AGREEMENT OF REORGANIZATION AND MERGER
BETWEEN
FIRST MERCHANTS CORPORATION
AND
XXXXXXXX COUNTY BANCORP
THIS AGREEMENT OF REORGANIZATION AND MERGER ("Agreement"), is entered this
17th day of January, 1996, by and between FIRST MERCHANTS CORPORATION ("First
Merchants") and XXXXXXXX COUNTY BANCORP ("Xxxxxxxx County").
W I T N E S S E T H:
WHEREAS, First Merchants is a corporation duly organized and existing under
the laws of the State of Indiana and a registered bank holding company under the
Bank Holding Company Act of 1956, as amended, with its principal place of
business in Muncie, Delaware County, Indiana.
WHEREAS, Xxxxxxxx County is a corporation duly organized and existing under
the laws of the State of Indiana and a registered bank holding company under the
Bank Holding Company Act of 1956, as amended, with its principal place of
business in Xxxxxxxxxx, Xxxxxxxx County, Indiana.
WHEREAS, The Xxxxxxxx County Bank (the "Bank") is a banking institution
duly organized and existing under the laws of the State of Indiana and a
wholly-owned subsidiary of Xxxxxxxx County with its principal banking office in
Xxxxxxxxxx, Xxxxxxxx County, Indiana.
WHEREAS, it is the desire of First Merchants and Xxxxxxxx County to effect
a transaction whereby the Bank will become a wholly-owned subsidiary of First
Merchants through a statutory merger of Xxxxxxxx County with and into First
Merchants.
WHEREAS, a majority of the entire Board of Directors of First Merchants and
a majority of the entire Board of Directors of Xxxxxxxx County have approved
this Agreement, designated it as a plan of reorganization within the provisions
of Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the
"Code"), and authorized its execution.
NOW, THEREFORE, in consideration of the mutual promises, covenants, and
agreements herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, First Merchants and Xxxxxxxx County
hereby make this Agreement and prescribe the terms and conditions of the merger
of
Xxxxxxxx County with and into First Merchants and the mode of carrying the
transaction into effect as follows:
SECTION 1
THE MERGER
Subject to the terms and conditions of this Agreement, on the Effective
Date, as defined in Section 11 hereof, Xxxxxxxx County shall be merged into and
under the Articles of Incorporation of First Merchants, which shall be the
"Continuing Company" and which shall continue its corporate existence under the
laws of the State of Indiana, pursuant to the provisions of and with the effect
provided in the Indiana Business Corporation Law and particularly Indiana Code
chapter 23-1-40 (the "Merger").
SECTION 2
EFFECT OF THE MERGER
Upon the Merger becoming effective:
2.01. GENERAL DESCRIPTION. The separate existence of Xxxxxxxx County
shall cease and the Continuing Company shall possess all of the assets of
Xxxxxxxx County including all of the issued and outstanding shares of capital
stock of the Bank and all of its rights, privileges, immunities, powers, and
franchises and shall be subject to and assume all of the duties and liabilities
of Xxxxxxxx County.
2.02. NAME, OFFICES, AND MANAGEMENT. The name of the Continuing Company
shall continue to be "First Merchants Corporation." Its principal banking
office shall be located at 000 X. Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx. The Board of
Directors of the Continuing Company, until such time as their successors have
been elected and qualified, shall consist of the current Board of Directors of
First Merchants. The officers of First Merchants immediately prior to the
Effective Date shall continue as the officers of the Continuing Company.
2.03. CAPITAL STRUCTURE. The amount of capital stock of the Continuing
Company shall not be less than the capital stock of First Merchants immediately
prior to the Effective Date increased by the amount of capital stock issued in
accordance with Section 3 hereof.
2.04. ARTICLES OF INCORPORATION AND BYLAWS. The Articles of Incorporation
and Bylaws of the Continuing Company shall be those
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of First Merchants immediately prior to the Effective Date until the same shall
be further amended as provided by law.
2.05. ASSETS AND LIABILITIES. The title to all assets, real estate and
other property owned by First Merchants and Xxxxxxxx County shall vest in the
Continuing Company without reversion or impairment. All liabilities of Xxxxxxxx
County shall be assumed by the Continuing Company.
SECTION 3
CONSIDERATION TO BE
DISTRIBUTED TO SHAREHOLDERS OF XXXXXXXX COUNTY
3.01. CONSIDERATION. Upon and by reason of the Merger becoming effective,
shareholders of Xxxxxxxx County of record on the Effective Date who have not
dissented to the Merger in accordance with Indiana Code Section 23-1-44, as
amended, shall be entitled to receive twenty and 53/100 (20.53) shares of First
Merchants common stock for each share of Xxxxxxxx County common stock held.
3.02. NO FRACTIONAL FIRST MERCHANTS COMMON SHARES. Certificates for
fractional shares of common stock of First Merchants shall not be issued in
respect of fractional interests arising from the exchange ratio. Each Xxxxxxxx
County shareholder who would otherwise have been entitled to a fraction of a
First Merchants share, upon surrender of all of his/her certificates
representing Xxxxxxxx County common shares, shall be paid in cash in an amount
equal to the fraction of the average of the closing price of First Merchants
common stock as quoted by NASDAQ for the five business days preceding the
Effective Date.
3.03. RECAPITALIZATION. If, between the date of this Agreement and the
Effective Date, First Merchants issues a stock dividend with respect to its
shares of common stock, combines, subdivides, or splits up its outstanding
shares or takes any similar recapitalization action, then the number of shares
of First Merchants common stock into which each outstanding Xxxxxxxx County
share will be converted under Section 3.01 hereof shall be adjusted so that each
Xxxxxxxx County shareholder shall receive such number of First Merchants shares
as represents the same percentage of outstanding shares of First Merchants
common stock at the Effective Date as would have been represented by the number
of shares such shareholder would have received if the recapitalization had not
occurred.
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3.04. DISTRIBUTION OF FIRST MERCHANTS COMMON STOCK AND CASH.
(a) Following the Effective Date, distribution of stock certificates
representing First Merchants common stock and cash payments for fractional
shares shall be made by First Merchants to each former shareholder of
Xxxxxxxx County within ten (10) days of such shareholder's delivery of
his/her certificates representing common stock of Xxxxxxxx County to the
conversion agent, First Merchants Bank (the "Conversion Agent"). Interest
shall not accrue or be payable with respect to any cash payments.
(b) Following the Effective Date, stock certificates representing
Xxxxxxxx County common stock shall be deemed to evidence only the right to
receive ownership of First Merchants common stock (for all corporate
purposes other than the payment of dividends) and cash for fractional
shares, as applicable. No dividends or other distributions otherwise
payable subsequent to the Effective Date on stock of First Merchants shall
be paid to any shareholder entitled to receive the same until such
shareholder has surrendered his/her certificates for Xxxxxxxx County common
stock to the Conversion Agent in exchange for certificates representing
First Merchants common stock and cash. Upon surrender, there shall be paid
to the recordholder of the new certificate(s) evidencing shares of First
Merchants common stock, the amount of all dividends and other
distributions, without interest thereon, withheld with respect to such
common stock.
(c) First Merchants shall be entitled to rely upon the stock transfer
books of Xxxxxxxx County to establish the persons entitled to receive cash
and shares of common stock of First Merchants, which books, in the absence
of actual knowledge by First Merchants of any adverse claim thereto, shall
be conclusive with respect to the ownership of such stock.
(d) With respect to any certificate for shares of Xxxxxxxx County
common stock which has been lost, stolen, or destroyed, First Merchants
shall be authorized to issue common stock to the registered owner of such
certificate upon receipt of an affidavit of lost stock certificate, in form
and substance satisfactory to First Merchants, and upon compliance by the
Xxxxxxxx County shareholder with all procedures historically required by
Xxxxxxxx County in connection with lost, stolen, or destroyed certificates.
