EXHIBIT A
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (the "Agreement") being made and entered
into as of the 25th day of January 1996, by and between First Chicago NBD
Corporation, a Delaware corporation ("FCN"), and Barrington Bancorp, Inc., a
Delaware corporation ("BBI").
WITNESSETH THAT:
WHEREAS, FCN is a registered bank holding company under the Bank Holding
Company Act of 1956, as amended ("BHC");
WHEREAS, BBI is a registered savings and loan holding company under the
Home Owner's Loan Act, as amended (HOLA");
WHEREAS, the Boards of Directors of FCN and BBI deem it advisable and in
the best interests of the stockholders of FCN and BBI that FCN and BBI become
affiliated by causing BBI to be merged with and into, and under the charter of,
FCN in accordance with the applicable corporation law of the State of Delaware
("Corporate Law") with FCN deemed to be the continuing and surviving entity (the
"Merger"), pursuant to which the stockholders of BBI will receive shares of
common stock, $1.00 par value per share, of FCN ("FCN Common Stock") as provided
herein in exchange for their shares of common stock, $.01 par value per share,
of BBI ("BBI Common Stock"); and
WHEREAS, FCN and BBI desire to make certain representations, warranties,
covenants and agreements in connection with the Merger and also desire to set
forth various conditions precedent to the Merger.
NOW THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained, the parties agree as follows:
ARTICLE I.
THE MERGER
Section 1.01 Effects of the Merger.
---------------------
(a) Surviving Corporation. Subject to the terms and conditions of
---------------------
this Agreement, BBI shall be merged with and into, and under the charter of, FCN
at the Effective Time (as defined below) in accordance with the Corporate Law
with FCN being the continuing and surviving corporation (sometimes referred to
hereinafter as the "Surviving Corporation"), and the separate existence of BBI
shall cease.
1
(b) Effective Time. The Merger shall become effective at the date
--------------
and time specified in the Certificate of Merger accepted for filing by the
Secretary of State of the State of Delaware (the "Effective Time"). The parties
shall execute, acknowledge and file, in accordance with the Corporate Law, the
Certificate of Merger upon the satisfaction of all conditions precedent to the
consummation of the transactions contemplated by this Agreement.
(c) Rights and Liabilities. The Surviving Corporation shall be
----------------------
called "First Chicago NBD Corporation", and shall possess all of the properties,
privileges, immunities, powers, franchises and rights of a public as well as a
private nature and be subject to all of the liabilities, restrictions and duties
of FCN and BBI and be governed by the laws of the State of Delaware.
(d) Restated Certificate of Incorporation. The Restated Certificate
-------------------------------------
of Incorporation of FCN shall be the Restated Certificate of Incorporation of
the Surviving Corporation until amended in accordance with the provisions
thereof and the applicable Corporate Law.
(e) Bylaws. The Bylaws of FCN in effect immediately prior to the
------
Effective Time shall be the Bylaws of the Surviving Corporation until altered,
amended or repealed as provided therein, or in the Restated Certificate of
Incorporation of the Surviving Corporation or the applicable Corporate Law.
(f) Directors and Officers. The directors of the Surviving
----------------------
Corporation shall be the persons who were directors of FCN immediately prior to
the Effective Time. The officers of the Surviving Corporation shall be the
persons who were officers of FCN immediately prior to the Effective Time.
(g) Advisory Directors. The directors and employees of BBI named on
------------------
Exhibit 1.01(g) hereto shall be entitled to become a member of the Barrington,
Illinois Advisory Board (to be established by FCN upon the Effective Time) for
such terms set forth on such Exhibit. Meetings of the Barrington, Illinois
Advisory Board shall be held at least once every six months, and each member of
the Barrington, Illinois Advisory Board shall receive compensation of $250 per
meeting attended.
(h) Accounting. For accounting purposes, it is intended that the
----------
Merger shall be accounted for as a purchase.
Section 1.02 Conversion of Stock. At the Effective Time:
-------------------
(a) FCN Common Stock. Each share of FCN Common Stock which is
----------------
issued immediately prior thereto (whether then outstanding or held in the
treasury of FCN) shall continue to be issued without any change therein and
shall continue as one share of Common Stock of the Surviving Corporation.
2
(b) BBI Common Stock. Each share of BBI Common Stock which is issued
----------------
and outstanding immediately prior to the Effective Time (other than "Excluded
Shares," which shall mean (i) shares of BBI Common Stock held by BBI, FCN and
their respective subsidiaries, which shall be canceled, but not those held in a
fiduciary capacity or in satisfaction of debts previously contracted, and (ii)
Dissenting Shares as defined in Section 1.02(d) hereof) shall, by virtue of the
Agreement and without any action on the part of the holder thereof, be converted
into and represent the right to receive and be exchangeable into a number of
shares of FCN Common Stock (rounded to the nearest thousandth of a share) equal
to a fraction, the numerator of which shall be equal to $25.85, and the
denominator of which shall be equal to the average closing price per share of
FCN Common Stock (as reported on the New York Stock Exchange Composite Tape
(the"NYSE Tape")) for the ten consecutive trading days ending on the fifth
trading day prior to the Effective Time as reported in the Wall Street Journal,
Midwest Edition (such fraction being the "Exchange Ratio", which shall be
rounded to the nearest thousandth of a share), subject to the payment of cash in
lieu of fractional shares in accordance with Section 1.04 hereof.
(c) Actions Affecting FCN Common Stock. If, prior to the Effective
----------------------------------
Time, shares of FCN Common Stock shall be changed into a different number of
shares or a different class of shares by reason of any reclassification,
recapitalization, split-up, combination, exchange of shares or readjustment, or
there occurs a distribution of warrants or rights with respect to FCN Common
Stock, or a stock dividend or stock split is declared with a record date prior
to the Effective Time, then in any such event the Exchange Ratio shall be
appropriately adjusted.
(d) Dissenting Shares. Any shares of BBI Common Stock held by a
-----------------
holder who dissents from the Merger in accordance with the Corporate Law and
becomes entitled to obtain payment for the fair value of such shares of BBI
Common Stock pursuant to the applicable provisions of the Corporate Law shall be
herein called "Dissenting Shares." Notwithstanding any other provision of this
Agreement, any Dissenting Shares shall not, after the Effective Time, be
entitled to vote for any purpose or receive any dividends or other distributions
and shall be entitled only to such rights as are afforded in respect of
Dissenting Shares pursuant to the Corporate Law.
Section 1.03 Time and Place of Closing.
-------------------------
(a) Closing; Closing Date. The closing of the transactions
---------------------
contemplated by this Agreement (the "Closing") will be held on a date mutually
agreed upon by FCN and BBI (the "Closing Date"). In the absence of such
agreement, the Closing shall be held on the tenth business day after the last to
occur of: (i) the receipt of all consents and approvals of government
regulatory authorities as legally required to consummate the Merger and the
expiration of all statutory waiting periods; and (ii) the requisite approval of
the Merger by the stockholders of BBI.
(b) Closing Location. The closing shall take place at the offices of
----------------
FCN or such other place as FCN and BBI may mutually agree prior to the Closing
Date.
3
Section 1.04 Exchange of BBI Common Stock.
----------------------------
(a) Exchange Procedures. As soon as practicable after the Effective
-------------------
Time, the Exchange Agent, which shall be First Chicago Trust Company of New
York, or such other exchange agent as shall be selected by FCN and reasonably
acceptable to BBI, shall mail to each holder of record of a certificate or
certificates (other than certificates representing Excluded Shares) which as of
the Effective Time represented outstanding shares of BBI Common Stock (the
"Certificates"): (i) a form 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 (or a lost
certificate affidavit and bond in a form reasonably acceptable to the Exchange
Agent); and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration (as herein defined). The
"Merger Consideration" shall mean the number of whole shares of FCN Common Stock
into which the BBI Common Stock shall have been converted by virtue of the
Merger as provided above and the cash value of any fraction of a share of FCN
Common Stock as provided below. Upon surrender of a Certificate for
cancellation to the Exchange Agent (or a lost certificate affidavit and bond in
a form reasonably acceptable to the Exchange Agent), together with such letter
of transmittal, duly executed, the holder of such Certificate shall be entitled
to receive as soon as reasonably practical thereafter the Merger Consideration
and the Certificate so surrendered shall forthwith be cancelled. In the event
of a transfer of ownership of BBI Common Stock which is not registered in the
transfer records of BBI, the Merger Consideration may be issued to a transferee
if the Certificate representing such BBI Common Stock is presented to the
Exchange Agent, accompanied by all documents required to evidence and effect
such transfer and by any applicable stock transfer and other taxes. No interest
shall be payable on or with respect to the cash in lieu of fractional shares.
(b) Delivery of Merger Consideration to Exchange Agent. At or prior
--------------------------------------------------
to the Effective Time, FCN shall deliver to the Exchange Agent the aggregate
Merger Consideration to be paid for all of the issued and outstanding shares of
BBI Common Stock other than Excluded Shares. On an as-required basis, FCN shall
promptly and timely tender to the Exchange Agent additional cash funds required
for the payment of cash in lieu of fractional shares. The Merger Consideration
remaining in the hands of the Exchange Agent for non-surrendered Certificates
shall be returned to FCN at the expiration of one year from the Effective Time
as provided in Section 1.04(c) below.
(c) Failure to Exchange BBI Common Stock. No dividends or other
------------------------------------
distributions declared with respect to FCN Common Stock payable to the holders
of record thereof on or after the Effective Time shall be paid to the holder of
any non-surrendered Certificate with respect to FCN Common Stock represented
thereby until the holder of record shall surrender such Certificate. Subject to
the effect, if any, of applicable law, after the subsequent surrender and
exchange of a Certificate, the holder thereof shall be entitled to receive any
such dividends or distributions, without interest thereon, which theretofore
became payable with respect to the FCN Common Stock represented by such
Certificate. All dividends or other distributions declared with respect to the
FCN Common Stock and payable to the holders of record thereof on or after the
Effective Time which are payable to the holder of a Certificate not theretofore
surrendered and
4
exchanged for FCN Common Stock pursuant to this Section 1.04 shall either, at
the option of the Surviving Corporation, be paid or delivered by the Surviving
Corporation to the Exchange Agent in trust either at the option of the Surviving
Corporation, for the benefit of such holders or held by the Surviving
Corporation in trust for the benefit of such holders. All such dividends and
distributions held by the Exchange Agent for payment or delivery to the holders
of non-surrendered Certificates unclaimed at the end of one year from the
Effective Time shall be repaid or redelivered by the Exchange Agent to the
Surviving Corporation after which time any holder of Certificates who has not
theretofore surrendered such Certificates to the Exchange Agent, subject to
applicable law, shall look as a general creditor only to the Surviving
Corporation for payment or delivery of such dividends or distributions, as the
case may be. Any Merger Consideration delivered or made available to the
Exchange Agent pursuant to this Section 1.04 and not exchanged for Certificates
within one year after the Effective Time pursuant to this Section 1.04 shall be
returned by the Exchange Agent to the Surviving Corporation which shall
thereafter act as Exchange Agent subject to the rights of holders of non-
surrendered Certificates.
(d) Full Payment. All shares of FCN Common Stock issued upon the
------------
surrender for exchange of BBI Common Stock shall thereupon be validly issued and
outstanding, fully paid and non-assessable, and shall not be liable to any
further call, nor shall the holder thereof be liable for any further payments
with respect thereto.
(e) Fractional Shares. No certificates or scrip representing
-----------------
fractional shares of FCN Common Stock shall be issued upon the surrender for
exchange of Certificates, no dividend or distribution of the Surviving
Corporation shall relate to any factional share, and such fractional share
interests will not entitle the owner thereof to vote or to any other rights of a
stockholder of the Surviving Corporation. In lieu of any fractional share, the
Exchange Agent or the Surviving Corporation, as the case may be, shall pay to
each holder of shares of BBI Common Stock who otherwise would be entitled to
receive a fractional share of FCN Common Stock an amount of cash (without
interest) equal to the product achieved when such fraction is multiplied by the
closing price of FCN Common Stock on the New York Stock Exchange ("NYSE") on the
trading day immediately preceding the Effective Time, as reported in the Wall
Street Journal, Midwest Edition, rounded to the nearest cent.
(f) List of BBI Stockholders. At the Effective Time, BBI shall
------------------------
deliver a certified copy of a list of its stockholders to the Exchange Agent,
after which there shall be no further registrations or transfers on the stock
transfer books of BBI of the shares of BBI Common Stock that were outstanding
immediately prior thereto. If, after the Effective Time, Certificates
representing such shares are presented to BBI or FCN, they shall be canceled and
exchanged as provided in this Article I.
Section 1.05 Conversion and/or Merger of First Federal Savings Bank of
---------------------------------------------------------
Barrington. The parties understand that it is the present intention of FCN to
----------
convert First Federal Savings Bank of Barrington ("BBI Bank"), a wholly owned
subsidiary of BBI, into a national banking association at or after the Effective
Time and/or to merge BBI Bank into one of FCN's national bank Subsidiaries
5
(retaining BBI Bank's existing office as a branch) at or after the Effective
Time (collectively, the "Bank Merger"). BBI shall take all such actions as are
reasonably requested by FCN so that FCN may accomplish such conversion and
merger as aforesaid. Nothing contained in this Section 1.05 is intended to
impose an obligation on FCN to alter the manner in which FCN or any FCN
Subsidiary conducts business; provided, however, that FCN, to the extent
required by law, shall cause its national bank Subsidiary into which BBI Bank is
merged to assume BBI Bank's liquidation account.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF FCN
FCN represents and warrants to BBI that:
Section 2.01 Organization. (a) FCN is a corporation duly organized,
------------
validly existing and in good standing under the laws of the State of Delaware
and has all requisite power and authority, corporate and otherwise, to own,
operate and lease its assets, properties and business and to carry on its
business substantially as it has been and is now being conducted. FCN is duly
qualified to do business and is in good standing in each jurisdiction where the
character of the assets or properties owned or leased by it or the nature of the
business transacted by it requires that it be so qualified, except where the
failure to so qualify would not have a Material Adverse Effect (as herein
defined) on FCN or its ability to consummate the transactions contemplated
herein. FCN has all requisite corporate power and authority to enter into this
Agreement and, subject to the receipt of all requisite regulatory approvals and
the expiration of applicable waiting periods, to consummate the transactions
contemplated hereby. FCN is duly registered as a bank holding company under
BHC.
