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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
AMERICAN COMMUNITY BANKSHARES, INC.
AND
FIRST FEDERAL CAPITAL CORP.
MAY 23, 2001
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TABLE OF CONTENTS
PAGE
AGREEMENT AND PLAN OF MERGER.....................................................................................1
ARTICLE I - THE MERGER...........................................................................................1
Section 1.1 The Merger..................................................................................1
Section 1.2 Effective Time..............................................................................1
Section 1.3 Effect of the Merger........................................................................2
Section 1.4 Articles of Incorporation; By-Laws..........................................................2
Section 1.5 Board of Directors of the Surviving Corporation.............................................2
Section 1.6 Conversion of Securities....................................................................2
Section 1.7 Adjustments for Dilution and Other Matters..................................................3
Section 1.8 Exchange of Certificates....................................................................3
Section 1.9 Dissenting Shares...........................................................................5
Section 1.10 Stock Transfer Books.......................................................................6
Section 1.11 The Bank Merger............................................................................6
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................................................8
Section 2.1 Organization and Qualification; Subsidiaries................................................8
Section 2.2 Articles of Incorporation and By-Laws.......................................................9
Section 2.3 Capitalization..............................................................................9
Section 2.4 Authority..................................................................................10
Section 2.5 No Conflict; Required Filings and Consents.................................................10
Section 2.6 Compliance; Permits........................................................................11
Section 2.7 Compliance with Environmental Laws.........................................................11
Section 2.8 Contracts and Agreements...................................................................12
Section 2.9 Agreements with Regulatory Agencies........................................................13
Section 2.10 Loan Loss Reserves........................................................................13
Section 2.11 Banking Reports; Financial Statements.....................................................13
Section 2.12 Absence of Certain Changes or Events......................................................15
Section 2.13 Absence of Litigation.....................................................................15
Section 2.14 Employee Benefit Plans....................................................................16
Section 2.15 Registration Statement; Proxy Statement/Prospectus........................................17
Section 2.16 Taxes, Reports, Minutes...................................................................18
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 2.17 Company Properties........................................................................19
Section 2.18 Brokers...................................................................................19
Section 2.19 Tax-Free Reorganization...................................................................20
Section 2.20 Vote Required.............................................................................20
Section 2.21 Absence of Undisclosed Liabilities........................................................20
Section 2.22 Shareholders of the Company...............................................................20
Section 2.23 Regulatory Filings........................................................................20
Section 2.24 Loans.....................................................................................21
Section 2.25 Loan Portfolio; Reports...................................................................21
Section 2.26 Mortgage-Backed and Related Securities and Investment Securities..........................21
Section 2.27 Fiduciary Responsibilities................................................................22
Section 2.28 Other Information.........................................................................22
Section 2.29 Insider Interests.........................................................................22
Section 2.30 Takeover Restrictions.....................................................................22
Section 2.31 Insurance.................................................................................22
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR...................................................22
Section 3.1 Organization and Qualification; Corporate Power............................................23
Section 3.2 Authorization..............................................................................23
Section 3.3 Capitalization.............................................................................23
Section 3.4 Financial Statements.......................................................................24
Section 3.5 No Violation...............................................................................24
Section 3.6 Consents and Approvals.....................................................................25
Section 3.7 Litigation.................................................................................25
Section 3.8 Employee Benefit Plans.....................................................................25
Section 3.9 Compliance with Environmental Laws.........................................................28
Section 3.10 Shares to be Issued in Merger.............................................................28
Section 3.11 Broker's Fees.............................................................................28
Section 3.12 Acquiror Information......................................................................28
Section 3.13 SEC Filings...............................................................................29
Section 3.14 Continuity of Business Enterprise.........................................................29
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TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE IV - COVENANTS OF THE COMPANY...........................................................................29
Section 4.1 Registration Statement and Shareholders Meeting............................................29
Section 4.2 Conduct of Business, Certain Covenants.....................................................29
Section 4.3 Information, Access Thereto................................................................31
Section 4.4 Confidentiality............................................................................31
Section 4.5 Recommendation of Merger to Shareholders...................................................31
Section 4.6 Litigation Matters.........................................................................31
Section 4.7 No Solicitation............................................................................32
Section 4.8 Best Efforts..............................................................................32
Section 4.9 Voting Agreements..........................................................................32
ARTICLE V - COVENANTS OF THE ACQUIROR...........................................................................33
Section 5.1 Affirmative Covenants......................................................................33
Section 5.2 Negative Covenants.........................................................................33
Section 5.3 Notice Regarding Breaches..................................................................33
Section 5.4 Stock Exchange Listing.....................................................................33
Section 5.5 Tax Treatment..............................................................................34
Section 5.6 Stock Options..............................................................................34
Section 5.7 SEC Filings................................................................................35
Section 5.8 Confidentiality............................................................................35
Section 5.9 Directors' and Officers' Indemnification and Insurance.....................................35
ARTICLE VI - ADDITIONAL COVENANTS AND AGREEMENTS................................................................37
Section 6.1 Regulatory Matters.........................................................................37
Section 6.2 Legal Conditions to Merger.................................................................38
Section 6.3 Subsequent Filings; Press Releases.........................................................38
Section 6.4 Additional Agreements......................................................................38
Section 6.5 Advice of Changes..........................................................................39
Section 6.6 Current Information........................................................................39
Section 6.7 Termination of Regulatory Agreements.......................................................39
Section 6.8 Tax Returns................................................................................39
Section 6.9 Compensation and Benefit Plans; Existing Agreements........................................39
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 6.10 Employment and Noncompetition Agreements..................................................40
ARTICLE VII - CONDITIONS OF MERGER..............................................................................40
CONDITIONS TO OBLIGATIONS OF EACH OF THE PARTIES.......................................................40
Section 7.1 Regulatory Approvals.......................................................................40
Section 7.2 Federal Tax Opinion........................................................................40
Section 7.3 Registration Statement.....................................................................41
Section 7.4 Orders, Decrees and Judgments..............................................................41
Section 7.5 NASDAQ Listing.............................................................................41
ARTICLE VIII - FURTHER CONDITIONS TO THE OBLIGATIONS OF THE COMPANY.............................................41
Section 8.1 Compliance by Acquiror.....................................................................41
Section 8.2 Opinion of Counsel.........................................................................42
Section 8.3 Officers' Certificate......................................................................42
Section 8.4 Litigation.................................................................................42
Section 8.5 Acquiror Changes...........................................................................42
ARTICLE IX - FURTHER CONDITIONS TO THE OBLIGATIONS OF ACQUIROR..................................................42
Section 9.1 Compliance by the Company..................................................................42
Section 9.2 Accuracy of Financial Statements...........................................................42
Section 9.3 Net Worth..................................................................................42
Section 9.4 Sufficiency of Documents, Proceedings......................................................43
Section 9.5 Opinion of Counsel.........................................................................43
Section 9.6 Officers' Certificate......................................................................43
Section 9.7 Absence of Certain Changes or Events.......................................................43
Section 9.8 Litigation.................................................................................43
Section 9.9 Agreements of Affiliates...................................................................44
Section 9.10 Bank Merger Agreement.....................................................................44
Section 9.11 Consents Under Agreements.................................................................44
Section 9.12 Accountant's Letter.......................................................................44
Section 9.13 Approval by Affirmative Vote of Shareholders; Exercise of
Dissenters' Rights.....................................................................44
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TABLE OF CONTENTS
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ARTICLE X - TERMINATION AND AMENDMENT...........................................................................45
Section 10.1 Termination...............................................................................45
Section 10.2 Effect of Termination.....................................................................46
Section 10.3 Fee.......................................................................................46
ARTICLE XI - MODIFICATIONS, AMENDMENTS AND WAIVER...............................................................47
Section 11.1 Modifications, Amendments and Waiver......................................................47
ARTICLE XII - MISCELLANEOUS.....................................................................................48
Section 12.1 Closing...................................................................................48
Section 12.2 Articles of Merger........................................................................48
Section 12.3 Further Acts..............................................................................48
Section 12.4 Notices...................................................................................48
Section 12.5 Expenses..................................................................................49
Section 12.6 Nonsurvival of Representations and Warranties.............................................49
Section 12.7 Entire Agreement..........................................................................49
Section 12.8 Governing Law.............................................................................50
Section 12.9 Binding Effect and Parties in Interest....................................................50
Section 12.10 Captions.................................................................................50
Section 12.11 Relief Due to Breach.....................................................................50
Section 12.12 Severability.............................................................................50
Section 12.13 Publicity................................................................................51
Section 12.14 Counterparts.............................................................................51
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 23, 2001 (the
"Agreement"), between American Community Bankshares, Inc., a Wisconsin
corporation (the "Company"), and First Federal Capital Corp., a Wisconsin
corporation (the "Acquiror").
WHEREAS, the Boards of Directors of the Acquiror and the Company have
each determined that it is fair to and in the best interests of their respective
shareholders for the Company to merge with and into the Acquiror (the "Merger")
upon the terms and subject to the conditions set forth herein and in accordance
with the Wisconsin Business Corporation Law (the "WBCL"); and
WHEREAS, the respective Boards of Directors of the Acquiror and the
Company have each approved the Merger of the Company with and into the Acquiror,
upon the terms and subject to the conditions set forth herein; and
WHEREAS, for Federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization under the provisions of Section 368 of
the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, immediately following the Merger, the parties intend to
consummate a merger of the Company's bank subsidiary ("Company-Bank") with and
into Acquiror's savings bank subsidiary ("Acquiror-Bank") (the "Bank Merger");
and
WHEREAS, the Acquiror and the Company desire to make certain
representations, warranties and agreements in connection with the Merger and
also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the parties hereto hereby agree as
follows:
ARTICLE I - THE MERGER
SECTION 1.1 THE MERGER. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the WBCL, at the Effective
Time (as defined in Section 1.2) the Company shall be merged with and into the
Acquiror. As a result of the Merger, the separate corporate existence of the
Company shall cease and the Acquiror shall continue as the surviving corporation
of the Merger (the "Surviving Corporation").
SECTION 1.2 EFFECTIVE TIME. As promptly as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Articles
VII, VIII and IX, the parties hereto shall cause the Merger to be consummated by
filing articles of merger (the "Articles of Merger") with the Wisconsin
Department of Financial Institutions (the "DFI") in such form as required by,
and executed in accordance with the relevant provisions of, the WBCL (the date
and time of such filing is referred to herein as the "Effective Time").
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SECTION 1.3 EFFECT OF THE MERGER. At the Effective Time, the effect of
the Merger shall be as provided in this Agreement and the applicable provisions
of the WBCL. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, except as otherwise provided herein, all the
property, rights, privileges, powers and franchises of the Acquiror and the
Company shall vest in the Surviving Corporation, and all debts, liabilities and
duties of the Acquiror and the Company shall become the debts, liabilities and
duties of the Surviving Corporation.
SECTION 1.4 ARTICLES OF INCORPORATION; BY-LAWS. At the Effective Time,
the Articles of Incorporation, as amended, of the Acquiror (the "Acquiror
Articles") and the By-Laws, as amended, of the Acquiror ("Acquiror By-Laws"), as
in effect immediately prior to the Effective Time, shall be the Articles of
Incorporation and the By-Laws of the Surviving Corporation.
SECTION 1.5 BOARD OF DIRECTORS OF THE SURVIVING CORPORATION.
(a) From and after the Effective Time, the Board of Directors of the
Surviving Corporation shall include the directors of the Acquiror immediately
prior to the Effective Time. In addition, as of the Effective Time the Surviving
Corporation and its Board of Directors shall take such action as may be
necessary to cause Xxxxx Xxxxxxxxx (the "Company Director") to be appointed as a
director of each of the Surviving Corporation and the Acquiror-Bank effective as
of the day of appointment (the "Appointment Date"). Such action shall include,
if necessary, expansion of the size of the Board of Directors of the Surviving
Corporation and/or Acquiror-Bank to the extent necessary to create a vacancy for
the Company Director to be appointed as of the Appointment Date. At the initial
annual meeting of shareholders following appointment of the Company Director,
the Surviving Corporation shall nominate the Company Director as its uncontested
candidate for election for a full three-year term as a director of the Surviving
Corporation and shall provide for his continuation as a director of the
Acquiring Bank for a like term.
(b) At the Effective Time, the officers of the Acquiror immediately
prior to the Effective Time shall be the officers of the Surviving Corporation,
in each case until their respective successors are duly elected or appointed.
SECTION 1.6 CONVERSION OF SECURITIES. Subject to Section 1.8(e)
regarding fractional shares, at the Effective Time, by virtue of the Merger and
without any action on the part of the Acquiror, the Company or the holder of the
following securities:
(a) Each share of common stock, $0.10 per share par value, of Acquiror
("Acquiror Common Stock", which term shall be deemed to include the rights to
purchase shares of Acquiror preferred stock, $.10 par value under the terms of
the Shareholders' Rights Agreement, dated January 24, 1995, by and between
Acquiror and Xxxxx Fargo Bank), issued and outstanding immediately prior to the
Effective Time shall remain outstanding and shall be unchanged after the Merger;
and
(b) Each share of the common stock, no par value, of the Company
("Company Common Stock"), issued and outstanding immediately prior to the
Effective Time (all such
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shares of Company Common Stock issued and outstanding immediately prior to the
Effective Time being referred to herein as the "Shares"), other than Shares held
by the Acquiror for its own account or any Acquiror Subsidiary (as defined in
Section 3.1(a), below) for its own account, shall cease to be outstanding and
shall be converted into and become the right to receive 4.5 shares, subject to
adjustment as provided pursuant to Section 1.7 (as adjusted, the "Exchange
Ratio"), of Acquiror Common Stock. All such Shares shall no longer be
outstanding and shall immediately be canceled and retired and shall cease to
exist, and each certificate previously representing any such Shares shall
thereafter represent the right to receive a certificate representing shares of
Acquiror Common Stock into which such Shares shall have been converted.
Certificates representing shares of Shares shall be exchanged for certificates
representing whole shares of Acquiror Common Stock issued in consideration
therefor upon the surrender of such certificates in accordance with the
provisions of Section 1.8 hereof, without interest.
(c) Each share of Shares held as treasury stock shall be canceled and
extinguished without conversion thereof into Acquiror Common Stock or payment
therefor.
(d) Any shares of Shares held by the Acquiror for its own account or
any Acquiror Subsidiary for its own account shall be canceled and extinguished
without conversion thereof into Acquiror Common Stock or payment therefor.
(e) For purposes of this Agreement, the "Acquiror Average Price" shall
be, as of any date of determination, the average of the closing prices of
Acquiror Common Stock as reported on the Nasdaq Stock Market for the ten (10)
consecutive trading days immediately preceding the fifth business day prior to
the applicable determination date.
SECTION 1.7 ADJUSTMENTS FOR DILUTION AND OTHER MATTERS. If prior to the
Effective Time, (a) the Company shall declare a stock dividend or distribution
upon or subdivide, split up, reclassify or combine the Shares, or declare a
dividend or make a distribution on Shares in any security convertible into
Shares, or (b) the Acquiror shall declare a stock dividend or distribution upon
or subdivide, split up, reclassify or combine Acquiror Common Stock or declare a
dividend or make a distribution on Acquiror Common Stock in any security
convertible into Acquiror Common Stock, appropriate adjustment or adjustments
will be made to the Exchange Ratio.
SECTION 1.8 EXCHANGE OF CERTIFICATES.
(a) Exchange Agent. As of the Effective Time, the Acquiror shall
deposit, or shall cause to be deposited with an exchange agent chosen by the
Acquiror (the "Exchange Agent"), for the benefit of the holders of Shares for
exchange in accordance with this Article I, through the Exchange Agent,
certificates representing the shares of Acquiror Common Stock and cash in lieu
of fractional shares (such certificates for shares of Acquiror Common Stock,
together with the amount of cash payable in lieu of fractional shares and any
dividends or distributions with respect to such Acquiror Common Stock are
referred to herein as the "Exchange Fund") payable and issuable pursuant to
Section 1.6 in exchange for outstanding Shares; provided, however, that the
Acquiror need not deposit the cash for fractional shares into the Exchange Fund
until such time as such funds are to be distributed by the Exchange Agent.
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(b) Exchange Procedures. No later than five (5) days after the
Effective Time, the Exchange Agent shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding Shares which were converted into the right to receive
shares of Acquiror Common Stock pursuant to Section 1.6 (a "Certificate" or
"Certificates"), (i) a letter of transmittal and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for certificates
representing shares of Acquiror Common Stock. Upon surrender of a Certificate
for cancellation to the Exchange Agent together with such letter of transmittal,
duly executed, the holder of such Certificate shall be entitled to receive in
exchange therefor a certificate representing that number of whole shares of
Acquiror Common Stock which such holder has the right to receive in respect of
the Certificate surrendered pursuant to the provisions of this Article I (after
taking into account all Shares then held by such holder), and the Certificate so
surrendered shall forthwith be canceled. In the event of a transfer of ownership
of Shares which is not registered in the transfer records of the Company, a
certificate representing the proper number of shares of Acquiror Common Stock
may be issued to a transferee if the Certificate representing such Shares is
presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and by evidence that any applicable stock
transfer taxes have been paid. 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 the posting
by such person of a bond in such amount as the Acquiror may reasonably direct as
indemnity against any claim that may be made against it or the Exchange Agent
with respect to such Certificate, the Exchange Agent will issue in exchange for
such lost, stolen or destroyed Certificate a certificate representing the proper
number of shares of Acquiror Common Stock. Until surrendered as contemplated by
this Section 1.8, each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender the
certificate representing shares of Acquiror Common Stock, dividends, cash in
lieu of any fractional shares of Acquiror Common Stock as contemplated by
Section 1.8(e) and other distributions as contemplated by Section 1.8(c).
(c) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions declared or made after the Effective Time with respect to
Acquiror Common Stock with a record date after the Effective Time shall be paid
to the holder of any unsurrendered Certificate with respect to the shares of
Acquiror Common Stock represented thereby, and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section 1.8(e),
until the holder of such Certificate shall surrender such Certificate. Subject
to the effect of applicable Laws, following surrender of any such Certificate,
there shall be paid to the holder of the certificates representing whole shares
of Acquiror Common Stock issued in exchange therefor, without interest, (i)
promptly, the amount of any cash payable with respect to a fractional share of
Acquiror Common Stock to which such holder is entitled pursuant to Section
1.8(e) and the amount of dividends or other distributions with a record date
after the Effective Time theretofore paid with respect to such whole shares of
Acquiror Common Stock, and (ii) at the appropriate payment date, the amount of
dividends or other distributions, with a record date after the Effective Time
but prior to surrender and a payment date occurring after surrender, payable
with respect to such whole shares of Acquiror Common Stock.
(d) No Further Rights in the Shares. All shares of Acquiror Common
Stock issued and cash paid upon conversion of the Shares in accordance with the
terms hereof (including any
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cash paid pursuant to Section 1.8(e)) shall be deemed to have been issued in
full satisfaction of all rights pertaining to such Shares.
(e) No Fractional Shares. No certificates or scrip representing
fractional shares of Acquiror Common Stock shall be issued upon the surrender
for exchange of Certificates, and such fractional share interest will not
entitle the owner thereof to vote or to any rights of a shareholder of the
Acquiror. Each holder of a fractional share interest shall be paid an amount in
cash equal to the product obtained by multiplying such fractional share interest
to which such holder (after taking into account all fractional share interests
then held by such holder) would otherwise be entitled by the Acquiror Average
Price as of the Effective Time. As soon as reasonably practicable after the
determination of the amount of cash, if any, to be paid to holders of fractional
share interests, the Acquiror shall make available such amounts (without
interest) to such holders of fractional shares.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the former shareholders of the Company for two
(2) years after the Effective Time shall be delivered to the Acquiror, upon
demand, and any former shareholders of the Company who have not theretofore
complied with this Article 1 shall thereafter look only to the Acquiror to claim
their shares of Acquiror Common Stock, any cash in lieu of fractional shares of
Acquiror Common Stock and any dividends or distributions with respect to
Acquiror Common Stock, in each case without interest thereon, and subject to
Section 1.8(g).