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SECTION 4
DISSENTING SHAREHOLDERS
Shareholders of Xxxxxxxx County shall have the rights accorded to
dissenting shareholders under Indiana Code Section 23-1-44, as amended.
SECTION 5
REPRESENTATIONS AND
WARRANTIES OF XXXXXXXX COUNTY
Xxxxxxxx County represents and warrants to First Merchants with respect to
itself and the Bank as follows: (For the purposes of this Section, a
"Disclosure Letter" is defined as a letter referencing Section 5 of this
Agreement which shall be prepared and executed by an authorized executive
officer of Xxxxxxxx County and delivered to and initialed by an authorized
executive officer of First Merchants contemporaneous with the execution of this
Agreement.)
5.01. ORGANIZATION AND AUTHORITY. Xxxxxxxx County is a corporation duly
organized and validly existing under the laws of the State of Indiana, and Bank
is a state banking association duly organized and validly existing under the
laws of the State of Indiana. Xxxxxxxx County and Bank have the power and
authority (corporate and other) to conduct their respective businesses in the
manner and by the means utilized as of the date hereof. Xxxxxxxx County's only
subsidiary is Bank, and Bank has no subsidiaries. Bank is subject to primary
federal regulatory supervision and regulation by the Federal Deposit Insurance
Corporation.
5.02. AUTHORIZATION.
(a) Xxxxxxxx County has the corporate power and authority to enter
into this Agreement and to carry out its obligations hereunder. This
Agreement, when executed and delivered, will have been duly authorized and
will constitute a valid and binding obligation of Xxxxxxxx County,
enforceable in accordance with its terms except to the extent limited by
insolvency, reorganization, liquidation, readjustment of debt or other laws
of general application relating to or affecting the enforcement of
creditors' rights.
(b) Neither the execution of this Agreement, nor the consummation of
the transactions contemplated hereby, does or will (i) conflict with,
result in a breach of, or constitute
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a default under Xxxxxxxx County's Articles of Incorporation or By-Laws or,
to the best of its knowledge, any federal, foreign, state or local law,
statute, ordinance, rule, regulation or court or administrative order or
decree, or any note, bond, indenture, mortgage, security agreement,
contract, arrangement or commitment, to which Xxxxxxxx County or Bank is
subject or bound, the result of which would materially affect the business
or financial condition of Xxxxxxxx County or the Bank; (ii) result in the
creation of or give any person the right to create any lien, charge,
encumbrance, security interest, or any other rights of others or other
adverse interest upon any right, property or asset of Xxxxxxxx County or
Bank; (iii) terminate or give any person, corporation or entity, the right
to terminate, amend, abandon, or refuse to perform any note, bond,
indenture, mortgage, security agreement, contract, arrangement or
commitment to which Xxxxxxxx County or Bank is subject or bound; or (iv)
accelerate or modify, or give any party thereto the right to accelerate or
modify, the time within which, or the terms according to which, Xxxxxxxx
County is to perform any duties or obligations or receive any rights or
benefits under any note, bond, indenture, mortgage, security agreement,
contract, arrangement or commitment.
(c) Other than in connection or in compliance with the provisions of
the Bank Holding Company Act of 1956, federal and state securities laws and
applicable Indiana banking and corporate statutes, all as amended, and the
rules and regulations promulgated thereunder, no notice to, filing with,
authorization of, exemption by, or consent or approval of, any public body
or authority is necessary for the consummation by Xxxxxxxx County of the
transactions contemplated by this Agreement.
5.03. CAPITALIZATION.
(a) As of December 31, 1995, Xxxxxxxx County had 60,000 shares of
common stock authorized, no par value per share, 27,555 shares of which
were issued and outstanding. Such issued and outstanding shares of
Xxxxxxxx County common stock have been duly and validly authorized by all
necessary corporate action of Xxxxxxxx County, are validly issued, fully
paid and nonassessable and have not been issued in violation of any
preemptive rights of any shareholders. Xxxxxxxx County has no intention or
obligation to authorize or issue additional shares of its common stock.
Xxxxxxxx County has not authorized the issuance of any other class of
stock. On a consolidated basis as of December 31, 1995, Xxxxxxxx County
had total capital of $8,902,996, which consisted of common
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stock of $2,755,500, additional capital of $709,036, retained earnings of
$5,399,994, and unrealized gain of $38,466.
(b) As of December 31, 1995, Bank had 1,000 shares of common stock
authorized, $100.00 par value per share, all of which shares were issued
and outstanding to Xxxxxxxx County. Such issued and outstanding shares of
Bank common stock have been duly and validly authorized by all necessary
corporate action of Bank, are validly issued, fully paid and nonassessable,
and have not been issued in violation of any preemptive rights of any Bank
shareholders. All the issued and outstanding shares of Bank common stock
are owned by Xxxxxxxx County free and clear of all liens, pledges, charges,
claims, encumbrances, restrictions, security interests, options and
preemptive rights and of all other rights of any other person, corporation
or entity with respect thereto. As of December 31, 1995, Bank had total
capital of $8,906,739, which consisted of common stock of $100,000, capital
surplus of $2,500,000, undivided profits of $6,268,273, and unrealized gain
of $38,466.
(c) There are no options, commitments, calls, agreements,
understandings, arrangements or subscription rights regarding the issuance,
purchase or acquisition of capital stock, or any securities convertible
into or representing the right to purchase or otherwise receive the capital
stock or any debt securities, of Xxxxxxxx County or Bank by which Xxxxxxxx
County or Bank is or may become bound. Neither Xxxxxxxx County or Bank has
any outstanding contractual or other obligation to repurchase, redeem or
otherwise acquire any of its respective outstanding shares of capital
stock.
(d) Except as set forth in the Disclosure Letter, no person or entity
beneficially owns 5% or more of Xxxxxxxx County's outstanding shares of
common stock.
5.04. ORGANIZATIONAL DOCUMENTS. The respective Articles of Incorporation
or Association and By-Laws of Xxxxxxxx County and Bank have been delivered to
First Merchants and represent true, accurate and complete copies of such
corporate documents of Xxxxxxxx County and Bank in effect as of the date of this
Agreement.
5.05. COMPLIANCE WITH LAW. Neither Xxxxxxxx County nor Bank has engaged
in any activity nor taken or omitted to take any action which has resulted or,
to the knowledge of Xxxxxxxx County could result, in the violation of any local,
state, federal or foreign law, statute, rule, regulation or ordinance or of any
order, injunction, judgment or decree of any court or government agency or
Page 7
body, the violation of which could materially affect the business, prospects,
condition (financial or otherwise) or results of operations of Xxxxxxxx County
or Bank. Xxxxxxxx County and Bank possess all licenses, franchises, permits and
other authorizations necessary for the continued conduct of their respective
businesses without material interference or interruption and such licenses,
franchises, permits and authorizations shall be transferred to First Merchants
on the Effective Date without any restrictions or limitations thereon or the
need to obtain any consents of third parties. All agreements and understandings
with, and all orders and directives of, all regulatory agencies or government
authorities with respect to the business or operations of Xxxxxxxx County or
Bank, including all correspondence, communications and commitments related
thereto, are set forth in the Disclosure Letter. Bank has received no inquiries
from any regulatory agency or government authority relating to its compliance
with the Bank Secrecy Act, the Truth-in-Lending Act or the Community
Reinvestment Act or any laws with respect to the protection of the environment
or the rules and regulations promulgated thereunder.
5.06. ACCURACY OF STATEMENTS. Neither this Agreement nor any report,
statement, list, certificate or other information furnished or to be furnished
by Xxxxxxxx County or Bank to First Merchants in connection with this Agreement
or any of the transactions contemplated hereby (including, without limitation,
any information which has been or shall be supplied by Xxxxxxxx County or Bank
with respect to their businesses, operations and financial condition for
inclusion in the proxy statement and registration statement relating to the
Merger) contains or shall contain (in the case of information relating to the
proxy statement at the time it is mailed and for the registration statement at
the time it becomes effective) any untrue statement of a material fact or omits
or shall omit to state a material fact necessary to make the statements
contained herein or therein not misleading.