(b) As used in this Agreement, the term "Material Adverse Effect"
with respect to an entity means any condition, event, change or occurrence that
has or may reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), properties, business, operations or results
of operations, of such entity and its Subsidiaries taken as a whole; it being
understood that a Material Adverse Effect shall not include: (i) a change with
respect to, or effect on, such entity and its Subsidiaries resulting from a
change in law, rule, regulation, generally accepted accounting principles or
regulatory accounting principles, including, but not limited to, a change that
would require the bad debt reserve of a thrift institution to be restored to
income; (ii) a change with respect to, or effect on, such entity and its
Subsidiaries resulting from expenses (such as legal, accounting and investment
bankers' fees) incurred in connection with this Agreement; (iii) a change with
respect to, or effect on, such entity and its Subsidiaries resulting from any
other matter affecting depository institutions generally including, without
limitation, changes in general economic conditions and changes in prevailing
interest and deposit rates; or (iv) any one-time special insurance premium
assessed by the Federal Deposit Insurance Corporation ("FDIC") on deposits
insured by the Savings Association Insurance Fund ("SAIF").
6
Section 2.02 Authorization. The execution, delivery and performance of
-------------
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of FCN. This
Agreement has been duly executed and delivered by FCN and, subject to receipt of
such approvals of regulatory authorities as may be required by statute or
regulation, constitutes the valid and binding obligation of FCN and is
enforceable against FCN (except to the extent that enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws or equitable principles or doctrines).
Section 2.03 Conflicts. Subject to the second sentence of this Section
---------
2.03, the execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not, conflict with or
result in any violation, breach or termination of, or default or loss of a
material benefit under, or permit the acceleration of any obligation under, or
result in the creation of any material lien, charge or encumbrance on any of the
property or assets under, any provision of the Restated Certificate of
Incorporation or Bylaws of FCN or similar documents of any FCN Subsidiary (as
defined in Section 2.07 hereof) or any mortgage, indenture, lease, agreement or
other instrument, permit, concession, grant, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to FCN or
any FCN Subsidiary or their respective properties, other than those which (i)
will be cured or waived prior to the Effective Time; (ii) which will not have a
Material Adverse Effect on FCN; or (iii) are disclosed in Section 2.03 of that
certain confidential writing delivered by FCN to BBI within two business days
prior to the date hereof (the "FCN Disclosure Schedule"). No consent, approval,
order or authorization of, or registration, declaration or filing with, any
federal or state governmental authority is required by or with respect to FCN in
connection with the execution and delivery of this Agreement or the consummation
by FCN of the transactions contemplated hereby except for: (a) the filing of
all applicable regulatory applications by FCN, BBI and/or their respective
Subsidiaries for approval of the execution and delivery of this Agreement and
the consummation of the transactions contemplated by this Agreement; (b) the
filing by FCN of the registration statement relating to the FCN Common Stock to
be issued pursuant to this Agreement (the "Registration Statement") with the SEC
and various blue sky authorities, which Registration Statement shall include the
prospectus/proxy statement for use in connection with the BBI Stockholders'
Meeting (the "Proxy Statement"); (c) the filing of the Certificate of Merger
with respect to the Merger with the Secretary of State of the State of Delaware;
(d) any filings, approvals or no-action letters with or from state securities
regulators; (e) any anti-trust filings, consents, waivers or approvals; and (f)
the approval of this Agreement and the transactions contemplated hereby by the
shareholders of BBI.
Section 2.04 Anti-takeover Provisions Inapplicable. No "business
-------------------------------------
combination," "moratorium," "control share" or other state anti-takeover statute
or regulation (i) prohibits or restricts FCN's ability to perform its
obligations under this Agreement or its ability to consummate the transactions
contemplated hereby, (ii) would have the effect of invalidating or voiding this
Agreement or any provision hereof, or (iii) would subject BBI to any material
impediment or condition in connection with the exercise of any of its rights
under this Agreement.
7
Section 2.05 Capitalization. As of the date hereof, the authorized
--------------
capital stock of FCN consists of (i) 750,000,000 shares of FCN Common Stock,
$1.00 par value per share, of which, as of December 31, 1995, 315,241,109 shares
were issued and outstanding, and (ii) 10,000,000 shares of preferred stock,
without par value, of which, as of December 31, 1995, 2,104,574 were issued and
outstanding. All of the issued and outstanding shares of FCN Common Stock have
been, and all of the shares of FCN Common Stock to be issued in the Merger will
be, at the Effective Time, duly and validly authorized and issued, and are or
will be, as the case may be, fully paid and non-assessable. None of the
outstanding shares of FCN Common Stock has been issued in violation of any
preemptive rights of the current or past stockholders of FCN and none of the
outstanding shares of FCN Common Stock is or will be entitled to any preemptive
rights in respect of the Merger or any of the other transactions contemplated by
this Agreement.
Section 2.06 FCN Financial Statements; Material Changes. FCN has
------------------------------------------
heretofore delivered to BBI its audited supplemental consolidated financial
statements contained in its Form 8-K Report dated December 4, 1995 (the "FCN
Financial Statements"). The FCN Financial Statements (x) are true and correct
in all material respects; (y) have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto, and except in the
case of unaudited consolidated financial statements for the absence of footnotes
and for normal recurring year-end adjustments which are not material); and (z)
fairly present the consolidated financial position of FCN as of the dates
thereof and the consolidated results of its operations, stockholders' equity,
cash flows and changes in financial position for the periods then ended. Since
September 30, 1995 to the date hereof, FCN has not undergone or suffered any
changes in its condition (financial or otherwise), which would have a Material
Adverse Effect on FCN except as disclosed in Section 2.06 of the FCN Disclosure
Schedule or in the FCN Financial Statements or, for purposes of Section 6.02
hereof, as disclosed by FCN in its documents filed with the SEC on or prior to
the second business day before the start of the ten consecutive trading day
period referenced in Section 1.02(b) hereof.
Section 2.07 FCN Subsidiaries. (a) Except for directors' qualifying
----------------
shares, FCN owns directly or indirectly all of the issued and outstanding shares
of capital stock of the FCN Significant Subsidiaries. All of the shares of
capital stock of each FCN Significant Subsidiary held by FCN or a FCN
Significant Subsidiary are fully paid and non-assessable and are owned free and
clear of any claim, lien or encumbrance, except as disclosed on Section 2.07 of
the FCN Disclosure Schedule.
(b) Each FCN Significant Subsidiary is either a bank or a corporation
and is duly organized, validly existing and in good standing under the laws of
the jurisdiction in which it is incorporated or organized, and is duly qualified
to do business and in good standing in each jurisdiction where the character of
the assets or properties owned or leased by it or the nature of the business
transacted by it requires it to be so qualified, except where the failure to so
qualify, either individually or in the aggregate, would not have a Material
Adverse Effect on FCN or the ability of FCN to consummate the transactions
contemplated herein. Each FCN Significant Subsidiary has the
8
corporate power and authority necessary for it to own, operate or lease its
assets, properties and business and to carry on its business as it has been and
is now being conducted.
(c) For purposes of this Agreement, an "FCN Subsidiary" or a
"Subsidiary" of FCN shall mean each corporation, financial institution and other
entity which is consolidated with FCN for financial reporting purposes;
provided, however, there shall not be included any such entity acquired in good
faith through foreclosure, or any such entity to the extent that the equity
securities of such entity are owned or controlled in a bona fide fiduciary
capacity; and an "FCN Significant Subsidiary" or "Significant Subsidiary" of FCN
shall mean any Significant Subsidiary within the meaning of Rule 1-02 of
Regulation S-X of the SEC.
Section 2.08 FCN Filings. FCN has previously made available, or will make
-----------
available prior to the Effective Time, to BBI true and correct copies of (i)
proxy statements of NBD Bancorp, Inc. ("NBD") and First Chicago Corporation
("FCC"), the predecessor corporations to FCN, relating to all meetings of their
respective stockholders (whether special or annual) during calendar years 1994
and 1995 and (ii) all other reports, as amended, or filings, as amended,
required to be filed under the Securities and Exchange Act of 1934, as amended
(the "Securities Exchange Act") by FCC, NBD or FCN with the SEC since January 1,
1994, including without limitation, all reports on Forms 10-K, 10-Q and 8-K.
Section 2.09 FCN Reports. Since January 1, 1994, each of NBD, FCC and
-----------
FCN, and the FCN Significant Subsidiaries, has filed, and will continue to file,
all reports and statements, together with any amendment required to be made with
respect thereto, that it was, or will be required to file with the SEC, the
Federal Reserve Board, the Office of the Comptroller of the Currency ("OCC"),
the FDIC, the NASD and other applicable banking, securities and other regulatory
authorities except where the failure to make such filing has not or will not
have a Material Adverse Effect on FCN. There is no unresolved violation,
criticism or exception by the SEC, Federal Reserve Board, OCC, FDIC or other
agency, commission or entity with respect to any report or statement referred to
herein that is likely to have a Material Adverse Effect on FCN.
Section 2.10 Compliance with Laws. (a) Except as disclosed in Section
--------------------
2.10 of the FCN Disclosure Schedule, the businesses of FCN and the FCN
Subsidiaries are not being conducted in violation of any law, ordinance or
regulation of any governmental entity, including, without limitation, any laws
affecting financial institutions (including those pertaining to the Bank Secrecy
Act, the investment of funds, the lending of money, the collection of interest
and the extension of credit), federal and state securities laws, laws and
regulations relating to financial statements and reports, truth-in-lending,
truth-in-savings, usury, fair credit reporting, consumer protection,
occupational safety, fair employment practices, fair labor standards and laws
and regulations relating to employee benefits, and any statutes or ordinances
relating to the properties occupied or used by FCN or any FCN Subsidiary, except
for possible violations which either singly or in the aggregate do not and,
insofar as reasonably can be foreseen in the future, will not have a Material
Adverse Effect on FCN.
9
(b) Except as disclosed in Section 2.10 of the FCN Disclosure
Schedule, no investigation or review by any governmental entity with respect to
FCN or any FCN Subsidiary is pending or, to the best knowledge of FCN,
threatened, nor has any governmental entity indicated to FCN an intention to
conduct the same, other than normal regulatory examinations or those the outcome
of which will not have a Material Adverse Effect on FCN.
(c) FCN and each of the FCN Subsidiaries, where applicable, is in
substantial compliance with the applicable provisions of the Community
Reinvestment Act of 1977 and the regulations promulgated thereunder. As of the
date of this Agreement, FCN has not been advised of the existence of any fact or
circumstance or set of facts or circumstances which, if true, would cause FCN or
any of the FCN Subsidiaries to fail to be in substantial compliance with such
provisions. No FCN Subsidiary that is a financial institution has a Community
Reinvestment Act rating from an applicable regulatory authority which is less
than "satisfactory."
Section 2.11 Disclosure. None of the written information supplied by FCN
----------
for inclusion in the Proxy Statement relating to the BBI Stockholders' Meeting
or the information relating to FCN and the FCN Subsidiaries in the Registration
Statement, will, in the case of the Proxy Statement or any amendments thereof or
supplements thereto, at the time of the BBI Stockholders' Meeting or, in the
case of the Registration Statement, at the time it becomes effective and at the
Effective Time, contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The Registration
Statement will comply as to form in all material respects with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations thereunder
(the "Securities Act").
Section 2.12 Litigation. Except as disclosed in Section 2.12 of the FCN
----------
Disclosure Schedule, there is no suit, action, investigation or proceeding,
legal, quasi-judicial, administrative or otherwise, pending or, to the best
knowledge of FCN, threatened, against or affecting FCN or any FCN Subsidiary, or
any of their respective officers, directors, employees or agents, in their
capacities as such, which in the reasonable judgment of FCN is likely to have a
Material Adverse Effect on FCN or materially adversely affect the ability of FCN
to consummate the transactions contemplated herein or which is seeking to enjoin
consummation of the transactions provided for herein.
Section 2.13 Taxes. Except as disclosed in Section 2.13 of the FCN
------
Disclosure Schedule, FCN and the FCN Significant Subsidiaries have each timely
filed all tax and information returns required to be filed, except for such
failures to file as cannot be reasonably expected to have a Material Adverse
Effect on FCN. FCN and its Significant Subsidiaries have duly and timely paid,
or established adequate reserves for the payment of, or is contesting in good
faith, all taxes required to be paid in respect of the periods covered by such
returns.
Section 2.14 FCN Benefit Plans. Each of the FCN benefit plans that is
-----------------
qualified under Section 401(a) of the Code ("FCN Qualified Plans") has been
determined by the Internal Revenue Service to qualify under Section 401(a) of
the Code, or an application for determination of such
10
qualification has been timely made to the Internal Revenue Service prior to the
end of the applicable remedial amendment period under Section 401(b) of the
Code, and, to the best of FCN's knowledge, there exist no circumstances likely
to materially adversely affect the qualified status of any such FCN Qualified
Plan. All such FCN Qualified Plans established or maintained by FCN or any of
the FCN Subsidiaries or to which FCN or any of the FCN Subsidiaries contribute
are in compliance in all material respects with all applicable requirements of
ERISA, and are in compliance in all material respects with all applicable
requirements (including qualification and non-discrimination requirements in
effect as of the Effective Time) of the Code for obtaining the tax benefits the
Code thereupon permits with respect to such FCN Qualified Plans.
Section 2.15 Compliance With Environmental Laws. Except as set forth in
----------------------------------
Section 2.15 of the FCN Disclosure Schedule, all real property owned or occupied
by FCN or any of its Subsidiaries (the "FCN Real Property"), is in compliance
with all applicable environmental laws and regulations, except for such non-
compliance as cannot be reasonably expected to have a Material Adverse Effect on
FCN. To the knowledge of FCN, there are no outstanding citations, notices of
violation, or orders of noncompliance issued to FCN or any of its Significant
Subsidiaries, nor have FCN or any of its Significant Subsidiaries been advised
that any such citation, notice of violation or order of noncompliance is
contemplated, pursuant to any environmental law or regulation relating to any
such FCN Real Property owned or occupied by FCN or any of its Significant
Subsidiaries or relating to any real property no longer owned or occupied by FCN
or any of its Significant Subsidiaries where the failure to cure the subject of
such citation, notice of violation or order of noncompliance could reasonably be
expected to have a Material Adverse Effect on FCN. To the knowledge of FCN,
there are no liens against such FCN Real Property imposed pursuant to any
environmental law or regulation which would have a Material Adverse Effect on
FCN.
