AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
ADVANTAGE BANCORP, INC.
AND
XXXXXXXX & XXXXXX CORPORATION
November 3, 1997
TABLE OF CONTENTS
Page
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 Directors and Officers . . . . . . . . . . . . . 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 Stock Transfer Books . . . . . . . . . . . . . . 5
SECTION 1.10 Company Common Stock . . . . . . . . . . . . . . 5
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF THE SELLER . . . . . . 6
SECTION 2.1 Organization and Qualification; Subsidiaries . . 6
SECTION 2.2 Articles of Incorporation and By-Laws . . . . . . 7
SECTION 2.3 Capitalization . . . . . . . . . . . . . . . . . 7
SECTION 2.4 Authority . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.5 No Conflict; Required Filings and Consents . . . 8
SECTION 2.6 Compliance; Permits . . . . . . . . . . . . . . . 9
SECTION 2.7 Securities and Banking Reports; Financial
Statements . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.8 Absence of Certain Changes or Events . . . . . . 10
SECTION 2.9 Absence of Litigation . . . . . . . . . . . . . . 11
SECTION 2.10 Employee Benefit Plans . . . . . . . . . . . . . 11
SECTION 2.11 Registration Statement; Proxy
Statement/Prospectus . . . . . . . . . . . . . . . . . . . 13
SECTION 2.12 Title to Property . . . . . . . . . . . . . . . . 14
SECTION 2.13 Environmental Matters . . . . . . . . . . . . . . 14
SECTION 2.14 Absence of Agreements . . . . . . . . . . . . . . 15
SECTION 2.15 Taxes . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.16 Insurance . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.17 Brokers . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.18 Tax Matters and Pooling . . . . . . . . . . . . . 16
SECTION 2.19 Material Adverse Effect . . . . . . . . . . . . . 16
SECTION 2.20 Material Contracts . . . . . . . . . . . . . . . 16
SECTION 2.21 Opinion of Financial Advisor . . . . . . . . . . 17
SECTION 2.22 Vote Required . . . . . . . . . . . . . . . . . . 17
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . 17
SECTION 3.1 Organization and Qualification; Subsidiaries . . 17
SECTION 3.2 Articles of Incorporation and By-Laws . . . . . . 18
SECTION 3.3 Capitalization . . . . . . . . . . . . . . . . . 18
SECTION 3.4 Authority . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.5 No Conflict; Required Filings and Consents . . . 19
SECTION 3.6 Compliance; Permits . . . . . . . . . . . . . . . 19
SECTION 3.7 Securities and Banking Reports; Financial
Statements . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.8 Absence of Certain Changes or Events . . . . . . 20
SECTION 3.9 Absence of Litigation . . . . . . . . . . . . . . 21
SECTION 3.10 Employee Benefit Plans . . . . . . . . . . . . . 21
SECTION 3.11 Registration Statement; Proxy
Statement/Prospectus . . . . . . . . . . . . . . . . . . . 22
SECTION 3.12 Title to Property . . . . . . . . . . . . . . . . 22
SECTION 3.13 Absence of Agreements . . . . . . . . . . . . . . 23
SECTION 3.14 Taxes . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.15 Brokers . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.16 Tax Matters and Pooling . . . . . . . . . . . . . 24
SECTION 3.17 Material Adverse Effect . . . . . . . . . . . . . 24
ARTICLE IV - COVENANTS OF THE SELLER . . . . . . . . . . . . . . . . 24
SECTION 4.1 Affirmative Covenants . . . . . . . . . . . . . . 24
SECTION 4.2 Negative Covenants . . . . . . . . . . . . . . . 25
SECTION 4.3 Letter of the Seller's Accountants . . . . . . . 28
SECTION 4.4 Access and Information . . . . . . . . . . . . . 28
SECTION 4.5 Update Disclosure; Breaches . . . . . . . . . . . 29
SECTION 4.6 Affiliates . . . . . . . . . . . . . . . . . . . 29
SECTION 4.7 Tax Treatment and Pooling . . . . . . . . . . . . 29
SECTION 4.8 Expenses . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.9 Delivery of Shareholder List . . . . . . . . . . 30
ARTICLE V - COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . 30
SECTION 5.1 Affirmative Covenants . . . . . . . . . . . . . . 30
SECTION 5.2 Negative Covenants . . . . . . . . . . . . . . . 30
SECTION 5.3 Access and Information . . . . . . . . . . . . . 31
SECTION 5.4 Update Disclosure; Breaches . . . . . . . . . . . 31
SECTION 5.5 Stock Exchange Listing . . . . . . . . . . . . . 32
SECTION 5.6 Tax Treatment and Pooling . . . . . . . . . . . . 32
SECTION 5.7 Stock Options . . . . . . . . . . . . . . . . . . 32
ARTICLE VI - ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . 32
SECTION 6.1 Proxy Statement/Prospectus; Registration
Statement . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 6.2 Meeting of the Seller's Shareholders . . . . . . 33
SECTION 6.3 Appropriate Action; Consents; Filings . . . . . . 33
SECTION 6.4 Employee Stock Options and Other Employee Benefit
Matters . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.5 Directors' and Officers' Indemnification and
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 6.6 Notification of Certain Matters . . . . . . . . . 35
SECTION 6.7 Public Announcements . . . . . . . . . . . . . . 35
SECTION 6.8 Customer Retention . . . . . . . . . . . . . . . 35
SECTION 6.9 Incentive Bonus Pool . . . . . . . . . . . . . . 36
SECTION 6.10 Recission of Repurchase Programs . . . . . . . . 36
ARTICLE VII - CONDITIONS OF MERGER . . . . . . . . . . . . . . . . . 36
SECTION 7.1 Conditions to Obligation of Each Party to Effect
the Merger . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.2 Additional Conditions to Obligations of the
Company . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 7.3 Additional Conditions to Obligations of the
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE VIII - TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . 40
SECTION 8.1 Termination . . . . . . . . . . . . . . . . . . . 40
SECTION 8.2 Effect of Termination . . . . . . . . . . . . . . 41
SECTION 8.3 Amendment . . . . . . . . . . . . . . . . . . . . 41
SECTION 8.4 Waiver . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE IX - GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . 41
SECTION 9.1 Non-Survival of Representations, Warranties and
Agreements . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 9.2 Enforcement of Agreement . . . . . . . . . . . . 42
SECTION 9.3 Notices . . . . . . . . . . . . . . . . . . . . . 42
SECTION 9.4 Certain Definitions . . . . . . . . . . . . . . . 43
SECTION 9.5 Headings . . . . . . . . . . . . . . . . . . . . 43
SECTION 9.6 Severability . . . . . . . . . . . . . . . . . . 43
SECTION 9.7 Entire Agreement . . . . . . . . . . . . . . . . 44
SECTION 9.8 Assignment . . . . . . . . . . . . . . . . . . . 44
SECTION 9.9 Parties in Interest . . . . . . . . . . . . . . . 44
SECTION 9.10 Governing Law . . . . . . . . . . . . . . . . . . 44
SECTION 9.11 Counterparts . . . . . . . . . . . . . . . . . . 44
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November 3, 1997 (the
"Agreement") between ADVANTAGE BANCORP, INC., a Wisconsin corporation (the
"Seller"), and XXXXXXXX & ILSLEY CORPORATION, a Wisconsin corporation (the
"Company").
WHEREAS, the Boards of Directors of the Company and the Seller have
each determined that it is fair to and in the best interests of their
respective shareholders for the Seller to merge with and into the Company
(the "Merger") upon the terms and subject to the conditions set forth
herein and in accordance with the Wisconsin Business Corporation Law (the
"WBCL");
WHEREAS, the respective Boards of Directors of the Company and the
Seller have each approved the Merger of the Seller with and into the
Company, upon the terms and subject to the conditions set forth herein,
and adopted in this Agreement;
WHEREAS, concurrently with this Agreement and as a condition to the
willingness of the Company to enter into this Agreement, the Seller and
the Company have entered into a stock option agreement granting the
Company, under the conditions set forth therein, the option to purchase
newly-issued shares of common stock of the Seller (the "Stock Option
Agreement");
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");
WHEREAS, for financial accounting purposes it is intended that the
Merger shall be accounted for as a pooling of interests; and
WHEREAS, the Company and the Seller 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 Seller shall be
merged with and into the Company. As a result of the Merger, the separate
corporate existence of the Seller shall cease and the Company 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
Article VII, the parties hereto shall cause the Merger to be consummated
by filing articles of merger (the "Articles of Merger") with the
Department of Financial Institutions of the State of Wisconsin (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").
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 Company and the Seller shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and the
Seller 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 Company (the
"Company Articles") and the By-Laws, as amended, of the Company ("Company
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 Directors and Officers. At the Effective Time, the
directors of the Company immediately prior to the Effective Time shall be
the directors of the Surviving Corporation, each to hold office in
accordance with the Articles of Incorporation and By-Laws of the Surviving
Corporation. At the Effective Time, the officers of the Company
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 Company, the Seller or
the holder of the following securities:
(a) Each share of the common stock, par value $.01 per share of the
Seller ("Seller Common Stock"), issued and outstanding immediately prior
to the Effective Time (all such shares of Seller Common Stock issued and
outstanding immediately prior to the Effective Time being referred to
herein as the "Shares"), other than (i) Shares held by the Company for its
own account or any Company Subsidiary (as defined in Section 3.1(a),
below) for its own account and (ii) Shares held by the Advantage Bank,
F.S.B. Bank Incentive Plan and Trust I and the Advantage Bank, F.S.B. Bank
Incentive Plan and Trust II and unallocated to participants thereunder,
shall cease to be outstanding and, subject to Section 1.6(e) below, shall
be converted into and become the right to receive 1.2 shares (the exchange
ratio, as adjusted pursuant to Section 1.6(e), is hereinafter referred to
as the "Exchange Ratio") of common stock, $1.00 per share par value, of
the Company ("Company 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 Company Common Stock into which such Seller Common Stock shall
have been converted. Certificates representing shares of Seller Common
Stock shall be exchanged for certificates representing whole shares of
Company Common Stock issued in consideration therefor upon the surrender
of such certificates in accordance with the provisions of Section 1.8
hereof, without interest.
(b) Each share of Seller Common Stock held as treasury stock shall
be canceled and extinguished without conversion thereof into Company
Common Stock or payment therefor.
(c) Each share of Seller Common Stock held by the Company for its
own account or any Company Subsidiary for its own account shall be
canceled and extinguished without conversion thereof into Company Common
Stock or payment therefor.
(d) Each share of Seller Common Stock held by the Advantage Bank,
F.S.B. Bank Incentive Plan and Trust I and the Advantage Bank, F.S.B. Bank
Incentive Plan and Trust II and unallocated to participants thereunder
shall be canceled and extinguished without conversion thereof into Company
Common Stock or payment therefor.
(e) If the average closing sale price of Company Common Stock as
reported on the NASDAQ-NMS for the ten consecutive trading days
immediately preceding the fifth business day prior to the Effective Time
(the "Average Price") is
(i) below $46.67 per share, then the Exchange Ratio shall be
adjusted to a number such that the product of the Exchange Ratio
(taken to four decimal places) and the Average Price shall equal
$56.00 (rounded to the nearest whole cent) (provided, however,
that if prior to the Effective Time the Company has, by written
notice to the Seller, informed the Seller that such adjustment
(if applicable) shall not occur, then such adjustment shall not
occur and the Seller shall have the right to terminate this
Agreement immediately with the effect as set forth in
Section 8.2 hereof); or
(ii) above $61.67 per share, then the Company shall have the
option, but not the obligation, to adjust the Exchange Ratio to
a number such that the product of the Exchange Ratio (taken to
four decimal places) and the Average Price shall equal $74.00
(rounded to the nearest whole cent); if prior to the Effective
Time the Company has, by written notice to the Seller, elected
to adjust the Exchange Ratio as provided in this subsection (ii)
(if applicable), then such adjustment shall occur and the Seller
shall have the right to terminate this Agreement immediately
with the effect as set forth in Section 8.2 hereof.
SECTION 1.7 Adjustments for Dilution and Other Matters. If prior
to the Effective Time, (i) the Seller shall declare a stock dividend or
distribution upon or subdivide, split up, reclassify or combine the Seller
Common Stock, or declare a dividend or make a distribution on Seller
Common Stock in any security convertible into Seller Common Stock, or (ii)
the Company shall declare a stock dividend or distribution upon or
subdivide, split up, reclassify or combine the Company Common Stock or
declare a dividend or make a distribution on Company Common Stock in any
security convertible into Company Common Stock, appropriate adjustment or
adjustments will be made to the Exchange Ratio and the methodology for
calculating the Exchange Ratio as set forth in Section 1.6 hereof.
SECTION 1.8 Exchange of Certificates.
(a) Exchange Agent. As of the Effective Time, the Company shall
deposit, or shall cause to be deposited with an exchange agent chosen by
the Company and which is reasonably acceptable to the Seller (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 Company Common Stock and cash in
lieu of fractional shares (such certificates for shares of Company Common
Stock, together with the amount of cash payable in lieu of fractional
shares and any dividends or distributions with respect to such Company
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 Company 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.
(b) Exchange Procedures. As soon as reasonably practicable 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 Shares were converted into the
right to receive shares of Company Common Stock pursuant to Section 1.6 (a
"Certificate" or "Certificates"), (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the
Exchange Agent and shall be in such form and have such other provisions as
the Company may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for certificates
representing shares of Company 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 Company 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 Seller, a
certificate representing the proper number of shares of Company 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 Company may 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 Company 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 Company Common Stock, dividends,
cash in lieu of any fractional shares of Company 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 Company 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 Company 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 Company Common
Stock issued in exchange therefor, without interest, (i) promptly, the
amount of any cash payable with respect to a fractional share of Company
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 Company 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 Company
Common Stock.
(d) No Further Rights in the Shares. All shares of Company Common
Stock issued and cash paid upon conversion of the Shares in accordance
with the terms hereof (including any 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 Company 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 Company. 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 Average Price.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the former shareholders of the Seller for
six months after the Effective Time shall be delivered to the Company,
upon demand, and any former shareholders of the Seller who have not
theretofore complied with this Article I shall thereafter look only to the
Company to claim their shares of Company Common Stock, any cash in lieu of
fractional shares of Company Common Stock and any dividends or
distributions with respect to Company Common Stock, in each case without
interest thereon, and subject to Section 1.8(g).
(g) No Liability. Neither the Company nor the Seller 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 Company 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 Company 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 Company, 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 was made by the Company.
SECTION 1.9 Stock Transfer Books. At the Effective Time, the
stock transfer books of the Seller shall be closed and there shall be no
further registration of transfers of shares of the Seller Common Stock
thereafter on the records of the Seller. 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 Company for any reason shall be converted into shares of
Company Common Stock and cash in lieu of fractional shares in accordance
with this Article I.
SECTION 1.10 Company Common Stock. The shares of Company Common
Stock issued and outstanding immediately prior to the Effective Time shall
be unaffected by the Merger and at the Effective Time, such shares shall
remain issued and outstanding.
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF THE SELLER
Except as set forth in the Disclosure Schedule delivered by the
Seller to the Company prior to the execution of this Agreement (the
"Seller Disclosure Schedule"), which will identify exceptions by specific
Section references, the Seller hereby represents and warrants to the
Company that:
SECTION 2.1 Organization and Qualification; Subsidiaries.
(a) The Seller is a company duly organized, validly existing and in
good standing under the laws of the State of Wisconsin, and is registered
as a savings and loan holding company under the Home Owners' Loan Act
("HOLA"). Each subsidiary of the Seller ("Seller Subsidiary" or,
collectively, "Seller Subsidiaries") is a federally-chartered savings bank
or a corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation. Each of the Seller and
the Seller 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 ("Seller
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 the Federal Deposit Insurance
Corporation (the "FDIC") and the Office of Thrift Supervision ("OTS"), and
neither the Seller nor any Seller Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Seller
Approvals, except in each case where the failure to be so organized,
existing and in good standing or to have such power, authority, Seller
Approvals and revocations or modifications would not, individually or in
the aggregate, have a Material Adverse Effect (as defined below) on the
Seller and the Seller Subsidiaries, taken as a whole.
(b) The Seller and each Seller 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, have a Material Adverse Effect on the Seller and the Seller
Subsidiaries, taken as a whole.
(c) A true and complete list of all of the Seller Subsidiaries,
together with (i) the Seller's percentage ownership of each Seller
Subsidiary and (ii) laws under which the Seller Subsidiary is
incorporated, is set forth on Section 2.1(c) of the Seller Disclosure
Schedule. Except as set forth on Section 2.1(c) of the Seller Disclosure
Schedule, the Seller and/or one or more of the Seller Subsidiaries owns
beneficially and of record all of the outstanding shares of capital stock
of each of the Seller Subsidiaries. Except for the subsidiaries set forth
on Section 2.1(c) of the Seller Disclosure Schedule, the Seller 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.
(d) As used in this Agreement, the term "Material Adverse Effect"
means, with respect to the Company or the Seller, as the case may be, any
effect that (i) is material and adverse to the business, assets,
liabilities, results of operations or financial condition of the Company
and the Company Subsidiaries taken as whole or the Seller and the Seller
Subsidiaries taken as a whole, respectively, or (ii) materially impairs
the ability of the Company or the Seller to consummate the transactions
contemplated hereby; provided, however, that Material Adverse Effect shall
not be deemed to include the impact of (a) actions contemplated by this
Agreement, (b) changes in laws and regulations or interpretations thereof
that are generally applicable to the banking or savings industries, (c)
changes in generally accepted accounting principles that are generally
applicable to the banking or savings industries, (d) reasonable expenses
incurred in connection with the transactions contemplated hereby, and (e)
changes attributable to or resulting from changes in general economic
conditions affecting banks, savings institutions or their holding
companies generally, including changes in the prevailing level of interest
rates.
(e) The minute books of the Seller and each of the Seller
Subsidiaries contain true, complete and accurate records in all material
respects of all meetings and other corporate actions held or taken since
September 30, 1994 of their respective shareholders and Boards of
Directors (including committees of their respective Boards of Directors).
SECTION 2.2 Articles of Incorporation and By-Laws. The Seller has
heretofore furnished to the Company a complete and correct copy of the
Articles of Incorporation and the By-Laws, as amended or restated, of the
Seller ("Seller Articles" or "Seller By-Laws") and each Seller Subsidiary.
Such Articles of Incorporation and By-Laws of the Seller and each Seller
Subsidiary are in full force and effect. Neither the Seller nor any
Seller 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
Seller consists of 10,000,000 shares of Seller Common Stock and 5,000,000
shares of preferred stock, par value $.01 per share ("Seller Preferred
Stock"). As of the date of this Agreement, (i) 3,235,830 shares of Seller
Common Stock are issued and outstanding (of which 31,635 are restricted
shares under employee benefit plans which have not and will not be
awarded), 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 Seller shareholder, (ii) 888,950 shares of Seller
Common Stock are held in the treasury of the Seller, (iii) 325,354 shares
of Seller Common Stock are reserved for future issuance pursuant to
outstanding employee stock options issued pursuant to the Seller's stock
option plans, and (iv) 643,930 shares of Seller Common Stock are reserved
for future issuance under the Stock Option Agreement. As of the date of
this Agreement, no shares of Seller Preferred Stock are issued and
outstanding. Except as set forth in clauses (iii) and (iv), above, there
are no options, warrants or other rights, agreements, arrangements or
commitments of any character, including without limitation voting
agreements or arrangements, relating to the issued or unissued capital
stock of the Seller or any Seller Subsidiary or obligating the Seller or
any Seller Subsidiary to issue or sell any shares of capital stock of, or
other equity interests in, the Seller or any Seller Subsidiary. All shares
of Seller 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
Seller or any Seller Subsidiary to repurchase, redeem or otherwise acquire
any shares of Seller Common Stock or the capital stock of any Seller
Subsidiary or to provide funds to or make any investment (in the form of a
loan, capital contribution or otherwise) in any Seller Subsidiary or any
other entity, except for loan commitments and other funding obligations
entered into in the ordinary course of business. Each of the outstanding
shares of capital stock of each Seller Subsidiary are duly authorized,
validly issued, fully paid and non-assessable, except as provided by
Section 180.0622(2)(b) of the WBCL, and were not issued in violation of
any preemptive rights of any Seller Subsidiary shareholder, and such
shares owned by the Seller or another Seller Subsidiary are owned free and
clear of all security interests, liens, claims, pledges, agreements,
limitations of the Seller's voting rights, charges or other encumbrances
of any nature whatsoever.