5.07. LITIGATION AND PENDING PROCEEDINGS. Except as set forth in the
Disclosure Letter, there are no material claims of any kind, nor any material
action, suits, proceedings, arbitrations or investigations pending or to the
knowledge of Xxxxxxxx County or Bank threatened in any court or before any
government agency or body, arbitration panel or otherwise (nor does Xxxxxxxx
County or Bank have any knowledge of a basis for any claim, action, suit,
proceeding, arbitration or investigation) against, by or materially adversely
affecting Xxxxxxxx County or Bank or their respective officers and/or directors,
businesses, prospects, conditions (financial or otherwise), results of
operations or assets, or which would prevent the performance of this Agreement
or declare the same unlawful or cause the rescission hereof. There are no
material uncured violations, or violations with respect to which material
refunds or restitutions may be required, cited in any compliance
Page 8
report to Xxxxxxxx County or Bank as a result of an examination by any
regulatory agency or body.
5.08. FINANCIAL STATEMENTS.
(a) Xxxxxxxx County's consolidated balance sheets as of the end of
the three fiscal years ended December 31, 1992, 1993 and 1994 and the nine
months ended September 30, 1995 and the related consolidated statements of
income, shareholders' equity and cash flows for the years or period then
ended (hereinafter collectively referred to as the "Financial Information")
present fairly the consolidated financial condition or position of Xxxxxxxx
County as of the respective dates thereof and the consolidated results of
operations of Xxxxxxxx County for the respective periods covered thereby
and have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis. All required regulatory reports
have been filed by Xxxxxxxx County and Bank with their respective primary
federal regulators during 1995, 1994, 1993 and 1992, are true, accurate and
complete and were prepared in conformity with generally accepted regulatory
accounting principles applied on a consistent basis.
(b) All loans reflected in the Financial Information and which have
been made, extended or acquired since September 30, 1995, (i) have been
made for good, valuable and adequate consideration in the ordinary course
of business; (ii) constitute the legal, valid and binding obligation of the
obligor and any guarantor named therein; (iii) are evidenced by notes,
instruments or other evidences of indebtedness which are true, genuine and
what they purport to be; and (iv) to the extent that Bank has a security
interest in collateral or a mortgage securing such loans, are secured by
perfected security interests or mortgages naming Bank as the secured party
or mortgagee.
5.09. ABSENCE OF CERTAIN CHANGES. Except for events and conditions
relating to the business environment in general or as set forth in the
Disclosure Letter, since September 30, 1995, no events or conditions of any
character, whether actual, threatened or contemplated, have occurred, or, to the
knowledge of Xxxxxxxx County, can reasonably be expected to occur, which
materially adversely affect Xxxxxxxx County's or Bank's business, prospects,
conditions (financial or otherwise), assets or results of operations or which
have caused, or can reasonably be expected to cause, Xxxxxxxx County's or Bank's
business to be conducted in a materially less profitable manner than prior to
September 30, 1995.
Page 9
5.10. ABSENCE OF UNDISCLOSED LIABILITIES. Neither Xxxxxxxx County nor
Bank is a party to any agreement, contract, obligation, commitment, arrangement,
liability, lease or license which individually exceeds $10,000 per year or which
may not be terminated within one year from the date of this Agreement, except as
set forth in the Disclosure Letter and except for unfunded loan commitments made
in the ordinary course of Bank's business consistent with past practices, nor to
the knowledge of Xxxxxxxx County, does there exist any circumstances resulting
from transactions effected or to be effected or events which have occurred or
may occur or from any action taken or omitted to be taken which could reasonably
be expected to result in any such agreement, contract, obligation, commitment,
arrangement, liability, lease or license.
5.11. TITLE TO ASSETS. Except as set forth in the Disclosure Letter,
Xxxxxxxx County and Bank have good and marketable title in fee simple absolute
to all real property (including, without limitation, all real property used as
bank holding company or bank premises and all other real estate owned) and
personal property reflected in the Financial Information as of September 30,
1995, good and marketable title to all other properties and assets which
Xxxxxxxx County or Bank purport to own, good and marketable title to or right to
use by terms of lease or contract all other property used in Xxxxxxxx County's
or Bank's business and good and marketable title to all property and assets
acquired since September 30, 1995, free and clear of all mortgages, liens,
pledges, restrictions, security interests, charges, claims or encumbrances of
any nature. All real property owned by Xxxxxxxx County or Bank is in compliance
with all applicable zoning laws and all laws, statutes, rules, regulations and
ordinances relating to the environment, pollution and the treatment, storage,
disposal, discharge or release of chemicals and hazardous or toxic substances or
wastes.
5.12. LOANS AND INVESTMENTS.
(a) Except as set forth in the Disclosure Letter, there is no loan of
Bank in excess of $10,000 that has been classified by bank regulatory
examiners as "Other Loans Specially Mentioned," "Substandard," "Doubtful"
or "Loss," nor is there any loan of Bank in excess of $10,000 that has been
identified by accountants or auditors (internal or external) as having a
significant risk of uncollectibility.
Bank's loan watch list and all loans in excess if $10,000 that Bank's
management has determined to be ninety (90) days or more past due with
respect to principal or interest or has placed on nonaccrual status are set
forth in the Disclosure Letter.
Page 10
(b) Each of the reserves and allowances for possible loan losses and
the carrying value for real estate owned which are shown on the Financial
Information is, in the opinion of Xxxxxxxx County and Bank, adequate in all
material respects under the requirements of generally accepted accounting
principles applied on a consistent basis to provide for possible losses on
loans outstanding and real estate owned as of the date of such Financial
Information.
(c) Except as set forth in the Disclosure Letter, none of the
investments reflected in the Financial Information and none of the
investments made by Xxxxxxxx County or Bank since September 30, 1995 is
subject to any restrictions, whether contractual or statutory, which
materially impairs the ability of Xxxxxxxx County or Bank to dispose freely
of such investment at any time. Except as set forth in the Disclosure
Letter, neither Xxxxxxxx County nor Bank are a party to any repurchase
agreements with respect to securities.
5.13. EMPLOYEE BENEFIT PLANS.
(a) The Disclosure Letter contains a list identifying each "employee
benefit plan," as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), which (i) is subject to any
provision of ERISA, and (ii) is maintained, administered or contributed to
by Xxxxxxxx County or Bank and covers any employee or former employee of
Xxxxxxxx County or Bank under which Xxxxxxxx County or Bank has any
liability. Copies of such plans (and, if applicable, related trust
agreements or insurance contracts) and all amendments thereto and written
interpretations thereof have been furnished to First Merchants together
with the three most recent annual reports prepared in connection with any
such plan and the current summary plan descriptions. Such plans are
hereinafter referred to individually as an "Employee Plan" and collectively
as the "Employee Plans." The Employee Plans which individually or
collectively would constitute an "employee pension benefit plan" as defined
in Section 3(2) of ERISA are identified in the list referred to above.
(b) The Employee Plans comply with and have been operated in
accordance with all applicable laws, regulations, rulings and other
requirements the breach or violation of which could materially affect
Xxxxxxxx County, Bank, or an Employee Plan. Each Employee Plan has been
administered in substantial conformance with such requirements and all
reports and information required with respect to each Employee Plan has
been timely given.
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(c) No "prohibited transaction," as defined in Section 406 of ERISA
or Section 4975 of the Code, for which no statutory or administrative
exemption exists, and no "reportable event," as defined in Section 4043(b)
of ERISA, has occurred with respect to any Employee Plan. Neither Xxxxxxxx
County or Bank has any liability to the Pension Benefit Guaranty
Corporation ("PBGC"), to the Internal Revenue Service ("IRS"), to the
Department of Labor ("DOL") or to an employee or Employee Plan beneficiary
under Section 502 of ERISA.