(g) No Liability. Neither the Acquiror nor the Company shall be liable
to any former holder of Shares for any such Shares (or dividends or
distributions with respect thereto) or cash or other payment delivered to a
public official pursuant to any abandoned property, escheat or similar laws.
(h) Withholding Rights. The Acquiror shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any former holder of Shares such amounts as the Acquiror is required to deduct
and withhold with respect to the making of such payment under the Code, or any
provision of state, local or foreign tax law. To the extent that amounts are so
withheld by the Acquiror, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the former holder of the
Shares in respect of which such deduction and withholding were made by the
Acquiror.
SECTION 1.9 DISSENTING SHARES.
(a) "Dissenting Shares" means any shares held by any holder who becomes
entitled to payment of the fair value of such shares under Chapter 180 of the
Wisconsin Statutes. Any holder of Dissenting Shares shall be entitled to payment
for such shares only to the extent permitted by and in accordance with the
provisions of Chapter 180 of the Wisconsin Statutes; provided, however, that if,
in accordance with Chapter 180 of the Wisconsin Statutes, any holder of
Dissenting Shares shall forfeit such right to payment of the fair value of such
shares, such shares shall thereupon be deemed to have been converted into and to
have become exchangeable for, as of the Effective Time, the right to receive
Acquiror Common Stock and cash in lieu of fractional shares. If such holder of
Dissenting Shares shall effectively withdraw or lose (through failure to perfect
or otherwise) his or her right to such payment after the Effective Time, Shares
of such
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holder shall be converted on a share by share basis into the right to receive
Acquiror Common Stock and cash in lieu of fractional shares in accordance with
the applicable provisions of this Agreement.
(b) The Company shall give Acquiror prompt notice of any written
objections to the Merger and any written demands for the payment of the fair
value of any shares, withdrawals of such demands, and any other instruments
received by the Company pursuant to Chapter 180 of the Wisconsin Statutes. The
Acquiror shall be responsible for, and shall be given the opportunity to direct
all negotiations and proceedings with respect to, any such demands under Chapter
180 of the Wisconsin Statutes. The Company shall not voluntarily make any
payment with respect to any demands for payment of fair value and shall not,
except with the prior written consent of Acquiror, settle or offer to settle any
such demands.
SECTION 1.10 STOCK TRANSFER BOOKS. At the Effective Time, the stock
transfer books of the Company shall be closed and there shall be no further
registration of transfers of Shares thereafter on the records of the Company.
From and after the Effective Time, the holders of Certificates shall cease to
have any rights with respect to such Shares except as otherwise provided herein
or by law. On or after the Effective Time, any Certificates presented to the
Exchange Agent or the Acquiror for any reason shall be converted into shares of
Acquiror Common Stock and cash in lieu of fractional shares in accordance with
this Article I.
SECTION 1.11 THE BANK MERGER.
(a) Following the Effective Time, the Company-Bank shall be merged and
consolidated with and into the Acquiror-Bank under the Charter and By-Laws of
Acquiror-Bank, pursuant to the provisions of, and with the effect provided in,
applicable Law, and Acquiror-Bank shall be the surviving bank and the separate
existence of Company-Bank shall thereupon cease (the term "Surviving Bank" shall
refer to Acquiror-Bank following the Bank Merger). Subject to the terms and
conditions specified herein, and upon satisfaction of all requirements of law,
the Bank Merger shall become effective on such date as shall be designated by
the Acquiror following the Effective Time and subsequent to the receipt of
approvals from all applicable governmental authorities authorizing the
consolidation (the "Bank Merger Effective Date").
(b) Surviving Bank.
(i) The Surviving Bank shall continue the banking business of
Company-Bank in the current locations of Company-Bank as
branch offices of the Surviving Bank.
(ii) The principal office of the Surviving Bank shall be the
principal office of Acquiror-Bank.
(iii) At and as of the Bank Merger Effective Date, the Charter and
By-Laws of Acquiror-Bank, as in effect immediately prior to
the Bank Merger Effective Date, shall be the Charter and
By-Laws of the Surviving Bank until thereafter amended as
provided by law.
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(iv) On the Bank Merger Effective Date, the Surviving Bank shall
have capital surplus equal to that of Company-Bank and
Acquiror-Bank combined, immediately prior to the Bank Merger
and undivided profits, including capital reserves, which,
when combined with the capital and surplus, will be equal to
the capital structure of Company-Bank and Acquiror-Bank as
of the date hereof, adjusted, however, for normal earnings
and expenses between the date hereof and the Bank Merger
Effective Date and adjusted as of the Bank Merger Effective
Date in accordance with generally accepted accounting
principles to reflect the Bank Merger.
(v) As of the Bank Merger Effective Date, the Company Director
and the Board of Directors of Acquiror-Bank in effect
immediately prior to the Bank Merger shall serve as the
Board of Directors of the Surviving Bank until such time as
their successors have been elected and have qualified.
(c) Corporate Existence; Assets and Liabilities of Surviving Bank.
Upon the Bank Merger Effective Date:
(i) All rights, franchises and interests of Company-Bank in and
to every type of property (real, personal and mixed) and
chooses in action shall be transferred to and vested in the
Surviving Bank by virtue of the Bank Merger without any deed
or other transfer, and the Surviving Bank, without any order
or other action on the part of any court or otherwise, shall
hold and enjoy all rights of property, franchises and
interests, including appointments, designations,
nominations, and all other rights and interest as trustee,
executor, administrator, registrar of stocks and bonds,
guardians of estates, assignee, and receiver of estates of
incompetents, and in every other fiduciary capacity, in the
same manner and to the same extent as such rights,
franchises and interests were held or enjoyed by
Company-Bank immediately prior to the Bank Merger.
(ii) The Surviving Bank shall be liable for all of the
liabilities of Company-Bank and all deposits, debts,
liabilities, obligations and contracts of Company-Bank,
matured or unmatured, whether insured, obsolete, contingent
or otherwise, and whether or not reflected or reserved
against on balance sheets, books of account, or records of
Company-Bank shall be those of the Surviving Bank and shall
not be relieved or canceled by the Bank Merger and all
rights of creditors and obligees, and all liens on property
of Company-Bank shall be preserved and unimpaired. All
assets of Company-Bank, as they exist at and as of the Bank
Merger Effective Date, shall pass to and vest in the
Surviving Bank, without any conveyance or other transfer;
and the Surviving Bank shall be responsible for all
liabilities of Company-Bank of every kind and description
existing as of the Bank Merger Effective Date.
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(iii) At any time after the Bank Merger Effective Date, the
officers of the Surviving Bank may, in the name of
Company-Bank, execute and deliver all such deeds,
assignments and other instruments and take or cause to be
taken all such further or other action as the Surviving Bank
may deem necessary or desirable in order to vest, perfect or
confirm in the Surviving Bank title to and possession of all
of Company-Bank's property, rights, privileges, immunities,
powers, purposes and otherwise to carry out the purposes
hereof.
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Disclosure Schedule delivered by the Company
to the Acquiror prior to execution of this Agreement (the "Company Disclosure
Schedule"), the Company hereby represents and warrants to the Acquiror that:
SECTION 2.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) The Company is a corporation duly organized and validly existing
under the laws of the State of Wisconsin, and is registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended (the "BHC Act").
Each subsidiary of the Company ("Company Subsidiary" or, collectively, "Company
Subsidiaries") is a state-chartered bank or a corporation duly organized and
validly existing under the laws of the state of its organization or
incorporation. Each of the Company and the Company Subsidiaries has the
requisite corporate power and authority and is in possession of all franchises,
grants, authorizations, licenses, permits, easements, consents, certificates,
approvals and orders ("Company Approvals") necessary to own, lease and operate
its properties and to carry on its business as it is now being conducted,
including, without limitation, appropriate authorizations from Federal Reserve
Board ("FRB") the Federal Deposit Insurance Corporation (the "FDIC") and the
Wisconsin Department of Financial Institutions ("DFI"), and neither the Company
nor any Company Subsidiary has received any notice of proceedings relating to
the revocation or modification of any Company Approvals, except in each case
where the failure to be so existing or to have such power, authority, Company
Approvals and revocations or modifications would not, individually or in the
aggregate, be an Adverse Change in the Company (as defined in Section 9.7) and
the Company Subsidiaries taken as a whole.
(b) The Company and each Company Subsidiary is duly qualified or
licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned, leased or
operated by it or the nature of its activities makes such qualification or
licensing necessary, except where such failures to be so duly qualified or
licensed and in good standing would not, either individually or in the
aggregate, be an Adverse Change in the Company and the Company Subsidiaries
taken as a whole.
(c) A true and complete list of all of the Company Subsidiaries,
together with (i) the Company's percentage ownership of each Company Subsidiary
and (ii) laws under which such Company Subsidiary is incorporated, is set forth
on Section 2.1(c) of the Disclosure Schedule delivered by the Company to the
Acquiror prior to the execution of this Agreement (the "Company Disclosure
Schedule"). Except as set forth on Section 2.1(c) of the Company Disclosure
Schedule, the Company and/or one or more of the Company Subsidiaries owns
beneficially and of record all of the outstanding shares of capital stock of
each of the Company Subsidiaries. Except for the subsidiaries set forth on
Section 2.1(c) of the Company
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Disclosure Schedule, the Company does not directly or indirectly own any equity
or similar interests in, or any interests convertible into or exchangeable or
exercisable for any equity or similar interest in, any corporation, partnership,
joint venture or other business association or entity other than in the ordinary
course of business, and in no event in excess of 5% of the outstanding equity
securities of such entity.
SECTION 2.2 ARTICLES OF INCORPORATION AND BY-LAWS. The Company has
heretofore furnished to the Acquiror a complete and correct copy of the Articles
of Incorporation and the By-Laws, as amended or restated, of the Company
("Company Articles" or "Company By-Laws") and each Company Subsidiary. Such
Articles of Incorporation and By-Laws of the Company and each Company Subsidiary
are in full force and effect. Neither the Company nor any Company Subsidiary is
in violation of any of the provisions of its Articles of Incorporation or
By-Laws.
SECTION 2.3 CAPITALIZATION. The authorized capital stock of the Company
consists of 1,000,000 shares of Company Common Stock. As of the date of this
Agreement, (a) 366,970 shares of Company Common Stock are issued and
outstanding, all of which are duly authorized, validly issued, fully paid and
non-assessable, except as provided by Section 180.0622(2)(b) of the WBCL (such
section, including judicial interpretations thereof and of Section 180.40(6),
its predecessor statute, are referred to herein as "Section 180.0622(2)(b) of
the WBCL"), and were not issued in violation of any preemptive right of any
Company shareholder, (b) 0 shares of Company Common Stock are held in the
treasury of the Company, and (c) 61,000 shares of Company Common Stock are
reserved for future issuance pursuant to outstanding employee stock options
issued pursuant to the Company's equity incentive plans. Except as set forth in
clause (c) above, there are no options, warrants or other rights, agreements,
arrangements or commitments of any character pursuant to which the Company or
any Company Subsidiary is a party, including without limitation voting
agreements or arrangements, relating to the issued or unissued capital stock of
the Company or any Company Subsidiary or obligating the Company or any Company
Subsidiary to issue or sell any shares of capital stock of, or other equity
interests in, the Company or any Company Subsidiary. All shares of Company
Common Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
shall be duly authorized, validly issued, fully paid and non-assessable, except
as otherwise provided by Section 180.0622(2)(b) of the WBCL. There are no
obligations, contingent or otherwise, of the Company or any Company Subsidiary
to repurchase, redeem or otherwise acquire any shares of Company Common Stock or
the capital stock of any Company Subsidiary or to provide funds to or make any
investment (in the form of a loan, capital contribution or otherwise) in any
Company Subsidiary or any other entity, except for loan commitments and other
funding obligations entered into in the ordinary course of business and except
as required under currently existing stock option agreements. Each of the
outstanding shares of capital stock of each Company Subsidiary is duly
authorized, validly issued, fully paid and non-assessable, except as provided by
Section 180.0622(2)(b) of the WBCL or Chapter 221 of the Wisconsin Statutes, and
was not issued in violation of any preemptive rights of any Company Subsidiary
shareholder, and all such shares owned by the Company or another Company
Subsidiary are owned free and clear of all security interests, liens, claims,
pledges,
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agreements, limitations of the Company's voting rights, charges or other
encumbrances of any nature whatsoever.
SECTION 2.4 AUTHORITY. The Company has the requisite corporate power
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby (other than,
with respect to the Merger, the approval and adoption of this Agreement by the
Company's shareholders in accordance with the WBCL and the Company Articles and
Company By-Laws). The execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement or to consummate the transactions so contemplated hereby (other than,
with respect to the Merger, the approval and adoption of this Agreement by the
Company's shareholders in accordance with the WBCL and the Company Articles and
Company By-Laws). This Agreement has been duly executed and delivered by, and
constitutes a valid and binding obligation of the Company and, assuming due
authorization, execution and delivery by the Acquiror, is enforceable against
the Company in accordance with its terms, except as enforcement may be limited
by laws affecting insured depository institutions, state banks and bank holding
companies regulated by the Bank Holding Company Act, general principles of
equity whether applied in a court of law or a court of equity and by bankruptcy,
insolvency and similar laws affecting creditors' rights and remedies generally.
SECTION 2.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by the Company does
not, and the performance of this Agreement and the transactions contemplated
hereby by the Company shall not, (i) conflict with or violate the Company
Articles or Company By-Laws or the Articles of Incorporation or By-Laws of any
Company Subsidiary, (ii) assuming that the consents and approvals referred to in
this Agreement are duly obtained, conflict with or violate any domestic
(federal, state or local) or foreign law, statute, ordinance, rule, regulation,
order, judgment or decree (collectively, "Laws") applicable to the Company or
any Company Subsidiary or by which its or any of their respective properties is
bound or affected, or (iii) assuming that the consents and approvals referred to
in this Agreement are duly obtained, result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, require the giving of notice to, or the consent of, any third
party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any of the properties or assets of the Company or any Company
Subsidiary pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any Company Subsidiary is a party or by which the
Company or any Company Subsidiary or its or any of their respective properties
is bound or affected, except in the case of clause (iii) for any such conflicts,
violations, breaches, defaults or other occurrences that would not, individually
or in the aggregate, be an Adverse Change in the Company and the Company
Subsidiaries taken as a whole.
(b) The execution and delivery of this Agreement by the Company does
not, and the performance of this Agreement by the Company shall not, require any
consent, approval,
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authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, domestic or foreign, except (i) for applicable
requirements, if any, of the Securities Act of 1933, as amended (the "Securities
Act"), the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
state securities or blue sky laws ("Blue Sky Laws"), the BHC Act and the filing
of appropriate merger or other documents as required by the DFI and (ii) where
the failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not prevent or delay consummation of
the Merger or the Bank Merger or otherwise prevent the Company from performing
its obligations under this Agreement and would not be an Adverse Change in the
Company and the Company Subsidiaries taken as a whole.
SECTION 2.6 COMPLIANCE; PERMITS. Neither the Company nor any Company
Subsidiary is in conflict with, or in default or violation of, (a) any Law
applicable to the Company or any Company Subsidiary or by which its or any of
their respective properties is bound or affected, or (b) any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company or any Company Subsidiary is
a party or by which the Company or any Company Subsidiary or its or any of their
respective properties is bound or affected, except for any such conflicts,
defaults or violations which would not, individually or in the aggregate, be an
Adverse Change in the Company or the Company Subsidiaries taken as a whole.
SECTION 2.7 COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as set forth on
Schedule 2.7, to the Company's knowledge, as of the date of this Agreement:
(a) The operations of Company and Company Subsidiaries comply and have
complied with all Environmental Laws; none of the Company or any of its
subsidiaries' operations are the subject of, nor is the Company or any Company
Subsidiary a party to, any judicial or administrative proceeding, pending or
threatened, alleging the violation of any Environmental Laws; neither the
Company nor any Company subsidiary are the subject of a federal, state or local
investigation, pending or threatened, evaluating whether any remedial action is
needed to respond to a release of any Hazardous Substance; neither Company nor
any Company Subsidiary has arranged for the treatment or disposal of any
Hazardous Substance; and neither Company nor any of its subsidiaries have
reported a spill, emission or release of a Hazardous Substance.
(b) Except as set forth on Schedule 2.7, all real property owned
directly by Company and Company Subsidiaries (the "Real Property") is in
compliance in all material respects with all Environmental Laws; neither Company
nor the Company Subsidiaries have any notice or knowledge regarding the Real
Property or its past use(s) which indicates noncompliance, or potential
noncompliance, with any Environmental Law; the Real Property is not subject to
any judicial or administrative proceedings alleging the violation of any
Environmental Law; the Real Property is not contaminated by any Hazardous
Substance; the Real Property is not the subject of a federal, state or local
investigation evaluating whether any remedial action is needed to respond to a
release, emission or discharge of any Hazardous Substance into the environment;
neither the Company nor any Company Subsidiary has transported any Hazardous
Substance to the Real Property or from the Real Property to any waste treatment,
storage or disposal facility; neither Company nor any Company Subsidiary has
arranged for the treatment or disposal of any Hazardous Substance; the Real
Property and buildings occupied by the Company and Company
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subsidiaries contain no urea-formaldehyde insulation, asbestos or asbestos
by-products, lead or regulated levels of PCBs; the Real Property contains no
fill material; and the Real Property does not face any risk of contamination by
a Hazardous Substance from any nearby property.
(c) For purposes of this Agreement, the term "Hazardous Substance"
shall mean any product, substance, chemical, contaminant, pollutant, effluent,
emission, waste or other material which, or the presence, nature, quantity
and/or concentration or toxicity or existence, use, manufacture, disposal,
transportation, emission, discharge, spill, release or effect of which, either
by itself or in combination with other materials located on or associated with
any of the Company Real Property, is defined or listed in, regulated or
monitored by, or otherwise classified pursuant to, any statute, law, ordinance,
rule or regulation applicable to the Company Real Property as "solid waste,"
"hazardous substances," "hazardous materials," "hazardous wastes," "infectious
wastes" or "toxic substances." Hazardous Substances shall include, but not be
limited to, (i)(A) any "hazardous substance" as defined in the Comprehensive
Environmental Response, Compensation and Liability Act, (B) any "regulated
substance" as defined in the Solid Waste Disposal Act, (C) any substance subject
to regulation pursuant to the Toxic Substances Control Act, and (D) any
hazardous substance as defined in Section 292.01(5) Wis. Stats., in each case as
such laws are now in effect or may be amended through the Closing Date and any
rule, regulation or administrative or judicial policy statement, guideline,
order or decision under such laws, (ii) petroleum and refined petroleum
products, (iii) asbestos and asbestos-containing products, (iv) flammable
explosives, (v) radioactive materials, and (vi) radon.
(d) For purposes of this Agreement, the term "Company Real Property"
means all real property (whether owned or leased) at which the operations of the
Company or any Company Subsidiary are or at any time were conducted and which is
otherwise held as "real estate owned" (REO) as a result of default by the
borrower and subsequent foreclosure by the Company or any Company Subsidiary.
SECTION 2.8 CONTRACTS AND AGREEMENTS.