Section 2.16 Contracts and Commitments. Section 2.16 of the FCN
-------------------------
Disclosure Schedule contains (and shall be supplemented by FCN, as required by
Section 5.10 hereof, so as to contain at the Closing Date) copies of the
Restated Certificate of Incorporation and Bylaws of FCN, certified by an officer
of FCN to be true and correct copies of such documents on the dates of such
certificates.
Section 2.17 Undisclosed Liabilities. All of the obligations or
-----------------------
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise,
whether due or to become due, and regardless of when asserted) arising out of
transactions or events heretofore entered into, or any action or inaction,
including taxes with respect to or based upon transactions or events heretofore
occurring, that are required to be reflected, disclosed or reserved against in
audited consolidated financial statements of FCN in accordance with generally
accepted accounting principles ("Liabilities") have been so reflected, disclosed
or reserved against in the FCN Financial Statements or in the notes thereto, and
FCN and the FCN Subsidiaries have no other Liabilities except (a) Liabilities
incurred since September 30, 1995 in the ordinary course of business or (b)
11
Liabilities that, either alone or when combined with all similar liabilities,
reasonably could not be expected to have a Material Adverse Effect on FCN.
Section 2.18 Assets. (a) FCN and the FCN Subsidiaries have good and
------
marketable title to their real properties, including leaseholds, and their other
assets and properties, all as reflected as owned or held by FCN in the FCN
Financial Statements, and those acquired since the date of the FCN Financial
Statements, except for assets and properties (i) disposed of since such date or
(ii) the failure to have good and marketable title with respect to which is not
reasonably expected to have a Material Adverse Effect on FCN.
(b) All leases pursuant to which FCN or any FCN Subsidiary, as
lessee, leases real or personal property which are material to the business of
FCN on a consolidated basis are, to the best knowledge of FCN, valid, effective,
and enforceable against the lessor in accordance with their respective terms
except where their invalidity, ineffectiveness or unenforceability is not
reasonably expected to have a Material Adverse Effect on FCN.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF BBI
BBI represents and warrants to FCN that:
Section 3.01 Organization. BBI is a corporation duly organized, validly
------------
existing and in good standing under the laws of the State of Delaware and has
all requisite power and authority, corporate and otherwise, to own, operate and
lease its assets, properties and business and to carry on its business
substantially as it has been and is now being conducted. BBI is duly qualified
to do business and is in good standing in each jurisdiction where the character
of the assets or properties owned or leased by it or the nature of the business
transacted by it requires that it be so qualified, except where the failure to
so qualify would not have a Material Adverse Effect on BBI or its ability to
consummate the transactions contemplated herein. BBI has all requisite
corporate power and authority to enter into this Agreement and, subject to the
approval of this Agreement and the Merger by its stockholders and the receipt of
all requisite regulatory approvals and the expiration of any applicable waiting
periods, to consummate the transactions contemplated hereby. BBI is duly
registered as a savings and loan holding company under HOLA.
Section 3.02 Authorization. The execution, delivery and performance of
-------------
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of BBI. This
Agreement has been duly executed and delivered by BBI and, subject to receipt of
such approvals of regulatory authorities as may be required by statute or
regulation, constitutes the valid and binding obligation of BBI and is
enforceable against BBI (except to the extent that enforceability thereof may be
limited by
12
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles or doctrines).
Section 3.03 Conflicts. Subject to the second sentence of this Section
---------
3.03, the execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not, conflict with or
result in any violation, breach or termination of, or default or loss of a
material benefit under, or permit the acceleration of any obligation under, or
result in the creation of any material lien, charge or encumbrance on any
property or assets under, any provision of the Certificate of Incorporation or
Bylaws of BBI or similar documents of any BBI Subsidiary (as defined in Section
3.07 hereof), or any mortgage, indenture, lease, agreement or other instrument,
permit, concession, grant, franchise, license, judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to BBI or BBI Bank or their
respective properties, other than those which (i) will be cured or waived prior
to the Effective Time; (ii) which will not have a Material Adverse Effect on BBI
or BBI Bank; or (iii) are disclosed in Section 3.03 of that certain confidential
writing delivered by BBI to FCN within two business days prior to the date
hereof (the "BBI Disclosure Schedule"). No consent, approval, order or
authorization of, or registration, declaration or filing with, any federal or
state governmental authority is required by or with respect to BBI or BBI Bank
in connection with the execution and delivery of this Agreement or the
consummation by BBI of the transactions contemplated hereby, including the Bank
Merger, except for: (a) the filing of all applicable regulatory applications by
FCN, BBI and/or their respective Subsidiaries for approval of the execution and
delivery of this Agreement and the consummation of the transactions contemplated
by this Agreement; (b) the filing by FCN of the Registration Statement with the
SEC and various blue sky authorities; (c) the filing of the Certificate of
Merger with respect to the Merger with the Secretary of State of the State of
Delaware; (d) any filings, approvals or non-action letters with or from state
securities regulators; (e) any anti-trust filings, consents, waivers or
approvals; and (f) the approval of this Agreement and the transactions
contemplated hereby by the shareholders of BBI.
Section 3.04 Anti-takeover Provisions Inapplicable. No "business
-------------------------------------
combination," "moratorium," "control share" or other state anti-takeover statute
or regulation, (i) prohibits or restricts BBI's ability to perform its
obligations under this Agreement or its ability to consummate the transactions
contemplated hereby, (ii) would have the effect of invalidating or voiding this
Agreement or any provision hereof, or (iii) would subject FCN to any material
impediment or condition in connection with the exercise of any of its right
under this Agreement.
Section 3.05 Capitalization. (a) As of the date hereof, the authorized
--------------
capital stock of BBI consists of (i) 1,100,000 shares of BBI Common Stock, $0.01
par value, of which 661,250 shares were issued and outstanding and no shares
were held as treasury shares as of December 31, 1995 and (ii) 100,000 shares of
preferred stock, $0.01 par value, of which none are issued and outstanding. All
of the issued and outstanding shares of BBI Common Stock have been duly and
validly authorized and issued, and are fully paid and non-assessable. None of
the outstanding shares of BBI Common Stock has been issued in violation of any
preemptive rights of current or
13
past stockholders or are subject to any preemptive rights of the current or past
stockholders of BBI. All of the issued and outstanding shares of BBI Common
Stock will be entitled to vote to approve this Agreement and the Merger.
(b) As of December 31, 1995, BBI had 66,125 shares of BBI Common
Stock reserved for issuance under the BBI 1993 Stock Option and Incentive Plan
(the "BBI Stock Option Plan") for the benefit of employees and directors of BBI
and BBI Bank, pursuant to which options covering 54,896 shares of BBI Common
Stock were outstanding as of such date (the "BBI Stock Options"). As of December
31, 1995, 22,861 shares of BBI Common Stock were outstanding under BBI Bank's
Recognition and Retention Plan and Trust (the "RRP"). As of December 31, 1995,
52,900 shares of BBI Common Stock were outstanding under the BBI Employee Stock
Ownership Plan ("ESOP"). Except as set forth in this Section, there are no
shares of capital stock or other equity securities of BBI outstanding and no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of the capital stock of BBI or BBI
Bank, or contracts, commitments, understandings, or arrangements by which either
BBI or BBI Bank is or may be bound to issue additional shares of its capital
stock or options, warranties, or rights to purchase or acquire any additional
share of its capital stock. Each BBI Stock Option has an exercise price of
$10.00 per share, except that one participant under the BBI Stock Option Plan
has a BBI Stock Option, covering 2,000 shares of BBI Common Stock, with an
exercise price of $19.50 per share. Neither the execution or delivery of this
Agreement, the approval of the Merger and this Agreement by the BBI stockholders
nor the consummation of the transactions contemplated herein will accelerate the
vesting or exercisability of any BBI Stock Options or BBI Common Stock issued or
outstanding pursuant to the BBI Stock Option Plan or RRP.
Section 3.06 BBI Financial Statements; Material Changes. BBI has
------------------------------------------
heretofore delivered to FCN its audited, consolidated financial statements for
fiscal years ended December 31, 1994 and December 31, 1993 and its unaudited
consolidated financial statements for the quarters ended March 31, 1995, June
30, 1995 and September 30, 1995 (together the "BBI Financial Statements"). The
BBI Financial Statements (x) are true and correct in all material respects; (y)
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto, and except in the case of the unaudited
consolidated financial statements for the absence of footnotes and for normal
and recurring year-end adjustments which are not material); and (z) fairly
present the consolidated financial position of BBI as of the dates thereof and
the consolidated results of its operations, stockholders' equity, cash flows and
changes in financial position for the periods then ended. Since December 31,
1994 to the date hereof, BBI and its Subsidiary have not undergone or suffered
any changes in their respective condition (financial or otherwise), properties,
business or operations which have been, in any case or in the aggregate,
materially adverse to BBI on a consolidated basis except as disclosed in Section
3.06 of the BBI Disclosure Schedule.
14
Section 3.07 BBI Subsidiaries. (a) The only Subsidiary of BBI is BBI
----------------
Bank. BBI owns directly or indirectly all of the issued and outstanding shares
of capital stock of BBI Bank. As of the date hereof, the authorized capital
stock of BBI Bank consists of (i) 1,100,000 shares of common stock, $.01 par
value, of which as of December 31, 1995, 661,250 shares were issued and
outstanding and no shares were held as treasury shares and (ii) 100,000 shares
of preferred stock with no par value, of which, as of December 31, 1995, none
were issued and outstanding. Except as set forth in Section 3.07 of the BBI
Disclosure Schedule, neither BBI nor BBI Bank owns directly or indirectly any
debt or equity securities, or other proprietary interest in any other
corporation, joint venture, partnership, entity, association or other business.
All of the shares of capital stock of BBI Bank held by BBI are fully paid and
non-assessable and are owned free and clear of any claim, lien or encumbrance,
except as disclosed in Section 3.07 of the BBI Disclosure Schedule.
(b) BBI Bank is a federally-chartered stock savings institution and
is duly organized and validly existing under the laws of the United States. BBI
Bank has the corporate power and authority necessary for it to own, operate or
lease its assets, properties and business and to carry on its business
substantially as it has been and is now being conducted.
(c) For purposes of this Agreement, a "BBI Subsidiary" or a
"Subsidiary" of BBI shall mean each corporation, savings bank, association, and
other entity in which BBI owns or controls directly or indirectly 10% or more of
the outstanding equity securities; provided, however, there shall not be
included any such entity acquired in good faith through foreclosure, or any such
entity to the extent that the equity securities of such entity are owned or
controlled in a bona fide fiduciary capacity.
(d) BBI Bank is a member in good standing of the Federal Home Loan
Bank System. All eligible deposit accounts issued by BBI Bank are insured by
the FDIC through the SAIF to the full extent permitted under applicable law.
BBI Bank is, and at all times since June 1, 1990 has been, a "domestic building
and loan association" as defined in Section 7701(a)(19) of the Code and a
"qualified thrift lender" as defined in Section 10(m) of HOLA. The liquidation
account established by BBI Bank in connection with its conversion from mutual to
stock form has been maintained since its establishment in accordance with
applicable laws and the records with respect to said account are complete and
accurate in all material respects.
Section 3.08 BBI Filings. BBI has previously made available, or will make
-----------
available prior to the Effective Time, to FCN true and complete copies of the
(i) proxy statements relating to all meetings of stockholders (whether special
or annual) of BBI during calendar years 1993, 1994 and 1995 and (ii) all other
reports, as amended, or filings, as amended, required to be filed under the
Securities Exchange Act by BBI with the SEC since January 1, 1994, including
without limitation, all reports on Forms 10-KSB, 10-QSB and 8-K.
Section 3.09 BBI Reports. Since January 1, 1994, each of BBI and BBI Bank
-----------
has filed, and will continue to file, all reports and statements, together with
any amendment required
15
to be made with respect thereto, that it has, or will be, required to file with
the SEC, the OTS, the FDIC, the NASD and other applicable banking, securities
and other regulatory authorities. As of their respective dates (and without
giving effect to any amendments or modifications filed after the date of this
Agreement with respect to reports and documents filed before the date of this
Agreement), each of such reports and documents, including the financial
statements, exhibits, and schedules thereto, complied in all material respects
with all of the statutes, rules and regulations enforced or promulgated by the
authority with which they were filed and did not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements made therein, in light of the circumstances under which they were
made, not misleading. Except for normal examinations conducted by the Internal
Revenue Service, state and local taxing authorities, the OTS or the FDIC in the
regular course of the business of BBI or BBI Bank, no federal, state or local
governmental agency, commission or other entity has initiated any proceeding or,
to the best knowledge of BBI, investigation into the business or operations of
BBI or BBI Bank within the past two years except as set forth in Section 3.09
of the BBI Disclosure Schedule. There is no unresolved violation, criticism or
exception by the SEC, OTS, FDIC or other agency, commission or entity with
respect to any report or statement referred to herein that is material to BBI or
BBI Bank.
Section 3.10 Compliance With Laws. (a) Except as disclosed in Section
--------------------
3.10 of the BBI Disclosure Schedule, the businesses of BBI and BBI Bank are
being conducted, in all material respects, in compliance with all laws,
ordinances or regulations of governmental authorities, including without
limitation, laws affecting financial institutions (including those pertaining to
the Bank Secrecy Act, the investment of funds, the lending of money, the
collection of interest and the extension of credit), federal and state
securities laws, laws and regulations relating to financial statements and
reports, truth-in-lending, truth-in-savings, usury, fair credit reporting,
consumer protection, occupational safety, fair employment practices, fair labor
standards and laws and regulations relating to employee benefits, and any
statutes or ordinances relating to the properties occupied or used by BBI or BBI
Bank.
(b) Except as disclosed in Section 3.10 of the BBI Disclosure
Schedule, no investigation or review by any governmental entity with respect to
BBI or BBI Bank is pending or, to the best knowledge of BBI, threatened, nor has
any governmental entity indicated to BBI an intention to conduct the same, other
than normal thrift regulatory examinations and those the outcome of which will
not have a Material Adverse Effect on BBI.
