel" shall mean Xxxxxxx & Xxxxx, 000 Xxxx
Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000-0000, Attn: Xxxxxxx X. Xxxxxxx,
Esq.
1.17 "Subsidiary" shall mean F & M Merger Corporation, Xxx Xxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxx 00000.
1.18 "Registration Statement" shall mean the Registration Statement
of F & M pursuant to which the shares of F & M Common to be issued in the
merger will be registered with the Securities and Exchange Commission ("SEC"),
and which shall include the prospectus of F & M relating to the F & M Common
issuable in the transaction and the proxy statement of WBC to its shareholders
relating to approval of the merger (the "Prospectus/Proxy Statement").
2. Preamble.
F & M and Subsidiary are multi-bank holding companies with
subsidiaries located in Wisconsin. Subsidiary is a wholly-owned subsidiary of
F & M. WBC is a one-bank holding company which presently owns 100% of the
issued and outstanding stock of BANK. F & M, Subsidiary and WBC, by their
respective employees and agents have had the opportunity to make such review
and investigation of the other as they deem appropriate and to negotiate the
terms and conditions of this Agreement. F & M, Subsidiary and WBC each believe
that this transaction is in their best interests and in the best interests of
their shareholders and desire to set forth their agreement and understanding in
this Agreement.
The parties have considered the proposed merger and believe that a
merger between WBC and Subsidiary will be the best interest of their respective
corporations and shareholders. The merger of WBC into Subsidiary is intended
to constitute a reorganization
-2-
3
within the meaning of Sections 368(a)(1)(A) and 368(a)(2)(E) of the Internal
Revenue Code of 1986, as amended.
In consideration of the foregoing and the terms, conditions and
covenants of this Agreement and in reliance on the warranties and
representations contained herein, the parties adopt this Plan and Agreement of
Merger and Reorganization and agree as follows:
3. Merger of WBC into Subsidiary.
3.1 Surviving Corporation. At the Effective Time of the merger,
WBC shall be merged into Subsidiary in accordance with the laws of the State of
Wisconsin. Subsidiary will be the surviving corporation and the separate
corporate existence, identity and organization of WBC, except as specifically
provided by law and this Agreement, shall cease. As the surviving corporation,
Subsidiary shall succeed to and possess all the assets, properties, powers,
privileges, rights and immunities of WBC and shall be subject to all
liabilities, obligations, limitations and duties of WBC as described in this
Agreement, including but not limited to the liabilities for loans made to WBC
by the WBC Shareholders which will be repaid by Subsidiary on the Closing Date.
3.2 Subsidiary Stock Subscription. Subject to fulfilling of the
conditions precedent to the closing of this transaction set forth below, F & M
will transfer to Subsidiary such shares of F & M Common and cash as may be
necessary to effect the merger, as described under paragraph 3.3 below.
3.3 Exchange of WBC Common. At the Effective Time, the shares of
the WBC Common shall be converted into shares of F & M Common as follows:
(a) All WBC Shareholders will receive shares of F & M
Common based upon the Exchange Ratio. The Exchange Ratio shall be calculated
by dividing the F & M Stock Consideration by the number of shares of WBC Common
issued and outstanding as of the Closing Date (excluding any treasury shares).
The Exchange Ratio shall be multiplied by the number of shares of WBC Common
held by each WBC Shareholder on the Closing Date to determine the number of
shares of F & M Common to be issued to that WBC Shareholder.
(b) The F & M Stock Consideration will be Five Hundred
Seventy-five Thousand (575,000) shares of F & M Common, adjusted
proportionately as necessary to reflect any stock dividend declared between the
date of this Agreement and the Closing Date and subject to F & M's right to
terminate under paragraph 3.4.
(c) In the event F & M declares a stock dividend or a stock
split in the form of a stock dividend with respect to F & M Common, the record
date for which is prior to the Closing Date, the F & M Stock Consideration will
be adjusted proportionately to reflect such stock dividend. For example, if F
& M declared a ten
-3-
4
percent (10%) stock dividend, the F & M Stock Consideration shall be increased
by ten percent (10%) from 575,000 shares to 632,500 shares.
3.4 Exchange of WBC Preferred. At the Effective Time, the
outstanding shares of WBC Preferred shall be converted into cash equal to its
par value of One Hundred and 00/100 Dollars ($100.00) per share plus any
dividends accrued and unpaid since the last dividend payment date, pro rated to
the Closing Date.
3.5 Right to Terminate. F & M shall have the right to terminate
this Agreement, if any of the following occurs prior to the Closing Date:
(a) WBC is or becomes obligated, to increase the number
of outstanding shares of WBC Common as of the Closing Date and the sum of the
actual number of shares of WBC Common outstanding and any additional shares
which WBC is obligated to issue as of the Closing Date is not used to determine
the Exchange Ratio.
(b) The expenses of this transaction [as set forth in
paragraph 4.4(d)] exceed the limit established in paragraph 4.4(d).
(c) The actual earnings of BANK, determined in accordance
with generally accepted accounting principles, applied on a consistent basis,
net of tax effect (the "Actual Earnings") as of the end of the month
immediately preceding the Closing Date are less than the amount corresponding
to such month end as shown on the attached Schedule A (the "Minimum Earnings").
The expenses of this transaction [as defined in paragraph 4.4(d)] and any
expense necessary to increase the BANK's reserve for loan and lease losses
shall not be considered in determining BANK's Actual Earnings or Minimum
Earnings under this paragraph.
3.6 Articles of Incorporation. The Articles of Incorporation of
Subsidiary in effect immediately prior to the Effective Time of the merger
shall continue in full force and effect as the Articles of Incorporation of the
surviving corporation.
3.7 Bylaws. The Bylaws of Subsidiary in effect immediately prior
to the Effective Time of the merger, shall continue in full force and effect as
the bylaws of the surviving corporation.
3.8 Officers, Directors and Employees. The present members of
BANK's Board of Directors will be retained by F & M as directors of the
surviving corporation provided that continued membership on the board is
consistent with safe and sound banking practices and is in the best interest of
F & M and BANK. Retirement from the Board of Directors will occur at age
seventy (70), as provided by F & M policy, provided that any director who is
age seventy (70) at the time of consummation of the acquisition of BANK by F &
M may remain a director until the earlier of either two (2) years from
-4-
5
the Effective Date or the 1999 annual shareholders' meeting of the surviving
corporation. F & M contemplates that BANK's current employees will continue to
be responsible for the BANK's operations in general, subject to review and
supervision by F & M, as determined by F & M to be consistent with safe and
sound banking practices and the best interest of F & M and BANK. The salaries
and benefits to be offered will be consistent with those currently received by
the employees of F & M or its subsidiary banks holding similar positions.
Years of service with BANK shall, to the extent permitted by applicable law, be
counted as years of service with F & M and the surviving corporation. In the
unlikely event positions with the BANK are eliminated as a result of the
transaction contemplated by this Agreement, the employees affected by such
action will be covered by F & M's severance plan, applicable to their position
at the time the positions are eliminated, based upon their years of service
with BANK. The officers and directors of BANK at the Effective Time of the
merger shall remain as the officers and directors of the surviving corporation,
provided, however, and except as expressly set forth above, that nothing in
this paragraph shall create any rights in favor of such officers and directors
to continued status as such following the consummation of the merger.
4. Representations and Warranties of WBC. WBC, by its duly authorized
officers, directors or other agents makes the following representations and
warranties to F & M each of which is true and correct as of the date hereof,
and shall remain true and correct to and including the Closing Date, and shall
be unaffected by any investigation heretofore or hereafter made by or any
notice to F & M. These representations and warranties shall not survive the
closing.
4.1 Ownership and Authority. The current WBC Shareholders are
listed on the attached Exhibit 1.11.