Section 2.8 of the Company Disclosure Schedule lists and briefly
describes each Contract (the "Company Existing Contracts") to which the Company
or any Company Subsidiary is a party or by which its assets are bound and which
constitutes:
(a) a lease of, or agreement to purchase or sell, any capital assets;
(b) any management, consulting, employment, personal service,
severance, agency or other contract or contracts providing for employment or
rendition of services and which: (i) are in waiting, or (ii) create other than
an at will employment relationship; or (iii) provide for any commission, bonus,
profit sharing, incentive, retirement, consulting or additional compensation;
(c) any agreement, notes, lines of credit, borrowing agreements or
other pledges or obligations evidencing any obligations or indebtedness of the
Company or any Company Subsidiary, and which exceeds $100,000 and is other than
a deposit or reverse repurchase obligation or other indebtedness incurred by
Company Bank in the ordinary course of business;
(d) a power of attorney (whether revocable or irrevocable) given to any
individual or entity by the Company or any Company Subsidiary that is in force;
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(e) an agreement by the Company or any Company Subsidiary not to
compete in any business or in any geographical area;
(f) an agreement restricting the right of the Company or any Company
Subsidiary to use or disclose any information in its possession;
(g) a partnership, joint venture or similar arrangement;
(h) a license;
(i) an agreement or arrangement with any Affiliate (as Affiliate is
defined for purposes of paragraphs (c) and (d) of Rule 145 of the Rules and
Regulations of the SEC under the Securities Act of 1933, as amended);
(j) an agreement for data processing services;
(k) any assistance agreement, supervisory agreement, memorandum of
understanding, consent order, cease and desist order or other regulatory order
or decree with or by the SEC, OTS, the FDIC or any other regulatory authority.
(l) any other agreement or set of related agreements or series of
agreements which is not in the ordinary course of business of the Company or any
Company Subsidiary and involves an amount in excess of $100,000.
SECTION 2.9 AGREEMENTS WITH REGULATORY AGENCIES. Neither the Company
nor any Company Subsidiary is subject to any cease-and-desist or other order
issued by, or is a party to any written agreement, consent agreement or
memorandum of understanding with, or is a party to any commitment letter or
similar undertaking to, or is subject to any order or directive by, or has been
a recipient of any supervisory letter from, or has adopted any board resolutions
at the request of the FRB, the FDIC, DFI or any other applicable federal or
state regulatory agency having jurisdiction over the Company or any Company
Subsidiary or its business ("Regulatory Agency"), that currently restricts the
conduct of its business or that relates to its capital adequacy, compliance with
laws, its credit policies, its management or its business (each a "Regulatory
Agreement"), nor has the Company or any Company Subsidiary been advised by any
Regulatory Agency that it is considering issuing or requesting any such
Regulatory Agreement.
SECTION 2.10 LOAN LOSS RESERVES. The reserves for possible loan losses
shown on the March 31, 2001 Consolidated Reports of Condition and Income (call
report) filed with a Regulatory Agency for the Company's Subsidiaries are
adequate in all material respects to provide for possible losses, net of
recoveries relating to loans previously charged off, on loans outstanding
(including accrued interest receivable) as of that date.
SECTION 2.11 BANKING REPORTS; FINANCIAL STATEMENTS.
(a) The Company and each Company Subsidiary have filed all forms,
reports and documents required to be filed with the FRB, DFI, the FDIC and any
other applicable federal or state securities or banking authorities (all such
reports and statements are collectively referred to
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as the "Company Reports"). The Company Reports, including all Company Reports
filed after the date of this Agreement, (x) were or will be prepared in all
material respects in accordance with the requirements of applicable Law and (y)
did not at the time they were filed, or will not at the time they are filed,
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 the light of the circumstances under which they were made, not
misleading.
(b) Except as set forth on Schedule 2.11(b), the Company has furnished
to Acquiror true, correct and complete copies of: (i) the audited Consolidated
Statements of Financial Condition of the Company as of the fiscal years ended
December 31, 2000, 1999 and 1998, and the related Consolidated Statements of
Earnings, Consolidated Statements of Shareholders' Equity and Consolidated
Statements of Cash Flows for each of said fiscal years, including the respective
notes thereto, together with the reports and workpapers of Wipfli, Ullrich,
Xxxxxxxxx L.L.P. relating thereto; and (ii) the unaudited Consolidated
Statements of Financial Condition as of March 31, 2001 and the related unaudited
Consolidated Statements of Earnings, Consolidated Statements of Shareholders'
Equity and Consolidated Statements of Cash Flow for the periods then ended
("Company Financial Statements"). Such Company Financial Statements fairly
present the financial position of the Company and the Subsidiaries as of and for
the periods ended on their respective dates and the operating results of the
Company and the Subsidiaries for the indicated periods in conformity with GAAP
applied on a consistent basis. Since December 31, 2000 through the date of
execution of this Agreement, there have not been, to the best of the Company's
knowledge and belief, any adverse material changes in its or the Subsidiaries'
consolidated financial condition, assets, liabilities or business, other than
changes in the ordinary course of business and as set forth in the Company
Financial Statements.
(c) The Company will furnish Acquiror with copies of its audited and
unaudited Consolidated Statements of Financial Condition, Consolidated
Statements of Earnings, Consolidated Statements of Shareholders' Equity and
Consolidated Statements of Cash Flows for each quarterly and yearly period
subsequent to December 31, 2000, and each financial report it or any of its
Subsidiaries files with the Federal Reserve Board, the FDIC, the DFI, or other
regulatory authority, subsequent to December 31, 2000 until the Effective Time
(the "Subsequent Company Financial Statements").
(d) Except as set forth on Schedule 2.1(b), all of the aforesaid
Company Financial Statements have been and, with respect to the Subsequent
Company Financial Statements, will be, prepared in accordance with GAAP,
utilizing accounting practices consistent with prior years except as otherwise
disclosed. All of the aforesaid Company Financial Statements present fairly, and
all of the Subsequent Company Financial Statements will present fairly, the
financial position of the Company and the Subsidiaries taken as a whole and the
results of its and their operations and changes in its and their financial
position as of and for the periods ending on their respective dates. The books
and records of the Company have been and are being maintained in all material
respects in accordance with GAAP and all other applicable legal and accounting
requirements and reflect only actual transactions. Subject to such changes which
may result from an audit of any Subsequent Company Financial Statements (which
changes in the aggregate will not result in an Adverse Change in the Company),
the allowance for loan losses in such Company Financial Statements is, and, with
respect to the Subsequent Company Financial Statements will be, adequate based
on past loan loss experience and evaluation of potential
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losses in current portfolios to cover all known or reasonably anticipated loan
losses. Except with respect to this Agreement and the transactions contemplated
herein, there are, and with respect to the Subsequent Financial Statements will
be, no agreements, contracts or other instruments to which the Company or the
Subsidiaries are a party or by which it or they or (to the knowledge of the
Company) any of the officers, directors, employees or shareholders of the
Company or the Subsidiaries have rights which would have a material adverse
effect on the consolidated financial position of the Company or the financial
position of the Company which are not disclosed herein or reflected in the
Company Financial Statements and the Subsequent Company Financial Statements.
SECTION 2.12 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
in the Company Financial Reports provided at the time of execution of this
Agreement or set forth in Section 2.12 of the Company Disclosure Schedule and
except for the transactions contemplated by this Agreement, since December 31,
2000, to the date of this Agreement, the Company and the Company Subsidiaries
have conducted their businesses only in the ordinary course and in a manner
consistent with past practice and, since December 31, 2000, there has not been
(a) any change in the financial condition, results of operations or business of
the Company and any of the Company Subsidiaries constituting an Adverse Change
in the Company and the Company Subsidiaries taken as a whole, (b) any damage,
destruction or loss (whether or not covered by the insurance) with respect to
any assets of the Company or any of the Company Subsidiaries constituting an
Adverse Change in the Company and the Company Subsidiaries taken as a whole, (c)
any change by the Company in its accounting methods, principles or practices,
(d) any revaluation by the Company of any of its assets in any material respect,
(e) to the date of this Agreement, any entry by the Company or any of the
Company Subsidiaries into any commitment or transactions material to the Company
and the Company Subsidiaries taken as a whole or (f) except for regular
quarterly cash dividends on Company Common Stock with usual record and payment
dates, to the date of this Agreement, any declaration, setting aside or payment
of any dividends or distributions in respect of shares of Company Common Stock
or any redemption, purchase or other acquisition of any of its securities or any
of the securities of any Company Subsidiary.
SECTION 2.13 ABSENCE OF LITIGATION.
(a) Except as set forth in Section 2.13 of the Company Disclosure
Schedule, neither the Company nor any of the Company Subsidiaries is a party to
any, and there are no pending or threatened, legal, administrative, arbitral or
other proceedings, claims, actions or governmental or regulatory investigations
of any nature against the Company or any of the Company Subsidiaries or
challenging the validity or propriety of the transactions contemplated by this
Agreement or which, if adversely determined would, individually or in the
aggregate, be an Adverse Change in the Company and the Company Subsidiaries
taken as a whole. Schedule 2.13 accurately describes all litigation against the
Company or it Subsidiaries in which the amount claimed is in excess of $25,000.
(b) There is no injunction, order, judgment, decree or regulatory
restriction imposed upon the Company, any of the Company Subsidiaries or the
assets of the Company or any of the Company Subsidiaries which constitutes an
Adverse Change in the Company and the Company Subsidiaries taken as a whole.
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SECTION 2.14 EMPLOYEE BENEFIT PLANS.
(a) Plans of the Company. Section 2.14(a) of the Company Disclosure
Schedule lists all employee benefit plans (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")), and all
bonus, stock option, stock purchase, restricted stock, incentive, deferred
compensation, retiree medical or life insurance, supplemental retirement,
severance or other benefit plans, programs or arrangements, and all material
employment, termination, severance or other employment contracts or employment
agreements, with respect to which the Company or any Company Subsidiary has any
obligation (collectively, the "Company Plans"). The Company has furnished or
made available to the Acquiror a complete and accurate copy of each Company Plan
(or a description of the Company Plan, if the Company Plan is not in writing)
and a complete and accurate copy of each material document prepared in
connection with each such Company Plan, including, without limitation, and where
applicable, a copy of (i) each trust or other funding arrangement, (ii) each
summary plan description and summary of material modifications as currently in
effect, (iii) the three (3) most recently filed IRS Forms 5500, Forms PBGC-1 and
related schedules, and (iv) the most recently issued IRS determination letter
for each such Company Plan.
(b) Absence of Certain Types of Plans. No member of the Company's
"controlled group," within the meaning of Section 400l(a)(14) of ERISA,
maintains or contributes to, or within the five (5) years preceding the date of
this Agreement has maintained or contributed to, an employee pension benefit
plan subject to Title IV of ERISA. Except as disclosed in Section 2.14(b) of the
Company Disclosure Schedule, none of the Company Plans obligates the Company or
any of the Company Subsidiaries to pay material separation, severance,
termination or similar type benefits (or provides for enhanced or accelerated
benefits) solely as a result of any transaction contemplated by this Agreement
or as a result of any "change in the ownership or effective control" of the
Company or of any of the Company Subsidiaries within the meaning of such term
under Section 280G of the Code. Except as disclosed in Section 2.14(b) of the
Company Disclosure Schedule, or as required by group health plan continuation
coverage requirements of Section 4980B of the Code ("COBRA"), none of the
Company Plans provides for or promises retiree medical, disability or life
insurance benefits to any current or former employee, officer or director of the
Company or any of the Company Subsidiaries. Each of the Company Plans is subject
only to the laws of the United States or a political subdivision thereof.
(c) Compliance with Applicable Laws. Except as disclosed in Section
2.14(c) of the Company Disclosure Schedule, each Company Plan has been operated
in all material respects in accordance with the requirements of all applicable
Law and all persons who participate in the operation of such Company Plans and
all Company Plan "fiduciaries" (within the meaning of Section 3(21) of ERISA)
have acted in accordance with the provisions of all applicable Law, except where
such violations of applicable Law would not, individually or in the aggregate,
be an Adverse Change in the Company and the Company Subsidiaries taken as a
whole. The Company and the Company Subsidiaries have performed all obligations
required to be performed by any of them under, are not in any respect in default
under or in violation of, and the Company and the Company Subsidiaries have no
knowledge of any default or violation by any party to, any Company Plan, except
where such failures, defaults or violations would not, individually or in the
aggregate, be an Adverse Change in the Company and the Company Subsidiaries
taken as a whole.
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(d) Qualification of Certain Plans. Each Company Plan that is intended
to be qualified under Section 401(a) of the Code or Section 401(k) of the Code
(including each trust established in connection with such a Plan that is
intended to be exempt from Federal income taxation under Section 501(a) of the
Code) is a standardized prototype plan which has a favorable determination
letter from the IRS (as defined herein) upon which the Company and any Company
Subsidiary can rely that it is so qualified, and, except as disclosed in Section
2.14(d) of the Company Disclosure Schedule, no event has occurred since the date
of such determination letter that would affect adversely the qualified status of
any such Company Plan. Except as disclosed in Section 2.14(d) of the Company
Disclosure Schedule, no trust maintained or contributed to by the Company or any
of the Company Subsidiaries is intended to be qualified as a voluntary
employees' beneficiary association or is intended to be exempt from Federal
income taxation under Section 50l(c)(9) of the Code.
(e) Absence of Certain Liabilities and Events. Except for matters
disclosed in Section 2.14(e) of the Company Disclosure Schedule, there has been
no non-exempt prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) with respect to any Company Plan. The Company and
each of the Company Subsidiaries has not incurred any liability for any excise
tax arising under Section 4972 or 4980B of the Code that would individually or
in the aggregate be an Adverse Change in the Company and the Company
Subsidiaries taken as a whole.
(f) Plan Contributions. All contributions, premiums or payments
required to be made prior to the Effective Time with respect to any Company Plan
will have been made on or before the Effective Time.
(g) Stock Options. Section 2.14(g) of the Company Disclosure Schedule
sets forth a true and complete list of each current or former employee, officer
or director of the Company or any Company Subsidiary who holds any option to
purchase Company Common Stock as of the date of this Agreement, together with
the number of shares of Company Common Stock subject to such option, the date of
grant of such option, the plan under which the options were granted, the option
price of such option, the vesting schedule for such option, whether such option
is intended to qualify as an incentive stock option within the meaning of
Section 422(b) of the Code, and the expiration date of such option. Section
2.14(g) indicates those of such options identified therein, if any, the vesting
of which will be accelerated as a result of the Merger.
(h) Employment Contracts. Except as disclosed in Section 2.14(h) of the
Company Disclosure Schedule, neither the Company nor any Company Subsidiary is a
party to any employment, severance, consulting or other similar contracts with
any employees, consultants, officers or directors of the Company or any of the
Company Subsidiaries. Neither the Company nor any Company Subsidiary is a party
to any collective bargaining agreements.
SECTION 2.15 REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS. The
information supplied by the Company for inclusion in the Registration Statement
referred to in Section 6.1 shall not at the time such Registration Statement is
declared effective contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. The information supplied by the Company for inclusion
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in the proxy statement/prospectus to be sent to the shareholders of the Company
in connection with the meeting of the Company's shareholders to consider the
Merger (the "Company Shareholders' Meeting") (such proxy statement/prospectus as
amended or supplemented is referred to herein as the "Proxy
Statement/Prospectus") shall not at the date the Proxy Statement/Prospectus (or
any amendment thereof or supplement thereto) is first mailed to shareholders, at
the time of the Company Shareholders' Meeting and at the Effective Time, be
false or misleading with respect to any material fact required to be stated
therein, or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they are made, not misleading. If at any time prior to
the Effective Time any event relating to the Company or any of its affiliates,
officers or directors should be discovered by the Company which should be set
forth in an amendment to the Registration Statement or a supplement to the Proxy
Statement/Prospectus, the Company shall promptly inform the Acquiror.
Notwithstanding the foregoing, the Company makes no representation or warranty
with respect to any information about, or supplied or omitted by, the Acquiror
which is contained in any of the foregoing documents.
SECTION 2.16 TAXES, REPORTS, MINUTES.
(a) The Company and the Company Subsidiaries have filed all material
Tax Returns (as defined below) required to be filed by them, and the Company and
the Company Subsidiaries have paid and discharged all material Taxes (as defined
below) shown to be due in connection with or with respect to the filing of such
Tax Returns, except such as are being contested in good faith by appropriate
proceedings and with respect to which the Company is maintaining reserves
adequate for their payment or where the failure to pay would not result in an
Adverse Change in the Company. Each such Tax Return is correct and complete in
all material respects and adequately reflects the Taxes required to be reflected
on such Tax Return. For purposes of this Agreement. "Tax" or "Taxes" shall mean
taxes, charges, fees, levies, and other governmental assessments and impositions
of any kind, payable to any federal, state, local or foreign governmental entity
or taxing authority or agency, including, without limitation, (i) income,
franchise, profits, gross receipts, estimated, ad valorem, value added, sales,
use, service, real or personal property, capital stock, license, payroll,
withholding, disability, employment, social security, workers compensation,
unemployment compensation, utility, severance, production, excise, stamp,
occupation, premiums, windfall profits, transfer and gains taxes, (ii) customs
duties, imposts, charges, levies or other similar assessments of any kind, and
(iii) interest, penalties and additions to tax imposed with respect thereto; and
"Tax Returns" shall mean returns, reports, and information statements with
respect to Taxes required to be filed with the United States Internal Revenue
Service (the "IRS") or any other governmental entity or taxing authority or
agency, domestic or foreign, including, without limitation, consolidated,
combined and unitary tax returns. Except as otherwise disclosed in Section 2.16
of the Company's Disclosure Schedule, neither the IRS nor any other governmental
entity or taxing authority or agency is now asserting, either through audits,
administrative proceedings or court proceedings, any deficiency or claim for
additional Taxes. Except as otherwise disclosed in Section 2.16 of the Company's
Disclosure Schedule, neither the Company nor any of the Company Subsidiaries has
granted any waiver of any statute of limitations with respect to, or any
extension of a period for the assessment of any Tax. Except as otherwise
disclosed in Section 2.16 of the Company's Disclosure Schedule and except for
statutory liens for current taxes not yet due, there are no material tax liens
on any assets of the Company or any of the Company Subsidiaries. Except as
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otherwise disclosed in Section 2.16 of the Company's Disclosure Schedule neither
the Company nor any of the Company Subsidiaries has received a ruling or entered
into an agreement with the IRS or any other taxing authority that would be an
Adverse Change in the Company or the Company Subsidiaries, taken as a whole,
after the Effective Time. Except as otherwise disclosed in Section 2.16 of the
Company's Disclosure Schedule, no agreements relating to allocating or sharing
of Taxes exist among the Company and the Company Subsidiaries. Neither the
Company nor any of the Company Subsidiaries has made an election under Section
341(f) of the Code.
(b) Copies of the Federal and State tax returns for the fiscal years
ended December 31, 2000, 1999 and 1998 of the Company, together with the
corresponding work papers of Xxxxxx, Xxxxxx & Xxxxxxxxx, L.L.P. or any other tax
preparer for the Company have been provided to Acquiror for review.
(c) Copies of all regulatory agency examination and compliance reports
from January 1, 1999 through the date of execution of this Agreement and of all
minutes of the Company's and Company-Bank's Boards of Directors and Committees,
from July 1, 1999 through the date of execution of this Agreement have been
provided to Acquiror to review.
SECTION 2.17 COMPANY PROPERTIES.
(a) Schedule 2.17 accurately identifies: (i) all real property owned,
beneficially or otherwise, or controlled by the Company, whether owned outright,
as a joint venture, owned or controlled in a fiduciary capacity, or controlled
through the participation in the management thereof, including properties now
held by the Company as a result of foreclosure or repossession or carried on the
books of the Company as "other real estate owned" ("ORE") or leased by the
Company (all of which shall be defined as "Real Estate") and such Schedule 2.17
sets forth a complete legal description of the Real Estate and a brief
description of any buildings located thereon. No complaints have been received
by the Company, and to the best of the Company's knowledge none are threatened,
that the Company is in violation of applicable building, zoning, environmental,
safety, or similar laws, ordinances, or regulations in respect of their
buildings or equipment, or the operation thereof, and to the best of the
Company's knowledge, the Company is not in violation of any such law, ordinance,
or regulation, (except as disclosed on Schedule 2.17) the violation of which
would result in an Adverse Change in the Company.
(b) Except as set forth on Schedule 2.17, the Company has to the best
of its knowledge good and marketable title to all of its real and personal
property, free, clear and discharged of, and from, any and all liens, mortgages,
charges, encumbrances and/or security interests of any kind.