(d) No "fiduciary," as defined in Section (3)(21) of ERISA, of an
Employee Plan has failed to comply with the requirements of Section 404 of
ERISA.
(e) Each of the Employee Plans which is intended to be qualified
under Code Section 401(a) has been amended to comply in all material
respects with the applicable requirements of the Code, including the Tax
Reform Act of 1986, the Revenue Act of 1987, the Technical and
Miscellaneous Revenue Act of 1988, the Omnibus Budget Reconciliation Act of
1989, the Revenue Reconciliation Act of 1990, the Tax Extension Act of
1991, the Unemployment Compensation Amendments of 1992, the Omnibus Budget
Reconciliation Act of 1993, and the Retirement Protection Act of 1994 and
any rules, regulations or other requirements promulgated thereunder (the
"Acts"). In addition, each such Employee Plan has been and is being
operated in substantial conformance with the applicable provisions of ERISA
and the Code, as amended by the Acts. Except as set forth in the
Disclosure Letter, Xxxxxxxx County and/or Bank, as applicable, sought and
received favorable determination letters from the IRS within the applicable
remedial amendment periods under Code Section 401(b), and has furnished to
First Merchants copies of the most recent IRS determination letters with
respect to any such Employee Plan.
(f) Except as set forth in the Disclosure Letter, no Employee Plan
owns any security of Xxxxxxxx County or Bank.
(g) No Employee Plan has incurred an "accumulated funding
deficiency," as determined under Code Section 412 and ERISA Section 302.
(h) No Employee Plan has been terminated or incurred a partial
termination (either voluntarily or involuntarily).
(i) No claims against an Employee Plan, Xxxxxxxx County or Bank, with
respect to an Employee Plan, (other than normal benefit claims) have been
asserted or threatened.
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(j) There is no contract, agreement, plan or arrangement covering any
employee or former employee of Xxxxxxxx County or Bank that, individually
or collectively, could give rise to the payment of any amount that would
not be deductible by reason of Section 280G or Section 162(a)(1) of the
Code.
(k) No event has occurred that would cause the imposition of the tax
described in Code Section 4980B. All requirements of ERISA Section 601
have been met.
(l) The Disclosure Letter contains a list of each employment,
severance or other similar contract, arrangement or policy and each plan or
arrangement (written or oral) providing for insurance coverage (including
any self-insured arrangements), workers' compensation, disability benefits,
supplemental unemployment benefits, vacation benefits, retirement benefits
or deferred compensation, profit sharing, bonuses, stock options, stock
appreciation or other forms of incentive compensation or post-retirement
insurance, compensation or benefits which (i) is not an Employee Plan, (ii)
was entered into, maintained or contributed to, as the case may be, by
Xxxxxxxx County or Bank and (iii) covers any employee or former employee of
Xxxxxxxx County or Bank. Such contracts, plans and arrangements as are
described above, copies or descriptions of all of which have been furnished
previously to First Merchants, are hereinafter referred to collectively as
the "Benefit Arrangements." Each of the Benefit Arrangements has been
maintained in substantial compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and
regulations which are applicable to such Benefit Arrangements.
(m) Except as set forth in the Disclosure Letter, neither Xxxxxxxx
County nor Bank has any present or future liability in respect of
post-retirement health and medical benefits for former employees of
Xxxxxxxx County or Bank.
(n) Except as set forth in the Disclosure Letter, there has been no
amendment to, written interpretation or announcement (whether or not
written) by Xxxxxxxx County or Bank relating to, or change in employee
participation or coverage under, any Employee Plan or Benefit Arrangement
which would increase materially the expense of maintaining such Employee
Plans or Benefit Arrangements above the level of the expense incurred in
respect thereof for the fiscal year ended December 31, 1994.
(o) For purposes of this Section 5.13, references to Xxxxxxxx County
or Bank are deemed to include (i) all predecessors of Xxxxxxxx County or
Bank, (ii) any subsidiary
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of Xxxxxxxx County or Bank, (iii) all members of any controlled group (as
determined under Code Section 414(b) or (c)) that includes Xxxxxxxx County
or Bank, and (iv) all members of any affiliated service group (as
determined under Code Section 414(m) or (n)) that includes Xxxxxxxx County
or Bank.
5.14 OBLIGATIONS TO EMPLOYEES. Except as set forth in the Disclosure
Letter, all accrued obligations and liabilities of Xxxxxxxx County and Bank,
whether arising by operation of law, by contract or by past custom, for payments
to trust or other funds, to any government agency or body or to any individual
director, officer, employee or agent (or his heirs, legatees or legal
representative) with respect to unemployment compensation or social security
benefits and all pension, retirement, savings, stock purchase, stock bonus,
stock ownership, stock option, stock appreciation rights or profit sharing plan,
any employment, deferred compensation, consultant, bonus or collective
bargaining agreement or group insurance contract or other incentive, welfare or
employee benefit plan or agreement maintained by Xxxxxxxx County or Bank for
their current or former directors, officers, employees and agents have been and
are being paid to the extent required by law or by the plan or contract, and
adequate actuarial accruals and/or reserves for such payments have been and are
being made by Xxxxxxxx County or Bank in accordance with generally accepted
accounting and actuarial principles. All obligations and liabilities of
Xxxxxxxx County and Bank, whether arising by operation of law, by contract, or
by past custom, for all forms of compensation which are or may be payable to
their current or former directors, officers, employees or agents have been and
are being paid, and adequate accruals and/or reserves for payment therefor have
been and are being made in accordance with generally accepted accounting
principles. All accruals and reserves referred to in this Section 5.14, are
correctly and accurately reflected and accounted for in the books, statements
and records of Xxxxxxxx County and Bank.
5.15. TAXES, RETURNS AND REPORTS. Xxxxxxxx County and Bank have (a) duly
filed all federal, state, local and foreign tax returns of every type and kind
required to be filed as of the date hereof, and each return is true, complete
and accurate in all material respects; (b) paid in all materials respects all
taxes, assessments and other governmental charges due or claimed to be due upon
them or any of their income, properties or assets; and (c) not requested an
extension of time for any such payments (which extension is still in force).
Except for taxes not yet due and payable, the reserve for taxes on the Financial
Information is adequate to cover all of Xxxxxxxx County's and Bank's tax
liabilities (including, without limitation, income taxes and franchise fees)
that may become payable in future years with
Page 14
respect to any transactions consummated prior to December 31, 1994. Neither
Xxxxxxxx County nor Bank has or will have, any liability for taxes of any nature
for or with respect to the operation of their business, including the assets of
any subsidiary, from December 31, 1994 up to and including the Effective Date,
except to the extent reflected on their Financial Information or on financial
statements of Xxxxxxxx County or Bank subsequent to such date and as set forth
in the Disclosure Letter. Neither Xxxxxxxx County nor Bank is currently under
audit by any state or federal taxing authority. Except as set forth in the
Disclosure Letter, neither the federal, state, or local tax returns of Xxxxxxxx
County or Bank have been audited by any taxing authority during the past five
(5) years.
5.16. DEPOSIT INSURANCE. The deposits of Bank are insured by the Federal
Deposit Insurance Corporation ("FDIC") in accordance with the Federal Deposit
Insurance Act, and Bank has paid all premiums and assessments with respect to
such deposit insurance.
5.17. BROKER'S OR FINDER'S FEES. Except as set forth in the Disclosure
Letter, no agent, broker or other person acting on behalf of Xxxxxxxx County or
Bank or under any authority of Xxxxxxxx County or Bank is or shall be entitled
to any commission, broker's or finder's fee or any other form of compensation or
payment from any of the parties hereto, other than attorneys' or accountants'
fees, in connection with any of the transactions contemplated by this Agreement.