4.2 WBC Organization and Authority.
(a) WBC is a corporation duly organized, validly existing
and in good standing under the laws of the State of Wisconsin with all
requisite corporate power and authority to own, operate and lease its
properties and to carry on its business as now being conducted and to enter
into and perform its obligations under this Agreement upon receiving the
necessary shareholder and regulatory approval. WBC is duly registered and
authorized to operate as a bank holding company. WBC is only qualified to do
business in the State of Wisconsin.
(b) WBC has good and marketable title to Two Thousand
Eight Hundred (2,800) shares of BANK Stock, free and clear of any and all
claims, mortgages, liens, security interests, pledges or other encumbrances of
any kind whatsoever, except for the pledge to Firstar Bank, N.A., to secure a
line of credit, with an outstanding balance of zero dollars as of this date.
-5-
6
(c) WBC is presently authorized to issue Two Thousand
Eight Hundred (2,800) shares of WBC Common. WBC presently has One Thousand
Five Hundred Sixty (1,560) shares of WBC Common validly and legally issued and
outstanding, all of which are fully paid and nonassessable, except as provided
by Wis. Stats. Section 180.0622(2)(b). WBC is also authorized to issue Three
Thousand One Hundred Ninety-seven (3,197) shares of WBC Preferred, One Hundred
and 00/100 ($100.00) par value, of which Three Thousand One Hundred
Ninety-seven (3,197) are validly and legally issued and outstanding, except as
provided by Wis. Stats. Section 180.0622(2)(b).
WBC has not issued, and does not have outstanding, any option, warrant
or convertible securities or other right to purchase or convert any obligation
into such corporation's securities and has not agreed to issue or sell any
additional securities of any type.
(d) The execution, delivery and performance of this Agreement
and the consummation of the transaction contemplated under it have been duly
authorized by appropriate corporate approval and will not violate any provision
of WBC's articles of incorporation or bylaws or any provisions of, or result in
the acceleration of any obligation under the mortgage, lien, lease, agreement,
instrument, court order, arbitration award, judgment or decree to which WBC is
a party, or by which WBC is bound and will not require the consent,
authorization or approval of any other public or private person or entity other
than the approval by WBC's shareholders and the appropriate federal and state
securities and banking regulatory agencies and will not violate any other
restriction of any kind or character to which WBC is subject.
4.3 BANK Organization and Authority.
(a) BANK is duly organized, validly existing and in good standing
under the laws of the State of Wisconsin and has all requisite banking and
corporate power and authority to own, operate and lease its properties and to
carry on its business as now being conducted. BANK has its main office and a
branch office in Prairie Du Chien, Wisconsin and additional branches in Seneca,
Xxxxxxx and Bagley, Wisconsin. All necessary corporate approval and
authorization and regulatory approval for BANK's present operations has been
given and remains in full force and effect and in good standing.
(b) BANK is authorized to issue Two Thousand Eight
Hundred (2,800) shares of BANK Stock, BANK's only class of stock. BANK has Two
Thousand Eight Hundred (2,800) shares of BANK Stock issued and outstanding, all
of which are legally and validly issued, fully paid and nonassessable.
(c) BANK has not issued and does not have outstanding any
option, warrant or convertible securities or other right to purchase or convert
any obligation into BANK's securities and has not agreed to issue or sell any
additional securities of any type.
-6-
7
(d) The execution, delivery and performance of this Agreement
and the consummation of the transaction contemplated under it have been duly
authorized by appropriate corporate approval and will not violate any provision
of BANK's articles of incorporation or bylaws or any provisions of, or result
in the acceleration of any obligation under the mortgage, lien, lease,
agreement, instrument, court order, arbitration award, judgment or decree to
which BANK is a party, or by which BANK is bound and will not require the
consent, authorization or approval of any other public or private person or
entity other than the approval by BANK's shareholders and the appropriate
federal and state bank regulatory agencies and will not violate any other
restriction of any kind or character to which BANK is subject.
(e) PCB Investments, Inc. ("PCB") is duly organized, validly
existing and in good standing under the laws of the State of Nevada and had and
continues to have all requisite corporate power and authority and regulatory
approvals to carry on its business as conducted in the past and as presently
conducted. PCB is a wholly-owned subsidiary of BANK.
4.4 Financial Matters.
(a) True copies of WBC's consolidated financial statements,
consisting of consolidated balance sheets, consolidated statements of
operations, consolidated statements of cash flow and consolidated statements of
stockholders' equity as of the close of business on December 31, 1995, 1994,
and 1993 have been delivered by WBC to F & M ("WBC's Financial Statements").
To the best knowledge of WBC's officers and directors, after due and diligent
inquiry all of WBC's Financial Statements are true and correct in all material
respects and present an accurate and complete disclosure of the financial
condition of WBC as of their respective dates, and the earnings for the periods
covered, all determined in accordance with generally accepted accounting
principles, applied on a consistent basis.
(b) To the best of BANK's knowledge, after due and
diligent inquiry, BANK does not have any loans presently outstanding which are
not in compliance with the requirements of federal or state banking laws or
regulations, except as set forth in Exhibit 4.4(b), which present any greater
than normal risk of collection or which were not made in the normal course of
business. BANK's last examination by the Federal Deposit Insurance Corporation
("FDIC") was as of June 12, 1995, and by the State of Wisconsin Department of
Financial Institutions, Division of Banking Commissioner ("Division") June 27,
1996. WBC's last examination by the Federal Reserve Bank of Chicago (the
"FRB") was May 2, 1989. Since the dates of these examinations, WBC and BANK,
after making due and diligent inquiry, are not aware of any outstanding loans
which are or may be subject to adverse classification except as set forth in
BANK's watch list as of January 31, 1997, a copy of which is attached hereto as
Exhibit 4.4(b), or of any adverse regulatory
-7-
8
action or proceeding against BANK, WBC or their respective officers, directors,
or employees, except as shown in the examination reports prepared by the FDIC,
the Division and the FRB as a result of their most recent examinations.
(c) WBC and BANK have good marketable title to all of
their assets, business and properties including, without limitation, all such
properties reflected in the WBC's Financial Statements as of December 31, 1995,
free and clear of any mortgage, lien, pledge, security interest, assessment,
levy, charge, claim or other encumbrance, except for real estate and personal
property taxes for 1996 which are not yet due. WBC and BANK do not have any
notice of any special assessment which will be levied or assessed against any
real property owned or leased by them. To the best knowledge of WBC's officers
and directors, after due and diligent inquiry all real property owned, operated
and leased by WBC and BANK is in full compliance in all material respects with
all applicable federal, state and local statutes and regulations including, but
not limited to, any building codes, safety codes, OSHA regulations,
environmental laws and regulations, the Americans with Disabilities Act, zoning
ordinances and other similar codes, ordinances, and regulations and neither WBC
nor BANK has received any citations, notices, charges or other complaints
claiming a violation of the foregoing nor are WBC or BANK aware of any
investigation of any alleged violation.
(d) All property and assets owned or currently in use by
WBC and BANK, or in which they have an interest (excluding interests which
arise in collateral given to secure loans made by BANK or because of a security
interest granted to BANK) or which are in their possession, are in good
operating condition and repair subject only to normal wear and tear. A
schedule of all real and personal property owned by WBC and BANK is attached as
Exhibit 4.4(c). If WBC or BANK lease any real or personal property, a separate
schedule clearly identifying such leased property will be included as a part of
Exhibit 4.4(c). As of the Closing Date, all such property and assets will be
in the condition represented above.
(e) For the period from January 1, 1997 to the Closing
Date, BANK has projected in good faith that its ordinary earnings determined in
accordance with generally accepted accounting principles, applied on a
consistent basis, net of tax effect, shall be as set forth in the attached
Exhibit 4.4(e). The expenses of this transaction are those incurred by BANK
for legal, tax opinion, accounting and/or auditing or investment banking and/or
brokerage fees or expenses associated with the acquisition of BANK by F & M and
will be reasonable and customary and will not in any event exceed Ten Thousand
and 00/100 Dollars ($10,000.00).