(c) BBI and BBI Bank, where applicable, is in substantial compliance
with the applicable provisions of the Community Reinvestment Act of 1977 and the
regulations promulgated thereunder. As of the date of this Agreement, BBI has
not been advised of the existence of any fact or circumstance or set of facts or
circumstances which, if true, would cause BBI or BBI Bank to fail to be in
substantial compliance with such provisions. BBI Bank does not have a Community
Reinvestment Act rating from an applicable regulatory authority which is less
than "satisfactory."
16
Section 3.11 Disclosure. None of the information supplied by BBI for
----------
inclusion in the Proxy Statement or in the Registration Statement, will, in the
case of the Proxy Statement or any amendments thereof, at the time of the BBI
Stockholders' Meeting or, in the case of the Registration Statement, at the time
it becomes effective and at the Effective Time, contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
Section 3.12 Litigation. Except as disclosed in Section 3.12 of the BBI
----------
Disclosure Schedule, there is no suit, action, investigation or proceeding,
legal, quasi-judicial, administrative or otherwise, pending or, to the best
knowledge of BBI, threatened, against or affecting BBI or BBI Bank or any of
their respective officers, directors, employees or agents, in their capacities
as such, which is seeking equitable relief or damages against BBI, BBI Bank, or
any of their respective officers, directors, employees or agents, in their
capacities as such, in excess of $50,000, or which would materially affect the
ability of BBI to consummate the transactions contemplated herein or which is
seeking to enjoin consummation of the transactions provided for herein or to
obtain other relief in connection with this Agreement or the transactions
contemplated hereby, nor is there any judgment, decree, injunction, rule or
order of any court, governmental department, commission, agency, instrumentality
or arbitrator outstanding against BBI or BBI Bank or any of their respective
officers, directors, employees or agents, in their capacities as such, having,
or which, insofar as reasonably can be foreseen in the future, would have any
such effect.
Section 3.13 Licenses. BBI and BBI Bank hold all licenses, certificates,
--------
permits, franchises and all patents, trademarks, service marks, trade names,
copyrights or right thereto, and required authorizations, approvals, consents,
licenses, clearances and orders or registrations with all appropriate federal,
state or other authorities that are material to the conduct of their respective
businesses as now conducted and as presently proposed to be conducted.
Section 3.14 Taxes. (a) Except as disclosed in Section 3.14 of the BBI
-----
Disclosure Schedule, BBI and BBI Bank have each timely filed all tax and
information returns required to be filed, except for such failures to file as
cannot be reasonably expected to have a Material Adverse Effect on BBI. BBI and
BBI Bank have paid (or BBI has paid on behalf of BBI Bank), or have accrued on
their respective books and set up an adequate reserve for the payment of, all
taxes reflected on such returns as required to be paid in respect of the periods
covered by such returns and have accrued on their respective books and set up an
adequate reserve for the payment of all income and other taxes anticipated to be
payable in respect of periods through the end of the calendar month next
preceding the date hereof. Neither BBI nor BBI Bank is delinquent in the
payment of any tax, assessment or governmental charge. No deficiencies for any
taxes have been proposed, asserted or assessed against BBI or BBI Bank that have
not been resolved or settled and no requests for waivers of the time to assess
any such tax are pending or have been agreed to. The income tax returns of BBI
and BBI Bank have not been audited by the Internal Revenue Service, state,
municipal or other taxing authority since 1994. Neither BBI nor BBI Bank is a
party to any action or proceeding by any governmental authority for the
assessment
17
or the collection of taxes. Deferred taxes of BBI and BBI Bank have been
accounted for in accordance with generally accepted accounting principles.
(b) BBI has not filed any consolidated federal income tax return with
an "affiliated group" (within the meaning of Section 1504 of the Code) where BBI
was not the common parent of the group. Neither BBI nor BBI Bank is, or has
been, a party to any tax allocation agreement or arrangement pursuant to which
it has any contingent or outstanding liability to anyone other than BBI or BBI
Bank.
(c) BBI and BBI Bank have each withheld amounts from its employees,
stockholders, or holders of public deposit accounts in compliance with the tax
withholding provisions of applicable federal, state and local laws, have filed
all federal, state and local returns and reports for all periods for which such
returns or reports would be due with respect to income tax withholding, social
security, unemployment taxes, income and other taxes and all payments or
deposits with respect to such taxes have been timely made.
Section 3.15 Insurance. BBI and BBI Bank maintain insurance with insurers
---------
which in the best judgment of management of BBI are sound and reputable, on
their respective assets, and upon their respective businesses and operations,
against loss or damage, risks, hazards and liabilities as in their judgment they
deem appropriate. BBI and BBI Bank maintain in effect all insurance required
to be carried by law or by any agreement by which they are bound. All material
claims under all policies of insurance maintained by BBI and BBI Bank have been
filed in due and timely fashion.
Section 3.16 BBI Benefit Plans. (a) Section 3.16 of the BBI Disclosure
-----------------
Schedule contains a list and a true and correct copy (or, a description with
respect to any oral employee benefit plan, practice, policy or arrangement),
including all amendments thereto, of each compensation, consulting, employment,
termination or collective bargaining agreement, and each stock option, stock
purchase, stock grant, stock appreciation right, ESOP, life, health, accident or
other insurance, bonus, deferred or incentive compensation, severance or
separation agreement or any agreement providing any payment or benefit resulting
from a change in control, profit sharing, retirement, or other employee benefit
plan, practice, policy or arrangement of any kind, oral or written, covering
employees, former employees, directors or former directors of BBI or BBI Bank or
their respective beneficiaries, including, but not limited to, any employee
benefit plans within the meaning of Section 3(3) of ERISA, which BBI or BBI Bank
maintains, to which BBI or BBI Bank contributes, or under which any employee,
former employee, director or former director of BBI or BBI Bank is covered or
has benefit rights and pursuant to which any liability of BBI or BBI Bank
exists or is reasonably likely to occur (the "BBI Benefit Plans"). Except as
set forth in Section 3.16 of the BBI Disclosure Schedule, BBI and BBI Bank
neither maintain nor have entered into any BBI Benefit Plan or other document,
plan or agreement which contains any change in control provisions which would
cause an increase or acceleration of benefits or benefit entitlements to
employees or former employees of BBI or BBI Bank or their respective
beneficiaries, or other provisions, which would cause an increase in the
liability of BBI or BBI
18
Bank or to FCN or any FCN Subsidiary as a result of the transactions
contemplated by this Agreement or any related action thereafter (a "Change in
Control Benefit"). The term "BBI Benefit Plans" as used herein refers to all
plans contemplated under the preceding sentences of this Section 3.16, provided
that the term "Benefit Plan" or "Benefit Plans" is used in this Agreement for
convenience only and does not constitute an acknowledgment that a particular
arrangement is an employee benefit plan within the meaning of Section 3(3) of
ERISA. No Benefit Plan is a multi-employer plan within the meaning of Section
3(37) of ERISA.
(b) Each of the BBI Benefit Plans that is intended to be a pension,
profit sharing, stock bonus, thrift or savings plan that is qualified under
Section 401(a) of the Code ("BBI Qualified Plans") has been determined by the
Internal Revenue Service to qualify under Section 401(a) of the Code, or an
application for determination of such qualification has been timely made to the
Internal Revenue Service prior to the end of the applicable remedial amendment
period under Section 401(b) of the Code (a copy of each such determination
letter or pending application is included in Section 3.16 of the BBI Disclosure
Schedule) and, to the best of BBI's knowledge, there exist no circumstances
likely to materially adversely affect the qualified status of any such BBI
Qualified Plan. All such BBI Qualified Plans established or maintained by BBI
or any of BBI Bank or to which BBI or BBI Bank contribute are in compliance in
all material respects with all applicable requirements of ERISA, and are in
compliance in all material respects with all applicable requirements (including
qualification and non-discrimination requirements in effect as of the Effective
Time) of the Code for obtaining the tax benefits the Code thereupon permits with
respect to such BBI Qualified Plans. Neither BBI nor BBI Bank is a plan sponsor
of, or contributes to, a defined benefit pension plan which is subject to Title
IV of ERISA. All accrued contributions and other payments required to be made
by BBI or BBI Bank to any BBI Benefit Plan through December 31, 1995, have been
made or reserves adequate for such purposes as of December 31, 1995, have been
set aside therefor and will be reflected in the BBI Financial Statements, dated
as of December 31, 1995. Neither BBI nor BBI Bank is in material default in
performing any of its respective contractual obligations under any of the BBI
Benefit Plans or any related trust agreement or insurance contract, and there
are no material outstanding liabilities of any such Plan other than liabilities
for benefits to be paid to participants in such Plan and their beneficiaries in
accordance with the terms of such Plan.
(c) There is no pending or, to the best knowledge of BBI, threatened
litigation or pending claim (other than benefit claims made in the ordinary
course) by or on behalf of or against any of the BBI Benefit Plans (or with
respect to the administration of any such Plans) now or heretofore maintained by
BBI or BBI Bank which allege violations of applicable state or federal law which
are reasonably likely to result in a liability on the part of BBI or BBI Bank or
any such Plan.
(d) BBI and BBI Bank and all other persons having fiduciary or other
responsibilities or duties with respect to any BBI Benefit Plan are and have
since the inception of each such Plan been in substantial compliance with, and
each such Plan is and has been operated in substantial accordance with, its
provisions and in substantial compliance with the applicable
19
laws, rules and regulations governing such Plan, including, without limitation,
the rules and regulations promulgated by the Department of Labor, the PBGC and
the Internal Revenue Service under ERISA, the Code or any other applicable law.
Notwithstanding the foregoing, no representation is made with respect to
compliance by a third party insurance company. No "reportable event" (as
defined in Section 4043(b) of ERISA) has occurred with respect to any BBI
Benefit Plan. No BBI Benefit Plan has engaged in or been a party to a
"prohibited transaction" (as defined in Section 406 of ERISA or Section 4975(c)
of the Code). All BBI Benefit Plans that are group health plans have been
operated in compliance with the group health plan continuation requirements of
Section 4980B of the Code and Section 601 of ERISA.
(e) Neither BBI nor BBI Bank has made any payments, or is or has been
a party to any agreement or any BBI Benefit Plan, that under any circumstances
could obligate it to make payments that are or will not be deductible because of
Sections 162(m) or 280G of the Code.
(f) Section 3.16 of the BBI Disclosure Schedule describes any
obligation that BBI or BBI Bank has to provide health or welfare benefits to
retirees or other former employees, directors or their dependents (other than
rights under Section 4980B of the Code or Section 601 of ERISA), including
information as to the number of retirees, other former employees or directors
and dependents entitled to such coverage and their ages.
(g) Section 3.16 of the BBI Disclosure Schedule lists: (i) each
employment, compensation, consulting, severance or termination agreement to
which BBI or BBI Bank is a party; (ii) each BBI Stock Option, showing the holder
thereof, the number of shares, the exercise price per share, the vesting dates
thereof, and a copy of the option agreements relating thereto; and (iii) each of
the RRP participants, showing the number of outstanding shares of BBI Common
Stock credited to each participant and the vesting dates thereof.
(h) BBI and BBI Bank have filed or caused to be filed, and will
continue to file or cause to be filed, in a timely manner all filings pertaining
to each BBI Benefit Plan with the Internal Revenue Service and the Department of
Labor, as prescribed by the Code or ERISA, or regulations issued thereunder.
All such filings, as amended, were complete and accurate in all material
respects as of the dates of such filings, and there were no misstatements or
omissions in any such filing which would be material to the financial condition
of BBI on a consolidated basis. Notwithstanding the foregoing, no
representation is made with respect to filings by a third party insurance
company.
(i) None of the actions taken or contemplated to be taken in
accordance with Section 5.12(c) of this Agreement will violate or conflict with
any agreement or understanding with the ESOP trustee.
Section 3.17 Compliance with Environmental Laws. (a) Except as set forth
----------------------------------
in Section 3.17 of the BBI Disclosure Schedule, all real property owned or
occupied by BBI or BBI Bank (the "BBI Real Property"), is in compliance with all
applicable environmental laws and
20
regulations, except for such non-compliance as cannot be reasonably expected to
have a Material Adverse Effect on BBI. To the knowledge of BBI, there are no
outstanding citations, notices of violation, or orders of noncompliance issued
to BBI or BBI Bank, nor have BBI or BBI Bank been advised that any such
citation, notice of violation or order of noncompliance is contemplated,
pursuant to any environmental law or regulation relating to any such BBI Real
Property owned or occupied by BBI or relating to any real property no longer
owned or occupied by BBI or BBI Bank where the failure to cure the subject of
such citation, notice of violation or order of noncompliance could reasonably be
expected to have a Material Adverse Effect on BBI. To the knowledge of BBI,
there are no liens against such BBI Real Property imposed pursuant to any
environmental law or regulation which would have a Material Adverse Effect on
BBI.
Section 3.18 Contracts and Commitments. Section 3.18 of the BBI
-------------------------
Disclosure Schedule contains (and shall be supplemented by BBI, as required by
Section 5.10 hereof, so as to contain at the Closing Date) copies of each of the
following documents, certified by an officer of BBI to be true and correct
copies of such documents on the dates of such certificates:
(a) A list and description of each outstanding loan agreement,
mortgage, pledge agreement or other similar document or commitment to extend
credit to any officer or director of BBI or BBI Bank.
(b) A list and description of each outstanding letter of credit and
each commitment to issue a letter of credit in excess of $50,000 to which BBI or
BBI Bank is a party and/or under which it may (contingently or otherwise) have
any liability.
(c) A list and description of each contract or agreement (not
otherwise included in the BBI Disclosure Schedule or specifically excluded
therefrom in accordance with the terms of this Agreement) involving goods,
services or occupancy and which (i) has a term of more than six months; (ii)
cannot be terminated on thirty days (or less) written notice without penalty;
and (iii) involves an annual expenditure by BBI or BBI Bank in excess of
$25,000.
(d) The Certificate of Incorporation, Charter and Bylaws of BBI and
BBI Bank.
(e) A list and description of all powers of attorney granted by BBI
or BBI Bank which are currently in force.
(f) A list of all policies of insurance currently maintained by BBI
or BBI Bank and a list of all unsettled or outstanding claims of BBI or BBI Bank
which have been, or to the best knowledge of BBI, will be, filed with the
companies providing insurance coverage for BBI or BBI Bank (except for routine
claims for health benefits).