(c) The Company, as lessee, has the right under valid and subsisting
leases to occupy, use, possess and control all property leased by the Company
and in the case of lease space used for any branch office to permit use of such
space by the Acquiror as a successor in interest.
SECTION 2.18 BROKERS. Except as disclosed on Schedule 2.18, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection
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with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Company.
SECTION 2.19 TAX-FREE REORGANIZATION. Neither the Company nor, to the
Company's knowledge, any of its affiliates has through the date of this
Agreement taken or agreed to take or omitted to take any action that would
prevent the Merger from qualifying as a reorganization under Section 368 of the
Code.
SECTION 2.20 VOTE REQUIRED. The affirmative vote of a majority of the
votes that holders of the outstanding shares of Company Common Stock are
entitled to cast is the only vote of the holders of any class or series of the
Company capital stock necessary to approve the Merger.
SECTION 2.21 ABSENCE OF UNDISCLOSED LIABILITIES. Except as and to the
extent fully reflected or reserved against in the Company Financial Statements
or the Subsequent Company Financial Statements, or those which would not result
in an Adverse Change in the Company, the Company has no liabilities or
obligations, of any nature, secured or unsecured (whether accrued, absolute,
contingent or otherwise) including, without limitation, any tax liabilities due
or to become due. Except as set forth on Schedule 2.21, the Company further
represents and warrants that it does not know or have reason to believe that
there is or will be any basis for assertion against it as of the date of
execution of this Agreement, or as of the date of any Subsequent Company
Financial Statements, of any material liability or obligation of any nature or
any amount not fully reflected or reserved against in the Company Financial
Statements as of said dates and for subsequent periods or in the footnotes
thereto.
SECTION 2.22 SHAREHOLDERS OF THE COMPANY. Schedule 2.22 will be
provided as of a date 30 days prior to the anticipated Effective Time and will
to the best of the Company's knowledge accurately identify the names and
addresses of all shareholders of the Company and the number of shares of Company
Common Stock beneficially owned by each such shareholder. From that date until
the Effective Time, the Company shall, upon request, provide Acquiror with
updated lists of all of its shareholders, including the names, addresses and
number of shares of Company Common Stock held by each shareholder.
SECTION 2.23 REGULATORY FILINGS. Accurate and complete copies of each
report, schedule, and shareholder communication used, circulated or filed since
July 1, 1999 by the Company have been or will be made available for Acquiror's
review. Each report, schedule or correspondence received since July 1, 1999 by
the Company from any governmental or regulatory agency have been provided to
Acquiror for review. The Company has, to the best of its knowledge, filed and
will continue to file in a timely manner all required filings and reports with
(a) the FDIC, (b) the FRB, and (c) the DFI (and will furnish Acquiror with
copies of all such filings and reports made subsequent to the date hereof until
the Effective Time), and all such filings were or will be complete and accurate
in all material respects as of the dates of the filings and reports, with no
such filing or report making any untrue statement of a material fact or omitting
to state a material fact necessary to make the statements made, in the light of
the circumstances under which they were made, not misleading, and the Company
has paid all fees and assessments due and payable in connection with such
filings and reports.
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SECTION 2.24 LOANS. All loans and loan commitments extended by the
Company and its Subsidiaries have to the best of their knowledge been made in
accordance with customary lending standards in the ordinary course of business.
The loans and loan commitments are evidenced by appropriate and sufficient
documentation (including any and all documentation required by applicable
banking laws, except where the absence of such documents would not result in an
Adverse Change in the Company), and to the best of the Company's knowledge
constitute valid and binding obligations of the borrowers enforceable in
accordance with their terms, except as limited by applicable bankruptcy,
insolvency, or other similar laws affecting the enforcement of creditors' rights
and remedies generally from time to time in effect and by applicable law which
may affect the availability of equitable remedies. All such loans and loan
commitments are, and at the Effective Time will be, to the best of the Company's
knowledge, free and clear of any security interest, lien, encumbrance or other
charge, and the Company has to the best of its knowledge complied, and at the
Effective Time will have complied, in all material respects with all laws and
regulations, including Truth-in-Lending and other consumer protection laws,
relating to such loans and loan commitments. Except as set forth on Schedule
2.24, the loans and loan commitments are not, as of the date hereof, subject to
any offsets, or to the knowledge of the Company, claims of offset, or claims of
other liability on the part of the Company.
SECTION 2.25 LOAN PORTFOLIO; REPORTS. Schedule 2.25 provides a listing
of all loans in excess of $250,000 and the Company has provided Acquiror with an
update regarding the status of each listed loan, together with having made
available for Acquiror's review the file or files for each such loan. Schedule
2.25 also lists all loans and obligations which, as of the date hereof, are
classified, whether internally or by regulators, as "Substandard", "Doubtful",
"Loss" or "Classified" or are in any respect non-performing or delinquent. The
Company will promptly notify Acquiror regarding any loans which subsequently fit
within either of the groupings described in the preceding two (2) sentences of
this section 2.25, but which were not in existence or not in such grouping as of
the date of execution of this Agreement. For purposes of this section 2.25, the
term "loans" includes all lines of credit, letters of credit, commitments, or
other obligations of the Company, whether drawn upon or not as of the date of
this Agreement. In determining whether the $250,000 threshold is met, all loans
to one party (including loans to related or otherwise affiliated parties) shall
be aggregated and treated as a single loan.
SECTION 2.26 MORTGAGE-BACKED AND RELATED SECURITIES AND INVESTMENT
SECURITIES. Schedule 2.26 sets forth the book and market value as of April 30,
2001 of the mortgage-backed and related securities, securities held for sale and
investment securities of the Company and its Subsidiaries. Schedule 2.26 also
lists a mortgage-backed and related securities and investment securities report
which lists the securities descriptions, CUSIP numbers, pool face values, book
values, coupon rates and current market values. Except for pledges to secure
trust deposits, FHLB borrowings, and reverse repurchase agreements entered into
in arms'-length transactions pursuant to normal commercial terms and conditions
and other pledges required by law, none of the investments reflected in the
balance sheet of the Company at March 31, 2001 is, to the Company's knowledge,
subject to any restriction (contractual, statutory or otherwise) that would
materially impair the ability of the entity holding the investment freely to
dispose of such investment at any time.
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SECTION 2.27 FIDUCIARY RESPONSIBILITIES. The Company and its
Subsidiaries have to the best of their knowledge performed all of their duties
in their capacities as trustees, executors, administrators, registrars,
guardians, custodians, escrow agents, receivers or any other fiduciary capacity
in a manner which complies in all material respects with all applicable laws,
regulations, orders, agreements, xxxxx, instruments and common law standards.
The Company, in the capacity as fiduciary of an XXX account or other tax
qualified plan maintained with the Company, has not exercised discretion in the
acquisition of shares of Company Common Stock into any such XXX account or plan
and has permitted such acquisition only pursuant to the specific direction of
the accountholder or plan administrator.
SECTION 2.28 OTHER INFORMATION. No representation or warranty by the
Company contained in this Agreement, or disclosure in any Schedule hereto
prepared by the Company, certificate or other instrument or document furnished
or to be furnished by or on behalf of the Company pursuant to this Agreement or
the regulatory filings contains or will to the knowledge of the Company contain
any untrue statement of a material fact or omits or will omit to state any
material fact required to be stated herein or therein which is necessary to make
the statements contained herein or therein not misleading.
SECTION 2.29 INSIDER INTERESTS. All loans, extensions of credit and
other contractual arrangements (including deposit relationships) between the
Company and any officer or director, of the Company, or any affiliate of any
such officer or director, conform (except where failure to conform would not
result in any Adverse Change in the Company) to applicable rules and regulations
and requirements of all applicable regulatory agencies, and all such loans,
extensions of credit and other contractual arrangements which aggregate in
excess of $100,000 for any such officer director, and/or affiliate are described
on Schedule 2.29.
SECTION 2.30 TAKEOVER RESTRICTIONS. The Company has or will take all
actions required or necessary to exempt this Agreement and the transactions
contemplated hereby from any applicable federal, state or organizational
document anti-takeover laws or provisions.
SECTION 2.31 INSURANCE. Schedule 2.31 contains a true, correct and
complete list of all insurance policies and bonds maintained by the Company. As
of the date hereof, the Company has not received any notice of cancellation or
amendment of any such policy or bond is not in default under any such policy or
bond, has no coverage thereunder in dispute, and all claims thereunder have been
filed in a timely fashion and all premiums due thereon on or prior to the date
of Closing have been paid as and when due, except where the notice, amendment,
default, dispute, filing or payments do not result in an Adverse Change in the
Company.
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR
Except as set forth in the Disclosure Schedule delivered by the
Acquiror to the Company prior to execution of this Agreement (the "Acquiror
Disclosure Schedule") the Acquiror hereby represents and warrants to the Company
that:
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SECTION 3.1 ORGANIZATION AND QUALIFICATION; CORPORATE POWER.
(a) The Acquiror is a corporation validly existing and in good standing
(meaning that it has filed its most recent required annual report and has not
filed articles of dissolution) under the laws of the state of Wisconsin, and
each direct or indirect subsidiary of Acquiror ("Acquiror Subsidiary" or
"Acquiror Subsidiaries") set forth on Schedule 3.1 is a corporation validly
existing and in good standing under the laws of the jurisdiction in which the
subsidiary is incorporated, and Acquiror and each of its subsidiaries is duly
qualified to do business and is in good standing in each jurisdiction in which
the nature of the business conducted or the properties or assets owned or leased
by it makes such qualification necessary, except where the failure to be so
qualified would not have a material adverse effect on Acquiror. Acquiror is a
registered savings and loan holding company under the Home Owners' Loan Act of
1933, as amended ("HOLA"). Acquiror and each of its subsidiaries has the
corporate power and authority to carry on its and their business as now
conducted, and to own, lease and operate its and their properties. The Articles
of Incorporation and Bylaws of Acquiror, copies of which previously have been
made available to the Company, are true, correct and complete copies of such
documents in effect as of the date of this Agreement.
(b) Acquiror-Bank is a federally chartered stock savings association
duly organized and in existence under the laws of the United States.
(c) Acquiror and each of its subsidiaries hold all licenses,
certificates, permits, franchises and rights from all appropriate federal, state
or other public authorities necessary for the conduct of its and their
businesses, except where the failure to so hold would not have a material
adverse effect on Acquiror.
SECTION 3.2 AUTHORIZATION. At the Effective Time, the execution,
delivery and performance of this Agreement by Acquiror will have been duly
authorized and approved by all necessary corporate action, and this Agreement
and the Plan of Merger will be legally binding on and enforceable against
Acquiror in accordance with their terms, subject to the receipt of all required
regulatory, shareholder or other governmental approvals and the conditions set
forth in Article Seven, and except as enforceability may be limited by
bankruptcy laws, insolvency laws or other laws affecting creditors' rights
generally. The execution and delivery of this Agreement and the Plan of Merger
do not, and the consummation of the Merger will not, violate the provisions of
Acquiror's Articles of Incorporation or Bylaws.
SECTION 3.3 CAPITALIZATION. The authorized capital stock of Acquiror
consists of 100,000,000 shares of Acquiror Common Stock, par value $0.10 per
share, of which 18,416,218 shares were issued and outstanding as of the date of
this Agreement; and 5,000,000 shares of Preferred Stock, par value $0.10 per
share ("Acquiror Preferred Stock") of which none are issued and outstanding as
of the date hereof. Except pursuant hereto, the Acquiror's stock option plan and
the Rights Agreement, dated January 24, 1995 by and between Acquiror and Xxxxx
Fargo (the "Rights Agreement"), there are no outstanding warrants, options,
rights, calls or other commitments of any nature relating to the issuance or
sale of any other class of equity securities of Acquiror, as of the date hereof.
All of the 18,416,218 outstanding shares of Acquiror Common Stock are duly
authorized, validly issued, fully paid and nonassessable, subject to a
limitation contained in Section 180.0622(2)(b) of the WBCL, as judicially
interpreted, which provides that
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shareholders of Wisconsin corporations may be personally liable for all debts
owing to employees of the corporation for services performed for such
corporation for up to six months' service in any one case, but not in an amount
greater than the consideration paid for such shares.
SECTION 3.4 FINANCIAL STATEMENTS.
(a) Acquiror has furnished to the Company true, correct and complete
copies of the audited Consolidated Balance Sheets of Acquiror as of the fiscal
years ended December 31, 2000 and 1999 and the related Consolidated Statements
of Income, Consolidated Statements of Changes in Shareholders' Equity and the
Consolidated Statements of Cash Flows for each of the three fiscal years ended
December 31, 2000, 1999 and 1998, including the respective notes thereto,
together with the reports of Ernst & Young LLP relating thereto (the "Acquiror
Financial Statements"). Such Financial Statements fairly present the
consolidated financial position of Acquiror as of and for the periods ended on
their respective dates and the consolidated operating results and changes in
financial position of Acquiror for the indicated periods in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent basis.
Since December 31, 2000, to the best of Acquiror's knowledge, there have not
been any material changes in Acquiror's consolidated financial condition,
assets, liabilities or business, other than changes in the ordinary course of
business.
(b) Acquiror will furnish the Company with copies of its unaudited
Quarterly Reports on Form 10-Q as filed with the Securities and Exchange
Commission (the "SEC") for each quarterly period subsequent to December 31, 2000
until the Effective Time Date ("Subsequent Acquiror Financial Statements").
(c) All of the aforesaid Acquiror Financial Statements have been, and
with respect to the Subsequent Acquiror Financial Statements, will be, prepared
in accordance with GAAP, utilizing accounting practices consistent with prior
years except as otherwise disclosed, and comply or will comply with applicable
accounting requirements of the SEC.
SECTION 3.5 NO VIOLATION. Except as set forth on Schedule 3.5, neither
the execution and delivery of this Agreement by the Acquiror, the consummation
by Acquiror and Acquiror - Bank of the transactions contemplated hereby or
thereby, nor compliance by the Acquiror with any of the terms or provisions
hereof or thereof, will (a) violate any provision of the Articles of
Incorporation or Bylaws of Acquiror or the stock charter, bylaws or similar
governing documents of Acquiror - Bank, or (b) assuming that the consents and
approvals referred to in Section 3.6 hereof are duly obtained, (i) violate any
statute, code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to Acquiror or Acquiror - Bank, or (ii) violate, conflict
with, result in a breach of any material provision of or the loss of any
material benefit constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, result in the termination
of or a right of termination or cancellation under, accelerate the performance
required by, or result in the creation of any material lien, pledge, security
interest, charge or other encumbrance upon any of the respective properties or
assets of Acquiror or Acquiror - Bank or any of their subsidiaries under any of
the material terms, conditions or provisions of any material note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Acquiror or Acquiror - Bank is a party, except
for such violations, conflicts, breaches or defaults which, either
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individually or in the aggregate, would not have or be reasonably likely to have
a material adverse effect on Acquiror.
SECTION 3.6 CONSENTS AND APPROVALS. Except for (a) the filing of
applications, notices or other documents necessary to obtain, and the receipt
of, the Requisite Regulatory Approvals, (b) the filing with the SEC of the
Registration Statement (as defined in Section 6.01), (c) the filing of Articles
of Merger with the DFI pursuant to the provisions of the WBCL, (d) such filings
and approvals as are required to be made or obtained under the securities or
"Blue Sky" laws of various states in connection with the issuance of the shares
of Acquiror Common Stock pursuant to this Agreement, and (e) such filings,
authorizations or approvals as may be set forth on Schedule 3.6, no consents or
approvals of or filings or registrations with any governmental entity or with
any third party are necessary in connection with the execution and delivery by
Acquiror of this Agreement, or the consummation by Acquiror of the Merger.
SECTION 3.7 LITIGATION. As of the date of this Agreement, except as
set forth on Schedule 3.7, there are no legal, administrative or other actions,
suits, proceedings or investigations of any kind or nature pending or, to the
knowledge of Acquiror, threatened against Acquiror that challenge the validity
or propriety of the transactions contemplated by this Agreement or which would
have a material adverse effect on Acquiror's consolidated financial condition,
assets, liabilities or business. Neither Acquiror nor Acquiror - Bank is subject
to, or in default with respect to, nor are any of its or their assets subject
to, any outstanding judgment, order or decree of any court or of any
governmental agency or instrumentality that has or is reasonably expected to
have a material adverse effect on Acquiror's consolidated financial condition,
assets, liabilities or business.
SECTION 3.8 EMPLOYEE BENEFIT PLANS.
(a) Plans of the Acquiror. Section 3.8(a) of the Acquiror Disclosure
Schedule lists all employee benefit plans (as defined in Section 3(3) of ERISA),
and all bonus, stock option, stock purchase, restricted stock, incentive,
deferred compensation, retiree medical or life insurance, supplemental
retirement, severance or other benefit plans, programs or arrangements, and all
material employment, termination, severance or other employment contracts or
employment agreements, with respect to which the Acquiror or any Acquiror
Subsidiary has any obligation (collectively, the "Acquiror Plans"). The Acquiror
has furnished or made available to the Company a complete and accurate copy of
each Acquiror Plan (or a description of the Acquiror Plan, if the Acquiror Plan
is are not in writing) and a complete and accurate copy of each material
document prepared in connection with each such Acquiror Plan, including, without
limitation, and where applicable, a copy of (i) each trust or other funding
arrangement, (ii) each summary plan description and summary of material
modifications as currently in effect, (iii) the three (3) most recently filed
IRS Forms 5500, Forms PBGC-1 and related schedules, and (iv) the most recently
issued IRS determination letter for each such Acquiror Plan.
(b) Absence of Certain Types of Plans. No member of the Acquiror's
"controlled group," within the meaning of Section 400l(a)(14) of ERISA,
maintains or contributes to, or within the five (5) years preceding the date of
this Agreement has maintained or contributed to, an employee pension benefit
plan subject to Title IV of ERISA. Except as disclosed in Section 3.8(b) of the
Acquiror Disclosure Schedule, none of the Acquiror Plans obligates the Acquiror
or
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any of the Acquiror Subsidiaries to pay material separation, severance,
termination or similar type benefits (or provides for enhanced or accelerated
benefits) solely as a result of any transaction contemplated by this Agreement
or as a result of any "change in the ownership or effective control" of the
Acquiror or of any of the Acquiror Subsidiaries within the meaning of such term
under Section 280G of the Code. Except as disclosed in Section 3.8(b) of the
Acquiror Disclosure Schedule, or as required by group health plan continuation
coverage requirements of Section 4980B of the Code ("COBRA"), none of the
Acquiror Plans provides for or promises retiree medical, disability or life
insurance benefits to any current or former employee, officer or director of the
Acquiror or any of the Acquiror Subsidiaries. Each of the Acquiror Plans is
subject only to the laws of the United States or a political subdivision
thereof.
(c) Compliance with Applicable Laws. Except as disclosed in Section
3.8(c) of the Acquiror Disclosure Schedule, each Acquiror Plan has been operated
in all material respects in accordance with the requirements of all applicable
Law and all persons who participate in the operation of such Acquiror Plans and
all Acquiror Plan "fiduciaries" (within the meaning of Section 3(21) of ERISA)
have acted in accordance with the provisions of all applicable Law, except where
such violations of applicable Law would not, individually or in the aggregate,
be a material adverse effect on the Acquiror and the Acquiror Subsidiaries taken
as a whole. The Acquiror and the Acquiror Subsidiaries have performed all
obligations required to be performed by any of them under, are not in any
respect in default under or in violation of, and the Acquiror and the Acquiror
Subsidiaries have no knowledge of any default or violation by any party to, any
Acquiror Plan, except where such failures, defaults or violations would not,
individually or in the aggregate, have a material adverse effect on the Acquiror
and the Acquiror Subsidiaries taken as a whole.