(f) For the fiscal year ended December 31, 1996, after
excluding amounts paid for new positions created in 1996, BANK did not increase
the amount of the salary, wages, bonuses or other cash
-8-
9
compensation for all employees by an aggregate amount which exceeds four
percent (4%) of the aggregate amount of such salary, wages, bonuses or other
cash compensation for the fiscal year ended December 31, 1995.
4.5 Changes Since Specific Dates. Since the dates set forth
below, with respect to WBC and BANK there have not been:
(a) Since December 31, 1995, any loss, damage,
destruction or failure to maintain the tangible assets of WBC or BANK (whether
or not covered by insurance), or affecting their business or properties, which
will materially adversely affect the financial condition or operations WBC or
BANK.
(b) Since November 13, 1996, any lapse, revocation,
failure to maintain in full force and effect or other event which, through the
passage of time or the giving of notice, or both could render any insurance
coverage previously maintained by WBC or BANK ineffective in whole or in part.
(c) Since December 31, 1995, any acquisition by WBC or
BANK of a capital asset at a cost in excess of Ten Thousand Dollars
($10,000.00) without prior approval of F & M, except as shown on the attached
Exhibit 4.5(c).
(d) Since November 13, 1996, any amendment to their
Articles of Incorporation or Bylaws.
(e) Since December 31, 1995, any change in accounting
procedures, practices or methods from those used by WBC and BANK in prior
years.
(f) Since November 13, 1996, any issuance, or agreement
to issue, on or before the Closing Date or thereafter, directly or indirectly,
any additional shares of stock of WBC or BANK.
(g) Since November 13, 1996, any declaration, setting
aside or payment of any dividend or any distribution in respect to WBC's stock
or any redemption, purchase or other acquisition by WBC or BANK of any stock or
any other repayments to the shareholders of WBC or BANK except for a dividend
of Five Hundred Thousand and 00/100 Dollars ($500,000.00) declared in December
1996, and paid in January, 1997.
(h) Since December 31, 1996, any sale, transfer, or other
disposition, prior to maturity, of any security or other earning asset
(exclusive of loans and leases), except as approved in writing by F & M.
(i) Any borrowings or other indebtedness (excluding
deposit liabilities) the balance of which currently exceeds the amounts
disclosed by WBC's December 31, 1995 Financial Statements.
-9-
10
(j) Any mortgage, lien, pledge, security interest,
assessment, levy, charge, claim or other encumbrance made with respect to any
of the properties or assets of WBC or BANK except as disclosed by WBC's
December 31, 1995 Financial Statements and for the pledge to Firstar Bank,
N.A., as described in paragraph 4.2(b).
(k) Since November 13, 1996, any sale, transfer or other
disposition of assets of WBC or BANK except in the normal course of business
and consistent with past practices, provided, however, that WBC or BANK may not
dispose of any securities prior to maturity without the prior consent of F & M.
(l) Any material change in the manner in which business
was being conducted by WBC or BANK prior to December 31, 1995, or other
material failure by WBC or BANK to use their best efforts to maintain its
present business organization (subject to the terms of this Agreement),
employees and customers.
(m) Any loan or commitment to make a loan by BANK with an
interest rate, repayment term, collateral or security requirements or other
conditions which are materially different from those upon which BANK made loans
prior to September 30, 1996, except to the extent such difference is in
response to competitive conditions encountered by BANK.
(n) Since November 13, 1996, any other materially adverse
change in WBC's or BANK's prospects, financial condition, assets, liabilities,
properties or business.
4.6 Liabilities.
(a) Neither WBC nor BANK have any liabilities, whether
accrued, absolute, contingent or otherwise, which arose or relate to any
transaction or occurrence involving WBC or BANK or their respective officers,
directors, employees, agents or servants prior to the date of this Agreement
which are not disclosed by WBC's or BANK's Financial Statements described
above. As of the date of this Agreement, WBC is indebted to the WBC
Shareholders for the principal amount shown on the attached Exhibit 4.6(a). To
the best of their knowledge, after due and diligent inquiry, as of the date
hereof, no known circumstances, conditions, happenings, events or arrangements,
contractual or otherwise, exist which may hereafter give rise to any such
liabilities of WBC or BANK.
(b) To the best of their knowledge, all parties with
whom WBC and BANK have contractual arrangements are in compliance therewith,
except for those loan customers of BANK identified on the attached Exhibit
4.6(b). Neither WBC nor BANK has declared, and is not prepared to declare, any
such parties in default under any such contractual arrangements. Neither WBC
nor BANK is in default in any material respect under any contracts to which it
is a party, nor has any event occurred, which through the passage of time or
the giving of notice or both, would constitute a default
-10-
11
under any such contract or obligation or cause the acceleration of any
obligation of WBC or BANK or result in the creation of a lien, charge,
assessment, encumbrance or other claim whatsoever upon any asset of WBC or
BANK. None of the contracts to which WBC or BANK is a party will be adversely
affected by the transaction contemplated by this Agreement.
(c) To the best of their knowledge, WBC and BANK are in
compliance in all material respects with all applicable federal, state, county
and local statutes, ordinances, regulations, decrees, orders, or other laws.
Neither WBC nor BANK has received notice of any alleged violation of any such
statutes, ordinances, regulations, decrees, orders or other laws, except as set
forth in the attached Exhibit 4.6(c).
(d) No legal, administrative or other proceedings,
investigations or inquiries or other claims, judgments, consent decrees,
stipulations, injunctions or restrictions are either pending or outstanding, or
to the best of their knowledge, threatened against or involving WBC or BANK or
affecting their assets, properties or business. WBC and BANK do not know, or
have any grounds to know of any basis for any such proceedings, investigations
or inquiries or other claims, judgments, consent decrees, stipulations,
injunctions or restrictions, except for normal foreclosure, repossession and
collection litigation described in the attached Exhibit 4.6(d).
(e) The assets and liabilities or potential liabilities
of WBC and BANK are fully insured (except for the deductible thereunder),
except for taxes, deposits, repurchase agreements or other similar deposit-type
instruments, and all policies of insurance carried by WBC or BANK are in full
force and all premiums thereon have been paid in a timely manner and are paid
to date and all bonds have been acquired and maintained on all employees,
agents, officers and directors of WBC or BANK required to be bonded. The
limits of coverage, deductibles and other material nonstandard provisions of
such insurance and bonds are disclosed in the attached Exhibit 4.6(e). Said
insurance and bonds, including but not limited to, general comprehensive
(commercial) public liability insurance covering personal injuries, death and
property damage, fidelity bonds and worker's compensation insurance have been
acquired and maintained for at least the past five (5) years.
4.7 Taxes. WBC and BANK have filed all federal, state and local
tax returns and reports covering income, sales, use, real or personal property
or other taxes of any type required to be filed and have paid all taxes
including any interest, penalties and assessments which are due and required to
be paid. The taxes provided for in WBC's Financial Statements and which will
be accrued prior to the Closing Date will be adequate for the payment of any
unpaid taxes as of the Closing Date. WBC's and BANK's income tax returns have
never been audited. Neither WBC nor BANK has waived any restrictions on the
assessment or collection of
-11-
12
taxes or consented to the extension of any statute of limitations relating to
any tax liability. Neither WBC nor BANK have determined or been advised that
WBC or BANK may be liable for a material deficiency or other liability in
respect to any state or federal income tax returns or other tax returns
previously filed by WBC or BANK.
4.8 Contracts and Commitments. Neither WBC nor BANK have any
contracts or commitments, either oral or written, with any officer, director,
shareholder, employee, customer, depositor, supplier of goods or services or
any other entity or person which contain any terms or conditions which are not
usual and customary under the circumstances and which may have a material
adverse effect on the operations, profitability or net worth of WBC or BANK.