(g) Each lease or license with respect to real or personal property,
whether as lessor, lessee, licensor or licensee, with annual rental or other
payments due thereunder in excess
21
of $50,000 to which BBI or BBI Bank is a party, which does not expire within six
months from the date hereof and cannot be terminated upon 30 days (or less)
written notice without penalty.
(h) All employment, consulting, advisory and professional services
contracts or arrangements to which BBI or BBI Bank is a party, including an
estimate of the fees and expenses paid or payable thereunder.
(i) All judgments, orders, injunctions, court decrees or settlement
agreements arising out of or relating to the labor and employment practices or
decisions of BBI or BBI Bank which, by their terms, continue to bind or affect
BBI or BBI Bank.
(j) All orders, decrees, or other agreements with regulatory agencies
binding upon or affecting the current operations of BBI or BBI Bank or any of
their directors of officers in their capacities as such.
(k) All trademarks, trade names, service marks, patents, or
copyrights, whether registered or the subject of an application for
registration, which are owned by BBI or BBI Bank or licensed from a third party.
(l) All contracts, agreements, commitments and understandings with
any labor union or guild (including any collective bargaining agreement).
(m) Each other agreement to which BBI or BBI Bank is a party (which
does not expire within six months from the date hereof and cannot be terminated
upon 30 days (or less) written notice without penalty) which individually during
its term could commit BBI or BBI Bank to an expenditure (either individually or
through a series of installments) in excess of $50,000 or which creates a
material right or benefit to receive payments, goods or services not referred to
elsewhere in this Section 3.18 including without limitation:
(i) each agreement of guaranty or indemnification running to any
person;
(ii) each agreement containing any covenant limiting the right of BBI
or BBI Bank to engage in any line of business or to compete with
any person;
(iii) each agreement with respect to any license, permit and similar
matter that is necessary to the operations of BBI or BBI Bank;
(iv) each agreement that requires the consent or approval of any
other party in order to consummate the Merger;
22
(v) each agreement relating to the servicing of loans and each
mortgage forward commitment and similar agreement pursuant to
which BBI or BBI Bank sells to others mortgages which it
originates;
(vi) each contract relating to the purchase or sale of financial or
other futures, or any put or call option relating to cash,
securities or commodities and each interest rate swap agreement
or other agreement relating to the hedging of interest rate
risks; and
(vii) each contract or agreement (with the exception of the Federal
National Mortgage Association or Federal Home Loan Mortgage
Corporation Seller's Guide), including but not limited to each
contract or agreement pursuant to which BBI or BBI Bank has
sold, transferred, assigned or agreed to service any loan, which
provides for any recourse or indemnification obligation on the
part of BBI or BBI Bank.
Section 3.19 Defaults. There has not been any default in any material
--------
obligation to be performed by BBI or BBI Bank under any material contract or
commitment, and neither BBI or BBI Bank has waived, and will not waive prior to
the Effective Time, any material right under any material contract or
commitment. To the best knowledge of BBI, no other party to any material
contract or commitment is in default in any material obligation to be performed
by such party.
Section 3.20 Corporate Records. The corporate record books, transfer
-----------------
books and stock ledgers of BBI and BBI Bank are complete and accurate in all
material respects and reflect all meetings, consents and other material actions
of the organizers, incorporators, stockholders, Boards of Directors and
committees of the Boards of Directors of BBI and BBI Bank and all transactions
in their respective capital stocks, since their respective inceptions.
Section 3.21 Undisclosed Liabilities. All of the Liabilities have, in the
-----------------------
case of BBI and BBI Bank, been reflected, disclosed or reserved against in the
BBI Financial Statements or in the notes thereto, and BBI and BBI Bank have no
other Liabilities except (a) Liabilities incurred since September 30, 1995 in
the ordinary course of business or (b) as disclosed in Section 3.21 of the BBI
Disclosure Schedule.
Section 3.22 Assets. (a) BBI and BBI Bank have good and marketable title
------
to their real properties, including any leaseholds and ground leases, and their
other assets and properties, all as reflected as owned or held by BBI or BBI
Bank in the BBI Financial Statements dated as of September 30, 1995, and those
acquired since such date, except for (i) assets and properties disposed of since
such date in the ordinary course of business and (ii) liens (except taxes which
are a lien but not yet payable and easements, rights-of-way and other non-
monetary restrictions which are not material) none of which, in the aggregate,
except as set forth in Section 3.22 of the
23
BBI Disclosure Schedule, are material to the assets of BBI on a consolidated
basis. All buildings, structures, fixtures and appurtenances comprising part of
the real properties of BBI and BBI Bank (whether owned or leased) are in good
operating condition and have been well maintained, reasonable wear and tear
excepted. Title to all real property owned by BBI and BBI Bank, including its
main office at 000 X. Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, is held in fee simple,
except as otherwise noted in the BBI Financial Statements as of September 30,
1995, or as set forth in Section 3.22 of the BBI Disclosure Schedule. BBI or
BBI Bank have title or other rights to their respective assets sufficient in all
material respects for the conduct of their respective businesses as presently
conducted, and except as set forth in the BBI Financial Statements as of
September 30, 1995 or in Section 3.22 of the BBI Disclosure Schedule, free,
clear and discharged of and from any and all liens, charges, encumbrances,
security interests and/or equities which are material to BBI or BBI Bank.
(b) All leases pursuant to which BBI or BBI Bank as lessee, leases
real or personal property which are material to the business of BBI on a
consolidated basis are, to the best knowledge of BBI, valid, effective, and
enforceable against the lessor in accordance with their respective terms. There
is not under any of such leases any existing default, or any event which with
notice or lapse of time or both would constitute a default, with respect to
either BBI or BBI Bank, or to the best knowledge of BBI, the other party.
Except as disclosed in Section 3.22 of the BBI Disclosure Schedule, none of such
leases contains a prohibition against assignment by BBI or BBI Bank, by
operation of law or otherwise, or any other provision which would preclude the
Surviving Corporation or BBI Bank from possessing and using the leased premises
for the same purposes and upon the same rental and other terms upon the
consummation of the Merger as are applicable to the use by BBI or BBI Bank as of
the date of this Agreement.
Section 3.23 Indemnification. To the best knowledge of BBI, except as set
---------------
forth in Section 3.23 of the BBI Disclosure Schedule, no action or failure to
take action by any director, officer, employee or agent of BBI or any BBI
Subsidiary has occurred which would give rise to a claim or a potential claim by
any such person for indemnification from BBI or any BBI Subsidiary under any
corporate indemnification provisions of BBI or any BBI Subsidiary in effect on
the date of this Agreement (whether contained in BBI's or BBI Bank's Certificate
of Incorporation, Charter or Bylaws or arising by virtue of any contract,
resolution or other agreement or document).
ARTICLE IV.
COVENANTS OF FCN AND BBI
Section 4.01 Business in Ordinary Course.
---------------------------
(a) During the period from the date of this Agreement to the Effective
Time, BBI shall, and shall cause its Subsidiary to, conduct its business only in
the ordinary and usual course consistent with past practices and shall, and
shall cause such Subsidiary to, use its best efforts to
24
maintain and preserve its business organization, employees and advantageous
business relationships and retain the services of its officers and key
employees.
(b) Without the prior written consent of FCN, BBI shall not declare,
set aside or pay any dividend or make any other distribution with respect to its
capital stock whether in cash, stock or other property, after the date of this
Agreement, except for the declaration and payment of regular quarterly cash
dividends on the BBI Common Stock in an amount not to exceed the amount of the
most recent quarterly cash dividend paid by BBI prior to the date of this
Agreement; provided, however, that the parties agree that BBI shall coordinate
the declaration of dividends on BBI Common Stock, and the record date and
payment dates relating thereto, with the dividend record and payment dates for
FCN Common Stock so that the holders of BBI Common Stock shall not receive two
dividends, or fail to receive one dividend, for any quarter with respect to
their shares of BBI Common Stock.
(c) Except as expressly provided herein, during the period from the
date hereof to the Effective Time, BBI and BBI Bank will not, without the prior
written consent of FCN, and except as set forth in Schedule 4.01 of the BBI
Disclosure Schedule:
(i) issue, sell or pledge any capital stock or any options,
warrants, or other rights to subscribe for or purchase
capital stock or any securities convertible into or
exchangeable for any capital stock, except pursuant to
options outstanding on the date hereof under the BBI Stock
Option Plan or pursuant to the exercise of the Stock Option
Agreement dated of even date hereof, between FCN and BBI
(the "FCN Stock Option Agreement") in accordance with its
terms;
(ii) directly or indirectly redeem, purchase or otherwise acquire
any capital stock or ownership interests of BBI or BBI Bank
(except for the acquisition of shares held in a fiduciary
capacity or in satisfaction of debts previously contracted);
(iii) effect a reclassification, recapitalization, split-up,
exchange of shares, readjustment or other similar change in
or to any capital stock or otherwise merge, liquidate,
reorganize or recapitalize;
(iv) change its Charter, Certificate of Incorporation or Bylaws;
(v) enter into, adopt or amend any employment agreement,
severance agreement, change of control agreement or similar
agreement or plan relative to the foregoing; or grant any
increase (other than ordinary and normal increases
consistent with past practices) in the compensation payable
or to become payable to directors, officers or
25
employees; or except as required by law, pay or agree to pay
any bonus, or adopt or make any change in any bonus,
insurance, pension, or other BBI Benefit Plan or grant or
award any additional shares of BBI Common Stock under the
RRP;
(vi) except in the ordinary course of its business consistent
with past practice, borrow or agree to borrow any funds,
including but not limited to repurchase transactions, or
indirectly guarantee or agree to guarantee any obligations
of others;
(vii) make or commit to make any new loan or letter of credit or
any new or additional discretionary advance under any
existing line of credit, in a principal amount in excess of
$500,000 or that would increase the aggregate credit
outstanding to any one borrower (or group of affiliated
borrowers) to more than $500,000 (excluding for this purpose
any accrued interest or overdrafts) (except for new loans,
letters of credit or advances in an aggregate principal
amount up to $2,500,000 to Raintree Homes Inc.), without the
prior written consent of FCN, which approval or rejection
shall be given on a timely basis after delivery by BBI to
FCN of the complete loan package;
(viii) enter into, modify or extend any agreement, contract or
commitment out of the ordinary course of business, other
than letters of credit, loan agreements, deposit agreements,
and other lending, credit and deposit documents made in the
ordinary course of business;
(ix) except in the ordinary course of business, place on any of
its assets or properties any mortgage, pledge, lien, charge,
or other encumbrance;
(x) place on any of its real estate assets or properties any
mortgage, pledge, lien, charge or other encumbrance;
(xi) cancel any material indebtedness owing to it or any claims
which it may possess or waive any rights of material value;
(xii) sell or otherwise dispose of any real property or any
material amount of tangible or intangible personal property
other than properties acquired in foreclosure or otherwise
in the ordinary collection of indebtedness owed to BBI Bank;
26
(xiii) knowingly or wilfully commit any act or fail to commit any
act which will cause a material breach of any agreement,
contract or commitment;
(xiv) violate any law, statute, rule, governmental regulation, or
order, which violation might have a Material Adverse Effect
on BBI;
(xv) purchase or commit to purchase any real or personal
property, deposit liabilities or make any capital
expenditure where the amount paid or committed therefor is
in excess of $50,000, except for outstanding commitments set
forth in Section 3.19 of the BBI Disclosure Schedule;
(xvi) engage in any activity or transaction outside the ordinary
course of business;
(xvii) enter into or acquire any derivatives contract or structured
note;
(xviii) enter into any new, or modify, amend or extend the terms of
any existing, contracts relating to the purchase or sale of
financial or other futures, or any put or call option
relating to cash, securities or commodities or any interest
rate swap agreements or other agreements relating to the
hedging of interest rate risk; or
(xix) settle any claim, action or proceeding involving monetary
damages, except in the ordinary course of business
consistent with past practice.
(d) BBI and BBI Bank shall not, without the prior written consent of
FCN, wilfully engage in any transaction or wilfully take any action that would
render untrue any of the representations and warranties of BBI contained in
Article III hereof, if such representations and warranties were given as of the
date of such transaction or action.
(e) BBI will, and will cause BBI Bank to, use their best efforts to
maintain their respective properties and assets in their present state of
repair, order and condition, reasonable wear and tear excepted, and to maintain
and keep in full force and effect all policies of insurance presently in effect,
including the insurance of accounts with the FDIC. BBI will, and will cause BBI
Bank to, take all requisite action (including without limitation the making of
claims and the giving of notices) pursuant to its directors' and officers'
liability insurance policy or policies in order to preserve all rights
thereunder with respect to all matters known by BBI which could reasonably give
rise to a claim prior to the Effective Time.
27
(f) BBI and BBI Bank will as soon as possible following the execution
of this Agreement, but in no event later than the Effective Time, (i) amend the
First Federal Savings Bank of Barrington Employee Severance Compensation Plan
(the "Employee Severance Compensation Plan") to provide that such plan shall
terminate one year following the Effective Time and (ii) amend the federal stock
charter of BBI Bank to repeal Section 8(A) effective no later than the Effective
Time.
Section 4.02 Certain Actions. (a) Neither BBI (nor BBI Bank) (i) shall
---------------
solicit, initiate, participate in discussions of, or encourage or take any other
action, directly or indirectly, to facilitate (including by way of the
disclosing or furnishing of any information that it is not legally obligated to
disclose or furnish) any inquiry or the making of any proposal relating to any
Acquisition Transaction (as defined below) or a potential Acquisition
Transaction with respect to itself or BBI Bank or (ii) shall (A) solicit,
initiate, participate in discussions of, or encourage or take any other action,
directly or indirectly, to facilitate any inquiry or proposal, or (B) enter into
any agreement, arrangement, or understanding (whether written or oral) regarding
any proposal or transaction providing for or requiring it to abandon, terminate
or fail to consummate this Agreement, or compensating it or BBI Bank under any
of the instances described in this clause. BBI shall immediately instruct and
otherwise use its best efforts to cause its directors, officers, employees,
agents, advisors (including, without limitation, any investment banker,
attorney, or accountant retained by it or BBI Bank), consultants and other
representatives to comply with such prohibitions. BBI shall immediately cease
any existing activities, discussions, or negotiations with any parties conducted
heretofore with respect to such activities. Notwithstanding the foregoing, BBI
and BBI Bank may provide information at the request of, and/or enter into
negotiations with, a third party with respect to an Acquisition Transaction if
and only if the Board of Directors of BBI shall be advised in a written opinion
of Silver, Xxxxxxxx & Xxxx, L.L.P., or other firm of outside counsel reasonably
acceptable to FCN, that such action is advisable in order for the Board of
Directors of BBI to act in a manner which is consistent with its fiduciary
obligations under Delaware law. BBI shall promptly notify FCN orally and in
writing in the event it receives any such inquiry or proposal and shall provide
reasonable detail of all relevant facts relating to such inquiries. This
Section shall not prohibit compliance with Rules 14d-9 and 14e-2 under the
Securities Exchange Act (or with any other applicable laws, regulations or
directives of any public authorities) and shall not prohibit accurate disclosure
by BBI in any document (including the Proxy Statement and the Registration
Statement) or other disclosure under applicable law if, in the reasonable
judgement of the Board of Directors of BBI, upon advice of counsel, disclosure
is appropriate under applicable law.