5.18. BRING DOWN OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties of Xxxxxxxx County and Bank contained in this Section 5 shall be
true, accurate and correct on and as of the Effective Date except as affected by
the transactions contemplated by and specified within the terms of this
Agreement.
5.19. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained in this Section 5 shall expire on the Effective Date,
and thereafter Xxxxxxxx County and Bank and all directors, officers and
employees of Xxxxxxxx County and Bank shall have no further liability with
respect thereto unless a court of competent jurisdiction should determine that
any misrepresentation or breach of a warranty was willfully or intentionally
caused either by action or inaction.
Page 15
SECTION 6
REPRESENTATIONS AND
WARRANTIES OF FIRST MERCHANTS
First Merchants hereby represents and warrants to Xxxxxxxx County as
follows:
6.01. ORGANIZATION AND QUALIFICATION. First Merchants is a corporation
organized and existing under the laws of the State of Indiana and has the
corporate power and authority to conduct its business in the manner and by the
means utilized as of the date hereof.
6.02. AUTHORIZATION.
(a) First Merchants has the corporate power and authority to enter
into this Agreement and to carry out its obligations hereunder subject to
certain required regulatory approvals. The Agreement, when executed and
delivered, will have been duly authorized and will constitute a valid and
binding obligation of First Merchants, enforceable in accordance with its
terms, except to the extent limited by insolvency, reorganization,
liquidation, readjustment of debt, or other laws of general application
relating to or affecting the enforcement of creditor's rights.
(b) Neither the execution of this Agreement, nor the consummation of
the transactions contemplated hereby, does or will (i) conflict with,
result in a breach of, or constitute a default under First Merchant's
Articles of Incorporation or By-laws or, to the best of its knowledge, any
federal, foreign, state, or local law, statute, ordinance, rule,
regulation, or court or administrative order or decree, or any note, bond,
indenture, mortgage, security agreement, contract, arrangement, or
commitment, to which First Merchants is subject or bound, the result of
which would materially affect the business or financial condition of First
Merchants; (ii) result in the creation of or give any person the right to
create any lien, charge, claim, encumbrance, security interest, or any
other rights of others or other adverse interest upon any right, property
or asset of First Merchants; (iii) terminate or give any person,
corporation or entity the right to terminate, amend, abandon, or refuse to
perform any note, bond, indenture, mortgage, security agreement, contract,
arrangement, or commitment to which First Merchants is a party or by which
First Merchant is subject or bound; or (iv) accelerate or modify, or give
any party thereto the right to accelerate or modify, the time within which,
or the terms according to which, First Merchants is to perform any duties
Page 16
or obligations or receive any rights or benefits under any note, bond,
indenture, mortgage, security agreement, contract, arrangement, or
commitment.
(c) Other than in connection or in compliance with the provisions of
the Bank Holding Company Act of 1956, federal and state securities laws,
and applicable Indiana banking and corporate statutes, all as amended, and
the rules and regulations promulgated thereunder, no notice to, filing
with, authorization of, exemption by, or consent or approval of, any public
body or authority is necessary for the consummation by First Merchants of
the transactions contemplated by this Agreement.
6.03. CAPITALIZATION.
(a) At December 31, 1995 First Merchants had 20,000,000 authorized,
no par value, of which 5,053,901 shares were issued and outstanding. The
5,053,901 shares of common stock are validly issued, fully paid and
nonassessable.
(b) First Merchants has 500,000 shares of Preferred Stock authorized,
no par value, no shares of which have been issued and no commitments exist
to issue any of such shares.
(c) Other than in connection with the proposed merger of Union
National Bancorp with and into First Merchants and pursuant to First
Merchant's Dividend Reinvestment and Stock Purchase Plan, Stock Option
Plans and Employee Stock Purchase Plans, there are no options, commitments,
calls or agreements outstanding regarding the issuance of capital stock or
any securities representing the right to purchase or otherwise receive such
stock, or any debt securities of First Merchants. First Merchants does not
have any outstanding contractual obligation to repurchase, redeem, or
otherwise acquire any of its outstanding shares of capital stock.
(d) The shares of First Merchants' common stock to be issued pursuant
to the Merger will be fully paid, validly issued and nonassessable.
6.04. ORGANIZATIONAL DOCUMENTS. The Articles of Incorporation and By-laws
of First Merchants in force as of the date hereof, have been delivered to
Xxxxxxxx County. The documents delivered by it represent complete and accurate
copies of the corporate documents of First Merchants in effect as of the date of
this Agreement.
6.05. ACCURACY OF STATEMENTS. Neither this Agreement nor any report,
statement, list, certificate or other information furnished
Page 17
or to be furnished by First Merchants to Xxxxxxxx County in connection with this
Agreement or any of the transactions contemplated hereby (including, without
limitation, any information which has been or shall be supplied by First
Merchants with respect to its business, operations and financial condition for
inclusion in the proxy statement and registration statement relating to the
Merger) contains or shall contain (in the case of information relating to the
proxy statement at the time it is mailed and to the registration statement at
the time it become effective) any untrue statement of a material fact or omits
or shall omit to state a material fact necessary to make the statements
contained herein or therein, in light of the circumstances in which they are
made, not misleading.
6.06. COMPLIANCE WITH LAW. First Merchants has not engaged in any
activity nor taken or omitted to take any action which has resulted or, to the
knowledge of First Merchants, could result in the violation of any local, state,
federal or foreign law, statute, rule, regulation or ordinance or of any order,
injunction, judgment or decree of any court or government agency or body, the
violation of which could materially adversely affect the business, prospects,
condition (financial or otherwise) or results of operations of First Merchants.
First Merchants possesses all licenses, franchises, permits and other
authorizations necessary for the continued conduct of its business without
material interference or interruption. There are no agreements or
understandings with, nor any orders of directives of, any regulatory agencies or
government authorities, which would have a material adverse effect on the
consolidated financial position of First Merchants. First Merchants has
received no written inquiries from any regulatory agency or government authority
relating to its compliance with the Bank Secrecy Act, the Truth-in-Lending Act
or the Community Reinvestment Act.
6.07. FINANCIAL STATEMENTS. First Merchants consolidated balance sheets
as of the end of the three (3) fiscal years ended December 31, 1992, 1993 and
1994 and the nine months ended September 30, 1995 and the related consolidated
statements of income, shareholders' equity and cash flows for the years or
period then ended present fairly the consolidated financial condition or
position of First Merchants as of the respective dates thereof and the
consolidated results of operations of First Merchants for the respective periods
covered thereby and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis. All required regulatory
reports have been filed by First Merchants with its primary federal regulator
during 1995, 1994, 1993 and 1992, are true, accurate and complete and have been
prepared in conformity with generally accepted regulatory accounting principles
applied on a consistent basis.
Page 18
6.08. ABSENCE OF CERTAIN CHANGES. Except for events and conditions
relating to the business environment in general, since September 30, 1995, no
events or conditions of any character, whether actual, threatened or
contemplated, have occurred, or can reasonably be expected to occur, which
materially adversely affect First Merchants consolidated business, prospects,
conditions (financial or otherwise), assets or results of operations or which
have caused, or can reasonably be expected to cause, First Merchants business,
on a consolidated basis, to be conducted in a materially less profitable manner
than prior to September 30, 1995.
6.09. FIRST MERCHANTS SECURITIES AND EXCHANGE COMMISSION FILINGS. First
Merchants has filed all reports and other documents required to be filed by it
under the Securities Exchange Act of 1934 and the Securities Act of 1933,
including First Merchants' Annual Report on Form 10-K for the year ended
December 31, 1994, and Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995, copies of which have previously been delivered to Xxxxxxxx
County.
6.10. BRING DOWN OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties of First Merchants contained in this Section 6 shall be true,
accurate and correct on and as of the Effective Date except as affected by the
transactions contemplated by and specified within the terms of this Agreement.