SECTION 2.4 Authority. The Seller has the requisite corporate
power and authority to execute and deliver this Agreement and the Stock
Option Agreement, to perform its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby and thereby (other
than, with respect to the Merger, the approval and adoption of this
Agreement by the Seller's shareholders in accordance with the WBCL and the
Seller Articles and Seller By-Laws). The execution and delivery of this
Agreement and the Stock Option Agreement by the Seller and the
consummation by the Seller of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary corporate
action and no other corporate proceedings on the part of the Seller are
necessary to authorize this Agreement or the Stock Option Agreement or to
consummate the transactions so contemplated hereby or thereby (other than,
with respect to the Merger, the approval and adoption of this Agreement by
the Seller's shareholders in accordance with the WBCL and the Seller
Articles and Seller By-Laws). This Agreement and the Stock Option
Agreement have been duly executed and delivered by, and constitute valid
and binding obligations of the Seller and, assuming due authorization,
execution and delivery by the Company, are enforceable against the Seller
in accordance with their respective terms, except as enforcement may be
limited by laws affecting insured depository institutions, 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 and the Stock
Option Agreement by the Seller does not, and the performance of this
Agreement and the Stock Option Agreement and the transactions contemplated
hereby and thereby by the Seller shall not, (i) conflict with or violate
the Seller Articles or Seller By-Laws or the Articles of Incorporation or
By-Laws of any Seller Subsidiary, (ii) 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 Seller or any Seller Subsidiary or by which its or any
of their respective properties is bound or affected, or (iii) 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, 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 Seller or any Seller Subsidiary pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Seller or any
Seller Subsidiary is a party or by which the Seller or any Seller
Subsidiary or its or any of their respective properties is bound or
affected, except in the case of clauses (ii) and (iii) for any such
conflicts, violations, breaches, defaults or other occurrences that would
not, individually or in the aggregate, have a Material Adverse Effect on
the Seller and the Seller Subsidiaries, taken as a whole. The Board of
Directors of the Seller has taken all actions necessary including
approving the transactions contemplated herein and in the Stock Option
Agreement to ensure that none of (A) the restrictions set forth in
Sections 180.1130-32, 180.1134, 180.1140-44 and 180.1150 of the WBCL, and
(B) the provisions set forth in Article 4.c. and Article 11 of the Seller
Articles, do or will apply to the transactions contemplated herein or,
except in the case of Article 4.c, in the Stock Option Agreement
(b) The execution and delivery of this Agreement and the Stock
Option Agreement by the Seller do not, and the performance of this
Agreement and the Stock Option Agreement by the Seller shall not, require
any consent, approval, 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 HOLA, and the filing of appropriate merger or
other documents as required by the WBCL 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 issuance of Seller Common Stock pursuant to the Stock
Option Agreement, or otherwise prevent the Seller from performing its
obligations under this Agreement and the Stock Option Agreement and would
not have a Material Adverse Effect on the Seller and the Seller
Subsidiaries, taken as a whole.
SECTION 2.6 Compliance; Permits. Neither the Seller nor any
Seller Subsidiary is in conflict with, or in default or violation of, (i)
any Law applicable to the Seller or any Seller Subsidiary or by which its
or any of their respective properties is bound or affected, or (ii) any
note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Seller or
any Seller Subsidiary is a party or by which the Seller or any Seller
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, have a Material Adverse
Effect on the Seller or the Seller Subsidiaries, taken as a whole.
SECTION 2.7 Securities and Banking Reports; Financial Statements.
(a) The Seller and each Seller Subsidiary have filed all forms,
reports and documents required to be filed with (x) the Securities and
Exchange Commission (the "SEC") since September 30, 1996, and as of the
date of this Agreement has delivered to the Company (i) its Annual Reports
on Form 10-K for the fiscal years ended September 30, 1994, 1995 and 1996,
respectively, (ii) its Quarterly Reports on Form 10-Q for the periods
ended December 31, 1996, March 31, 1997 and June 30, 1997, (iii) all proxy
statements relating to the Seller's meetings of shareholders (whether
annual or special) held since September 30, 1994, (iv) all Current Reports
on Form 8-K filed by the Seller with the SEC since September 30, 1994, (v)
all other reports or registration statements (other than Quarterly Reports
on Form 10-Q not referred to in clause (ii) above) filed by the Seller
with the SEC since September 30, 1994 and (vi) all amendments and
supplements to all such reports and registration statements filed by the
Seller with the SEC since September 30, 1994 (collectively, the "Seller
SEC Reports") and (y) the OTS, the FDIC and any other applicable federal
or state securities or banking authorities (all such reports and
statements are collectively referred to with the Seller SEC Reports as the
"Seller Reports"). The Seller Reports, including all Seller Reports filed
after the date of this Agreement, (i) were or will be prepared in all
material respects in accordance with the requirements of applicable Law
and (ii) 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) Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the Seller SEC Reports,
including any Seller SEC Reports filed since the date of this Agreement
and prior to or on the Effective Time, have been prepared in accordance
with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as may be indicated in the
notes thereto) and each fairly presents the consolidated financial
position of the Seller and the Seller Subsidiaries as of the respective
dates thereof and the consolidated results of its operations and changes
in financial position for the periods indicated, except that any unaudited
interim financial statements were or are subject to normal and recurring
year-end adjustments which were not or are not expected to be material in
amount.
(c) Except (i) for the liabilities that are fully reflected or
reserved against on the consolidated statement of financial condition of
the Seller included in the Seller's Form 10-Q for the quarter ended June
30, 1997, (ii) for the liabilities incurred in the ordinary course of
business consistent with past practice since June 30, 1997, and (iii) as
set forth in Section 2.7 of the Seller Disclosure Schedule, neither the
Seller nor any Seller Subsidiary has incurred any liability of any nature
whatsoever (whether absolute, accrued, contingent or otherwise due or to
become due), that, either alone or when combined with all similar
liabilities, has had, or would reasonably be expected to have, a Material
Adverse Effect on the Seller and the Seller Subsidiaries, taken as a
whole.
SECTION 2.8 Absence of Certain Changes or Events. Except as
disclosed in the Seller SEC Reports filed prior to the date of this
Agreement or set forth in Section 2.8 of the Seller Disclosure Schedule
and except for the transactions contemplated by this Agreement, since
September 30, 1996 to the date of this Agreement, the Seller and the
Seller Subsidiaries have conducted their businesses only in the ordinary
course and in a manner consistent with past practice and, since September
30, 1996, there has not been (i) any change in the financial condition,
results of operations or business of the Seller and any of the Seller
Subsidiaries having a Material Adverse Effect on the Seller or the Seller
Subsidiaries, taken as a whole, (ii) any damage, destruction or loss
(whether or not covered by insurance) with respect to any assets of the
Seller or any of the Seller Subsidiaries having a Material Adverse Effect
on Seller and the Seller Subsidiaries, taken as a whole, (iii) any change
by the Seller in its accounting methods, principles or practices, (iv) any
revaluation by the Seller of any of its assets in any material respect,
(v) except for repurchases pursuant to the Seller's Common Stock
Repurchase Program or for regular quarterly cash dividends on Seller
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 Seller Common Stock or any
redemption, purchase or other acquisition of any of its securities or any
of the securities of any Seller Subsidiary, (vi) any strike, work
stoppage, slow-down or other labor disturbance suffered by the Seller or
the Seller Subsidiaries, (vii) any collective bargaining agreement,
contract or other agreement or understanding with a labor union or
organization to which the Seller or the Seller Subsidiaries have been a
party, (viii) any union organizing activities relating to employees of the
Seller or the Seller Subsidiaries, or (ix) any increase in the wages,
salaries, compensation, pension, or other fringe benefits or perquisites
payable to any executive officer, employee or director, any grant of
severance or termination pay, any contract entered into to make or grant
any severance or termination pay, or any bonus paid other than year-end
bonuses for fiscal 1997 as listed in Section 2.8 of the Seller Disclosure
Schedule.
SECTION 2.9 Absence of Litigation.
(a) Except as set forth in Section 2.9 of the Seller Disclosure
Schedule, neither the Seller nor any of the Seller Subsidiaries is a party
to any, and there are no pending or, to the best of the Seller's
knowledge, threatened, legal, administrative, arbitral or other
proceedings, claims, actions or governmental or regulatory investigations
of any nature against the Seller or any of the Seller Subsidiaries or
challenging the validity or propriety of the transactions contemplated by
this Agreement as to which there is reasonable probability of an adverse
determination and which, if adversely determined, would, individually or
in the aggregate, have a Material Adverse Effect on the Seller and the
Seller Subsidiaries, taken as a whole.
(b) There is no injunction, order, judgment, decree or regulatory
restriction imposed upon the Seller, any of the Seller Subsidiaries or the
assets of the Seller or any of the Seller Subsidiaries which has had a
Material Adverse Effect on the Seller and the Seller Subsidiaries, taken
as a whole.
SECTION 2.10 Employee Benefit Plans.
(a) Plans of the Seller. Section 2.10(a) of the Seller Disclosure
Schedule lists (i) 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
Seller or any Seller Subsidiary has any obligation (collectively, the
"Plans"). The Seller has furnished or made available to the Company a
complete and accurate copy of each Plan (or a description of the Plans, if
the Plans are not in writing) and a complete and accurate copy of each
material document prepared in connection with each such 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, (iii) the three (3) most recently filed IRS
Forms 5500 and related schedules, (iv) the most recently issued IRS
determination letter for each such Plan and (v) the three (3) most
recently prepared actuarial and financial statements in connection with
each such Plan.
(b) Absence of Certain Types of Plans. Except as disclosed in
Section 2.10(b) of the Seller Disclosure Schedule, no member of the
Seller's "controlled group," within the meaning of Section 4001(a)(14) of
ERISA, maintains or contributes to, or within the five years preceding the
date of this Agreement has maintained or contributed to, an employee
pension benefit plan subject to Title IV of ERISA ("Title IV Plan"). No
Title IV Plan is a "multiemployer pension plan" as defined in Section
3(37) of ERISA. Except as disclosed in Section 2.10(b) of the Seller
Disclosure Schedule, none of the Plans obligates the Seller or any of the
Seller Subsidiaries to pay material separation, severance, termination or
similar- type benefits solely as a result of any transaction contemplated
by this Agreement or as a result of a "change in control," within the
meaning of such term under Section 280G of the Code. Except as disclosed
in Section 2.10(b) of the Seller Disclosure Schedule, or as required by
COBRA, none of the Plans provides for or promises retiree medical,
disability or life insurance benefits to any current or former employee,
officer or director or life insurance benefits to any current or former
employee, officer or director of the Seller or any of the Seller
Subsidiaries. Each of the Plans is subject only to the laws of the United
States or a political subdivision thereof.
(c) Compliance with Applicable Law. Except as disclosed in
Section 2.10(c) of the Seller Disclosure Schedule, each Plan has been
operated in all respects in accordance with the requirements of all
applicable Law and all persons who participate in the operation of such
Plans and all 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, have a Material Adverse Effect on the Seller and the
Seller Subsidiaries, taken as a whole. The Seller and the Seller
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 Seller and the Seller Subsidiaries have no knowledge of any
default or violation by any party to, any Plan, except where such
failures, defaults or violations would not, individually or in the
aggregate, have a Material Adverse Effect on the Seller and the Seller
Subsidiaries, taken as a whole. No legal action, suit or claim is pending
or, to the knowledge of the Seller or the Seller Subsidiaries, threatened
with respect to any Plan (other than claims for benefits in the ordinary
course) and, except as disclosed in Section 2.10(c) of the Seller
Disclosure Schedule, to the knowledge of the Seller or the Seller
Subsidiaries, no fact or event exists that could give rise to any such
action, suit or claim. Except as disclosed in Section 2.10(c) of the
Seller Disclosure Schedule, neither the Seller nor any Seller Subsidiary
has incurred any material liability to the Pension Benefit Guaranty
Corporation (other than for premiums which have been paid when due) or any
material liability under Section 302 of ERISA or Section 412 of the Code
that has not been satisfied in full and no condition exists that presents
a material risk of incurring any such liability.
(d) Qualification of Certain Plans. Each 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 2.10(d) of the Seller Disclosure Schedule, the Seller is not aware
of any fact or event that has occurred since the date of such
determination letter from the IRS to adversely affect the qualified status
of any such Plan. Except as disclosed in Section 2.10(d) of the Seller
Disclosure Schedule, no trust maintained or contributed by the Seller or
any of the Seller Subsidiaries is intended to be qualified as a voluntary
employees' beneficiary association or is intended to be exempt from
federal income taxation under Section 501(c)(9) of the Code.
(e) Absence of Certain Liabilities and Events. Except for matters
disclosed in Section 2.10(e) of the Seller Disclosure Schedule, there has
been no prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) with respect to any Plan. The Seller and
each of the Seller 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 have a Material Adverse Effect on the
Seller and the Seller Subsidiaries, taken as a whole, and, to the
knowledge of the Seller or the Seller Subsidiaries, no fact or event
exists that could give rise to any such liability.
(f) Plan Contributions. All contributions, premiums or payments
required to be made prior to the Effective Time with respect to any Plan
have been made on or before the Effective Time.
(g) Funded Status of Plans and Rights to Terminate. With respect to
each Title IV Plan, the present value of all accrued benefits under each
such Plan, based upon the actuarial assumptions used for funding purposes
in the most recent actuarial report prepared by each such Plan's actuary
with respect to each such Plan did not exceed, as of the most recent
valuation date, the then current value of assets of such Plan, allocable
to each accrued benefit. No provision of any such Plan, nor any amendment
thereto, would result in any limitation on the Seller or the Seller
Subsidiaries rights to terminate each such Plan and to receive any
residual amounts under Section 4044 of ERISA.
(h) Stock Options. Section 2.10(h) of the Seller Disclosure
Schedule sets forth a true and complete list of each current or former
employee, officer or director of the Seller or any Seller Subsidiary who
holds any option to purchase Seller Common Stock as of the date of this
Agreement, together with the number of shares of Seller 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 (an "ISO"), and the expiration date of such option. Section
2.10(h) of the Seller Disclosure Schedule also sets forth the total number
of such ISOs and such non-qualified options.
(i) Employment Contracts. Except for employment, severance,
consulting or other similar contracts with any employees, consultants,
officers or directors of the Seller or any of the Seller Subsidiaries
disclosed in Section 2.10(i) of the Seller Disclosure Schedule, neither
the Seller nor any Seller Subsidiary is a party to any such contracts.
Neither the Seller nor any Seller Subsidiary is a party to any collective
bargaining agreements.
(j) Effect of Agreement. Except as disclosed in Section 2.10(j) of
the Seller Disclosure Schedule, the consummation of the transactions
contemplated by this Agreement will not, either alone or in conjunction
with another event, entitle any current or former employee of the Seller
or any Seller Subsidiary to severance pay, unemployment compensation or
any other payment, except as expressly provided herein, or accelerate the
time of payment or vesting or increase the compensation due any such
employee or former employee, in each case, except as expressly provided
herein.
SECTION 2.11 Registration Statement; Proxy Statement/Prospectus.
The information supplied by the Seller for inclusion in the Registration
Statement (as defined in Section 3.11) shall not at the time the
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 Seller for inclusion in the proxy
statement/prospectus to be sent to the shareholders of the Seller in
connection with the meeting of the Seller's shareholders to consider the
Merger (the "Seller 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 Seller Shareholders'
Meeting and at the Effective Time, be false or misleading with respect to
any material fact required to be stated herein, 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 Seller or any of its affiliates, officers or
directors should be discovered by the Seller which should be set forth in
an amendment to the Registration Statement or a supplement to the Proxy
Statement/Prospectus, the Seller shall promptly inform the Company.
Notwithstanding the foregoing, the Seller makes no representation or
warranty with respect to any information about, or supplied or omitted by,
the Company which is contained in any of the foregoing documents.
SECTION 2.12 Title to Property. The Seller and each of the Seller
Subsidiaries has good and marketable title to all of their respective
properties and assets, real and personal, free and clear of all mortgage
liens, and free and clear of all other liens, charges and encumbrances
except liens for taxes not yet due and payable, pledges to secure deposits
and such minor imperfections of title, if any, as do not materially
detract from the value of or interfere with the present use of the
property affected thereby or which, individually or in the aggregate,
would not have a Material Adverse Effect on the Seller and the Seller
Subsidiaries, taken as a whole; and all leases pursuant to which the
Seller or any of the Seller Subsidiaries lease from others material
amounts of real or personal property are in good standing, valid and
effective in accordance with their respective terms, and there is not,
under any of such leases, any existing material default or event of
default (or event which with notice or lapse of time, or both, would
constitute a material default and in respect of which the Seller or such
Seller Subsidiary has not taken adequate steps to prevent such a default
from occurring). Substantially all of the Seller's and each of the Seller
Subsidiaries' buildings and equipment in regular use have been reasonably
maintained and are in good and serviceable condition, reasonable wear and
tear excepted.
SECTION 2.13 Environmental Matters. Except as set forth in Section
2.13 of the Seller Disclosure Schedule, the Seller represents and warrants
that to the best of the Seller's knowledge: (i) each of the Seller, the
Seller Subsidiaries and properties owned and operated by the Seller or the
Seller Subsidiaries, are in compliance with all applicable federal, state
and local laws including common law, rules, guidance, regulations and
ordinances and with all applicable decrees, orders, judgments, and
contractual obligations relating to the environment or Hazardous Materials
which are hereinafter defined as chemicals, pollutants, contaminants,
wastes, toxic substances, compounds, products, solid, liquid, gas,
petroleum or other regulated substances or materials which are hazardous,
toxic or otherwise harmful to the environment ("Environmental Laws"),
except for violations which, either individually or in the aggregate would
not have a Material Adverse Effect on the Seller and the Seller
Subsidiaries taken as a whole; (ii) there is no asbestos or any material
amount of ureaformaldehyde materials in or on any property owned or
operated by the Seller or Seller Subsidiaries and no electric transformers
or capacitors, other than those owned by public utility companies, on any
such properties contain any PCB's; (iii) there are no underground or
aboveground storage tanks located on, in or under any properties currently
or formerly owned or operated by the Seller or any of the Seller
Subsidiaries; (iv) the Seller or the Seller Subsidiaries have not received
any notice from any governmental agency or third party notifying the
Seller or the Seller Subsidiaries of any Environmental Claim (as defined
herein); (v) there are no circumstances with respect to any properties
currently owned or operated by the Seller or any of the Seller
Subsidiaries that to the best of the Seller's knowledge (a) will form the
basis on an Environmental Claim against the Seller or the Seller
Subsidiaries or any properties currently or formerly owned or operated by
the Seller or any of the Seller Subsidiaries or (b) will cause any
properties currently owned or operated by the Seller or any of the Seller
Subsidiaries to be subject to any restrictions on ownership, occupancy,
use or transferability under any applicable Environmental Law or require
notification to or consent of any Governmental Authority (as defined
herein) or third party pursuant to any Environmental Law; and (vi) neither
the Seller nor any Seller Subsidiary has received any written
communication from any federal or state agency naming the Seller or any
Seller Subsidiary as a potentially responsible party for environmental
contamination with respect to any property on which the Seller or any
Seller Subsidiary holds a security interest.