(d) Qualification of Certain Plans. Each Acquiror Plan that is intended
to be qualified under Section 401(a) of the Code or Section 401(k) of the Code
(including each trust established in connection with such a Plan that is
intended to be exempt from Federal income taxation under Section 501(a) of the
Code) has received a favorable determination letter from the IRS (as defined
herein) that it is so qualified, and, except as disclosed in Section 3.8(d) of
the Acquiror Disclosure Schedule, no event has occurred since the date of such
determination letter that would affect adversely the qualified status of any
such Acquiror Plan. Except as disclosed in Section 3.8(d) of the Acquiror
Disclosure Schedule, no trust maintained or contributed to by the Acquiror or
any of the Acquiror Subsidiaries is intended to be qualified as a voluntary
employees' beneficiary association or is intended to be exempt from Federal
income taxation under Section 50l(c)(9) of the Code.
(e) Acquiror Plans Subject to Title IV of ERISA. Section 3.8(e) of the
Acquiror Disclosure Schedule lists all employee pension benefit plans subject to
Title IV of ERISA which are maintained by, contributed to, or within the five
(5) years preceding the date of this Agreement have been maintained by or
contributed to, a member of the Acquiror's "controlled group," within the
meaning of Section 4001(a)(14) of ERISA (the "Title IV Plans").
(i) Neither the Acquiror nor any Acquiror Subsidiary has any
liability to the PBGC with respect to any Title IV Plan nor
has any liability under Section 502 or 4071 of ERISA.
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(ii) With respect to each Title IV Plan, the Acquiror and any
Acquiror Subsidiary has met the minimum funding standard,
and has made all contributions required, under Section 302
of ERISA and Section 402 of the Code.
(iii) Neither the Acquiror nor any Acquiror Subsidiary has filed
a notice of intent to terminate any Title IV Plan nor has
adopted any amendment to treat a Title IV Plan as
terminated. The PBGC has not instituted proceedings to
treat any Title IV Plan as terminated. No event has
occurred or circumstance exists that may constitute grounds
under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Title IV Plan.
(iv) No amendment has been made, or is reasonably expected to be
made, to any Title IV Plan that has required or could
require the provision of security under Section 307 of
ERISA or Section 401(a)(29) of the Code.
(v) No accumulated funding deficiency, whether or not waived,
exists with respect to any Title IV Plan; no event has
occurred or circumstance exists that may result in an
accumulated funding deficiency as of the last day of the
current plan year of any such Title IV Plan.
(vi) The actuarial report for each Title IV Plan fairly presents
the financial condition and the results of operations of
each such Title IV Plan in accordance with GAAP.
(vii) No reportable event (as defined in Section 4043 of ERISA
and in regulations issued thereunder) has occurred with
respect to any Title IV Plan.
(viii) Neither Acquiror nor any Acquiror Subsidiary has knowledge
of any facts or circumstances that may give rise to any
liability of Acquiror, any Acquiror Subsidiary, Company, or
any Company Subsidiary, to the PBGC under Title IV of
ERISA.
(f) Absence of Certain Liabilities and Events. Except for matters
disclosed in Section 3.8(f) of the Acquiror Disclosure Schedule, there has been
no non-exempt prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) with respect to any Acquiror Plan. The Acquiror and
each of the Acquiror Subsidiaries has not incurred any liability for any excise
tax arising under Section 4972 or 4980B of the Code that would individually or
in the aggregate be a material adverse effect on the Acquiror and the Acquiror
Subsidiaries taken as a whole.
(g) Plan Contributions. All contributions, premiums or payments
required to be made prior to the Effective Time with respect to any Acquiror
Plan will have been made on or before the Effective Time.
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SECTION 3.9 COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as set forth on
Schedule 3.9, to Acquiror's knowledge, as of the date of this Agreement:
(a) The operations of Acquiror and Acquiror Subsidiaries comply and
have complied with all Environmental Laws; none of the Acquiror or any of its
subsidiaries' operations are the subject of, nor is the Acquiror or any Acquiror
Subsidiary a party to, any judicial or administrative proceeding, pending or
threatened, alleging the violation of any Environmental Laws; neither the
Acquiror nor any Acquiror subsidiary are the subject of a federal, state or
local investigation, pending or threatened, evaluating whether any remedial
action is needed to respond to a release of any Hazardous Substance; neither
Acquiror nor any Acquiror Subsidiary has arranged for the treatment or disposal
of any Hazardous Substance; and neither Acquiror nor any of its subsidiaries
have reported a spill, emission or release of a Hazardous Substance.
(b) Except as set forth on Schedule 3.9, all real property owned
directly by Acquiror and Acquiror Subsidiaries (the "Real Property") is in
compliance in all material respects with all Environmental Laws; neither
Acquiror nor the Acquiror Subsidiaries have any notice or knowledge regarding
the Real Property or its past use(s) which indicates noncompliance, or potential
noncompliance, with any Environmental Law; the Real Property is not subject to
any judicial or administrative proceedings alleging the violation of any
Environmental Law; the Real Property is not contaminated by any Hazardous
Substance; the Real Property is not the subject of a federal, state or local
investigation evaluating whether any remedial action is needed to respond to a
release, emission or discharge of any Hazardous Substance into the environment;
neither the Acquiror nor any Acquiror Subsidiary has transported any Hazardous
Substance to the Real Property or from the Real Property to any waste treatment,
storage or disposal facility; neither Acquiror nor any Acquiror Subsidiary has
arranged for the treatment or disposal of any Hazardous Substance; the Real
Property and buildings occupied by the Acquiror and Acquiror subsidiaries
contain no urea-formaldehyde insulation, asbestos or asbestos by-products, lead
or regulated levels of PCBs; the Real Property contains no fill material; and
the Real Property does not face any risk of contamination by a Hazardous
Substance from any nearby property.
SECTION 3.10 SHARES TO BE ISSUED IN MERGER. The Acquiror Common Stock,
which certain shareholders of the Company will be entitled to receive upon
consummation of the Merger pursuant to the terms of the Plan of Merger, will, at
the Effective Time, be duly authorized and will, when issued pursuant to the
Plan of Merger, be validly issued, fully paid and nonassessable (subject to the
limitations provided in Section 180.0622(2)(b) of the WBCL).
SECTION 3.11 BROKER'S FEES. Neither Acquiror, nor any of its
subsidiaries, nor any of their respective officers or directors, has employed
any broker or finder or incurred any liability for any broker's fees,
commissions or finder's fees in connection with any of the transactions
contemplated by this Agreement, except that Acquiror has engaged, and will pay a
financial advisory service fee, to Xxxxxx Associates, Inc.
SECTION 3.12 ACQUIROR INFORMATION. The information relating to Acquiror
and its subsidiaries to be contained or incorporated by reference in the Proxy
Statement/Prospectus (as defined in Section 6.01) and the Registration Statement
(as defined in Section 6.01) will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein
not misleading. The Registration Statement (except for such portions
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thereof that relate only to the Company or any of its subsidiaries) will comply
in all material respects with the provisions of the Securities Act of 1933, as
amended (the "Securities Act") and the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and the rules and regulations thereunder.
SECTION 3.13 SEC FILINGS. Acquiror has timely filed all registration
statements, prospectuses, forms, reports and documents and related exhibits
required to be filed by it under the Securities Act or the Exchange Act, as the
case may be, since January 1, 1998 (collectively, the "Acquiror SEC Filings")
except where a failure to have so filed would not have a material adverse effect
on the Acquiror. The Acquiror SEC Filings (a) were prepared, in all material
respects, in accordance with the requirements of the Securities Act or the
Exchange Act, as the case may be, and (b) did not at the time they were filed
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 made
therein, in the light of the circumstances under which they were made, not
misleading. No Acquiror Subsidiary is subject to the periodic reporting
requirements of the Exchange Act.
SECTION 3.14 CONTINUITY OF BUSINESS ENTERPRISE. Acquiror has no
intention as of the date of execution of this Agreement of disposing of the
assets of the Company or the Company Subsidiaries, except in the normal course
of business of the Company and the Company Subsidiaries.
ARTICLE IV - COVENANTS OF THE COMPANY
The Company hereby covenants and agrees with Acquiror as follows:
SECTION 4.1 REGISTRATION STATEMENT AND SHAREHOLDERS MEETING. The
Company shall cause the Company Shareholders' Meeting to be held after the
execution of this Agreement and upon availability of the Proxy
Statement/Prospectus (as defined in Section 2.15) for the purpose of acting upon
this Agreement and the Plan of Merger, and in connection therewith shall
distribute the Proxy Statement/Prospectus and any amendments or supplements
thereto and shall solicit proxies from its shareholders in accordance with
applicable law.
SECTION 4.2 CONDUCT OF BUSINESS, CERTAIN COVENANTS.
(a) From and after the execution and delivery of this Agreement and
until the Effective Time, the Company and Company Subsidiaries shall:
(i) conduct its and their business and operate only in the usual
and ordinary course of business in accordance with prudent and sound
banking practices;
(ii) maintain an allowance for loan losses deemed by management
of the Company Bank to be adequate based on past loan loss experience
and evaluation of potential losses in current portfolios;
(iii) remain in good standing with all applicable federal and
state regulatory authorities and preserve each of its and their
existing banking locations;
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(iv) use its and their best efforts (but without any obligation to
pay additional or increased compensation of any type) to retain the
services of its and their present officers and employees identified by
Acquiror, so that its and their goodwill and business relationships
with customers and others are not adversely affected;
(v) maintain usual and customary insurance covering the
performance of its and their duties by its and their directors,
officers, and employees and maintaining full force and effect all of
the insurance policies reflected on Schedule 2.31 hereto;
(vi) take no action which would adversely affect or delay the
ability of the Company or Acquiror to obtain any necessary approvals,
consents or waivers of any governmental authority required for the
transactions contemplated hereby; and
(vii) take no action which would cause the termination or
cancellation by the FDIC of insurance in respect of the Company-Bank's
deposits.
(b) From and after the execution and delivery of this Agreement and
until the Effective Time, the Company and Company Subsidiaries shall not,
without the prior consent of Acquiror:
(i) except as contemplated by Section 5.6(a), issue, deliver or
sell, or authorize or propose the issuance, delivery or sale of, any
shares of its or their capital stock, or issue or grant any stock
options, warrants, rights, calls or commitments of any character
calling for or permitting the issue or sale of its or their capital
stock (or securities convertible into or exchangeable, with or without
additional consideration, for shares of such capital stock) or any
stock appreciation rights;
(ii) declare and/or pay any cash or non-cash dividend, or
institute any other form of dividend or distribution, with respect to
the Company's capital stock; except that the Company may pay normal
quarterly cash dividends;
(iii) increase or reduce the number of shares of its or their
capital stock issued or outstanding by repurchase, split-up, reverse
split, reclassification, distribution of stock dividends, or change of
par or stated value;
(iv) except as required pursuant to the terms of any option to
acquire Company Common Stock, purchase, permit the conversion of or
otherwise acquire or transfer (other than in its role as transfer agent
for the Company Common Stock) for any consideration any outstanding
shares of its or their capital stock or securities carrying the right
to acquire, or convert into or exchange for such stock, with or without
additional consideration;
(v) make or grant any general or individual wage, bonus or salary
increase or fringe benefit increase except in the usual and ordinary
course of business and in accordance with past pay practices;
(vi) transfer or lease any of its or their assets or property
except in the ordinary course of business;
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(vii) transfer or grant any rights under any leases, licenses or
agreements, other than in the usual and ordinary course of business;
(viii) make any payment to any director, officer, employee or
independent contractor, in connection with or as a result of the
transactions contemplated by this Agreement, or otherwise, that is not
deductible under either Sections 162(a)(1) or 404 of the Code or is not
an ordinary business expense for travel, meals or entertainment
authorized by the Company in furtherance of the duties of the director,
officer or employee;
SECTION 4.3 INFORMATION, ACCESS THERETO. Upon advance notice to the
Company, Acquiror, Acquiror-Bank and its representatives and agents shall, at
reasonable times during normal business hours prior to the Effective Time, have
access to the facilities, employees, operations, records and properties of the
Company and Company Bank necessary to confirm and facilitate the transactions
contemplated by this Agreement. Upon request, the Company and its Subsidiaries
will furnish Acquiror or its representatives or agents, its and their attorneys,
responses to auditors' requests for information and such financial and operating
data and other information reasonably requested by Acquiror, developed by the
Company its auditors, accountants or attorneys, and will permit Acquiror, its
representatives or agents accompanied by a company representative to discuss
such information directly with any individual or firm performing auditing or
accounting functions for the Company.
SECTION 4.4 CONFIDENTIALITY. Company will cause all internal, nonpublic
financial and business information obtained by it from the Acquiror and Acquiror
Subsidiaries to be treated confidentially (exercising the same degree of care as
it uses to preserve and safeguard its own confidential information); provided,
however, that notwithstanding the foregoing, nothing contained herein shall
prevent or restrict Company from making such disclosure thereof as may be
required by law or as may be required in the performance of this Agreement.
Furthermore, Company shall have no obligation to keep confidential any
information that (a) was already known to Company and was received from a source
other than the Acquiror or any of its Subsidiaries, directors, officers,
employees or agents which is not otherwise subject to a confidentiality
agreement, or (b) is required to be disclosed to the SEC, the OTS, the FDIC, the
FRB or any other governmental agency or authority or regulatory authority, or is
otherwise required to be disclosed by law. If the Merger shall not be
consummated, all nonpublic financial statements, documents and materials and all
copies thereof shall be returned to the Acquiror or destroyed by Company and
shall not be used by Company in any way the Company reasonably believes would be
detrimental to the Acquiror.
SECTION 4.5 RECOMMENDATION OF MERGER TO SHAREHOLDERS. The Board of
Directors of the Company will, except in the event of termination of this
Agreement by the Company pursuant to Section 10.1(h), unanimously recommend in
the Proxy Statement/Prospectus approval of the Merger and all transactions
related thereto and such other matters as may be submitted in connection with
this Agreement, to all shareholders of the Company entitled to vote thereon.
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SECTION 4.6 LITIGATION MATTERS. The Company will consult with Acquiror
about any proposed settlement or lack thereof, or any disposition of, any
litigation matter in which it or its Subsidiaries is or becomes involved and the
amount involved exceeds $25,000.
SECTION 4.7 NO SOLICITATION. From and after the date hereof until
termination of this Agreement, neither the Company, nor any of their respective
officers, directors, employees, representatives, agents or affiliates
(including, without limitation, any investment banker, attorney or accountant
retained by the Company) will, directly or indirectly, initiate, solicit or
knowingly encourage (including by way of furnishing nonpublic information or
assistance), or take any other action to facilitate knowingly, any inquiries or
the making of any proposal that constitutes, or may reasonably be expected to
lead to, any Acquisition Proposal (as defined below), or enter into or maintain
or continue discussions or negotiate with any person or entity in furtherance of
such inquiries or to obtain an Acquisition Proposal or agree to or endorse any
Acquisition Proposal; provided, however, that the Company may provide third
parties with nonpublic information or, otherwise facilitate any effort or
attempt by any third party relating to any unsolicited Acquisition Proposal if
the Company, after having consulted with and considered the advice of outside
counsel, has determined in good faith that such actions are necessary to the
discharge of the fiduciary duties of the Company's Board of Directors. The
Company shall notify Acquiror orally (within one business day) and in writing
(as promptly as practicable) of all relevant details relating to all inquiries
and proposals which it or any such officer, director, employee, investment
banker, financial advisor, attorney, accountant or other representative may
receive relating to any of such matters and if such inquiry or proposal is in
writing, the Company shall deliver promptly to Acquiror a copy of such inquiry
or proposal. For purposes of this Agreement, "Acquisition Proposal" shall mean
any of the following, or any proposal of any of the following, involving the
Company (other than the transactions contemplated hereunder): (a) any merger,
consolidation, share exchange, business combination or other similar
transaction; (b) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of 10% or more of the assets of the Company and Company
Subsidiaries, taken as a whole, in a single transaction or series of
transactions; (c) any tender offer or exchange offer for 10% or more of the
outstanding shares of capital stock of the Company or the filing of a
registration statement under the Securities Act in connection therewith; or (d)
any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing.
SECTION 4.8 BEST EFFORTS. The Company agrees to use its best efforts to
cause the conditions contained in Articles VII, VIII and IX to be satisfied and
to effect the Merger.
SECTION 4.9 VOTING AGREEMENTS. Within ten days of the date of execution
of this Agreement, the Company shall obtain and deliver to Acquiror signed
voting agreements ("Voting Agreements"), which Voting Agreements shall be
automatically terminated in the case of termination of this Agreement under
Section 10.1(h), substantially in the form attached hereto as Exhibit 4.9, from
each of its executive officers and directors in their individual capacity, to
the effect that he or she will vote the shares of Company Common Stock
beneficially owned by him or her in favor of the Merger and all transactions
related thereto, and he or she will not dispose of any shares of Company Common
Stock beneficially owned by him or her prior to the Effective Time, subject to
certain exceptions as provided in the Voting Agreements.
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ARTICLE V - COVENANTS OF THE ACQUIROR
SECTION 5.1 AFFIRMATIVE COVENANTS. The Acquiror hereby covenants and
agrees with the Company that prior to the Effective Time, unless the prior
written consent of the Company shall have been obtained and except as otherwise
contemplated herein, it will and it will cause each Acquiror Subsidiary to:
(a) operate its business only in the ordinary course consistent with
past practices:
(b) take such reasonable actions as are requested by the Company to
complete the Merger.
SECTION 5.2 NEGATIVE COVENANTS. Except as otherwise contemplated by
this Agreement, from the date of this Agreement until the Effective Time, the
Acquiror shall not do, or agree to commit to do, or permit any Acquiror
Subsidiaries to do, without the prior written consent of the Company any of the
following:
(a) declare or pay any extraordinary or special dividends on or make
any other extraordinary or special distributions in respect of any of its
capital stock unless appropriate adjustment or adjustments are made to the
Exchange Ratio as set forth in Section 1.6 hereof;
(b) take any action that is intended or may reasonably be expected to
result in any of its representations and warranties set forth in this Agreement
being or becoming untrue in any material respect, or in any of the conditions to
the Merger set forth in Articles VII and VIII not being satisfied, or in a
violation of any provision of this Agreement except, in every case, as may be
required by applicable Law;
(c) take or cause to be taken any action, or omit to take any action,
which as a result would disqualify the Merger as a tax free reorganization under
Section 368 of the Code:
(d) amend its Articles of Incorporation or By-Laws or other governing
instrument in a manner which would adversely affect in any manner the terms of
the Acquiror Common Stock or the ability of the Acquiror to consummate the
transactions contemplated hereby; or
(e) agree in writing or otherwise to do any of the foregoing.
SECTION 5.3 NOTICE REGARDING BREACHES.
The Acquiror shall, in the event it becomes aware of the impending or
threatened occurrence of any event or condition which would cause or constitute
a material breach (or would have caused or constituted a material breach had
such event occurred or been known prior to the date of this Agreement) of any of
its representations or agreements contained or referred to herein, give prompt
written notice thereof to the Company and use its best efforts to prevent or
promptly remedy the same.
SECTION 5.4 STOCK EXCHANGE LISTING. The Acquiror shall use its best
efforts to cause the shares of Acquiror Common Stock to be issued in the Merger
to be approved for listing on The Nasdaq Stock Market prior to the Effective
Time.
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SECTION 5.5 TAX TREATMENT. The Acquiror will use its best efforts to
cause the Merger to qualify as a reorganization under Section 368 of the Code.
SECTION 5.6 STOCK OPTIONS.