6.11. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained in this Section 6 shall expire on the Effective Date,
and thereafter First Merchants and all directors, officers and employees of
First Merchants shall have no further liability with respect thereto unless a
court of competent jurisdiction should determine that any misrepresentation or
breach of a warranty was willfully or intentionally caused either by action or
inaction.
XXXXXXX 0
XXXXXXXXX XX XXXXXXXX XXXXXX
Xxxxxxxx Xxxxxx covenants and agrees with First Merchants, and covenants
and agrees to cause Bank to act, as follows:
7.01. SHAREHOLDER APPROVAL. Xxxxxxxx County shall submit this Agreement
to its shareholders for approval at a meeting to be called and held in
accordance with applicable law and the Articles of Incorporation and By-Laws of
Xxxxxxxx County at the earliest possible reasonable date, and the Board of
Directors of Xxxxxxxx County shall subject to their fiduciary duties recommend
to the
Page 19
shareholders of Xxxxxxxx County that such shareholders approve this Agreement.
7.02. OTHER APPROVALS. Xxxxxxxx County and Bank shall proceed
expeditiously, cooperate fully and use their best efforts to procure upon
reasonable terms and conditions all consents, authorizations, approvals,
registrations and certificates, to complete all filings and applications and to
satisfy all other requirements prescribed by law which are necessary for
consummation of the Merger on the terms and conditions provided in this
Agreement at the earliest possible reasonable date.
7.03. CONDUCT OF BUSINESS.
(a) On and after the date of this Agreement and until the Effective
Date or until this Agreement shall be terminated as herein provided,
neither Xxxxxxxx County nor Bank shall, without the prior written consent
of First Merchants, (i) make any material changes in their capital
structure; (ii) authorize a class of stock or issue, or authorize the
issuance of, stock other than or in addition to the outstanding stock as
set forth in Section 5.03 hereof; (iii) declare, distribute or pay any
dividends on their shares of common stock, or authorize a stock split, or
make any other distribution to their shareholders, except for (a) the
payment by Xxxxxxxx County prior to the Effective Date of quarterly cash
dividends on its common stock in April, 1996 (for the first fiscal quarter)
and July, 1996 (for the second fiscal quarter), which dividends shall not
exceed One and 50/100 Dollars ($1.50) and One and 50/100 Dollars ($1.50)
per share, respectively, provided that Xxxxxxxx County shall not pay any
such dividend with respect to any fiscal quarter in which the Merger shall
become effective and in which Xxxxxxxx County shareholders will become
entitled to receive dividends on the shares of First Merchants into which
the shares of Xxxxxxxx County have been converted, and (b) the payment by
the Bank to Xxxxxxxx County of dividends to pay Xxxxxxxx County's expenses
of operations and its business and payment of fees and expenses incurred in
connection with the transactions contemplated by this Agreement; (iv)
merge, combine or consolidate with or sell their assets or any of their
securities to any other person, corporation or entity, effect a share
exchange or enter into any other transaction not in the ordinary course of
business; (v) incur any liability or obligation, make any commitment,
payment or disbursement, enter into any contract, agreement, understanding
or arrangement or engage in any transaction, or acquire or dispose of any
property or asset having a fair market value in excess of $10,000.00
(except for personal or real property acquired or disposed of in connection
with foreclosures on mortgages or enforcement of
Page 20
security interests and loans made or sold by Bank in the ordinary course of
business); (vi) subject any of their properties or assets to a mortgage,
lien, claim, charge, option, restriction, security interest or encumbrance;
(vii) promote or increase or decrease the rate of compensation (except for
promotions and non-material increases in the ordinary course of business
and in accordance with past practices) or enter into any agreement to
promote or increase or decrease the rate of compensation of any director,
officer or employee of Xxxxxxxx County or Bank; (viii) execute, create,
institute, modify or amend any pension, retirement, savings, stock
purchase, stock bonus, stock ownership, stock option, stock appreciation or
depreciation right or profit sharing plans, any employment, deferred
compensation, consultant, bonus or collective bargaining agreement, group
insurance contract or other incentive, welfare or employee benefit plan or
agreement for current or former directors, officers of employees of
Xxxxxxxx County or Bank, change the level of benefits or payments under any
of the foregoing or increase or decrease any severance or termination of
pay benefits or any other fringe or employee benefits other than as
required by law or regulatory authorities; (ix) amend their Articles of
Incorporation or By-Laws from those in effect on the date of this
Agreement; (x) modify, amend or institute new employment policies or
practices, or enter into, renew or extend any employment or severance
agreements with respect to any present or former Xxxxxxxx County or Bank
directors, officers or employees; (xi) give, dispose, sell, convey, assign,
hypothecate, pledge, encumber or otherwise transfer or grant a security
interest in any common stock of Bank; and (xii) fail to make additions to
Bank's reserve for loan, losses, or any other reserve account, in the
ordinary course of business and in accordance with sound banking practices.
(b) Xxxxxxxx County and Bank shall maintain, or cause to be
maintained, in full force and effect insurance on its properties and
operations and fidelity coverage on its directors, officers and employees
in such amounts and with regard to such liabilities and hazards as
customarily are maintained by other companies operating similar businesses.
(c) Xxxxxxxx County and Bank shall continue to give to First
Merchants and its employees, accountants, attorneys and other authorized
representatives reasonable access during regular business hours and other
reasonable times to all their premises, properties, statements, books and
records.
7.04. PRESERVATION OF BUSINESS. On and after the date of this Agreement
and until the Effective Date or until this Agreement is terminated as herein
provided. Xxxxxxxx County and Bank each
Page 21
shall (a) carry on their business diligently, substantially in the same manner
as heretofore conducted, and in the ordinary course of business; (b) use their
best efforts to preserve their business organizations intact, to keep their
present officers and employees and to preserve their present relationship with
customers and others having business dealings with them; and (c) not do or fail
to do anything which will cause a material breach of, or material default in,
any contract, agreement, commitment, obligation, understanding, arrangement,
lease or license to which they are a party or by which they are or may be
subject or bound.
7.05. OTHER NEGOTIATIONS. Except with the prior written approval of First
Merchants, on and after the date of this Agreement and until the Effective Date,
Xxxxxxxx County and Bank shall not, and shall not permit or authorize their
respective directors, officers, employees, agents or representatives to,
directly or indirectly, initiate, solicit, encourage, or engage in discussions
or negotiations with, or provide information to, any corporation, association,
partnership, person or other entity or group concerning any merger,
consolidation, share exchange, combination, purchase or sale of substantial
assets, sale of shares of capital stock (or securities convertible or
exchangeable into or otherwise evidencing, or any agreement or instrument
evidencing the right to acquire, capital stock), tender offer, acquisition of
control of Xxxxxxxx County or Bank or similar transaction involving Xxxxxxxx
County or Bank (all such transactions hereinafter referred to as "Acquisition
Transactions"). Xxxxxxxx County and Bank shall promptly communicate to First
Merchants the terms of any proposal, written or oral, which either may receive
with respect to an Acquisition Transaction and any request by or indication of
interest on the part of any third party with respect to initiation of any
Acquisition Transaction or discussion with respect thereto.
7.06. RESTRICTIONS REGARDING AFFILIATES. Xxxxxxxx County shall, within 30
days after the date of this Agreement and promptly thereafter until the
Effective Date to reflect any changes, provide First Merchants with a list
identifying each person who may be deemed to be an "affiliate" of Xxxxxxxx
County for purposes of Rule 145 under the Securities Act of 1933, as amended
("1933 Act"). Each director, executive officer and other person who is an
"affiliate" of Xxxxxxxx County for purposes of the 1933 Act shall deliver to
First Merchants on or prior to the Effective Date hereunder a written agreement,
in form and substance satisfactory to counsel to First Merchants, providing that
such person will not sell, pledge, transfer, dispose of or otherwise reduce his
market risk with respect to shares of First Merchants common stock to be
received by such person pursuant to this Agreement (a) during the period 30 days
prior to the Effective Date, (b) until such time as financial results covering
at least 30 days of combined operations of First Merchants and Xxxxxxxx County
have been published within
Page 22
the meaning of Section 201.01 of the Securities and Exchange Commission's
Codification of Financial Reporting Policies, and (c) unless such sales are
pursuant to an effective registration statement under the 1933 Act or pursuant
to Rule 145 of the Securities and Exchange Commission or another exemption from
the 0000 Xxx.
