Execution Copy
STOCK OPTION AND TRIGGER PAYMENT AGREEMENT (the "Agreement"),
dated November 13, 1996, between OSB Financial Corp., a Wisconsin
corporation ("Issuer"), and FCB Financial Corp., a Wisconsin corporation
("Grantee").
W I T N E S S E T H:
WHEREAS, Grantee and Issuer have entered into an Agreement and
Plan of Merger of even date herewith (the "Merger Agreement"), which
agreement has been executed by the parties hereto immediately prior to
this Stock Option and Trigger Agreement; and
WHEREAS, as a condition to Grantee's entering into the Merger
Agreement and in consideration therefor, Issuer has agreed to grant
Grantee the Option (as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein and in the Merger Agreement, the
parties hereto agree as follows:
1. (a) Issuer hereby grants to Grantee an unconditional,
irrevocable option (the "Option") to purchase, subject to the terms
hereof, up to 230,866 fully paid and nonassessable (except as otherwise
provided by Section 180.0622(2)(b) of the Wisconsin Business Corporation
Law) shares (the "Option Shares") of Issuer's Common Stock, par value
$0.01 per share ("Issuer Common Stock"), at a price of $24.375 per share
(the "Option Price"); provided, however, that in no event shall the number
of shares of Issuer Common Stock for which this Option is exercisable
exceed 19.9% of the issued and outstanding shares of Issuer Common Stock
without giving effect to any shares subject to or issued pursuant to the
Option. The number of shares of Issuer Common Stock that may be received
upon the exercise of the Option and the Option Price are subject to
adjustment as herein set forth.
(b) In the event that any additional shares of Issuer Common
Stock are either (i) issued or otherwise become outstanding after the date
of this Agreement (other than pursuant to this Agreement) or (ii)
redeemed, repurchased, retired or otherwise cease to be outstanding after
the date of this Agreement (such event a "Change in Shares Outstanding
Event"), the number of shares of Issuer Common Stock subject to the Option
shall be increased or decreased, as appropriate, so that, after such
Change in Shares Outstanding Event, such number equals 19.9% of the number
of shares of Issuer Common Stock then issued and outstanding without
giving effect to any shares subject or issued pursuant to the Option.
Nothing contained in this Section 1(b) or elsewhere in this Agreement
shall be deemed to authorize Issuer to issue or redeem, repurchase, or
retire shares of Issuer Common Stock or to authorize either the Issuer or
the Grantee otherwise to breach any provision of the Merger Agreement.
(c) The Option Price shall be payable, at the option of the
Grantee, as follows:
(i) in cash, or
(ii) subject to the receipt of all approvals of any
Governmental Entity required for the Issuer to acquire, and Grantee to
issue, the Grantee Shares (as defined below) from Grantee, in shares of
common stock, $0.01 par value, of Grantee ("Grantee Shares"),
in either case in accordance with Section 4 hereof.
(d) As used in this Agreement, the "Fair Market Value" of any
share shall be the average of the last sales price for such share on The
Nasdaq Stock Market during the ten trading days prior to the fifth trading
day preceding the date such Fair Market Value is to be determined.
2. (a) The Option may be exercised by Grantee, in whole or in
part, at any time or from time to time after the Merger Agreement becomes
terminable by Grantee under circumstances which could entitle Grantee to a
termination fee (as opposed to the reimbursement of expenses only) under
Section 8.3(a) of the Merger Agreement or Section 8.3(b) of the Merger
Agreement (regardless of whether the Merger Agreement is actually
terminated), any such event by which the Merger Agreement becomes so
terminable by Grantee being referred to herein as a " Trigger Event."
(b) (i) Issuer shall notify Grantee promptly in writing of the
occurrence of any Trigger Event, it being understood that the giving of
such notice by Issuer shall not be a condition to the right of Grantee to
exercise the Option.
(ii) In the event Grantee wishes to exercise the Option,
Grantee shall deliver to Issuer written notice (an "Exercise Notice")
specifying the total number of Option Shares it wishes to purchase.