4.9 Reporting and Withholding on Payment of Interest. To the best
of their knowledge, after due and diligent inquiry, WBC and BANK have fully
complied with the Internal Revenue Code (the "Code"), and all rules and
regulations of the Internal Revenue Service ("IRS") issued thereunder, with
respect to the reporting of payments of interest and other payments by them,
and have complied with all provisions requiring the withholding for income
taxes on such amounts when required. WBC and BANK have instituted adequate
procedures to assure compliance with such provisions. To the best of their
knowledge, all reporting to the IRS required of WBC and BANK has been done in a
timely manner via proper medium. Neither WBC nor BANK have been advised of any
violation or potential violation with respect to such reporting requirements.
4.10 Employees and Employee Benefits.
(a) WBC and BANK are not parties to or bound by any
written or oral (i) employment or employment-related consulting contract which
is not terminable at will by WBC or BANK, as the case may be without penalty,
except as set forth in the attached Exhibit 4.10(a), or (ii) plan or agreement
providing for any employee bonus, deferred compensation, pension, profit
sharing, retirement benefits, stock purchase, stock option, employee pension
benefit plan or employee welfare benefit plan except as set forth in the on the
attached Exhibits 4.10(b) and 4.10(c).
(b) All pension, profit sharing, or other employee
pension benefit plans of WBC and BANK("the Plans") are described in Exhibit
4.10(b) and are now, and will continue until the Closing Date to be, qualified
Plans under Section 401(a) of the Code, in full compliance with the Employee
Retirement Income Security Act of 1974 as amended ("ERISA"). To WBC's and
BANK's best knowledge, after due and diligent inquiry, all premiums, notices,
reports and other filings required to be delivered or filed under applicable
law with respect to such Plans have been duly and timely delivered or filed.
Neither WBC nor BANK have knowledge of any fact or circumstance which would
materially and adversely affect such Plans' qualified status or compliance as
above described, or of any
-12-
13
"reportable event" (as such term is defined in Section 4043(c) of ERISA) or any
"prohibited transaction" (as such term is defined in Section 406 of ERISA and
Section 4975(c) of the Code) which has occurred since the date on which said
sections first became applicable to the Plans. The Plans satisfy the minimum
funding standards set forth in the Code and ERISA. As of the Closing Date
there will be no unfunded vested liability of the Plans, except for the
obligation of WBC and BANK for contributions for the current year which are not
yet due and payable but for which adequate amounts are being accrued on a
monthly basis.
(c) All employee welfare benefit plans of WBC and BANK
(the "Welfare Plans") are described in Exhibit 4.10(c) and are now, and will
continue until the Closing Date to be, in full compliance with the Code and the
Employee Retirement Income Security Act of 1974 as amended ("ERISA"). To WBC's
and BANK's best knowledge, all notices, reports and other filings required to
be delivered or filed under applicable law with respect to such Welfare Plans
have been duly and timely delivered or filed. Neither WBC nor BANK have
knowledge of any fact or circumstance which would adversely affect such Welfare
Plans' compliance as above described or any "prohibited transaction" (as such
term is defined in Section 406 of ERISA and Section 4975(c) of the Code) which
has occurred since the date on which said sections first became applicable to
the Welfare Plans.
(d) No person or governmental agency has any pending or
threatened claim against WBC or BANK or their directors, officers, employees or
agents arising out of any statute, ordinance or regulation alleging that WBC or
BANK (i) has discriminated against applicants for employment, employees or the
public, (ii) has any employment practices, policies or procedures which are
discriminatory or have been breached, (iii) failed to comply with federal and
state wage and hour laws, rules or regulations, (iv) violated occupational
safety and health statutes, regulations or standards or (v) has committed an
unfair labor practice(s).
4.11 Environmental Matters.
(a) To the knowledge of WBC and BANK, there has been no
release of any hazardous substance, as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") nor
any release of oil or hazardous substance as provided under Wis. Stats. Section
144.76, on, upon or into the real property owned by or leased to WBC or BANK
or, except for loan number 524068915 to the best of WBC's and BANK's knowledge
upon any real estate or property which secures any loan made by WBC or BANK or
which WBC or BANK have a right to acquire upon foreclosure or otherwise.
(b) To the knowledge of WBC and BANK, there have been no
such releases on, upon or into any real property adjoining or in the vicinity
of the property described in paragraph 4.11(a) above,
-13-
14
which through air, soil or groundwater migration could have come to be located
upon any property owned or leased by WBC or BANK, or which secures a loan made
by WBC or BANK or may be acquired by WBC or BANK in foreclosure.
4.12 Accuracy of All Statements. No representation or warranty by
WBC or BANK in this Agreement or otherwise, in any of WBC's or BANK's Financial
Statements, or in any other statement, certificate, schedule or exhibit hereto
furnished or to be furnished by or on behalf of WBC or BANK pursuant to this
Agreement, nor any document or certificate delivered to F & M pursuant to this
Agreement or in connection with actions contemplated hereby, contains or shall
contain any untrue statement of material fact or omits or shall omit a material
fact necessary to make the statement contained therein not misleading.
4.13 Prospectus/Proxy Statement. The parts of the Prospectus/Proxy
Statement which were provided or reviewed by WBC and BANK with respect to WBC
and BANK will not, at the date it is first mailed or delivered to WBC's
Shareholders, and will not, at the date or dates of the meeting of WBC's
Shareholders called to approve the Merger, as then amended or supplemented,
contain any statements that are, at the time at which, and in light of the
circumstances under which they are made, false or misleading with respect to
any material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not false or
misleading.
Notwithstanding the foregoing, WBC makes no representation or warranty
regarding and shall have no responsibility for the accuracy of any information
with respect to F & M or Subsidiary or any of their affiliates or subsidiaries
contained in the Prospectus/Proxy Statement.
4.14 Financial Adviser. WBC has not engaged, consented to engage, or
authorized any financial adviser, broker, investment banker, or similar third
party to act on its behalf, directly or indirectly, in connection with the
transaction contemplated by this Agreement.
5. Representations and Warranties of F & M.
F & M, by its duly authorized officers, employees or other agents
makes the following representations to WBC, each of which is true and correct
as of the date hereof and shall remain true and correct to and including the
Closing Date, shall be unaffected by any investigation heretofore or hereafter
made by or any notice to WBC except as set forth herein. These representations
and warranties shall not survive the closing.
5.1 Organization and Authority.
-14-
15
(a) F & M is a corporation duly organized, validly
existing and in good standing under the laws of the State of Wisconsin with all
requisite corporate power and authority to own, operate and lease its
properties and to carry on its business as now being conducted and to enter
into and perform its obligations under this Agreement, upon receiving the
necessary approval from the federal and state regulatory authorities. F & M is
only qualified to do business in the State of Wisconsin and has received
approval from the Federal Reserve Bank of Chicago to engage in business as a
bank holding company.
(b) Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the State of Wisconsin will all
requisite corporate power and authority to own, operate and lease its
properties and to carry on its business as now being conducted and to enter
into and perform its obligations under this Agreement, upon receiving the
approval of its shareholders and the federal and state regulatory authorities.
Subsidiary is only qualified to do business in the State of Wisconsin.
(c) F & M is authorized to issue Twenty Million
(20,000,000) shares of F & M Common and has Seven Million Four Hundred
Twenty-one Thousand Nine Hundred Thirty-three (7,421,933) shares issued and
outstanding. F & M anticipates that additional shares of F & M Common will be
issued by it prior to the Closing Date. F & M does not anticipate a public
sale offering at this time. All outstanding shares are legally and validly
issued and fully paid and nonassessable except as provided by Wis. Stats.
Section 180.0622(2)(b).