7.07. PRESS RELEASE. Neither Xxxxxxxx County or Bank shall issue any
press releases or make any other public announcements or disclosures relating to
the Merger without the prior approval of First Merchants.
7.08. DISCLOSURE LETTER UPDATE. Xxxxxxxx County shall promptly
supplement, amend and update monthly and as of the Effective Date the Disclosure
Letter with respect to any matters hereafter arising which, if in existence or
having occurred as of the date of this Agreement, would have been required to be
set forth or described in the Disclosure Letter.
SECTION 8
COVENANTS OF FIRST MERCHANTS
First Merchants covenants and agrees with Xxxxxxxx County as follows:
8.01. APPROVALS. First Merchants shall proceed expeditiously, cooperate
fully and use its best efforts to procure upon reasonable terms and conditions
all consents, authorizations, approvals, registrations and certificates, to
complete all filings and applications and to satisfy all other requirements
prescribed by law which are necessary for consummation of the Merger on the
terms and conditions provided in this Agreement. First Merchants shall provide
Xxxxxxxx County with copies of proposed regulatory filings in connection with
the Merger and afford Xxxxxxxx County the opportunity to offer comment on the
filings before filing. The approval of First Merchants shareholders of the
transactions contemplated by this Agreement is not required.
8.02. EMPLOYEE BENEFIT PLANS. Within one (1) year following the Effective
Date, First Merchants will permit Bank employees to participate in any
tax-qualified retirement plan First Merchants maintains for its employees,
provided that such an employee meets the applicable participation requirements,
in lieu of the Bank's current tax-qualified retirement plan. Until that time,
the Bank's current tax-qualified retirement plan will be maintained at the same
level, with respect to benefit accruals, provided for on the Effective Date.
Following the Effective Date, Bank employees will otherwise receive employee
benefits that in the aggregate are
Page 23
substantially comparable to the employee benefits provided to those employees by
Xxxxxxxx County or the Bank on the Effective Date. For purposes of determining
a Xxxxxxxx County or Bank employee's eligibility and vesting service under a
First Merchant's employee benefit plan that the employee is permitted to enter,
service with Xxxxxxxx County or Bank will be treated as service with First
Merchants; provided, however, that service with Xxxxxxxx County or Bank will not
be treated as service with First Merchants for purposes of benefit accrual.
8.03. FIRST MERCHANTS BOARD OF DIRECTORS. In connection with the first
annual meeting of the shareholders of First Merchants following the Effective
Date, First Merchants shall cause all necessary action to be taken to cause the
current Chairman of the Board of the Bank, Xxxxxxx Xxxxxxxxxx, to be nominated
for election as a member of the First Merchants' Board of Directors for a three
(3)-year term.
8.04. PRESS RELEASE. Except as required by law, First Merchants shall not
issue any press release to any national wire service relating solely to the
Merger without the prior approval of Xxxxxxxx County.
8.05. CONFIDENTIALITY. First Merchants shall, and shall use its best
efforts to cause its officers, employees, and authorized representatives to,
hold in strict confidence all confidential data and information obtained by it
from Xxxxxxxx County or Bank, unless such information (i) was already known to
First Merchants, (ii) becomes available to First Merchants from other sources,
(iii) is independently developed by First Merchants, (iv) is disclosed outside
of First Merchants with and in accordance with the terms of prior written
approval of Xxxxxxxx County or Bank , or (v) is or becomes readily ascertainable
from public or published information or trade sources or public disclosure of
such information is required by law or requested by a court or other
governmental agency, commission, or regulatory body. First Merchants further
agrees that in the event the Agreement is terminated, it will return to Xxxxxxxx
County all information obtained by First Merchants regarding Xxxxxxxx County or
Bank, including all copies made of such information by First Merchants.
8.06. COVENANTS REGARDING THE BANK. Upon consummation of the Merger, the
Bank shall be a bank organized under the laws of the State of Indiana and the
officers and directors of the Bank in office immediately prior to the
consummation of the Merger shall be the officers and directors of the Bank at
the Effective Date subject to the provisions of the Bank's Articles of
Incorporation and By-Laws. The Bank directors will be subject to First
Merchants' policy of mandatory retirement at age seventy (70); provided,
however, the policy of mandatory retirement will not
Page 24
apply to any of the Bank's current directors until twelve (12) months after the
Effective Date. First Merchants intends to continue to operate the Bank as an
operating subsidiary of First Merchants under the name "The Xxxxxxxx County
Bank."
SECTION 9
CONDITIONS PRECEDENT TO THE MERGER
The obligation of each of the parties hereto to consummate the transaction
contemplated by this Agreement is subject to the satisfaction and fulfillment of
each of the following conditions on or prior to the Effective Date:
9.01. SHAREHOLDER APPROVAL. The shareholders of Xxxxxxxx County shall
have approved, ratified and confirmed this Agreement as required by applicable
law.
9.02. REGISTRATION STATEMENT EFFECTIVE. First Merchants shall have
registered its shares of common stock to be issued to shareholders of Xxxxxxxx
County in accordance with this Agreement with the Securities and Exchange
Commission pursuant to the 1933 Act, and all state securities and "blue sky"
approvals and authorizations required to offer and sell such shares shall have
been received by First Merchants. The registration statement with respect
thereto shall have been declared effective by the Securities and Exchange
Commission and no stop order shall have been issued or threatened.
9.03. TAX OPINION. The parties shall have obtained an opinion of counsel
which shall be in form and content satisfactory to counsel for all parties
hereto, to the effect that the Merger effected pursuant to this Agreement shall
constitute a tax-free transaction (except to the extent cash is received) to
each party hereto and to the shareholders of each party. Such opinion shall be
based upon factual representations received by such counsel from the parties,
which representations may take the form of written certifications.
9.04. AFFILIATE AGREEMENTS. First Merchants shall have obtained (a) from
Xxxxxxxx County, a list identifying each affiliate of Xxxxxxxx County and (b)
from each affiliate of Xxxxxxxx County, the agreements contemplated by Section
7.06 hereof.
9.05. REGULATORY APPROVALS. The Board of Governors of the Federal Reserve
System and the Indiana Department of Financial Institutions shall have
authorized and approved the Merger and the transactions related thereto. In
addition, all appropriate orders,
Page 25
consents, approvals and clearances from all other regulatory agencies and
governmental authorities whose orders, consents, approvals or clearances are
required by law for consummation of the transactions contemplated by this
Agreement shall have been obtained.
9.06. OFFICER'S CERTIFICATE. First Merchants and Xxxxxxxx County shall
have delivered to each other a certificate signed by their Chairman or President
and their Secretary, dated the Effective Date, certifying that (a) all the
representations and warranties of their respective corporations are true,
accurate and correct on and as of the Effective Date; (b) all the covenants of
their respective corporations have been complied with from the date of the
Agreement through and as of the Effective Date; and (c) their respective
corporations have satisfied and fully complied with all conditions necessary to
make this Agreement effective as to them.
9.07. FAIRNESS OPINION. Xxxxxxxx County shall have obtained an opinion
from an investment banker of its choosing to the effect that the terms of the
Merger, is fair to the shareholders of Xxxxxxxx County from a financial
viewpoint. Such opinion shall be (a) in form and substance reasonably
satisfactory to Xxxxxxxx County, (b) dated as of a date not later than the
mailing date of the Proxy Statement relating to the Merger and (c) included in
the Proxy Statement.