(iii) Upon the giving by Grantee of Issuer of the
Exercise Notice and the tender of the applicable aggregate Option Price,
Grantee, to the extent permitted by law and Issuer's organizational
documents, and provided that the conditions to Issuer's obligation to
issue Option Shares to Grantee hereunder set forth in Section 3 have been
satisfied or waived, shall be deemed to be the holder of record of the
Option Shares issuable upon such exercise, notwithstanding that the stock
transfer books of Issuer shall then be closed or that certificates
representing such Option Shares shall not then be actually delivered to
Grantee.
(iv) Each closing of a purchase of Option Shares (a
"Closing") shall occur at a place, on a date, and at a time designated by
Grantee in an Exercise Notice delivered at least two business days prior
to the date of the Closing.
(c) The Option shall terminate upon the earliest to occur of:
(i) the Effective Time of the Merger;
(ii) the termination of the Merger Agreement pursuant to
Section 8.1 thereof, other than under circumstances which also constitute
a Trigger Event under this Agreement;
(iii) 180 days following any termination of the Merger
Agreement upon or during the continuance of a Trigger Event (or if, at the
expiration of such 180-day period, the Option cannot be exercised by
reason of any applicable judgment, decree, order, law or regulation, ten
business days after such impediment to exercise shall have been removed or
shall have become final and not subject to appeal, but in no event under
this clause (iii) later than September 30, 1997); and
(iv) payment by Issuer of the Trigger Payment set forth in
Section 5 of this Agreement to Grantee.
(d) Notwithstanding the foregoing, the Option may not be
exercised if (i) Grantee is in material breach of any of its
representations or warranties, or in material breach of any of its
covenants or agreements, contained in this Agreement or in the Merger
Agreement, or (ii) a Trigger Payment has been paid pursuant to Section 5
of this Agreement or demand therefor has been made and not withdrawn.
3. The obligation of Issuer to issue Option Shares to Grantee
hereunder is subject to the conditions that
(a) the Option Shares, and any Grantee Shares which are issued
in payment of the Option Price, shall have been approved for listing on
The Nasdaq Stock Market;
(b) all consents, approvals, orders or authorizations of, or
registrations, declarations or filings with, any federal, state or local
administrative agency or commission or other federal, state or local
Governmental Entity, if any, required in connection with the issuance by
Issuer and the acquisition by Grantee of the Option Shares hereunder shall
have been obtained or made; and
(c) no preliminary or permanent injunction or other order by
any court of competent jurisdiction prohibiting or otherwise restraining
such issuance shall be in effect.
The condition set forth in paragraph (a) above may be waived by Issuer, in
the case of Grantee Shares, and by Grantee, in the case of Option Shares,
in the sole discretion of the waiving party.
4. At any Closing,
(a) Issuer shall deliver to Grantee or its designee a single
certificate in definitive form representing the number of Option Shares
designated by Grantee in its Exercise Notice, such certificate to be
registered in the name of Grantee and to bear the legend set forth in
Section 13; and
(b) Grantee shall deliver to issuer the aggregate price for the
Option Shares so designated and being purchased by
(i) wire transfer of immediately available funds or
certified check or bank check, or
(ii) subject to the condition in Section 1(c)(ii), delivery
of a certificate or certificates representing the number of Grantee Shares
being issued by Grantee in consideration thereof, determined in accordance
with Section 4(c).
(c) In the event that Grantee issues Grantee Shares to Issuer
in consideration of Option Shares pursuant to Section 4(b)(ii), the number
of Grantee Shares to be so issued shall be equal to the quotient obtained
by dividing:
(i) the product of (x) the number of Option Shares with
respect to which the Option is being exercised and (y) the Option Price,
by
(ii) the Fair Market Value of the Grantee Shares as of the
date immediately preceding the date the Exercise Notice is delivered to
Issuer.
(d) Issuer shall pay all expenses, and any and all federal,
state and local taxes and other charges that may be payable in connection
with the preparation, issue and delivery of stock certificates under this
Section 4.