5.2 Performance of this Agreement. The execution, delivery and
performance of this Agreement and the consummation of the transaction
contemplated under it have been duly authorized by appropriate corporate
approval and will not violate any provision of F & M's or Subsidiary's articles
of incorporation or bylaws or any provisions of, or result in the acceleration
of any obligation under any mortgage, lien, lease, agreement, instrument, court
order, arbitration award, judgment or decree to which F & M or Subsidiary is a
party, or by which F & M or Subsidiary is bound and will not require the
consent, authorization or approval of any other public or private person or
entity other than the approval by F & M as the sole shareholder of Subsidiary
and the appropriate federal and state securities and banking regulatory
agencies and will not violate any other restriction of any kind or character to
which F & M or Subsidiary are subject except as set forth in this Agreement.
5.3 Legality of Shares to be Issued. The shares of F & M Common
to be delivered pursuant to this Agreement, when so delivered, will have been
duly and validly authorized and issued by F & M and will be fully paid and
nonassessable, except as provided by Wis. Stats. Section 180.0622(2)(b).
-15-
16
5.4 Financial Statements. True copies of the audited consolidated
financial statements of F & M consisting of consolidated balance sheets,
consolidated statements of income, consolidated statements of stockholder's
equity and consolidated statements of cash flows as of the close of business on
December 31, 1995, 1994 and 1993, have been delivered by F & M to WBC (F & M's
Financial Statements). All of F & M's Financial Statements are true and
correct in all material respects and present an accurate and complete
disclosure of the financial condition of F & M as of their respective dates and
of the earnings for the periods covered, in accordance with generally accepted
accounting principles applied on a consistent basis.
5.5 Litigation. There are no legal, administrative or other
proceedings, investigations or inquiries or other claims, judgments, consent
decrees, stipulations, injunctions or restrictions which may have a material
adverse effect on F & M or Subsidiary either threatened, pending or outstanding
against or involving F & M or Subsidiary, nor do F & M or Subsidiary know, or
have reasonable grounds to know, of any basis for any such proceedings,
investigations or inquiries, or other claims, judgments, consent decrees,
stipulations, injunctions or restrictions.
5.6 Directors, Officers and Employees of BANK. Neither F & M or
its directors, officers, employees, agents, attorneys or accountants have made
or will make any representations or warranties as to any further positions with
BANK or F & M following the consummation of the transaction contemplated by
this Agreement to any director, officer or employee of WBC or BANK, except as
set forth in written agreements between BANK and any of its employees as
disclosed to F & M and except as provided in paragraph 3.8. F & M will provide
the officers and directors of BANK with directors' and officers' liability
insurance with the same limits of liability and terms and conditions as are
provided by other subsidiaries of F & M (without any exclusion for prior acts).
This representation is intended to create a contractual right for the benefit
of BANK's officers and directors and may be separately enforced by them
subsequent to consummation of the transaction contemplated by this Agreement in
the event F & M fails to comply with this representation, provided, however,
nothing herein shall obligate F & M to provide such coverage if it determines
in its sole discretion not to provide such average to its subsidiary banks.
5.7 Accuracy of All Statements. No representation or warranty by
F & M or Subsidiary in this Agreement or otherwise, nor any financial
statements, statement, certificate, schedule or exhibit hereto furnished or to
be furnished by or on behalf of F & M or Subsidiary pursuant to this Agreement,
nor any document or certificate delivered to WBC pursuant to this Agreement or
in connection with actions contemplated hereby, contains or shall contain any
untrue statement of material fact or omits or shall
-16-
17
omit a material fact necessary to make the statement contained therein not
misleading.
5.8 Prospectus/Proxy Statement. The Prospectus/Proxy Statement
will not, at the date it is first mailed or delivered to WBC's shareholders,
and will not, at the date or dates of the meeting of the WBC Shareholders
called to approve the Merger, as then amended or supplemented, contain any
statements that are at the time at which, and in light of the circumstances
under which they are made, false or misleading with respect to any material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not false or misleading.
Notwithstanding the foregoing, F & M and Subsidiary make no representation or
warranty and shall have no responsibility for the accuracy of any information
contained in or omitted from the Prospectus/Proxy Statement in so far as it
describes the WBC and BANK.
5.9 No Broker. All negotiations relative to this Agreement and
the transaction contemplated hereby have been carried on directly by F & M and
Subsidiary with WBC without the intervention of any broker or third party on
behalf of F & M and Subsidiary. F & M and Subsidiary have not engaged,
consented to engage, or authorized any broker, investment banker, or third
party to act on its behalf, directly or indirectly, in any capacity in
connection with the transaction contemplated by this Agreement.
6. Covenants of WBC.
WBC hereby covenants and agrees as follows:
6.1 Access to Information. F & M and its authorized
representatives shall have full access during normal business hours to all
properties, books, records, contracts and documents of WBC and BANK and WBC and
BANK shall furnish or cause to be furnished to F & M or its authorized
representatives all information with respect to the affairs and business of WBC
as F & M may reasonably request.
6.2 Actions Prior to Closing. From and after the date of this
Agreement and until the Closing Date, WBC and BANK:
(a) Shall carry on their business diligently and
substantially in the same manner as heretofore and WBC and BANK shall not
engage in or institute any unusual or novel methods of doing business and shall
inform F & M in advance before either introducing any new products or services
or modifying any existing products or services.
(b) Shall not (i) grant any increase in the rates of pay,
salary, or compensation provided to its officers, directors or employees, which
in combination with all increases granted which became effective on or after
January 1, 1997, for the 1997 calendar
-17-
18
year (regardless if approved before or after January 1, 1997) exceed in the
aggregate four percent (4%) of the total compensation paid to the officers,
directors or employees of BANK as of December 31, 1996, (ii) for the fiscal
year ended December 31, 1996, increase the amount of any bonus paid by BANK in
excess of the amount paid by BANK for the year ended December 31, 1995, except
for the payment of Five Hundred and 00/100 Dollars ($500.00) paid to the
employees hired as BANK's new assistant vice-president in November 1996, (iii)
pay any bonuses for the 1997 fiscal year, and (iv) increase or decrease the
benefits provided under, the contribution to, or the cost sharing allocation of
any employee fringe benefit or any of the benefit plans described in Exhibits
4.10(b) and 4.10(c), except for normal adjustments imposed by third party
providers.
(c) Shall not enter into any contract or commitment or
engage in any transaction which is not in the normal course of business and
which is not consistent with WBC's and BANK's past business practices.
(d) Shall not create any indebtedness without the prior
written consent other than (i) short term indebtedness incurred in the normal
course of business, (ii) indebtedness incurred pursuant to an existing contract
previously disclosed to F & M, (iii) indebtedness incurred to do the acts and
things contemplated by this Agreement, or (iv) increase the indebtedness to the
WBC Shareholders or to Firstar Bank, N.A., except for accrued interest.
(e) Shall not declare or pay any cash dividend, stock
dividend or make any other distribution in respect of its stock, or directly or
indirectly redeem, purchase or otherwise acquire any of its own stock, or grant
any stock warrant, stock options or issue directly or indirectly any shares of
common or preferred stock or any other security of any type whatsoever or in
any way dispose of any shares of its own stock or any other security, except
for the payment of dividends from BANK to WBC for WBC's normal operations
consistent with past practices.
(f) Shall not amend their Articles of Incorporation or
Bylaws or make any changes in authorized or issued stock.
(g) Shall maintain current insurance in effect and
acquire such additional insurance as may be reasonably required by increased
business and risks, and operate, maintain and repair all property in a normal
business manner.
(h) Shall make adequate provision for any income and
property (real and personal) taxes which will be due with respect to any 1997
earnings and shall file all tax reports or returns and pay all income,
franchise, real estate, personal property, sales, use, excise or other taxes on
or before the date on which such reports, returns, or payments are due.
-18-
19
(i) Shall pay all liabilities in a timely manner on or
before their due dates and shall make adequate provision or accruals for all
liabilities of WBC and BANK.