(b) "Acquisition Transaction" shall, with respect to BBI, mean any of
the following: (i) a merger or consolidation, or any similar transaction (other
than the Merger), of any company with either BBI or BBI Bank, (ii) a purchase,
lease or other acquisition of all or substantially all the assets of either BBI
or BBI Bank, (iii) a purchase or other acquisition of "beneficial ownership" by
any "person" or "group" (as such terms are defined in Section 13(d)(3) of the
Securities Exchange Act) (including by way of merger, consolidation, share
exchange, or otherwise) which would cause such person or group to become the
beneficial owner of securities
28
representing 20% or more of the voting power of either BBI or BBI Bank , but
excluding the acquisition of beneficial ownership by any employee benefit plan
maintained or sponsored by BBI or (iv) a tender or exchange offer to acquire
securities representing 20% or more of the voting power of BBI.
ARTICLE V.
ADDITIONAL AGREEMENTS
Section 5.01 Inspection of Records; Confidentiality. (a) FCN and BBI
--------------------------------------
shall each afford to the other and to the other's accountants, counsel and other
representatives (and their Subsidiaries) reasonable access during normal
business hours during the period prior to the Effective Time to all of their
respective properties, books, contracts, commitments and records, including all
attorneys' responses to auditors' requests for information, and accountants'
work papers, developed by either of them or their respective Subsidiaries or
their respective accountants or attorneys, and will permit each other and their
respective representatives to discuss such information directly with each
other's officers, directors, employees, attorneys and accountants. FCN and BBI
shall each use their best efforts to furnish to the other all other information
concerning its business, properties and personnel as such other party may
reasonably request. Any failure to comply with this covenant shall be
disregarded if promptly corrected without material adverse consequences to the
other party. The availability or actual delivery of information shall not
affect the representations, warranties, covenants, and agreements of the party
providing such information that are contained in this Agreement or in any
certificates or other documents delivered pursuant hereto.
(b) In the event that this Agreement is terminated, each party shall
return all non-public documents furnished hereunder, shall destroy all documents
or portions thereof prepared by such other party that contain non-public
information furnished by the other party pursuant hereto and, in any event,
shall hold all non-public information confidential unless or until such
information is or becomes a matter of public knowledge or is or becomes known to
the party receiving the information through persons other than the party
providing such information.
Section 5.02 Registration Statement; Stockholder Approval. As soon as
--------------------------------------------
practicable after the date hereof, FCN shall file the Registration Statement
with the SEC, and BBI and FCN shall use their best efforts to cause the
Registration Statement to become effective under the Securities Act. FCN will
take any action required to be taken under the applicable blue sky or securities
laws in connection with the issuance of the shares of FCN Common Stock in the
Merger. Each party shall furnish all information concerning it and the holders
of its capital stock as the other party may reasonably request in connection
with such action. BBI shall call the BBI Stockholders' Meeting as soon as
reasonably practicable after the date of this Agreement for the purpose of
voting upon this Agreement and the Merger. In connection with the BBI
Stockholders' Meeting, (i) BBI, with the cooperation of FCN, shall prepare the
Proxy Statement as part of the Registration Statement and BBI shall mail the
Proxy Statement to its stockholders and (ii) the
29
Board of Directors of BBI shall recommend to its stockholders as in the best
interests of the stockholders the approval of this Agreement and the Merger
provided, however, that such recommendation may be withdrawn, modified or
amended, or not made at all, after the receipt by BBI of an offer to effect an
Acquisition Transaction (as defined in Section 4.02 hereof) with BBI if and only
if the Board of Directors of BBI shall be advised in a written opinion of
Silver, Xxxxxxxx & Xxxx, L.L.P., or other firm of outside counsel reasonably
acceptable to FCN, that such action is advisable in order for the Board of
Directors of BBI to act in a manner which is consistent with its fiduciary
obligations under Delaware law.
Section 5.03 Affiliate Letters. BBI shall use best efforts to obtain and
-----------------
deliver to FCN as promptly as practicable after (and shall use its reasonable
best efforts to obtain and deliver within five business days after) the date
hereof a signed representation letter substantially in the form of Exhibit 5.03
hereto from each executive officer and director of BBI and each stockholder of
BBI or other person who BBI reasonably believes is an "affiliate" of BBI within
the meaning of such term as used in Rule 145 under the Securities Act and shall
use its best efforts to obtain and deliver to FCN a signed representation letter
substantially in the form of Exhibit 5.03 from any person who becomes an
executive officer or director of BBI or any stockholder who becomes such an
"affiliate" after the date hereof as promptly as practicable after (and shall
use its reasonable best efforts to obtain and deliver within five business days
after) such person achieves such status. For a period of at least two years
after the Effective Time, FCN shall file on a timely basis all reports required
to be filed by it pursuant to Section 13 of the Securities Exchange Act, so that
the public information provisions of Rule 144(c) under the Securities Act are
satisfied and the resale provisions of paragraphs (d)(1) and (2) are therefore
available to such affiliates in the event they desire to transfer shares of FCN
Common Stock issued to them in the Merger.
Section 5.04 Brokers. Each of FCN and BBI represents, as to itself and
-------
its Subsidiaries, that no agent, broker, investment banker or other firm or
person or officer or director of either is or will be entitled to any broker's
or finder's fee or any other commission, bonus or similar fee in connection with
any of the transactions contemplated by this Agreement, other than Xxxxx
Financial, Inc., which has provided advice to BBI at its request in connection
with the Merger and whose fee for such services (which is set forth in Schedule
5.04 of the Disclosure Schedule) shall be paid by BBI.
Section 5.05 Cooperation. Each party covenants that it will use its best
-----------
efforts to bring about the transactions contemplated by this Agreement as soon
as practicable, unless this Agreement is terminated as provided herein. Subject
to the terms and conditions herein provided, each of the parties hereto agrees
to use all reasonable efforts to take, or cause to be taken, all action, and to
do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement at the earliest practicable time.
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/or directors of FCN or BBI, as the case may be, shall take all such
necessary action. Each party shall use its reasonable best efforts to preserve
for itself and the other party each available
30
legal privilege with respect to the confidentiality of their negotiations and
related communications, including the attorney-client privilege.
Notwithstanding the foregoing, the obligations of BBI and its Subsidiary set
forth in this Section 5.05 shall be subject to the fiduciary obligations of the
Board of Directors of BBI set forth in Sections 4.02(a) and 5.02 herein.
Section 5.06 Regulatory Applications. FCN, BBI and/or their respective
-----------------------
Subsidiaries shall, as soon as reasonably practicable, file all necessary
applications relating to the Merger, the Bank Merger, and other transactions
contemplated or this Agreement with all applicable regulatory authorities, and
shall use their best efforts to respond as promptly as practicable to all
inquiries received concerning said applications. In the event of an adverse or
unfavorable determination by any regulatory authority, or in the event the
Merger is challenged or opposed by any administrative or legal proceeding,
whether by the United States Department of Justice or otherwise, the
determination of whether and to what extent to seek appeal or review,
administrative or otherwise, or other appropriate remedies shall be made by FCN.
The party filing an application shall deliver a copy thereof to the other party
in advance of filing with a reasonable opportunity for such other party to
review the application, and copies of all responses from or written
communications from regulatory authorities relating to the Merger or this
Agreement (to the extent permitted by law), and the filing party shall also
deliver a final copy of each regulatory application to the other party promptly
after it is filed with the appropriate regulatory authority. Each party shall
advise the other party periodically of the status of each regulatory
application.
Section 5.07 Financial Statements and Reports. From the date of this
--------------------------------
Agreement and prior to the Effective Time: (a) each party will deliver to the
other, not later than ninety 90 days after the end of any fiscal year, its
Annual Report on Form 10-K or 10-KSB as the case may be (and all schedules and
exhibits thereto) for the fiscal period then ended prepared in conformity with
generally accepted accounting principles; (b) BBI will deliver to FCN not later
than 30 days after the end of any fiscal quarter, the Reports of Condition and
Income filed by each of its Subsidiaries that is a financial institution with
its primary regulator which shall be prepared in accordance with all applicable
rules and regulations; (c) each party will deliver to the other not later than
45 days after the end of each quarter, its Report on Form 10-Q or 10-QSB, as the
case may be, for such quarter as filed with the SEC which shall be prepared in
conformity with generally accepted accounting principles and the rules and
regulations of the SEC; and (d) BBI will deliver to FCN any and all other
material reports filed by BBI or BBI Bank with the SEC, the Federal Reserve
Board, the OCC, the FDIC, the OTS, or any other regulatory agency within three
business days of the filing of any such report.
Section 5.08 Notice. At all times prior to the Effective Time, each party
------
shall promptly notify the other in writing of the occurrence of any event which
will or may result in the failure to satisfy any of the conditions specified in
Sections 6.01 or 6.02 hereof. In the event that either party becomes aware of
the occurrence or impending occurrence of any event which would constitute or
cause a breach by it of any of its representations and warranties, covenants or
agreements herein in any material respect, or would have constituted or caused a
breach by it
31
of its representations and warranties, covenants or agreements herein in any
material respect, had such an event occurred or been known prior to the date
hereof, said party shall immediately give detailed and written notice thereof to
the other party, and shall, unless the same has been waived in writing by the
other party, use its reasonable efforts to remedy the same, provided that such
efforts, if not successful, shall not be deemed to satisfy any condition
precedent to the Merger.
Section 5.09 Press Releases. Except as provided in Section 4.02(a) or as
--------------
otherwise reasonably determined by a party upon advice of counsel to comply with
its legal obligations, at any time prior to the Effective Time, each party shall
mutually agree with the other prior to the issuance of any press release or
other information to the press or any third party for general circulation with
respect to this Agreement or the transactions contemplated hereby.
Section 5.10 Delivery of Supplements to Disclosure Schedules. Five
-----------------------------------------------
business days prior to the Effective Time, each party will supplement or amend
its Disclosure Schedule with respect to any matter hereafter arising which, if
existing or occurring at or prior to the date of this Agreement, would have been
required to be set forth or described in such Disclosure Schedule or which is
necessary to correct any information in the Disclosure Schedule or in any
representation and warranty made by the disclosing party which has been rendered
inaccurate thereby. For purposes of determining the accuracy of the
representations and warranties of FCN and BBI contained, respectively, in
Articles II and III hereof in order to determine the fulfillment of the
conditions set forth in Section 6.01(a) and 6.02(a) hereof as of the date of
this Agreement, the Disclosure Schedule of each party shall be deemed to include
only that information contained therein on the date it is initially delivered to
the other party.
Section 5.11 Litigation Matters. BBI will consult with FCN about any
------------------
proposed settlement, or any disposition of, any litigation involving amounts in
excess of $50,000.
Section 5.12 Options; RRP; BBI Employee Stock Ownership Plan; Employment
-----------------------------------------------------------
Agreements; Benefits and Related Matters.
----------------------------------------
(a) BBI Stock Option Plan. The BBI Stock Option Plan and each BBI
---------------------
Stock Option outstanding on the date hereof and remaining outstanding
immediately prior to the Effective Time shall, at the Effective Time, be assumed
by FCN and each such option shall be converted automatically into an option to
purchase shares of FCN Common Stock in an amount and at an exercise price
determined as provided below and (otherwise subject to, the terms of BBI's Stock
Option Plan):
(i) The number of shares of FCN Common Stock to be subject to
the substituted option shall be equal to the product of the number of shares of
BBI Common Stock subject to the original option and the Exchange Ratio, provided
that any fractional shares of FCN Common Stock resulting from such
multiplication shall be rounded to the nearest share; and
32
(ii) The exercise price per share of FCN Common Stock under the
substituted option shall be equal to the exercise price per share of BBI Common
Stock under the original option divided by the Exchange Ratio, provided that
such exercise price shall be rounded to the nearest cent.
The adjustment provided herein with respect to any options which
are "incentive stock options" (as defined in Section 422 of the Code) shall be
and is intended to be effected in a manner which is consistent with Section
424(a) of the Code. The duration and other terms of the new option shall be the
same as the original option, except that all references to BBI shall be deemed
to be references to FCN.
Notwithstanding the foregoing, each director of BBI and each
employee of BBI named on Exhibit 5.12(a) hereto and who is a holder of a BBI
Stock Option pursuant to the BBI Stock Option Plan outstanding on the date
hereof and remaining outstanding at the Effective Time shall receive from FCN,
as soon as reasonably practical after the Effective Time, whether or not the BBI
Stock Option is then exercisable, a cash payment in an amount equal to the
product of (i) the number of shares of BBI Common Stock subject to such option
listed on Exhibit 5.12(a) and (ii) the excess, if any, of $25.85 over the
exercise price per share of such option, net of any cash which must be withheld
under federal and state income and employment tax requirements; provided,
however, the amount herein payable to a director or employee shall be subject to
a cut-back, if necessary, so that FCN is not obligated to make a payment in
respect of a BBI Stock Option that will not be deductible, because of Section
280G of the Code. Such cash payments shall be in consideration for, and shall
result in, the settlement and cancellation of such options only to the extent of
the shares subject to such option listed on Exhibit 5.12(a). The portion of the
options that shall be settled and cancelled shall be the portion scheduled to
vest at the latest dates. As a condition to the receipt of a cash payment in
cancellation of options, each option holder shall execute and deliver to FCN a
cancellation agreement in form and substance reasonably satisfactory to FCN.