5. (a) Subject to the provisions of Section 8.3(d) of the Merger
Agreement, if a Trigger Event shall have occurred and any regulatory
approval or order required for the issuance by Issuer, or the acquisition
by Grantee, of the Option or the Option Shares upon exercise of the Option
shall not have been obtained, Grantee shall have the right to receive, and
Issuer shall pay to Grantee, an amount (the "Trigger Payment") equal to
the product of
(i) the maximum number of Option Shares that would have
been subject to purchases by Grantee upon exercise of the Option pursuant
to Sections 1 and 2 hereof if all such regulatory approvals or orders had
been obtained, and
(ii) the difference between (A) the Market/Offer Price (as
defined herein), determined as of the date on which notice of demand for
the Trigger Payment is given by Grantee, and (B) the Option Price (but
only if such Market/Offer Price is higher than such Option Price).
Demand for the Trigger Payment shall be given by notice in accordance with
the provisions of Section 17 hereof. The Trigger Payment shall be paid to
Grantee by Issuer on the Payment Date (as defined herein), by wire
transfer or immediately available funds to an account to be designated in
writing by Grantee not less than two business days before the Payment
Date.
(b) For purposes of this Section 5, "Payment Date" means the
date on which termination fees are required to be paid by Issuer to
Grantee under Sections 8.3(a) or 8.3(b), as the case may be, of the Merger
Agreement as a result of the occurrence of the Trigger Event referred to
in subsection (a) of this Section 5 or such later date as Grantee shall
specify with two business days prior written notice to Issuer.
(c) Issuer shall have no obligation to pay the Trigger Payment
if Grantee is in material breach of any of its representations or
warranties, or in material breach of any of its covenants or agreements,
contained in this Agreement or in the Merger Agreement.
6. Issuer represents and warrants to Grantee that
(a) Issuer has the corporate power and authority to enter into
this Agreement and to carry out its obligations hereunder, subject in the
case of the repurchase of the Option Shares pursuant to Section 8(a) to
applicable law;
(b) this Agreement has been duly and validly executed and
delivered by Issuer, and, assuming the due authorization, execution and
delivery hereof by Grantee and the receipt of all required regulatory
approvals, constitutes a valid and binding obligation of Issuer,
enforceable against Issuer in accordance with its terms;
(c) Issuer has taken all necessary corporate action to
authorize and reserve for issuance and to permit it to issue, upon
exercise of the Option, and at all times from the date hereof through the
expiration of the Option will have reserved, the number of authorized and
unissued Option Shares, such amount being subject to adjustment as
provided in Sections 1 and 12, all of which, upon their issuance and
delivery in accordance with the terms of this Agreement, will be duly
authorized, validly issued, fully paid and nonassessable (except as
otherwise provided by Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law);
(d) upon delivery of the Option Shares to Grantee upon the
exercise of the Option, Grantee will acquire the Option Shares free and
clear of all claims, liens, charges, encumbrances and security interests
of any nature whatsoever;
(e) except as described in Section 3.4 of the Merger Agreement,
the execution and delivery of this Agreement by Issuer does not, and,
subject to compliance with applicable law with respect to the repurchase
of the Option Shares pursuant to Section 8(a), the consummation by Issuer
of the transactions contemplated hereby will not, violate, conflict with,
or result in a breach of any provision of, or constitute a default (with
or without notice or a lapse of time, or both) under, or result in the
termination of, or accelerate the performance required by, or result in a
right of termination, cancellation, or acceleration of any obligation or
the loss of a material benefit under, or the creation of a lien, pledge,
security interest or other encumbrance on assets (any such conflict,
violation, default, right of termination, cancellation, acceleration, loss
or creation, hereinafter a "Violation") of Issuer or any of its
Subsidiaries, pursuant to
(i) any provision of the Articles of Incorporation or the
Bylaws of Issuer,
(ii) any provisions of any material loan or credit
agreement, note, mortgage, indenture, lease, benefit plan or other
agreement, obligation, instrument, permit, concession, franchise or
license (any of the foregoing in effect on the date hereof being referred