(j) Shall use their best efforts (without making any
commitments on behalf of F & M) to preserve their business organization intact,
to keep available to F & M the present key officers and employees of WBC and
BANK and to preserve for F & M the present relationships of WBC and BANK with
their suppliers, customers and others having business relations with them.
(k) Shall not sell or dispose of any property or assets
except in the normal course of business, including but not limited to, selling
or disposing of any securities held by WBC, BANK or PCB prior to their normal
maturity dates.
(l) Shall promptly notify F & M of any lawsuits, claims,
proceedings, regulatory actions or investigations that may be threatened,
brought, asserted or commenced against it or its officers, directors, employees
or agents involving in any way the business, properties or assets of WBC or
BANK, except for routine collection litigation which is initiated by BANK and
is not expected to result in any loss to BANK, provided that if any
counterclaim, cross-claim or third-party claim is asserted in such litigation,
F & M shall be given notice thereof.
(m) Shall not make loans or grant credit to any customer
on terms materially more favorable than those which are available under BANK's
current underwriting guidelines. F & M, WBC and BANK understand that BANK, in
order to meet market conditions may need to offer terms more favorable than
those currently offered but that BANK will not be a market leader in this
regard.
(n) Shall not allow BANK's primary capital to asset ratio
(12 C.F.R. Part 325 method), determined in accordance with accepted accounting
standards applicable to preparation of Reports of Condition required to be
filed with the Federal Deposit Insurance Corporation, applied on a consistent
basis, to drop by more than 25 basis points unless BANK has disclosed the
reason for the decline to F & M in advance and F & M has consented in writing
to the adjustment causing such decline.
(o) Shall remain in compliance with all agreements,
commitments, understandings, undertakings or other obligations to the Director,
the FDIC or any other regulatory agency having jurisdiction over WBC and BANK.
(p) Shall cooperate fully and completely with F & M in
the preparation and filing of the Registration Statement, and shall provide to
F & M such information as may be required for use therein pertaining to WBC and
BANK, or their businesses or operations.
-19-
20
(q) Shall not take any action which would be reasonably
likely to make unavailable either the pooling of interest accounting treatment
of the merger or to cause the merger not to qualify as a tax-free
reorganization.
(r) Shall operate PCB so that its business and operations
comply and are in accordance with the provisions of parts (c) through (q) of
this paragraph 6.3.
6.4 Stock Records. Prior to the special shareholders meeting to
approve the Merger, the Board of Directors of WBC, in accordance with its
bylaws, shall take such steps as are necessary to close its stock transfer
books and establish a record date for such meeting after the close of the
transfer books, furnish F & M with a current shareholder list as of such record
date and validly call a special shareholders' meeting or obtain unanimous
consent of shareholders as provided by statute and WBC's bylaws.
6.5 Audited Financial Statements. If audited financial statements of
WBC and/or BANK are required to permit the shares of F & M Common to be
registered with the SEC, WBC agrees to furnish such statements for the required
years to F & M, provided, however, that the expenses of preparing such
statements shall not be considered in determining BANK's expenses under
paragraph 3.4(b) or BANK's Minimum Earnings under paragraph 3.4(c).
6.6 Reserves for Loan and Lease Losses. BANK shall take such
action as may be necessary to maintain its reserve for loan and lease losses at
one and 45/100 percent (1.45%) of loans and leases until the Closing Date, or
shall have the prior written consent of F & M to establish a lower reserve for
loan and lease losses.
7. Covenants of F & M. F & M and Subsidiary hereby covenant and agree as
follows:
(a) As promptly as practicable after the execution of
this Agreement, F & M and Subsidiary, with the cooperation of WBC, shall
prepare and file with the SEC the Registration Statement. As promptly as
practicable after comments, if any, are received from the SEC on such
preliminary Registration Statement, F & M and Subsidiary, with the cooperation
of WBC, shall file with the SEC an amendment to the Registration Statement
responding to such comments, and shall seek to have such Registration Statement
declared effective. F & M and Subsidiary shall also use their best efforts to
qualify under the blue sky laws of the various states in which common
shareholders of WBC are located the shares of F & M Common Stock to be issued
pursuant to this transaction and shall file the NASD Listing Application in a
timely manner. F & M and Subsidiary shall pay the expenses of preparing and
delivering the joint Prospectus/Proxy Statement for WBC's Shareholders.
-20-
21
(b) As promptly as practicable after the execution of
this Agreement, F & M and Subsidiary shall take action to obtain regulatory
approval of this transaction.
(c) Shall not take any action which would be reasonably
likely to make unavailable either the pooling of interest accounting treatment
of the merger or to cause the merger not to qualify as a tax-free
reorganization.
(d) Notify WBC, at the time of any public announcement,
of any tender offer by another financial institution or holding company to
acquire F & M Common, or of F & M's intention to enter into a merger agreement
with another financial institution or holding company.
8. Conditions Precedent to F & M's Obligation. Each and every obligation
of F & M and Subsidiary to be performed on the Closing Date shall be subject to
the satisfaction prior thereto of the following conditions:
8.1 Truth of Representations and Warranties. The representations
and warranties made in this Agreement or given on behalf of WBC and BANK
hereunder, shall have been continuously true and correct from the date of
execution of this Agreement to the Closing Date, and shall be true and correct
on and as of the Closing Date with the same effect as though such
representations and warranties had been made or given on and as of the Closing
Date and WBC and BANK shall have complied with all other terms, conditions and
covenants of this Agreement.
8.2 Compliance with Covenants. Except as expressly set forth in
paragraph 8.7, WBC and BANK shall have performed all of their obligations, and
complied with all of the covenants under this Agreement which are to be
performed or complied with by them from the date of this Agreement through and
as of the Closing Date, including the delivery of the closing documents
specified in paragraph 10.3.
8.3 Absence of Suit. No action, suit or proceeding before any
court or any governmental or regulatory authority shall have been commenced or
threatened, and no investigation by any governmental or regulatory authority
shall have been commenced, against F & M, Subsidiary, WBC or BANK, or any of
the affiliates, associates, officers, directors or employees of any of them,
seeking to restrain, prevent or change the transaction contemplated hereby, or
questioning the validity or legality of any such transaction, or seeking
damages in connection with any of such transaction.
8.4 WBC's Director and Shareholder Authorization. The merger
contemplated by this Agreement shall have been duly and validly authorized by
WBC's directors and shareholders in accordance with the laws of the State of
Wisconsin.
-21-
22
8.5 Receipt of Approvals. All approvals, consents and/or waivers,
including any approvals required by any federal or state governmental
regulatory agency, that are necessary to effect the transactions contemplated
hereby shall have been received and all waiting periods thereunder shall have
expired.
8.6 Accuracy of Financial Statements. F & M and Subsidiary and
their representatives shall be reasonably satisfied as to the accuracy of all
year end and interim period balance sheets, statements of income and other
financial statements of WBC or BANK furnished to F & M and Subsidiary for
periods ended after December 31, 1995.
8.7 BANK Earnings. The Actual Earnings of BANK from January 1,
1997 through the month end prior to the month in which closing occurs,
determined in accordance with generally accepted accounting principles applied
on a consistent basis, reference shall not be less than the Minimum Earnings
[as defined in paragraph 3.5(c)] from January 1, 1997, through the month end
prior to the month in which closing occurs.
8.8 Legal Opinion. F & M shall have received the opinion of WBC
Counsel referred to in subparagraph 10.3(e).
8.9 Time Limit on Closing. Closing shall have taken place by June
30, 1997.
8.10 Proceedings and Instruments Satisfactory; Certificates. All
proceedings, corporate or otherwise, to be taken in connection with the
transactions contemplated by this Agreement shall have occurred and all
appropriate documents incident thereto as F & M and Subsidiary may reasonably
request shall have been delivered to F & M and Subsidiary. WBC and BANK shall
have delivered certificates in such detail as F & M may reasonably request as
to compliance with the conditions set forth in this Article 8.