9.08. POOLING OF INTERESTS. First Merchants shall have obtained from its
independent accountants, Geo. S. Olive & Co. LLC, a letter stating that, based
upon their review of such documents and information which they deemed relevant,
such firm is currently unaware of any reason why the Merger cannot be accounted
for as a "pooling of interests."
SECTION 10
TERMINATION OF MERGER
10.01. MANNER OF TERMINATION. This Agreement and the transactions
contemplated hereby may be terminated at any time prior to the Effective Date by
written notice delivered by First Merchants to Xxxxxxxx County or by Xxxxxxxx
County to First Merchants:
(a) By Xxxxxxxx County or First Merchants, if there has been a
material misrepresentation, a breach of warranty or a failure to comply
with any covenant on the part of any party in the representation,
warranties, and covenants set forth
Page 26
herein; provided the party in default shall have no right to terminate for
its own default;
(b) By Xxxxxxxx County or First Merchants, if it shall determine in
its sole discretion that the transactions contemplated by this Agreement
have become inadvisable or impracticable by reason of commencement or
threat of material litigation or proceedings against any of the parties;
(c) By Xxxxxxxx County or First Merchants, if the financial
condition, business, assets, or results of operations of the other party
shall have been materially and adversely changed from that in existence at
September 30, 1995;
(d) By Xxxxxxxx County or First Merchants, if the transaction
contemplated herein has not been consummated by September 30, 1996;
(e) By First Merchants if any of the items, events or information set
forth in any update to the Disclosure Letter has had or may have a material
adverse effect on the financial condition, results of operations, business,
or prospects of Xxxxxxxx County or Bank;
(f) By First Merchants or Xxxxxxxx County if the Merger will not
constitute a tax-free reorganization under the Code; or
(g) By First Merchants if the Merger cannot be accounted for as a
"pooling of interests."
10.02. EFFECT OF TERMINATION. Upon termination by written notice, as
provided in this Section, this Agreement shall be void and of no further force
or effect and there shall be no obligation on the part of Xxxxxxxx County or
First Merchants or their respective officers, directors, employees, agents, or
shareholders, except for payment of their respective expenses and First
Merchants obligations under Section 8.05.
SECTION 11
EFFECTIVE DATE OF MERGER
Subject to the terms and upon satisfaction of all requirements of law and
the conditions specified in this Agreement, the Merger shall become effective at
the close of business on the day specified in the Articles of Merger of Xxxxxxxx
County with and into First Merchants as filed with the Secretary of State of
Page 27
Indiana ("Effective Date"). The Effective Date shall occur no later than the
last business day of the month in which that thirty (30) day period following
the last approval of the Merger by a federal regulatory agency or governmental
authority expires.
SECTION 12
CLOSING
12.01. CLOSING DATE AND PLACE. The closing of the Merger ("Closing")
shall take place at the main office of First Merchants on the Effective Date.
12.02. ARTICLES OF MERGER. Subject to the provisions of this Agreement,
on the Effective Date, the Articles of Merger shall be duly filed with the
Secretary of State of the State of Indiana.
12.03. OPINIONS OF COUNSEL. At the Closing, Xxxxxxxx County shall deliver
an opinion of its counsel, Xxxx & Haviza, to First Merchants, and First
Merchants shall deliver an opinion of its counsel, Xxxxxxx Xxxxxxx Xxxxx &
Xxxxxxx, to Xxxxxxxx County, dated as of the date of the Closing and
substantially in the form set forth in Exhibit A and Exhibit B, respectively,
attached hereto.
SECTION 13
MISCELLANEOUS
13.01. EFFECTIVE AGREEMENT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, but none of the provisions thereof shall inure to the benefit
of any other person, firm, or corporation whomsoever. Neither this Agreement
nor any of the rights, interests, or obligations hereunder shall be assigned or
transferred by either party hereto without the prior written consent of the
other party.
13.02. WAIVER; AMENDMENT.
(a) First Merchants and Xxxxxxxx County may, by an instrument in
writing executed in the same manner as this Agreement: (i) extend the time
for the performance of any of the covenants or agreements of the other
party under this Agreement; (ii) waive any inaccuracies in the
representations or warranties of the other party contained in this
Agreement or in any document delivered pursuant hereto or thereto; (iii)
waive the performance by the other party of any of the covenants or
agreements to be performed by it or them under
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this Agreement; or (iv) waive the satisfaction or fulfillment of any
condition the nonsatisfaction or nonfulfillment of which is a condition to
the right of the party so waiving to terminate this Agreement. The waiver
by any party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any other or subsequent breach
hereunder.
(b) Notwithstanding approval by the shareholders of Xxxxxxxx County,
this Agreement may be amended, modified, or supplemented by the written
agreement of Xxxxxxxx County and First Merchants without further approval
of such shareholders, except that no such amendment, modification, or
supplement shall result in a decrease in the consideration specified in
Section 3 hereof or shall materially adversely affect the rights of
shareholders of Xxxxxxxx County without the further approval of such
shareholders.
13.03. NOTICES. Any notice required or permitted by this Agreement shall
be deemed to have been duly given if delivered in person, receipted for or sent
by certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to First Merchants: With a copy to:
000 X. Xxxxxxx Xxxxxx Xxxxxxx Xxxxxxx Xxxxx & Xxxxxxx
Xxx 000 0000 Xxxxxx Xxxxx
Xxxxxx, XX 00000 00 Xxxx Xxxxxx Xxxxxx
Xxxx: Xxxxxx X. Xxxxxxxx, Indianapolis, Indiana 46204-2982
President Attn: Xxxxx X. Xxxxxxxx, Esq.
If to Xxxxxxxx County: With a copy to:
000 Xxxx Xxxxxxxxxx Xx. Xxxx & Haviza
Xxxxxxxxxx, XX 00000 000 Xxxxx Xxxx Xxxxxx
Attn: Xxx Xxxxxx, Xxxxxxxxxx, XX 00000
Chairman Attn: Xxxx X. Xxxx, Esq.
or such substituted address as any of them have given to the other in writing.
13.04. HEADINGS. The headings in this Agreement have been inserted solely
for the ease of reference and should not be considered in the interpretation or
construction of this Agreement.
13.05. SEVERABILITY. In case any one or more of the provisions contained
herein shall, for any reason, be held to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect any other
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provision of this Agreement, but this Agreement shall be construed as if such
invalid, illegal, or unenforceable provision or provisions had never been
contained herein.
13.06. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute one and the same instrument.
13.07. GOVERNING LAW. This Agreement is executed in and shall be
construed in accordance with the laws of the State of Indiana.
13.08. ENTIRE AGREEMENT. This Agreement supersedes any other agreement,
whether oral or written, between First Merchants and Xxxxxxxx County relating to
the matters contemplated hereby, and constitutes the entire agreement between
the parties hereto.
13.09. EXPENSES. First Merchants and Xxxxxxxx County shall each pay their
own expenses incidental to the transactions contemplated hereby. It is
understood that the cost of the fairness opinion referenced in Section 9.07
shall be borne by Xxxxxxxx County whether or not the Merger is consummated.
IN WITNESS WHEREOF, First Merchants and Xxxxxxxx County have made and
entered into this Agreement as of the day and year first above written and have
caused this Agreement to be executed and attested by their duly authorized
officers.
FIRST MERCHANTS CORPORATION
ATTEST:
/S/ Xxxxxx X. Xxxxxx By /S/ Xxxxxx X. Xxxxxxxx
----------------------------- -----------------------------
Xxxxxx X. Xxxxxx, Secretary Xxxxxx X. Xxxxxxxx, President
XXXXXXXX COUNTY BANCORP
ATTEST:
/S/ Xxxxxxx X. Xxxx By /S/ Xxx Xxxxxx
----------------------------- -----------------------------
Xxxxxxx Xxxx, Secretary Xxx Xxxxxx, Chairman
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