The following definitions apply for purposes of this Section 2.13:
(a) "Environmental Claims" shall mean any and all administrative,
regulatory, judicial or private actions, suits, demands, demand letters,
notices, claims, liens, notices of non-compliance or violation,
investigations, allegations, injunctions or proceedings relating in any
way to (i) any Environmental Law; (ii) any Hazardous Material including
without limitation any abatements, removal, remedial, corrective or other
response action in connection with any Hazardous Material, Environmental
Law or order of a Governmental Authority or (iii) any actual or alleged
damage, injury, threat or harm to the environment, which individually or
in the aggregate would have a Material Adverse Effect on the Seller or the
Seller Subsidiaries; (b) "Governmental Authority" shall mean any
applicable federal, state, regional, county or local person or body having
governmental authority.
SECTION 2.14 Absence of Agreements. Neither the Seller nor any
Seller Subsidiary is a party to any agreement or memorandum of
understanding with, or a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a
recipient of any extraordinary supervisory letter which restricts
materially the conduct of its business (including any contract containing
covenants which limit the ability of the Seller or of any Seller
Subsidiary to compete in any line of business or with any person or which
involve any restriction of the geographical area in which, or method by
which, the Seller or any Seller Subsidiary may carry on its business
(other than as may be required by Law or applicable regulatory
authorities)), or in any manner relates to its capital adequacy, its
credit policies or its management, except for those the existence of which
has been disclosed to the Company prior to the date of this Agreement, nor
has the Seller been advised that any federal, state, or governmental
agency is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree,
agreement, memorandum of understanding, extraordinary supervisory letter,
commitment letter or similar submission, except as disclosed by the Seller
in Section 2.14 of the Seller Disclosure Schedule.
SECTION 2.15 Taxes. The Seller and the Seller Subsidiaries have
timely filed all material Tax Returns (as defined below) required to be
filed by them, and the Seller and the Seller Subsidiaries have timely paid
and discharged all material Taxes (as defined below) 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 Seller is maintaining reserves adequate for their payment.
To the best of the Seller's knowledge, the liability for Taxes set forth
on each such Tax Return 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 2.15 of the Seller's
Disclosure Schedule, to the best of the Seller's knowledge, 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 2.15 of the Seller's Disclosure Schedule,
neither the Seller nor any of the Seller 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 2.15 of the Seller's Disclosure Schedule and except for statutory
liens for current taxes not yet due, to the best of the Seller's knowledge
there are no material tax liens on any assets of the Seller or any of the
Seller Subsidiaries. Except as otherwise disclosed in Section 2.15 of the
Seller's Disclosure Schedule neither the Seller nor any of the Seller
Subsidiaries has received a ruling or entered into an agreement with the
IRS or any other taxing authority that would have a Material Adverse
Effect on the Seller or the Seller Subsidiaries, taken as a whole, after
the Effective Time. Except as otherwise disclosed in Section 2.15 of the
Seller's Disclosure Schedule, no agreements relating to allocating or
sharing of Taxes exist among the Seller and the Seller Subsidiaries.
Neither the Seller nor any of the Seller Subsidiaries has made an election
under Section 341(f) of the Code.
SECTION 2.16 Insurance. Section 2.16 of the Seller Disclosure
Schedule lists all material policies of insurance of the Seller and the
Seller Subsidiaries currently in effect. To the best of the Seller's
knowledge, neither the Seller nor any of the Seller Subsidiaries has any
liability for unpaid premiums or premium adjustments not properly
reflected on the Seller's financial statements included in the Seller's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1997.
SECTION 2.17 Brokers. No broker, finder or investment banker
(other than Xxxxx Financial, Inc.) is entitled to any brokerage, finder's
or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on
behalf of Seller. Prior to the date of this Agreement, the Seller has
furnished to the Company a complete and correct copy of all agreements
between the Seller and Xxxxx Financial, Inc. pursuant to which such firm
would be entitled to any payment relating to the transactions contemplated
hereunder.
SECTION 2.18 Tax Matters and Pooling.
(a) Neither the Seller nor, to the best of the Seller's knowledge,
any of its affiliates has through the date of this Agreement taken or
agreed to take any action that would prevent the Merger from qualifying as
(i) a reorganization under Section 368(a)(1)(A) of the Code or (ii) for
pooling-of-interests accounting treatment under generally accepted
accounting principles ("GAAP").
(b) To the Seller's knowledge, there is no plan or intention on the
part of shareholders of the Seller who will receive Company Common Stock
to sell or otherwise dispose of an amount of Company Common Stock to be
received in the Merger which would reduce their ownership of Company
Common Stock to a number of shares having in the aggregate a value at the
time of the Merger of less than 50 percent of the total value of the
Seller Common Stock outstanding immediately prior to the Merger.
SECTION 2.19 Material Adverse Effect. Since June 30, 1997, there
has been no Material Adverse Effect on the Seller and the Seller
Subsidiaries, taken as a whole.
SECTION 2.20 Material Contracts. Except as disclosed in
Section 2.20 of the Seller Disclosure Schedule (which may reference other
sections of such Schedule) and, except as included as exhibits in the
Seller SEC Reports, neither the Seller nor any Seller Subsidiary is a
party to or obligated under any contract, agreement or other instrument or
understanding which is not terminable by the Seller or the Seller
Subsidiary without additional payment or penalty within 60 days and
obligates the Seller or any Seller Subsidiary for payments or other
consideration with a value in excess of $100,000, or would require
disclosure by the Seller pursuant to item 601(b)(10) of Regulation S-K
under the Exchange Act.
SECTION 2.21 Opinion of Financial Advisor. The Seller has received
the opinion of Xxxxx Financial, Inc. on the date of this Agreement to the
effect that, as of the date of this Agreement, the consideration to be
received in the Merger by the Seller's shareholders is fair to the
Seller's shareholders from a financial point of view, and Seller will
promptly, after the date of this Agreement, deliver a copy of such opinion
to the Company.
SECTION 2.22 Vote Required. The affirmative vote of a majority of
the votes that holders of the outstanding shares of Seller Common Stock
are entitled to cast is the only vote of the holders of any class or
series of the Seller capital stock necessary to approve the Merger.
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Disclosure Schedule delivered by the
Company to the Seller prior to the execution of this Agreement (the
"Company Disclosure Schedule"), which shall identify exceptions by
specific Section references, the Company hereby represents and warrants to
the Seller that:
SECTION 3.1 Organization and Qualification; Subsidiaries.
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Wisconsin. The
Company is a registered bank holding company under the Bank Holding
Company Act of 1956, as amended (the "BHCA"). Each subsidiary of the
Company (a "Company Subsidiary" or, collectively, "Company Subsidiaries")
is a bank or a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation or the United
States of America. Each of the Company and the Company Subsidiaries have
the requisite corporate power and authority and are in possession of all
franchises, grants, authorizations, licenses, permits, easements,
consents, certificates, approvals and orders ("Company Approvals")
necessary to own, lease and operate their respective properties and to
carry on their respective business as now being conducted, including
appropriate authorizations from the Federal Reserve Board, FDIC, the DFI
or the Office of the Comptroller of the Currency (the "OCC") 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 organized,
existing and in good standing or to have such power, authority, Company
Approvals and revocations or modifications would not, individually or in
the aggregate, have a Material Adverse Effect on the Company 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 for such failures to be so duly qualified
or licensed and in good standing that would not, either individually or in
the aggregate, have a Material Adverse Effect on the Company and the
Company Subsidiaries, taken as a whole.
(c) A true and complete list of all of the Company Subsidiaries is
set forth in Exhibit 21 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1996 ("Exhibit 21") previously delivered to
the Seller. Except as set forth in Section 3.1(c) of the Company
Disclosure Schedule, the Company and/or one or more of the Company
Subsidiaries owns beneficially and of record substantially all of the
outstanding shares of capital stock of each of the Company Subsidiaries.
Except for the Company Subsidiaries, set forth on said Exhibit 21, 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, 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 3.2 Articles of Incorporation and By-Laws. The Company
has previously furnished to the Seller a complete and correct copy of the
Company Articles and the Company By-Laws. The Company Articles and
Company By-Laws are in full force and effect. The Company is not in
violation of any of the provisions of the Company Articles or the Company
By-Laws.
SECTION 3.3 Capitalization.
(a) The authorized capital stock of the Company consists of (i)
160,000,000 shares of Company Common Stock of which, as of October 27,
1997, 101,364,755 shares were issued and outstanding, 7,937,835 shares
were held in treasury, 6,416,320 shares were reserved for issuance
pursuant to outstanding employee stock options; and (ii) 5,000,000 shares
of Preferred Stock, $1.00 par value ("Company Preferred Stock"), of which
2,000,000 shares of Company Preferred Stock have been designated as Series
A Convertible Preferred Stock ("Series A Preferred Stock") and 685,314
shares of which, as of the date of this Agreement, are outstanding. All
of the outstanding shares of the Company's capital stock have been duly
authorized and validly issued and are fully paid and non-assessable,
except pursuant to Section 180.0622(2)(b) of the WBCL. Except as set forth
in clauses (i) and (ii), above, as of the date of this Agreement there are
no options, warrants or other rights, agreements, arrangements or
commitments of any character 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.
(b) The shares of Company Common Stock to be issued pursuant to the
Merger will, upon issuance in accordance with the provisions of this
Agreement, be duly authorized, validly issued, fully paid and
non-assessable, except as otherwise provided by Section 180.0622(2)(b) of
the WBCL.
SECTION 3.4 Authority. The Company has the requisite corporate
power and authority to execute and deliver this Agreement and the Stock
Option Agreement, and to perform its obligations hereunder and thereunder
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Stock Option Agreement by
the Company and the consummation by the Company of the transactions
contemplated hereby and thereby have been duly and validly authorized by
all necessary corporate action on the part of the Company and no other
corporate proceedings on the part of the Company are necessary to
authorize this Agreement or the Stock Option Agreement or to consummate
the transactions so contemplated hereby or thereby. This Agreement and
the Stock Option Agreement have been duly and validly executed and
delivered by the Company and constitute valid and binding obligations of
the Company and assuming the authorization, execution and delivery by the
Seller, are enforceable against the Company in accordance with their
respective terms, except as enforcement may be limited by laws affecting
insured depository institutions, 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 3.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement and the Stock
Option Agreement by the Company do not, and the performance of this
Agreement and the Stock Option Agreement 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 any Company Subsidiary, (ii) conflict
with or violate any Laws applicable to the Company or any Company
Subsidiary or by which any of their respective properties is bound or
affected, or (iii) result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would become a default)
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
(ii) and (iii) for any such conflicts, violations, breaches, defaults or
other occurrences that would not, individually or in the aggregate, have a
Material Adverse Effect on the Company and the Company Subsidiaries, taken
as a whole.
(b) The execution and delivery of this Agreement and the Stock
Option Agreement by the Company do not, and the performance of this
Agreement by the Company shall not, require any consent, approval,
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, the Exchange Act,
Blue Sky Laws, the BHCA, the banking laws of the State of Wisconsin (the
"WBL") and the filing of appropriate merger or other documents as required
by Wisconsin Law 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
issuance of Seller Common Stock pursuant to the Stock Option Agreement, or
otherwise prevent the Company from performing its obligations under this
Agreement, and would not have a Material Adverse Effect on the Company or
the Company Subsidiaries, taken as a whole.
SECTION 3.6 Compliance; Permits. Neither the Company nor any
Company Subsidiary is in conflict with, or in default or violation of, (i)
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 (ii)
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 any of 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, have a Material Adverse
Effect on the Company and the Company Subsidiaries, taken as a whole.
SECTION 3.7 Securities and Banking Reports; Financial Statements.
(a) The Company and each Company Subsidiary have filed all forms,
reports and documents required to be filed with (x) the SEC since December
31, 1996, and as of the date of this Agreement have delivered or made
available to Seller, in the form filed with the SEC, (i) its Annual
Reports on Form 10-K for the fiscal years ended December 31, 1994, 1995
and 1996, respectively, (ii) all proxy statements relating to the
Company's meetings of shareholders (whether annual or special) held since
December 31, 1994, (iii) all Current Reports on Form 8-K filed by the
Company with the SEC since December 31, 1994, (iv) all other reports or
registration statements (other than Quarterly Reports on Form 10-Q not
referred to in clause (ii) above) filed by the Company with the SEC since
December 31, 1994, and (v) all amendments and supplements to all such
reports and registration statements filed by the Company with the SEC
since December 31, 1994 (collectively, the "Company SEC Reports") and (y)
the Federal Reserve Board, the DFI and any other applicable Federal or
state securities or banking authorities (all such reports and statements
are collectively referred to with the Company SEC Reports as the "Company
Reports"). The Company Reports, including all Company Reports filed after
the date of this Agreement, (i) were or will be prepared in accordance
with the requirements of applicable Law and (ii) 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
light of the circumstances under which they were made, not misleading.
(b) Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the Company SEC
Reports, including any Company SEC Reports filed since the date of this
Agreement and prior to or on the Effective Time, have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except as may be
indicated in the notes thereto) and each fairly presents the consolidated
financial position of the Company and the Company Subsidiaries as of the
respective dates thereof and the consolidated results of its operations
and changes in financial position for the periods indicated, except that
any unaudited interim financial statements were or are subject to normal
and recurring year-end adjustments, which were not or are not expected to
be material in amount.
(c) Except (i) for the liabilities that are fully reflected or
reserved against on the consolidated statement of financial condition of
the Company included in the Company Form 10-K for the year ended December
31, 1996, (ii) for the liabilities incurred in the ordinary course of
business consistent with past practice since December 31, 1996, and (iii)
as set forth in Section 3.7 of the Company Disclosure Schedule, neither
the Company nor any Company Subsidiary has incurred any liability of any
nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether due or to become due) that, either alone or when combined with all
similar liabilities, has had, or would reasonably be expected to have, a
Material Adverse Effect on the Company and the Company Subsidiaries, taken
as a whole.
SECTION 3.8 Absence of Certain Changes or Events. Except as
disclosed in the Company SEC Reports filed prior to the date of this
Agreement, since December 31, 1996 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, 1996, there has not been (i) any change in the
financial condition, results of operations or business of the Company or
any of the Company Subsidiaries having a Material Adverse Effect on the
Company and the Company Subsidiaries, taken as a whole, (ii) any damage,
destruction or loss (whether or not covered by insurance) with respect to
any assets of the Company or any of the Company Subsidiaries having a
Material Adverse Effect on the Company and the Company Subsidiaries, taken
as a whole, (iii) any change by the Company or any Company Subsidiaries in
its accounting methods, principles or practices, (iv) any revaluation by
the Company or any Company Subsidiaries of any of its assets in any
respect, (v) 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
(vi) except for repurchases pursuant to the Company's Common Stock
repurchase program or for regular quarterly cash dividends of 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 3.9 Absence of Litigation.
(a) Except as set forth in Section 3.9 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, to the best of the Company's
knowledge, 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 as to which there is a reasonable probability of an adverse
determination and which, if adversely determined, would, individually or
in the aggregate, have a Material Adverse Effect on the Company and the
Company's Subsidiaries, taken as a whole.
(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 has had
a Material Adverse Effect on the Company and the Company's Subsidiaries,
taken as a whole.
SECTION 3.10 Employee Benefit Plans.
(a) Compliance with Applicable Laws. Each of the Company's
"employee benefit plans" within the meaning of Section 3(3) of ERISA, for
the benefit of employees of the Company and the Company Subsidiaries (the
"Company Plans") has been operated in all 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, have a
Material Adverse Effect on 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, have a Material
Adverse Effect on the Company and the Company Subsidiaries, taken as a
whole. No legal action, suit or claim is pending or, to the knowledge of
the Company or the Company Subsidiaries, threatened with respect to any
Company Plan (other than claims for benefits in the ordinary course) and,
to the knowledge of the Company or the Company Subsidiaries, no fact or
event exists that could give rise to any such action, suit or claim.
(b) 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) has received a favorable determination
letter from the IRS (as defined herein) that it is so qualified, and the
Company is not aware of any fact or event that has occurred since the date
of such determination letter from the IRS to adversely affect the
qualified status of any Company Plan or the exempt status of any such
trust. Except as disclosed in Section 3.10(b) 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 501(c)(9) of the Code.
(c) Absence of Certain Liabilities and Events. There have been no
prohibited transactions (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 and, to the
knowledge of the Company or the Company Subsidiaries, no fact or event
exists that could give rise to any such liability.
(d) Plan Contributions. All contributions, provisions or payments
required to be made with respect to any Company Plan have been made on or
before their due dates.
SECTION 3.11 Registration Statement; Proxy Statement/Prospectus.
The information supplied by the Company for inclusion in the registration
statement of the Company (the "Registration Statement") pursuant to which
the shares of Company Common Stock to be issued in the Merger will be
registered with the SEC shall not, at the time the Registration Statement
(including any amendments or supplements thereto) is declared effective by
the SEC, 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 light of the circumstances under which
they were made, not misleading. The information supplied by the Company
for inclusion in 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 Seller
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 necessary in order to make the statements made
therein, in 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 will promptly inform the Seller. The Registration Statement
and the Proxy Statement/Prospectus shall comply in all material respects
as to form with the requirements of the Securities Act, the Exchange Act
and the rules and regulations thereunder. Notwithstanding the foregoing,
the Company makes no representation or warranty with respect to any
information about, or supplied or omitted by, Seller which is contained in
any of the foregoing documents.
SECTION 3.12 Title to Property. The Company and each of the
Company Subsidiaries has good and marketable title to all of their
respective properties and assets, real and personal, free and clear of all
mortgage liens, and free and clear of all other liens, charges and
encumbrances except liens for taxes not yet due and payable, pledges to
secure deposits and such minor imperfections of title, if any, as do not
materially detract from the value of or interfere with the present use of
the property affected thereby or which, individually or in the aggregate,
would not have a Material Adverse Effect on the Company and the Company
Subsidiaries, taken as a whole; and all leases pursuant to which the
Company or any of the Company Subsidiaries lease from others material
amounts of real or personal property are in good standing, valid and
effective in accordance with their respective terms, and there is not,
under any of such leases, any existing material default or event of
default (or event which with notice or lapse of time, or both, would
constitute a material default and in respect of which the Company or such
subsidiary has not taken adequate steps to prevent such a default from
occurring). Substantially all of the Company's and each of the Company
Subsidiaries' buildings and equipment in regular use have been reasonably
maintained and are in good and serviceable condition, reasonable wear and
tear excepted.