to as a "Material Contract") of Issuer or its Subsidiaries or to which any
of them is a party, or
(iii) any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Issuer or its properties or
assets,
which Violation, in the case of each clauses (ii) and (iii), could
reasonably be expected to have a Material Adverse Effect on Issuer (except
that no representation or warranty is given concerning any Violation of a
Material Contract with respect to the repurchase of Option Shares pursuant
to Section 8(a));
(f) except as described in Section 3.4 of the Merger Agreement,
the execution and delivery of this Agreement by Issuer does not, and the
performance of this Agreement by Issuer will not, require any consent,
approval, authorization or permit of, filing with or notification to, any
Governmental Entity;
(g) none of Issuer, any of its affiliates or anyone acting on
its or their behalf, has issued, sold or offered any security of Issuer to
any person under circumstances that would cause the issuance and sale of
the Option Shares, as contemplated by this Agreement, to be subject to the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), as in effect on the date hereof, and, assuming the
representations and warranties of Grantee contained in Section 7(g) are
true and correct, the issuance, sale and delivery of the Option Shares
hereunder would be exempt from the registration and prospectus delivery
requirements of the Securities Act, as in effect on the date hereof (and
Issuer shall not take any action which would cause the issuance, sale, and
delivery of the Option Shares hereunder not to be exempt from such
requirements); and
(h) any Grantee Shares acquired pursuant to this Agreement will
be acquired for Issuer's own account, for investment purposes only, and
will not be acquired by Issuer with a view to the public distribution
thereof in violation of any applicable provision of the Securities Act.
7. Grantee represents and warrants to Issuer that
(a) Grantee has the corporate power and authority to enter into
this Agreement and to carry out its obligations hereunder;
(b) this Agreement has been duly and validly executed and
delivered by Grantee and, assuming the due authorization, execution and
delivery hereof by Issuer and the receipt of all required regulatory
approvals, constitutes a valid and binding obligation of Grantee,
enforceable against Grantee in accordance with its respective terms;
(c) prior to any delivery of Grantee Shares in consideration of
the purchase of Option Shares pursuant hereto, Grantee will have taken all
necessary corporate action to authorize for issuance and to permit it to
issue such Grantee Shares, all of which, upon their issuance and delivery
in accordance with the terms of this Agreement, will be duly authorized,
validly issued, fully paid and nonassessable (except as otherwise provided
in Section 180.0622(2)(b) of the Wisconsin Business Corporation Law);
(d) upon any delivery of such Grantee Shares to Issuer in
consideration of the purchase of the Option Shares pursuant hereto, Issuer
will acquire the Grantee Shares free and clear of all claims, liens,
charges, encumbrances and security interests of any nature whatsoever;
(e) except as described in Section 3.4 of the Merger Agreement,
the execution and delivery of this Agreement by Grantee does not, and the
consummation by Grantee of the transactions contemplated hereby will not,
violate, conflict with, or result in the breach of any provision of, or
constitute a default (with or without notice or a lapse of time, or both)
under, or result in any Violation by Grantee or any of its Subsidiaries,
pursuant to
(i) any provision of the Articles of Incorporation or
Bylaws of Grantee,
(ii) any Material Contract of Grantee or any of its
Subsidiaries or to which any of them is a party, or
(iii) any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Grantee or its properties or
assets,
which Violation, in the case of each of clauses (ii) or (iii), would have
a Material Adverse Effect on Grantee;
(f) except as described in Section 3.4 of the Merger Agreement,
the execution and delivery of this Agreement by Grantee does not, and the
consummation by Grantee of the transactions contemplated hereby will not,
require any consent, approval, authorization or permit of, filing with or
notification to, any Governmental Entity; and
(g) any Option Shares acquired upon exercise of the Option will
be acquired for Grantee's own account, for investment purposes only and
will not be, and the Option is not being, acquired by Grantee with a view
to the public distribution thereof, in violation of any applicable
provision of the Securities Act.