(b) RRP. The RRP and each RRP agreement issued thereunder outstanding
---
on the date hereof and remaining outstanding immediately prior to the Effective
Time shall, at the Effective Time, be assumed by FCN. Any shares of FCN Common
Stock ("FCN Restricted Stock") to be issued pursuant to this Agreement in
exchange for shares of BBI Common Stock that are subject to forfeiture
restrictions ("Restricted Stock") under the RRP shall remain subject to the same
forfeiture restrictions formerly applicable to the BBI Common Stock, an
appropriate legend may be made on the certificates for FCN Restricted Stock
issued in the exchange indicating the applicable restrictions and any related
agreement(s) that apply to the vesting or forfeiture of such shares (and the FCN
Restricted Stock shall otherwise be subject to the terms of the RRP) and the
certificates for FCN Restricted Stock may be held in safekeeping by or on behalf
of FCN pending expiration of the forfeiture restrictions.
Notwithstanding the foregoing, each director of BBI and each
employee of BBI named on Exhibit 5.12(b) hereto and who is a holder of
Restricted Stock pursuant to the RRP
33
outstanding on the date hereof and remaining outstanding at the Effective Time
shall receive from FCN, as soon as reasonably practical after the Effective
Time, whether or not the Restricted Stock is then exercisable, a cash payment in
an amount equal to the product of (i) the number of shares of Restricted Stock
held by or for the account of such director or employee and listed on Exhibit
5.12(b) and (ii) $25.85, net of any cash which must be withheld under federal
and state income and employment tax requirements; provided, however, the amount
herein payable to a director or employee shall be subject to a cut-back, if
necessary, so that FCN is not obligated to make a payment in respect of
Restricted Stock that will not be deductible, because of Section 280G of the
Code. Such cash payments shall be in consideration for, and shall result in,
the settlement and cancellation of such Restricted Stock only in respect of the
shares of Restricted Stock listed on Exhibit 5.12(b). The shares of Restricted
Stock that shall be deemed settled and cancelled shall be the shares of
Restricted Stock scheduled to vest at the latest dates. As a condition to the
receipt of a cash payment in cancellation of Restricted Stock, each holder shall
execute and deliver to FCN a cancellation agreement in form and substance
reasonably satisfactory to FCN.
(c) BBI Employee Stock Ownership Plan.
---------------------------------
From and after the date of this Agreement through the Effective Time, BBI
and its Subsidiary may make such contributions to the ESOP as BBI and its
Subsidiary shall reasonably determine to maximize repayment of the ESOP loan;
provided, however, that all such contributions shall be deductible by BBI or the
BBI Subsidiary under Section 404 of the Code and otherwise in compliance with
Section 415 of the Code. At or immediately prior to the Effective Time, the
ESOP shall be amended to provide that (i) a participant shall not be required to
be employed on the last day of the plan year to receive allocations thereunder,
(ii) the definition of compensation for all purposes of the ESOP including
allocations under Section 415 of the Code shall be W-2 wages limited, however,
to the amount of W-2 wages received in calendar year 1995, (iii) all accounts
thereunder shall be fully vested and nonforfeitable and (iv) the FCN Common
Stock issued upon the conversion of the BBI Common Stock in the Merger shall
become the qualifying employer security for purposes of the ESOP subject to the
following provisions of this paragraph. From and after the Effective Time
through December 31, 1997, FCN shall make, or shall cause a FCN Subsidiary to
make such maximum annual contributions to the ESOP, as permitted by Sections 404
and 415 of the Code, so as to maximize payments on the ESOP loan as promptly as
practicable and to maintain the ESOP as a separate plan for the benefit of those
persons who are ESOP participants immediately prior to the Effective Time, it
being the intention of the parties that through December 31, 1997 the ESOP will
be maintained exclusively for the benefit of those persons employed by BBI or a
BBI Subsidiary prior to the Effective Time and during such period allocations of
benefits shall be made to them to the maximum extent permitted by law. Upon
payment in full of the ESOP loan on December 31, 1997, FCN shall cause the ESOP
to be terminated or merged into another tax-qualified plan of FCN as soon as
practicable thereafter. FCN, at its expense, may in its discretion file one or
more Applications for Determination with the appropriate district office of the
Internal Revenue Service (the"Key District Office") relating to the amendment
and termination or merger of the ESOP and the distribution of the assets of the
ESOP to participants, former participants and their beneficiaries
34
and the requirements of this paragraph shall be subject to any requirements
imposed by the Internal Revenue Service as a condition for determining that the
ESOP continues to be qualified under Section 401(a) and 4975 of the Code. If
the ESOP loan has not been fully retired as of December 31, 1997, then the
Application for Determination will include a request for the conversion to cash
of a sufficient amount of FCN Common Stock to retire the ESOP loan. Upon
receipt of a favorable Determination Letter from the Key District Office in
response to the Application for Determination, FCN shall cause the ESOP to make
distribution of benefits from the ESOP at the earliest practicable time in a
manner consistent with the favorable Determination Letter. In this regard
participants, former participants, and their beneficiaries will be offered the
ability to transfer to or to make a tax-free rollover, to the extent permitted
by law, to an individual retirement account at their election. In the event
that a person listed on the attached Exhibit 5.12(c) is employed by BBI or a
BBI Subsidiary immediately prior to the Effective Time, then such person shall
as soon as practicable following the calendar year of his termination of
employment, or if earlier upon the termination or merger of the ESOP be paid by
FCN or an FCN Subsidiary an amount equal to the aggregate of (i) the cash amount
set forth opposite his/her name on Exhibit 5.12(c) plus (ii) $25.85 divided by
the Exchange Ratio (as adjusted for recapitalizations, stock splits and the like
but not stock dividends) multiplied by the difference between (x) the amount of
shares listed opposite his/her name on Exhibit 5.12(c) multiplied by the
Exchange Ratio (as adjusted for recapitalizations, stock splits, stock dividends
and the like) and (y) the number of shares of FCN Common Stock allocated to
his/her account under the ESOP as of the end of the calendar year following such
employment termination plus (iii) the amount of the cash dividends on the number
of shares of FCN Common Stock resulting from (x)-(y) above with record dates on
or after the Effective Time through the date of termination of employment;
provided, however, that FCN shall not be obligated to make any such cash payment
under any circumstances in which such payments are or will not be deductible
because of Section 280G of the Code and provided further, that the amount
specified in Exhibit 5.12(c) shall be subject to verification and confirmation
by FCN prior to payment. Notwithstanding the forgoing, BBI shall make an
application to the Key District Office for a determination letter or ruling
relating to the proposed termination of the ESOP as of the Effective Time
providing for the conversion to cash of a sufficient number of FCN Common Stock
received in the Merger with respect to unallocated employer securities to fully
retire the ESOP loan with all remaining unallocated employer securities (or
proceeds) being allocated as ESOP earnings to participants or former
participants of the ESOP without any amount thereof being subject to limitation
on allocation under Section 415 of the Code. In the event that a favorable
determination letter or ruling is received by BBI prior to December 31, 1996
relating to the matters set forth in the preceding sentence and allocations to
participants consistent with such favorable determination letter or ruling will
result in the same or substantially the same economic value to the persons
listed on Exhibit 5.12(c) as would be received by such persons had the ESOP been
continued through December 31, 1997, then the ESOP may be terminated by FCN with
distribution of assets being made as soon as practicable thereafter with
recipients being given the opportunity for transfer or tax-free rollover to
individual retirement accounts.
35
(d) Written Agreements with Employees. As soon as practicable
---------------------------------
following the execution of this Agreement, BBI and/or BBI Bank will enter into
new employment agreements with Messrs. Xxxx X. Xxxxxx and Xxxxx X. Xxxxxx and
Xx. Xxxxxxxxxx Xxxxxxx in a form reasonably acceptable to BBI and FCN for the
periods set forth in the next sentence, in exchange for the cancellation and
termination of their existing severance agreements as of the Effective Time.
FCN agrees to continue to employ Messrs. Xxxx X. Xxxxxx and Xxxxx X. Xxxxxx and
Xx. Xxxxxxxxxx Xxxxxxx at their same compensation currently in effect as of the
Effective Time for a period of 24 months, 18 months and 18 months, respectively.
FCN shall assume all of the obligations of BBI Bank under the Employee Severance
Plan. The rights of BBI or BBI Bank employees under the Employee Severance Plan
shall be deemed for all purposes of this Agreement to be vested contractual
rights of such employees and the obligation of FCN with respect thereto shall
survive the Effective Time.
(e) Continuing Employees. To the extent permitted by applicable law,
--------------------
from and after the Effective Time, the former employees of BBI and BBI Bank who
are continuing employees of FCN or any FCN Subsidiary after the Effective Time
(the "Continuing Employees") shall be entitled to participate in the applicable
FCN benefit plans and receive full credit for their prior employment with BBI
and BBI Bank as if they were then employed by FCN or an FCN Subsidiary for
purposes of eligibility to participate in, vesting and benefits (but not accrual
of benefits under any FCN defined benefit plans); except, however, any
Continuing Employee shall not participate in any FCN defined contribution
retirement plan for plan years prior to 1998 during which they received
allocations under the ESOP and any Continuing Employee who terminates employment
for any reason after the Effective Time and receives severance payments pursuant
to or calculated based upon the Employee Severance Plan shall not be entitled to
severance or other benefits under the FCN Reduction in Workforce Policy or any
successor FCN severance or reduction policy or plans. The Continuing Employees
will not be subject to any exclusion or penalty for pre-existing conditions that
were covered under the BBI health plan immediately prior to the Effective Time
or any waiting period relating to coverage under the FCN health plan. Effective
one year following the Effective Time, Continuing Employees rights under the
Employee Severance Plan shall terminate.
Section 5.13 Extent of Knowledge. For purposes of this Agreement and any
-------------------
other certificate or document delivered by one party to the other pursuant
hereto, the "best knowledge" of FCN or BBI shall be limited to matters actually
known to any of its executive officers.
Section 5.14 Tax Treatment. Neither BBI or BBI Bank, nor FCN or any of
-------------
the FCN Subsidiaries, shall voluntarily take any action which would disqualify
the transaction contemplated in this Agreement as a "reorganization" pursuant to
Section 368(a) of the Code.
Section 5.15 Stock Exchange Listing. FCN shall use its best efforts to
----------------------
list on the NYSE subject to official notice of issuance, the shares of FCN
Common Stock to be issued in the Merger.
36
Section 5.16 Directors' and Officers' Indemnification Insurance. FCN
--------------------------------------------------
agrees that the Merger shall not affect or diminish any of BBI's or BBI Bank's
duties and obligations of indemnification existing immediately prior to the
Effective Time in favor of employees, agents, directors, or officers of BBI or
BBI Bank arising by virtue of the Certificate of Incorporation, Charter or
Bylaws of BBI and BBI Bank in the form in effect at the date of this Agreement
or arising by operation of law or arising by virtue of any contract, resolution
or other agreement or document existing at the date of this Agreement, and such
duties and obligations shall continue in full force and effect for so long as
they would (but for the Merger) otherwise survive and continue in full force and
effect. FCN shall cause the persons serving as officers and directors of BBI
and BBI Bank immediately prior to the Effective Time to be covered for a period
of three years from the Effective Time by the directors' and officers' liability
insurance policy maintained by BBI and BBI Bank (provided that FCN may
substitute therefor policies of at least the same coverage and amounts
containing terms and conditions which are not materially less advantageous than
such policy) with respect to acts or omissions occurring prior to the Effective
Time which were committed by such officers and directors in their capacity as
such.
Section 5.17 Reservation of Shares. FCN shall take all corporate action
---------------------
necessary to reserve for issuance a sufficient number of shares of FCN Common
Stock for delivery pursuant to the plans referred to in Section 5.12(a) hereof.
As soon as practicable after the Effective Time, FCN shall file an appropriate
registration statement or registration statements (which may be done by means of
an amendment to the Registration Statement) with respect to such shares and
shall use its best efforts to maintain the effectiveness of such registration
statement or registration statements (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as necessary to cover
issuance of such shares pursuant to such plans.
Section 5.18 Data Processing and Contracts. To the extent permitted by
-----------------------------
applicable regulatory requirements:
(a) Commencing on the date hereof and continuing through the Effective
Time, BBI agrees to provide reasonable access to its facilities, personnel,
files and equipment, and the facilities, personnel, files and equipment of its
Subsidiary, and agrees to use its reasonable best efforts to provide such access
to third parties providing services or equipment to BBI or its Subsidiary, to
officers, employees, agents and representatives of FCN and its Subsidiaries for
the purpose of FCN effecting a conversion (the "Conversion") of the data
processing and operating systems of BBI and its Subsidiary to the data
processing and operating systems of FCN and its Subsidiaries at the Effective
Time or as soon as possible thereafter as FCN may determine. Such access, which
shall include, without limitation, the right of FCN and its Subsidiaries to
install and test on the premises of BBI and its Subsidiary all equipment and
systems necessary or appropriate to effect the Conversion, the right to train
officers, employees, agents and representatives of BBI and its Subsidiary, and
the right to maintain without cost or expense to FCN or its Subsidiaries
adequate working space on site at BBI and its Subsidiary. Such access and
Conversion activities shall be designed and implemented to the extent reasonably
practicable to limit interference with the normal business of BBI and its
Subsidiary. Immediately upon execution of this Agreement
37
and through the Effective Time, BBI agrees to make available and cause its
Subsidiary to make available, Xxxxxxxxxx Xxxxxxx, Vice President and Xxxxx
Xxxxxx, Assistant Vice President and any other officer, employee or agent who
BBI management reasonably believes has the appropriate training and expertise in
data processing and operations to work with FCN and its Subsidiaries in order
to effectuate the Conversion. BBI and FCN agree to jointly review and approve
all external communications relating to the Conversion.
(b) From the effective date of this Agreement through the Effective Time,
BBI agrees that neither it nor its Subsidiary will, except with respect to
loans, extensions of credit and deposit taking activities, enter into, renew,
extend, modify or terminate any contract or other agreement with an aggregate
value in excess of $25,000 (i) without consulting with FCN or (ii) if FCN
advises against such action, unless, in the case of (ii), BBI reasonably
believes such action is in the best interests of BBI and will not unduly
restrict, delay or materially increase the expenses of the Conversion. BBI and
its Subsidiary will use their reasonable efforts to implement prior to the
Effective Time the joint decision of BBI and FCN with respect to any such
agreement.