8.11 Securities Matters. The Registration Statement shall have been
declared effective under the Securities Act of 1933 by the SEC. No stop order
suspending the effectiveness of the Registration Statement shall have been
issued by the SEC and no proceedings for that purpose shall, to the knowledge
of F & M or Subsidiary, on or prior to the Effective Time, have been initiated
or threatened by the SEC. F & M and Subsidiary shall have received all other
federal or state securities permits exemptions, registrations or other
authorizations necessary to issue the F & M Common in exchange for the WBC
Stock to consummate the merger.
8.12 Prospectus/Proxy Statement. The Prospectus/Proxy Statement will
not contain any untrue statement of a material fact or omit any material fact
regarding WBC or BANK required to be stated therein or necessary to make the
statements contained therein, in the light of the circumstances under which
they were made, not misleading.
-22-
23
8.13 Exchange of Stock Certificates. As a condition of delivery of
the consideration required by this Agreement, the WBC Shareholders shall have
executed and delivered documents assigning their shares of WBC Common and WBC
Preferred to F & M and/or Subsidiary containing appropriate representations
regarding tax matters, ownership, authority to act, residency and such other
matters as F & M shall request.
8.14 Affiliates of WBC. Each person who shall be deemed to be an
"affiliate" of WBC within the meaning of the Securities Act of 1933 and Rule
145 promulgated by the SEC thereunder shall have executed and delivered to F &
M an Affiliate's Undertaking, in the form attached hereto as Exhibit 8.14,
dated as of the Effective Time.
8.15 Pooling Accounting. The merger contemplated herein shall be
treated as and qualify for accounting using the pooling of interests
method provided that this condition shall be deemed waived if the
disqualification is the result of an omission by F & M.
8.16 Tax Status. F & M shall have delivered to WBC an opinion of legal
counsel selected by F & M to the effect that the shares of F & M Common
to be issued in this transaction in exchange for shares of WBC Common and WBC
Preferred will be issued as part of a tax-free reorganization. F & M covenants
to proceed diligently and in good faith to obtain such opinion as soon as
practically possible.
8.17 Dissenters Rights. That no more than ten percent (10%) of the
total consideration paid by F & M in this transaction, determined in accordance
with the accounting rules applicable to the pooling of interests accounting
treatment, shall be paid in cash, including amounts paid for fractional shares
and amounts paid to WBC Shareholders who exercise their dissenters rights under
Wis. Stats. Section Section 180. 1301 et seq.
9. Conditions Precedent to WBC's Obligations.
Each and every obligation of WBC to be performed on the Closing Date
shall be subject to the satisfaction prior thereto of the following conditions:
9.1 Truth of Representations and Warranties. The representations
and warranties made by F & M and Subsidiary in this Agreement or given on their
behalf hereunder, shall be true and correct on and as of the Closing Date with
the same effect as though such representations and warranties had been made or
given on and as of the Closing Date.
9.2 F & M's and Subsidiary's Compliance. F & M and Subsidiary
shall have performed and complied with all of its obligations under this
Agreement which are to be performed or
-23-
24
complied with by them prior to or as of the Closing Date, including delivery of
the closing documents.
9.3 Absence of Suit. No action, suit or proceeding before any
court or any governmental or regulatory authority shall have been commenced or
be threatened and, no investigation by any governmental or regulatory authority
shall have been commenced, against F & M, Subsidiary, WBC or BANK, or any of
the affiliates, associates, officers, directors, or employees of any of them,
seeking to restrain, prevent, or change the transactions contemplated hereby,
or questioning the validity or legality of any such transactions, or seeking
damages in connection with any of such transactions.
9.4 Proceedings and Instruments Satisfactory; Certificates. All
proceedings, corporate or otherwise, to be taken by F & M and Subsidiary in
connection with the transaction contemplated by this Agreement shall have
occurred and all appropriate documents incident thereto as WBC may reasonably
request shall have been delivered to WBC. F & M and Subsidiary shall have
delivered certificates in such detail as WBC may reasonably request to comply
with the conditions set forth in this Article 9.
9.5 Receipt of Approvals. All approvals, consents and or waivers,
including any approvals required by any federal or state governmental
regulatory agency and shareholder approval which WBC shall make a good faith,
best efforts to obtain, that are necessary to effect the transactions
contemplated hereby shall have been received, and all waiting periods shall
have expired provided the failure to obtain the same was not the result of an
act or omission by WBC or BANK.
9.6 Time Limit on Closing. Closing shall have taken place by June
30, 1997.
9.7 Legal Opinion. WBC shall have received the opinion of F & M
Counsel referred to in subparagraph 10.4(d).
9.8 Prospectus/Proxy Statement. The Prospectus/Proxy Statement will
not contain any untrue statement of material fact or omit any material fact
required to be stated therein or necessary to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading.
9.9 Tax Status. WBC shall have received an opinion of legal counsel
selected by F & M to the effect that the shares of F & M Common to be issued in
this transaction in exchange for shares of WBC Common will be issued as part of
a tax-free reorganization. F & M covenants to proceed diligently and in good
faith to obtain such opinion as soon as practically possible.
10. Closing.
-24-
25
10.1 Time and Place. The closing of this transaction ("Closing")
shall take place at the offices of F & M (or such other place as the parties
may agree) on the Closing Date.
10.2 Rights of WBC Shareholders After the Effective Time. After
the Effective Time and until the surrender of a stock certificate representing
shares of WBC Common or WBC Preferred, each such outstanding certificate, which
prior to the Effective Time represented shares of WBC Common or WBC Preferred,
shall be deemed for all purposes, subject to the further provisions of this
Agreement, to evidence the ownership of the number of full shares of F & M
Common or cash into which such shares have been converted as provided in this
Agreement; provided, however, that unless and until any such certificates
representing WBC Common or WBC Preferred shall be so surrendered, the cash or
stock certificate representing the shares, any interest dividends or other
distributions of any kind payable shall be withheld by F & M. Upon the
subsequent surrender and exchange of such WBC Common or WBC Preferred
certificates, such holder of record of the certificates formerly representing
shares of WBC Common or WBC Preferred (or such holder's assignee) shall be paid
the amount of any such cash dividends or other distributions, without interest,
which became payable under this Agreement. Delivery of certificates
representing shares of F & M Common or cash payment to former WBC Shareholders
who have tendered their certificates for their shares of WBC Common or WBC
Preferred at or before the Effective Time shall be made as soon as reasonably
possible after the Effective Time.
10.3 Documents to be Delivered by WBC. At the time of or prior to
the closing, WBC shall deliver the following documents:
(a) A certificate by the chairman, vice-chairman or
president of WBC and BANK (i) that the representations and warranties made by
WBC or BANK as the case may be in this Agreement are true and correct on as of
the Closing Date with the same effect as though such representations and
warranties had been made on or given on and as of the Closing Date, (ii) that
WBC and BANK have performed and complied with all of their obligations under
this Agreement which are to be performed or complied with by or prior to or on
the Closing Date, and (iii) that all Schedules and Exhibits delivered by WBC to
F & M prior or as of the Closing Date are true, correct and complete as of the
Closing Date.
(b) An Incumbency Certificate for the officers executing
the documents in connection with the transaction contemplated hereby.
(c) Copies of the Articles of Incorporation and Bylaws of
WBC and BANK, duly certified by their respective custodians as true, correct
and complete copies thereof, including any amendments as of the Closing Date.
-25-
26
(d) A written opinion from WBC counsel dated as of the
Closing Date addressed to F & M and F & M Counsel, that the matters set forth
in paragraphs 4.2, 4.3, 4.4(c), 4.5(d), 4.5(h) and 4.6(d) are true and correct
as represented in the form attached hereto as Exhibit 10.3(d).
(e) Certified copies of resolutions adopted by WBC's board
of directors to the effect that the execution, delivery and performance of this
Agreement and the transactions contemplated by it have been duly and validly
authorized in accordance with the laws of the State of Wisconsin.