8. (a) At the request of Grantee by written notice (x) at any time
during which the Option is exercisable pursuant to Section 2 (the
"Repurchase Period"), Issuer (or any successor entity thereof) shall, if
permitted by applicable law, the Articles of Incorporation and Bylaws of
the Issuer and Issuer's Material Contracts, repurchase from Grantee all or
any portion of the Option, at the price set forth in subparagraph (i)
below, or, (y) at any time prior to September 30, 1997, Issuer (or any
successor entity thereof) shall, if permitted by applicable law, the
Articles of Incorporation and Bylaws of Issuer and Issuer's Material
Contracts, repurchase from Grantee all or any portion of the Option Shares
purchased by Grantee pursuant to the Option, at the price set forth in
subparagraph (ii) below:
(i) (A) The difference between the "Market/Offer Price"
(as defined below) for shares of Issuer Common Stock as of the date
Grantee gives notice of its intent to exercise its rights under this
Section 8 and the Option Price, multiplied by the number of Option Shares
purchasable pursuant to the Option (or portion thereof with respect to
which Grantee is exercising its rights under this Section 8), but only if
the Market/Offer Price is greater than the Option Price.
(B) For purposes of this Agreement, "Market/Offer
Price" shall mean, as of any date, the higher of (I) the price per share
offered as of such date pursuant to any tender or exchange offer or other
offer with respect to a Business Combination involving Issuer as the
Target Party which was made prior to such date and not terminated or
withdrawn as of such date and (II) the Fair Market Value per share of
Issuer Common Stock as of such date.
(ii) (A) The product of (I) the sum of (a) the Option
Price paid by Grantee per Option Share acquired pursuant to the Option,
and (b) the difference between the "Offer Price" (as defined below) and
the Option Price, but only if the Offer Price is greater than the Option
Price, and (II) the number of Option Shares so to be repurchased pursuant
to this Section 8.
(B) For purposes of this clause (ii), the "Offer
Price" shall be the highest price per share offered pursuant to a tender
or exchange offer or other Business Combination offer involving Issuer as
the Target Party during the Repurchase Period prior to the delivery by
Grantee of a notice of repurchase.
(b) If Grantee shall have previously elected to purchase Option
Shares pursuant to the exercise of the Option by the issuance and delivery
of Grantee Shares, then Issuer shall, if so requested by Grantee, in
fulfillment of its obligation pursuant to Section 8(a)(y) (that is, with
respect to the Option Price only and without limitation to its obligation
to pay additional consideration under clause (b) of Section
8(a)(ii)(A)(I)), redeliver the certificates for such Grantee Shares to
Grantee, free and clear of all liens, claims, charges and encumbrances of
any kind or nature whatsoever; provided, however, that if at any time less
than all of the Option Shares so purchased by Grantee pursuant to the
Option are to be repurchased by Issuer pursuant to Section 8(a)(y), then
(i) Issuer shall be obligated to redeliver to Grantee the same proportion
of such Grantee Shares as the number of Option Shares that Issuer is then
obligated to repurchase bears to the number of Option Shares acquired by
Grantee upon exercise of the Option and (ii) Grantee shall issue to Issuer
new certificates representing those Grantee Shares which are not due to be
redelivered to Grantee pursuant to this Section 8(b) to the extent that
excess Grantee Shares are included in the certificates redelivered to
Grantee by Issuer.
(c) In the event Grantee exercises its rights under this
Section 8, Issuer shall, within ten business days thereafter, pay the
required amount to Grantee in immediately available funds and Grantee
shall surrender to Issuer the Option or the certificate or certificates
evidencing the Option Shares purchased by Grantee pursuant hereto, and
Grantee shall warrant that it owns the Option or such shares and that the
Option or such shares are then free and clear of all liens, claims,
damages, charges and encumbrances of any kind or nature whatsoever.
(d) If Grantee has elected to purchase Option shares pursuant
to the exercise of the Option by the issuance and delivery of Grantee
Shares, notwithstanding that Grantee may no longer hold any such Option
Shares or that Grantee elects not to exercise its other rights under this
Section 8, Grantee may require, at any time or from time to time prior to
September 30, 1997, Issuer to sell to Grantee any such Grantee Shares at
the price attributed to such Grantee Shares pursuant to Section 4 plus
interest at the publicly announced prime rate as published in the Wall
Street Journal (Midwest Edition) on such amount from the Closing Date
relating to the exchange of such Grantee shares pursuant to Section 4 to
the Closing Date under this Section 8(d) less any dividends on such
Grantee Shares paid during such period or declared and payable to
shareholders of record on a date during such period.