ARTICLE VI.
CONDITIONS
Section 6.01 Conditions to the Obligations of FCN. Notwithstanding any
------------------------------------
other provision of this Agreement, the obligations of FCN to consummate the
Merger are subject to the following conditions precedent (except as to those
which FCN may chose to waive):
(a) All of the representations and warranties made by BBI in this
Agreement and in any documents or certificates provided by BBI in accordance
with this Agreement shall have been true and correct in all material respects as
of the date of this Agreement and as of the Effective Time as though made on and
as of the Effective Time except for information contained in a subsequent
Disclosure Schedule of BBI relating to any event or series of events arising
after the date hereof which does not have a Material Adverse Effect on BBI or as
otherwise contemplated by this Agreement;
(b) BBI shall have performed in all material respects all obligations
and shall have complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by it
prior to or at the Effective Time;
(c) There shall not have been any action taken or any statute, rule,
regulation or order enacted, promulgated or issued or deemed applicable to the
Merger by any federal or state government or governmental agency or
instrumentality or court, which would prohibit FCN's ownership or operation of
all or a material portion of the business or assets of BBI or BBI Bank, or would
compel FCN to dispose of all or a material portion of the business or assets of
BBI Bank, as a result of this Agreement, or which would render FCN or BBI unable
to consummate the transactions contemplated by this Agreement;
38
(d) Since the date hereof, BBI shall not have suffered Material
Adverse Effect;
(e) FCN shall have received the opinion of Silver, Xxxxxxxx & Xxxx,
L.L.P., counsel to BBI, in the form of the attached Exhibit 6.01(e);
(f) FCN shall have received a certificate signed by the President and
Chief Executive Officer of BBI, dated as of the Effective Time, certifying that
based upon his best knowledge, the conditions set forth in Sections 6.01(a),
(b), (c) and (d) hereof have been satisfied; and
(g) All regulatory approvals and consents to consummate the Bank
Merger shall have been received and all required waiting periods shall have
expired.
(h) As of the end of the month ending prior to the Closing Date, the
consolidated stockholders' equity of BBI shall not be less than $11.3 million.
In computing such amount, the determination shall be made in accordance with
generally accepted accounting principles as in effect on the date hereof and
applied consistently with prior periods and there shall be added back the
following expenses, charges and similar amounts which are paid or accrued by BBI
or its Subsidiary: (i) all Merger related expenses for executive compensation,
investment banker fees and expenses, legal fees and expenses, accounting fees
and expenses, expenses of the Stockholder Meeting, expenses for the preparation,
printing and mailing of the proxy statement, and expenses for the preparation of
regulatory applications and the registration statement; (ii) expenses requested
or required in writing by FCN; (iii) any one-time special insurance premium
assessed by the FDIC on deposits insured by the SAIF; (iv) charges related to
any change in generally accepted accounting principles or regulatory accounting
principles that would require the bad debt reserve of a thrift institution to be
restored to income; (v) charges, fees and expenses related to any change with
respect to, or effect on, BBI resulting from any other matter affecting
depository institutions generally, including, without limitation, changes in
general economic conditions and changes in prevailing interest and deposit
rates; and (vi) any other items of expense which are mutually agreed to by BBI
and FCN.
Section 6.02 Conditions to the Obligations of BBI. Notwithstanding any
------------------------------------
other provision of this Agreement, the obligations of BBI to consummate the
Merger are subject to the following conditions precedent (except as to those
which BBI may chose to waive):
(a) All of the representations and warranties made by FCN in this
Agreement and in any documents or certificates provided by FCN in accordance
with this Agreement shall have been true and correct in all material respects as
of the date of this Agreement and as of the Effective Time as though made on and
as of the Effective Time except for information contained in a subsequent
Disclosure Schedule of FCN relating to any event or series of events arising
after the date hereof which does not have a Material Adverse Effect on FCN or as
otherwise contemplated by this Agreement;
39
(b) FCN shall have performed in all material respects all obligations
and shall have complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by it
prior to or at the Effective Time;
(c) BBI shall have received the opinion of Xxxxxxx X. Xxxxxxxx,
Executive Vice President, General Counsel and Secretary, to FCN, in the form
attached hereto as Exhibit 6.02(d); and
(d) BBI shall have received a certificate signed by any Executive Vice
President or more senior officer of FCN, dated as of the Effective Time, that
based upon his best knowledge, the conditions set forth in Sections 6.02(a), (b)
and (c) have been satisfied.
Section 6.03 Conditions to the Obligations of the Parties.
--------------------------------------------
Notwithstanding any other provision of this Agreement, the obligations of FCN on
the one hand, and BBI on the other hand, to consummate the Merger are subject to
the following conditions precedent (except as to those which FCN or BBI may
chose to waive):
(a) No preliminary or permanent injunction or other order by any
federal or state court which prevents the consummation of the Merger shall have
been issued and shall remain in effect;
(b) The parties shall have received all applicable regulatory
approvals and consents to consummate the transactions contemplated in this
Agreement and all required waiting periods shall have expired;
(c) The Registration Statement shall have been declared effective
under the Securities Act and no stop orders shall be in effect and no
proceedings for such purpose shall be pending or threatened by the SEC;
(d) Each party shall have received, in form and substance reasonably
satisfactory it, an opinion, dated as of the Effective Time, from its counsel
substantially to the effect that, on the basis of facts, representations and
assumptions set forth in such opinion which are consistent with the state of
facts existing at the Effective Time:
(i) The Merger will constitute a tax free reorganization under
Section 368(a)(1)(A) of the Code and FCN and BBI will each
be a party to the reorganization;
(ii) No gain or loss will be recognized by FCN or BBI as a result
of the Merger;
(iii) No gain or loss will be recognized by the stockholders of
BBI who exchange their BBI Common Stock solely for FCN
Common Stock
40
pursuant to the Merger (except with respect to cash received
in lieu of a fractional share interest in FCN Common Stock);
(iv) The tax basis of the FCN Common Stock received by
stockholders who exchange all of their BBI Common Stock
solely for FCN Common Stock in the Merger will be the same
as the tax basis of the BBI Common Stock surrendered in
exchange therefor (reduced by any amount allocable to a
fractional share interest for which cash is received); and
(v) The holding period of FCN Common Stock received by
stockholders of BBI in the Merger will include the period
during which the shares of BBI Common Stock surrendered in
exchange therefor were held; provided, such BBI Common Stock
was held as a capital asset by the holder of such BBI Common
Stock at the Effective Time.
In rendering such opinion, counsel may require and rely upon
representations contained in certificates of officers of FCN, BBI and others.
(f) The FCN Common Stock to be issued to holders of BBI Common Stock
shall have been approved for listing on the NYSE subject to official notice of
issuance; and
(g) The Merger shall have been approved by the requisite vote of the
holders of BBI Common Stock.
ARTICLE VII.
TERMINATION; EXPENSES; AMENDMENT; WAIVER
Section 7.01 Termination. This Agreement may be terminated at any time
-----------
prior to the Effective Time:
(a) By the mutual written consent of the Boards of Directors of FCN
and BBI;
(b) At any time prior to the Effective Time, by FCN or BBI if there
shall have been a final judicial or regulatory determination (as to which all
periods for appeal shall have expired and no appeal shall be pending) that any
material provision of this Agreement is illegal, invalid or unenforceable
(unless the enforcement thereof is waived by the affected party) or denying any
regulatory application the approval of which is a condition precedent to either
party's obligations hereunder;
41
(c) At any time on or before the date specified in 7.01(f) hereof, by
FCN or BBI in the event that any of the conditions precedent to the obligations
of such party to the Merger are rendered impossible to be satisfied or fulfilled
by said date (other than by reason of a breach by the party seeking to
terminate);
(d) By either party at any time after the stockholders of BBI fail to
approve this Agreement and the Merger by the required vote at the BBI
Stockholders' Meeting;
(e) By FCN or BBI, in the event of a material breach by the other
party of any representation, warranty, covenant or agreement contained herein or
in any schedule or document delivered pursuant hereto, which breach would result
in the failure to satisfy the closing condition set forth in Section 6.01(a) or
6.01(b), in the case of FCN, or Section 6.02(a) or 6.02(b), in the case of BBI,
and which breach cannot be or is not cured within 30 days after written notice
of such breach is given by the non-breaching party to the party committing such
breach; or
(f) By either party on or after December 31, 1996, in the event the
Merger has not been consummated by such date (provided that the terminating
party is not then in material breach of any representation, warranty, covenant
or other agreement contained herein).
In the event either party elects to effect any termination pursuant to
Section 7.01(b) through 7.01(f) above, it shall give written notice to the other
party hereto specifying the basis for such termination.
Section 7.02 Expenses. Each of the parties shall bear its own costs,
--------
fees and expenses incurred in connection with this Agreement and the
transactions contemplated hereby; provided, however the costs of expenses of
printing and mailing the proxy statement and printing the Registration Statement
and all filing and other fees paid to the SEC in connection with the Merger
shall be borne equally by FCN and BBI.
Section 7.03 Survival of Agreements. In the event of termination of this
----------------------
Agreement by either FCN or BBI as provided in Section 7.01, this Agreement shall
forthwith become void and have no effect except that (i) the agreements
contained in Sections 5.01(b), 5.05 and 7.02 hereof shall survive the
termination hereof and (ii) nothing contained in this Section 7.03 shall relieve
any party thereto from any liability for any willful and material breach of this
Agreement.
Section 7.04 Amendment. This Agreement may be amended by the parties
---------
hereto by action taken or authorized by their respective Boards of Directors at
any time before or after approval hereof by the stockholders of BBI but, after
such approval, no amendment shall be made which changes the form of
consideration or the value of the consideration to be received by the
stockholders of BBI without the approval of the stockholders of BBI. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto. FCN and BBI may, without approval of their
respective Boards of Directors, make such technical changes to this Agreement,
not inconsistent with the purposes hereof, as may be required to effect
42
or facilitate any regulatory approval or acceptance of the Merger or of this
Agreement or to effect or facilitate any regulatory or governmental filing or
recording required for the consummation of any of the transactions contemplated
hereby.
Section 7.05 Waiver. Any term, provision or condition of this Agreement
------
(other than the requirement of BBI stockholder approval) may be waived in
writing at any time by the party which is entitled to the benefits hereof. Each
and every right granted to any party hereunder, or under any other document
delivered in connection herewith or therewith, and each and every right allowed
it by law or equity, shall be cumulative and may be exercised from time to time.
The failure of either party at any time or times to require performance of any
provision hereof shall in no manner affect such party's right at a later time to
enforce the same. No waiver by any party of a condition or of the breach of any
term, covenant, representation or warranty contained in this Agreement, whether
by conduct or otherwise, in any one or more instances shall be deemed to be or
construed as a further or continuing waiver of any such condition or breach or a
waiver of any other condition or of the breach of any other term, covenant,
representation or warranty of this Agreement. No investigation, review or audit
by FCN of BBI or BBI of FCN prior to or after the date hereof shall estop or
prevent either party form exercising any right hereunder or be deemed to be a
waiver of any such right.
ARTICLE VIII.
GENERAL PROVISIONS
Section 8.01 Survival. All representations, warranties, covenants and
--------
agreements of the parties in this Agreement or in any instrument delivered by
the parties pursuant to this Agreement (other than the agreements, covenants and
obligations set forth herein which are contemplated to be performed after the
Effective Time) shall not survive the Effective Time, provided that no such
representations, warranties or covenants shall be deemed to be terminated or
extinguished so as to deprive FCN or BBI (or any of their respective directors,
officers, employees or agents) of any defense in law or equity which otherwise
would be available against the claims of any person, including, without
limitation, any stockholder or former stockholder of either FCN of BBI, the
aforesaid representations, warranties, and covenants being material inducements
to consummation by FCN, BBI and the Surviving Corporation of the transactions
contemplated hereby.
Section 8.02 Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given if delivered personally, by
facsimile transmission or by registered or certified mail 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 deemed to be delivered on the date so delivered:
(a) if to FCN:
43
First Chicago NBD Corporation
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
copy to:
First Chicago NBD Corporation
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
(b) if to BBI:
Barrington Bancorp, Inc.
000 X. Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
copy to: Xxxx X. Xxxxxx
Silver, Xxxxxxxx & Xxxx, L.L.P.
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxxxxxx X. Xxxxx, P.C.
44
Section 8.03 Applicable Law. This Agreement shall be construed and
--------------
interpreted according to the laws of the State of Delaware without regard to
conflicts of laws principles thereof, except to the extent that the federal laws
of the United States apply.
Section 8.04 Headings. The article headings and section headings
---------
contained in this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this Agreement.
Section 8.05 Severability. If any term, provision, covenant, or
------------
restriction contained in this Agreement is held by a final and unappealable
order of a court of competent jurisdiction to be invalid, void, or
unenforceable, then the remainder of the terms, provisions, covenants, and
restrictions contained in this Agreement shall remain in full force and effect,
and shall in no way be affected, impaired, or invalidated unless the effect
would be to cause this Agreement to not achieve its essential purposes.
Section 8.06 Entire Agreement; Binding Effect; Non-Assignment;
-------------------------------------------------
Counterparts; No Third-Party Beneficiaries. Except as otherwise expressly
------------------------------------------
provided herein, this Agreement (including the documents and instruments
referred to herein) and the FCN Option Agreement constitute the entire agreement
between the parties hereto and supersede all other prior agreements and
undertakings, both written and oral, between the parties, with respect to the
subject matter hereof. This Agreement shall be binding upon and inure to the
benefit of the parties named herein and their respective successors. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any party hereto without the prior written consent of the other
party hereto. This Agreement may be executed in two or more counterparts which
together shall constitute a single agreement. Except for provisions of Sections
5.12 and 5.16 hereof, neither this Agreement nor the FCN Option Agreement is
intended to confer upon any person other than the parties thereto any rights or
remedies thereunder.
45
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the day and year first above written.
FIRST CHICAGO NBD CORPORATION
By:
-------------------------
------------------------
Assistant Secretary
BARRINGTON BANCORP, INC.
By:
-------------------------
Xxxx X. Xxxxxx
President
------------------------
Secretary
46