SECTION 3.13 Absence of Agreements. Neither the Company nor any of
the Company Subsidiaries is a party to any agreement or memorandum of
understanding with, or a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a
recipient of any extraordinary supervisory letter which restricts
materially the conduct of its business (including any contract containing
covenants which limit the ability of the Company or Company Subsidiary to
compete in any line of business or with any person or which involve any
restriction of the geographical area in which, or method by which, the
Company or any Company Subsidiary may carry on its business (other than as
may be required by Law or applicable regulatory authorities)), in any
manner relates to its capital adequacy, its credit policies, or its
management, except for those the existence of which has been disclosed to
Seller prior to the date of this Agreement, nor has the Company been
advised that any federal, state, or governmental agency is contemplating
issuing or requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter or
similar submission, except as disclosed by the Company in Section 3.13 of
the Company Disclosure Schedule.
SECTION 3.14 Taxes. The Company and the Company Subsidiaries have
timely filed all Material Tax Returns (as defined below) required to be
filed by them, and the Company and the Company Subsidiaries have timely
paid and discharged all Material Taxes (as defined below) due in
connection with or with respect to the filing of such Tax Returns and have
timely paid all other Taxes as are due, except such as are being contested
in good faith by appropriate proceedings and with respect to which Seller
is maintaining reserves adequate for their payment. 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
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 3.14 of
the Company Disclosure Schedule, to the best knowledge of the Company,
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 3.14 of the Seller's Disclosure
Schedule, neither Company nor any of the Company's 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 3.14 of the Company 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 otherwise disclosed in Section 3.14 of the Company 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 have a Material Adverse Effect on the Company
and the Company Subsidiaries, taken as a whole, after the Effective Time.
Except as otherwise disclosed in Section 3.14 of the Company
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.
SECTION 3.15 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company.
SECTION 3.16 Tax Matters and Pooling. 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 any action that would prevent the
Merger from qualifying (i) as a reorganization under Section 368(a)(1)(A)
of the Code or (ii) for pooling-of-interests accounting treatment under
GAAP.
SECTION 3.17 Material Adverse Effect. Since December 31, 1996
there has been no Material Adverse Effect on the Company and the Company
Subsidiaries, taken as a whole.
ARTICLE IV - COVENANTS OF THE SELLER
SECTION 4.1 Affirmative Covenants. The Seller 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 Seller
Subsidiary to:
(a) operate its business only in the ordinary course consistent with
past practices;
(b) use all reasonable efforts to preserve intact its business
organization and assets, maintain its rights and franchises, retain the
services of its officers and key employees and maintain its relationships
with customers;
(c) use all reasonable efforts to maintain and keep its properties
in as good repair and condition as at present, ordinary wear and tear
excepted;
(d) use all reasonable efforts to keep in full force and effect
insurance and bonds comparable in amount and scope of coverage to that now
maintained by it;
(e) use all reasonable efforts to perform in all material respects
all obligations required to be performed by it under all material
contracts, leases, and documents relating to or affecting its assets,
properties, and business;
(f) take such reasonable actions as are requested by the Company to
complete the Merger; and
(g) The Seller will use its reasonable best efforts to cause each
holder of an option to purchase Seller Common Stock under the 1991 Stock
Option and Incentive Plan and the 1995 Equity Incentive Plan to execute a
consent and waiver agreement amending the terms of such option in the form
of Exhibit 4.1 hereof (an "Option Agreement"), and to cause Messrs. Xxxxxx
and Xxxxxxx to execute amendments to their Employment Agreements in the
form of Exhibit 4.1 hereof to clarify their rights under said Employment
Agreements.
SECTION 4.2 Negative Covenants. Except as specifically
contemplated by this Agreement, from the date of this Agreement until the
Effective Time, the Seller shall not do, or permit any Seller Subsidiary
to do, without the prior written consent of the Company, any of the
following:
(a) (i) except as required by applicable law or to maintain
qualification pursuant to the Code, adopt, amend, renew or terminate any
Plan or any agreement, arrangement, plan or policy between the Seller or
any Seller Subsidiary and one or more of its current or former directors,
officers or employees or (ii) except for normal increases in the ordinary
course of business consistent with past practice, and subject to the
specific provisions of Annex A, or, except as required by applicable law,
increase in any manner the base salary, bonus incentive compensation or
fringe benefits of any director, officer or employee or pay any benefit
not required by any plan or agreement as in effect as of the date hereof
(including, without limitation, the granting of stock options, stock
appreciation rights, restricted stock, restricted stock units or
performance units or shares);
(b) (i) except as provided below declare or pay any dividend on, or
make any other distribution in respect of, its outstanding shares of
capital stock, except for (A) regular quarterly cash dividends on
Seller Common Stock with usual record and payment dates for such
dividends with each such dividend at a rate per share of Seller
Common Stock not in excess of $.10 and (B) dividends by a Seller
Subsidiary to the Seller;
(ii) declare or pay any dividends or make any distributions in
any amount on Seller Common Stock in or with respect to the quarter
in which the Effective Time shall occur and in which the shareholders
of Seller Common Stock are entitled to receive dividends on the
shares of Company Common Stock into which the shares of Seller Common
Stock have been converted; provided that, it is the intent of this
clause (ii) to provide that the holders of Seller Common Stock will
receive either the payment of cash dividends on their shares of
Seller Common Stock or the payment of cash dividends as the holders
of shares of Company Common Stock received in exchange for the shares
of Seller Common Stock pursuant to this Agreement for the calendar
quarter during which the Effective Time shall occur, but will not
receive and will not become entitled to receive for the same calendar
quarter both the payment of a cash dividend as shareholders of Seller
Common Stock and the payment of a cash dividend as the holders of
shares of Company Common Stock received in exchange for the shares of
Seller Common Stock pursuant to this Agreement; and if the Seller
does not declare and pay cash dividends in a particular calendar
quarter because of the Seller's reasonable expectation that the
Effective Time was to have occurred in such calendar quarter wherein
the holders of Seller Common Stock would have become entitled to
receive cash dividends for such calendar quarter on the shares of
Company Common Stock to have been exchanged for the shares of Seller
Common Stock pursuant to this Agreement, and the Effective Time does
not in fact occur in such calendar quarter, then, as a result
thereof, the Seller shall be entitled to declare and pay a cash
dividend (within the limitations of this clause (ii)) on such shares
of Seller Common Stock for such calendar quarter by the declaration
and payment of such cash dividends as soon as reasonably practicable
after the end of such calendar quarter;
(c) (i) redeem, purchase or otherwise acquire any shares of its
capital stock or any securities or obligations convertible into or
exchangeable for any shares of its capital stock, or any options,
warrants, conversion or other rights to acquire any shares of its capital
stock or any such securities or obligations; (ii) merge with or into any
other corporation or bank, permit any other corporation or bank to merge
into it or consolidate with any other corporation or bank, or effect any
reorganization or recapitalization; (iii) purchase or otherwise acquire
any substantial portion of the assets, or more than 5% of any class of
stock, of any corporation, bank or other business other than in the
ordinary course of business and consistent with past practice; (iv)
liquidate, sell, dispose of, or encumber any assets or acquire any assets,
other than in the ordinary course of its business consistent with past
practice; or (v) split, combine or reclassify any of its capital stock or
issue or authorize or propose the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock;
(d) issue, deliver, award, grant or sell, or authorize or propose
the issuance, delivery, award, grant or sale of, any shares of any class
of capital stock of the Seller or any Seller Subsidiary (including shares
held in treasury) or any rights, warrants or options to acquire, any such
shares, other than the issuance of Seller Common Stock issuable upon
exercise of employee or director stock options outstanding as of the date
of this Agreement or pursuant to Seller Plans, in effect as of the date of
this Agreement;
(e) authorize, permit or cause any of its officers, directors,
employees or agents to directly or indirectly solicit, initiate or
encourage any inquiries relating to, or the making of any proposal which
constitutes, a "takeover proposal" (as defined below), or (i) recommend,
endorse or agree to any takeover proposal, (ii) participate in any
discussions or negotiations with respect to a takeover proposal, or (iii)
provide third parties with any nonpublic information relating to any such
inquiry or proposal; provided, however, that the Seller may, and may
authorize and permit its officers, directors, employees or agents to,
provide third parties with nonpublic information, otherwise facilitate any
effort or attempt by any third party to make or implement a takeover
proposal and participate in discussions and negotiations with any third
party relating to any takeover proposal, if the Seller, after having
consulted with and considered the advice of outside counsel, has
determined in good faith that such actions are necessary for the discharge
of the fiduciary duties of the Seller's Board of Directors. The Seller
will immediately cease and cause to be terminated any existing activities,
discussions or negotiations previously conducted with any parties other
than the Company with respect to any of the foregoing. The Seller will
notify the Company immediately if any such inquiries or takeover proposals
are received by, any such information is requested from, or any such
negotiations or discussions are sought to be initiated or continued with,
the Seller, and the Seller shall keep the Company informed, on a current
basis, of the status of any such discussions and negotiations. As used in
this Agreement, "takeover proposal" shall mean any tender or exchange
offer, proposal for a merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction
involving the Seller or any Seller Subsidiary or any proposal or offer to
acquire in any manner a substantial equity interest in, or a substantial
portion of the assets of, the Seller or any Seller Subsidiary other than
the transactions contemplated or permitted by this Agreement;
(f) propose or adopt any amendments to its Articles of Incorporation
or By-laws in any way adverse to the Company;
(g) change any of its methods of accounting in effect at June 30,
1997, or change any of its methods of reporting income or deductions for
federal income tax purposes from those employed in the preparation of the
federal income tax returns for the taxable year ending December 31, 1996,
except as may be required by Law or GAAP;
(h) change in any material respect any lending, investment,
liability management or other material policies concerning the business or
operations of the Seller or any of the Seller Subsidiaries, except as
required by Law, including, without limitation: (i) acquire or sell any
contracts for the purchase or sale of financial or other futures or any
put or call options, or enter into any xxxxxx or interest rate swaps
relating to cash, securities, or any commodities whatsoever or enter into
any other derivative transaction; (ii) except for transactions disclosed
in Section 4.2(h) of the Seller Disclosure Schedule, sell, assign,
transfer, pledge, mortgage or otherwise encumber, or permit any
encumbrances to exist with respect to, any of its assets with a value in
excess of $100,000 individually, except in the ordinary course of business
consistent with past practice; (iii) make any investment with an interest
maturity of five years or more except in the ordinary course of business
consistent with past practice; (iv) incur any material liabilities or
material obligations, whether directly or by way of guaranty, including
any obligation for borrowed money, whether or not evidenced by a note,
bond, debenture or similar instrument, except in the ordinary course of
business consistent with past practice and in no event in excess of
$100,000 individually except for borrowings from the FHLB or pursuant to
repurchase agreements consistent with past practices; (v) enter into any
agreement with respect to any acquisition of a material amount of assets
or securities or any discharge, waiver, satisfaction, release or
relinquishment of any material contract rights, liens, encumbrances, debt
or claims, not in the ordinary course of business and consistent with past
practices and in no event with a value in excess of $200,000 individually
except for satisfaction of liens on loans receivable consistent with past
practice; (vi) settle any claim, action, suit, litigation, proceeding,
arbitration, investigation or controversy of any kind, for any amount in
excess of $250,000, net of any insurance proceeds, or in any manner which
would restrict in any material respect the operations or business of the
Seller or any of the Seller Subsidiaries; (vii) make any capital
expenditure, except in the ordinary course and consistent with past
practice and in no event in excess of $100,000 individually; or (viii)
take any action or fail to take any action which individually or in the
aggregate can be expected to have a Material Adverse Effect on the Seller
and the Seller Subsidiaries, taken as a whole;
(i) take or cause to be taken any action which would disqualify the
Merger (i) as a tax-free reorganization under Section 368 of the Code or
(ii) for pooling of interests accounting treatment under GAAP; and
(j) agree in writing or otherwise to do any of the foregoing.
SECTION 4.3 Letter of the Seller's Accountants. The Seller shall
use its reasonable best efforts to cause to be delivered to the Company
"comfort" letters of Ernst & Young, LLP, the Seller's independent public
accountants, dated the date on which the Registration Statement shall
become effective and the Effective Time, respectively, and addressed to
the Company, in a form reasonably satisfactory to the Company and
reasonably customary in scope and substance for letters delivered by
independent public accountants in connection with registration statements
similar to the Registration Statement and transactions such as those
contemplated by this Agreement.
SECTION 4.4 Access and Information.
(a) Until the Effective Time and upon reasonable notice, and subject
to applicable laws relating to the exchange of information, the Seller
shall, and shall cause each Seller Subsidiary to, afford to the Company's
officers, employees, accountants, legal counsel and other representatives
of the Company, access, during normal business hours, to all its
properties, books, contracts, commitments and records. Prior to the
Effective Time, the Seller shall (and shall cause each Seller Subsidiary
to) furnish promptly (as soon as available or received by the Seller or
any Seller Subsidiary) to the Company (i) a copy of each Seller Report
filed by it or received by it (to the extent not prohibited by Law and if
so prohibited the Seller shall promptly so notify the Company) after the
date of this Agreement and prior to the Effective Time pursuant to the
requirements of federal or state securities laws, the HOLA or any other
federal or state banking laws or any other applicable Laws promptly after
such documents are available, (ii) the monthly financial statements of the
Seller and the Seller Subsidiaries (as prepared by the Seller in
accordance with its normal accounting procedures) promptly after such
financial statements are available without further request by the Company,
(iii) a copy of any action, including all minutes, taken by the Board of
Directors, or any committee thereof, of the Seller and the Seller
Subsidiaries and any documents or other materials of any kind provided to
such Boards or committees promptly after such action, minutes, materials
or other documents become available without further request by the
Company, (iv) a copy of each Tax Return filed by the Seller and each
Seller Subsidiary for the three most recent years available, a copy of any
correspondence received from the IRS or any other governmental entity or
taxing authority or agency and any other correspondence relating to Taxes,
and any other documents relating to Taxes as the Company may reasonably
request, and (v) all other information concerning its business, properties
and personnel as the Company may reasonably request, other than in each
case reports or documents which the Seller is not permitted to disclose
under applicable Law or binding agreement entered into prior to the date
of this Agreement. The parties hereto will make appropriate substitute
disclosure arrangements under circumstances in which the restrictions of
the preceding sentence apply.
(b) Unless otherwise required by Law, the parties will hold any such
information which is nonpublic in confidence until such time as such
information becomes publicly available through no wrongful act of either
party, and in the event of termination of this Agreement for any reason
each party shall promptly return all nonpublic documents obtained from any
other party, and any copies made of such documents, to such other party or
destroy such documents and copies.
SECTION 4.5 Update Disclosure; Breaches.
(a) From and after the date of this Agreement until the Effective
Time, the Seller shall update the Seller Disclosure Statement on a regular
basis by written notice to the Company to reflect any matters which have
occurred from and after the date of this Agreement which, if existing on
the date of this Agreement, would have been required to be described
therein; provided that, (i) to the extent that any information that would
be required to be included in an update under this Section 4.5(a) would
have in the past been contained in internal reports prepared by the Seller
or any Seller Subsidiary in the ordinary course, such update may occur by
delivery of such internal reports prepared in accordance with past
practice, with appropriate steps taken by the Seller to identify relevant
information contained therein, and (ii) to the extent that updating
required under this Section is unduly burdensome to the Seller, the Seller
and the Company will use their best efforts to develop alternate updating
procedures utilizing, wherever possible, existing reporting systems.
(b) The Seller 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 4.6 Affiliates. Within thirty (30) days after the date of
this Agreement, (a) the Seller shall deliver to the Company a letter
identifying all persons who are then "affiliates" of the Seller,
including, without limitation, all directors and executive officers of the
Seller, for purposes of Rule 145 promulgated under the Securities Act
and/or for purposes of applicable SEC accounting releases with respect to
pooling-of-interests accounting treatment (each a "Seller Affiliate") and
(b) the Seller shall advise the persons identified in such letter of the
resale restrictions imposed by applicable securities laws and regulations
governing pooling-of-interests accounting treatment and shall use
reasonable efforts to obtain from each person identified in such letter a
written agreement, substantially in the form attached hereto as Exhibit
4.6. The Seller shall use its reasonable best efforts to obtain from any
person who becomes an affiliate of the Seller after the Seller's delivery
of the letter referred to above, and on or prior to the Effective Time, a
written agreement substantially in such form as soon as practicable after
attaining such status.
SECTION 4.7 Tax Treatment and Pooling. The Seller will use its
reasonable best efforts to cause the Merger to qualify for pooling-of-
interests accounting treatment and as a reorganization under Section
368(a)(1)(A) of the Code.
SECTION 4.8 Expenses.
(a) All Expenses (as defined below) incurred by the Company and the
Seller shall be borne solely and entirely by the party which has incurred
the same, except that the parties shall share equally in the out-of-pocket
expenses relating to the printing of the Registration Statement and the
Proxy Statement/Prospectus, and all SEC, NASDAQ, and other regulatory
filing and listing fees incurred in connection herewith.
(b) "Expenses" as used in this Agreement shall include all
reasonable out-of-pocket expenses (including, without limitation, all fees
and expenses of counsel, accountants, investment bankers, experts and
consultants to the party and its affiliates) incurred by a party or on its
behalf in connection with or related to the authorization, preparation and
execution of this Agreement and the Stock Option Agreement, the
solicitation of shareholder approvals and all other matters related to the
closing of the transactions contemplated hereby and by the Stock Option
Agreement.
SECTION 4.9 Delivery of Shareholder List. The Seller shall
arrange to have its transfer agent deliver to the Company or its designee,
from time to time prior to the Effective Time, a true and complete list
setting forth the names and addresses of the Seller shareholders, their
holdings of stock as of the latest practicable date, and such other
shareholder information as the Company may reasonably request.
ARTICLE V - COVENANTS OF THE COMPANY
SECTION 5.1 Affirmative Covenants. The Company hereby covenants
and agrees with the Seller that prior to the Effective Time, unless the
prior written consent of the Seller shall have been obtained and except as
otherwise contemplated herein, it will and it will cause each Company
Subsidiary to:
(a) maintain its corporate existence in good standing and maintain
all books and records in accordance with accounting principles and
practices as utilized in the Company's or the Company Subsidiaries', as
the case may be, financial statements applied on a consistent basis; and
(b) conduct its business in the ordinary course of business
consistent with past practices and in a manner that does not violate any
Law, except for possible violations which individually or in the aggregate
do not, and, insofar as reasonably can be foreseen, in the future will
not, have a Material Adverse Effect on the Company and the Company
Subsidiaries, taken as a whole.
SECTION 5.2 Negative Covenants. Except as otherwise contemplated
by this Agreement, from the date of this Agreement until the Effective
Time, the Company shall not do, or agree to commit to do, or permit any
Company Subsidiaries to do, without the prior written consent of the
Seller any of the following:
(a) solely in the case of the Company, 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; provided, however, that nothing contained
herein shall prohibit the Company from increasing the quarterly cash
dividend on Company Common Stock;
(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 Article VII 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 which would disqualify the
Merger (i) as a tax free reorganization under Section 368 of the Code or
(ii) for pooling-of-interests accounting treatment under GAAP;
(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 Company Common Stock or the ability of the
Company to consummate the transactions contemplated hereby;
(e) enter into any agreement providing for, or otherwise participate
in, any merger, consolidation or other transaction in which the Company or
any surviving corporation would be required not to consummate the Merger
or any of the other transactions contemplated hereby in accordance with
the terms of this Agreement, as the case may be; or
(f) agree to do any of the foregoing.
SECTION 5.3 Access and Information.