(e) In the event the repurchase price specified in Section 8(a)
would subject the purchase of the Option or the Option Shares purchased by
Grantee pursuant to the Option to a vote of the shareholders of Issuer
pursuant to applicable law or the Articles of Incorporation of Issuer,
then Grantee may, at its election, reduce the repurchase price to an
amount which would permit such repurchase without the necessity for such a
shareholder vote.
9. Following the date hereof and prior to the fifth anniversary of
the date hereof (the "Expiration Date"), each party shall vote any shares
of capital stock of the other party acquired by such party pursuant to
this Agreement ("Restricted Shares"), including any Grantee Shares issued
pursuant to Section 1(c), or otherwise beneficially owned (within the
meaning of Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act")), by such party on each matter
submitted to a vote of shareholders of such other party for and against
such matter in the same proportion as the vote of all other shareholders
of such other party are voted (whether by proxy or otherwise) for and
against such matter.
10. (a) Prior to the Expiration Date, neither party shall, directly
or indirectly, sell, assign, pledge, or otherwise dispose of or transfer
any Restricted Shares beneficially owned by such party, other than (i)
pursuant to Section 8, or (ii) in accordance with Section 10(b) or
Section 11.
(b) Following the termination of the Merger Agreement, a party
shall be permitted to sell any Restricted Shares beneficially owned by it
if such sale is made pursuant to a tender or exchange offer that has been
approved or recommended, or otherwise determined to be fair to and in the
best interests of the shareholders of the other party, by a majority of
the members of the Board of Directors of such other party, which majority
shall include a majority of directors who were directors prior to the
announcement of such tender or exchange offer.
11. (a) Following the termination of the Merger Agreement, either
party hereto that owns Restricted Shares (a "Designated Holder") may by
written notice (the "Registration Notice") to the other party (the
"Registrant") request the Registrant to register under the Securities Act
all or any part of the Restricted Shares beneficially owned by such
Designated Holder (the "Registrable Securities") pursuant to a bona fide
firm commitment underwritten public offering, in which the Designated
Holder and the underwriters shall effect as wide a distribution of such
Registrable Securities as is reasonably practicable and shall use their
best efforts to prevent any person (including any Group (as used in Rule
13d-5 under the Exchange Act)) and its affiliates from purchasing through
such offering Restricted Shares representing more than 1% of the
outstanding shares of common stock of the Registrant on a fully diluted
basis (a "Permitted Offering").
(b) The Registration Notice shall include a certificate
executed by the Designated Holder and its proposed managing underwriter,
which underwriter shall be an investment banking firm of recognized
standing on a national or regional basis (the "Manager"), stating that
(i) they have a good faith intention to commence promptly
a Permitted Offering, and
(ii) Manager in good faith believes that, based on the
then-prevailing market conditions, it will be able to sell the Registrable
Securities at a per share price equal to at least 80% of the then Fair
Market Value of such shares.
(c) The Registrant (and/or any person designed by the
Registrant) shall thereupon have the option exercisable by written notice
delivered to the Designated Holder within ten business days after the
receipt of the Registration Notice, irrevocably to agree to purchase all
or any part of the Registrable Securities proposed to be so sold for cash
at a price equal to the product of (i) the number of Registrable
Securities to be so purchased by the Registrant and (ii) the then Fair
Market Value of such shares.
(d) Any purchase of Registrable Securities by the Registrant
(or its designee) under Section 11(c) shall take place at a closing to be
held at the principal executive offices of the Registrant or at the
offices of its counsel at any reasonable date and time designated by the
Registrant and/or such designee in such notice within twenty business days
after delivery of such notice, and any payment for the shares to be so
purchased shall be made by delivery at the time of such closing in
immediately available funds.