(f) Such other documents of transfer, certificates or
authority and other documents as F & M may reasonably request.
10.4 Documents to be Delivered by F & M and Subsidiary. As of the
Close Date, F & M and Subsidiary shall deliver the following documents:
(a) Certificates for shares of F & M Common and cash
payments as determined under Article 3 of this Agreement. Such checks or
certificates will be in the name of WBC Shareholders entitled to the same in
accordance with their interest in WBC as of the Effective Time provided,
however, that such cash and any certificates need not be delivered until such
time as the provisions of paragraph 10.2 have been complied with by such
Shareholders.
(b) An Incumbency Certificate relating to all parties
executing documents relating to any of the transactions contemplated hereby on
behalf of F & M and Subsidiary.
(c) A certificate by an officer of F & M and Subsidiary that,
to the best of such officer's knowledge, (i) the representations and warranties
made by F & M and Subsidiary in this Agreement are true and correct as of the
Closing Date, (ii) that F & M and Subsidiary have performed and complied with
all of their obligations which are to be performed or complied with by or prior
to or as of the Closing Date and (iii) that all Schedules and Exhibits
delivered by F & M to WBC are true, correct and complete as of the Closing
Date.
(d) A written opinion from counsel for F & M and Subsidiary
dated as of the Closing Date addressed to WBC and WBC Counsel that the matters
set forth in paragraphs 5.1, 5.2, and 5.3 are true and correct as represented
in the form attached hereto as Exhibit 4.10(d).
(e) Certified copies of the resolutions adopted by F &
M's and Subsidiary's boards of directors to the effect that the execution,
delivery and performance of this Agreement and the transactions contemplated by
it have been duly and validly authorized in accordance with the laws of the
State of Wisconsin.
-26-
27
11. Law Governing.
This Agreement shall be construed and interpreted according to the
laws of the State of Wisconsin.
12. Assignment.
This Agreement may not be assigned in whole or in part without the
written consent of all parties, provided, however, that Subsidiary's
participation in this transaction shall not require any further consent or
authorization.
13. Amendment and Modification.
This Agreement may only be amended or modified by a written agreement
signed by the duly authorized representatives of F & M, Subsidiary and WBC.
14. Abandonment.
This Agreement may be terminated and the transaction provided for by
this Agreement may be abandoned at any time before the Closing Date:
(a) By mutual consent of F & M, Subsidiary and WBC;
(b) By F & M and Subsidiary, pursuant to paragraph 3.4,
or if any of the conditions provided for in Article 8 of this Agreement have
not been met and have not been waived in writing by F & M or Subsidiary.
(c) By WBC if any of the conditions provided for in
Article 9 of this Agreement have not been met and have not been waived in
writing by WBC.
(d) In the event of a breach of this Agreement, by notice
from the non-breaching party to the breaching party as set forth below.
In the event of termination and abandonment by any party as provided
in this Article, written notice shall be given to the other party setting forth
the breach of this Agreement or the default in performance which has occurred,
or the condition which has not been met. The party to whom the notice is
directed shall, if such party is able to effect a satisfaction or cure, have
ten (10) days after such notice is given to satisfy such condition or cure such
breach or default, provided that if such ten (10) day period is not sufficient
and the party is making a diligent effort to satisfy such condition or cure
such breach or default, the time to do so may be extended for such period as
the parties may agree not to exceed thirty (30) days provided however, that the
F & M Per Share Price shall be the higher of the price as of the date of the
-27-
28
notice or as of the date on which the default is satisfied or cured. The
termination and/or abandonment of this Agreement shall not alter or diminish
the liability of the party that failed to comply with the conditions of this
Agreement, provided, however, that termination pursuant to paragraph 3.4 shall
be without liability of any party to any other party. Each party shall pay its
own expenses incident to preparation for the consummation of this Agreement and
the transactions contemplated hereunder. In the event F & M declares, after
the date of this Agreement, a stock dividend or stock split, the F & M Stock
Consideration shall be adjusted proportionately based upon the stock dividend
or split.
15. Notices.
All notices, requests, demands, and other communications hereunder
shall be deemed to have been duly given, upon actual delivery, if delivered by
hand; or upon receipt by the addressee, if given by mail (certified mail -
return receipt requested with postage prepaid is required for notice by mail);
or upon receipt by the addressee, if by private courier; or upon receipt of the
transmission by the addressee if by telecopy (with a copy sent by first class
mail):
(a) If to WBC, to Wisconsin Ban Corp., x/x Xxxxxxx Xxxx
Xxxx, 000 Xxxx Xxxxxxxxx Avenue, X.X. Xxx 000, Xxxxxxx Xx Xxxxx, Xxxxxxxxx
00000, Attn: Xxxxxxx X. Xxxxxxx FAX: 608-326- 6839, with a copy to Xxxxxxxx,
Xxxxxxx & Xxxxxxxx SC, Attn: Xxxxx Xxxxxxxx, 000 Xxxxx Xxx, Xxxx Xxxxx,
Xxxxxxx, 00000.
(b) If to F & M or Subsidiary, to Xx. Xxxx X. Xxxxxxx,
Xxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxx 00000, FAX: 000-000-0000, with a copy to
Xxxxxxx X. Xxxx, Esq., McCarty, Curry, Xxxxxxx, Peeters & Xxxx, X.X. Xxx 000,
Xxxxxxxx Xxxxxxxxx 00000, FAX: 000-000-0000.
The place to which notice is to be given may be changed by notice
given in accordance with this Article.
16. Entire Agreement.
This Agreement with Exhibits embodies the entire agreement between the
parties hereto with respect to the transaction contemplated herein and
supersedes all prior agreements, written or oral, express or implied and all
negotiations, discussions or other matters between the parties and there have
been and are no agreements representations or warranties between the parties
other than those set forth or provided for herein.
17. Counterparts.
This Agreement may be executed in two (2) or more partially or fully
executed counterparts, each of which shall be deemed an original and shall bind
the signatory, but all of which together shall constitute but one and the same
instrument.
-28-
29
18. Binding Effect.
This Agreement shall inure to the benefit of and bind the parties and
their respective heirs, beneficiaries, transferees, successors, and assigns.
19. Headings.
The headings of this Agreement are inserted for convenience only and
shall not constitute a part hereof.
20. Confidentiality.
Except as necessary to take action pursuant to this Agreement, each
party agrees that all information and documents received from the other party
regarding the proposed transaction shall be held in confidence and that all
documents containing such information will be returned upon request if the
parties abandon the transaction. The parties further agree to use such
information only in connection with the proposed transaction contemplated by
this Agreement. This paragraph shall not apply to information or documents
which are, or by law must be made, publicly available. The parties agree to
not publicly disclose this Agreement or its Exhibits or any of the provisions
hereof, except as a part of regulatory filings or pursuant to press releases
and other public statements approved by F & M and WBC.
21. Further Documents.
F & M, Subsidiary, and WBC agree to execute any and all other
documents and to take such other action or corporate proceedings as may be
reasonably necessary or desirable to carry out the terms hereof.
-29-
30
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed all as of the day and year first above written.
F & M BANCORPORATION, INC. ("F & M")
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Xxxx X. Xxxxxxx
CEO and Chairman of the Board
ATTEST:
By: /s/ Xxxxx Xxxxx
------------------------------------
Xxxxx Xxxxx, Secretary
F & M MERGER CORPORATION ("SUBSIDIARY")
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Xxxx X. Xxxxxxx, President
ATTEST:
By: /s/ Xxxxxx X. Xxxx
------------------------------------
Xxxxxx X. Xxxx, Secretary
WISCONSIN BAN CORP. ("WBC")
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx, President
ATTEST:
By: /s/ Xxxxxxxx X. Weeks
------------------------------------
Xxxxxxxx X. Weeks, Director
-30-