(a) Until the Effective Time and upon reasonable notice and subject
to applicable laws relating to the exchange of information, the Company
shall, and shall cause each Company Subsidiary to, afford to the Seller's
officers, employees, accountants, legal counsel and other representatives
of the Seller, access, during normal business hours, to all its
properties, books, contracts, commitments and records. Prior to the
Effective Time, the Company shall (and shall cause each Company Subsidiary
to) furnish promptly (as soon as available or received by the Company or
any Company Subsidiary) to the Seller (i) a copy of each Company Report
filed by it or received by it (to the extent not prohibited by Law and if
so prohibited, the Company shall promptly so notify the Seller) after the
date of this Agreement and prior to the Effective Time pursuant to the
requirements of federal or state securities laws, the BHCA, any other
federal or state banking laws or any other applicable Laws promptly after
such documents are available and (ii) all other information concerning the
business, properties and personnel of the Company or the Company
Subsidiaries as the Seller may reasonably request, other than in each case
reports or documents which the Company is not permitted to disclose under
applicable law or binding agreement entered in to prior to the date of
this Agreement. The parties hereto will make appropriate substitute
disclosure arrangements under circumstances in which the restrictions of
the preceding sentence apply.
(b) Unless otherwise required by Law, the parties will hold any such
information which is nonpublic in confidence until such time as such
information becomes publicly available through no wrongful act of either
party, and in the event of termination of this Agreement for any reason
each party shall promptly return all nonpublic documents obtained from any
other party, and any copies made of such documents, to such other party or
destroy such documents or copies.
SECTION 5.4 Update Disclosure; Breaches.
(a) From and after the date of this Agreement until the Effective
Time, the Company shall update the Company Disclosure Statement on a
regular basis by written notice to the Seller to reflect any matters which
have occurred from and after the date of this Agreement which, if existing
on the date of this Agreement, would have been required to be described
therein; provided that, to the extent that updating required under this
Section is unduly burdensome to the Company, the Company and the Seller
will use their best efforts to develop alternate updating procedures
utilizing, wherever possible, existing reporting systems.
(b) The Company 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 Seller
and use its best efforts to prevent or promptly remedy the same.
SECTION 5.5 Stock Exchange Listing. The Company shall use all
reasonable efforts to cause the shares of Company Common Stock to be
issued in the Merger to be approved for listing on the Nasdaq National
Market prior to the Effective Time.
SECTION 5.6 Tax Treatment and Pooling. The Company will use its
reasonable best efforts to cause the Merger to qualify (i) as a
reorganization under Section 368(a)(1)(A) of the Code and (ii) for
pooling-of-interests accounting treatment under GAAP.
SECTION 5.7 Stock Options.
(a) At the Effective Time, the Company will assume the Seller's 1991
Stock Option and Incentive Plan, the 1995 Equity Incentive Plan and the
1996 Non-Employee Director Stock Option Plan (the "Option Plans") and all
of the Seller's obligations thereunder. At the Effective Time, each
outstanding option issued pursuant to the Option Plans shall be deemed to
constitute an option to acquire, on the same terms and conditions as were
applicable under such option (as amended as contemplated in Section 4.1(g)
and Annex A) (including, without limitation, the time periods allowed for
exercise), a number of shares of Company Common Stock equal to the product
of the Exchange Ratio and the number of shares of Seller Common Stock
subject to such option (provided that any fractional shares of Company
Common Stock resulting from such multiplication shall be rounded down to
the nearest share), at a price per share (rounded up to the nearest cent)
equal to the exercise price per share of the shares of Seller Common Stock
subject to such option divided by the Exchange Ratio.
(b) Within five days after the Effective Time, the Company shall
file with the SEC a registration statement on an appropriate form under
the Securities Act with respect to the shares of Company Common Stock
subject to options to acquire Company Common Stock issued pursuant to
Section 5.7(a) hereof, and shall use its best efforts to maintain the
current status of the prospectus related thereto, as well as comply with
applicable state securities or Blue Sky Laws, for so long as such options
remain outstanding.
The adjustment provided herein with respect to any options which are
ISOs shall be and is intended to be effected in a manner which is
consistent with Section 424(a) of the Code. The duration and other terms
of the new option shall be the same as the original option, except that
all references to the Seller shall be deemed to be references to the
Company.
ARTICLE VI - ADDITIONAL AGREEMENTS
SECTION 6.1 Proxy Statement/Prospectus; Registration Statement.
As promptly as practicable after the execution of this Agreement, the
Seller and the Company shall prepare and file with the SEC the Proxy
Statement/Prospectus and Registration Statement under the Securities Act
and the Exchange Act relating to the approval of the Merger by the
shareholders of the Seller and shall use all reasonable efforts to cause
the Registration Statement to become effective as soon thereafter as
practicable. The Proxy Statement/Prospectus shall include the
recommendation of the Board of Directors of the Seller in favor of the
Merger, unless the Board of Directors of the Seller shall have determined
in good faith based on advice of counsel that such recommendation would
violate its fiduciary duty to the Seller's shareholders.
SECTION 6.2 Meeting of the Seller's Shareholders. The Seller
shall promptly after the date of this Agreement take all action necessary
in accordance with the WBCL and Seller Articles and the Seller By-Laws to
convene the Seller Shareholders' Meeting. The Seller shall use its best
efforts to solicit from shareholders of the Seller proxies in favor of the
Merger and shall take all other action necessary or advisable to secure
the vote or consent of shareholders required by the WBCL to approve the
Merger, unless the Board of Directors of the Seller shall have determined
in good faith based on advice of counsel that such actions would violate
its fiduciary duty to the Seller's shareholders.
SECTION 6.3 Appropriate Action; Consents; Filings. The Seller and
the Company shall use all reasonable efforts to (i) take, or cause to be
taken, all appropriate action, and do, or cause to be done, all things
necessary, proper or advisable under applicable Law to consummate and make
effective the transactions contemplated by this Agreement and the Stock
Option Agreement, (ii) obtain all consents, licenses, permits, waivers,
approvals, authorizations or orders required under Law (including, without
limitation, all foreign and domestic (federal, state and local)
governmental and regulatory rulings and approvals and parties to
contracts) required in connection with the authorization, execution and
delivery of this Agreement and the Stock Option Agreement and the
consummation by them of the transactions contemplated hereby and thereby,
including, without limitation, the Merger and the issuance of Seller
Common Stock pursuant to the Stock Option Agreement, (iii) make all
necessary filings, and thereafter make any other required submissions,
with respect to this Agreement, the Stock Option Agreement and the Merger
required under (A) the Securities Act and the Exchange Act and the rules
and regulations thereunder, and any other applicable federal or state
securities laws, (B) applicable federal or state banking laws and (C) any
other applicable Law; provided that, the Company and the Seller shall
cooperate with each other in connection with the making of all such
filings, including providing copies of all such documents to the
non-filing party and its advisors prior to filing and, if requested, to
accept all reasonable additions, deletions or changes suggested in
connection therewith. The Seller and the Company shall furnish all
information required for any application or other filing to be made
pursuant to the rules and regulations of any applicable Law (including all
information required to be included in the Proxy Statement/Prospectus and
the Registration Statement) in connection with the transactions
contemplated by this Agreement. In case at any time after the Effective
Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of each
party to this Agreement shall use all reasonable efforts to take all such
necessary action.
SECTION 6.4 Employee Stock Options and Other Employee Benefit
Matters. Annex A hereto sets forth certain agreements with respect to the
Seller's employee and director stock options and other employee benefit
matters.
SECTION 6.5 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 Seller or any of the Seller
Subsidiaries (including in his/her role as a fiduciary of the employee
benefit plans of the Seller or the Seller 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 Seller, any of the Seller 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 and respond thereto. It is
understood and agreed that after the Effective Time, the Company 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 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 after consultation with the Company;
provided, however, that the (1) Company shall have the right to assume the
defense thereof and upon such assumption the Company 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 Company 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 Company and the Indemnified Parties, the Indemnified Parties may
retain counsel satisfactory to them after consultation with the Company,
and the Company shall pay the reasonable fees and expenses of such counsel
for the Indemnified Parties, (2) Company shall in all cases be obligated
pursuant to this Section 6.5(a) to pay for only one firm of counsel for
all Indemnified Parties, (3) Company shall not be liable for any
settlement effected without its prior written consent (which consent shall
not be unreasonably withheld) and (4) Company 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
6.5, upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify the Company thereof, provided that
the failure to so notify shall not affect the obligations of the Company
under this Section 6.5 except to the extent such failure to notify
materially prejudices the Company.
(b) The Company shall purchase, and for a period of three (3) years
after the Effective Time, the Company shall use its best efforts to
maintain, directors and officers liability insurance "tail" or "runoff"
coverage with respect to wrongful acts and/or omissions committed or
allegedly committed prior to the Effective Time. Such coverage shall have
an aggregate coverage limit over the term of such policy in an amount no
less than the annual aggregate coverage limit under the Seller's existing
directors and officers liability policy, and in all other respects shall
be at least comparable to such existing policy; provided, however, that in
no event shall the Company be required to expend on an annual basis more
than 200% of the current amount expended by the Seller (the "Insurance
Amount") to maintain or procure insurance coverage, and further provided
that if the Company is unable to maintain or obtain the insurance called
for by this Section 6.5 Company shall use all reasonable efforts to obtain
as much comparable insurance as available for the Insurance Amount.
(c) In the event the Company 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 Company or the Surviving Corporation, as the case may be,
assume the obligations set forth in this section.
(d) In addition to the other indemnification obligations set forth
in this Section 6.5, the Company will fulfill the obligations to indemnify
directors and officers of the Seller contained in the Seller Articles.
(e) The provisions of this Section 6.5 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and his or
her heirs and representatives.
SECTION 6.6 Notification of Certain Matters. The Seller shall
give prompt notice to the Company, and the Company shall give prompt
notice to the Seller, of (i) the occurrence, or non-occurrence, of any
event the occurrence, or non-occurrence, of which would be likely to cause
any representation or warranty contained in this Agreement to be untrue or
inaccurate and (ii) any failure of the Seller or the Company, as the case
may be, to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder; provided, however, that the
delivery of any notice pursuant to this Section 6.6 shall not limit or
otherwise affect the remedies available hereunder to the party receiving
such notice.
SECTION 6.7 Public Announcements. The Company and the Seller
shall consult with each other before issuing any press release or
otherwise making any public statements with respect to the Merger and
shall not issue any such press release or make any such public statement
prior to such consultation, except as may be required by Law or any
listing agreement with or rule of the National Association of Securities
Dealers, Inc.
SECTION 6.8 Customer Retention. To the extent permitted by law or
applicable regulation, the Seller shall use all reasonable efforts to
assist the Company in its efforts to retain the Seller's customers for the
Surviving Corporation. Such efforts shall include making introductions of
the Company's employees to such customers, assisting in the mailing of
information prepared by the Company and reasonably acceptable to the
Seller, to such customers and actively participating in any "transitional
marketing programs" as the Company shall reasonably request.
SECTION 6.9 Incentive Bonus Pool. Promptly following the
execution and delivery of this Agreement, the Seller will establish a
bonus pool equal to $516,000 for employees of the Seller and Seller
Subsidiaries (the "Bonus Pool"). The Bonus Pool will be used to:
(1) incent employees of the Seller and the Seller Subsidiaries
to retain the Seller's customers;
(2) incent employees of the Seller and the Seller Subsidiaries
to attain net income targets; and
(3) retain key employees of the Seller and the Seller
Subsidiaries.
The Bonus Pool will be administered by a committee of three persons:
Xxxx X. Xxxxxx, President and Chief Executive Officer of the Seller,
Xxxxxx X. Xxxxxxx, the President of the Company and Xxxx X. Xxxxxxx, the
Senior Vice President and Chief Financial Officer of the Seller. The
committee will designate participants, set targets and do all other things
necessary to administer the Bonus Pool. The initial allocation of the
Bonus Pool will be determined by Xxxx X. Xxxxxx and may thereafter be
changed only with his written consent. The committee shall act by the
decision of the majority of its members, except as stated in the previous
sentence.
SECTION 6.10 Recission of Repurchase Programs. Prior to the
Effective Time, the Company and the Seller shall renounce and rescind
their respective publicly announced share repurchase programs in order to
meet the requirements for pooling of interests accounting treatment for
the Merger under GAAP.
ARTICLE VII - CONDITIONS OF MERGER
SECTION 7.1 Conditions to Obligation of Each Party to Effect the
Merger. The respective obligations of each party to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of
the following conditions:
(a) Effectiveness of the Registration Statement. The Registration
Statement shall have been declared effective by the SEC under the
Securities Act. No stop order suspending the effectiveness of the
Registration Statement shall have been issued by the SEC and no
proceedings for that purpose shall, on or prior to the Effective Time,
have been initiated or, to the knowledge of the Company or the Seller,
threatened by the SEC.
(b) Shareholder Approval. This Agreement and the Merger shall have
been approved and adopted by the requisite vote of the shareholders of the
Seller.
(c) Regulatory Approvals. (i) The Merger shall have been approved
by the applicable regulatory authorities, including, without limitation,
the OTS and the Federal Reserve Board, which approvals shall not contain
any materially burdensome conditions that would significantly adversely
affect the Company; (ii) all conditions required to be satisfied prior to
the Effective Time imposed by the terms of such approval shall have been
satisfied; and (iii) all waiting periods relating to such approval shall
have expired.
(d) No Order. No federal or state governmental or regulatory
authority or other agency or commission, or federal or state court of
competent jurisdiction, shall have enacted, issued, promulgated, enforced
or entered any statute, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or permanent)
which is in effect restricting, preventing or prohibiting consummation of
the transactions contemplated by this Agreement.
(e) Pooling of Interests. The Seller and the Company shall have
received a letter of the Seller's independent public accountants, dated as
of the Closing Date, in form and substance reasonably satisfactory to the
Seller and the Company, stating that the Seller is an entity that
qualifies for pooling of interests accounting treatment pursuant to GAAP
and applicable SEC regulations. The Seller and the Company shall also
have received a letter of the Company's independent accountants, dated the
Closing Date, in form and substance reasonably satisfactory to the Seller
and the Company, stating that the transactions effected pursuant to this
Agreement will qualify as a pooling of interests pursuant to GAAP and
applicable SEC regulations.
SECTION 7.2 Additional Conditions to Obligations of the Company.
The obligations of the Company to effect the Merger are also subject to
the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of the Seller contained in this Agreement, without giving
effect to any update to the Seller Disclosure Schedule or notice to the
Company under Section 4.5 or 6.6, shall be true and correct in all
respects as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the
Effective Time as though made on and as of the Effective Time; provided,
however, that for purposes of determining the satisfaction of the
condition contained in this clause, no effect shall be given to any
exception in such representations and warranties relating to materiality
or a Material Adverse Effect, and provided, further, however, that, for
purposes of this clause, such representations and warranties shall be
deemed to be true and correct unless the failure or failures of such
representations and warranties to be so true and correct, individually or
in the aggregate, represent a Material Adverse Effect on the Seller and
the Seller Subsidiaries, taken as a whole. Company shall have received a
certificate signed on behalf of the Seller by the Chief Executive Officer
and the Chief Financial Officer of the Seller to the foregoing effect.
(b) Agreements and Covenants. The Seller shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or
prior to the Effective Time.
(c) Consents Obtained. All Seller Approvals and all filings
required to be made by the Seller for the authorization, execution and
delivery of this Agreement and the consummation by it of the transactions
contemplated hereby shall have been obtained and made by the Seller,
except those for which failure to obtain such Seller Approvals or make
such filings would not individually or in the aggregate, have a Material
Adverse Effect on the Seller and the Seller Subsidiaries, taken as a
whole.
(d) No Challenge. There shall not be pending any action, proceeding
or investigation before any court or administrative agency or by a
government agency (i) challenging or seeking material damages in
connection with, the Merger or the conversion of Seller Common Stock into
Company Common Stock pursuant to the Merger or (ii) seeking to restrain,
prohibit or limit the exercise of full rights of ownership or operation by
the Company or the Company Subsidiaries of all or any portion of the
business or assets of the Seller, which in either case is reasonably
likely to have a Material Adverse Effect on either the Seller and the
Seller Subsidiaries, taken as a whole, or the Company and the Company
Subsidiaries, taken as a whole.
(e) Tax Opinion. An opinion of Xxxxxxx & Xxxx, S.C., independent
counsel to the Company, dated as of the Effective Time, substantially to
the effect that on the basis of facts, representations and assumptions set
forth in such opinion which are consistent with the state of facts
existing at the Effective Time, the Merger will be treated for federal
income tax purposes as a reorganization within the meaning of Section
368(a) of the Code, and accordingly that no gain or loss will be
recognized by Seller as a result of the Merger. In rendering such
opinion, Xxxxxxx & Xxxx, S.C. may require and rely upon representations
and covenants contained in certificates of officers of the Company, the
Seller and others.
(f) Comfort Letters. The Company shall have received from Ernst &
Young, LLP the "comfort" letters referred to in Section 4.3.
(g) No Material Adverse Changes. Since the date of the Agreement,
there has not been any change in the financial condition, results of
operations or business of the Seller and the Seller Subsidiaries, taken as
a whole, that either individually or in the aggregate would have a
Material Adverse Effect on the Seller and the Seller Subsidiaries taken as
a whole. The Company shall have received a certificate of the President
and the Chief Financial Officer of the Seller to that effect.
(h) Opinion of Counsel. The Company shall have received from Xxxxx
& Xxxxxxx an opinion dated the Effective Time, in form and substance
reasonably satisfactory to the Company, covering the matters set forth in
Annex B hereto, which opinion shall be based on such assumptions and
containing such qualifications and limitations as are appropriate and
reasonably satisfactory to the Company.
SECTION 7.3 Additional Conditions to Obligations of the Seller.
The obligation of the Seller to effect the Merger is also subject to the
following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of the Company set forth in this Agreement, without giving
effect to any notice to the Seller under Section 5.4 or 6.6, shall be true
and correct in all respects as of the date of this Agreement and (except
to the extent such representations and warranties speak as of an earlier
date) as of the Effective Time, as though made on and as of the Effective
Time; provided, however, that for purposes of determining the satisfaction
of the condition contained in this clause, no effect shall be given to any
exception in such representations and warranties relating to materiality
or a Material Adverse Effect, and provided, further, however, that, for
purposes of this clause, such representations and warranties shall be
deemed to be true and correct unless the failure or failures of such
representations and warranties to be so true and correct, individually or
in the aggregate, represent a Material Adverse Effect on the Company and
the Company Subsidiaries, taken as a whole. The Seller shall have
received a certificate signed on behalf of the Company by the Chief
Executive Officer and the Chief Financial Officer of the Company to the
foregoing effect.
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or
prior to the Effective Time.
(c) Consents Under Agreements. All consents, waivers, approvals,
authorizations or orders required to be obtained, and all filings required
to be made by the Company for the authorizations, execution and delivery
of this Agreement and the consummation by it of the transactions
contemplated hereby shall have been obtained and made by the Company,
except where failure to obtain any consents, waivers, approvals,
authorizations or orders required to be obtained or any filings required
to be made would not have a Material Adverse Effect on the Company and the
Company Subsidiaries, taken as a whole.
(d) Federal Tax Opinion. The Seller shall have received an opinion
of Xxxxx & Xxxxxxx ("Seller's Counsel"), in form and substance reasonably
satisfactory to the Seller, dated as of the Effective Time, substantially
to the effect that on the basis of facts, representations and assumptions
set forth in such opinion which are consistent with the state of facts
existing at the Effective Time, the Merger will be treated as a
reorganization within the meaning of Section 368(a) of the Code, and that,
accordingly, for federal income tax purposes:
(i) No gain or loss will be recognized by the Seller as a
result of the Merger;
(ii) No gain or loss will be recognized by the shareholders of
the Seller (except with respect to cash received in lieu of a
fractional share interest in Company Common Stock); and
(iii) The aggregate tax basis of the Company Common Stock
received by shareholders of Seller pursuant to the Merger will be the
same as the aggregate tax basis of the Seller Common Stock
surrendered in exchange therefor (reduced by any amount allocable to
a fractional share interest for which cash is received).