(e) If the Registrant does not elect to exercise its option
pursuant to this Section 11 with respect to all Registrable Securities, it
shall use its best efforts to effect, as promptly as practicable, the
registration under the Securities Act of the unpurchased Registrable
Securities proposed to be so sold; provided, however, that
(i) neither party shall be entitled to demand more than an
aggregate of two effective registration statements hereunder, and
(ii) the Registrant will not be required to file any such
registration statement during any period of time (not to exceed 40 days
after such request in the case of clause (A) below or 90 days in the case
of clauses (B) and (C) below) when
(A) the Registrant is in possession of material non-
public information which it reasonably believes would be detrimental to be
disclosed at such time and, in the opinion of counsel to the Registrant,
such information would be required to be disclosed if a registration
statement were filed at that time;
(B) the Registrant is required under the Securities
Act to include audited financial statements for any period in such
registration statement and such financial statements are not yet available
for inclusion in such registration statement; or
(C) the Registrant determines, in its reasonable
judgment, that such registration would interfere with any financing,
acquisition or other material transaction involving the Registrant or any
of its affiliates.
(f) The Registrant shall use its reasonable best efforts to
cause any Registrable Securities registered pursuant to this Section 11 to
be qualified for sale under the securities or Blue Sky laws of such
jurisdictions as the Designated Holder may reasonably request and shall
continue such registration or qualification in effect in such
jurisdiction; provided, however, that the Registrant shall not be required
to qualify to do business in, or consent to general service of process in,
any jurisdiction by reason of this provision.
(g) The registration rights set forth in this Section 11 are
subject to the condition that the Designated Holder shall provide the
Registrant with such information with respect to such holder's Registrable
Securities, the plans for the distribution thereof, and such other
information with respect to such holder as, in the reasonable judgment of
counsel for the Registrant, is necessary to enable the Registrant to
include in such registration statement all material facts required to be
disclosed with respect to a registration thereunder.
(h) A registration effected under this Section 11 shall be
effected at the Registrant's expense, except for underwriting discounts
and commissions and the fees and the expenses of counsel to the Designated
Holder, and the Registrant shall provide to the underwriters such
documentation (including certificates, opinions of counsel and "comfort"
letters from auditors) as is customary in connection with underwritten
public offerings as such underwriters may reasonably require.
(i) In connection with any registration effected under this
Section 11, the parties agree
(i) to indemnify each other and the underwriters in the
customary manner,
(ii) to enter into an underwriting agreement in form and
substance customary for transactions of such type with the Manager and the
other underwriters participating in such offering, and
(iii) to take all further actions which shall be
reasonably necessary to effect such registration and sale (including if
the Manager deems it necessary, participating in road show presentations).
(j) The Registrant shall be entitled to include (at its
expense) additional shares of its common stock in a registration effected
pursuant to this Section 11 only if and to the extent the Manager
determines that such inclusion will not adversely affect the prospects for
success of such offering.
12. Without limitation to any restriction on Issuer contained in
this Agreement or in the Merger Agreement, in the event of any change in
Issuer Common Stock by reason of stock dividends, splitups, mergers (other
than the Merger), recapitalizations, combinations, exchange of shares or
the like, the type and number of shares or securities subject to the
Option, and the Option Price provided in Section 1, shall be adjusted
appropriately to restore to Grantee its rights hereunder, including the
right to purchase from Issuer (or its successors) shares of Issuer Common
Stock (or such other shares or securities into which Issuer Common Stock
has been so changed) for the aggregate Option Price as provided in Section
1.
13. Each certificate representing Option Shares issued to Grantee
hereunder, and Grantee Shares, if any, delivered to Issuer at a Closing,
shall include a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES OR BLUE SKY LAWS, AND MAY BE REOFFERED OR SOLD
ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION
IS AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER AS SET FORTH IN A STOCK OPTION AND
TRIGGER PAYMENT AGREEMENT, DATED AS OF NOVEMBER 13, 1996, A COPY
OF WHICH MAY BE OBTAINED FROM THE ISSUER UPON REQUEST.
It is understood and agreed that:
(i) the reference to the resale restrictions of the
Securities Act and state securities or Blue Sky laws in the above legend
shall be removed by delivery of substitute certificate(s) without such
reference if Grantee or Issuer, as the case may be, shall have delivered
to the other party a copy of a letter from the staff of the Securities and
Exchange Commission, or an opinion of counsel, in form and substance
reasonably satisfactory to the other party, to the effect that such legend
is not required for purposes of the Securities Act or such laws;
(ii) the reference to the provisions to this Agreement in
the above legend shall be removed by delivery of substitute certificate(s)
without such reference if the shares have been sold or transferred in
compliance with the provisions of this Agreement and under circumstances
that do not require the retention of such reference; and
(iii) the legend shall be removed in its entirety if
the conditions in the preceding clauses (i) and (ii) are both satisfied.