(a) At the Effective Time, the Acquiror will assume the Company's 1995
Stock Option Plan (the "Option Plan") and all of the Company's obligations
thereunder and may, at its election, provide for the merger of the Company's
option plans into those of the Acquiror. At the Effective Time, the Option Plan
shall be amended to provide that each outstanding option issued pursuant to the
Option Plan shall become an option to acquire, on the same terms and conditions
as were applicable under such option (including, without limitation, the time
periods allowed for exercise), a number of shares of Acquiror Common Stock equal
to the product of the Exchange Ratio and the number of shares of Company Common
Stock subject to such option (provided that any fractional shares of Acquiror
Common Stock resulting from such multiplication shall be rounded up to the
nearest share), at a price per share (rounded down to the nearest cent) equal to
the exercise price per share of the shares of Company Common Stock subject to
such option divided by the Exchange Ratio on the same terms and conditions as
were applicable under such option (including without limitation, the time
periods allowed for exercise). Immediately prior to the Effective Time, the
Company may issue remaining unissued options under the Option Plan, to result in
a total of 62,500 granted options, and may also amend the Option Plan or adopt a
further option plan to permit issuance of up to an additional 1, 350 option
grants. The Company shall also amend the Option Plan to (i) modify the Option
Plan by eliminating any existing provisions providing for an adjustment in
option shares in the event of payment of a cash dividend (in connection with
which amendment the Company shall utilize its best efforts to have option
grantees enter into replacement option agreements which eliminate any claim or
right to such adjustment), (ii) eliminate any right of option grantees to put
granted options to the Company, and (iii) include such further amendments an may
be reasonably requested by Acquiror. Notwithstanding the foregoing, with respect
to options that are incentive stock options, the excess of the aggregate fair
market value of the shares subject to the option immediately after the
substitution over the aggregate option price of such shares shall not be more
than the excess of the aggregate fair market value of all shares subject to the
option immediately before the substitution over the aggregate option price of
such shares. The duration and other terms of the option shall remain the same,
except that all references to the Company shall refer to the Acquiror. All
options granted under the Option Plans shall be fully vested as of the day
preceding the Effective Time. The Acquiror agrees to take all corporate action
necessary to reserve for issuance a sufficient number of shares of Acquiror
Common Stock for delivery upon exercise of options under the Option Plans
assumed by the Acquiror in accordance with this Agreement.
(b) Acquiror shall, maintain an effective registration statement on an
appropriate form under the Securities Act with respect to the shares of Acquiror
Common Stock subject to options to acquire Acquiror Common Stock issued pursuant
to Section 5.6 hereof, and shall comply with applicable state securities or Blue
Sky Laws, for so long as such options remain outstanding.
(c) The provisions of this 5.6 are intended to be for the benefit of,
and shall be enforceable by, each optionee and his or her heirs and
representatives, it being expressly agreed
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that each person to whom this Section 5.6 applies shall be a third-party
beneficiary of this Section 5.6.
SECTION 5.7 SEC FILINGS. The Surviving Corporation shall make all
filings with the SEC that are described in subsection (c) of Rule 144 under the
Securities Act for a period of two years following the Effective Time. The
provisions of this Section 5.7 are intended to be for the benefit of, and shall
be enforceable by, each Affiliate and his or her heirs and representatives (it
being expressly agreed that each such person to whom this Section 5.7 applies
shall be a third-party beneficiary of this Section 5.7).
SECTION 5.8 CONFIDENTIALITY. Acquiror will cause all internal,
nonpublic financial and business information obtained by it from the Company and
Company to be treated confidentially (exercising the same degree of care as it
uses to preserve and safeguard its own confidential information); provided,
however, that notwithstanding the foregoing, nothing contained herein shall
prevent or restrict Acquiror from making such disclosure thereof as may be
required by law in connection with the offering and sale of Acquiror Common
Stock pursuant to this Agreement or as may be required in the performance of
this Agreement. Furthermore, Acquiror shall have no obligation to keep
confidential any information that (a) was already known to Acquiror and was
received from a source other than the Company or any of its Subsidiaries,
directors, officers, employees or agents which is not otherwise subject to a
confidentiality agreement, or (b) is required to be disclosed to the SEC, the
OTS, the FDIC, the FRB or any other governmental agency or authority or
regulatory authority, or is otherwise required to be disclosed by law. If the
Merger shall not be consummated, all nonpublic financial statements, documents
and materials and all copies thereof shall be returned to the Company or
destroyed by Acquiror and shall not be used by Acquiror in any way the Acquiror
reasonably believes would be detrimental to the Company.
SECTION 5.9 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.
(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 person 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, officer or employee of the Company or any of the Company Subsidiaries
(including in his/her role as a fiduciary of the employee benefit plans of the
Company or the Company Subsidiaries, if applicable) (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, officer or employee of the Company, any of the Company
Subsidiaries or any of their respective predecessors or (ii) this Agreement or
any of the transactions contemplated hereby, 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 the respond thereto. It
is understood and agreed that after the Effective Time, the Acquiror shall
indemnify and hold harmless, 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 in advance of the
final disposition of any claim, suit, proceeding or investigation to each
Indemnified Party to the fullest extent permitted by law upon receipt of any
undertaking required by applicable law), judgments, fines and amounts paid in
settlement in connection with
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any such threatened or actual claim, 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), the Indemnified Parties may retain counsel satisfactory to
them; provided, however, that (A) Acquiror shall have the right to assume the
defense thereof and upon such assumption the Acquiror shall not be liable to any
indemnified Party for any legal expenses of other counsel or any other expenses
subsequently incurred by any Indemnified Party in connection with the defense
thereof, except that if the Acquiror elects not to assume such defense or
counsel for the Indemnified Parties reasonably advises that there are issues
which raise conflicts of interest between the Acquiror and the Indemnified
Parties, the Indemnified Parties may retain counsel satisfactory to them, and
Acquiror shall pay the reasonable fees and expenses of such counsel for the
Indemnified Parties, (B) Acquiror shall in all cases be obligated pursuant to
this Section 5.9 (a) to pay for only one firm of counsel for all Indemnified
Parties, (C) Acquiror shall not be liable for any settlement effected without
its prior written consent (which consent shall not be unreasonably withheld) and
(D) Acquiror 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. Any Indemnified Party wishing to claim indemnification under
this Section 5.9, upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify the Acquiror thereof, provided that the
failure to so notify shall not affect the obligations of the Acquiror under this
Section 5.9 except to the extent such failure to notify materially prejudices
the Acquiror.
(b) The Surviving Corporation shall use its best efforts to purchase,
and for a period of six (6) years after the Effective Time maintain in effect,
directors and officers liability insurance coverage with respect to wrongful
acts and/or omissions committed or allegedly committed by any of the officers or
directors of the Company prior to the Effective Time ("D&O Coverage"). Such D&O
Coverage shall have an aggregate coverage limit over the term of such policy in
an amount no less than the aggregate annual coverage limit under the Company's
existing directors' and officers' liability insurance policy; provided, however,
that in no event will the Surviving Corporation be required to expend, on an
annual basis, as the cost of maintaining such D&O Coverage, more than the amount
currently expended by the Company to procure its existing D&O Coverage (the
"Maximum Premium"); and provided further, that if the Surviving Corporation is
unable to obtain or maintain the D&O Coverage called for by this Section 5.9 for
an amount equal to or less than the Maximum Premium, then the Surviving
Corporation will nonetheless use its best efforts to procure and maintain as
much comparable D&O Coverage as it can obtain for such Maximum Premium.
Notwithstanding the foregoing, the Surviving Corporation, if it so elects, may
satisfy its obligations under this Section 5.9 at any time by procuring one or
more so-called "tail" or "runoff" policies of directors' and officers' liability
insurance that insure against the risks that would be insured against by the D&O
Coverage.
(c) In the event the Acquiror or the Surviving Corporation 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, proper
provision shall be made so that the successors and assigns of the Acquiror or
the Surviving Corporation, as the case may be, assume the obligations set forth
in this section.
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(d) In addition to the other indemnification obligations set forth in
this Section 5.9, the Acquiror will indemnify directors and officers of the
Company and the Company Subsidiaries to the same extent as provided in the
Company Articles and Bylaws as if they were to continue to exist and apply to
the directors and officers of the Company and Company Subsidiaries for six (6)
years from the Effective Time.
(e) The provisions of this Section 5.9 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and his or her
heirs and representatives, it being expressly agreed that each such officer,
director or employee to whom this Section 5.9 applies shall be a third-party
beneficiary of this Section 5.9.
ARTICLE VI - ADDITIONAL COVENANTS AND AGREEMENTS
SECTION 6.1 REGULATORY MATTERS.
(a) The Acquiror shall prepare and file with the SEC a registration
statement on Form S-4 covering the Acquiror Common Stock to be issued pursuant
to the Plan of Merger (the "Registration Statement"), and the Company shall give
to Acquiror all information concerning the Company which is required for
inclusion in the Registration Statement. The Registration Statement shall
include a Proxy Statement/Prospectus for use in connection with the Shareholders
Meeting, all in accordance with the rules and regulations of the SEC. Each of
Acquiror and the Company shall use its best efforts to have the Registration
Statement declared effective under the Securities Act as promptly as practicable
after such filing, and the Company shall thereafter mail the Proxy
Statement/Prospectus to its shareholders. Acquiror shall use its best efforts to
obtain all necessary state securities law or "Blue Sky" permits and approvals
required to carry out the transactions contemplated by this Agreement, and the
Company shall furnish all information concerning the Company and the holders of
Company Common Stock as may be requested in connection with any such action.
(b) The Acquiror shall promptly prepare and submit all applications,
notices and statements with the appropriate regulatory agencies and governmental
entities to obtain the Requisite Regulatory Approvals (as defined in Section
7.1) for approval of the transactions contemplated by this Agreement.
(c) The parties hereto shall cooperate with each other and use their
reasonable best efforts to promptly prepare and file all necessary
documentation, effect all applications, notices, petitions and filings, and
obtain as promptly as practicable all Requisite Regulatory Approvals, permits,
consents, approvals and authorizations of all third parties, regulatory agencies
and governmental entities which are necessary or advisable to consummate the
transactions contemplated by this Agreement. The Company and Acquiror shall have
the right to review in advance, and to the extent practicable each will consult
the other on, in each case subject to applicable laws relating to the exchange
of information, all the information relating to the Company or Acquiror, 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, regulatory
agency or governmental entity in connection with the transactions contemplated
by this Agreement; provided, however, that nothing contained herein shall be
deemed to provide either party with a right to review any information provided
to any regulatory agency or governmental entity on a
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confidential basis in connection with the transactions contemplated hereby. In
exercising the foregoing right, each of the parties hereto shall act reasonably
and as promptly as practicable.
(d) Acquiror and the Company shall, upon request, furnish each other
with all information concerning themselves, their subsidiaries, directors,
officers and shareholders and such other matters as may be reasonably necessary
or advisable in connection with the Registration Statement or any other
statement, filing, notice or application made by or on behalf of Acquiror, the
Company or any of their respective subsidiaries to any regulatory agency or
governmental entity in connection with the Merger and the other transactions
contemplated by this Agreement.
(e) The Acquiror and the Company shall promptly advise each other upon
receiving any communication from any regulatory agency or governmental entity
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 the Requisite Regulatory Approval (as defined in
Section 7.1) will not be obtained or the receipt of any such approval will be
materially delayed.
SECTION 6.2 LEGAL CONDITIONS TO MERGER. Each of Acquiror and the
Company shall, and shall cause their subsidiaries to, use their best efforts (a)
to take, or cause to be taken, all actions necessary, proper or advisable to
comply promptly with all legal requirements which may be imposed on such party
or its subsidiaries with respect to the Merger and, subject to the conditions
set forth in Articles VII, VIII and IX hereof, to consummate the transactions
contemplated by this Agreement, and (b) to obtain (and to cooperate with the
other party to obtain) any Requisite Regulatory Approvals, consent,
authorization, order or approval of, or any exemption by, any governmental
entity and any other third party which is required to be obtained by the Company
or Acquiror or any of their respective subsidiaries in connection with the
Merger and the other transactions contemplated by this Agreement.
SECTION 6.3 SUBSEQUENT FILINGS; PRESS RELEASES. As soon as reasonably
available, but in no event more than three business days after the filing
thereof with the SEC, Acquiror will deliver to the Company its Forms 8-K, 10-Q,
10-K, and proxy, as filed with the SEC under the Exchange Act. In addition, from
and after the date of this Agreement through the Effective Time, the Company
shall promptly deliver to Acquiror, but in no event more than three business
days after filing or mailing, copies of all press releases issued by it or any
Company Subsidiary, together with copies of all filings or submissions to any
regulatory agency, and copies of all communications with shareholders (including
copies of the notice, proxy statement and accompanying materials prepared in
connection with any meeting of the Company's shareholders, including the meeting
to be held to consider and vote upon approval of the transactions contemplated
by this Agreement).
SECTION 6.4 ADDITIONAL AGREEMENTS. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, or to vest the Acquiror with full title to all
properties, assets, rights, approvals, immunities and franchises of the Company
or any Company Subsidiary, the proper officers and directors of each party to
this Agreement and their respective subsidiaries shall take all such necessary
action as may be requested by Acquiror.
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SECTION 6.5 ADVICE OF CHANGES. The Acquiror and Company shall each
promptly advise the other of any change or event having a material adverse
effect (or in the case of the Company, an Adverse Change in the Company) on it
or which it believes would or would be reasonably likely to cause or constitute
a material breach of any of its representations, warranties or covenants
contained herein. From time to time prior to the Effective Time, the Acquiror
and Company will promptly supplement or amend the Disclosure Schedules delivered
in connection with the execution of this Agreement to reflect any matter which,
if existing, occurring or known at the date of this Agreement, would have been
required to be set forth or described in such Disclosure Schedules or which is
necessary to correct any information in such Disclosure Schedules which has been
rendered inaccurate thereby.
SECTION 6.6 CURRENT INFORMATION. During the period from the date of
this Agreement to the Effective Time, the Company will cause one or more of its
designated representatives to confer on a regular and frequent basis (not less
than monthly) with representatives of Acquiror and to report (a) the general
status of the ongoing operations of the Company and any Company Subsidiary, and
(b) the status of those loans held by the Company or any of Company Subsidiary
which, individually or in combination with one or more other loans to the same
borrower thereunder, have an unpaid principal amount of $250,000 or more and are
non-performing assets. The Company will promptly notify Acquiror of any Adverse
Change in the Company.
SECTION 6.7 TERMINATION OF REGULATORY AGREEMENTS. The Company and the
Company Bank shall cause all regulatory agreements to which the Company or
Company Bank is or becomes subject to be terminated and to be of no further
force and effect at or prior to the Effective Time.
SECTION 6.8 TAX RETURNS. The Company shall prepare and file, as
approved or as may be directed by Acquiror, any tax returns with respect to the
Merger.
SECTION 6.9 COMPENSATION AND BENEFIT PLANS; EXISTING AGREEMENTS. Except
with respect to the qualified plans of Acquiror and as otherwise provided
herein, the Employees of the Company and its Subsidiaries shall be entitled to
participate in Acquiror's employee benefit plans in which similarly situated
employees of Acquiror participate, to the same extent as comparable employees of
Acquiror. As soon as administratively practicable after the Effective Time,
Acquiror shall permit the Employees to participate in Acquiror's group
hospitalization, medical, life and disability insurance plans, severance plan
and similar plans on the same terms and conditions as applicable to comparable
employees of Acquiror (including the waiver of pre-existing condition
prohibitions), giving effect to years of service with the Company and Company
Subsidiaries (to the extent the relevant Company Plans gave effect) as if such
service were with Acquiror, for purposes of eligibility and vesting, but not for
benefit accrual purposes (except as regards to vacation, severance and
short-term disability accruals). Acquiror shall permit Employees to participate
in the tax-qualified retirement plans of the Acquiror as soon as
administratively feasible following, giving effect to years of service with the
Company and Company Subsidiaries (to the extent the relevant Company Plans gave
effect) as if such service were with Acquiror for purposes of eligibility and
vesting, but not for benefit accrual purposes. Notwithstanding anything in this
Section 6.9 to the contrary, participation by the Employees in employee benefit
plans and programs of Acquiror with respect to which eligibility for employees
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of Acquiror to participate is at the discretion of Acquiror, shall be at the
sole discretion of Acquiror. Also notwithstanding anything in this Section 6.9
to the contrary, Acquiror shall have sole discretion with respect to the
determination as to whether to terminate, merge or continue any Company Plans;
provided, however, that Acquiror shall continue to maintain Company Plans (other
than stock-based or incentive plans) until the Employees are permitted to
participate in Acquiror's plans. At the Effective Time, Acquiror or an Acquiror
Subsidiary shall be substituted for the Company as the sponsoring employer under
those Company Plans with respect to which the Company or a Company Subsidiary is
a sponsoring employer immediately prior to the Effective Time, and shall assume
and be vested with all of the powers, rights, duties, obligations and
liabilities previously vested in the Company with respect to each such Company
Plan.
SECTION 6.10 EMPLOYMENT AND NONCOMPETITION AGREEMENTS. The Company
agrees to utilize its best efforts to cause its employees identified on Exhibit
6.10 to accept continued employment with the Acquiror and to enter into
employment agreements incorporating an agreement to refrain, following any
termination of employment, from competing with the Acquiror in the offering or
providing of financial or related services to markets or customers previously
served by the Company for a reasonable period following such termination.
ARTICLE VII - CONDITIONS OF MERGER
Conditions to Obligations of Each of the Parties
SECTION 7.1 REGULATORY APPROVALS. Except for necessary Bank Merger
approvals, the parties hereto shall have received all regulatory approvals,
consents and waivers required to consummate the transactions contemplated by
this Agreement from the appropriate regulatory agencies and governmental
entities, including the OTS, the FDIC, the FRB, the DFI, and any other state and
banking authorities, and each such approval shall remain in full force and
effect and all statutory waiting periods in connection therewith shall have
expired and such approvals and the transactions contemplated thereby shall not
have been contested by any federal or state governmental authority or any other
third party by formal proceeding; provided, however, that no approval, consent
or waiver shall be deemed to have been received if it shall include any
condition or requirement that, in the reasonable opinion of the Acquiror, would
so adversely affect the economic or business benefits of the transactions
contemplated by this Agreement to Acquiror so as to render inadvisable the
consummation of the Merger (all such approvals and expiration of applicable
waiting periods referred to as "Requisite Regulatory Approvals").
SECTION 7.2 FEDERAL TAX OPINION. The Company and Acquiror shall have
received from Xxxxxxx Xxxx & Xxxxxxxxx L.L.P., an opinion, dated the Effective
Time, in form and substance reasonably satisfactory to the Company and Acquiror,
to the effect that, on the basis of the facts, representations and assumptions
set forth in such opinion, (a) the Merger will for federal income tax purposes
constitute a reorganization within the meaning of Section 368, or any successor
thereto, of the Code and the Acquiror and Company are parties to a
reorganization within the meaning of Section 368(b) of the Code, and (b) that,
except with respect to holders of Company Common Stock who exercise dissenters'
rights and except for cash payments in lieu of
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a fractional share interest, (i) no gain or loss will be recognized by a holder
of Company Common Stock upon conversion in the Merger of Company Common Stock
into Acquiror Common Stock, (ii) the basis of Acquiror Common Stock to be
received in the Merger by a holder of Company Common Stock will be the same as
such holder's basis in the Company Common Stock exchanged therefor, and (iii)
the holding period of Acquiror Common Stock to be received in the Merger by a
holder of Company Common Stock will include the period during which such holder
held the Company Common Stock exchanged therefor, provided that such Company
Common Stock was held as a capital asset immediately prior to the consummation
of the Merger. In rendering such opinion, Xxxxxxx Xxxx & Friedrich may rely upon
representations contained in certificates of officers of Acquiror, the Company
and others.
SECTION 7.3 REGISTRATION STATEMENT. The Registration Statement filed by
Acquiror with the SEC with respect to the Acquiror Common Stock to be issued
pursuant to this Agreement and the Plan of Merger shall have become effective
and no stop order proceedings with respect thereto shall be pending or
threatened.
SECTION 7.4 ORDERS, DECREES AND JUDGMENTS. Consummation of the
transactions contemplated by this Agreement shall not violate any order, decree
or judgment of any court or governmental body having competent jurisdiction. No
order, injunction or decree issued by any court or agency of competent
jurisdiction or other legal restraint or prohibition preventing the consummation
of the Merger or any of the other transactions contemplated by this Agreement
shall be in effect. No statute, rule, regulation, order, injunction or decree
shall have been enacted, entered, promulgated or enforced by any governmental
entity which prohibits, materially restricts or makes illegal the consummation
of the Merger.
SECTION 7.5 NASDAQ LISTING. The shares of Acquiror Common Stock which
shall be issued to the shareholders of the Company upon consummation of the
Merger and pursuant to the Option Plans shall have been authorized for listing
on the NASDAQ National Market System, subject to official notice of issuance.
ARTICLE VIII - FURTHER CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
The obligation of the Company to consummate the transactions contemplated by
this Agreement is further subject to the satisfaction of the following
conditions:
SECTION 8.1 COMPLIANCE BY ACQUIROR. (a) All the terms, covenants and
conditions of this Agreement required to be complied with and satisfied by
Acquiror at or prior to the Effective Time shall have been duly complied with
and satisfied in all material respects, and (b) the representations and
warranties made by the Acquiror, as may be updated pursuant to Section 6.5
hereof, shall be true and correct in all material respects at and as of the
Effective Time, except for those specifically relating to a time or times other
than the Effective Time (which shall be true and correct in all material
respects at such time or times), with the same force and effect as if made at
and as of the Effective Time. The Company shall have received a certificate
signed on behalf of the Acquiror by the Chief Executive Officer and the Chief
Financial Officer to the foregoing effects.
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SECTION 8.2 OPINION OF COUNSEL. There shall have been delivered and
addressed to the Company an opinion of Xxxxxxx Xxxx & Xxxxxxxxx, in form and
substance reasonably satisfactory to counsel to the Company, dated as of the
Closing Date, containing such opinions as are customary in a transaction of this
kind.
SECTION 8.3 OFFICERS' CERTIFICATE. Acquiror shall deliver to the
Company a certificate signed by its President or any Senior Vice President and
by its Secretary or Assistant Secretary, dated the Closing Date, certifying to
his or her respective best knowledge and belief, that Acquiror has met and
complied with all conditions necessary to make this Agreement and the Plan of
Merger effective as to it.
SECTION 8.4 LITIGATION. Acquiror shall not be made a party to, or to
the knowledge of Acquiror threatened by, any actions, suits, proceedings,
litigation or legal proceedings which, in the reasonable opinion of the Company,
have or are likely to have a material adverse effect on the consolidated assets,
properties, business, operations or condition, financial or otherwise, of
Acquiror. No action, suit, proceeding or claim shall have been instituted, made
or threatened by any person relating to the Merger or the validity or propriety
of the transactions contemplated by this Agreement or the Plan of Merger which
would make consummation of the Merger inadvisable in the reasonable opinion of
the Company.
SECTION 8.5 ACQUIROR CHANGES. Acquiror shall not have suffered any
material adverse change in its business, financial condition, operating results
or prospects as determined in the reasonable opinion of the Company and its
outside counsel.
ARTICLE IX - FURTHER CONDITIONS TO THE OBLIGATIONS OF ACQUIROR
The obligation of Acquiror to consummate the transactions contemplated by this
Agreement is further subject to the satisfaction of the following conditions:
SECTION 9.1 COMPLIANCE BY THE COMPANY. (a) All the terms, covenants
and conditions of this Agreement required to be complied with and satisfied by
the Company at or prior to the Effective Time shall have been duly complied with
and satisfied, and (b) the representations and warranties made by the Company,
as may be updated pursuant to Section 6.5 hereof, shall be true and correct at
and as of the Effective Time, except for those specifically relating to a time
or times other than the Effective Time (which shall be true and correct at such
time or times), with the same force and effect as if made at and as of the
Effective Time. The Acquiror shall have received a certificate signed on behalf
of the Company by the Chief Executive Officer and the Chief Financial Officer to
the foregoing effects.
SECTION 9.2 ACCURACY OF FINANCIAL STATEMENTS. Except for matters
described on Schedule 2.11(b), the Company Financial Statements and Subsequent
Company Financial Statements heretofore or hereafter furnished to Acquiror shall
not be inaccurate in any material respect.
SECTION 9.3 NET WORTH. The Company's net worth, less the fees and
expenses incurred in connection with this Agreement, as shown by the sum of its
total shareholders' equity (unadjusted for any changes in the application of
accounting principals by the Company to the Option Plan prior to the Effective
Time) plus the allowance for loan losses, as of the end of the
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calendar quarter prior to the later of (x) the Shareholders' Meeting, or (y)
receipt of Requisite Regulatory Approvals, shall not be less than such amount as
set forth in the Company's Consolidated Statement of Financial Condition at
December 31, 2000. The Company shall deliver to Acquiror a certificate signed by
its Chief Financial Officer, dated the Closing Date, certifying to such effect.
SECTION 9.4 SUFFICIENCY OF DOCUMENTS, PROCEEDINGS. All documents
delivered by and proceedings of the Company in connection with the transactions
contemplated by this Agreement and the Plan of Merger shall be reasonably
satisfactory to Acquiror.
SECTION 9.5 OPINION OF COUNSEL. There shall have been delivered and
addressed to Acquiror an opinion of Xxxxx, Xxxx & Xxxxxxx, A Limited Liability
S.C., legal counsel to the Company, in form and substance reasonably
satisfactory to Acquiror, dated the Closing Date, containing such opinions as
are customary in a transaction of this kind.
SECTION 9.6 OFFICERS' CERTIFICATE. Company shall deliver to the
Acquiror a certificate signed by its President or any Senior Vice President and
by its Secretary or Assistant Secretary, dated the Closing Date, certifying to
his or her respective best knowledge and belief, that the Company has met and
complied with all conditions necessary to make this Agreement and the Plan of
Merger effective as to it.
SECTION 9.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. As of the Closing
Date, there shall have been no "Adverse Change in the Company" (as defined
below) from that which was represented and warranted on the date of this
Agreement pursuant to this Agreement and the Schedules provided on the date of
this Agreement, it being understood that no update provided pursuant to any
other Section of this Agreement shall constitute a waiver or other consent to
any Adverse Change in the Company. For purposes of this Agreement, an "Adverse
Change in the Company" shall mean an effect or effects or change or changes
which have occurred or may occur between the date of this Agreement and the
Effective Time and result in or cause (a) any material adverse change in the
business, financial condition, operating results or prospects of the Company and
the Company Subsidiaries; or (b) the existence of any pending or threatened
litigation or administrative action which (i) creates any reasonable possibility
that the Company or the Company Subsidiaries may incur a material loss that has
not been reserved against; (ii) challenges any portion of the Merger and which,
in the reasonable opinion of Acquiror, would be likely to enjoin consummation,
or result in rescission, of any part of the Merger; or (iii) Acquiror's board of
directors reasonably determines, in the exercise of its fiduciary duty, would be
so materially adverse as to render consummation of the Merger adverse to the
best interests of Acquiror's shareholders.
SECTION 9.8 LITIGATION. Company shall not be made a party to, or to the
knowledge of Company threatened by, any actions, suits, proceedings, litigation
or legal proceedings which, in the reasonable opinion of the Acquiror, have or
are likely to result in an Adverse Change in the Company. No action, suit,
proceeding or claim shall have been instituted, made or threatened by any person
relating to the Merger or the validity or propriety of the transactions
contemplated by this Agreement or the Plan of Merger which would make
consummation of the Merger inadvisable in the reasonable opinion of the
Acquiror.
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SECTION 9.9 AGREEMENTS OF AFFILIATES. As soon as practicable after the
date of mailing of the Proxy Statement/Prospectus, the Company shall deliver to
Acquiror a letter identifying all persons who the Company believes to be, at the
time this Agreement is submitted to a vote of the shareholders of the Company,
"affiliates" of the Company for purposes of Rule 145 under the Securities Act.
The Company shall use its best efforts to cause each person who is identified as
an "affiliate" in the letter referred to above to deliver to Acquiror prior to
the Effective Time a written agreement, in substantially the form attached
hereto as Exhibit 9.9, providing that each such person will agree not to sell,
pledge, transfer or otherwise dispose of the shares of Acquiror Common Stock to
be received by such person in the Merger except in compliance with the
applicable provisions of the Securities Act. Prior to the Effective Time, the
Company shall amend and supplement such letter and use its best efforts to cause
each additional person who is identified as an "affiliate" to execute a written
agreement in substantially the form of Exhibit 9.9.
SECTION 9.10 BANK MERGER AGREEMENT. The Bank Merger shall have been
duly authorized and approved by the Company-Bank and the other terms and
conditions of the Bank Merger, except for receipt of necessary regulatory
approvals (which may have been obtained, but receipt of which as of the
Effective Time of the Merger shall not be required) shall have been satisfied so
as to permit the Bank Merger to be consummated as contemplated thereby.
SECTION 9.11 CONSENTS UNDER AGREEMENTS. The consent, approval or waiver
of each person whose consent or approval shall be required in order to permit
the succession by the Surviving Corporation pursuant to the Merger or by the
Acquiror - Bank pursuant to the Bank Merger to any obligation, right or interest
of the Company or any of its Subsidiaries under any loan or credit agreement,
note, mortgage, indenture, lease, license or other agreement or instrument shall
have been obtained, except where the failure to obtain such consent, approval or
waiver would not materially adversely affect the economic or business benefits
of the transactions contemplated by this Agreement to Acquiror.
SECTION 9.12 ACCOUNTANT'S LETTER. The Company shall have caused to be
delivered to Acquiror letters from the Company's independent public accountants,
Xxxxxx, Xxxxxxx & Xxxxxxxxx LLP dated the date on which the Registration
Statement shall become effective, and dated the Effective Time, and addressed to
Acquiror and the Company, with respect to the Company's consolidated financial
position and results of operation, and which describes procedures which shall be
consistent with applicable professional standards for letters delivered by
independent accountants in connection with comparable transactions.
SECTION 9.13 APPROVAL BY AFFIRMATIVE VOTE OF SHAREHOLDERS; EXERCISE OF
DISSENTERS' RIGHTS. This Agreement and the Plan of Merger shall have been duly
approved, confirmed and ratified by the requisite majority vote of the
shareholders of the Company. In addition, there shall not be more than 20% of
the total shares of Company Common Stock issued and outstanding that have
properly exercised their dissenters' rights as of the Effective Time.
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ARTICLE X - TERMINATION AND AMENDMENT
SECTION 10.1 Termination. This Agreement may be terminated and the Plan
of Merger abandoned at any time prior to the filing of the Articles of Merger
(whether before or after approval of this Agreement and the Plan of Merger by
the shareholders of the Company):
(a) by written agreement between Acquiror and the Company authorized by
a majority of the entire Board of Directors of each;
(b) by Acquiror, provided Acquiror has used its best efforts to ensure
that all of the conditions set forth in Articles VII and VIII have been
fulfilled, if any of the conditions set forth in Articles Seven or Nine hereof
shall not have been fulfilled and shall not have been waived or shall have
become impossible of fulfillment;
(c) by the Company, provided the Company has used its best efforts to
ensure that all of the conditions set forth in Articles VII and IX have been
fulfilled, if any of the conditions set forth in Articles Seven or Eight hereof
shall not have been fulfilled and shall not have been waived or shall have
become impossible of fulfillment;
(d) by either Acquiror or the Company if the Merger is not consummated
on or before January 31, 2002, unless the failure to consummate shall be due to
the failure of the party seeking to terminate to perform or observe the
covenants and agreements of such party set forth herein;
(e) by either Acquiror or the Company upon written notice to the other
party (i) 90 days after the date on which any request for application shall have
been withdrawn at the request or recommendation of the regulatory agency or
governmental entity which must grant a Requisite Regulatory Approval, or a
Requisite Regulatory Approval shall have been denied, unless within the 90-day
period following such denial or withdrawal, a petition for rehearing or an
amended application has been filed with the applicable regulatory agency or
governmental entity, provided, however, that no party shall have the right to
terminate this Agreement pursuant to this Section 10.1(e) if such denial or
request or recommendation for withdrawal shall be due to the failure of the
party seeking to terminate this Agreement to perform or observe the covenants
and agreements of such party set forth herein; or (ii) if any court, regulatory
agency or governmental entity of competent jurisdiction shall have issued a
final nonappealable order enjoining or otherwise prohibiting the consummation of
any of the transactions contemplated by this Agreement;
(f) by Acquiror if notice of changes to any of the Company's Disclosure
Schedules is provided by the Company, and Acquiror reasonably determines that
such changes would constitute an Adverse Change in the Company as defined in
Section 9.7;
(g) by the Company if notice of changes to any of Acquiror's Disclosure
Schedules is provided by Acquiror and the Company reasonably determines that
such changes would have a material adverse effect upon the business of Acquiror
and its subsidiaries if the transactions contemplated by this Agreement were
consummated.
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(h) by the Company upon three days' prior written notice to Acquiror
if, as a result of an Acquisition Proposal (as defined in Section 4.7) by a
party other than the Acquiror or its affiliates, the Board of Directors of the
Company determines in good faith that its failure to accept such takeover
proposal could reasonably be deemed to constitute a breach of its fiduciary
obligations under applicable law after consultation with and receipt of advice
from outside counsel; provided, however, that, prior to any such termination,
the Company (after disclosing to the Acquiror the identity of the party making
the takeover proposal and the financial terms thereof) shall, and shall cause
its financial and legal advisors to, negotiate with the Acquiror to make such
adjustments in the terms and conditions of this Agreement as would enable the
Company to proceed with the transactions contemplated herein on such adjusted
terms.
SECTION 10.2 EFFECT OF TERMINATION. In the event this Agreement and the
Plan of Merger are terminated as provided herein, this Agreement and the Plan of
Merger shall become void and of no further force and effect without any
liability on the part of the terminating party or parties or their respective
shareholders, directors or officers; provided, however, that Sections 4.4, 5.8,
10.2, 10.3, 12.5 and 12.11 of this Agreement shall survive any such termination
and that no party shall be relieved or released from any liability or damages
arising out of its willful breach of any provision of this Agreement. In the
event of termination of this Agreement, written notice thereof and the reasons
therefor shall be given to the other parties by the terminating party.
SECTION 10.3 FEE.
(a) The Company hereby agrees to pay Acquiror and Acquiror shall be
entitled to receipt of a fee (the "Fee") of $950,000 following the signing by
the Company of a definitive agreement in connection with an Acquisition Proposal
received prior to termination of this Agreement pursuant to Section 10.1(h), or
the occurrence of a Company Purchase Event (as defined below). Such payment
shall be made in immediately available funds within five business days after
delivery of notice of entitlement by Acquiror.
(b) The term "Company Purchase Event" shall mean:
(i) The Company or any Company Subsidiary agreeing orally or in
writing, to enter into an agreement relating to any of the
following transactions, occurring after the date hereof and
before the Effective Time or occurring within 12 months of
the date of termination of this Agreement pursuant to
Article Ten (other than pursuant to Section 10.1(a), (c),
(d), (e), (f) or (g)):
(A) the acquisition by any person, other than Acquiror or
any of its subsidiaries, alone or together with such
person's affiliates and associates or any group, of
beneficial ownership of 50% or more of the Company
Common Stock (for purposes of this Subsection (b)(i),
the terms "group" and "beneficial ownership" shall be
as defined in Section 13(d) of the Exchange Act and
regulations promulgated thereunder as interpreted
thereunder);
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(B) a merger, consolidation, share exchange, business
combination or any other similar transaction involving
the Company or the Company-Bank;
(C) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition of 50% or more of the assets of
the Company or the Company-Bank, in a single
transaction or series of transactions; or
(ii) Termination by the Company of this Agreement pursuant to
Section 10.1(h); or
(iii) Failure by the Board of Directors of the Company to
recommend approval of the Merger and the transactions
contemplated thereby to their shareholders, unless Acquiror
has materially breached its representations, warranties or
covenants provided herein and has not attempted to cure such
breach to the reasonable satisfaction of the Company.
(c) The Company shall notify Acquiror promptly in writing of its
knowledge of the occurrence of any Company Purchase Event; provided, however,
that the giving of such notice by the Company shall not be a condition to the
right of Acquiror to the Fee.
ARTICLE XI - MODIFICATIONS, AMENDMENTS AND WAIVER
SECTION 11.1 MODIFICATIONS, AMENDMENTS AND WAIVER. At any time prior to
the Effective Time and before or after shareholder approval of this Agreement
and the Plan of Merger by the Company's shareholders, the Company and Acquiror
may (a) by written agreement executed by a duly authorized officer of each,
extend the time for the performance of any of the obligations or other acts of
the parties hereto, (b) by written notice executed by a duly authorized officer
of the party adversely affected waive compliance in whole or in part with any of
the covenants, agreements or conditions contained in this Agreement or the Plan
of Merger, or (c) by written agreement executed by a duly authorized officer of
each, make any other amendment or modification of this Agreement or the Plan of
Merger; provided, however, that, after Company shareholder approval of this
Agreement, no such extension, waiver, amendment or modification shall adversely
affect the amount of the consideration to be received in the Merger by the
shareholders of the Company. Any such extension, waiver, amendment or
modification shall be conclusively evidenced by the execution and delivery of
the same by the President or any Senior Vice President in the case of Acquiror,
or the President or Chairman in the case of the Company, attested to by the
Secretary or Assistant Secretary of each party. The failure of any party at any
time or times to require performance of any provision hereof shall in no manner
affect such party's right at a later time to enforce the same. No waiver by any
party of any condition or of the breach of any term contained in this Agreement
or the Plan of Merger, whether by conduct or otherwise, in any one or more
instances shall be deemed to be or construed as a further or continuing waiver
of any such condition or a waiver of any other condition or of the breach of any
other term of this Agreement or the Plan of Merger.
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ARTICLE XII - MISCELLANEOUS
SECTION 12.1 CLOSING. A closing (the "Closing") of the transactions
provided for herein shall take place on a date chosen by Acquiror, which shall
be no later than 15 days after all approvals required hereby have been received
and all applicable waiting periods have expired, or on such later day as the
parties may agree, at the offices of Xxxxxxx Xxxx & Xxxxxxxxx in Milwaukee,
Wisconsin. In the event the Closing does not take place on the date referred to
in the preceding sentence because any condition to the obligations of any party
under this Agreement and the Plan of Merger is not met on that date, the other
parties to this Agreement may postpone the Closing to any designated subsequent
business day by giving the nonperforming party to this Agreement notice of the
postponed date. At the Closing, the parties will exchange the certificates,
opinions and other documents called for herein. Subject to the terms and
conditions hereof, consummation of the Merger in the manner described herein
shall be accomplished as soon as practicable after the exchange of the documents
at the Closing has been completed.
SECTION 12.2 ARTICLES OF MERGER. Subject to the provisions of this
Agreement, at Closing, as herein defined, the Articles of Merger shall be
signed, verified and affirmed as required by the WBCL and duly filed with the
DFI.
SECTION 12.3 FURTHER ACTS. Each of the parties (a) shall perform such
further acts and execute such further documents as may be reasonably required to
effect the Merger (including, without limitation, the certification, execution,
acknowledgement and filing of the Plan of Merger) and to effect the Bank Merger,
and (b) shall use all best efforts to satisfy or obtain the satisfaction of the
conditions set forth in Articles VII, VIII and IX hereof.
SECTION 12.4 NOTICES. All documents, notices, requests, demands and
other communications that are required or permitted to be delivered or given
under this Agreement and the Plan of Merger shall be in writing and shall be
deemed to have been duly delivered or given upon the delivery or mailing
thereof, as the case may be, if delivered personally or sent by registered or
certified mail, return receipt requested, postage prepaid:
(a) if to the Company, to:
Xxxxx Xxxxxxxxx
Chairman, Board of Directors
American Community Bankshares, Inc.
000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxx 00000
with a copy to:
Xxxxxx X. Xxxxxx
Xxxxx, Xxxx & Xxxxxxx, A Limited Liability, S.C.
000 Xxxxx Xxxxxx #000
X.X. Xxx 0000
Xxxxxx, XX 00000
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(b) and if to Acquiror to:
Xxxx X. Xxxxx
President and Chief Executive Officer
First Federal Capital Corp.
000 Xxxxx Xxxxxx
Xx Xxxxxx, Xxxxxxxxx 00000
with a copy to:
W. Xxxxxxx Xxxxxxx
Xxxxxxx Xxxx & Friedrich, LLP
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
or to such other person or address as a party hereto shall specify hereunder.
SECTION 12.5 EXPENSES. Unless otherwise specifically referred herein,
the Company and Acquiror each shall pay all of their own fees and expenses
incident to the negotiation, preparation, execution and performance of this
Agreement, the Bank Merger Agreement and the Shareholders Meeting, including the
fees and expenses of their own counsel, accountants, investment bankers and
other experts, whether or not the transactions contemplated by this Agreement
are consummated; provided, however, in the event this Agreement is terminated by
either party hereto pursuant to Sections 10.1(b) (as a result of the Company's
failure to satisfy the conditions of Article IX), (c) (as a result of the
Acquiror's failure to satisfy the conditions of Article VIII or Acquiror's
failure to use best efforts to insure all of the conditions of Article VII have
been fulfilled), (f) or (h), or in the event the Company is obligated to pay the
Acquiror the Fee pursuant to Section 10.2, the terminating party shall be
entitled to recover from the other party (or the Acquiror from the Company in
the event of a termination pursuant to section 10.1(i)) the actual fees and
expenses incurred by the terminating party incident hereto provided, however,
that in no event will Acquiror be required to reimburse the Company for its fees
and expenses in excess of $100,000, nor will the Company be required to
reimburse Acquiror for its fees and expenses in excess of $100,000.
SECTION 12.6 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations, warranties and agreements in this Agreement or in any
instrument delivered by the Company or the Acquiror pursuant to or in connection
with this Agreement shall expire at the Effective Time, except that the
agreements of the parties which by their terms are to be performed in whole or
in part after the Effective Time shall survive the Effective Time, shall be
enforceable only by the parties hereto, but shall not create any third party
beneficiary rights except with respect to the obligations of the Acquiror set
forth in Sections 5.6, 5.7 and 5.9.
SECTION 12.7 ENTIRE AGREEMENT. This Agreement (including the Acquiror
and Company Disclosure Schedules attached hereto and as subsequently may be
amended pursuant to the terms hereof), the Plan of Merger and the Bank Merger
constitute the entire agreement and understanding of the parties with respect to
the transactions contemplated hereby and thereby, supersede any and all prior
agreements and understandings relating to the subject matter hereof
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and thereof and may not be modified, amended or terminated except in writing
signed by each of the parties hereto.
SECTION 12.8 GOVERNING LAW. This Agreement, the Plan of Merger and the
Bank Merger Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Wisconsin as such laws are applied to
contracts entered into to be performed entirely within Wisconsin.
SECTION 12.9 BINDING EFFECT AND PARTIES IN INTEREST. This Agreement and
the Plan of Merger may not be assigned by any party hereto without the written
consent of the other parties. This Agreement and the Plan of Merger shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Nothing in this Agreement,
expressed or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement and the
Plan of Merger otherwise than as specifically provided herein.
SECTION 12.10 CAPTIONS. The caption headings of the Articles, Sections
and subsections of this Agreement are for convenience of reference only and are
not intended to be, and should not be construed as, a part of this Agreement or
the Plan of Merger.
SECTION 12.11 RELIEF DUE TO BREACH.
(a) Notwithstanding anything in this Agreement to the contrary and
except as provided below, the Company and its Subsidiaries and Acquiror and its
Subsidiaries agree that irreparable damage would occur in the event that the
provisions of this Agreement were not performed in accordance with its specific
terms or was otherwise breached. It is accordingly agreed that each of the
Acquiror and the Company shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.
(b) If this Agreement is terminated by reason of a willful breach by
the Company or any of its Subsidiaries, then the Company or any of its
Subsidiaries shall be liable to the Acquiror for all actual, consequential and
incidental damages suffered by the Acquiror arising from such willful breach.
(c) If this Agreement is terminated by reason of a willful breach by
Acquiror or any of its subsidiaries, then Acquiror shall be liable to the
Company for all actual, consequential and incidental damages suffered by the
Company arising from such willful breach.
SECTION 12.12 SEVERABILITY. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
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57
SECTION 12.13 PUBLICITY. Except as otherwise required by law, so long
as this Agreement is in effect, neither Acquiror nor the Company shall, or shall
permit any of its Subsidiaries to, issue or cause the publication of any press
release or other written statement for general circulation with respect to the
transactions contemplated by this Agreement, without the consent of the other
party, which consent shall not be unreasonably withheld.
SECTION 12.14 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original
instrument and all of which together shall constitute a single agreement.
IN WITNESS WHEREOF, the Acquiror and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
FIRST FEDERAL CAPITAL CORP.
Dated: ___________, 2001 By: _______________________________
Xxxx X. Xxxxx, President and Chief
Executive Officer
Attest: _____________________________
AMERICAN COMMUNITY BANKSHARES, INC.
Dated: ___________, 2001 By: _______________________________
Xxxxx Xxxxxxxxx, Chairman of the
Board of Directors
Attest: _____________________________
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COMPANY DISCLOSURE SCHEDULE
Section 2.1(c) Listing of Subsidiaries
Section 2.7 Environmental Matters
Section 2.8 Contracts and Agreements
Section 2.11(b) Financial Statements Exception
Section 2.12 Disclosure of Certain Changes or Events
Section 2.13 Litigation Disclosure
Section 2.14(a) Disclosure of Benefit Plans
Section 2.14(b) Disclosure of Severance, Separation, Termination Benefits
Section 2.14(c) Disclosure of Any Non-Compliance of Company Plans with Applicable Law
Section 2.14(d) Disclosure of Adverse Effect Upon Favorable Determination Letter
Section 2.14(e) Disclosure of Prohibited Transactions
Section 2.14(g) Listing of Outstanding Stock Options
Section 2.14(h) Disclosure of Employment Contracts
Section 2.16 Disclosure of Tax Issues
Section 2.17 Identification of Real Property Owned, Controlled, or Leased
Section 2.18 Disclosure of Broker/Financial Advisor
Section 2.21 Disclosure of Liabilities or Obligations Reflected on Company Financial Statements.
Section 2.22 List of Shareholders of Company
Section 2.24 Claims or Offsets Relating to Loans.
Section 2.25 Listing of Loans in Excess of $250,000
Section 2.26 Listing of Mortgage-Backed and Related Securities Held for Sale or Investment.
Section 2.29 Disclosure of Insider Interests
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Section 2.31 Listing of Insurance Policies and Bonds
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ACQUIROR DISCLOSURE SCHEDULE
Section 3.5 Disclosure of Possible Violations Arising from Execution of Agreement
Section 3.6 Disclosure of Any Additional Consents or Approvals Required
Section 3.7 Litigation Disclosure
Section 3.8 Disclosure of Employee Benefit Plans
Section 3.9 Disclosure of Environmental Issues
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EXHIBIT 4.9
_______________, 2001
First Federal Capital Corp.
000 Xxxxx Xxxxxx
Xx Xxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
On May ___, 2001, First Federal Capital Corp., a Wisconsin corporation
(the "Acquiror"), and American Community Bankshares, Inc., a Wisconsin
corporation ("Company"), entered into an Agreement and Plan of Merger (the
"Agreement") providing, among other things, for the merger of the Company with
and into Acquiror (the "Merger"). The undersigned is a shareholder of the
Company (a "Shareholder") and a director or an executive officer of the Company,
and pursuant to Section 4.9 of the Agreement, hereby enters into this voting
agreement (the "Voting Agreement") with respect to shares of common stock, no
par value per share, of the Company held of record or shares as to which he has
sole or shared voting power ("Company Common Stock").
The Shareholder understands that Acquiror has undertaken and will
continue to undertake substantial expenses in connection with the Agreement and
the actions necessary to consummate the Merger and the other transactions
contemplated thereby. In consideration of, and as a condition to, Acquiror
consummating the transactions contemplated by the Agreement, and in
consideration of the expenses incurred and to be incurred by Acquiror in
connection therewith, the Shareholder and Acquiror agree as follows:
1. The Shareholder agrees to be present (in person or by proxy) or to
use his best efforts to cause the holder of record on the applicable record date
(the "Record Holder") to be present (in person or by proxy) at all meetings of
shareholders of the Company called to vote for approval of the Merger or any
transactions contemplated by the Agreement so that all of the shares of Company
Common Stock then owned of record or beneficially by him or her will be counted
for the purpose of determining the presence of a quorum at such meetings, and to
vote or cause the Record Holder to vote all such shares in favor of approval and
adoption of the Agreement and the transactions contemplated thereby.
2. The Shareholder agrees not to vote or execute or to cause the Record
Holder to vote or execute any written consent to rescind or amend in any manner
any prior vote or written consent to approve or adopt the Agreement and the
transactions contemplated thereby.
3. The Shareholder agrees to use his or her best efforts to cause the
Merger and the other transactions contemplated by the Agreement to be
consummated.
4. Prior to the Effective Time (as defined in Section 1.02 of the
Agreement or termination of this Agreement, as the case may be), the Shareholder
will not sell, assign, transfer or otherwise dispose of (including, without
limitation, by the creation of a Lien (as defined in paragraph 8 below)), or
permit to be sold, assigned, transferred or otherwise disposed of, any
62
shares of Company Common Stock owned of record or beneficially by such
Shareholder, whether such shares of Company Common Stock are owned of record or
beneficially by such Shareholder on the date of this Voting Agreement or are
subsequently acquired, whether pursuant to the exercise of stock options or
otherwise, except (i) for transfers by will or by operation of law (in which
case this Voting Agreement shall bind the transferee); (ii) for sales,
assignments, transfers or other dispositions necessitated by hardship with the
prior written consent of the Acquiror; (iii) for sales or transfers to the
Company in exercise of Company stock options, provided, however, that shares of
Company Common Stock issued in exercise of such options shall be subject to the
terms of this Voting Agreement; or (iv) as Acquiror may otherwise agree in
writing.
5. Shareholder will vote, or use his best efforts to cause the Record
Holder to vote, the shares of Company Common Stock against any action, proposal
or agreement that could reasonably be expected to result in a breach in any
material respect of any covenant, representation or warranty or any other
obligation of the Company under the Agreement, or which could reasonably be
expected to result in any of the conditions to the Company's obligations under
the Agreement not being fulfilled and will vote, or use his best efforts to
cause the Record Holder to vote, such shares of Company Common Stock against any
Acquisition Proposal (as defined below).
6. The Shareholder will not, directly or indirectly, initiate, solicit
or knowingly encourage (including the furnishing of nonpublic information) or
take any action to knowingly facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
Acquisition proposal (as defined below). The Shareholder shall notify Acquiror
orally (within one business day) and in writing (as promptly as practicable) of
all relevant details relating to all inquiries and proposals which he or she may
receive relating to any of such matters and if such inquiry or proposal is in
writing the Shareholder shall deliver a copy of such inquiry or proposal
promptly to Acquiror.
7. For purposes of this Voting Agreement, "Acquisition Proposal" shall
mean any of the following, or any proposal of any of the following, involving
the Company (other than the transactions contemplated under the Agreement): (a)
any merger, consolidation, share exchange, business combination or other similar
transaction; (b) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of 10% or more of the assets of the Company and its Subsidiaries,
taken as a whole, in a single transaction or series of transactions; (c) any
tender offer or exchange offer for 10% or more of the outstanding shares of
capital stock of the Company or the filing of a registration statement under the
Securities Act of 1933, as amended, in connection therewith; or (d) any public
announcement of a proposal, plan or intention to do any of the foregoing or any
agreement to engage in any of the foregoing.
8. The Shareholder represents that (i) the Shareholder has the complete
and unrestricted power and the unqualified right to enter into and perform the
terms of the Voting Agreement; (ii) assuming the due authorization, execution
and delivery by the Acquiror and the Company, this Voting Agreement constitutes
a valid and binding agreement with respect to such shareholder, enforceable
against such Shareholder in accordance with its terms except that (a) the
enforceability hereof may be subject to applicable bankruptcy, insolvency or
other similar laws, now or hereinafter in effect affecting creditors' rights
generally and (b) the availability of the remedy of specific performance or
injunctive or other forms of equitable relief may be subject to
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equitable defenses and would be subject to the discretion of the court before
which any proceeding therefor may be brought; (iii) that with respect to such
shares such Shareholder owns of record the shares of Company Common Stock are
free and clear of any liens, claims, charges or other encumbrances and
restrictions of any kind whatsoever ("Liens") except as noted below, and (iv)
that such shareholder has sole and unrestricted voting power or shared voting
power with respect to such shares of Company Common Stock registered as follows:
------------------------------
------------------------------
------------------------------
------------------------------
9. The Shareholder acknowledges receipt and review of a copy of the
Agreement. Notwithstanding any other provision of this Voting Agreement, the
provisions of this Voting Agreement shall not prohibit or restrain the
Shareholder from complying with his fiduciary obligations as a director or
executive officer of the Company.
10. Notwithstanding anything herein to the contrary, the agreements
contained herein shall terminate upon the earlier of (i) consummation of the
Merger; or (ii) any termination of the Agreement in accordance with Article X
thereof.
11. Notices may be provided to Acquiror in the manner specified in
Section 12.4 of the Agreement.
12. This Voting Agreement is to be governed by the laws of the State of
Wisconsin, without giving effect to the principles of conflicts of laws thereof.
If any provision hereof is deemed unenforceable, the enforceability of the other
provisions shall not be affected.
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of
the date first above written.
Very truly yours,
------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Accepted and agreed to as of
the date first above written.
FIRST FEDERAL CAPITAL CORP.
By:
----------------------------------
Xxxxxxxx X. Xxxxx, Secretary
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EXHIBIT 6.10
The Company shall use its best efforts to cause each of the following
employees to enter into employment agreements with the Acquiror (and/or
agreements to refrain from competition with Acquiror in the event of a
termination of employment):
Xxxxxxx Xxxxx
Xxxxx Xxxxx
Xxxxx Stilfer
Xxxxxx Xxxxxx
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EXHIBIT 9.9
_________________, 2001
First Federal Capital Corp.
000 Xxxxx Xxxxxx
Xx Xxxxxx, Xxxxxxxxx 00000
Gentlemen:
I have been advised that I may be deemed an "affiliate" of American
Community Bankshares, Inc., a Wisconsin corporation (the "Company"), as the term
"affiliate" is defined for purposes of paragraphs (c) and (d) of Rule 145 of the
Rules and Regulations of the Securities and Exchange Commission ("SEC") under
the Securities Act of 1933, as amended (the "Securities Act"), and may be deemed
an "affiliate" of the Company at the time of the merger (the "Merger") of the
Company with and into First Federal Capital Corp., a Wisconsin corporation (the
"Acquiror"), in accordance with the Agreement and Plan of Reorganization, dated
_____________, 2001, by and between the Company and the Acquiror (the
"Agreement"). Pursuant to the terms of the Merger, I will receive shares of
Acquiror common stock, $0.10 par value per share ("Acquiror Common Stock") in
exchange for each share of Company common stock, no par value per share
("Company Common Stock") held by me.
I represent, warrant and covenant to Acquiror that in the event I
acquire any shares of Acquiror Common Stock as a result of the Merger:
1. I agree that I will not make any sale, transfer or other disposition
of such shares of Acquiror Common Stock in violation of the Securities Act or
the Rules and Regulations promulgated thereunder by the SEC.
2. I have carefully read this letter and the Agreement, and discussed
the requirements relating to, and other applicable limitations upon, the sale,
transfer or other disposition of shares of Acquiror Common Stock acquired by me
as a result of the Merger to the extent I felt necessary with my counsel or
counsel for the Company.
3. I have been advised that the shares of Acquiror Common Stock to be
issued pursuant to the Merger have been registered under the Securities Act by
the Acquiror through the filing of a Registration Statement on Form S-4 with the
SEC and that such registration does not apply to any distribution by me of
shares of Acquiror Common Stock received by me in the Merger. I also have been
advised that, since at the Effective Time of the Merger (as defined in Section
1.2 of the Agreement), I may be deemed to have been an "affiliate" of the
Company, any offering or sale by me of any of the shares of Acquiror Common
Stock acquired in the Merger will, under current law, require either (i) further
registration under the Securities Act of the shares of Acquiror Common Stock to
be sold; (ii) compliance with the volume and other applicable limitations of
paragraph (d) of Rule 145 (which incorporates by reference paragraphs (c), (e),
(f) and (g) of Rule 144) promulgated under the Securities Act; or (iii) the
availability of some other exemption from registration with respect to any such
proposed sale, transfer or other disposition by me which shall include, in the
case of a distribution under some other exemption from registration, an opinion
of counsel, which opinion of counsel shall be reasonably satisfactory to counsel
for Acquiror, or a "no-action" letter obtained by me from the staff of the SEC,
that such exemption is available. In addition, I have been advised that any
transferee in a private offering or other similar disposition will be subject to
the same limitations as those imposed on me. With respect to a transfer under
(ii) above, such transfer will be viewed by you as in conformity with Rule 145
upon my delivery to you or your transfer agent of a broker's letter in customary
form stating that the requirements of Rule 145(d)(1) have been met.
4. I understand that Acquiror is under no obligation to register shares
of Acquiror Common Stock that I may wish to sell, transfer or otherwise dispose
of or to take any other action necessary in order to make compliance with an
exemption from registration available.
5. I also understand that if I rely on the exemption from the
registration provisions contained in Section 4 of the Securities Act (other than
as provided in Rules 144 or 145), I will obtain and deliver to Acquiror a copy
of a letter from any prospective transferee which will contain (a)
representations reasonably satisfactory to
66
Acquiror as to the nondistributive intent, sophistication, ability to bear risk
and access to information of such transferee; (b) an acknowledgement of the
restrictions on transfer of the Acquiror Common Stock proposed for transfer; and
(c) an assumption of the obligations of the undersigned under this paragraph 5.
6. I also understand that to enforce the foregoing commitments, stop
transfer instructions will be given to Acquiror's transfer agent with respect to
the Acquiror Common Stock and there will be placed on the certificates
representing shares of Acquiror Common Stock issued to me in the Merger, or any
substitutions therefor, a legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145, PROMULGATED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), APPLIES. THE SHARES REPRESENTED BY THIS
CERTIFICATE ONLY MAY BE TRANSFERRED IN ACCORDANCE WITH THE TERMS OF AN
AGREEMENT DATED ______________, 2001, BETWEEN THE REGISTERED HOLDER
HEREOF AND FIRST FEDERAL CAPITAL CORP., A COPY OF WHICH AGREEMENT IS ON
FILE AT THE PRINCIPAL OFFICES OF FIRST FEDERAL CAPITAL CORP.
It is understood and agreed the legend set forth in this paragraph
shall be removed by the delivery of substitute certificates without such legend
if such legend is not required for purposes of the Securities Act. It is
understood and agreed that such legend and the stop orders referred to in this
Paragraph 6 will be removed if (i) one year shall have elapsed from the date the
undersigned acquired the shares of Acquiror Common Stock in the Merger and the
provisions of Rule 145(d)(2) are then available to the undersigned, (ii) two
years shall have elapsed from the date the undersigned has acquired the shares
of Acquiror Common Stock in the Merger and the provisions of Rule 145(d)(3) are
then available to the undersigned, or (iii) Acquiror has received either an
opinion of counsel, which opinion of counsel shall be reasonably satisfactory to
Acquiror, or a "no-action" letter obtained by the undersigned from the staff of
the SEC, to the effect that the restrictions imposed by Rule 145 under the
Securities Act no longer apply to the undersigned.
Very truly yours,
Accepted and agreed to as of
the date first above written.
___________________________________ FIRST FEDERAL CAPITAL CORP.
Signature
___________________________________ By:________________________________
Print Name Xxxxxxxx X. Xxxxx, Secretary
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