In rendering such opinion, the Seller's Counsel may require and rely
upon representations and covenants contained in certificates of officers
of Company, the Seller and others.
(e) No Challenge. There shall not be pending any action, proceeding
or investigation before any court or administrative agency or by a
government agency (i) challenging or seeking material damages in
connection with, the Merger or the conversion of Seller Common Stock into
Company Common Stock pursuant to the Merger or (ii) seeking to restrain,
prohibit or limit the exercise of full rights of ownership or operation by
the Company or the Company Subsidiaries of all or any portion of the
business or assets of Seller, which in either case is reasonably likely to
have a Material Adverse Effect on either the Seller and the Seller
Subsidiaries, taken as a whole, or the Company and the Company
Subsidiaries, taken as a whole.
(f) No Material Adverse Changes. Since the date of the Agreement,
there has not been any change in the financial condition, results of
operations or business of the Company and the Company Subsidiaries, taken
as a whole, that either individually or in the aggregate would have a
Material Adverse Effect on the Company and the Company Subsidiaries taken
as a whole. The Seller shall have received a certificate of the President
and the Chief Financial Officer of the Company to that effect.
(g) Opinion of Counsel. The Seller shall have received from Xxxxxxx
& Xxxx, S.C. an opinion dated the Effective Time, in form and substance
reasonably satisfactory to the Seller, covering the matters set forth in
Annex C hereto, which opinion shall be based on such assumptions and
contain such qualifications and limitations as are appropriate and
reasonably satisfactory to the Seller.
ARTICLE VIII - TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1 Termination.
(a) This Agreement may be terminated at any time prior to the
Effective Time:
(i) by mutual consent of the Company and the Seller by a vote
of a majority of the members of the entire Boards of Directors of the
Company and Seller;
(ii) by either the Company or the Seller if any approval of the
shareholders of the Seller required for the consummation of the
Merger shall not have been obtained by reason of the failure to
obtain the required vote at a duly held meeting of such shareholders
or at any adjournment or postponement thereof;
(iii) by the Seller or the Company (A) if there has been a
breach in any material respect (except that where any statement in a
representation or warranty expressly includes a standard of
materiality, such statement shall have been breached in any respect)
of any representation, warranty, covenant or agreement on the part of
Seller, on the one hand, or the Company, on the other hand, set forth
in this Agreement, or (B) if any representation or warranty of
Seller, on the one hand, or the Company, on the other hand, shall be
discovered to have become untrue in any material respect (except that
where any statement in a representation or warranty expressly
includes a standard of materiality, such statement shall have become
untrue in any respect), in either case which breach or other
condition has not been cured within 30 business days following
receipt by the nonterminating party of notice of such breach or other
condition, or which breach by its nature, cannot be cured prior to
Closing; provided, however, neither party shall have the right to
terminate this Agreement pursuant to this Section 8.1(a)(iii) unless
the breach of any representation or warranty (but not breaches of
covenants or agreements), together with all other such breaches,
would entitle the party receiving such representation or warranty not
to consummate the transactions contemplated hereby under Section
7.2(a) (in the case of a breach of a representation or warranty by
the Seller) or Section 7.3(a) (in the case of a breach of a
representation or warranty by the Company); and, provided further
this Agreement may not be terminated pursuant to this clause (iii) by
the breaching party or party making any representation or warranty
which shall have become untrue in any material respect;
(iv) by either the Company or the Seller if any permanent
injunction preventing the consummation of the Merger shall have
become final and nonappealable;
(v) by either the Company or the Seller if the Merger shall not
have been consummated by April 30, 1998, for a reason other than the
failure of the party seeking termination to comply with its
obligations under this Agreement; provided that if the Merger shall
not have been consummated on or prior to April 30, 1998 as a result
of proceedings of a governmental authority or litigation, then the
date on which either the Company or the Seller may terminate this
Agreement under this Section 8.1(a)(v) shall be extended to the
earlier of (A) the elapse of a reasonable period of time necessary to
consummate the Merger following the final termination of proceedings
of a governmental authority or litigation or (B) November 30, 1998;
(vi) by either the Company or the Seller if any regulatory
authority has denied approval of the Merger, and neither the Company
nor the Seller has, within 30 days after the entry of such order
denying approval, filed a petition seeking review of such order as
provided by applicable law;
(vii) by the Seller pursuant to Section 1.6(e) hereof; or
(viii) by the Company at any time prior to the Seller
Shareholders' Meeting if the Seller's Board of Directors shall have
failed to make its recommendation referred to in Section 6.1,
withdrawn such recommendation or modified or changed such
recommendation in a manner adverse in any respect to the interests of
the Company.
SECTION 8.2 Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 8.1, this Agreement
shall forthwith become void and all rights and obligations of any party
hereto shall cease except: (i) as set forth in Section 9.1 of this
Agreement and (ii) nothing herein shall relieve any party from liability
for any willful breach of this Agreement or shall restrict either party's
rights in the case thereof.
SECTION 8.3 Amendment. This Agreement may be amended by the
parties hereto by action taken by or on behalf of their respective Boards
of Directors at any time prior to the Effective Time; provided, however,
that, after approval of the Merger by the shareholders of the Seller, no
amendment may be made, without further approval of such shareholders which
would reduce the amount or change the type of consideration into which
each share of Seller Common Stock shall be converted pursuant to this
Agreement upon consummation of the Merger. This Agreement may not be
amended except by an instrument in writing signed by the parties hereto.
SECTION 8.4 Waiver. At any time prior to the Effective Time, the
parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other party hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant hereto and (c) waive compliance with any
of the agreements or conditions contained herein. Any such extension or
waiver shall be valid only if set forth in a written instrument signed on
behalf of such party, but such extension or waiver or failure to insist on
strict compliance with an obligation, covenant, agreement or condition
shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
ARTICLE IX - GENERAL PROVISIONS
SECTION 9.1 Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this
Agreement shall terminate at the Effective Time or upon the termination of
this Agreement pursuant to Article VIII, except that the agreements set
forth in Article I and Sections 5.7, 6.4 (including Annex A), 6.5 and 6.9
shall survive the Effective Time and those set forth in Sections 4.4(b),
4.8, 5.3(b) and Article IX hereof shall survive termination indefinitely.
SECTION 9.2 Enforcement of Agreement. The parties hereto agree
that irreparable damage would occur in the event that the provisions
contained in each of Sections 4.4(b), 5.3(b), 5.7, 6.4 (including
Annex A), 6.5 and 6.9 of this Agreement were not performed in accordance
with its specific terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or injunctions
to prevent breaches of Sections 4.4(b), 5.3(b), 5.7, 6.4 (including Annex
A), 6.5 and 6.9 of this Agreement and to enforce specifically the terms
and provisions thereof 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.
SECTION 9.3 Notices. All notices and other communications given
or made pursuant hereto shall be in writing and shall be deemed given if
delivered personally, telecopied (with confirmation), mailed by registered
or certified mail (postage prepaid, return receipt requested) to the
parties at the following addresses (or at such other address for a party
as shall be specified by like notice) and shall be effective upon receipt:
(a) If to the Company:
Xxxxxxxx & Ilsley Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
With a copy to:
Xxxxxxx & Xxxx, S.C.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxxxxxx
(b) If to the Seller:
Advantage Bancorp, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxx X. Xxxxxx
With a copy to:
Xxxxx & Xxxxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx
Xxx X. Xxxxxxx
SECTION 9.4 Certain Definitions. For purposes of this Agreement,
the term:
(a) "affiliate" means a person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, the first mentioned person; including, without limitation,
any partnership or joint venture in which any person (either alone, or
through or together with any other subsidiary) has, directly or
indirectly, an interest of 5% or more;
(b) "business day" means any day other than a day on which banks in
Wisconsin are required or authorized to be closed;
(c) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the
management or policies of a person, whether through the ownership of stock
or as trustee or executor, by contract or credit arrangement or otherwise;
(d) "person" means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or group (as
defined in Section 13(d) of the Exchange Act); and
(e) "subsidiary" or "subsidiaries" of Seller, the Company, the
Surviving Corporation, or any other person, means any corporation,
partnership, joint venture or other legal entity of which the Seller, the
Company, the Surviving Corporation or such other person, as the case may
be (either alone or through or together with any other subsidiary), owns,
directly or indirectly, 50% or more of the stock or other equity interests
the holders of which are generally entitled to vote for the election of
the board of directors or other governing body of such corporation or
other legal entity.
SECTION 9.5 Headings. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 9.6 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule
of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance of the transactions contemplated hereby is
not affected in any manner adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.
SECTION 9.7 Entire Agreement. This Agreement, the Stock Option
Agreement, and the written confidentiality agreement in effect between the
parties constitute the entire agreement of the parties and supersede all
prior agreements and undertakings, both written and oral, between the
parties, or any of them, with respect to the subject matter hereof and,
except as otherwise expressly provided herein, are not intended to confer
upon any other person any rights or remedies hereunder.
SECTION 9.8 Assignment. This Agreement and the Stock Option
Agreement shall not be assigned by operation of law or otherwise, except
that the Company may assign all or any of its rights hereunder and
thereunder to any affiliate provided that no such assignment shall relieve
the assigning party of its obligations hereunder.
SECTION 9.9 Parties in Interest. This Agreement (including Annex
A hereto) shall be binding upon and inure solely to the benefit of each
party hereto, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement,
other than (i) Section 6.5 (which is intended to be for the benefit of the
Indemnified Parties and may be enforced by such Indemnified Parties) and
(ii) Section 5.7, Section 6.4 (including Annex A hereto) and Section 6.9
(which are intended to be for the benefit of the directors, officers and
employees of the Seller and the Seller Subsidiaries and may be enforced by
such persons).
SECTION 9.10 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Wisconsin,
regardless of the laws that might otherwise govern under applicable
principles of conflicts of law.
SECTION 9.11 Counterparts. This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement.
SECTION 9.12 Time Is of the Essence. Time is of the essence of
this Agreement and the Stock Option Agreement.
IN WITNESS WHEREOF, the Company and the Seller have caused this
Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
ADVANTAGE BANCORP, INC.
By: /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
Chairman of the Board,
President and Chief Executive Officer
XXXXXXXX & XXXXXX CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Chairman of the Board and
Chief Executive Officer
ANNEX A
EMPLOYEE BENEFIT MATTERS
1. Conduct of Business Between Date of Signing the Agreement and
the Effective Time. Between the date of signing of the Agreement and the
Effective Time (i) there will be no increases in base salary for Messrs.
Xxxxxx and Xxxxxxx; (ii) other employees may receive increases in base
salary and bonuses in the ordinary course of business consistent with past
practice, subject to Paragraphs 10 and 11 hereof; (iii) no new programs,
plans or agreements providing compensation for employees or directors will
be adopted or implemented, existing programs, plans or agreements will not
be amended or modified except as provided herein or in agreements executed
by employees and/or directors in connection herewith, and no further
grants or awards will be made under existing programs or agreements except
as explicitly provided herein; (iv) no new employment agreements will be
granted and the existing employment agreements will not be amended except
as provided herein or in the agreements executed by employees
contemporaneously herewith; (v) Seller shall not make any contributions,
other than employee elective deferrals, to its 401(k) plan but shall make
contributions to Seller's ESOP (as defined in Paragraph 9) at levels
consistent with prior Seller contributions and as further permitted under
Paragraph 9; and (vi) Seller or Seller Subsidiaries will only pay
severance to those employees who are terminated by their employer and then
only in amounts and for a period consistent with past practice of the
employer.
2. General.
(a) Those individuals who are employed by the Seller or the Seller
Subsidiaries as of the Effective Time and who remain, at the Company's
discretion, employees of the Company or its subsidiaries following the
Effective Time shall be referred to hereinafter as "Affected Employees".
(b) The Company will give Affected Employees full credit for their
prior service with the Seller or the Seller Subsidiaries (or any service
credited as such in connection with a previous acquisition by Seller or
any Seller Subsidiary) (i) for purposes of eligibility (including initial
participation and eligibility for retirement benefits) and vesting under
any qualified or nonqualified retirement or profit sharing plans
maintained by the Company in which employees of Seller and Seller
Subsidiaries may be eligible to participate and (ii) for all purposes
under any welfare benefit plans (including severance) and vacation plans
and arrangements maintained by the Company. Further, the Company shall
treat compensation received from the Seller or Seller Subsidiaries (or any
compensation credited as such in connection with a previous acquisition by
Seller or any Seller Subsidiary) as compensation received from the Company
for all purposes under any welfare benefit plans (including severance) and
vacation plans and arrangements maintained by the Company.
Notwithstanding the preceding sentences of this Section 2(b) or anything
else contained in this Annex or the Merger Agreement to the contrary, for
purposes of the Company's retiree health plan, Affected Employees will be
given access to the retiree health plan if they meet the eligibility
criteria for the plan with no credit for prior service with Seller or
Seller Subsidiaries (or any service credited as such in connection with a
previous acquisition by Seller or any Seller Subsidiary), but the cost of
health insurance under the plan will be borne 100% by the Affected
Employees with no subsidy by the Company.
(c) The Company will, or will cause the Seller or the Seller
Subsidiaries to, waive all limitations as to preexisting conditions and
waiting periods with respect to participation and coverage requirements
applicable to the Affected Employees under any welfare benefit plans that
such employees may be eligible to participate in on or after the Effective
Time, other than limitations or waiting periods that are already in effect
with respect to such employees and that have not been satisfied as of the
Effective Time under any welfare plan maintained for the Affected
Employees immediately prior to the Effective Time.
3. 401(k) Plan. Accounts in Seller's 401(k) plan of participants
who are employed at the Effective Time by the Seller or Seller
Subsidiaries will be fully vested as of the Effective Time. The Company
reserves the right thereafter to merge or freeze Seller's 401(k) plan.
4. Employment Agreements. The Employment Agreements for
Messrs. Xxxxxx and Xxxxxxx are being contemporaneously amended by
execution of agreements between the executive, Seller, Seller's bank
subsidiary and the Company in the form attached to the Merger Agreement as
Exhibit 4.1 setting the maximum amount to be paid under Sections 8(a)(i)
and (ii) of the Employment Agreements consistent with prior information
provided to the Company, and making payment of compensation under each
Employment Agreement subject to a complete and permanent release of all
claims arising out of the applicable executive's employment, including age
discrimination (but not including any vested accrued benefits under the
Seller's or Seller's bank subsidiary's qualified or nonqualified
retirement or profit sharing plans), which release is not revoked during
the statutory period allowed for revocation.
5. Employee Welfare Benefits. Affected Employees will be
integrated into the employee welfare benefit plans of the Company,
including health, dental, group term life insurance, tuition
reimbursement, long-term disability and other employee benefit plans
available to similarly situated employees, as of the later of (i) the
Effective Time; or (ii) at the discretion of the Company, such later date
as is administratively practicable but no later than January 1, 1999;
provided, however, that Seller's employee welfare benefit plans shall
continue in force until the applicable Company employee welfare benefit
plan applies to the Affected Employees. Company reserves the right, at
any time and from time to time, to modify or amend, in whole or in part,
any or all provisions of such plans of the Company, except to the extent
otherwise provided in this Annex.
6. Severance Plan. Severance payments to former employees of
Seller or Seller Subsidiaries who are terminated by Company or its
subsidiaries will be made in accordance with the Company's normal
severance schedule, as attached hereto, pursuant to the M&I Severance Plan
as in effect on the date of such employee's termination of employment.
Notwithstanding the foregoing, all employees of Seller or Seller
Subsidiaries, including Messrs. Xxxxxx and Xxxxxxx, who have written
agreements in effect at the Effective Time pertaining to payments on
termination of their employment with Seller or Seller Subsidiaries will
not be entitled to any payments pursuant to the M&I Severance Plan upon
termination of employment unless they waive all rights to compensation,
severance and benefits under those other agreements.
7. Executive Salary Continuation Agreement. The Executive Salary
Continuation Agreements for Messrs. Xxxxxx and Xxxxxxx shall be assumed in
full by the Company.
8. Bank Incentive Plans and Trusts I and II. The Bank Incentive
Plans and Trusts I and II will be assumed in full by the Company.
9. ESOP.
(a) As of the Effective Time, Seller shall amend its Employee Stock
Ownership Plan (the "ESOP") as necessitated by the remaining provisions of
this Section 9 and to provide that effective as of the Effective Time,
Seller shall appoint three (3) independent persons who shall serve as the
Administrator and Advisory Committee (as defined in the ESOP) of the ESOP
(collectively, the "Administrator"), with all of the powers and duties
previously vested under the ESOP in the Administrator, Advisory Committee
and Seller's Board of Directors, including but not limited to, complete
authority to administer, amend and terminate the ESOP in accordance with
the terms and intent of this Agreement. Notwithstanding the foregoing,
such amendment shall also provide that in the event any of these three
individuals resigns or otherwise vacates his appointment, the remaining
person or persons constituting the Administrator shall appoint the
successor for the vacant position.
(b) As of the day (the "Contribution Date") immediately prior to the
Effective Time, the Seller shall make a contribution to the Seller's ESOP,
which, together with any dividends on Seller's stock held in the ESOP,
will equal the amount the Seller would have contributed to the ESOP
pursuant to Section 3.03(b)(ii) of the ESOP to pay the currently maturing
obligation under the Exempt Loan (as defined in the ESOP) for the then
current Plan Year (as defined in the ESOP) multiplied by a fraction (the
"Fraction"), the numerator of which is the number of days in the current
Plan Year through and including the Effective Time and the denominator of
which is 365, and shall cause the Trustee of the ESOP to use the full
amount of such contribution promptly to repay a portion of the outstanding
Exempt Loan. As a result of the aforementioned contribution and
repayment, the Seller shall take such action as may be necessary or
appropriate to cause shares of the Seller's stock to be released from the
suspense account maintained under the ESOP and allocated to the accounts
of certain Participants (as defined in the ESOP) as follows:
(i) first, if (A) Seller paid cash dividends on one or more
dividend dates that coincide with or precede the
Contribution Date and (B) allocations have not yet been
made on or before such Contribution Date to the accounts of
eligible Participants in accordance with Section 3.03(d)(i)
of the ESOP as of such dividend dates, then full and
fractional shares of Seller's stock shall be allocated as
of each respective dividend date to Participants who
otherwise would have received or had allocated to their
accounts cash dividends on such dividend date but for the
fact that such dividends were used in accordance with
Section 3.03(b)(i) of the ESOP to pay principal and
interest on the Exempt Loan. Such allocation shall be made
in accordance with Section 3.03(d)(i) of the ESOP; and
(ii) second, as of the Contribution Date, to the accounts of
each Participant who would be entitled to an allocation for
the then current Plan Year if (A) the Contribution Date
were the last day of such Plan Year and (B) the 1,000 Hour
of Service requirements set forth in Section 3.01(b)(i) and
(ii) and Section 3.02(b)(i) and (ii) of the ESOP were
multiplied by the Fraction; such allocation of the Employer
Matching Contribution (as defined in the ESOP) for such
Plan Year shall be made under Section 3.01(a) of the ESOP,
in accordance with each such Participant's Deposits (as
defined in the ESOP) under Seller's 401(k) Plan for the
portion of such Plan Year through the end of the last
payroll period ending on or before the Contribution Date;
such allocation of the Other Employer Contribution (as
defined in the ESOP) shall be made, under Section 3.02(a)
of the ESOP, in accordance with the ratio of (A) the
Compensation (as defined in the ESOP) of each such
Participant for the portion of the Plan Year through the
end of the last payroll period ending on or before the
Contribution Date to (B) the aggregate Compensation through
the end of the last payroll period ending on or before the
Contribution Date of all Participants entitled to such
allocation.