In addition, such certificates shall bear any other legend as may be
required by law. Certificates representing shares sold in a registered
public offering pursuant to Section 11 shall not be required to bear the
legend set forth in this Section 13.
14. (a) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
permitted assigns.
(b) Except as expressly provided for in this Agreement, neither
this Agreement nor the rights or obligations of either party hereto are
assignable, except by operation of law, or with the written consent of the
other party.
(c) Nothing contained in this Agreement, express or implied, is
intended to confer upon any person other than the parties hereto and their
respective successors and permitted assigns any rights or remedies of any
nature whatsoever by reason of this Agreement.
(d) Any Restricted Shares sold by a party in compliance with
the provisions of Section 11 shall, upon consummation of such sale, be
free of the restrictions imposed with respect to such shares by this
Agreement, unless and until such party shall repurchase or otherwise
become the beneficial owner of such shares, and any transferee of such
shares shall not be entitled to the registration rights of such party.
15. The parties hereto acknowledge that damages would be an
inadequate remedy for a breach of this Agreement by either party hereto
and that the obligations of the parties hereto shall be enforceable by
either party hereto through injunctive or other equitable relief.
16. If any term, provision, covenant or restriction contained
in this Agreement is held by a court or a federal or state regulatory
agency of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions and covenants and restrictions
contained in this Agreement shall remain in full force and effect, and
shall in no way be affected, impaired or invalidated. Subject to Section
5, if for any reason any such court or regulatory agency determines that
Grantee is not permitted to acquire, or Issuer is not permitted to
repurchase pursuant to Section 8, the full number of Option Shares
provided in Section 1 hereof (as the same may be adjusted), it is the
express intention of Issuer to allow Grantee to acquire or to require
Issuer to repurchase such lesser number of shares as may be permissible
without any amendment or modification hereof.
17. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied
(with confirmation), mailed by registered or certified mail (return
receipt requested) or delivered by an express courier (with confirmation)
at the respective addresses of the parties set forth in the Merger
Agreement (or at such other address for a party as shall be specified by
like notice).
18. This Agreement shall be governed by and construed in
accordance with the laws of the State of Wisconsin, regardless of the laws
that might otherwise govern under applicable principles of conflicts of
laws thereof.
19. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of which shall
constitute one and the same agreement.
20. Except as otherwise expressly provided herein, each of the
parties hereto shall bear and pay all costs and expenses incurred by it or
on its behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial consultants, investment
bankers, accountants and counsel.
21. Except as otherwise expressly provided herein or in the
Merger Agreement, this Agreement contains the entire agreement between the
parties with respect to the transactions contemplated hereunder and
supersedes all prior arrangements or understandings with respect thereof,
written or oral.
22. This Agreement may be amended by the parties hereto and the
terms and conditions hereof may be waived only by an instrument in writing
signed on behalf of each of the parties hereto, or, in the case of a
waiver, by an instrument signed on behalf of the party waiving compliance.
23. The time periods for exercises of certain rights under
Sections 2, 5 and 8 shall be extended (but in no event by more than six
months):
(a) to the extent necessary to obtain all regulatory approvals
for the exercise of such rights; and
(b) to the extent necessary to avoid any liability under
Section 16(b) of the Exchange Act by reason of such exercise.
24. Capitalized terms used in this Agreement and not defined
herein shall have the meanings assigned thereto in the Merger Agreement.
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed on its behalf by its officers thereunto duly
authorized, all as of the date first above written.
FCB FINANCIAL CORP.
By:/s/ Donald D. Parker
Donald D. Parker
President and Chief Executive
Officer
OSB FINANCIAL CORP.
By:/s/ James J. Rothenbach
James J. Rothenbach
President and Chief Executive
Officer