(c) The Company, Seller and the Administrator agree to take such
action as may be necessary or appropriate:
(i) to cause the ESOP to terminate as of the Effective Time and
for all Account balances to become fully vested and nonforfeitable as
of such date;
(ii) to cause the Trustee of the ESOP to sell, from the suspense
account maintained under the ESOP, shares of stock of the Company
with an aggregate value equal to the remaining outstanding ESOP
indebtedness, after giving effect to the repayment described in
paragraph (a) hereof, and to use the proceeds of such sale to repay
in full all such outstanding ESOP indebtedness;
(iii) to cause those shares of stock of the Company (and any
cash) remaining in the suspense account maintained under the ESOP,
after giving effect to the aforementioned sale (the "Remaining
Shares"), to be allocated among all Participants in proportion to the
number of shares allocated to such Participants' ESOP Accounts as of
the Effective Time or in such other manner as may be required by the
Internal Revenue Service (the "Service") as a condition to its
issuance of a favorable determination letter regarding the qualified
status of the ESOP upon its termination; and
(iv) for the Account balances of all Participants to be
distributed in a lump sum (or transferred in accordance with Section
401(a)(31) of the Code) as soon as practicable, and consistent with
any requirements in the determination letter from the Service,
following the later of (A) the Effective Time or (B) the date of
receipt of such favorable determination letter from the Service.
(d) As soon as practicable after the date hereof, the Seller and the
Company shall jointly file a request for an advance determination letter
from the Service regarding the continued qualified status of the ESOP upon
its termination, and the parties hereby agree to cooperate fully in all
matters pertaining to such filing (including, but not limited to, making
such changes to the ESOP and the proposed allocations described herein as
may be requested by the Service as a condition to its issuance of a
favorable determination letter; and authorizing and directing their
respective counsel jointly to perform all acts necessary to secure such
favorable determination letter from the Service (including preparing the
determination letter application, filing such application with the
Service, and dealing with any employee of the Service who reviews such
application)). The Seller and the Company recognize that time is of the
essence, and the parties hereby agree to use their best efforts to secure
a favorable determination letter from the Service prior to the Effective
Time. If, despite the Seller's and the Company's attempts to obtain such
a favorable determination letter, the Service does not permit all or any
portion of the Remaining Shares to be allocated as of the Effective Time
as contemplated hereby, the parties hereby agree to take such action as
may be necessary to allocate the Remaining Shares (or amounts attributable
thereto) as rapidly as possible among Participants in the ESOP in such
other manner as is consistent with meeting their respective fiduciary
duties under ERISA and with obtaining the Service's determination that the
ESOP retains its qualified status upon its termination, including, without
limitation, and notwithstanding paragraph 9(b)(i) hereof, to cause the
ESOP to remain open after the Effective Time, until all of the Remaining
Shares have been allocated among such Participants' Accounts and upon such
basis as the Service may require or as may be necessary to avoid the
imposition of any tax or other liability upon the Company in connection
with the ESOP; provided, however, that no such action shall create any
liability for the Company to make any contributions to the ESOP or to
provide any replacement benefits to Participants outside the ESOP. In all
events, it is the intention that the Participants in the ESOP will receive
the entire benefit of the Remaining Shares which are unallocated after
application of the above provisions. In the event that any action under
this Agreement needs to be taken with respect to the ESOP on or after the
Effective Time, such action may only be taken by and shall be the sole and
exclusive responsibility of the Administrator; provided, however, that any
and all such actions shall be taken in accordance with the provisions and
intent of this Agreement.
(e) The Trustee (as defined in the ESOP) fees and expenses described
in Section 9.09 of the ESOP shall be paid consistent with the historic
practice of the ESOP and the Seller.
10. Officer Incentive Compensation Plan. For that portion of fiscal
1998 ending on the earlier of (a) a participant's termination of
employment or (b) the Effective Time, participant will receive a prorated
portion of the bonus payment paid to such participant under the Seller's
Officer Incentive Compensation Plan for fiscal year 1997, based on the
number of days which elapsed during such period as a percentage of 365
days.
11. Bonuses. Bonuses for employees of the Seller and Seller
Subsidiaries other than those participating in the Officer Incentive
Compensation Plan, for fiscal 1998 shall be paid pursuant to the terms of
any such bonus plans, or in the absence of a plan, consistent with past
practice of Seller and Seller Subsidiaries. Any bonus amounts which, in a
manner consistent with past practice, have been accrued as of the end of
fiscal 1997, including amounts accrued under the Seller's Excell Bonus
Plan and Seller's Officer Incentive Compensation Plan, may also be paid.
All bonuses in respect of fiscal 1998 which, in a manner consistent with
past practice, are accrued but unpaid as of the Effective Time shall be
paid promptly following the Effective Time. In addition, Seller and
Seller Subsidiaries may make bonus payments to employees (whether or not
such employees are participating in the Officer Incentive Compensation
Plan) from the Bonus Pool established pursuant to Section 6.9 of the
Merger Agreement.
12. Amendments. The Company agrees that the Seller shall be
permitted, prior to the Effective Time, to make the amendments to, and to
take such other actions with respect to, its plans and agreements, as
described herein, but to make no other amendments or changes in policy
without the consent of the Company.
13. Amendment of Option Plans and Participant Consent. The Seller
will amend its 1991 Stock Option and Incentive Plan (the "1991 Plan"),
contemporaneously with the execution of the Agreement, to add the
following sentence to the end of Section 13 of the 1991 Plan:
"Notwithstanding anything contained herein to the contrary, if any
merger or consolidation of the Corporation is to be treated as a
pooling of interests for accounting purposes, the Committee shall not
provide a Participant exercising any Option or Right pursuant to this
Paragraph with any consideration therefor other than stock of the
acquiring corporation."
The Seller, contemporaneously with the execution of the Agreement to the
extent practicable, but in no event later than the Effective Time, will
use its reasonable best efforts to obtain a consent and waiver, in the
form attached to the Agreement as Exhibit 4.1, of each person granted an
option under the 1991 Plan agreeing to the amendment to the 1991 Plan and
to the same amendment to Section 8 of the option grant form and waiving
any rights he or she might have had under Section 13 of the 1991 Plan or
Section 8 of the option grant form before such amendment. The Seller will
amend, contemporaneously with the execution of the Agreement, its 1995
Equity Incentive Plan (the "1995 Plan") to delete the following clause in
Section 4(b)(iii) thereof: "... or, if deemed appropriate, make provisions
for a cash payment to the holder of an outstanding Award, ...". In
addition, contemporaneously with the execution of the Agreement to the
extent practicable, but in no event later than the Effective Time, Seller
will use its reasonable best efforts to obtain a consent and waiver, in
the form attached to the Agreement as Exhibit 4.1., of each person granted
options under the 1995 Plan agreeing to the amendment of Section 8 of the
option grant forms as set forth above and waiving any rights he or she
might have had under Section 4(b)(iii) of the 1995 Plan before such
amendment.
Schedule of Severance Payments
Your Position Severance Pay
Nonexempt Employee 2 weeks, plus 1 week for each full year
of continuous employment.
Minimum: 4 weeks
Maximum: 26 weeks
Exempt Employee (Non-Officer) 2 weeks, plus 2 weeks for each full
year of continuous employment.
Minimum: 8 weeks
Maximum: 26 weeks
Officer/Assistant Vice 2 weeks, plus 2 weeks for each full
President year of continuous employment.
Minimum: 12 weeks
Maximum: 36 weeks
Vice President or Above 2 weeks, plus 2 weeks for each full
year of continuous employment.
Minimum: 24 weeks
Maximum 52 weeks
ANNEX B
FORM OF OPINION OF COUNSEL TO SELLER
(i) Seller is a corporation validly existing and in good standing
(meaning it has filed its most recent annual report and has not filed
articles of dissolution) under the laws of the State of Wisconsin, and has
the requisite corporate power and authority to carry on its business as
now being conducted.
(ii) Seller has the necessary corporate power and authority to
execute and deliver the Agreement and the Stock Option Agreement and to
perform its obligations thereunder and to consummate the transactions
contemplated thereby.
(iii) The execution and delivery of the Agreement and the Stock
Option Agreement by Seller and the consummation by Seller of the
transactions contemplated thereby have been duly and validly authorized by
all necessary corporate action on the part of Seller.
(iv) The Agreement and the Stock Option Agreement have been duly and
validly executed and delivered by Seller and, assuming the due execution
and delivery thereof by the Company, each constitutes the legal, valid and
binding obligation of Seller, enforceable against Seller in accordance
with its respective terms, (a) except as such enforceability may be
subject to the effect of any applicable bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar law affecting creditors' rights
generally and to the effect of general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good faith
and fair dealing (regardless of whether considered in a proceeding in
equity or at law) and (b) except as the enforceability of any indemnity
provision may be limited by federal or state securities laws or the public
policy underlying such laws or may otherwise be limited by applicable
provisions of the WBCL.
(v) The execution and delivery of the Agreement and the Stock Option
Agreement by Seller do not, and the performance of the Agreement and the
Stock Option Agreement by Seller shall not, (a) conflict with or violate
the Seller Articles or Seller By-Laws, or (b) conflict with or violate any
material federal or Wisconsin state or local law, statute, ordinance,
rule, regulation, order, judgment or decree known to us to be applicable
to Seller or by which any of its properties is bound or affected. The
limitations of Article 4.C. of the Seller Articles and the voting
requirements of Article 11.A. of the Seller Articles are inapplicable to
the transactions contemplated in the Agreement (other than the
transactions contemplated in the Stock Option Agreement). The voting
requirements of Article 11.A. of the Seller Articles are inapplicable to
the transactions contemplated in the Stock Option Agreement.
We have participated in the preparation and filing of the Proxy
Statement/Prospectus and the Registration Statement and, in the course of
such preparation, in conferences with certain officers and employees of
Seller with respect thereto. Although we are not passing upon or assuming
any responsibility for the accuracy, completeness or fairness of the
statements contained or incorporated in the Proxy Statement/Prospectus or
the Registration Statement, during the course of such participation no
facts have come to our attention which would lead us to believe that the
Proxy Statement/Prospectus at the time it was first mailed to holders of
Seller Common Stock and at the time of the Seller Shareholders' Meeting,
or the Registration Statement at the time it became effective and at the
Effective Time, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading (except that we do
not comment with respect to the financial statements and other financial
and statistical information included therein or omitted therefrom, or any
information about, or supplied or omitted by, the Company for use in the
Proxy Statement/Prospectus or the Registration Statement).
ANNEX C
FORM OF OPINION OF COUNSEL TO COMPANY
(i) The Company is a corporation validly existing and in good
standing (meaning it has filed its most recent annual report and has not
filed articles of dissolution) under the laws of the State of Wisconsin,
and has the requisite corporate power and authority to carry on its
business as now being conducted.
(ii) The Company has the necessary corporate power and authority to
execute and deliver the Agreement and the Stock Option Agreement and to
perform its obligations thereunder and to consummate the transactions
contemplated thereby.
(iii) The execution and delivery of the Agreement and the Stock
Option Agreement by the Company and the consummation by the Company of the
transactions contemplated thereby have been duly and validly authorized by
all necessary corporate action on the part of the Company.
(iv) The Agreement and the Stock Option Agreement have been duly and
validly executed and delivered by the Company and, assuming the due
execution and delivery thereof by Seller, each constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its respective terms, (a) except as such enforceability
may be subject to the effect of any applicable bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar law affecting creditors'
rights generally and to the effect of general principles of equity,
including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing (regardless of whether considered in a
proceeding in equity or at law) and (b) except as the enforceability of
the indemnity provision may be limited by federal or state securities laws
or the public policy underlying such laws or may otherwise be limited by
applicable provisions of the WBCL.
(v) The shares of Company Common Stock to be delivered in exchange
for the outstanding shares of Seller Common Stock, as set forth in the
Agreement, are duly authorized and, when issued as contemplated by the
Agreement, will be validly issued, fully paid and nonassessable (except as
otherwise provided in Section 180.0622(2)(b) of the WBCL).
(vi) The execution and delivery of the Agreement and the Stock
Option Agreement by the Company do not, and the performance of the
Agreement and the Stock Option Agreement by the Company shall not, (a)
conflict with or violate the Company Articles or Company By-Laws, or (b)
conflict with or violate any material federal or Wisconsin state or local
law, statute, ordinance, rule, regulation, order, judgment or decree known
to us to be applicable to the Company or by which any of its properties is
bound or affected.
(vii) The Registration Statement has become effective under the
Securities Act and, to the best of our knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending under the
Securities Act.
(viii) The Registration Statement as of the effective date thereof
(excluding the financial statements and other financial and statistical
information included or incorporated therein or omitted therefrom, and all
information about, or supplied or omitted by, Seller for use in the
Registration Statement, as to all of which we do not express any opinion)
complied as to form in all material respects with the requirements of the
Securities Act and the Exchange Act.
We have participated in the preparation and filing of the Proxy
Statement/Prospectus and the Registration Statement and, in the course of
such preparation, in conferences with certain officers and employees of
the Company with respect thereto. Although we are not passing upon or
assuming any responsibility for the accuracy, completeness or fairness of
the statements contained or incorporated in the Proxy Statement/Prospectus
or the Registration Statement, during the course of such participation no
facts have come to our attention which would lead us to believe that the
Proxy Statement/Prospectus at the time it was first mailed to holders of
Seller Common Stock and at the time of the Seller Shareholders' Meeting,
or the Registration Statement at the time it became effective and at the
Effective Time, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading (except that we do
not comment with respect to the financial statements and other financial
and statistical information included therein or omitted therefrom, or any
information about, or supplied or omitted by, Seller for use in the Proxy
Statement/Prospectus or the Registration Statement).
Exhibit 4.1
CONSENT AND WAIVER AGREEMENT
THIS AGREEMENT is entered into as of the __ day of __________, 1997
by and among ___________________ ("Optionee"), Advantage Bancorp, Inc.
("Seller") and Xxxxxxxx & Xxxxxx Corporation ("Company").
PREAMBLE
In connection with the proposed merger of Seller with and into
Company (the "Merger") pursuant to that certain Agreement and Plan of
Merger dated as of _______________ (the "Merger Agreement"), and in order
to induce the Company and Seller to consummate the Merger, Optionee, as
the holder of an option or options to purchase Seller's common stock (the
"Option") pursuant to Seller's 1991 Stock Option and Incentive Plan ("the
1991 Plan"), hereby agrees as follows:
1. Consent. The Optionee hereby consents to the amendment of
Section 13 of the 1991 Plan and Section 8 of his or her Option
Agreement(s) by adding the following sentence at the end thereof:
"Notwithstanding anything contained herein to the contrary, if any
merger or consolidation of the Corporation is to be treated as a
pooling of interests for accounting purposes, the Committee shall not
provide a Participant exercising any Option or Right pursuant to this
Paragraph with any consideration therefor other than stock of the
acquiring corporation."
2. Waiver. The Optionee hereby waives any and all rights he or she
might have under Section 13 of the 1991 Plan and Section 8 of his or her
Option Agreement(s) prior to the amendment thereof.
3. Reliance. Optionee acknowledges that Seller and Company are
taking various actions, including, without limitation, expending
significant amounts of money to pursue the Merger, in reliance upon this
Agreement.
4. Choice of Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Wisconsin.
5. Termination. This Agreement shall terminate in the event the
Merger Agreement is terminated prior to the consummation of the Merger.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date set forth above.
_____________________________
Optionee
_____________________________
Print Name
ADVANTAGE BANCORP, INC.
By:_________________________
Its:_________________________
XXXXXXXX & ILSLEY CORPORATION
By:_________________________
Its:_________________________
CONSENT AND WAIVER AGREEMENT
THIS AGREEMENT is entered into as of the __ day of __________, 1997
by and among ___________________ ("Optionee"), Advantage Bancorp, Inc.
("Seller") and Xxxxxxxx & Xxxxxx Corporation ("Company").
PREAMBLE
In connection with the proposed merger of Seller with and into
Company (the "Merger") pursuant to that certain Agreement and Plan of
Merger dated ________________ (the "Merger Agreement"), and in order to
induce the Company and Seller to consummate the Merger, Optionee, as the
holder of an option or options to purchase Seller's common stock (the
"Option") pursuant to Seller's 1995 Equity Incentive Plan ("the 1995
Plan"), hereby agrees as follows:
1. Consent. The Optionee hereby consents to the amendment of
Section 4(b)(iii) of the 1995 Plan to delete the following clause:
"...or, if deemed appropriate, make provisions for a cash payment to the
holder of any outstanding Award;...". The Optionee further consents to
the amendment of Section 8 of his or her Option Agreement(s) by adding the
following sentence at the end thereof:
"Notwithstanding anything contained herein to the contrary, if any
merger or consolidation of the Corporation is to be treated as a
pooling of interests for accounting purposes, the Committee shall not
provide a Participant exercising any Option or Right pursuant to this
Paragraph with any consideration therefor other than stock of the
acquiring corporation."
2. Waiver. The Optionee hereby waives any and all rights he or she
might have under Section 4(b)(iii) of the 1995 Plan and Section 8 of his
or her Option Agreement(s) prior to the amendment thereof.
3. Reliance. Optionee acknowledges that Seller and Company are
taking various actions, including, without limitation, expending
significant amounts of money to pursue the Merger, in reliance upon this
Agreement.
4. Choice of Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Wisconsin.
5. Termination. This Agreement shall terminate in the event the
Merger Agreement is terminated prior to the consummation of the Merger.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date set forth above.
_____________________________
Optionee
_____________________________
Print Name
ADVANTAGE BANCORP, INC.
By:_________________________
Its:_________________________
XXXXXXXX & ILSLEY CORPORATION
By:_________________________
Its:_________________________
AMENDMENT OF EMPLOYMENT AGREEMENT
This Amendment of Employment Agreement ("Amendment #3"), dated as of
November __, 1997, is between Advantage Bancorp, Inc. ("Advantage"),
Advantage Bank, FSB (the "Bank"), Xxxx X. Xxxxxx (the "Employee") and
Xxxxxxxx & Ilsley Corporation ("M&I").
WHEREAS, Employee and the Bank entered into an Employment Agreement
on March 20, 1992, which has been amended on two previous occasions (the
"Employment Agreement"); and
WHEREAS, M&I and Advantage have entered into an Agreement and Plan of
Merger dated as of the date hereof (the "Merger Agreement") pursuant to
which Advantage will merge with and into M&I with M&I being the survivor
(the "Merger").
NOW, THEREFORE, in connection with, and as consideration for, such
Merger, the parties hereto wish to enter into this Amendment #3 as
follows.
1. Agreement as to Pay-out. The parties hereto agree that (A) the
Merger (if consummated) will satisfy the conditions in the Employment
Agreement for a lump sum cash payment to Employee pursuant to Section 8 of
the Employment Agreement and, accordingly, the Bank shall make such
payment to Employee (subject to the limitations set forth in the last
sentence of Section 8(a) of the Employment Agreement as amended hereby),
within 25 business days after the Merger so long as (i) Employee is
employed by the Bank on the date of the Merger and (ii) Employee executes
a complete and permanent release of all claims arising out of his
employment through the date of the Merger in the form attached hereto, and
does not revoke the release within the statutory period for revocation and
(B) the "Date of Termination", as used in the Employment Agreement, shall
be the date of the Merger. The parties further agree that, except for
health insurance benefits to be provided by M&I to Employee through
March 20, 2000 pursuant to the M&I Health Program with the same cost
sharing arrangement provided to M&I employees, the Employment Agreement
will not govern the terms and conditions of Employee's employment with the
Bank or any successor thereto after the Merger.
2. Amendment of Section 8. Section 8(a) of the Employment Agreement
shall be amended by deleting the last sentence thereof in its entirety and
substituting the following:
"Notwithstanding any other statement or provision herein to the
contrary, the amounts payable to the Employee pursuant to subsections
(i) and (ii) above shall not exceed $1,094,802.
3. Choice of Law. This Amendment #3 shall be governed by, and
construed in accordance with the laws of the State of Wisconsin.
IN WITNESS WHEREOF, the undersigned have executed this Amendment of
Employment Agreement as of the date set forth above.
ADVANTAGE BANCORP, INC. ADVANTAGE BANK, FSB
By:________________________ By:_____________________
Title:______________________ Title:____________________
EMPLOYEE XXXXXXXX & XXXXXX CORPORATION
__________________________ By:______________________
Xxxx X. Xxxxxx
Title:_____________________
COMPLETE AND PERMANENT RELEASE
The undersigned, formerly an employee of Advantage Bank, FSB (the
"Employee"), entered into an Employment Agreement with Advantage Bank, FSB
(the "Bank") whereby the Employee was entitled to certain payments and
benefits if his employment were terminated or constructively terminated
after a "Change in Control." Section 8(a) of this Employment Agreement
was amended as of ___________, 1997 to modify the amount of payments in
the event of a "Change in Control." The payments were conditioned on
Employee executing this Complete and Permanent Release and not revoking it
within the statutory period for revocation.
In consideration of the payments to be made pursuant to Section 8(a)
of the Employment Agreement, as amended (the "Payments"), Employee, by
signing below, hereby agrees that execution of this Release operates to,
and hereby does, release Xxxxxxxx & Xxxxxx Corporation ("M&I"), its parent
corporations, its and their subsidiaries and affiliates, its and their
predecessors in interest including Advantage Bancorp, Inc. ("Advantage"),
the Bank and its other subsidiaries and affiliates, its and their present,
future or former employees, officers, directors, stockholders,
representatives, agents, successors and assigns (the "Released Parties")
from all claims or demands and all rights to any monetary payment or
recovery (the "Claims") the Employee has had, presently has or may have,
arising out of the Employee's employment with the Bank or the termination
of that employment, which Claims are based on facts or circumstances
existing prior to the date the Employee signs this Release, regardless of
whether such facts or circumstances are currently known or unknown by the
Employee, including, without limitation, a release of any Claims the
Employee may have based on the Civil Rights Act of 1866, as amended, the
Civil Rights Act of 1991, as amended; the Age Discrimination in Employment
Act of 1967, as amended; Title VII of the Civil Rights Act of 1964, as
amended; the Americans with Disabilities Act; the Equal Pay Act of 1963,
any and all laws of any state concerning wages, employment and discharge;
any state or local municipality fair employment statutes or laws; and any
other law, rule, regulation or ordinance or common law cause of action,
whether arising in contract or tort, pertaining to employment, terms and
conditions of employment, or termination of employment; provided, however,
that execution of this Release shall not adversely affect the Employee's
rights to receive benefits under any qualified or nonqualified employee
benefit plans and arrangements of the Bank in which he participated prior
to the merger of Advantage into M&I (the "Merger") including, but not
limited to, the following: the Bank Incentive Plan and Trust I and II,
the 1991 Stock Option and Incentive Plan, the Employment Agreement, as
amended, and the Executive Salary Continuation Agreement.
The Employee has 21 days from the date the Employee receives this Release
to sign and return this Release to M&I, but in no event may the Employee
sign this Release prior to the first day subsequent to the date of the
Merger. By signing below, the Employee agrees to and acknowledges that
the Payments a) are in lieu of any amount that such Employee would
otherwise receive under any other severance plan of Advantage, the Bank,
M&I or M&I Xxxxxxxx & Xxxxxx Bank, b) shall not be taken into account for
purposes of determining benefits under any pension, deferred compensation
or welfare benefit plans of Advantage, the Bank, M&I or M&I Xxxxxxxx &
Ilsley Bank, whether qualified or nonqualified and c) shall be reduced by
any Federal, State or local withholding or other taxes as required under
applicable law.
The Released Parties hereby release the Employee from any liability
to the Released Parties arising out of the Employee's employment with the
Bank through the date of this Complete and Permanent Release except (i) to
the extent of the obligations set forth herein, (ii) any obligations under
any of the employee benefit plans and arrangements referred to in the
proviso of the second paragraph of this Complete and Permanent Release, or
(iii) liabilities attributable to (aa) a willful failure to deal fairly
with the Bank or its shareholders in connection with a matter in which the
Employee had a material conflict of interest, (bb) a violation of criminal
law, unless the Employee had reasonable cause to believe that his conduct
was lawful, (cc) a transaction from which the Employee derived an improper
personal profit or benefit, or (dd) willful misconduct.
Notwithstanding the foregoing, this Complete and Permanent Release
does not waive rights, if any, the Employee or his successors and assigns
may have under or pursuant to, or release the Released Parties from
obligations, if any, they may have to the Employee or to his successors
and assigns on claims arising out of, related to or asserted under or
pursuant to, this Complete and Permanent Release, the merger agreement
relating to the Merger, any insurance contract, or any indemnity agreement
or obligation contained in or adopted or acquired pursuant to any
provision of the charter or by-laws of Advantage or its subsidiaries or
affiliates or in any applicable insurance policy carried by Advantage or
its affiliates or subsidiaries for any matter which arises or may arise in
the future in connection with the Employee's employment with the Bank.
The Payments will be paid no later than 25 business days following
the Merger except in no event will the Payments be paid before the
expiration of the period allowable for revocation as set forth below.
Upon execution, this Release should be returned to Xxxxxxxx & Xxxxxx
Corporation, Attn: Xxxxxx Xxxxxx, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, XX
00000.. The Employee has seven (7) calendar days from the date that the
Employee signs this Release to revoke this Release by giving written
notice of the Employee's intent to do so to M&I. This Release shall not
become effective or enforceable until this seven (7) day period has
expired. If the Employee revokes this Release, the Employee will not
receive the Payments.
The Employee is advised to consult with an attorney before signing this
Release.
AGREED TO AND ACCEPTED THIS ___ DAY OF ________, 1997.
______________________________
Employee
________________________________
Print Name
XXXXXXXX & XXXXXX CORPORATION
By:
Its:
M&I XXXXXXXX & ILSLEY BANK
By:
Its:____________________________
AMENDMENT OF EMPLOYMENT AGREEMENT
This Amendment of Employment Agreement ("Amendment #3"), dated as of
November __, 1997, is between Advantage Bancorp, Inc. ("Advantage"),
Advantage Bank, FSB (the "Bank"), Xxxx Xxxxxxx (the "Employee") and
Xxxxxxxx & Ilsley Corporation ("M&I").
WHEREAS, Employee and the Bank entered into an Employment Agreement
on March 20, 1992, which has been amended on two previous occasions (the
"Employment Agreement"); and
WHEREAS, M&I and Advantage have entered into an Agreement and Plan of
Merger dated as of the date hereof (the "Merger Agreement") pursuant to
which Advantage will merge with and into M&I with M&I being the survivor
(the "Merger").
NOW, THEREFORE, in connection with, and as consideration for, such
Merger, the parties hereto wish to enter into this Amendment #3 as
follows.
1. Agreement as to Pay-out. The parties hereto agree that (A) the
Merger (if consummated) will satisfy the conditions in the Employment
Agreement for a lump sum cash payment to Employee pursuant to Section 8 of
the Employment Agreement and, accordingly, the Bank shall make such
payment to Employee (subject to the limitations set forth in the last
sentence of Section 8(a) of the Employment Agreement as amended hereby),
within 25 business days after the Merger so long as (i) Employee is
employed by the Bank on the date of the Merger and (ii) Employee executes
a complete and permanent release of all claims arising out of his
employment through the date of the Merger in the form attached hereto and
does not revoke the release within the statutory period for revocation and
(B) the "Date of Termination", as used in the Employment Agreement, shall
be the date of the Merger. The parties further agree that, except for
health insurance benefits to be provided by M&I to Employee through March
20, 2000 pursuant to the M&I Health Program with the same cost sharing
arrangement provided to M&I employees, the Employment Agreement will not
govern the terms and conditions of Employee's employment with the Bank or
any successor thereto after the Merger.
2. Amendment of Section 8. Section 8(a) of the Employment Agreement
shall be amended by deleting the last sentence thereof in its entirety and
substituting the following:
"Notwithstanding any other statement or provision herein to the
contrary, the amounts payable to the Employee pursuant to subsections
(i) and (ii) above shall not exceed $455,802.
3. Choice of Law. This Amendment #3 shall be governed by, and
construed in accordance with the laws of the State of Wisconsin.
IN WITNESS WHEREOF, the undersigned have executed this Amendment of
Employment Agreement as of the date set forth above.
ADVANTAGE BANCORP, INC. ADVANTAGE BANK, FSB
By:________________________ By:_____________________
Title:______________________ Title:____________________
EMPLOYEE XXXXXXXX & XXXXXX CORPORATION
__________________________ By:______________________
Xxxx Xxxxxxx
Title:_____________________
COMPLETE AND PERMANENT RELEASE
The undersigned, formerly an employee of Advantage Bank, FSB (the
"Employee"), entered into an Employment Agreement with Advantage Bank, FSB
(the "Bank") whereby the Employee was entitled to certain payments and
benefits if his employment were terminated or constructively terminated
after a "Change in Control." Section 8(a) of this Employment Agreement
was amended as of ___________, 1997 to modify the amount of payments in
the event of a "Change in Control." The payments were conditioned on
Employee executing this Complete and Permanent Release and not revoking it
within the statutory period for revocation.
In consideration of the payments to be made pursuant to Section 8(a)
of the Employment Agreement, as amended (the "Payments"), Employee, by
signing below, hereby agrees that execution of this Release operates to,
and hereby does, release Xxxxxxxx & Xxxxxx Corporation ("M&I"), its parent
corporations, its and their subsidiaries and affiliates, its and their
predecessors in interest including Advantage Bancorp, Inc. ("Advantage"),
the Bank and its other subsidiaries and affiliates, its and their present,
future or former employees, officers, directors, stockholders,
representatives, agents, successors and assigns (the "Released Parties")
from all claims or demands and all rights to any monetary payment or
recovery (the "Claims") the Employee has had, presently has or may have,
arising out of the Employee's employment with the Bank or the termination
of that employment, which Claims are based on facts or circumstances
existing prior to the date the Employee signs this Release, regardless of
whether such facts or circumstances are currently known or unknown by the
Employee, including, without limitation, a release of any Claims the
Employee may have based on the Civil Rights Act of 1866, as amended, the
Civil Rights Act of 1991, as amended; the Age Discrimination in Employment
Act of 1967, as amended; Title VII of the Civil Rights Act of 1964, as
amended; the Americans with Disabilities Act; the Equal Pay Act of 1963,
any and all laws of any state concerning wages, employment and discharge;
any state or local municipality fair employment statutes or laws; and any
other law, rule, regulation or ordinance or common law cause of action,
whether arising in contract or tort, pertaining to employment, terms and
conditions of employment, or termination of employment; provided, however,
that execution of this Release shall not adversely affect the Employee's
rights to receive benefits under any qualified or nonqualified employee
benefit plans and arrangements of the Bank in which he participated prior
to the merger of Advantage into M&I (the "Merger") including, but not
limited to, the following: the Bank Incentive Plan and Trust I and II,
the 1991 Stock Option and Incentive Plan, the Employment Agreement, as
amended, and the Executive Salary Continuation Agreement.
The Employee has 21 days from the date the Employee receives this Release
to sign and return this Release to M&I, but in no event may the Employee
sign this Release prior to the first day subsequent to the date of the
Merger. By signing below, the Employee agrees to and acknowledges that
the Payments a) are in lieu of any amount that such Employee would
otherwise receive under any other severance plan of Advantage, the Bank,
M&I or M&I Xxxxxxxx & Xxxxxx Bank, b) shall not be taken into account for
purposes of determining benefits under any pension, deferred compensation
or welfare benefit plans of Advantage, the Bank, M&I or M&I Xxxxxxxx &
Ilsley Bank, whether qualified or nonqualified and c) shall be reduced by
any Federal, State or local withholding or other taxes as required under
applicable law.
The Released Parties hereby release the Employee from any liability
to the Released Parties arising out of the Employee's employment with the
Bank through the date of this Complete and Permanent Release except (i) to
the extent of the obligations set forth herein, (ii) any obligations under
any of the employee benefit plans and arrangements referred to in the
proviso of the second paragraph of this Complete and Permanent Release, or
(iii) liabilities attributable to (aa) a willful failure to deal fairly
with the Bank or its shareholders in connection with a matter in which the
Employee had a material conflict of interest, (bb) a violation of criminal
law, unless the Employee had reasonable cause to believe that his conduct
was lawful, (cc) a transaction from which the Employee derived an improper
personal profit or benefit, or (dd) willful misconduct.
Notwithstanding the foregoing, this Complete and Permanent Release
does not waive rights, if any, the Employee or his successors and assigns
may have under or pursuant to, or release the Released Parties from
obligations, if any, they may have to the Employee or to his successors
and assigns on claims arising out of, related to or asserted under or
pursuant to, this Complete and Permanent Release, the merger agreement
relating to the Merger, any insurance contract, or any indemnity agreement
or obligation contained in or adopted or acquired pursuant to any
provision of the charter or by-laws of Advantage or its subsidiaries or
affiliates or in any applicable insurance policy carried by Advantage or
its affiliates or subsidiaries for any matter which arises or may arise in
the future in connection with the Employee's employment with the Bank.
The Payments will be paid no later than 25 business days following
the Merger except in no event will the Payments be paid before the
expiration of the period allowable for revocation as set forth below.
Upon execution, this Release should be returned to Xxxxxxxx & Xxxxxx
Corporation, Attn: Xxxxxx Xxxxxx, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, XX
00000.. The Employee has seven (7) calendar days from the date that the
Employee signs this Release to revoke this Release by giving written
notice of the Employee's intent to do so to M&I. This Release shall not
become effective or enforceable until this seven (7) day period has
expired. If the Employee revokes this Release, the Employee will not
receive the Payments.
The Employee is advised to consult with an attorney before signing this
Release.
AGREED TO AND ACCEPTED THIS ___ DAY OF ________, 1997.
______________________________
Employee
________________________________
Print Name
XXXXXXXX & XXXXXX CORPORATION
By:
Its:
M&I XXXXXXXX & ILSLEY BANK
By:
Its:____________________________
EXHIBIT 4.6
AFFILIATE LETTER
_________________________
_________________________
_________________________
_________________________
Gentlemen:
I have been advised that as of the date of this letter I may be
deemed to be an "affiliate" of _______________________, a Wisconsin
corporation ("Seller"), as the term "affiliate" is (i) defined for
purposes of paragraphs (c) and (d) of Rule 145 of the Rules and Regulation
(the "Rules and Regulations") of the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the
"Act"), and/or (ii) used in and for purposes of Accounting Series,
Releases 130 and 135, as amended, of the Commission. Pursuant to the
terms of the Agreement and Plan of Merger dated as of _______________ (the
"Agreement"), among _____________________, a Wisconsin corporation ("the
Company"), and Seller, Seller will be merged with and into the Company
(the "Merger").
As a result of the Merger, I may receive shares of capital stock
of Company Common Stock, par value $1.00 per share (the "Company
Securities"). I would receive such shares in exchange for, respectively,
shares owned by me of Seller Common Stock par value $.01 per share (the
"Seller Securities").
I represent, warrant and covenant to Company that in the event I
receive any Company Securities as a result of the Merger:
A. I shall not make any sale, transfer or other
disposition of the Company Securities in violation of the Act or the
Rules and Regulations.
B. I have carefully read this letter and the Agreement and
discussed its requirements and other applicable limitations upon my
ability to sell, transfer or otherwise dispose of Company Securities
to the extent I felt necessary, with my counsel or counsel for
Seller.
C. I have been advised that the issuance of Company
Securities to me pursuant to the Merger has been registered with the
Commission under the Act on a Registration Statement on Form S-4.
However, I have also been advised that, since at the time the Merger
was submitted for a vote of the stockholders of Seller, I may be
deemed to have been an affiliate of Seller and the distribution by me
of the Company Securities has not been registered under the Act, and
that I may not sell, transfer or otherwise dispose of Company
Securities issued to me in the Merger unless (i) such sale, transfer
or other disposition has been registered under the Act, (ii) such
sale, transfer or other disposition is made in conformity with the
volume and other limitations of Rule 145 promulgated by the
Commission under the Act, or (iii) in the opinion of counsel
reasonably acceptable to the Company, such sale, transfer or other
disposition is otherwise exempt from registration under the Act.
D. I understand that the Company is under no obligation to
register the sale, transfer or other disposition of the Company
Securities by me or on my behalf under the Act or to take any other
action necessary in order to make compliance with an exemption from
such registration available.
E. I also understand that stop transfer instructions will
be given to the Company's transfer agents with respect to the Company
Securities and that there will be placed on the certificates for the
Company Securities issued to me, 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 APPLIES. THE SHARES REPRESENTED BY THIS CERTIFICATE
MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH THE TERMS OF AN
AGREEMENT DATED ______________ BETWEEN THE REGISTERED HOLDER
HEREOF AND THE COMPANY, A COPY OF WHICH AGREEMENT IS ON FILE AT
THE PRINCIPAL OFFICES OF THE COMPANY."
F. I also understand that unless the transfer by me of my
Company Securities has been registered under the Act or is a sale
made in conformity with the provisions of Rule 145, the Company
reserves the right to put the following legend on the certificates
issued to my transferee:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED
FROM A PERSON WHO RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH
RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES.
THE SHARES HAVE BEEN ACQUIRED BY THE HOLDER NOT WITH A VIEW TO,
OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF
WITHIN THE MEANING OF SECURITIES ACT OF 1933 AND MAY NOT BE
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933."
It is understood and agreed that the legends set forth in
paragraph E and F above shall be removed by delivery of substitute
certificates without such legend if the undersigned shall have delivered
to the Company a copy of a letter from the staff of the Commission, or an
opinion of counsel in form and substance reasonably satisfactory to the
Company, to the effect that such legend is not required for purposes of
the Act.
I further represent to and covenant with the Company that I have
not, within the 30 days prior to the Effective Time (as defined in the
Agreement), sold, transferred or otherwise disposed of any shares of
Seller Securities or shares of the capital stock of the Company held by me
and that I will not sell, transfer or otherwise dispose of any shares of
Company Securities received by me in the Merger or other shares of the
capital stock of the Company until after such time as results covering at
least 30 days of combined operations of Seller and the Company have been
published by the Company, in the form of a quarterly earnings report, an
effective registration statement filed with the Commission, a report to
the Commission on Form 10-K, 10-Q, or 8-K, or any other public filing or
announcement which includes the combined results of operations.
Very truly yours,
___________________________________
Name:
Accepted this ___ day of
____________, 199_ by
COMPANY
By: _____________________________
Name:
Title:
