Execution Copy
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
FCB FINANCIAL CORP.
AND
ANCHOR BANCORP WISCONSIN INC.
January 5, 1999
TABLE OF CONTENTS
Page
ARTICLE I - THE MERGER........................................................1
SECTION 1.1 The Merger..................................................1
SECTION 1.2 Effective Time..............................................1
SECTION 1.3 Effect of the Merger........................................2
SECTION 1.4 Articles of Incorporation; By-Laws..........................2
SECTION 1.5 Board of Directors of the Surviving Corporation.............2
SECTION 1.6 Conversion of Securities....................................3
SECTION 1.7 Adjustments for Dilution and Other Matters..................4
SECTION 1.8 Exchange of Certificates....................................5
SECTION 1.9 Stock Transfer Books........................................7
SECTION 1.10 Buyer Common Stock..........................................7
SECTION 1.11 The Bank Merger.............................................7
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................9
SECTION 2.1 Organization and Qualification; Subsidiaries................9
SECTION 2.2 Articles of Incorporation and By-Laws......................11
SECTION 2.3 Capitalization.............................................11
SECTION 2.4 Authority..................................................12
SECTION 2.5 No Conflict; Required Filings and Consents.................12
SECTION 2.6 Compliance; Permits........................................13
SECTION 2.7 Environmental Matters......................................13
SECTION 2.8 Contracts..................................................14
SECTION 2.9 Agreements with Regulatory Agencies........................15
SECTION 2.10 Loan Loss Reserves.........................................15
SECTION 2.11 Securities and Banking Reports; Financial Statements.......15
SECTION 2.12 Absence of Certain Changes or Events.......................16
SECTION 2.13 Absence of Litigation......................................16
SECTION 2.14 Employee Benefit Plans.....................................17
SECTION 2.15 Registration Statement; Proxy Statement/Prospectus.........19
SECTION 2.16 Taxes19
SECTION 2.17 Brokers....................................................20
SECTION 2.18 Tax Matters and Pooling....................................20
SECTION 2.19 Vote Required..............................................20
SECTION 2.20 Year 2000 Compliance.......................................20
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE BUYER....................21
SECTION 3.1 Organization and Qualification; Subsidiaries...............21
SECTION 3.2 Articles of Incorporation and By-Laws......................22
SECTION 3.3 Capitalization.............................................22
SECTION 3.4 Authority..................................................23
SECTION 3.5 No Conflict; Required Filings and Consents.................24
SECTION 3.6 Compliance; Permits........................................24
SECTION 3.7 Environmental Matters......................................24
SECTION 3.8 Contracts..................................................25
SECTION 3.9 Agreements with Regulatory Agencies........................25
SECTION 3.10 Loan Loss Reserves.........................................26
SECTION 3.11 Securities and Banking Reports; Financial Statements.......26
SECTION 3.12 Absence of Certain Changes or Events.......................27
SECTION 3.13 Absence of Litigation......................................27
SECTION 3.14 Employee Benefit Plans.....................................27
SECTION 3.15 Registration Statement; Proxy Statement/Prospectus.........28
SECTION 3.16 Taxes29
SECTION 3.17 Brokers....................................................29
SECTION 3.18 Tax Matters and Pooling....................................30
SECTION 3.19 Vote Required..............................................30
SECTION 3.20 Year 2000 Compliance.......................................30
ARTICLE IV - COVENANTS OF THE COMPANY........................................30
SECTION 4.1 Affirmative Covenants......................................30
SECTION 4.2 Negative Covenants.........................................31
SECTION 4.3 Letter of the Company's Accountants........................33
SECTION 4.4 Access and Information.....................................33
SECTION 4.5 Update Disclosure; Breaches................................33
SECTION 4.6 Affiliates.................................................34
SECTION 4.7 Tax Treatment and Pooling..................................34
ARTICLE V - COVENANTS OF THE BUYER...........................................34
SECTION 5.1 Affirmative Covenants......................................34
SECTION 5.2 Negative Covenants.........................................35
SECTION 5.3 Access and Information.....................................35
SECTION 5.4 Update Disclosure; Breaches................................36
SECTION 5.5 Stock Exchange Listing.....................................36
SECTION 5.6 Tax Treatment and Pooling..................................36
SECTION 5.7 Stock Options..............................................37
SECTION 5.8 SEC Filings................................................37
ARTICLE VI - ADDITIONAL AGREEMENTS...........................................37
SECTION 6.1 Proxy Statement/Prospectus; Registration Statement.........37
SECTION 6.2 Meetings of Shareholders...................................38
SECTION 6.3 Appropriate Action; Consents; Filings......................38
SECTION 6.4 Employee Stock Options and Other Employee
Benefit Matters......................................38
SECTION 6.5 Directors'and Officers'Indemnification and
Insurance............................................39
SECTION 6.6 Notification of Certain Matters............................40
SECTION 6.7 Public Announcements.......................................40
SECTION 6.8 Recision of Repurchase Programs............................41
SECTION 6.9 Dividends..................................................41
SECTION 6.10 Issuance of Shares.........................................41
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SECTION 6.11 Expenses...................................................41
ARTICLE VII - CONDITIONS OF MERGER...........................................41
SECTION 7.1 Conditions to Obligation of Each Party t
Effect the Merger....................................41
SECTION 7.2 Additional Conditions to Obligations of the Buyer..........42
SECTION 7.3 Additional Conditions to Obligations of the Company........44
ARTICLE VIII - TERMINATION, AMENDMENT AND WAIVER.............................46
SECTION 8.1 Termination................................................46
SECTION 8.2 Effect of Termination......................................47
SECTION 8.3 Amendment..................................................47
SECTION 8.4 Waiver.....................................................47
ARTICLE IX - GENERAL PROVISIONS..............................................48
SECTION 9.1 Non-Survival of Representations, Warranties
and Agreements.......................................48
SECTION 9.2 Enforcement of Agreement...................................48
SECTION 9.3 Notices....................................................48
SECTION 9.4 Certain Definitions........................................49
SECTION 9.5 Headings...................................................50
SECTION 9.6 Severability...............................................50
SECTION 9.7 Entire Agreement...........................................50
SECTION 9.8 Assignment.................................................50
SECTION 9.9 Parties in Interest........................................50
SECTION 9.10 Governing Law..............................................51
SECTION 9.11 Counterparts...............................................51
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COMPANY DISCLOSURE SCHEDULES
Section 2.1(c) Organization and Qualification; Subsidiaries.
Section 2.7 Environmental Matters.
Section 2.11 Securities and Banking Reports; Financial Statements.
Section 2.12 Absence of Certain Changes or Events.
Section 2.13 Absence of Litigation.
Section 2.14(a) Plans of the Company.
Section 2.14(b) Absence of Certain Types of Plans.
Section 2.14(c) Compliance with Applicable Law.
Section 2.14(d) Qualification of Certain Plans.
Section 2.14(e) Absence of Certain Liabilities and Events.
Section 2.14(h) Stock Options.
Section 2.14(i) Employment Contracts.
Section 2.16 Taxes.
Section 2.20 Year 2000 Compliance.
BUYER DISCLOSURE SCHEDULES
Section 3.1(c) Organization and Qualification; Subsidiaries.
Section 3.7 Environmental Matters.
Section 3.11 Securities and Banking Reports; Financial Statements.
Section 3.12 Absence of Litigation.
Section 3.16 Taxes.
Section 3.20 Year 2000 Compliance.
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of January 5, 1999 (the
"Agreement"), between FCB Financial Corp., a Wisconsin corporation (the
"Company"), and Anchor BanCorp Wisconsin Inc., a Wisconsin corporation (the
"Buyer").
WHEREAS, the Boards of Directors of the Buyer and the Company have each
determined that it is fair to and in the best interests of their respective
shareholders for the Company to merge with and into the Buyer (the "Merger")
upon the terms and subject to the conditions set forth herein and in accordance
with the Wisconsin Business Corporation Law (the "WBCL"); and
WHEREAS, the respective Boards of Directors of the Buyer and the
Company have each approved the Merger of the Company with and into the Buyer,
upon the terms and subject to the conditions set forth herein; and
WHEREAS, as a condition to and immediately after the execution of this
Agreement, the Company and the Buyer are entering into a Stock Option Agreement
(the "Stock Option Agreement") in the form attached hereto as Exhibit A; and
WHEREAS, for Federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization under the provisions of Section 368 of
the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, for financial accounting purposes, it is intended that the
Merger shall be accounted for as a pooling of interests; and
WHEREAS, the Buyer and the Company desire to make certain
representations, warranties and agreements in connection with the Merger and
also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the parties hereto hereby agree as
follows:
ARTICLE I - THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the WBCL, at the Effective
Time (as defined in Section 1.2) the Company shall be merged with and into the
Buyer. As a result of the Merger, the separate corporate existence of the
Company shall cease and the Buyer shall continue as the surviving corporation of
the Merger (the "Surviving Corporation").
SECTION 1.2 Effective Time. As promptly as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Article
VII, the parties hereto shall
cause the Merger to be consummated by filing articles of merger (the "Articles
of Merger") with the Department of Financial Institutions of the State of
Wisconsin (the "DFI") in such form as required by, and executed in accordance
with the relevant provisions of, the WBCL (the date and time of such filing is
referred to herein as the "Effective Time").
SECTION 1.3 Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in this Agreement and the applicable provisions
of the WBCL. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, except as otherwise provided herein, all the
property, rights, privileges, powers and franchises of the Buyer and the Company
shall vest in the Surviving Corporation, and all debts, liabilities and duties
of the Buyer and the Company shall become the debts, liabilities and duties of
the Surviving Corporation.
SECTION 1.4 Articles of Incorporation; By-Laws. At the Effective Time,
the Articles of Incorporation, as amended, of the Buyer (the "Buyer Articles")
and the By-Laws, as amended, of the Buyer ("Buyer By-Laws"), as in effect
immediately prior to the Effective Time, shall be the Articles of Incorporation
and the By-Laws of the Surviving Corporation.
SECTION 1.5 Board of Directors of the Surviving Corporation.
(a) From and after the Effective Time, the Board of Directors of the
Surviving Corporation shall include the directors of the Buyer immediately prior
to the Effective Time. In addition, the Surviving Corporation and its Board of
Directors shall take such action as may be necessary to cause two (2) directors
of the Company (which directors shall be selected by the Buyer) (the "Company
Directors") to be appointed as directors of the Surviving Corporation effective
at the Effective Time. Such action shall include, if necessary, expansion of the
size of the Board of Directors of the Surviving Corporation to the extent
necessary to create sufficient vacancies for the Company Directors to be
appointed as of the Effective Time ("Necessary Vacancies"); provided, that if
(i) at least one (1) Company Director is appointed as of the Effective Time and
(ii) the Effective Time occurs within sixty (60) days prior to July 27, 1999,
the anticipated date of the next annual meeting of shareholders of the Buyer
(the "Next Annual Meeting"), then the Surviving Corporation shall not be
required to expand immediately the size of its Board of Directors to create a
Necessary Vacancy for the second Company Director prior to the Next Annual
Meeting; rather, the Surviving Corporation and its Board of Directors shall take
such action as may be necessary to cause the second Company Director either to
be a Board nominee for election as a director at, or to be appointed as a
director effective as of, the Next Annual Meeting. If the initial term of any
Company Director who is appointed or elected pursuant to the preceding
provisions of this Section 1.5(a) expires less than two (2) years after the
Effective Time, then at the annual meeting at which such Company Director's
initial term expires the Surviving Corporation and its Board of Directors shall
nominate such Company Director for election by the shareholders of the Surviving
Corporation to a full three-year term as a director (a "Subsequent Full Term").
If the initial term of any Company Director expires two (2) years after the
Effective Time or later, however, the Surviving Corporation and its Board of
Directors shall be under no obligation to nominate such Company Director for
election to a Subsequent Full Term; provided, however,
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that at least one Company Director shall be eligible to be elected to a
Subsequent Full Term hereunder. In the event that a Company Director shall die,
become disabled or otherwise choose to no longer serve as a Company Director
prior to the end of his initial term and any Subsequent Full Term to which he is
entitled to be nominated as provided above, such Company Director shall be
succeeded by an individual (selected by the Buyer) who was serving as a director
of the Company at the Effective Time. Such successor director shall thereafter
be deemed to be a Company Director.
(b) The Surviving Corporation shall, effective as of the Effective
Time, take such action as may be necessary to cause two (2) directors of the
Company (which directors shall be selected by the Buyer) (the "Company Bank
Directors") to be appointed to serve on the Board of Directors of AnchorBank,
S.S.B. ("AnchorBank") for a term of not less than three (3) years. The Company
Directors and the Company Bank Directors may be the same or different persons.
In the event a Company Bank Director shall die, become disabled or otherwise
choose to no longer serve as a Company Bank Director prior to the end of such
three-year term, such Company Bank Director shall be succeeded by an individual
(selected by the Buyer) who was serving as a director of the Company at the
Effective Time. Such successor director shall thereafter be deemed to be a
Company Bank Director.
(c) At the Effective Time, the officers of the Buyer immediately prior
to the Effective Time shall be the officers of the Surviving Corporation, in
each case until their respective successors are duly elected or appointed;
provided, however, that the following officers of the Company: James J.
Rothenbach, Harold L. Hermansen, James J. Goetz, Theodore W. Hoff, and Phillip
J. Schoofs shall be appointed as officers of the Surviving Corporation in the
capacities to be determined by the Surviving Corporation and, in the case of
James J. Rothenbach, pursuant to the terms and conditions of the Employment
Agreement attached hereto as Exhibit B. In addition, Donald D. Parker, the
Chairman of the Board of the Company, shall serve as an officer of the Surviving
Corporation pursuant to the terms and conditions of the Employment Agreement
attached hereto as Exhibit C.
(d) The parties hereto agree to take such action as may be necessary to
cause the agreements set forth in this Section 1.5 to be satisfied.
SECTION 1.6 Conversion of Securities. Subject to Section 1.8(e)
regarding fractional shares, at the Effective Time, by virtue of the Merger and
without any action on the part of the Buyer, the Company or the holder of the
following securities:
(a) Each share of the common stock, par value $.01 per share of the
Company ("Company Common Stock"), issued and outstanding immediately prior to
the Effective Time (all such shares of Company Common Stock issued and
outstanding immediately prior to the Effective Time being referred to herein as
the "Shares"), other than Shares held by the Buyer for its own account or any
Buyer Subsidiary (as defined in Section 3.1(a), below) for its own account,
shall cease to be outstanding and shall be converted into and become the right
to receive 1.83 shares, subject to adjustment as provided below (the exchange
ratio, as adjusted pursuant to Section 1.7, is hereinafter referred to as the
"Exchange Ratio"), of common stock,
3
$0.10 per share par value, of the Buyer ("Buyer Common Stock," which term shall
be deemed to include the rights to purchase shares of Buyer preferred stock,
$.10 par value, under the terms of the Rights Agreement, dated July 22, 1997, by
and between Buyer and Firstar Bank Wisconsin, N.A. (as successor to Firstar
Trust Company)). All such Shares shall no longer be outstanding and shall
immediately be canceled and retired and shall cease to exist, and each
certificate previously representing any such Shares shall thereafter represent
the right to receive a certificate representing shares of Buyer Common Stock
into which such Company Common Stock shall have been converted. Certificates
representing shares of Company Common Stock shall be exchanged for certificates
representing whole shares of Buyer Common Stock issued in consideration therefor
upon the surrender of such certificates in accordance with the provisions of
Section 1.8 hereof, without interest.
(b) Each share of Company Common Stock held as treasury stock shall be
canceled and extinguished without conversion thereof into Buyer Common Stock or
payment therefor.
(c) Each share of Company Common Stock held by the Buyer for its own
account or any Buyer Subsidiary for its own account shall be canceled and
extinguished without conversion thereof into Buyer Common Stock or payment
therefor.
(d) If (i) the Anchor Average Price (as defined below) as of the date
that the last approval necessary to consummate the Merger is received is less
than $15.00 and (ii) the Average Price Ratio (as of the date that the last
approval necessary to consummate the Merger is received) is less than 85% of the
Average Price Ratio (as of the date of this Agreement), then the Company shall
have the right to terminate this Agreement immediately with the effect as set
forth in Section 8.2 hereof. For purposes of this Agreement, "Average Price
Ratio" means, as of either date of determination, the ratio of (x) the Anchor
Average Price as of the date of determination, over (y) the average of the
closing prices for the twenty (20) consecutive trading days immediately
preceding the fifth business day prior to the date of determination of the
common stock of the entities identified in Exhibit D hereto. For purposes of
this Agreement, the Anchor Average Price shall, as of any date of determination,
be the average of the closing prices of Buyer Common Stock as reported on The
Nasdaq Stock Market for the twenty (20) consecutive trading days immediately
preceding the fifth business day prior to the applicable determination date.
SECTION 1.7 Adjustments for Dilution and Other Matters. If prior to the
Effective Time, (a) the Company shall declare a stock dividend or distribution
upon or subdivide, split up, reclassify or combine the Company Common Stock, or
declare a dividend or make a distribution on Company Common Stock in any
security convertible into Company Common Stock, or (b) the Buyer shall declare a
stock dividend or distribution upon or subdivide, split up, reclassify or
combine Buyer Common Stock or declare a dividend or make a distribution on Buyer
Common Stock in any security convertible into Buyer Common Stock, appropriate
adjustment or adjustments will be made to the Exchange Ratio.
4
SECTION 1.8 Exchange of Certificates.
(a) Exchange Agent. As of the Effective Time, the Buyer shall deposit,
or shall cause to be deposited with an exchange agent chosen by the Buyer and
which is reasonably acceptable to the Company (the "Exchange Agent"), for the
benefit of the holders of Shares for exchange in accordance with this Article I,
through the Exchange Agent, certificates representing the shares of Buyer Common
Stock and cash in lieu of fractional shares (such certificates for shares of
Buyer Common Stock, together with the amount of cash payable in lieu of
fractional shares and any dividends or distributions with respect to such Buyer
Common Stock are referred to herein as the "Exchange Fund") payable and issuable
pursuant to Section 1.6 in exchange for outstanding Shares; provided, however,
that the Buyer need not deposit the cash for fractional shares into the Exchange
Fund until such time as such funds are to be distributed by the Exchange Agent.
(b) Exchange Procedures. No later than ten (10) days after the
Effective Time, the Exchange Agent shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding Shares which Shares were converted into the right to
receive shares of Buyer Common Stock pursuant to Section 1.6 (a "Certificate" or
"Certificates"), (i) a letter of transmittal and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for certificates
representing shares of Buyer Common Stock. Upon surrender of a Certificate for
cancellation to the Exchange Agent together with such letter of transmittal,
duly executed, the holder of such Certificate shall be entitled to receive in
exchange therefor a certificate representing that number of whole shares of
Buyer Common Stock which such holder has the right to receive in respect of the
Certificate surrendered pursuant to the provisions of this Article I (after
taking into account all Shares then held by such holder), and the Certificate so
surrendered shall forthwith be canceled. In the event of a transfer of ownership
of Shares which is not registered in the transfer records of the Company, a
certificate representing the proper number of shares of Buyer Common Stock may
be issued to a transferee if the Certificate representing such Shares is
presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and by evidence that any applicable stock
transfer taxes have been paid. In the event any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and the posting
by such person of a bond in such amount as the Buyer may reasonably direct as
indemnity against any claim that may be made against it or the Exchange Agent
with respect to such Certificate, the Exchange Agent will issue in exchange for
such lost, stolen or destroyed Certificate a certificate representing the proper
number of shares of Buyer Common Stock. Until surrendered as contemplated by
this Section 1.8, each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender the
certificate representing shares of Buyer Common Stock, dividends, cash in lieu
of any fractional shares of Buyer Common Stock as contemplated by Section 1.8(e)
and other distributions as contemplated by Section 1.8(c).
(c) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions declared or made after the Effective Time with respect to
Buyer Common Stock
5
with a record date after the Effective Time shall be paid to the holder of any
unsurrendered Certificate with respect to the shares of Buyer Common Stock
represented thereby, and no cash payment in lieu of fractional shares shall be
paid to any such holder pursuant to Section 1.8(e), until the holder of such
Certificate shall surrender such Certificate. Subject to the effect of
applicable laws, following surrender of any such Certificate, there shall be
paid to the holder of the certificates representing whole shares of Buyer Common
Stock issued in exchange therefor, without interest, (i) promptly, the amount of
any cash payable with respect to a fractional share of Buyer Common Stock to
which such holder is entitled pursuant to Section 1.8(e) and the amount of
dividends or other distributions with a record date after the Effective Time
theretofore paid with respect to such whole shares of Buyer Common Stock, and
(ii) at the appropriate payment date, the amount of dividends or other
distributions, with a record date after the Effective Time but prior to
surrender and a payment date occurring after surrender, payable with respect to
such whole shares of Buyer Common Stock.
(d) No Further Rights in the Shares. All shares of Buyer Common Stock
issued and cash paid upon conversion of the Shares in accordance with the terms
hereof (including any cash paid pursuant to Section 1.8(e)) shall be deemed to
have been issued in full satisfaction of all rights pertaining to such Shares.
(e) No Fractional Shares. No certificates or scrip representing
fractional shares of Buyer Common Stock shall be issued upon the surrender for
exchange of Certificates, and such fractional share interest will not entitle
the owner thereof to vote or to any rights of a shareholder of the Buyer. Each
holder of a fractional share interest shall be paid an amount in cash equal to
the product obtained by multiplying such fractional share interest to which such
holder (after taking into account all fractional share interests then held by
such holder) would otherwise be entitled by the Anchor Average Price as of the
Effective Time.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the former shareholders of the Company for two
(2) years after the Effective Time shall be delivered to the Buyer, upon demand,
and any former shareholders of the Company who have not theretofore complied
with this Article I shall thereafter look only to the Buyer to claim their
shares of Buyer Common Stock, any cash in lieu of fractional shares of Buyer
Common Stock and any dividends or distributions with respect to Buyer Common
Stock, in each case without interest thereon, and subject to Section 1.8(g).
(g) No Liability. Neither the Buyer nor the Company shall be liable to
any former holder of Shares for any such Shares (or dividends or distributions
with respect thereto) or cash or other payment delivered to a public official
pursuant to any abandoned property, escheat or similar laws.
(h) Withholding Rights. The Buyer shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any former holder of Shares such amounts as the Buyer is required to deduct and
withhold with respect to the making of such payment under the Code, or any
provision of state, local or foreign tax law. To the extent that amounts are so
withheld by the Buyer, such withheld amounts shall be treated for
6
all purposes of this Agreement as having been paid to the former holder of the
Shares in respect of which such deduction and withholding were made by the
Buyer.
SECTION 1.9 Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and there shall be no further
registration of transfers of shares of the Company Common Stock thereafter on
the records of the Company. From and after the Effective Time, the holders of
Certificates shall cease to have any rights with respect to such Shares except
as otherwise provided herein or by law. On or after the Effective Time, any
Certificates presented to the Exchange Agent or the Buyer for any reason shall
be converted into shares of Buyer Common Stock and cash in lieu of fractional
shares in accordance with this Article I.
SECTION 1.10 Buyer Common Stock. The shares of Buyer Common Stock
issued and outstanding immediately prior to the Effective Time shall be
unaffected by the Merger, and at the Effective Time such shares shall remain
issued and outstanding.
SECTION 1.11 The Bank Merger
(a) Following the Effective Time, Fox Cities Bank ("Fox Cities") shall
be merged and consolidated with and into AnchorBank under the Charter and
By-Laws of AnchorBank (the "Bank Merger"), pursuant to the provisions of, and
with the effect provided in, applicable law, and AnchorBank shall be the
surviving bank and the separate existence of Fox Cities shall thereupon cease
(the term "Surviving Bank" shall refer to AnchorBank following the Bank Merger).
Subject to terms and upon satisfaction of all requirements of law and the
conditions specified herein, the Bank Merger shall become effective on such date
as shall be designated by the Buyer following the Effective Time and subsequent
to the receipt of approvals from all applicable governmental authorities
authorizing the consolidation (the "Bank Merger Effective Date").
(b) Surviving Bank.
(i) The Surviving Bank shall continue the banking business of Fox
Cities in the current locations of Fox Cities as branch offices of
the Surviving Bank.
(ii) The principal office of the Surviving Bank shall be the
principal office of AnchorBank.
(iii) At and as of the Bank Merger Effective Date, the Charter and
By-Laws of AnchorBank, as in effect immediately prior to the Bank
Merger Effective Date, shall be the Charter and By-Laws of the
Surviving Bank until thereafter amended as provided by law.
(iv) On the Bank Merger Effective Date, the Surviving Bank shall
have capital surplus equal to that of AnchorBank and Fox Cities,
combined, immediately prior to the Bank Merger and undivided
profits, including capital reserves, which, when combined with the
capital and surplus, will be equal to
7
the capital structure of AnchorBank and Fox Cities as of the date
hereof, adjusted, however, for normal earnings and expenses
between the date hereof and the Bank Merger Effective Date.
(v) As of the Bank Merger Effective Date, the Board of Directors
of AnchorBank (except as otherwise contemplated by this Agreement)
shall continue to serve as the Board of Directors of the Surviving
Bank until such time as their successors have been elected and
have qualified.
(vi) As of the Bank Merger Effective Date, the Surviving Bank will
establish an advisory board (which shall be subject to annual
review and renewal by the Surviving Bank's Board of Directors).
The advisory board shall consist of all persons serving as
directors of Fox Cities as of the Effective Time who are not
appointed or elected to serve either as Company Directors or as
Company Bank Directors. The Buyer recognizes the need for an
advisory board in order for the Surviving Bank to realize its full
potential in the market area now served by Fox Cities, to maintain
close personal and business relationships, and to assist in the
transition of Fox Cities to AnchorBank's system of operations. The
parties believe that the advisory board members, through their
continued identification with the Surviving Bank and active
support, will ensure an ongoing program of interest and commitment
in the former Fox Cities market area. The advisory board will
provide the Surviving Bank's management and Board of Directors
with advice and counsel with respect to the following: (A) loan
originations from the former Fox Cities market area; (B) savings
programs to be offered in the former Fox Cities markets; (C)
advertising programs; (D) community activities and involvement;
and (E) such other business and financial matters as the advisory
board believes may further contribute to the Surviving Bank's
successful operation in the former Fox Cities market area. In
conformance with regulatory guidelines, members of the advisory
board will serve terms of one year, subject to nomination and
election annually by the Board of Directors of the Surviving Bank.
The advisory board shall meet at least quarterly. Each member of
the advisory board will receive a fee of $200 per month for as
long as he shall serve thereon. The Surviving Bank shall maintain
the advisory board for at least one year and thereafter for so
long as the Surviving Bank believes the advisory board can
continue to provide valuable local community assistance.
(c) Corporate Existence; Assets and Liabilities of the Surviving Bank.
Upon the Bank Merger Effective Date:
(i) All rights, franchises and interests of Fox Cities in and to
every type of property (real, personal and mixed) and choses in
action shall be transferred to and vested in the Surviving Bank by
virtue of the Bank Merger without any deed or other transfer, and
the Surviving Bank, without any order or other action on the part
of any court or otherwise, shall hold and enjoy all rights of
property, franchises and interests, including appointments,
designations, nominations, and
8
all other rights and interest as trustee, executor, administrator,
registrar of stocks and bonds, guardians of estates, assignee, and
receiver of estates of incompetents, and in every other fiduciary
capacity, in the same manner and to the same extent as such
rights, franchises and interests were held or enjoyed by Fox
Cities immediately prior to the Bank Merger.
(ii) The Surviving Bank shall be liable for all of the liabilities
of Fox Cities and all deposits, debts, liabilities, obligations
and contracts of Fox Cities matured or unmatured, whether insured,
obsolete, contingent or otherwise, and whether or not reflected or
reserved against on balance sheets, books of account, or records
of Fox Cities shall be those of the Surviving Bank and shall not
be relieved or canceled by the Bank Merger and all rights of
creditors and obligees, and all liens on property of Fox Cities
shall be preserved and unimpaired. All assets of Fox Cities, as
they exist at and as of the Bank Merger Effective Date, shall pass
to and vest in the Surviving Bank, without any conveyance or other
transfer; and the Surviving Bank shall be responsible for all
liabilities of Fox Cities of every kind and description existing
as of the Bank Merger Effective Date.
(iii) At any time after the Bank Merger Effective Date, the
officers of the Surviving Bank may, in the name of Fox Cities,
execute and deliver all such deeds, assignments and other
instruments and take or cause to be taken all such further or
other action as the Surviving Bank may deem necessary or desirable
in order to vest, perfect or confirm in the Surviving Bank title
to and possession of all of Fox Cities' property, rights,
privileges, immunities, powers, purposes and otherwise to carry
out the purposes hereof.
(iv) The liquidation account established by Fox Cities pursuant to
the plan of conversion adopted in connection with its conversion
from mutual to stock form shall continue to be maintained by the
Surviving Bank after the Bank Merger Effective Date for the
benefit of those persons and entities who were savings account
holders of Fox Cities on Fox Cities' eligibility record date and
who continue from time to time to have rights therein.
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Disclosure Schedule delivered by the Company
to the Buyer prior to the execution of this Agreement (the "Company Disclosure
Schedule"), the Company hereby represents and warrants to the Buyer that:
SECTION 2.1 Organization and Qualification; Subsidiaries.
(a) The Company is a corporation duly organized and validly existing
under the laws of the State of Wisconsin, and is registered as a savings and
loan holding company under the Home Owners' Loan Act ("HOLA"). Each subsidiary
of the Company ("Company
9
Subsidiary" or, collectively, "Company Subsidiaries") is a federally-chartered
savings bank or a corporation duly organized and validly existing under the laws
of the state of its incorporation. Each of the Company and the Company
Subsidiaries has the requisite corporate power and authority and is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates, approvals and orders ("Company Approvals")
necessary to own, lease and operate its properties and to carry on its business
as it is now being conducted, including, without limitation, appropriate
authorizations from the Federal Deposit Insurance Corporation (the "FDIC") and
the Office of Thrift Supervision ("OTS"), and neither the Company nor any
Company Subsidiary has received any notice of proceedings relating to the
revocation or modification of any Company Approvals, except in each case where
the failure to be so existing or to have such power, authority, Company
Approvals and revocations or modifications would not, individually or in the
aggregate, have a Material Adverse Effect (as defined below) on the Company and
the Company Subsidiaries taken as a whole.
(b) The Company and each Company Subsidiary is duly qualified or licensed
as a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned, leased or operated by
it or the nature of its activities makes such qualification or licensing
necessary, except where such failures to be so duly qualified or licensed and in
good standing would not, either individually or in the aggregate, have a
Material Adverse Effect on the Company and the Company Subsidiaries taken as a
whole.
(c) A true and complete list of all of the Company Subsidiaries, together
with (i) the Company's percentage ownership of each Company Subsidiary and (ii)
laws under which the Company Subsidiary is incorporated, is set forth on Section
2.1(c) of the Company Disclosure Schedule. Except as set forth on Section 2.1(c)
of the Company Disclosure Schedule, the Company and/or one or more of the
Company Subsidiaries owns beneficially and of record all of the outstanding
shares of capital stock of each of the Company Subsidiaries. Except for the
subsidiaries set forth on Section 2.1(c) of the Company Disclosure Schedule, the
Company does not directly or indirectly own any equity or similar interests in,
or any interests convertible into or exchangeable or exercisable for any equity
or similar interest in, any corporation, partnership, joint venture or other
business association or entity other than in the ordinary course of business,
and in no event in excess of 5% of the outstanding equity securities of such
entity.
(d) As used in this Agreement, the term "Material Adverse Effect" means,
with respect to the Buyer or the Company, as the case may be, any effect that
(i) is material and adverse to the business, assets, liabilities, results of
operations or financial condition of the Buyer and the Buyer Subsidiaries taken
as whole or the Company and the Company Subsidiaries taken as a whole,
respectively, or (ii) materially impairs the ability of the Buyer or the Company
to consummate the transactions contemplated hereby; provided, however, that
Material Adverse Effect shall not be deemed to include the impact of (A) actions
contemplated by this Agreement, (B) changes in laws and regulations or
interpretations thereof that are generally applicable to the banking or savings
industries, (C) changes in generally accepted accounting principles ("GAAP")
that are generally applicable to the banking or savings
10
industries, (D) expenses incurred in connection with the transactions
contemplated hereby, and (E) changes attributable to or resulting from changes
in general economic conditions affecting banks, savings institutions or their
holding companies generally, including changes in the prevailing level of
interest rates.
SECTION 2.2 Articles of Incorporation and By-Laws. The Company has
heretofore furnished to the Buyer a complete and correct copy of the Articles of
Incorporation and the By-Laws, as amended or restated, of the Company ("Company
Articles" or "Company By-Laws") and each Company Subsidiary. Such Articles of
Incorporation and By-Laws of the Company and each Company Subsidiary are in full
force and effect. Neither the Company nor any Company Subsidiary is in violation
of any of the provisions of its Articles of Incorporation or By-Laws.
SECTION 2.3 Capitalization. The authorized capital stock of the Company
consists of 15,000,000 shares of Company Common Stock and 5,000,000 shares of
preferred stock, par value $.01 per share ("Company Preferred Stock"). As of the
date of this Agreement, (a) 3,840,680 shares of Company Common Stock are issued
and outstanding, all of which are duly authorized, validly issued, fully paid
and non-assessable, except as provided by Section 180.0622(2)(b) of the WBCL
(such section, including judicial interpretations thereof and of Section
180.40(6), its predecessor statute, are referred to herein as "Section
180.0622(2)(b) of the WBCL"), and were not issued in violation of any preemptive
right of any Company shareholder, (b) 687,688 shares of Company Common Stock are
held in the treasury of the Company, (c) 230,344 shares of Company Common Stock
are reserved for future issuance pursuant to outstanding employee stock options
issued pursuant to the Company's equity incentive plans and (d) 764,295 shares
of Company Common Stock are reserved for future issuance under the Stock Option
Agreement. As of the date of this Agreement, no shares of Company Preferred
Stock are issued and outstanding. Except as set forth in clauses (c) and (d)
above, there are no options, warrants or other rights, agreements, arrangements
or commitments of any character pursuant to which the Company or any Company
Subsidiary is a party, including without limitation voting agreements or
arrangements, relating to the issued or unissued capital stock of the Company or
any Company Subsidiary or obligating the Company or any Company Subsidiary to
issue or sell any shares of capital stock of, or other equity interests in, the
Company or any Company Subsidiary. All shares of Company Common Stock subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, shall be duly authorized,
validly issued, fully paid and non-assessable, except as otherwise provided by
Section 180.0622(2)(b) of the WBCL. There are no obligations, contingent or
otherwise, of the Company or any Company Subsidiary to repurchase, redeem or
otherwise acquire any shares of Company Common Stock or the capital stock of any
Company Subsidiary or to provide funds to or make any investment (in the form of
a loan, capital contribution or otherwise) in any Company Subsidiary or any
other entity, except for loan commitments and other funding obligations entered
into in the ordinary course of business and except as required under the Stock
Option Agreement and under currently existing stock option agreements. Each of
the outstanding shares of capital stock of each Company Subsidiary are duly
authorized, validly issued, fully paid and non-assessable, except as provided by
Section 180.0622(2)(b) of
11
the WBCL, and were not issued in violation of any preemptive rights of any
Company Subsidiary shareholder, and all such shares owned by the Company or
another Company Subsidiary are owned free and clear of all security interests,
liens, claims, pledges, agreements, limitations of the Company's voting rights,
charges or other encumbrances of any nature whatsoever.
SECTION 2.4 Authority. The Company has the requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby (other than,
with respect to the Merger, the approval and adoption of this Agreement by the
Company's shareholders in accordance with the WBCL and the Company Articles and
Company By-Laws). The execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement or to consummate the transactions so contemplated hereby (other than,
with respect to the Merger, the approval and adoption of this Agreement by the
Company's shareholders in accordance with the WBCL and the Company Articles and
Company By-Laws). This Agreement has been duly executed and delivered by, and
constitutes a valid and binding obligation of the Company and, assuming due
authorization, execution and delivery by the Buyer, is enforceable against the
Company in accordance with its terms, except as enforcement may be limited by
laws affecting insured depository institutions, general principles of equity
whether applied in a court of law or a court of equity and by bankruptcy,
insolvency and similar laws affecting creditors' rights and remedies generally.
SECTION 2.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement and the transactions contemplated hereby
by the Company shall not, (i) conflict with or violate the Company Articles or
Company By-Laws or the Articles of Incorporation or By-Laws of any Company
Subsidiary, (ii) conflict with or violate any domestic (federal, state or local)
or foreign law, statute, ordinance, rule, regulation, order, judgment or decree
(collectively, "Laws") applicable to the Company or any Company Subsidiary or by
which its or any of their respective properties is bound or affected, or (iii)
result in any breach of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, require the giving of
notice to, or the consent of, any third party under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance on any of the properties or assets of the
Company or any Company Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any Company Subsidiary is a
party or by which the Company or any Company Subsidiary or its or any of their
respective properties is bound or affected, except in the case of clause (iii)
for any such conflicts, violations, breaches, defaults or other occurrences that
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company and the Company Subsidiaries taken as a whole.
12
(b) The execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company shall not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, domestic or foreign, except (i)
for applicable requirements, if any, of the Securities Act of 1933, as amended
(the "Securities Act"), the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), state securities or blue sky laws ("Blue Sky Laws"), the HOLA,
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act") and the
filing of appropriate merger or other documents as required by the WBCL and (ii)
where the failure to obtain such consents, approvals, authorizations or permits,
or to make such filings or notifications, would not prevent or delay
consummation of the Merger or otherwise prevent the Company from performing its
obligations under this Agreement and would not have a Material Adverse Effect on
the Company and the Company Subsidiaries taken as a whole.
SECTION 2.6 Compliance; Permits. Neither the Company nor any Company
Subsidiary is in conflict with, or in default or violation of, (a) any Law
applicable to the Company or any Company Subsidiary or by which its or any of
their respective properties is bound or affected, or (b) any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company or any Company Subsidiary is
a party or by which the Company or any Company Subsidiary or its or any of their
respective properties is bound or affected, except for any such conflicts,
defaults or violations which would not, individually or in the aggregate, have a
Material Adverse Effect on the Company or the Company Subsidiaries taken as a
whole.
SECTION 2.7 Environmental Matters
(a) Except as set forth in Section 2.7 of the Company Disclosure
Schedule, (i) none of the "Company Real Property" (as that term is defined
below) has been designated, restricted or, to the Company's knowledge,
investigated by any governmental authority as a result of the actual or
suspected presence, spillage, leakage, discharge or other emission of "Hazardous
Substances" (as hereinafter defined), nor to the Company's knowledge is there
any basis for any such designation, restriction or investigation; (ii) neither
the Company nor any Company Subsidiary has received any written notice, order or
decree concerning, or arising by reason of, the actual or suspected presence,
spillage, leakage, discharge, disposal or other emission of any Hazardous
Substance in, on, under, around, about or in the vicinity of, or the
transportation of any Hazardous Substance at, from, or to, any of the Company
Real Property.
(b) Except as disclosed in Section 2.7 of the Company Disclosure
Schedule, neither the Company nor any Company Subsidiary nor any Company Real
Property is in violation of, or subject to any liabilities as a result of any
past or current violations of, any existing law (including common law), rule or
regulation of any governmental authority relating to occupational health and
safety or relating to pollution or protection of the environment, including,
without limitation, laws, rules, and regulations relating to the emission,
generation, discharge, spillage, leakage, storage, off-site dumping, release or
threatened release of Hazardous Substances into ambient air, surface water,
groundwater or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal,
13
transport or handling of Hazardous Substances (collectively, "Environmental
Laws"), and no expenditures are required in connection with the operation of the
Company's or any Company Subsidiary's businesses in order to comply with any
such Environmental Laws, except for such violations, liabilities and/or
expenditures as would not, individually or in the aggregate, have a Material
Adverse Effect on the Company or any Company Subsidiary.
(c) Except as set forth in Section 2.7 of the Company Disclosure
Schedule, there are no legal, administrative, arbitration or other proceedings,
claims, actions, causes of action or governmental investigations of any nature
pending or, to the Company's knowledge, threatened against the Company or any
Company Subsidiary seeking to impose, or that could reasonably result in the
imposition, on the Company or any Company Subsidiary, of any liability or
obligation arising under any Environmental Law. Except as set forth in Section
2.7 of the Company Disclosure Schedule, to the Company's knowledge, there is no
reasonable basis for any proceeding, claim, action or governmental investigation
that would impose any such liability or obligation.
(d) For purposes of this Agreement, the term "Hazardous Substance" shall
mean any product, substance, chemical, contaminant, pollutant, effluent, waste
or other material whose presence, nature, quantity and/or intensity of
existence, use, manufacture, disposal, transportation, emission, discharge,
spill, release or effect, either by itself or in combination with other
materials located on any of the Company Real Property or Buyer Real Property (as
defined herein), as applicable, is either: (i) regulated or monitored by any
applicable governmental authority or (ii) defined or listed in, or otherwise
classified pursuant to, any applicable Environmental Law as "hazardous
substances," "hazardous materials," "hazardous wastes," "infectious wastes,"
"toxic substances" or the like. Hazardous Substances shall include, but not be
limited to (i) petroleum and refined petroleum products, (ii) asbestos,
asbestos-containing products, and presumed asbestos-containing material, (iii)
flammable explosives, (iv) radioactive materials, and (v) polychlorinated
biphenyls, whether contained or not.
(e) For purposes of this Agreement, the term "Company Real Property"
means (i) all real property (whether owned or leased) at which the operations of
the Company or any Company Subsidiary are or at any time were conducted and (ii)
all real property held by the Company or any Company Subsidiary as collateral
for any loans made or loans-in-process, or which is otherwise held as "real
estate owned" (REO) as a result of default by the borrower and subsequent
foreclosure by the Company or any Company Subsidiary.
SECTION 2.8 Contracts. Each contract which is material to the business of
the Company and the Company Subsidiaries is in full force and effect; neither
the Company nor any Company Subsidiary, nor, to the knowledge of the Company,
any other party, is in default under any such contract, and no event has
occurred which constitutes, or with the lapse of time or the giving of notice or
both would constitute, a default by the Company or any Company Subsidiary or, to
the knowledge of the Company, by any other party, under any such contract; and
there are no material disputes or disagreements between the Company or any
Company Subsidiary and any other party with respect to any such contract.
14
SECTION 2.9 Agreements with Regulatory Agencies. Neither the Company nor
any Company Subsidiary is subject to any cease-and-desist or other order issued
by, or is a party to any written agreement, consent agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or has been a
recipient of any supervisory letter from, or has adopted any board resolutions
at the request of the OTS, the FDIC or any other applicable federal or state
regulatory agency having jurisdiction over the Company or any Company Subsidiary
or its business ("Regulatory Agency"), that currently restricts the conduct of
its business or that relates to its capital adequacy, compliance with laws, its
credit policies, its management or its business (each a "Regulatory Agreement"),
nor has the Company or any Company Subsidiary been advised by any Regulatory
Agency that it is considering issuing or requesting any such Regulatory
Agreement.
SECTION 2.10 Loan Loss Reserves. The reserves for possible loan losses
shown on the September 30, 1998 call reports filed for the Company's
Subsidiaries are adequate in all material respects to provide for possible
losses, net of recoveries relating to loans previously charged off, on loans
outstanding (including accrued interest receivable) as of September 30, 1998.
SECTION 2.11 Securities and Banking Reports; Financial Statements.
(a) The Company and each Company Subsidiary have filed all forms, reports
and documents required to be filed with (i) the Securities and Exchange
Commission (the "SEC") since December 31, 1995, and as of the date of this
Agreement the Company has delivered to the Buyer (A) its Annual Reports on Form
10-K for the fiscal years ended March 31, 1998, 1997 and 1996, respectively, (B)
its Quarterly Reports on Form 10-Q for the periods ended June 30 and September
30, 1998, (C) all proxy statements relating to the Company's meetings of
shareholders (whether annual or special) held since March 31, 1996, (D) all
Current Reports on Form 8-K filed by the Company with the SEC since March 31,
1996, (E) all other reports or registration statements (other than Quarterly
Reports on Form 10-Q not referred to in clause (B) above) filed by the Company
with the SEC since March 31, 1996 and (F) all amendments and supplements to all
such reports and registration statements filed by the Company with the SEC since
March 31, 1996 (collectively, the "Company SEC Reports") and (ii) the OTS, the
FDIC and any other applicable federal or state securities or banking authorities
(all such reports and statements are collectively referred to with the Company
SEC Reports as the "Company Reports"). The Company Reports, including all
Company Reports filed after the date of this Agreement, (x) were or will be
prepared in all material respects in accordance with the requirements of
applicable Law and (y) did not at the time they were filed, or will not at the
time they are filed, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Reports, including
any Company SEC Reports filed since the date of this Agreement and prior to or
on the Effective Time, has been
15
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto) and each
fairly presents the consolidated financial position of the Company and the
Company Subsidiaries as of the respective dates thereof and the consolidated
results of its operations and changes in financial position for the periods
indicated, except that any unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments.
(c) Except for (i) those liabilities that are fully reflected or reserved
against in the financial statements that are contained in the Company SEC
Reports, (ii) liabilities disclosed in Section 2.11 of the Company Disclosure
Schedule, and (iii) liabilities incurred in the ordinary course of business
consistent with past practice since September 30, 1998, neither the Company nor
any Company Subsidiary has incurred any liability of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether due or to become
due) that, either alone or when combined with all similar liabilities, has had,
or could reasonably be expected to have, a Material Adverse Effect on the
Company and the Company Subsidiaries taken as a whole.
SECTION 2.12 Absence of Certain Changes or Events. Except as disclosed in
the Company SEC Reports filed prior to the date of this Agreement or set forth
in Section 2.12 of the Company Disclosure Schedule and except for the
transactions contemplated by this Agreement, since September 30, 1998 to the
date of this Agreement, the Company and the Company Subsidiaries have conducted
their businesses only in the ordinary course and in a manner consistent with
past practice and, since September 30, 1998, there has not been (a) any change
in the financial condition, results of operations or business of the Company and
any of the Company Subsidiaries having a Material Adverse Effect on the Company
and the Company Subsidiaries taken as a whole, (b) any damage, destruction or
loss (whether or not covered by insurance) with respect to any assets of the
Company or any of the Company Subsidiaries having a Material Adverse Effect on
Company and the Company Subsidiaries taken as a whole, (c) any change by the
Company in its accounting methods, principles or practices, (d) any revaluation
by the Company of any of its assets in any material respect, (e) to the date of
this Agreement, any entry by the Company or any of the Company Subsidiaries into
any commitment or transactions material to the Company and the Company
Subsidiaries taken as a whole or (f) except for regular quarterly cash dividends
on Company Common Stock with usual record and payment dates, to the date of this
Agreement, any declaration, setting aside or payment of any dividends or
distributions in respect of shares of Company Common Stock or any redemption,
purchase or other acquisition of any of its securities or any of the securities
of any Company Subsidiary.
SECTION 2.13 Absence of Litigation.
(a) Except as set forth in Section 2.13 of the Company Disclosure
Schedule, neither the Company nor any of the Company Subsidiaries is a party to
any, and there are no pending or, to the Company's knowledge, threatened, legal,
administrative, arbitral or other proceedings, claims, actions or governmental
or regulatory investigations of any nature against the Company or any of the
16
Company Subsidiaries or challenging the validity or propriety of the
transactions contemplated by this Agreement which, if adversely determined,
would, individually or in the aggregate, have a Material Adverse Effect on the
Company and the Company Subsidiaries taken as a whole.
(b) There is no injunction, order, judgment, decree or regulatory
restriction imposed upon the Company, any of the Company Subsidiaries or the
assets of the Company or any of the Company Subsidiaries which has had a
Material Adverse Effect on the Company and the Company Subsidiaries taken as a
whole.
SECTION 2.14 Employee Benefit Plans.
(a) Plans of the Company. Section 2.14(a) of the Company Disclosure
Schedule lists (i) all employee benefit plans (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")), and all
bonus, stock option, stock purchase, restricted stock, incentive, deferred
compensation, retiree medical or life insurance, supplemental retirement,
severance or other benefit plans, programs or arrangements, and all material
employment, termination, severance or other employment contracts or employment
agreements, with respect to which the Company or any Company Subsidiary has any
obligation (collectively, the "Company Plans"). The Company has furnished or
made available to the Buyer a complete and accurate copy of each Company Plan
(or a description of the Company Plans, if the Company Plans are not in writing)
and a complete and accurate copy of each material document prepared in
connection with each such Company Plan, including, without limitation, and where
applicable, a copy of (i) each trust or other funding arrangement, (ii) each
summary plan description and summary of material modifications, (iii) the three
(3) most recently filed IRS Forms 5500 and related schedules, and (iv) the most
recently issued IRS determination letter for each such Plan.
(b) Absence of Certain Types of Plans. No member of the Company's
"controlled group," within the meaning of Section 4001(a)(14) of ERISA,
maintains or contributes to, or within the five years preceding the date of this
Agreement has maintained or contributed to, an employee pension benefit plan
subject to Title IV of ERISA. Except as disclosed in Section 2.14(b) of the
Company Disclosure Schedule, none of the Company Plans obligates the Company or
any of the Company Subsidiaries to pay material separation, severance,
termination or similar- type benefits solely as a result of any transaction
contemplated by this Agreement or as a result of a "change in control," within
the meaning of such term under Section 280G of the Code. Except as disclosed in
Section 2.14(b) of the Company Disclosure Schedule, or as required by group
health continuation rights under Section 4980B of the Code ("COBRA" rights),
none of the Company Plans provides for or promises retiree medical, disability
or life insurance benefits to any current or former employee, officer or
director or life insurance benefits to any current or former employee, officer
or director of the Company or any of the Company Subsidiaries. Each of the
Company Plans is subject only to the laws of the United States or a political
subdivision thereof.
(c) Compliance with Applicable Laws. Except as disclosed in Section
2.14(c) of the Company Disclosure Schedule, each Company Plan has been operated
in all respects in
17
accordance with the requirements of all applicable Law and all persons who
participate in the operation of such Company Plans and all Company Plan
"fiduciaries" (within the meaning of Section 3(21) of ERISA) have acted in
accordance with the provisions of all applicable Law, except where such
violations of applicable Law would not, individually or in the aggregate, have a
Material Adverse Effect on the Company and the Company Subsidiaries taken as a
whole. The Company and the Company Subsidiaries have performed all obligations
required to be performed by any of them under, are not in any respect in default
under or in violation of, and the Company and the Company Subsidiaries have no
knowledge of any default or violation by any party to, any Plan, except where
such failures, defaults or violations would not, individually or in the
aggregate, have a Material Adverse Effect on the Company and the Company
Subsidiaries taken as a whole.
(d) Qualification of Certain Plans. Each Company Plan that is intended to
be qualified under Section 401(a) of the Code or Section 401(k) of the Code
(including each trust established in connection with such a Plan that is
intended to be exempt from Federal income taxation under Section 501(a) of the
Code) has received a favorable determination letter from the IRS (as defined
herein) that it is so qualified, and, except as disclosed in Section 2.14(d) of
the Company Disclosure Schedule, no event has occurred since the date of such
determination letter from the IRS to adversely affect the qualified status of
any such Plan. Except as disclosed in Section 2.14(d) of the Company Disclosure
Schedule, no trust maintained or contributed to by the Company or any of the
Company Subsidiaries is intended to be qualified as a voluntary employees'
beneficiary association or is intended to be exempt from Federal income taxation
under Section 501(c)(9) of the Code.
(e) Absence of Certain Liabilities and Events. Except for matters
disclosed in Section 2.14(e) of the Company Disclosure Schedule, there has been
no non-exempt prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) with respect to any Plan. The Company and each of
the Company Subsidiaries has not incurred any liability for any excise tax
arising under Section 4972 or 4980B of the Code that would individually or in
the aggregate have a Material Adverse Effect on the Company and the Company
Subsidiaries taken as a whole.
(f) Plan Contributions. All contributions, premiums or payments required
to be made prior to the Effective Time with respect to any Company Plan will
have been made on or before the Effective Time.
(g) Stock Options. Section 2.14(g) of the Company Disclosure Schedule
sets forth a true and complete list of each current or former employee, officer
or director of the Company or any Company Subsidiary who holds any option to
purchase Company Common Stock as of the date of this Agreement, together with
the number of shares of Company Common Stock subject to such option, the date of
grant of such option, the plan under which the options were granted, the option
price of such option, the vesting schedule for such option, whether such option
is intended to qualify as an incentive stock option within the meaning of
Section 422(b) of the Code, and the expiration date of such option. Section
2.14(g) indicates
18
those of such options identified therein, if any, the vesting of which will be
accelerated as a result of the Merger.
(h) Employment Contracts. Except for employment, severance, consulting or
other similar contracts with any employees, consultants, officers or directors
of the Company or any of the Company Subsidiaries disclosed in Section 2.14(h)
of the Company Disclosure Schedule, neither the Company nor any Company
Subsidiary is a party to any such contracts. Neither the Company nor any Company
Subsidiary is a party to any collective bargaining agreements.
SECTION 2.15 Registration Statement; Proxy Statement/Prospectus. The
information supplied by the Company for inclusion in the Registration Statement
(as defined in Section 3.15) shall not at the time the Registration Statement is
declared effective contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. The information supplied by the Company for inclusion
in the proxy statement/prospectus to be sent to the shareholders of the Company
in connection with the meeting of the Company's shareholders to consider the
Merger (the "Company Shareholders' Meeting") (such proxy statement/prospectus as
amended or supplemented is referred to herein as the "Proxy
Statement/Prospectus") shall not at the date the Proxy Statement/Prospectus (or
any amendment thereof or supplement thereto) is first mailed to shareholders, at
the time of the Company Shareholders' Meeting and at the Effective Time, be
false or misleading with respect to any material fact required to be stated
therein, or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they are made, not misleading. If at any time prior to
the Effective Time any event relating to the Company or any of its affiliates,
officers or directors should be discovered by the Company which should be set
forth in an amendment to the Registration Statement or a supplement to the Proxy
Statement/Prospectus, the Company shall promptly inform the Buyer.
Notwithstanding the foregoing, the Company makes no representation or warranty
with respect to any information about, or supplied or omitted by, the Buyer
which is contained in any of the foregoing documents.
SECTION 2.16 Taxes. The Company and the Company Subsidiaries have timely
filed all material Tax Returns (as defined below) required to be filed by them,
and the Company and the Company Subsidiaries have timely paid and discharged all
material Taxes (as defined below) due in connection with or with respect to the
filing of such Tax Returns, except such as are being contested in good faith by
appropriate proceedings and with respect to which the Company is maintaining
reserves adequate for their payment. To the Company's knowledge, the liability
for Taxes set forth on each such Tax Return adequately reflects the Taxes
required to be reflected on such Tax Return. For purposes of this Agreement,
"Tax" or "Taxes" shall mean taxes, charges, fees, levies, and other governmental
assessments and impositions of any kind, payable to any federal, state, local or
foreign governmental entity or taxing authority or agency, including, without
limitation, (i) income, franchise, profits, gross receipts, estimated, ad
valorem, value added, sales, use, service, real or personal property,
19
capital stock, license, payroll, withholding, disability, employment, social
security, workers compensation, unemployment compensation, utility, severance,
production, excise, stamp, occupation, premiums, windfall profits, transfer and
gains taxes, (ii) customs duties, imposts, charges, levies or other similar
assessments of any kind, and (iii) interest, penalties and additions to tax
imposed with respect thereto; and "Tax Returns" shall mean returns, reports, and
information statements with respect to Taxes required to be filed with the
United States Internal Revenue Service (the "IRS") or any other governmental
entity or taxing authority or agency, domestic or foreign, including, without
limitation, consolidated, combined and unitary tax returns. Except as otherwise
disclosed in Section 2.16 of the Company's Disclosure Schedule, to the Company's
knowledge, neither the IRS nor any other governmental entity or taxing authority
or agency is now asserting, either through audits, administrative proceedings or
court proceedings, any deficiency or claim for additional Taxes. Except as
otherwise disclosed in Section 2.16 of the Company's Disclosure Schedule,
neither the Company nor any of the Company Subsidiaries has granted any waiver
of any statute of limitations with respect to, or any extension of a period for
the assessment of, any Tax. Except as otherwise disclosed in Section 2.16 of the
Company's Disclosure Schedule and except for statutory liens for current taxes
not yet due, to the Company's knowledge there are no material tax liens on any
assets of the Company or any of the Company Subsidiaries. Except as otherwise
disclosed in Section 2.16 of the Company's Disclosure Schedule neither the
Company nor any of the Company Subsidiaries has received a ruling or entered
into an agreement with the IRS or any other taxing authority that would have a
Material Adverse Effect on the Company or the Company Subsidiaries, taken as a
whole, after the Effective Time. Except as otherwise disclosed in Section 2.16
of the Company's Disclosure Schedule, no agreements relating to allocating or
sharing of Taxes exist among the Company and the Company Subsidiaries. Neither
the Company nor any of the Company Subsidiaries has made an election under
Section 341(f) of the Code.
SECTION 2.17 Brokers. No broker, finder or investment banker (other than
Hovde Financial, Inc.) is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Company.
SECTION 2.18 Tax Matters and Pooling. Neither the Company nor, to the
Company's knowledge, any of its affiliates has through the date of this
Agreement taken or agreed to take or omitted to take any action that would
prevent the Merger from qualifying as (i) a reorganization under Section 368 of
the Code or (ii) for pooling-of-interests accounting treatment under GAAP.
SECTION 2.19 Vote Required. The affirmative vote of a majority of the
votes that holders of the outstanding shares of Company Common Stock are
entitled to cast is the only vote of the holders of any class or series of the
Company capital stock necessary to approve the Merger.
SECTION 2.20 Year 2000 Compliance. Except as identified on Section 2.20
of the Company Disclosure Schedule, none of the personal property, equipment or
assets owned or
20
utilized by the Company, including but not limited to computer software,
databases, hardware, controls and peripherals, has characteristics or qualities
that may cause it to fail to (a) operate and produce data on and after January
1, 2000 (including taking into effect that such year is a leap year), or use
data based on time periods on and after January 1, 2000 (including taking into
effect that such year is a leap year), accurately and without delay,
interruption or error relating to the fact that the time at which and the date
on which such software is operating is on or after 12:01 a.m. on January 1, 2000
(including taking into effect that 2000 is a leap year) and (b) accept,
calculate, process, maintain, store and output, accurately and without delay,
interruption or error, all times or dates, or both, whether before, on or after
12:01 a.m. January 1, 2000 or 11:59 on December 31, 1999 (including taking into
effect that 2000 is a leap year), and any time periods determined or to be
determined based on such times or date or both (each a "Year 2000 Defect"),
except for Year 2000 Defects which would not cause a Material Adverse Effect on
the Company and the Company Subsidiaries taken as a whole. Except as identified
in Section 2.20 of the Company Disclosure Schedule, none of the property or
assets owned or utilized by the Company will fail to perform in any material
respect or require any repair, rewrite, conversion or other adaptation because
of, or due in any way to, a Year 2000 Defect, except for Year 2000 Defects which
would not cause a Material Adverse Effect on the Company and the Company
Subsidiaries taken as a whole. The Company has no knowledge that a vendor or
supplier of the Company may experience a Year 2000 Defect that could cause a
Material Adverse Effect on the Company and the Company Subsidiaries taken as a
whole.
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE BUYER
Except as set forth in the Disclosure Schedule delivered by the Buyer to
the Company prior to the execution of this Agreement (the "Buyer Disclosure
Schedule), the Buyer hereby represents and warrants to the Company that:
SECTION 3.1 Organization and Qualification; Subsidiaries.
(a) The Buyer is a corporation duly organized and validly existing under
the laws of the State of Wisconsin, and is registered as a savings and loan
holding company under HOLA. Each subsidiary of the Buyer (a "Buyer Subsidiary"
or, collectively, "Buyer Subsidiaries") is a state-chartered savings association
or a corporation duly organized and validly existing under the laws of the state
of its incorporation. Each of the Buyer and the Buyer Subsidiaries has the
requisite corporate power and authority and is in possession of all franchises,
grants, authorizations, licenses, permits, easements, consents, certificates,
approvals and orders ("Buyer Approvals") necessary to own, lease and operate
their respective properties and to carry on their respective business as now
being conducted, including, without limitation, appropriate authorizations from
the FDIC, OTS and the DFI, and neither the Buyer nor any Buyer Subsidiary has
received any notice of proceedings relating to the revocation or modification of
any Buyer Approvals, except in each case where the failure to be so organized,
existing and in good standing or to have such power, authority, Buyer Approvals
and
21
revocations or modifications would not, individually or in the aggregate,
have a Material Adverse Effect on the Buyer and the Buyer Subsidiaries taken as
a whole.
(b) The Buyer and each Buyer Subsidiary is duly qualified or licensed as
a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned, leased or operated by
it or the nature of its activities makes such qualification or licensing
necessary, except for such failures to be so duly qualified or licensed and in
good standing that would not, either individually or in the aggregate, have a
Material Adverse Effect on the Buyer and the Buyer Subsidiaries taken as a
whole.
(c) A true and complete list of all of the Buyer Subsidiaries, together
with (a) the Buyer's percentage ownership of each Buyer Subsidiary and (b) laws
under which the Buyer Subsidiary is incorporated, is set forth on Section 3.1(c)
of the Buyer Disclosure Schedule. Except as set forth on Section 3.1(c) of the
Buyer Disclosure Schedule, the Buyer and/or one or more of the Buyer
Subsidiaries owns beneficially and of record all of the outstanding shares of
capital stock of each of the Buyer Subsidiaries. Except for the subsidiaries set
forth on Section 3.1(c) of the Buyer Disclosure Schedule and except as provided
in the Stock Option Agreement, the Buyer does not directly or indirectly own any
equity or similar interests in, or any interests convertible into or
exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, joint venture or other business association or entity
other than in the ordinary course of business, and in no event in excess of 5%
of the outstanding equity securities of such entity.
SECTION 3.2 Articles of Incorporation and By-Laws. The Buyer has
previously furnished to the Company a complete and correct copy of the Articles
of Incorporation and the By-Laws, as amended or restated, of the Buyer ("Buyer
Articles" or "Buyer By-Laws") and each Buyer Subsidiary. Such Articles of
Incorporation and By-Laws of the Buyer and each Buyer Subsidiary are in full
force and effect. Neither the Buyer nor any Buyer Subsidiary is in violation of
any of the provisions of its Articles of Incorporation or By-Laws.
SECTION 3.3 Capitalization.
(a) The authorized capital stock of the Buyer consists of 30,000,000
shares of Buyer Common Stock and 5,000,000 shares of preferred stock, $.10 par
value of Buyer ("Buyer Preferred Stock"). As of the date of this Agreement, (i)
17,899,702 shares of Buyer Common Stock are issued and outstanding, all of which
are duly authorized, validly issued, fully paid and non-assessable, except as
provided by Section 180.0622(2)(b) of the WBCL, and were not issued in violation
of any preemptive right of any Buyer shareholder, (ii) 7,098,946 shares of Buyer
Common Stock are held in the treasury of the Buyer, and (iii) 837,944 shares of
Buyer Common Stock are reserved for future issuance pursuant to outstanding
employee stock options issued pursuant to the Buyer's stock option plans. As of
the date of this Agreement, no shares of Buyer Preferred Stock are issued and
outstanding. Except as set forth in clause (iii), above, there are no options,
warrants or other rights, agreements, arrangements or commitments of any
character, including without limitation voting agreements or
22
arrangements, relating to the issued or unissued capital stock of the Buyer or
any Buyer Subsidiary or obligating the Buyer or any Buyer Subsidiary to issue or
sell any shares of capital stock of, or other equity interests in, the Buyer or
any Buyer Subsidiary. All shares of Buyer Common Stock subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, shall be duly authorized,
validly issued, fully paid and non-assessable, except as otherwise provided by
Section 180.0622(2)(b) of the WBCL. There are no obligations, contingent or
otherwise, of the Buyer or any Buyer Subsidiary to repurchase, redeem or
otherwise acquire any shares of Buyer Common Stock or the capital stock of any
Buyer Subsidiary or to provide funds to or make any investment (in the form of a
loan, capital contribution or otherwise) in any Buyer Subsidiary or any other
entity, except for loan commitments and other funding obligations entered into
in the ordinary course of business. Each of the outstanding shares of capital
stock of each Buyer Subsidiary are duly authorized, validly issued, fully paid
and non-assessable, except as provided by Section 180.0622(2)(b) of the WBCL,
and were not issued in violation of any preemptive rights of any Buyer
Subsidiary shareholder, and such shares owned by the Buyer or another Buyer
Subsidiary are owned free and clear of all security interests, liens, claims,
pledges, agreements, limitations of the Buyer's voting rights, charges or other
encumbrances of any nature whatsoever.
(b) The shares of Buyer Common Stock to be issued pursuant to the Merger
will, upon issuance in accordance with the provisions of this Agreement, be duly
authorized, validly issued, fully paid and non-assessable, except as otherwise
provided by Section 180.0622(2)(b) of the WBCL.
SECTION 3.4 Authority. The Buyer has the requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby (other than,
with respect to the Merger, the approval and adoption of this Agreement by the
Buyer's shareholders in accordance with the WBCL and the Buyer Articles and
Buyer By-Laws). The execution and delivery of this Agreement by the Buyer and
the consummation by the Buyer of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of the Buyer are necessary to authorize this
Agreement or to consummate the transactions so contemplated hereby (other than,
with respect to the Merger, the approval and adoption of this Agreement by the
Buyer's shareholders in accordance with the WBCL and the Buyer Articles and
Buyer By-Laws). This Agreement has been duly executed and delivered by, and
constitutes a valid and binding obligation of the Buyer and, assuming due
authorization, execution and delivery by the Company, is enforceable against the
Buyer in accordance with its terms, except as enforcement may be limited by laws
affecting insured depository institutions, general principles of equity whether
applied in a court of law or a court of equity and by bankruptcy, insolvency and
similar laws affecting creditors' rights and remedies generally.
23
SECTION 3.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the Buyer does not,
and the performance of this Agreement and the transactions contemplated hereby
by the Buyer shall not, (i) conflict with or violate the Buyer Articles or Buyer
By-Laws or the Articles of Incorporation or By-Laws of any Buyer Subsidiary,
(ii) conflict with or violate any Laws applicable to the Buyer or any Buyer
Subsidiary or by which its or any of their respective properties is bound or
affected, or (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, require
the giving of notice to, or the consent of, any third party under, or give to
others any rights of termination, amendment, acceleration or cancellation of, or
result in the creation of a lien or encumbrance on any of the properties or
assets of the Buyer or any Buyer Subsidiary pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Buyer or any Buyer Subsidiary is a
party or by which the Buyer or any Buyer Subsidiary or its or any of their
respective properties is bound or affected, except in the case of clause (iii)
for any such conflicts, violations, breaches, defaults or other occurrences that
would not, individually or in the aggregate, have a Material Adverse Effect on
the Buyer and the Buyer Subsidiaries taken as a whole.
(b) The execution and delivery of this Agreement by the Buyer does not,
and the performance of this Agreement by the Buyer shall not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, domestic or foreign, except (i)
for applicable requirements, if any, of the Securities Act, the Exchange Act,
Blue Sky Laws, the HOLA, the HSR Act, the banking laws of the State of Wisconsin
(the "WBL") and the filing of appropriate merger or other documents as required
by the WBCL and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
prevent or delay consummation of the Merger or otherwise prevent the Buyer from
performing its obligations under this Agreement, and would not have a Material
Adverse Effect on the Buyer or the Buyer Subsidiaries taken as a whole.
SECTION 3.6 Compliance; Permits. Neither the Buyer nor any Buyer
Subsidiary is in conflict with, or in default or violation of, (a) any Law
applicable to the Buyer or any Buyer Subsidiary or by which its or any of their
respective properties is bound or affected, or (b) any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Buyer or any Buyer Subsidiary is a party
or by which the Buyer or any Buyer Subsidiary or any of its or any of their
respective properties is bound or affected, except for any such conflicts,
defaults or violations which would not, individually or in the aggregate, have a
Material Adverse Effect on the Buyer and the Buyer Subsidiaries taken as a
whole.
SECTION 3.7 Environmental Matters
(a) Except as set forth in Section 3.7 of the Buyer Disclosure Schedule,
(i) none of the Buyer Real Property (as that term is defined below) has been
designated, restricted, to the
24
Buyer's knowledge, or investigated by any governmental authority as a result of
the actual or suspected presence, spillage, leakage, discharge or other emission
of Hazardous Substances, nor to the Buyer's knowledge is there any basis for any
such designation or investigation; (ii) neither the Buyer nor any Buyer
Subsidiary has received any written notice, order or decree concerning, or
arising by reason of, the actual or suspected presence, spillage, leakage,
discharge, disposal or other emission of any Hazardous Substance in, on, under,
around, about or in the vicinity of, or the transportation of any Hazardous
Substance at, from, or to, any of the Buyer Real Property.
(b) Except as disclosed in Section 3.7 of the Buyer Disclosure Schedule,
neither the Buyer nor any Buyer Subsidiary nor any Buyer Real Property is in
violation of, or subject to any liabilities as a result of any past or current
violations of, any Environmental Laws, and no expenditures are required in
connection with the operation of the Buyer's or any Buyer Subsidiary's
businesses in order to comply with any such Environmental Laws, except for such
violations, liabilities and/or expenditures as would not, individually or in the
aggregate, have a Material Adverse Effect on the Buyer or any Buyer Subsidiary.
(c) Except as set forth in Section 3.7 of the Buyer Disclosure Schedule,
there are no legal, administrative, arbitration or other proceedings, claims,
actions, causes of action, or governmental investigations of any nature pending
or, to the Buyer's knowledge, threatened against the Buyer or any Buyer
Subsidiary seeking to impose, or that could reasonably result in the imposition,
on the Buyer or any Buyer Subsidiary, of any liability or obligation arising
under any Environmental Law. Except as set forth in Section 3.7 of the Buyer
Disclosure Schedule, to the Buyer's knowledge, there is no reasonable basis for
any proceeding, claim, action or governmental investigation that would impose
any such liability or obligation.
(d) For purposes of this Section 3.7, the term "Buyer Real Property"
means (i) all real property (whether owned or leased) at which the operations of
the Buyer or any Buyer Subsidiary are or at any time were conducted and (ii) all
real property held by the Buyer or any Buyer Subsidiary as collateral for any
loans made or loans-in-process, or which is otherwise held as "real estate
owned" (REO) as a result of default by the borrower and subsequent foreclosure
by the Buyer or any Buyer Subsidiary.
SECTION 3.8 Contracts. Each contract which is material to the business of
the Buyer and the Buyer Subsidiaries is in full force and effect; neither the
Buyer nor any Buyer Subsidiary, nor, to the knowledge of the Buyer, any other
party, is in default under any such contract, and no event has occurred which
constitutes, or with the lapse of time or the giving of notice or both would
constitute, a default by the Buyer or any Buyer Subsidiary or, to the knowledge
of the Buyer, by any other party, under any such contract; and there are no
material disputes or disagreements between the Buyer or any Buyer Subsidiary and
any other party with respect to any such contract.
SECTION 3.9 Agreements with Regulatory Agencies. Neither the Buyer nor
any Buyer Subsidiary is subject to any Regulatory Agreements, nor has the Buyer
or any Buyer
25
Subsidiary been advised by any Regulatory Agency that it is considering issuing
or requesting any such Regulatory Agreement.
SECTION 3.10 Loan Loss Reserves. The reserves for possible loan losses
shown on the September 30, 1998 call reports filed for the Buyer's Subsidiaries
are adequate in all material respects to provide for possible losses, net of
recoveries relating to loans previously charged off, on loans outstanding
(including accrued interest receivable) as of September 30, 1998.
SECTION 3.11 Securities and Banking Reports; Financial Statements.
(a) The Buyer and each Buyer Subsidiary have filed all forms, reports and
documents required to be filed with (i) the SEC since March 31, 1996, and as of
the date of this Agreement the Buyer has delivered to the Company (A) its Annual
Reports on Form 10-K for the fiscal years ended March 31, 1998, 1997 and 1996,
respectively, (B) its Quarterly Reports on Form 10-Q for the periods ended June
30 and September 30, 1998, (C) all proxy statements relating to the Buyer's
meetings of shareholders (whether annual or special) held since March 31, 1996,
(D) all Current Reports on Form 8-K filed by the Buyer with the SEC since March
31, 1996, (E) all other reports or registration statements (other than Quarterly
Reports on Form 10-Q not referred to in clause (B) above) filed by the Buyer
with the SEC since March 31, 1996 and (F) all amendments and supplements to all
such reports and registration statements filed by the Buyer with the SEC since
March 31, 1996 (collectively, the "Buyer SEC Reports") and (ii) the OTS, the
FDIC, the DFI and any other applicable federal or state securities or banking
authorities (all such reports and statements are collectively referred to with
the Buyer SEC Reports as the "Buyer Reports"). The Buyer Reports, including all
Buyer Reports filed after the date of this Agreement, (x) were or will be
prepared in all material respects in accordance with the requirements of
applicable Law and (y) did not at the time they were filed, or will not at the
time they are filed, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Buyer SEC Reports, including
any Buyer SEC Reports filed since the date of this Agreement and prior to or on
the Effective Time, has been prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes thereto) and each fairly presents the consolidated financial position
of the Buyer and the Buyer Subsidiaries as of the respective dates thereof and
the consolidated results of its operations and changes in financial position for
the periods indicated, except that any unaudited interim financial statements
were or are subject to normal and recurring year-end adjustments.
(c) Except for (i) those liabilities that are fully reflected or reserved
against in the financial statements that are contained in the Buyer SEC Reports,
(ii) liabilities disclosed in Section 3.11 of the Buyer Disclosure Schedule, and
(iii) liabilities incurred in the ordinary
26
course of business consistent with past practice since September 30, 1998,
neither the Buyer nor any Buyer Subsidiary has incurred any liability of any
nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether due or to become due) that, either alone or when combined with all
similar liabilities, has had, or could reasonably be expected to have, a
Material Adverse Effect on the Buyer and the Buyer Subsidiaries taken as a
whole.
SECTION 3.12 Absence of Certain Changes or Events. Except as disclosed in
the Buyer SEC Reports filed prior to the date of this Agreement, since September
30, 1998 to the date of this Agreement, the Buyer and the Buyer Subsidiaries
have conducted their businesses only in the ordinary course and in a manner
consistent with past practice and, since September 30, 1998, there has not been
(a) any change in the financial condition, results of operations or business of
the Buyer or any of the Buyer Subsidiaries having a Material Adverse Effect on
the Buyer and the Buyer Subsidiaries taken as a whole, (b) any damage,
destruction or loss (whether or not covered by insurance) with respect to any
assets of the Buyer or any of the Buyer Subsidiaries having a Material Adverse
Effect on the Buyer and the Buyer Subsidiaries, taken as a whole, (c) any change
by the Buyer or any Buyer Subsidiaries in its accounting methods, principles or
practices, (d) any revaluation by the Buyer or any Buyer Subsidiaries of any of
its assets in any respect, (e) to the date of this Agreement, any entry by the
Buyer or any of the Buyer Subsidiaries into any commitment or transactions
material to the Buyer and the Buyer Subsidiaries taken as a whole or (f) except
for repurchases pursuant to the Buyer's Common Stock repurchase program or for
regular quarterly cash dividends of Buyer Common Stock with usual record and
payment dates, to the date of this Agreement, any declaration, setting aside or
payment of any dividends or distributions in respect of shares of Buyer Common
Stock or any redemption, purchase or other acquisition of any of its securities
or any of the securities of any Buyer Subsidiary.
SECTION 3.13 Absence of Litigation.
(a) Except as set forth in Section 3.13 of the Buyer Disclosure Schedule,
neither the Buyer nor any of the Buyer Subsidiaries is a party to any, and there
are no pending or, to the Buyer's knowledge, threatened, legal, administrative,
arbitral or other proceedings, claims, actions or governmental or regulatory
investigations of any nature against the Buyer or any of the Buyer Subsidiaries
or challenging the validity or propriety of the transactions contemplated by
this Agreement as to which there is a reasonable probability of an adverse
determination and which, if adversely determined, would, individually or in the
aggregate, have a Material Adverse Effect on the Buyer and the Buyer's
Subsidiaries taken as a whole.
(b) There is no injunction, order, judgment, decree or regulatory
restriction imposed upon the Buyer, any of the Buyer Subsidiaries or the assets
of the Buyer or any of the Buyer Subsidiaries which has had a Material Adverse
Effect on the Buyer and the Buyer's Subsidiaries taken as a whole.
SECTION 3.14 Employee Benefit Plans.
(a) Compliance with Applicable Laws. Each of the Buyer's "employee
benefit plans" within the meaning of Section 3(3) of ERISA, for the benefit of
employees of the Buyer
27
and the Buyer Subsidiaries (the "Buyer Plans") has been operated in all respects
in accordance with the requirements of all applicable Law and all persons who
participate in the operation of such Buyer Plans and all Buyer Plan
"fiduciaries" (within the meaning of Section 3(21) of ERISA) have acted in
accordance with the provisions of all applicable Law, except where such
violations of applicable Law would not, individually or in the aggregate, have a
Material Adverse Effect on the Buyer and the Buyer Subsidiaries, taken as a
whole. The Buyer and the Buyer Subsidiaries have performed all obligations
required to be performed by any of them under, are not in any respect in default
under or in violation of, and the Buyer and the Buyer Subsidiaries have no
knowledge of any default or violation by any party to, any Buyer Plan, except
where such failures, defaults or violations would not, individually or in the
aggregate, have a Material Adverse Effect on the Buyer and the Buyer
Subsidiaries, taken as a whole. No legal action, suit or claim is pending or, to
the knowledge of the Buyer or the Buyer Subsidiaries, threatened with respect to
any Buyer Plan (other than claims for benefits in the ordinary course) and, to
the knowledge of the Buyer or the Buyer Subsidiaries, no fact or event exists
that could give rise to any such action, suit or claim.
(b) Qualification of Certain Plans. Each Buyer Plan that is intended to
be qualified under Section 401(a) of the Code or Section 401(k) of the Code
(including each trust, established in connection with such a Plan that is
intended to be exempt from Federal income taxation under Section 501(a) of the
Code) has received a favorable determination letter from the IRS (as defined
herein) that it is so qualified, and the Buyer is not aware of any fact or event
that has occurred since the date of such determination letter from the IRS to
adversely affect the qualified status of any Buyer Plan or the exempt status of
any such trust. Except as disclosed in Section 3.14(b) of the Buyer Disclosure
Schedule, no trust maintained or contributed to by the Buyer or any of the Buyer
Subsidiaries is intended to be qualified as a voluntary employees' beneficiary
association or is intended to be exempt from federal income taxation under
Section 501(c)(9) of the Code.
(c) Absence of Certain Liabilities and Events. There have been no
prohibited transactions (within the meaning of Section 406 of ERISA or Section
4975 of the Code) with respect to any Buyer Plan. The Buyer and each of the
Buyer Subsidiaries has not incurred any liability for any excise tax arising
under Section 4972 or 4980B of the Code and, to the knowledge of the Buyer or
the Buyer Subsidiaries, no fact or event exists that could give rise to any such
liability.
(d) Plan Contributions. All contributions, provisions or payments
required to be made with respect to any Buyer Plan have been made on or before
their due dates.
SECTION 3.15 Registration Statement; Proxy Statement/Prospectus. The
information supplied by the Buyer for inclusion in the Registration Statement of
the Buyer (the "Registration Statement") pursuant to which the shares of Buyer
Common Stock to be issued in the Merger will be registered with the SEC shall
not, at the time the Registration Statement is declared effective by the SEC,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The
28
information supplied by the Buyer for inclusion in the Proxy
Statement/Prospectus, which will be sent to the shareholders of the Buyer in
connection with the meeting of the Buyer's shareholders to consider the Merger
(the "Buyer Shareholders' Meeting") shall not at the date the Proxy
Statement/Prospectus (or any amendment thereof or supplement thereto) is first
mailed to shareholders, at the time of the Buyer Shareholders' Meeting and at
the Effective Time, be false or misleading with respect to any material fact
required to be stated therein, or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they are made, not misleading. If at any
time prior to the Effective Time any event relating to the Buyer or any of its
affiliates, officers or directors should be discovered by the Buyer which should
be set forth in an amendment to the Registration Statement or a supplement to
the Proxy Statement/Prospectus, the Buyer shall promptly inform the Company.
Notwithstanding the foregoing, the Buyer makes no representation or warranty
with respect to any information about, or supplied or omitted by, the Buyer
which is contained in any of the foregoing documents.
SECTION 3.16 Taxes. The Buyer and the Buyer Subsidiaries have timely
filed all material Tax Returns (as defined in Section 2.16) required to be filed
by them, and the Buyer and the Buyer Subsidiaries have timely paid and
discharged all material Taxes (as defined in Section 2.16) due in connection
with or with respect to the filing of such Tax Returns and have timely paid all
other Taxes as are due, except such as are being contested in good faith by
appropriate proceedings and with respect to which Company is maintaining
reserves adequate for their payment. Except as otherwise disclosed in Section
3.16 of the Buyer Disclosure Schedule, to the knowledge of the Buyer, neither
the IRS nor any other governmental entity or taxing authority or agency is now
asserting, either through audits, administrative proceedings or court
proceedings, any deficiency or claim for additional Taxes. Except as otherwise
disclosed in Section 3.16 of the Company's Disclosure Schedule, neither Buyer
nor any of the Buyer's Subsidiaries has granted any waiver of any statute of
limitations with respect to, or any extension of a period for the assessment of,
any Tax. Except as otherwise disclosed in Section 3.16 of the Buyer Disclosure
Schedule and except for statutory liens for current taxes not yet due, there are
no material tax liens on any assets of the Buyer or any of the Buyer
Subsidiaries. Except as otherwise disclosed in Section 3.16 of the Buyer
Disclosure Schedule, neither the Buyer nor any of the Buyer Subsidiaries has
received a ruling or entered into an agreement with the IRS or any other taxing
authority that would have a Material Adverse Effect on the Buyer and the Buyer
Subsidiaries taken as a whole, after the Effective Time. Except as otherwise
disclosed in Section 3.16 of the Buyer Disclosure Schedule, no agreements
relating to allocating or sharing of Taxes exist among the Buyer and the Buyer
Subsidiaries. Neither the Buyer nor any of the Buyer Subsidiaries has made an
election under Section 341(f) of the Code.
SECTION 3.17 Brokers. No broker, finder or investment banker (other than
McDonald Investments, Inc.) is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Buyer.
29
SECTION 3.18 Tax Matters and Pooling. Neither the Buyer nor, to the
Buyer's knowledge, any of its affiliates has through the date of this Agreement
taken or agreed or omitted to take any action that would prevent the Merger from
qualifying (i) as a reorganization under Section 368 of the Code or (ii) for
pooling-of-interests accounting treatment under GAAP.
SECTION 3.19 Vote Required. The affirmative vote of a majority of the
votes that holders of the outstanding shares of Buyer Common Stock are entitled
to cast is the only vote of the holders of any class or series of the Buyer
capital stock necessary to approve the Merger.
SECTION 3.20 Year 2000 Compliance. Except as identified on Section 3.20
of the Buyer Disclosure Schedule, none of the personal property, equipment or
assets owned or utilized by the Buyer, including but not limited to computer
software, databases, hardware, controls and peripherals, has a Year 2000 Defect.
Except as identified on Section 3.20 of the Buyer Disclosure Schedule, none of
the property or assets owned or utilized by the Buyer will fail to perform in
any material respect or require any repair, rewrite, conversion or other
adaptation because of, or due in any way to, a Year 2000 Defect, except for Year
2000 Defects which would not cause a Material Adverse Effect on the Buyer and
the Buyer Subsidiaries taken as a whole. The Buyer has no knowledge that a
vendor or supplier of the Buyer may experience a Year 2000 Defect that could
cause a Material Adverse Effect on the Buyer and the Buyer Subsidiaries taken as
a whole.
ARTICLE IV - COVENANTS OF THE COMPANY
SECTION 4.1 Affirmative Covenants. The Company hereby covenants and
agrees with the Buyer that prior to the Effective Time, unless the prior written
consent of the Buyer shall have been obtained and except as otherwise
contemplated herein, it will and it will cause each Company Subsidiary to:
(a) operate its business only in the ordinary course consistent with past
practices;
(b) use all reasonable efforts to preserve intact its business
organization and assets, maintain its rights and franchises, retain the services
of its officers and key employees and maintain its relationships with customers;
(c) use all reasonable efforts to maintain and keep its properties in as
good repair and condition as at present, ordinary wear and tear excepted;
(d) use all reasonable efforts to keep in full force and effect insurance
and bonds comparable in amount and scope of coverage to that now maintained by
it;
(e) use all reasonable efforts to perform in all material respects all
obligations required to be performed by it under all material contracts, leases,
and documents relating to or affecting its assets, properties, and business; and
30
(f) take such reasonable actions as are requested by the Buyer to
complete the Merger.
SECTION 4.2 Negative Covenants. Except as specifically contemplated by
this Agreement and the Stock Option Agreement, from the date of this Agreement
until the Effective Time, the Company shall not do, or permit any Company
Subsidiary to do, without the prior written consent of the Buyer, any of the
following:
(a) (i) except as required by applicable law or to maintain qualification
pursuant to the Code, adopt, amend, renew or terminate any Plan or any
agreement, arrangement, plan or policy between the Company or any Company
Subsidiary and one or more of its current or former directors or officers or
(ii) except for normal increases in the ordinary course of business consistent
with past practice or except as required by applicable law, increase in any
manner the base salary, bonus incentive compensation or fringe benefits of any
director or officer or pay any benefit not required by any plan or agreement as
in effect as of the date hereof (including, without limitation, the granting of
stock options, stock appreciation rights, restricted stock, restricted stock
units or performance units or shares); provided, however, that notwithstanding
the foregoing, nothing herein shall prohibit the Company and Fox Cities from
extending for an additional year the employment agreements of each of James J.
Rothenbach, Harold L. Hermansen, James J. Goetz, Theodore W. Hoff and Phillip J.
Schoofs if the Effective Time shall not have occurred prior to the deadline for
extending the terms of such employment agreements subject at all times to
Section 3 of Annex A;
(b) declare or pay any dividend on, or make any other distribution in
respect of, its outstanding shares of capital stock, except for (i) regular
quarterly cash dividends on Company Common Stock with usual record and payment
dates for such dividends with each such dividend at a rate per share of Company
Common Stock not in excess of $0.22 and (ii) dividends by a Company Subsidiary
to the Company;
(c) (i) redeem, purchase or otherwise acquire any shares of its capital
stock (except as otherwise provided by currently existing agreements relating to
outstanding stock options) or any securities or obligations convertible into or
exchangeable for any shares of its capital stock, or any options, warrants,
conversion or other rights to acquire any shares of its capital stock or any
such securities or obligations; (ii) merge with or into any other corporation or
bank, permit any other corporation or bank to merge into it or consolidate with
any other corporation or bank, or effect any reorganization or recapitalization;
(iii) purchase or otherwise acquire any substantial portion of the assets, or
more than 5% of any class of stock, of any corporation, bank or other business
other than in the ordinary course of business and consistent with past practice;
(iv) liquidate, sell, dispose of, or encumber any assets or acquire any assets,
other than in the ordinary course of its business consistent with past practice;
or (v) split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock;
(d) issue, deliver, award, grant or sell, or authorize or propose the
issuance, delivery, award, grant or sale of, any shares of any class of capital
stock of the Company or
31
any Company Subsidiary (including shares held in treasury) or any rights,
warrants or options to acquire, any such shares, other than the issuance of
Company Common Stock issuable upon exercise of employee or director stock
options outstanding as of the date of this Agreement or pursuant to Company
Plans, in effect as of the date of this Agreement;
(e) authorize, permit or cause any of its officers, directors, employees
or agents to directly or indirectly solicit, initiate or encourage any inquiries
relating to, or the making of any proposal which constitutes, a "takeover
proposal" (as defined below), or (i) recommend, endorse or agree to any takeover
proposal, (ii) participate in any discussions or negotiations with respect to a
takeover proposal, or (iii) provide third parties with any nonpublic information
relating to any such inquiry or proposal; provided, however, that the Company
may, and may authorize and permit its officers, directors, employees or agents
to, provide third parties with nonpublic information, otherwise facilitate any
effort or attempt by any third party to make or implement an unsolicited
takeover proposal and participate in discussions and negotiations with any third
party relating to any unsolicited takeover proposal, if the Company, after
having consulted with and considered the advice of outside counsel, has
determined in good faith that such actions are appropriate in the discharge of
the fiduciary duties of the Company's Board of Directors. As used in this
Agreement, "takeover proposal" shall mean any tender or exchange offer, proposal
for a merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the Company or any
Company Subsidiary or any proposal or offer to acquire in any manner
substantially all of the stock or the assets of the Company or any Company
Subsidiary other than the transactions contemplated or permitted by this
Agreement;
(f) propose or adopt any amendments to its Articles of Incorporation or
By-laws in any way adverse to the Buyer;
(g) change any of its methods of accounting in effect at September 30,
1998, or change any of its methods of reporting income or deductions for Federal
income tax purposes from those employed in the preparation of the Federal income
tax returns for the taxable year ended March 31, 1998, except as may be required
by Law or GAAP;
(h) change in any material respect any lending, investment, liability
management or other material policies concerning the business or operations of
the Company or any of the Company Subsidiaries, except as required by Law;
(i) take or cause to be taken or omit to take any action which would
disqualify the Merger (i) as a tax-free reorganization under Section 368 of the
Code or (ii) for pooling of interests accounting treatment under GAAP;
(j) take any action that is intended or may reasonably be expected to
result in any of its representations and warranties set forth in this Agreement
being or becoming untrue in any material respect, or in any of the conditions to
the Merger set forth in Article VII not being satisfied, or in a violation of
any provision of this Agreement except, in every case, as may be required by
applicable Law; or
32
(k) agree in writing or otherwise to do any of the foregoing.
SECTION 4.3 Letter of the Company's Accountants. The Company shall use
its reasonable best efforts to cause to be delivered to the Buyer "comfort"
letters of Wipfli Ullrich Bertelson LLP, the Company's independent public
accountants, dated the date on which the Registration Statement shall become
effective and the Effective Time, respectively, and addressed to the Buyer, in a
form reasonably satisfactory to the Buyer and reasonably customary in scope and
substance for letters delivered by independent public accountants in connection
with registration statements similar to the Registration Statement and
transactions such as those contemplated by this Agreement.
SECTION 4.4 Access and Information.
(a) Until the Effective Time and upon reasonable notice, and subject to
applicable laws relating to the exchange of information, the Company shall, and
shall cause each Company Subsidiary to, afford to the Buyer's officers,
employees, accountants, legal counsel and other representatives of the Buyer,
access, during normal business hours, to all its properties, books, contracts,
commitments and records. Prior to the Effective Time, the Company shall (and
shall cause each Company Subsidiary to) furnish promptly (as soon as available
or received by the Company or any Company Subsidiary) to the Buyer (i) a copy of
each Company Report filed by it or received by it (to the extent not prohibited
by Law and if so prohibited the Company shall promptly so notify the Buyer)
after the date of this Agreement and prior to the Effective Time pursuant to the
requirements of federal or state securities laws, the HOLA or any other federal
or state banking laws or any other applicable Laws promptly after such documents
are available, (ii) a copy of any correspondence received from the IRS or any
other governmental entity or taxing authority or agency and any other
correspondence relating to Taxes, and any other documents relating to Taxes as
the Buyer may reasonably request, and (iii) all other information concerning its
business, properties and personnel as the Buyer may reasonably request, other
than in each case reports or documents which the Company is not permitted to
disclose under applicable Law or binding agreements entered into prior to the
date of this Agreement. The parties hereto will make appropriate substitute
disclosure arrangements under circumstances in which the restrictions of the
preceding sentence apply.
(b) Unless otherwise required by Law, the parties will hold any such
information which is nonpublic in confidence until such time as such information
becomes publicly available through no wrongful act of either party, and in the
event of termination of this Agreement for any reason each party shall promptly
return all nonpublic documents obtained from any other party, and any copies
made of such documents, to such other party or destroy such documents and
copies.
SECTION 4.5 Update Disclosure; Breaches.
(a) From and after the date of this Agreement until the Effective Time,
the Company shall update the Company Disclosure Statement on a regular basis by
written notice to the Buyer to reflect any matters which have occurred from and
after the date of this
33
Agreement which, if existing on the date of this Agreement, would have been
required to be described therein; provided that, to the extent that updating
required under this Section is unduly burdensome to the Company, the Buyer and
the Company will use their best efforts to develop alternate updating procedures
utilizing, wherever possible, existing reporting systems.
(b) The Company shall, in the event it becomes aware of the impending or
threatened occurrence of any event or condition which would cause or constitute
a material breach (or would have caused or constituted a material breach had
such event occurred or been known prior to the date of this Agreement) of any of
its representations or agreements contained or referred to herein, give prompt
written notice thereof to the Buyer and use its best efforts to prevent or
promptly remedy the same.
SECTION 4.6 Affiliates. Within thirty (30) days after the date of this
Agreement, (a) the Company shall deliver to the Buyer a letter identifying all
persons who are then "affiliates" of the Company, including, without limitation,
all directors and executive officers of the Company, for purposes of Rule 145
promulgated under the Securities Act and/or for purposes of applicable SEC
accounting releases with respect to pooling-of-interests accounting treatment
(each a "Company Affiliate") and (b) the Company shall advise the persons
identified in such letter of the resale restrictions imposed by applicable
securities laws and regulations governing pooling-of-interests accounting
treatment and shall use reasonable efforts to obtain from each person identified
in such letter a written agreement, substantially in the form attached hereto as
Exhibit E. The Company shall use its reasonable efforts to obtain from any
person who becomes an affiliate of the Company after the Company's delivery of
the letter referred to above, and on or prior to the Effective Time, a written
agreement substantially in such form as soon as practicable after attaining such
status.
SECTION 4.7 Tax Treatment and Pooling. The Company will use its
reasonable efforts to cause the Merger to qualify for pooling-of-interests
accounting treatment and as a reorganization under Section 368 of the Code.
ARTICLE V - COVENANTS OF THE BUYER
SECTION 5.1 Affirmative Covenants. The Buyer hereby covenants and agrees
with the Company that prior to the Effective Time, unless the prior written
consent of the Company shall have been obtained and except as otherwise
contemplated herein, it will and it will cause each Buyer Subsidiary to:
(a) operate its business only in the ordinary course consistent with past
practices;
(b) use all reasonable efforts to preserve intact its business
organization and assets, maintain its rights and franchises, retain the services
of its officers and key employees and maintain its relationships with customers;
(c) take such reasonable actions as are requested by the Company to
complete the Merger.
34
SECTION 5.2 Negative Covenants. Except as otherwise contemplated by this
Agreement, from the date of this Agreement until the Effective Time, the Buyer
shall not do, or agree to commit to do, or permit any Buyer Subsidiaries to do,
without the prior written consent of the Company any of the following:
(a) declare or pay any extraordinary or special dividends on or make any
other extraordinary or special distributions in respect of any of its capital
stock unless appropriate adjustment or adjustments are made to the Exchange
Ratio as set forth in Section 1.6 hereof;
(b) take any action that is intended or may reasonably be expected to
result in any of its representations and warranties set forth in this Agreement
being or becoming untrue in any material respect, or in any of the conditions to
the Merger set forth in Article VII not being satisfied, or in a violation of
any provision of this Agreement except, in every case, as may be required by
applicable Law;
(c) take or cause to be taken or omit to take any action which would
disqualify the Merger (i) as a tax free reorganization under Section 368 of the
Code or (ii) for pooling-of-interests accounting treatment under GAAP;
(d) amend its Articles of Incorporation or By-laws or other governing
instrument in a manner which would adversely affect in any manner the terms of
the Buyer Common Stock or the ability of the Buyer to consummate the
transactions contemplated hereby;
(e) enter into any agreement providing for, or otherwise participate in,
any merger, consolidation or other transaction in which the Buyer or any
surviving corporation would be required not to consummate the Merger or any of
the other transactions contemplated hereby in accordance with the terms of this
Agreement, as the case may be;
(f) change any of its methods of accounting in effect at September 30,
1998, or change any of its methods of reporting income or deductions for Federal
income tax purposes from those employed in the preparation of the Federal income
tax returns for the taxable year ended March 31, 1998, except as may be required
by Law or GAAP;
(g) change in any material respect any lending, investment, liability
management or other material policies concerning the business or operations of
the Buyer or any of the Buyer Subsidiaries, except as required by Law; or
(h) agree in writing or otherwise to do any of the foregoing.
SECTION 5.3 Access and Information.
(a) Until the Effective Time and upon reasonable notice and subject to
applicable laws relating to the exchange of information, the Buyer shall, and
shall cause each Buyer Subsidiary to, afford to the Company's officers,
employees, accountants, legal counsel and other representatives of the Company,
access, during normal business hours, to all its properties, books, contracts,
commitments and records. Prior to the Effective Time, the Buyer
35
shall (and shall cause each Buyer Subsidiary to) furnish promptly (as soon as
available or received by the Buyer or any Buyer Subsidiary) to the Company (i) a
copy of each Buyer Report filed by it or received by it (to the extent not
prohibited by Law and if so prohibited, the Buyer shall promptly so notify the
Company) after the date of this Agreement and prior to the Effective Time
pursuant to the requirements of federal or state securities laws, the BHCA, any
other federal or state banking laws or any other applicable Laws promptly after
such documents are available and (ii) all other information concerning the
business, properties and personnel of the Buyer or the Buyer Subsidiaries as the
Company may reasonably request, other than in each case reports or documents
which the Buyer is not permitted to disclose under applicable law or binding
agreement entered in to prior to the date of this Agreement. The parties hereto
will make appropriate substitute disclosure arrangements under circumstances in
which the restrictions of the preceding sentence apply.
(b) Unless otherwise required by Law, the parties will hold any such
information which is nonpublic in confidence until such time as such information
becomes publicly available through no wrongful act of either party, and in the
event of termination of this Agreement for any reason each party shall promptly
return all nonpublic documents obtained from any other party, and any copies
made of such documents, to such other party or destroy such documents or copies.
SECTION 5.4 Update Disclosure; Breaches.
(a) From and after the date of this Agreement until the Effective Time,
the Buyer shall update the Buyer Disclosure Statement on a regular basis by
written notice to the Company to reflect any matters which have occurred from
and after the date of this Agreement which, if existing on the date of this
Agreement, would have been required to be described therein; provided that, to
the extent that updating required under this Section is unduly burdensome to the
Buyer, the Buyer and the Company will use their best efforts to develop
alternate updating procedures utilizing, wherever possible, existing reporting
systems.
(b) The Buyer shall, in the event it becomes aware of the impending or
threatened occurrence of any event or condition which would cause or constitute
a material breach (or would have caused or constituted a material breach had
such event occurred or been known prior to the date of this Agreement) of any of
its representations or agreements contained or referred to herein, give prompt
written notice thereof to the Company and use its best efforts to prevent or
promptly remedy the same.
SECTION 5.5 Stock Exchange Listing. The Buyer shall use its best efforts
to cause the shares of Buyer Common Stock to be issued in the Merger to be
approved for listing on The Nasdaq Stock Market prior to the Effective Time.
SECTION 5.6 Tax Treatment and Pooling. The Buyer will use its reasonable
efforts to cause the Merger to qualify (a) as a reorganization under Section 368
of the Code and (b) for pooling-of-interests accounting treatment under GAAP.
36
SECTION 5.7 Stock Options.
(a) At the Effective Time, the Buyer will assume the Company's 1993 Stock
Option and Incentive Plan, the Company's 1998 Incentive Stock Plan, and the OSB
Financial Corp. 1992 Stock Option and Incentive Plan (collectively, the "Option
Plans") and all of the Company's obligations thereunder. At the Effective Time,
each outstanding option issued pursuant to the Option Plans shall be deemed to
constitute an option to acquire, on the same terms and conditions as were
applicable under such option (including, without limitation, the time periods
allowed for exercise), a number of shares of Buyer Common Stock equal to the
product of the Exchange Ratio and the number of shares of Company Common Stock
subject to such option (provided that any fractional shares of Buyer Common
Stock resulting from such multiplication shall be rounded up to the nearest
share), at a price per share (rounded down to the nearest cent) equal to the
exercise price per share of the shares of Company Common Stock subject to such
option divided by the Exchange Ratio. The duration and other terms of the new
option shall be the same as the original option, except that all references to
the Company shall be deemed to be references to the Buyer. The Buyer agrees to
take all corporate action necessary to reserve for issuance a sufficient number
of shares of Buyer Common Stock for delivery upon exercise of options under the
Option Plans assumed by the Buyer in accordance with this Agreement.
(b) Within ten (10) days after the Effective Time, the Buyer shall, to
the extent necessary, file with the SEC a registration statement on an
appropriate form under the Securities Act with respect to the shares of Buyer
Common Stock subject to options to acquire Buyer Common Stock issued pursuant to
Section 5.7(a) hereof, and shall use its best efforts to maintain the current
status of the prospectus related thereto, as well as comply with applicable
state securities or Blue Sky Laws, for so long as such options remain
outstanding.
SECTION 5.8 SEC Filings. The Surviving Corporation shall make all filings
with the SEC that are described in subsection (c) of Rule 144 under the
Securities Act for a period of two years following the Effective Time.
ARTICLE VI - ADDITIONAL AGREEMENTS
SECTION 6.1 Proxy Statement/Prospectus; Registration Statement. As
promptly as practicable after the execution of this Agreement, the Buyer and the
Company shall prepare and file with the SEC the Proxy Statement/Prospectus and
Registration Statement under the Securities Act and the Exchange Act relating to
the approval of the Merger by the shareholders of the Buyer and the shareholders
of the Company and shall use all reasonable efforts to cause the Registration
Statement to become effective as soon thereafter as practicable. It shall be a
condition precedent to the mailing of the Proxy Statement/Prospectus to the
shareholders of the Buyer and the Company that the Company shall have received
an opinion from Hovde Financial, Inc. that, as of the date thereof, the Exchange
Ratio is fair from a financial point of view to the holders of Company Common
Stock, and the Buyer shall have received an opinion from McDonald Investments,
Inc. that, as of the date thereof, the Exchange Ratio is fair from a financial
point of view to Buyer.
37
SECTION 6.2 Meetings of Shareholders. The Buyer and the Company shall
promptly after the date of this Agreement take all action necessary in
accordance with the WBCL, the Buyer Articles and the Buyer By-Laws, and the
Company Articles and the Company By-Laws, to convene the Buyer Shareholders'
Meeting and the Company Shareholders' Meeting. The Buyer and the Company shall
use their best efforts to solicit from their respective shareholders proxies in
favor of the Merger and shall take all other action necessary or advisable to
secure the vote or consent of shareholders required by the WBCL to approve the
Merger (including, without limitation, recommending that the respective
shareholders approve this Agreement, the Merger and the transactions
contemplated hereby and thereby), unless the Board of Directors of the Company
or the Buyer, as the case may be, shall have determined in good faith based on
the advice of counsel that such actions could reasonably be deemed to violate
its fiduciary duty to the shareholders of the Buyer or the Company, as the case
may be.
SECTION 6.3 Appropriate Action; Consents; Filings. The Company and the
Buyer shall use all reasonable efforts to (a) take, or cause to be taken, all
appropriate action, and do, or cause to be done, all things necessary, proper or
advisable under applicable Law to consummate and make effective the transactions
contemplated by this Agreement and the Stock Option Agreement, (b) obtain all
consents, licenses, permits, waivers, approvals, authorizations or orders
required under Law (including, without limitation, all foreign and domestic
(federal, state and local) governmental and regulatory rulings and approvals and
parties to contracts) required in connection with the authorization, execution
and delivery of this Agreement and the Stock Option Agreement and the
consummation by them of the transactions contemplated hereby and thereby, (c)
make all necessary filings, and thereafter make any other required submissions,
with respect to this Agreement, the Stock Option Agreement and the Merger
required under (i) the Securities Act and the Exchange Act and the rules and
regulations thereunder, and any other applicable federal or state securities
laws, (ii) the HSR Act, (iii) applicable federal or state banking laws and (iv)
any other applicable Law; provided that, the Buyer and the Company shall
cooperate with each other in connection with the making of all such filings,
including providing copies of all such documents to the non-filing party and its
advisors prior to filing and, if requested, to accept all reasonable additions,
deletions or changes suggested in connection therewith. The Company and the
Buyer shall furnish all information required for any application or other filing
to be made pursuant to the rules and regulations of any applicable Law
(including all information required to be included in the Proxy
Statement/Prospectus and the Registration Statement) in connection with the
transactions contemplated by this Agreement. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of each party to
this Agreement shall use all reasonable efforts to take all such necessary
action.
SECTION 6.4 Employee Stock Options and Other Employee Benefit Matters.
Annex A hereto sets forth certain agreements with respect to the Company's
employee and director stock options and other employee benefit matters.
38
SECTION 6.5 Directors' and Officers' Indemnification and Insurance.
(a) In the event of any threatened or actual claim, action, suit,
proceeding or investigation, whether civil, criminal or administrative,
including, without limitation, any such claim, action, suit, proceeding or
investigation in which any person who is now, or has been at any time prior to
the date of this Agreement, or who becomes prior to the Effective Time, a
director, officer or employee of the Company or any of the Company Subsidiaries
(including in his/her role as a fiduciary of the employee benefit plans of the
Company or the Company Subsidiaries, if applicable) (the "Indemnified Parties")
is, or is threatened to be, made a party based in whole or in part on, or
arising in whole or in part out of, or pertaining to (i) the fact that he is or
was a director, officer or employee of the Company, any of the Company
Subsidiaries or any of their respective predecessors or (ii) this Agreement or
any of the transactions contemplated hereby, whether in any case asserted or
arising before or after the Effective Time, the parties hereto agree to
cooperate and use their best efforts to defend against and respond thereto. It
is understood and agreed that after the Effective Time, the Buyer shall
indemnify and hold harmless, to the fullest extent permitted by law, each such
Indemnified Party against any losses, claims, damages, liabilities, costs,
expenses (including reasonable attorney's fees and expenses in advance of the
final disposition of any claim, suit, proceeding or investigation to each
Indemnified Party to the fullest extent permitted by law upon receipt of any
undertaking required by applicable law), judgments, fines and amounts paid in
settlement in connection with any such threatened or actual claim, action, suit,
proceeding or investigation, and in the event of any such threatened or actual
claim, action, suit, proceeding or investigation (whether asserted or arising
before or after the Effective Time), the Indemnified Parties may retain counsel
satisfactory to them; provided, however, that the (A) Buyer shall have the right
to assume the defense thereof and upon such assumption the Buyer shall not be
liable to any Indemnified Party for any legal expenses of other counsel or any
other expenses subsequently incurred by any Indemnified Party in connection with
the defense thereof, except that if the Buyer elects not to assume such defense
or counsel for the Indemnified Parties reasonably advises that there are issues
which raise conflicts of interest between the Buyer and the Indemnified Parties,
the Indemnified Parties may retain counsel satisfactory to them, and the Buyer
shall pay the reasonable fees and expenses of such counsel for the Indemnified
Parties, (B) Buyer shall in all cases be obligated pursuant to this Section
6.5(a) to pay for only one firm of counsel for all Indemnified Parties, (C)
Buyer shall not be liable for any settlement effected without its prior written
consent (which consent shall not be unreasonably withheld) and (D) Buyer shall
have no obligation hereunder to any Indemnified Party when and if a court of
competent jurisdiction shall ultimately determine, and such determination shall
have become final and nonappealable, that indemnification of such Indemnified
Party in the manner contemplated hereby is prohibited by applicable Law. Any
Indemnified Party wishing to claim indemnification under this Section 6.5, upon
learning of any such claim, action, suit, proceeding or investigation, shall
promptly notify the Buyer thereof, provided that the failure to so notify shall
not affect the obligations of the Buyer under this Section 6.5 except to the
extent such failure to notify materially prejudices the Buyer.
(b) The Surviving Corporation shall use its best efforts to purchase, and
for a period of six (6) years after the Effective Time maintain in effect,
directors and officers liability
39
insurance coverage with respect to wrongful acts and/or omissions committed or
allegedly committed by any of the officers or directors of the Company prior to
the Effective Time ("D&O Coverage"). Such D&O Coverage shall have an aggregate
coverage limit over the term of such policy in an amount no less than the
aggregate annual coverage limit under the Company's existing directors' and
officers' liability insurance policy, and in all other material respects shall
be least comparable to such existing policy; provided, however, that in no event
will the Surviving Corporation be required to expend, on an annual basis, as the
cost of maintaining such D&O Coverage, more than 200% of the amount currently
expended by the Company to procure its existing D&O Coverage (the "Maximum
Premium"); and provided further, that if the Surviving Corporation is unable to
obtain or maintain the D&O Coverage called for by this Section 6.5(b) for an
amount equal to or less than the Maximum Premium, then the Surviving Corporation
will nonetheless use its best efforts to procure and maintain as much comparable
D&O Coverage as it can obtain for such Maximum Premium. Notwithstanding the
foregoing, the Surviving Corporation, if it so elects, may satisfy its
obligations under this Section 6.5(b) at any time by procuring one or more
so-called "tail" or "runoff" policies of directors' and officers' liability
insurance that insure against the risks that would be insured against by the D&O
Coverage.
(c) In the event the Buyer or the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) transfers or conveys all or substantially all
of its properties and assets to any person, then, and in each such case, proper
provision shall be made so that the successors and assigns of the Buyer or the
Surviving Corporation, as the case may be, assume the obligations set forth in
this section.
(d) In addition to the other indemnification obligations set forth in
this Section 6.5, the Buyer will fulfill the obligations to indemnify directors
and officers of the Company contained in the Company Articles.
(e) The provisions of this Section 6.5 are intended to be for the benefit
of, and shall be enforceable by, each Indemnified Party and his or her heirs and
representatives.
SECTION 6.6 Notification of Certain Matters. The Company shall give
prompt notice to the Buyer, and the Buyer shall give prompt notice to the
Company, of (a) the occurrence, or non-occurrence, of any event the occurrence,
or non-occurrence, of which would be likely to cause any representation or
warranty contained in this Agreement to be untrue or inaccurate and (b) any
failure of the Company or the Buyer, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder; provided, however, that the delivery of any notice pursuant to
this Section 6.6 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
SECTION 6.7 Public Announcements. The Buyer and the Company shall consult
with each other before issuing any press release or otherwise making any public
statements with respect to the Merger and shall not issue any such press release
or make any
40
such public statement prior to such consultation, except as may be required by
Law or any listing agreement with or rule of the market or exchange on which the
securities of the Buyer or the Company, as the case may be, are then traded.
SECTION 6.8 Recision of Repurchase Programs. Prior to the Effective Time,
the Buyer and the Company shall renounce and rescind their respective publicly
announced share repurchase programs in order to meet the requirements for
pooling of interests accounting treatment for the Merger under GAAP.
SECTION 6.9 Dividends. After the date of this Agreement, each of the
Buyer and the Company shall coordinate with the other the payment of dividends
with respect to the Buyer Common Stock and the Company Common Stock and the
record and payment dates relating thereto, it being the intention of the parties
hereto that the holders of Buyer Common Stock and Company Common Stock shall not
receive two dividends, or fail to receive one dividend, in any single quarter
with respect to their shares of Buyer Common Stock and/or Company Common Stock
or the shares of Buyer Common Stock any holder of Company Common Stock receives
in exchange therefor in the Merger.
SECTION 6.10 Issuance of Shares. If and to the extent necessary to reduce
the aggregate number of "tainted treasury shares" to a number that is consistent
with the accounting of the Merger as a "pooling of interests" under GAAP, each
of the Buyer and the Company shall, prior to the Effective Time, coordinate with
the other party with respect to the issuance of, and pursuant thereto shall
issue, shares of Buyer Common Stock or Company Common Stock, as may be
appropriate, in such manner, and limited to such number, as is necessary.
SECTION 6.11 Expenses.
(a) All Expenses (as defined below) incurred by the Buyer and the Company
shall be borne solely and entirely by the party which has incurred the same,
except that the parties shall share equally in the out-of-pocket expenses
relating to the printing of the Registration Statement and the Proxy
Statement/Prospectus.
(b) "Expenses" as used in this Agreement shall include all out-of-pocket
expenses (including, without limitation, all fees and expenses of counsel,
accountants, investment bankers, experts and consultants to the party and its
affiliates) incurred by a party or on its behalf in connection with or related
to the authorization, preparation and execution of this Agreement and the Stock
Option Agreement, the solicitation of shareholder approvals and all other
matters related to the closing of the transactions contemplated hereby and
thereby.
ARTICLE VII - CONDITIONS OF MERGER
SECTION 7.1 Conditions to Obligation of Each Party to Effect the Merger.
The respective obligations of each party to effect the Merger shall be subject
to the satisfaction at or prior to the Effective Time of the following
conditions:
41
(a) Effectiveness of the Registration Statement. The Registration
Statement shall have been declared effective by the SEC under the Securities
Act. No stop order suspending the effectiveness of the Registration Statement
shall have been issued by the SEC and no proceedings for that purpose shall, on
or prior to the Effective Time, have been initiated or, to the knowledge of the
Buyer or the Company, threatened by the SEC.
(b) Shareholder Approval. This Agreement and the Merger shall have been
approved and adopted by the requisite vote of the shareholders of the Buyer and
the Company.
(c) Regulatory Approvals. (i) The Merger shall have been approved by the
applicable regulatory authorities; (ii) all conditions required to be satisfied
prior to the Effective Time imposed by the terms of such approval shall have
been satisfied; and (iii) all waiting periods relating to such approval shall
have expired.
(d) No Order. No federal or state governmental or regulatory authority or
other agency or commission, or federal or state court of competent jurisdiction,
shall have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, executive order, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect restricting, preventing
or prohibiting consummation of the transactions contemplated by this Agreement.
(e) Pooling of Interests. The Buyer and the Company shall have received a
letter of the Company's independent accountants, dated as of the Effective Time,
in form and substance reasonably satisfactory to the Buyer and the Company,
stating that the Company is an entity that qualifies for pooling of interests
accounting treatment pursuant to GAAP and applicable SEC regulations. The Buyer
and the Company shall also have received a letter of the Buyer's independent
accountants, dated as of the Effective Time, in form and substance reasonably
satisfactory to the Buyer and the Company, stating that the transactions
effected pursuant to this Agreement will qualify as a pooling of interests
pursuant to GAAP and applicable SEC regulations.
SECTION 7.2 Additional Conditions to Obligations of the Buyer. The
obligations of the Buyer to effect the Merger are also subject to the following
conditions:
(a) Representations and Warranties. Each of the representations and
warranties of the Company contained in this Agreement, without giving effect to
any update to the Company Disclosure Schedule or notice to the Buyer under
Section 4.5 or 6.6, shall be true and correct in all respects as of the date of
this Agreement and (except to the extent such representations and warranties
speak as of an earlier date) as of the Effective Time as though made on and as
of the Effective Time; provided, however, that, for purposes of this clause,
such representations and warranties shall be deemed to be true and correct
unless the failure or failures of such representations and warranties to be so
true and correct, individually or in the aggregate, represent a Material Adverse
Effect on the Company and the Company Subsidiaries taken as a whole. Buyer shall
have received a certificate signed on behalf of the Company by the Chief
Executive Officer and the Chief Financial Officer of the Company to the
foregoing effect.
42
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the
Effective Time.
(c) Consents Obtained. All Company Approvals and all filings required to
be made by the Company for the authorization, execution and delivery of this
Agreement and the consummation by it of the transactions contemplated hereby
shall have been obtained and made by the Company, except those for which failure
to obtain such Company Approvals or make such filings would not, individually or
in the aggregate, have a Material Adverse Effect on the Company and the Company
Subsidiaries taken as a whole.
(d) No Challenge. There shall not be pending any action, proceeding or
investigation before any court or administrative agency or by a government
agency (i) challenging or seeking material damages in connection with the Merger
or the conversion of Company Common Stock into Buyer Common Stock pursuant to
the Merger or (ii) seeking to restrain, prohibit or limit the exercise of full
rights of ownership or operation by the Buyer or the Buyer Subsidiaries of all
or any portion of the business or assets of the Company, which in either case is
reasonably likely to have a Material Adverse Effect on either the Company and
the Company Subsidiaries taken as a whole or the Buyer and the Buyer
Subsidiaries taken as a whole.
(e) Federal Tax Opinion. The Buyer shall have received an opinion of
Whyte Hirschboeck Dudek S.C., independent counsel to the Buyer, dated as of the
Effective Time, substantially to the effect that on the basis of facts,
representations and assumptions set forth in such opinion which are consistent
with the state of facts existing at the Effective Time, the Merger will be
treated for Federal income tax purposes as a reorganization within the meaning
of Section 368(a) of the Code, and accordingly that no gain or loss will be
recognized by Company as a result of the Merger. In rendering such opinion,
Whyte Hirschboeck Dudek S.C. may require and rely upon representations and
covenants contained in certificates of officers of the Buyer, the Company and
others.
(f) Comfort Letters. The Buyer shall have received from Wipfli Ullrich
Bertelson LLP the "comfort" letters referred to in Section 4.3.
(g) No Material Adverse Changes. Since the date of this Agreement, there
shall not have been any change in the financial condition, results of operations
or business of the Company and the Company Subsidiaries, taken as a whole, that
either individually or in the aggregate would have a Material Adverse Effect on
the Company and the Company Subsidiaries taken as a whole. For purposes of this
Section 7.2(g) only, a Material Adverse Effect on the Company and the Company
Subsidiaries shall be deemed to have been incurred if there has been (i) any
reduction in the CAMELS (Capital, Assets, Management, Earnings, Liquidity and
Sensitivity to Market Risk) composite rating of Fox Cities to 3 or higher (i.e.,
4 or 5) and/or (ii) any reduction in Fox Cities' CRA (Community Reinvestment
Act) rating to "substantial noncompliance" or worse. The Buyer shall have
received a certificate of the Chief
43
Executive Officer and the Chief Financial Officer of the Company with respect to
the foregoing matters.
(h) Employment Agreements. James J. Rothenbach and Donald D. Parker shall
have entered into Employment Agreements, containing substantially the terms and
conditions set forth in Exhibits B and C, hereto, respectively. Each of Harold
L. Hermansen, James J. Goetz, Theodore W. Hoff and Phillip J. Schoofs shall have
entered into a termination agreement relating to their respective employment
agreements in a form reasonably acceptable to the parties and each of said
individuals shall have received the payout amounts due him under his respective
employment agreement.
SECTION 7.3 Additional Conditions to Obligations of the Company. The
obligation of the Company to effect the Merger is also subject to the following
conditions:
(a) Representations and Warranties. Each of the representations and
warranties of the Buyer set forth in this Agreement, without giving effect to
any notice to the Company under Section 5.4 or 6.6, shall be true and correct in
all respects as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the Effective
Time, as though made on and as of the Effective Time; provided, however, that
for purposes of this clause, such representations and warranties shall be deemed
to be true and correct unless the failure or failures of such representations
and warranties to be so true and correct, individually or in the aggregate,
represent a Material Adverse Effect on the Buyer and the Buyer Subsidiaries
taken as a whole. The Company shall have received a certificate signed on behalf
of the Buyer by the Chief Executive Officer and the Chief Financial Officer of
the Buyer to the foregoing effect.
(b) Agreements and Covenants. The Buyer shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Effective
Time.
(c) Consents Obtained. All consents, waivers, approvals, authorizations
or orders required to be obtained, and all filings required to be made by the
Buyer for the authorization, execution and delivery of this Agreement and the
consummation by it of the transactions contemplated hereby shall have been
obtained and made by the Buyer, except where failure to obtain any consents,
waivers, approvals, authorizations or orders required to be obtained or any
filings required to be made would not have a Material Adverse Effect on the
Buyer and the Buyer Subsidiaries taken as a whole.
(d) Federal Tax Opinion. The Company shall have received an opinion of
Foley & Lardner, independent counsel to the Company, in form and substance
reasonably satisfactory to the Company, dated as of the Effective Time,
substantially to the effect that on the basis of facts, representations,
assumptions and the Buyer's, Company's, and other certificates set forth in such
opinion which are consistent with the state of facts existing at the Effective
Time, the Merger will be treated as a reorganization within the meaning of
Section 368(a) of the Code, and that, accordingly, for federal income tax
purposes:
44
(i) No gain or loss will be recognized by the Company as a result
of the Merger;
(ii) No gain or loss will be recognized by the shareholders of the
Company (except with respect to cash received in lieu of a fractional
share interest in Buyer Common Stock);
(iii) The aggregate tax basis of the Buyer Common Stock received
by shareholders of the Company pursuant to the Merger will be the same as
the aggregate tax basis of the Company Common Stock surrendered in
exchange therefor (reduced by any amount allocable to a fractional share
interest for which cash is received); and
(iv) The holding period of Buyer Common Stock received by each
shareholder of the Company in the Merger will include the holding period
of Company Common Stock exchanged therefor, provided that such
shareholder held such Company Common Stock as a capital asset within the
meaning of Section 1221 of the Code on the Effective Time.
In rendering such opinion, the Company's counsel may require and rely
upon representations and covenants contained in certificates of officers of the
Buyer, the Company and others. The Buyer and the Company agree to make such
representations and covenants to the Company's counsel to facilitate the
delivery of such opinion.
(e) No Challenge. There shall not be pending any action, proceeding or
investigation before any court or administrative agency or by a government
agency (i) challenging or seeking material damages in connection with the Merger
or the conversion of Company Common Stock into Buyer Common Stock pursuant to
the Merger or (ii) seeking to restrain, prohibit or limit the exercise of full
rights of ownership or operation by the Buyer or the Buyer Subsidiaries of all
or any portion of the business or assets of Company, which in either case is
reasonably likely to have a Material Adverse Effect on either the Company and
the Company Subsidiaries taken as a whole or the Buyer and the Buyer
Subsidiaries taken as a whole.
(f) No Material Adverse Changes. Since the date of this Agreement, there
shall not have been any change in the financial condition, results of operations
or business of the Buyer and the Buyer Subsidiaries taken as a whole, that
either individually or in the aggregate would have a Material Adverse Effect on
the Buyer and the Buyer Subsidiaries taken as a whole. For purposes of this
Section 7.3(f) only, a Material Adverse Effect on the Buyer and the Buyer
Subsidiaries shall be deemed to have been incurred if there has been (i) any
reduction in the CAMELS (Capital, Assets, Management, Earnings, Liquidity and
Sensitivity to Market Risk) composite rating of any Buyer Subsidiary to 3 or
higher (i.e., 4 or 5) and/or (ii) any reduction in any Buyer Subsidiary's CRA
(Community Reinvestment Act) rating to "substantial noncompliance" or worse. The
Company shall have received a certificate of the Chief Executive Officer and the
Chief Financial Officer of the Buyer with respect to the foregoing matters.
45
(g) Employment Agreements. The Buyer shall have entered into Employment
Agreements, containing substantially the terms and conditions set forth in
Exhibits B and C, hereto, with James J. Rothenbach and Donald D. Parker,
respectively. Each of Harold L. Hermansen, James J. Goetz, Theodore W. Hoff and
Phillip J. Schoofs shall have entered into a termination agreement relating to
their respective employment agreements in a form reasonably acceptable to the
parties and each of said individuals shall have received the payout amounts due
him under his respective employment agreement.
(h) Chief Executive Officer. Douglas J. Timmerman shall hold the office
of Chairman of the Board, President and Chief Executive Officer of the Buyer.
(i) Rabbi Trust. The rabbi trust contemplated by Section 7 of Annex A
shall have been established.
ARTICLE VIII - TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1 Termination.
(a) This Agreement may be terminated at any time prior to the Effective
Time:
(i) by mutual consent of the Buyer and the Company by a vote of a
majority of the members of the entire Boards of Directors of the Buyer
and the Company;
(ii) by either the Buyer or the Company if any approval of the
shareholders of the Buyer or the Company required for the consummation of
the Merger shall not have been obtained by reason of the failure to
obtain the required vote at a duly held meeting of such shareholders or
at any adjournment or postponement thereof;
(iii) by the Company or the Buyer (A) if there has been a breach
in any material respect of any representation, warranty, covenant or
agreement on the part of Company, on the one hand, or the Buyer, on the
other hand, set forth in this Agreement, or (B) if any representation or
warranty of the Company, on the one hand, or the Buyer, on the other
hand, shall be discovered to have become untrue in any material respect,
in either case which breach or other condition has not been cured within
30 business days following receipt by the nonterminating party of notice
of such breach or other condition, or which breach by its nature, cannot
be cured prior to the Effective Time; provided, however, neither party
shall have the right to terminate this Agreement pursuant to this Section
8.1(a)(iii) unless the breach of any representation or warranty (but not
breaches of covenants or agreements), together with all other such
breaches, would entitle the party receiving such representation or
warranty not to consummate the transactions contemplated hereby under
Section 7.2(a) (in the case of a breach of a representation or warranty
by the Company) or Section 7.3(a) (in the case of a breach of a
representation or warranty by the Buyer); and, provided further that this
Agreement may not be terminated pursuant to this clause (iii) by the
breaching
46
party or party making any representation or warranty which shall have
become untrue in any material respect;
(iv) by the Company upon two days' prior written notice to the
Buyer if, as a result of an unsolicited takeover proposal (as defined in
Section 4.2(e)) by a party other than the Buyer or its affiliates, the
Board of Directors of the Company determines in good faith that its
failure to accept such takeover proposal could reasonably be deemed to
constitute a breach of its fiduciary obligations under applicable law
after consultation with and receipt of advice from outside counsel;
provided, however, that, prior to any such termination, the Company
(after disclosing to the Buyer the identity of the party making the
takeover proposal and the financial terms thereof) shall, and shall cause
its financial and legal advisors to, negotiate with the Buyer to make
such adjustments in the terms and conditions of this Agreement as would
enable the Company to proceed with the transactions contemplated herein
on such adjusted terms.
(v) by either the Buyer or the Company if any permanent injunction
preventing the consummation of the Merger shall have become final and
nonappealable;
(vi) by either the Buyer or the Company if the Merger shall not
have been consummated by September 30, 1999;
(vii) by either the Buyer or the Company if any regulatory
authority has denied approval of the Merger, and neither the Buyer nor
the Company has, within 30 days after the entry of such order denying
approval, filed a petition seeking review of such order as provided by
applicable law; or
(viii) by the Company pursuant to Section 1.6(d) hereof.
SECTION 8.2 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 8.1, this Agreement shall forthwith become
void and all rights and obligations of any party hereto shall cease except: (a)
as set forth in Section 9.1 of this Agreement and (b) nothing herein shall
relieve any party from liability for any willful breach of this Agreement or
shall restrict either party's rights in the case thereof.
SECTION 8.3 Amendment. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; provided, however, that, after approval
of the Merger by the shareholders of the Company, no amendment may be made
without further approval of such shareholders which would reduce the amount or
change the type of consideration into which each share of Company Common Stock
shall be converted pursuant to this Agreement upon consummation of the Merger.
This Agreement may not be amended except by an instrument in writing signed by
the parties hereto.
SECTION 8.4 Waiver. At any time prior to the Effective Time, the parties
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other party hereto, (b) waive any inaccuracies in the
representations and warranties
47
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any of the agreements or conditions contained herein. Any such
extension or waiver shall be valid only if set forth in a written instrument
signed on behalf of such party, but such extension or waiver or failure to
insist on strict compliance with an obligation, covenant, agreement or condition
shall not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.
ARTICLE IX - GENERAL PROVISIONS
SECTION 9.1 Non-Survival of Representations, Warranties and Agreements.
The representations, warranties and agreements in this Agreement shall terminate
at the Effective Time or upon the termination of this Agreement pursuant to
Article VIII, except that the agreements set forth in Article I and Sections
5.7, 5.8, 6.4 (including Annex A) and 6.5 shall survive the Effective Time and
those set forth in Sections 4.4(b), 5.3(b), 6.11 and Article IX hereof shall
survive termination indefinitely.
SECTION 9.2 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that the provisions of this
Agreement (including, without limitation, the provisions contained in each of
Sections 1.6, 4.4(b), 5.3(b), 5.7, 5.8, 6.4 (including Annex A) and 6.5 of this
Agreement) were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
SECTION 9.3 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed given if delivered
personally, telecopied (with confirmation), mailed by registered or certified
mail (postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice) and shall be effective upon receipt:
48
(a) If to the Buyer:
Anchor BanCorp Wisconsin Inc.
25 West Main Street
Madison, Wisconsin 53703
Attention: Douglas J. Timmerman, Chairman of the Board, President
and Chief Executive Officer
With a copy to:
Whyte Hirschboeck Dudek S.C.
Suite 2100
111 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: John F. Emanuel and Andrew J. Guzikowski
(b) If to the Company:
FCB Financial Corp.
420 South Koeller Street
Oshkosh, Wisconsin 54902
Telecopier: (920) 303-4951
Attention: James J. Rothenbach, President and Chief Executive
Officer
With a copy to:
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Telecopier: (414) 297-4900
Attention: Jay O. Rothman
SECTION 9.4 Certain Definitions. For purposes of this Agreement, the
term:
(a) "affiliate" means a person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, the first mentioned person; including, without limitation, any partnership
or joint venture in which any person (either alone, or through or together with
any other subsidiary) has, directly or indirectly, an interest of 5% or more;
(b) "business day" means any day other than a day on which banks in
Wisconsin are required or authorized to be closed;
(c) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee or
executor, of the power to
49
direct or cause the direction of the management or policies of a person, whether
through the ownership of stock or as trustee or executor, by contract or credit
arrangement or otherwise;
(d) "person" means an individual, corporation, partnership, association,
trust, unincorporated organization, other entity or group (as defined in Section
13(d) of the Exchange Act); and
(e) "subsidiary" or "subsidiaries" of the Company, the Buyer, the
Surviving Corporation, or any other person, means any corporation, partnership,
joint venture or other legal entity of which the Company, the Buyer, the
Surviving Corporation or such other person, as the case may be (either alone or
through or together with any other subsidiary), owns, directly or indirectly,
50% or more of the stock or other equity interests the holders of which are
generally entitled to vote for the election of the board of directors or other
governing body of such corporation or other legal entity.
SECTION 9.5 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.6 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
SECTION 9.7 Entire Agreement. This Agreement (including the agreements
contemplated hereby) and the written confidentiality agreement in effect between
the parties constitute the entire agreement of the parties and supersede all
prior agreements and undertakings, both written and oral, between the parties,
or any of them, with respect to the subject matter hereof and, except as
otherwise expressly provided herein, are not intended to confer upon any other
person any rights or remedies hereunder.
SECTION 9.8 Assignment. This Agreement shall not be assigned by operation
of law or otherwise, except that the Buyer may assign all or any of its rights
hereunder and thereunder to any affiliate provided that no such assignment shall
relieve the assigning party of its obligations hereunder.
SECTION 9.9 Parties in Interest. This Agreement (including Annex A
hereto) shall be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, other than (a) Sections 1.5 and
1.11 (which is intended to be for the benefit of the directors and specified
50
officers of the Company and may be enforced by such persons), (b) Section 6.5
(which is intended to be for the benefit of the Indemnified Parties and may be
enforced by such Indemnified Parties), (c) Section 5.7 and Section 6.4
(including Annex A hereto) (which are intended to be for the benefit of the
directors, officers and employees of the Company and the Company Subsidiaries
and may be enforced by such persons), and (d) Section 5.8 (which is intended for
the benefit of affiliates of the Company and may be enforced by such persons).
SECTION 9.10 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Wisconsin, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law.
SECTION 9.11 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
51
IN WITNESS WHEREOF, the Buyer and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
ANCHOR BANCORP WISCONSIN INC.
By: /s/ Douglas J. Timmerman
FCB FINANCIAL CORP.
By: /s/ James J. Rothenbach
52
ANNEX A
EMPLOYEE BENEFIT MATTERS
1. General
(a) Those individuals who are employed by the Company or the Company
Subsidiaries as of the Effective Time and who remain, at the Buyer's discretion,
employees of the Buyer or the Buyer Subsidiaries following the Effective Time
shall be referred to hereinafter as "Affected Employees".
(b) The Buyer will give Affected Employees full credit for their prior
service with the Company or the Company Subsidiaries (or any service credited as
such in connection with a previous acquisition by the Company or any Company
Subsidiary) (i) for purposes of eligibility (including initial participation and
eligibility for retirement benefits) and vesting under any qualified or
nonqualified retirement or profit sharing plans maintained by the Buyer or any
Buyer Subsidiary in which employees of the Company and the Company Subsidiaries
may be eligible to participate and (ii) for all purposes under any welfare
benefit plans (including severance) and vacation plans and arrangements
maintained by the Buyer or any Buyer Subsidiary. Further, the Buyer shall treat
compensation received from the Company or the Company Subsidiaries (or any
compensation credited as such in connection with a previous acquisition by the
Company or any Company Subsidiary) as compensation received from the Buyer or
any Buyer Subsidiary for all purposes under any welfare benefit plans (including
severance) and vacation plans and arrangements maintained by the Buyer or any
Buyer Subsidiary.
(c) The Buyer will waive or cause to be waived all limitations as to
preexisting conditions and waiting periods with respect to participant and
coverage requirements applicable to the Affected Employees under any welfare
benefit plans that such employees may be eligible to participate in on or after
the Effective Time, other than limitations or waiting periods that are already
in effect with respect to such employees and that have not been satisfied as of
the Effective Time under any welfare plan maintained for the Affected Employees
immediately prior to the Effective Time.
2. 401(k) Plan. Accounts in the Company's 401(k) plan of participants who
are employed at the Effective Time by the Company or any Company Subsidiary will
be fully vested as of the Effective Time.
3. Employment Agreements. The current Employment Agreements with Messrs.
Parker and Rothenbach will be superseded by the new Employment Agreements
contemplated by Exhibit B and Exhibit C to the Agreement. The Employment
Agreements with Messrs. Schoofs, Hoff, Hermansen and Goetz shall terminate and a
payout shall be made thereunder as contemplated herein and by Section 7.3(g) of
the Agreement. With respect to the Employment Agreements with Messrs. Schoofs,
Hoff, Hermansen and Goetz, the Buyer agrees and acknowledges that the
consummation of the Merger will constitute an involuntary termination of each of
said executives for which they will be entitled to a termination payment as
provided
1
in Section 2.6 of each of said Employment Agreements. In each case, such payment
will be equal to the product of 2.0 times the respective executive's "base
amount" at the time of the Merger as determined in accordance with Section
280G(b)(3) of the Code. The parties intend that the termination payments will be
made contemporaneous with the consummation of the Merger and that thereafter
said Employment Agreements will be of no further force or effect except that the
Surviving Corporation will continue to have the benefit of the confidentiality
provisions set forth in Article IV of such Employment Agreements or the
substantial equivalent thereof. Notwithstanding the foregoing, it is anticipated
that each of Messrs. Schoofs, Hoff, Hermansen and Goetz will be offered
employment with the Surviving Corporation following the Merger in accordance
with Section 1.5 of the Agreement.
4. Employee Welfare Benefits. Affected Employees will be integrated into
the employee welfare benefit plans of the Buyer, including health, dental, group
term life insurance, tuition reimbursement, long-term disability and other
employee benefit plans available to similarly situated employees, as of the
later of (i) the Effective Time; or (ii) at the discretion of the Buyer, such
later date as is administratively practicable; provided, however, that Company's
employee welfare benefit plans shall continue in force until the applicable
Buyer employee welfare benefit plan applies to the Affected Employees.
5. Severance Plan. Severance payments to employees of the Company or the
Company Subsidiaries who are terminated by the Buyer or the Buyer Subsidiaries
within nine (9) months of the Effective Time will be made in accordance with the
severance schedule attached hereto.
6. Deferred Compensation Agreements. The Deferred Compensation Agreements
for Messrs. Parker and Hermansen shall be assumed in full by the Buyer or,
subject to the agreement of the parties thereto, terminated as of the Effective
Time with an appropriate payout of amounts accrued thereunder being made at the
Effective Time.
7. Unfunded Deferred Compensation Plan for Directors. The Unfunded
Deferred Compensation Plan for Directors shall be assumed in full by the Buyer.
A rabbi trust will be established with respect to such Plan prior to the
Effective Time, which rabbi trust shall be automatically funded in the event
that a change in control of the Surviving Corporation or the Surviving Bank
occurs or in the event that Douglas J. Timmerman no longer holds the office of
Chairman of the Board, President and Chief Executive Officer of the Buyer and
AnchorBank.
8. ESOP.
(a) As of the date (the "Contribution Date") immediately prior to the
Effective Time, the Company shall make a contribution to the Company's Employee
Stock Ownership Plan (the "ESOP"), which, together with any dividends on the
Company Common Stock held in the ESOP, will equal the amount the Company would
have contributed to the ESOP pursuant to Section 3.01 of the ESOP as if the
Effective Time were the last day of a Plan year, and in no event less than the
amount needed to pay the current obligation under the Exempt Loan (as defined in
the ESOP) and shall cause the Trustee of the ESOP to use the full amount of such
contribution promptly to repay a portion of the outstanding Exempt Loan. As a
result
2
of the aforementioned contribution and repayment, the Company shall take such
action as may be necessary or appropriate to cause shares of Company Common
Stock to be released from the suspense account maintained under the ESOP and
allocated to the accounts of Participants (as defined in the ESOP) as if the
Contribution Date were the last day of the Plan year, but applying the 1000 hour
requirement of Section 3.01(c) by multiplying 1000 by a fraction, the numerator
of which is the days elapsed from the first day of the current Plan year to and
including the Contribution Date and the denominator of which is 365.
(b) The parties agree to take such action as may be necessary or
appropriate:
(i) to cause all ESOP Account balances to become fully vested and
nonforfeitable as the Effective Time, and to freeze further entry
into the ESOP;
(ii) to cause the Trustee of the ESOP to sell, from the suspense
account maintained under the ESOP, shares of stock of the Buyer
with an aggregate value equal to the remaining outstanding ESOP
indebtedness, after giving effect to the repayment described in
paragraph (a) hereof, and to use the proceeds of such sale to
repay in full all such outstanding ESOP indebtedness;
(iii) to cause those shares of Buyer Common Stock (and any cash)
remaining in the suspense account maintained under the ESOP, after
giving effect to the aforementioned sale (the "Remaining Shares"),
to be allocated among all Participants in proportion to the number
of shares allocated to such Participants' ESOP Accounts as of the
Effective Time unless another manner is required by the Internal
Revenue Service (the "Service") as a condition to its issuance of
a favorable determination letter regarding the qualified status of
the ESOP upon its termination; and
(iv) to cause the ESOP to be terminated and for the Account balances of
all Participants to be distributed in a lump sum (or transferred
in accordance with Section 401(a)(31) of the Code) as soon as
administratively prudent and consistent with any requirements in
the determination letter from the Service, following the later of
(A) the Effective Time or (B) the date of receipt of such
favorable determination letter from the Service.
(c) As soon as practicable after the date hereof, the Company shall file
a request for a determination letter from the Service regarding the continued
qualified status of the ESOP upon its termination, and the parties hereby agree
to cooperate fully in all matters pertaining to such filing (including, but not
limited to, making such changes to the ESOP and the proposed allocations
described herein as may be requested by the Service as a condition to its
issuance of a favorable determination letter; and authorizing and directing
their respective counsel jointly to perform all acts necessary to secure such
favorable determination letter from the Service (including preparing the
determination letter application, filing such application with the Service, and
dealing with any employee of the Service who reviews such application)). If,
despite the Company's and the Buyer's attempts to obtain such a favorable
determination letter, the Service does not permit all or any portion of the
Remaining Shares to be allocated as of the Effective Time as contemplated
hereby, the parties hereby agree to take such action as may be
3
necessary to allocate the Remaining Shares (or amounts attributable thereto) as
rapidly as possible among Participants in the ESOP in such other manner as is
consistent with meeting their respective fiduciary duties under ERISA and with
obtaining the Service's determination without limitation, and notwithstanding
paragraph 8(b)(i) hereof, to cause the ESOP to remain in effect until all of the
Remaining Shares have been allocated among such Participants' accounts and upon
such basis as the Service may require or as may be necessary to avoid the
imposition of any tax or other liability upon the Buyer in connection with the
ESOP; provided, however, that no such action shall create any liability for the
Buyer to make any contributions to the ESOP or to provide any replacement
benefits to Participants outside the ESOP. In all events, it is the intention
that the Participants in the ESOP will receive the entire benefit of the
Remaining Shares which are unallocated after application of the above
provisions. In the event that any action under this Agreement needs to be taken
with respect to the ESOP on or after the Effective Time, such action may only be
taken by and shall be the sole and exclusive responsibility of the Trustee;
provided, however, that any and all such actions shall be taken in accordance
with the provisions and intent of this Agreement.
(d) The fees and expenses of administration of the ESOP shall be paid
consistent with the historic practice of the ESOP and the Company.
9. Bonus Plan. For that portion of fiscal 1999 or 2000 of the Company,
depending upon and ending as of the Effective Time, each participant (subject to
the proviso set forth in the last sentence of this Section 9) will receive a
prorated portion of the bonus payment payable to such participant under the
Company's Bonus Plan for fiscal year 1999 or 2000, as the case may be, based on
the number of days which elapsed during such fiscal year as a percentage of 365
days. Any bonus payable to Donald D. Parker as contemplated by this Section 9
shall be equal to 50% of the equivalent bonus paid to James J. Rothenbach. In
the event that the Effective Time occurs after March 31, 1999, but before
payment of bonuses under the Company's Bonus Plan for fiscal 1999, accrued
bonuses for fiscal 1999 shall be paid in accordance with the Company's past
practices but in no event later than May 14, 1999. In the event that the
Effective Time occurs after March 31, 1999, the Company's Bonus Plan for fiscal
year 2000 will be substantially identical to the Company's Bonus Plan for fiscal
year 1999 with such benchmarks as the parties may mutually agree; provided,
however, that notwithstanding the foregoing, the Company may, in its sole
discretion, determine not to implement a Bonus Plan for the fiscal year 2000.
10. Assumption of Stock Options. The parties agree to take such actions
as may be necessary to ensure that the Company's outstanding stock options are
converted into options to purchase Buyer Common Stock and assumed by Buyer as
contemplated by Section 5.7 of the Agreement. The Buyer acknowledges and agrees
that the outstanding options will become exercisable (to the extent not then
exercisable) as a result of the transactions contemplated by the Agreement.
11. Other Agreements. Other agreements of the Company or the Company
Subsidiaries relating to employee benefits shall be assumed in full by the
Buyer. Such agreements are identified in the disclosure schedules to the
Agreement.
4
SCHEDULE OF SEVERANCE PAYMENTS
Position Severance Pay
- -------------------------- -----------------------------------------------------
Nonexempt Employee 2 weeks, plus 1 week for each full year of
continuous employment.
Minimum: 4 weeks
Maximum: 26 weeks
- -------------------------- -----------------------------------------------------
Exempt Employee 2 weeks, plus 2 weeks for each full year of
continuous employment.
Minimum: 8 weeks
Maximum: 26 weeks
- -------------------------- -----------------------------------------------------
Officer/Assistant
Vice President 2 weeks, plus 2 weeks for each full year of
continuous employment.
Minimum: 12 weeks
Maximum: 36 weeks
- -------------------------- -----------------------------------------------------
Vice President or Above 2 weeks, plus 2 weeks for each full year of
continuous employment.
Minimum: 24 weeks
Maximum: 52 weeks
5
----------------------------
EXHIBIT A
----------------------------
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated January 5, 1999, between Anchor BanCorp
Wisconsin Inc., a Wisconsin corporation ("Grantee"), and FCB Financial Corp., a
Wisconsin corporation ("Issuer").
WITNESSETH:
WHEREAS, Grantee and Issuer have entered into an Agreement and Plan of
Merger (the "Merger Agreement"); and
WHEREAS, as a condition and an inducement to Grantee's entering into the
Merger Agreement, Issuer is granting Grantee the Option (as hereinafter
defined); and
WHEREAS, the Board of Directors of Issuer has approved the grant of the
Option and the Merger Agreement.
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 an
aggregate of 764,295 (as adjusted as set forth in Sections 1(b) and 5(b) hereof)
fully paid and nonassessable, except as provided by Section 180.0622(2)(b) of
the Wisconsin Business Corporation Law ("WBCL"), shares of the common stock, par
value $0.01 per share, of Issuer ("Issuer Common Stock") at a price per share of
$27.45 (the "Option Price"); provided, however, that in no event shall the
number of shares for which this Option is exercisable exceed 19.9% of the then
issued and outstanding shares of Issuer Common Stock. 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
issued or otherwise become outstanding after the date of this Agreement (other
than pursuant to this Agreement and other than pursuant to an event described in
Section 5(a) hereof), the number of shares of Issuer Common Stock subject to the
Option shall be increased so that, after such issuance, such number together
with any shares of Issuer Common Stock previously issued pursuant hereto, 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 l(b) or elsewhere in this Agreement shall be
deemed to authorize Issuer to issue shares of Issuer Common Stock in breach of
any provision of the Merger Agreement.
2. a. Grantee may exercise the Option, in whole or part, if, but only if,
both an Initial Triggering Event (as hereinafter defined) and a Subsequent
Triggering Event (as hereinafter defined) shall have occurred prior to the
occurrence of an Exercise Termination
1
Event (as hereinafter defined); provided, however, that Grantee shall have sent
the written notice of such exercise (as provided in subsection (e) of this
Section 2) within forty-five (45) days following such Subsequent Triggering
Event (or such later period as provided in Section 10 hereof). Each of the
following shall be an Exercise Termination Event: (i) the Effective Time of the
Merger; (ii) termination of the Merger Agreement in accordance with the
provisions thereof if such termination occurs prior to the occurrence of an
Initial Triggering Event except (x) a termination by Grantee pursuant to Section
8.1(a)(iii) of the Merger Agreement, (y) a termination by Grantee or Issuer
pursuant to Section 8.1(a)(ii) of the Merger Agreement if prior to the duly held
meeting of the shareholders of the Issuer at which the required vote to approve
the Merger was not obtained it shall have been publicly disclosed that any
person (other than Grantee or any Grantee Subsidiary (as defined below)) shall
have made, or disclosed an intention to make, a "takeover proposal" (as defined
in the Merger Agreement) or (z) a termination by Issuer pursuant to Section
8.1(a)(iv) of the Merger Agreement (each such exception, a "Listed
Termination"); or (iii) the passage of one (1) year after termination of the
Merger Agreement if such termination follows the occurrence of an Initial
Triggering Event or is a Listed Termination. Notwithstanding anything to the
contrary contained herein, (i) the Option may not be exercised at any time when
Grantee shall be in material breach of any of its representations, warranties,
covenants or agreements contained in this Agreement or in the Merger Agreement
such that, in the case of the Merger Agreement, Issuer shall be entitled to
terminate the Merger Agreement pursuant to Section 8.1(a)(iii) thereof and (ii)
this Agreement shall automatically terminate upon the proper termination of the
Merger Agreement by Issuer either pursuant to Section 8.1(a)(iii) thereof as a
result of the material breach by Grantee of its covenants or agreements
contained in the Merger Agreement, pursuant to Section 8.1(a)(ii) of the Merger
Agreement as a result of the failure of Grantee's shareholders to approve the
Merger, or pursuant to Section 8.1(a)(viii) of the Merger Agreement.
Notwithstanding the occurrence of an Exercise Termination Event, Grantee shall
be entitled to purchase those shares of Issuer Common Stock with respect to
which it has exercised the Option in accordance with the terms hereof prior to
the Exercise Termination Event.
b. The term "Initial Triggering Event" shall mean any of the following
events or transactions occurring on or after the date hereof:
i. Issuer or any subsidiary of Issuer (an "Issuer Subsidiary"),
without having received Grantee's prior written consent, shall have entered into
an agreement (including any letter of intent or memorandum of understanding) to
engage in an Acquisition Transaction (as hereinafter defined) with any person
(the term "person" for purposes of this Agreement having the meaning assigned
thereto in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and the rules and regulations thereunder) other
than Grantee or any of the subsidiaries of Grantee (each a "Grantee Subsidiary")
or the Board of Directors of Issuer (the "Issuer Board") shall have recommended
that the shareholders of Issuer approve or accept any Acquisition Transaction
other than the Merger. For purposes of this Agreement, "Acquisition Transaction"
shall mean either (x) a merger or consolidation, or any similar transaction,
involving Issuer or Fox Cities Bank (other than internal mergers, consolidations
or similar transactions involving solely Issuer and/or one or more existing
wholly-owned Issuer Subsidiaries, provided, that any such transaction is not
2
entered into in violation of the terms of the Merger Agreement), (y) a purchase,
lease or other disposition of 35% or more of the consolidated assets, net
revenues or net income of Issuer (on a consolidated basis), or (z) an issuance,
sale or other disposition (including by way of merger, consolidation, share
exchange or otherwise) of securities representing 25% or more of the voting
power of Issuer or Fox Cities Bank;
ii. Any person (other than Grantee or any Grantee Subsidiary) shall
have acquired beneficial ownership (as such term is defined in Rule 13d-3 under
the 1934 Act) or the right to acquire beneficial ownership of, or any "group"
(as such term is defined under the 1934 Act) shall have been formed which
beneficially owns or has the right to acquire beneficial ownership of, 20% or
more of the then outstanding shares of Issuer Common Stock (other then shares
held in accounts related to Issuer's employee benefit plans);
iii. The shareholders of Issuer shall have voted and failed to
approve the Merger Agreement and the Merger at a meeting which has been held for
that purpose, or such meeting, in violation of the Merger Agreement, shall not
have been held, or such meeting shall have been canceled prior to termination of
the Merger Agreement if, in any event, prior to such meeting (or if such meeting
shall not have been held or shall have been canceled, prior to the termination
of the Merger Agreement), it shall have been publicly announced or disclosed
that any person (other than Grantee or any Grantee Subsidiary) shall have made,
or disclosed a bona fide intention to make, a proposal to engage in an
Acquisition Transaction;
iv. The Board of Directors of Issuer shall have withdrawn or modified
(or publicly announced its intention to withdraw or modify) its recommendation
that the shareholders of Issuer approve the transactions contemplated by the
Merger Agreement, or Issuer or any Issuer Subsidiary shall have authorized,
recommended, proposed (or publicly announced its intention to authorize,
recommend or propose) an agreement to engage in an Acquisition Transaction with
any person other than Grantee or a Grantee Subsidiary;
v. Any person other than Grantee or any Grantee Subsidiary shall have
made a bona fide proposal to Issuer or its shareholders to engage in an
Acquisition Transaction and such proposal shall have been publicly announced;
vi. Any person other than Grantee or any Grantee Subsidiary shall
have commenced (as such term is defined in Rule 14d-2 under the 1934 Act), or
shall have filed with the Securities and Exchange Commission (the "SEC") a
registration statement under the 1934 Act or tender offer materials with respect
to, a potential exchange offer or tender offer to purchase any shares of Issuer
Common Stock such that, upon consummation of such offer, such person or a
"group" (as such term is defined under the 1934 Act) of which such person is a
member, would acquire beneficial ownership (as such term is defined in Rule
13d-3 of the 1934 Act), or the right to acquire beneficial ownership, of 20% or
more of the then outstanding shares of Issuer Common Stock;
vii. Issuer shall have willfully breached any covenant or obligation
contained in the Merger Agreement in anticipation of and in order to facilitate
engaging in an Acquisition Transaction, and following such breach Grantee would
be entitled to terminate the
3
Merger Agreement (whether immediately or after the giving of notice or passage
of time or both);
viii. Any person other than Grantee or any Grantee Subsidiary shall
have filed an application or notice with the Office of Thrift Supervision
("OTS") or other federal or state bank regulatory or antitrust authority, which
application or notice has been accepted for processing, for approval to engage
in an Acquisition Transaction; or
ix. Any person (other than Grantee or any Grantee Subsidiary) shall
acquire a sufficient number of outstanding shares of Issuer Common Stock to
allow such person to elect a majority of the members of the Issuer Board or
shall otherwise enter into an agreement or other arrangement by which such
person would be entitled to elect or cause the appointment of a majority of the
members of the Issuer Board.
c. The term "Subsequent Triggering Event" shall mean any of the following
events or transactions occurring after the date hereof:
i. The acquisition by any person (other than Grantee or any Grantee
Subsidiary) of beneficial ownership of 51% or more of the then outstanding
shares of Issuer Common Stock; or
ii. The occurrence of the Initial Triggering Event described in
clause (i) of subsection (b) of this Section 2, except that the percentage
referred to in clause (z) of the second sentence thereof shall be 51%.
d. Issuer shall notify Grantee promptly in writing of the occurrence of
any Initial Triggering Event or Subsequent Triggering Event (together, a
"Triggering 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.
Any period of time specified in this Agreement within which Grantee is entitled
or required to exercise the Option or any other right granted to it hereunder,
or to take any other action, which is specified to run from the occurrence of a
Triggering Event, shall not commence to run until Grantee has received the
notice of such Triggering Event required to be given by Issuer under this
Section 2(d).
e. In the event Grantee is entitled to and wishes to exercise the Option
(or any portion thereof), it shall send to Issuer a written notice (the date of
which being herein referred to as the "Notice Date") specifying (i) the total
number of shares it will purchase pursuant to such exercise and (ii) a place and
date not earlier than three business days nor later than 30 business days from
the Notice Date for the closing of such purchase; provided, that if the closing
of the purchase and sale pursuant to the Option cannot be consummated by reason
of any applicable judgment, decree, order, law or regulation, the period of time
that otherwise would run pursuant to this sentence shall run instead from the
date on which such restriction or consummation has expired or been terminated;
and, provided, further, without limiting the foregoing, that if prior
notification to or approval of the OTS or any other regulatory or antitrust
authority is required in connection with such purchase, Grantee shall file the
required notice or application for approval, shall notify Issuer of such filing,
and shall use its best
4
efforts to process the same, then the period of time that otherwise would run
pursuant to this sentence shall run instead from the date on which any required
notification periods have expired or been terminated or such approvals have been
obtained, and in either event, any requisite waiting period or periods shall
have passed. Any exercise of the Option shall be deemed to occur on the Notice
Date relating thereto.
f. At the closing referred to in subsection (e) of this Section 2,
Grantee shall (i) pay to Issuer the aggregate purchase price for the shares of
Issuer Common Stock purchased pursuant to the exercise of the Option in
immediately available funds by wire transfer to a bank account designated by
Issuer and (ii) present and surrender this Agreement to Issuer at its principal
executive offices; provided, however, that the failure or refusal of the Issuer
to designate such a bank account or accept surrender of this Agreement shall not
preclude Grantee from exercising the Option.
g. At such closing, simultaneously with the delivery of immediately
available funds as provided in subsection (f) of this Section 2, Issuer shall
deliver to Grantee a certificate or certificates representing the number of
shares of Issuer Common Stock purchased by Grantee, which shares shall be free
and clear of all liens, claims, charges and encumbrances of any kind whatsoever,
except as provided by Section 180.0622(2)(b) of the WBCL, and Grantee shall be
deemed to be the holder of record of such shares, notwithstanding that the stock
transfer books of Issuer may then be closed. Issuer shall pay its out-of-pocket
expenses payable in connection with the preparation, issue and delivery of stock
certificates under this Section 2 in the name of Grantee or its assignee,
transferee or designee. If the Option should be exercised in part only, Issuer
shall also deliver to Grantee a new Option evidencing the rights of Grantee
thereof to purchase the balance of the shares purchasable hereunder.
h. Certificates for Issuer Common Stock delivered at a closing hereunder
may be endorsed with a restrictive legend that shall read substantially as
follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS 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 THE STOCK OPTION AGREEMENT, DATED
JANUARY 5, 1999, 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 of 1933, as amended (the "1933 Act"), in the above legend
shall be removed by delivery of substitute certificate(s) without such reference
if Grantee shall have delivered to Issuer a copy of a letter from the staff of
the SEC, or an opinion of counsel, in form and substance satisfactory to Issuer,
to the effect that such legend is not required for purposes of the 1933 Act;
(ii) the reference to the provisions of 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
5
transferred in compliance with the provisions of this Agreement and under
circumstances that do not require the retention of such reference in the opinion
of counsel to Grantee, which opinion shall be satisfactory to Issuer; and (iii)
the legend may 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 or this Agreement.
3. Issuer agrees: (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares of
Issuer Common Stock so that the Option may be exercised without additional
authorization of Issuer Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Issuer Common
Stock; (ii) that it will not, by charter amendment or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any other voluntary
act, avoid or seek to avoid the observance or performance of any of the
covenants, stipulations or conditions to be observed or performed hereunder by
Issuer; (iii) to take all action as may from time to time be required in order
to permit Grantee to exercise the Option and duly and effectively to issue
shares of Issuer Common Stock pursuant hereto; and (iv) to take all action
provided herein to protect the rights of Grantee against dilution.
4. This Agreement (and the Option granted hereby) are exchangeable,
without expense, at the option of Grantee, upon presentation and surrender of
this Agreement at the principal office of Issuer, for other Agreements providing
for Options of different denominations entitling Grantee to purchase, on the
same terms and subject to the same conditions as are set forth herein, in the
aggregate the same number of shares of Issuer Common Stock purchasable
hereunder. The terms "Agreement" and "Option" as used herein include any
Agreements and related Options for which this Agreement (and the Option granted
hereby) may be exchanged. Upon receipt by Issuer of evidence satisfactory to it
of the loss, theft, destruction or mutilation of this Agreement, and (in the
case of loss, theft or destruction) of satisfactory indemnification and/or an
appropriate indemnity bond, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date.
5. In addition to the adjustment in the number of shares of Issuer Common
Stock that is purchasable upon exercise of the Option pursuant to Section 1 of
this Agreement, the number of shares of Issuer Common Stock purchasable upon the
exercise of the Option and the Option Price shall be subject to adjustment from
time to time as provided in this Section 5.
a. In the event of any change in, or distributions (other than the
payment of cash dividends in the ordinary course consistent with past practice)
in respect of, Issuer Common Stock by reason of stock dividends, split-ups,
mergers, recapitalizations, combinations, subdivisions, conversions, exchanges
of shares or the like, the type and number of shares of Issuer Common Stock
purchasable upon exercise hereof shall be appropriately adjusted and proper
provision shall be made so that, in the event that any additional shares of
Issuer Common Stock are to be issued or otherwise become outstanding as a result
of any such change (other than pursuant to an exercise of the Option), the
number of shares of Issuer Common Stock that remain subject to the Option shall
be increased so that, after such issuance
6
and together with shares of Issuer Common Stock previously issued pursuant to
the exercise of the Option (as adjusted on account of any of the foregoing
changes in the Issuer Common Stock), such number equals 19.9% of the number of
shares of Issuer Common Stock then issued and outstanding.
b. Whenever the number of shares of Issuer Common Stock purchasable upon
exercise hereof is adjusted as provided in this Section 5, the Option Price
shall be adjusted by multiplying the Option Price by a fraction, the numerator
of which shall be equal to the number of shares of Issuer Common Stock
purchasable prior to the adjustment and the denominator of which shall be equal
to the number of shares of Issuer Common Stock purchasable after the adjustment.
6. a. If, within one (1) year following exercise of the Option by
Grantee, Issuer effects any registration or registrations of shares of Issuer
Common Stock under the 1933 Act for its own account or for any other shareholder
of Issuer (other than a registration on Form S-4, Form S-8 or any successor
forms), it will allow Grantee to participate (on the same terms as any other
participant) in such registration or registrations with respect to any or all of
the shares of capital stock of Issuer acquired by Grantee pursuant to this
Agreement that are then beneficially owned by Grantee (the "Registrable
Securities"), subject to any existing priority registration rights granted to
existing holders of Issuer Common Stock; provided, however, that if the managing
underwriters in such offering advise Issuer that, in their written opinion, the
number of Registrable Securities requested by Grantee to be included in such
registration exceeds the number of shares of Issuer Common Stock which can be
sold in such offering, Issuer may exclude from such registration all or a
portion, as may be appropriate, of the Registrable Securities requested for
inclusion by Grantee. Issuer shall provide Grantee written notice of its intent
to effect such a registration and Grantee shall, by written notice to Issuer
within ten (10) business days of receipt of notice from Issuer, request that a
specified number of the Registrable Securities be included in the registration
(the "Piggybank Registration Notice"). In the event that Grantee fails to
provide the Piggyback Registration Notice, Grantee's rights with respect to
participation in such registration shall lapse. Issuer reserves the right, in
its sole discretion, to terminate at any time a registration effected pursuant
to this Section 6(a).
b. In addition to the rights provided pursuant to Section 6(a) hereof, at
any time within one (1) year after the exercise of the Option, Grantee may, by
written notice to the Issuer (the "Demand Registration Notice"), request the
Issuer to register under the 1933 Act all or any part of the Registrable
Securities.
c. Upon any request or demand for registration under the preceding
Sections 6(a) and 6(b), Issuer shall have the option exercisable by written
notice delivered to Grantee within thirty (30) business days after the receipt
of the Piggyback Registration Notice or the Demand Registration Notice, as the
case may be, 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 Issuer and
(ii) the Fair Market Value (as defined below) of a share of such Registrable
Securities. As used
7
herein, the "Fair Market Value" of any share of Registrable Securities shall be
the average of the daily last bid price for a share of Issuer Common Stock on
the Nasdaq National Market during the five (5) trading days prior to the date on
which the Piggyback Registration Notice or the Demand Registration Notice, as
the case may be, for such share is received by Issuer.
d. Any purchase of Registrable Securities by Issuer under Section 6(c)
shall take place at a closing to be held at the principal executive offices of
Issuer or at the offices of its counsel at any reasonable date and time
designated by Issuer in such notice within thirty (30) business days after
delivery of such notice, and payment of the purchase price for the shares to be
so purchased shall be made by delivery at the time of such closing in
immediately available funds.
e. If Issuer does not elect to exercise its option pursuant to Section
6(c) with respect to all Registrable Securities in connection with a
registration effected pursuant to Section 6(b) hereof, it shall use its
reasonable efforts to effect and keep current the registration under the 1933
Act of the unpurchased Registrable Securities proposed to be sold. Issuer will
use its reasonable efforts to cause such registration statement promptly to
become effective and then to remain effective for such period not in excess of
60 (sixty) days from the day such registration statement first becomes effective
or such shorter time as may be reasonably necessary to effect the sale or other
disposition of the Registrable Securities; provided, however, that
i. Grantee shall not be entitled to demand more than one (1)
effective registration statement hereunder, and
ii. Issuer will not be required to file any such registration
statement during any period of time (not to exceed 120 days after such request
in the case of clauses (A) and (B) below or 180 days in the case of clause (C)
below) when
(1) Issuer is in possession of material non-public information
which it believes would be detrimental to be disclosed at such time and, in the
opinion of counsel to Issuer, such information would be required to be disclosed
if a registration statement were filed at that time;
(2) Issuer is required under the 1933 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
(3) Issuer determines, in its sole discretion, that such
registration would interfere with any financing, acquisition or other material
transaction involving Issuer or any of its affiliates.
f. Issuer shall use its reasonable efforts to cause any Registrable
Securities registered pursuant to this Section 6 to be qualified for sale under
the securities or "blue sky" laws of such jurisdictions as Grantee may
reasonably request and shall continue such registration or qualification in
effect in such jurisdiction; provided, however, that Issuer shall
8
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 6 are subject to the
condition that Grantee shall provide Issuer with such information with respect
to the Registrable Securities, the plans for the distribution thereof, and such
other information with respect to such holder as, in the judgment of counsel for
Issuer, is necessary to enable Issuer 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 6 shall be effected at
Issuer's expense, except for underwriting discounts and commissions, brokers'
fees and the fees and the expenses of counsel and other advisors to Grantee, and
Issuer shall provide to the underwriters, if any, 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 6, the
parties agree
i. to indemnify each other and the underwriters, if any, in the
customary manner,
ii. to enter into an underwriting agreement if the offering is an
underwritten offering in form and substance customary for transactions of such
type with the underwriters participating in such offering, and
iii. to take all reasonable further actions which shall be reasonably
necessary to effect such registration and sale (including if the managing
underwriter, if any, reasonably deems it necessary, participating in road-show
presentations).
j. If Issuer Common Stock or any other securities to be acquired upon
exercise of the Option are then listed on the Nasdaq National Market or a
national securities exchange, Issuer, upon the request of Grantee, will promptly
file an application to list the shares of Issuer Common Stock or other
securities to be acquired upon exercise of the Option on the Nasdaq National
Market or a national securities exchange, as the case may be, and will its
reasonable efforts to obtain approval of such listing as soon as practicable.
7. a. At any time after the occurrence of a Repurchase Event (as defined
below), (i) at the request of Grantee, delivered prior to an Exercise
Termination Event (or such later period as provided in Section 10), Issuer (or
any successor thereto) shall (subject to applicable law and regulation)
repurchase the Option from Grantee at a price (the "Option Repurchase Price")
equal to the amount by which (A) the market/offer price (as defined below)
exceeds (B) the Option Price, multiplied by the number of shares for which this
Option may then be exercised and (ii) at the request of Grantee delivered prior
to an Exercise Termination Event (or such later period as provided in Section
10), Issuer (or any successor thereto) shall
9
(subject to applicable law and regulation) repurchase such number of the Option
Shares from Grantee as Grantee shall designate at a price (the "Option Share
Repurchase Price") equal to the market/offer price multiplied by the number of
Option Shares so designated. The term "market/offer price" shall mean the
highest of (i) the price per share of Issuer Common Stock at which a tender or
exchange offer therefor has been made, (ii) the price per share of Issuer Common
Stock to be paid by any third party pursuant to an agreement with Issuer, (iii)
the highest closing price for shares of Issuer Common Stock within the
three-month period immediately preceding the date Grantee gives notice of the
required repurchase of this Option or Grantee gives notice of the required
repurchase of Option Shares, as the case may be, or (iv) in the event of a sale
of all or any substantial part of Issuer's assets or deposits, the sum of the
net price paid in such sale for such assets or deposits and the current market
value of the remaining net assets of Issuer as determined by a nationally
recognized investment banking firm selected by Grantee and reasonably acceptable
to Issuer, divided by the number of shares of Issuer Common Stock outstanding at
the time of such sale. In determining the market/offer price, the value of
consideration other than cash shall be determined by a nationally recognized
investment banking firm selected by Grantee and acceptable to Issuer.
b. Grantee may exercise its right to require Issuer to repurchase the
Option and any Option Shares pursuant to this Section 7 by surrendering for such
purpose to Issuer, at its principal office, a copy of this Agreement or
certificates for Option Shares, as applicable, accompanied by a written notice
or notices stating that Grantee elects to require Issuer to repurchase this
Option and/or the Option Shares in accordance with the provisions of this
Section 7. As promptly as practicable, and in any event within thirty (30)
business days after the surrender of the Option and/or certificates representing
Option Shares and the receipt of such notice or notices relating thereto, Issuer
shall deliver or cause to be delivered to Grantee the Option Repurchase Price
and/or to Grantee the Option Share Repurchase Price therefor or the portion
thereof that Issuer is not then prohibited under applicable law and regulation
from so delivering.
c. To the extent that Issuer is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from repurchasing the
Option and/or the Option Shares in full, Issuer shall so notify Grantee and
thereafter deliver or cause to be delivered, from time to time, to Grantee the
portion of the Option Repurchase Price and the Option Share Repurchase Price,
respectively, that it is no longer prohibited from delivering, within ten (10)
business days after the date on which Issuer is no longer so prohibited;
provided, however, that if Issuer at any time after delivery of a notice of
repurchase pursuant to paragraph (b) of this Section 7 is prohibited under
applicable law or regulation, or as a consequence of administrative policy, from
delivering to Grantee the Option Repurchase Price and the Option Share
Repurchase Price in full (and Issuer hereby undertakes to use its reasonable
efforts to obtain all required regulatory and legal approvals and to file any
required notices in order to accomplish such repurchase), Grantee may revoke its
notice of repurchase of the Option and/or the Option Shares whether in whole or
to the extent of the prohibition, whereupon, in the latter case, Issuer shall
(i) deliver to Grantee that portion of the Option Repurchase Price and/or the
Option Share Repurchase Price that Issuer is not prohibited from delivering; and
(ii) deliver to Grantee either (A) a new Agreement evidencing the right of
Grantee to purchase that number
10
of shares of Issuer Common Stock obtained by multiplying the number of shares of
Issuer Common Stock for which the surrendered Agreement was exercisable at the
time of delivery of the notice of repurchase by a fraction, the numerator of
which is the Option Repurchase Price less the portion thereof theretofore
delivered to Grantee and the denominator of which is the Option Repurchase
Price, and/or (B) a certificate for the Option Shares it is then so prohibited
from repurchasing.
d. For purposes of this Section 7, a "Repurchase Event" shall be deemed
to have occurred upon the occurrence of any of the following events or
transactions after the date hereof:
i. the acquisition by any person (other than Grantee or any Grantee
Subsidiary) of beneficial ownership of 75% or more of the then outstanding
Issuer Common Stock; or
ii. the consummation of any Acquisition Transaction described in
Section 2(b)(i) hereof.
8. a. In the event that prior to an Exercise Termination Event, Issuer
shall enter into an agreement (i) to consolidate with or merge into any person
(other than Grantee or a Grantee Subsidiary), or engage in a plan of exchange
with any person (other than Grantee or a Grantee Subsidiary) and Issuer shall
not be the continuing or surviving corporation of such consolidation or merger
or the acquirer in such plan of exchange, (ii) to permit any person, other than
Grantee or a Grantee Subsidiary, to merge into Issuer or be acquired by Issuer
in a plan of exchange and Issuer shall be the continuing or surviving or
acquiring corporation, but, in connection with such merger or plan of exchange,
the then outstanding shares of Issuer Common Stock shall be changed into or
exchanged for stock or other securities of any other person or cash or any other
property or the then outstanding shares of Issuer Common Stock shall after such
merger or plan of exchange represent less than 50% of the outstanding shares and
share equivalents of the merged or acquiring company, or (iii) to sell or
otherwise transfer all or substantially all of its or an Issuer Subsidiary's
assets or deposits to any person, other than Grantee or a Grantee Subsidiary,
then, and in each such case, the agreement governing such transaction shall make
proper provision so that the Option shall, upon the consummation of any such
transaction and upon the terms and conditions set forth herein, be converted
into, or exchanged for, an option (the "Substitute Option"), at the election of
Grantee, of either (x) the Acquiring Corporation (as hereinafter defined) or (y)
any person that controls the Acquiring Corporation.
b. The following terms have the meanings indicated:
i. "Acquiring Corporation" shall mean (i) the continuing or surviving
person of a consolidation or merger with Issuer (if other than Issuer), (ii) the
acquiring person in a plan of exchange in which Issuer is acquired, (iii) the
Issuer in a merger or plan of exchange in which Issuer is the continuing or
surviving or acquiring person, and (iv) the transferee of all or substantially
all of Issuer's assets or deposits (or the assets or deposits of the Issuer
Subsidiary).
11
ii. "Substitute Common Stock" shall mean the common stock issued by
the issuer of the Substitute Option upon exercise of the Substitute Option.
iii. "Assigned Value" shall mean the market/offer price, as defined
in Section 7.
iv. "Average Price" shall mean the average closing price of a share
of the Substitute Common Stock for one year immediately preceding the
consolidation, merger or sale referred to in Section 8(a), but in no event
higher than the closing price of the shares of Substitute Common Stock on the
day preceding such consolidation, merger or sale; provided, that if Issuer is
the issuer of the Substitute Option, the Average Price shall be computed with
respect to a share of common stock issued by the person merging into Issuer or
by any company which controls or is controlled by such person, as Grantee may
elect.
c. The Substitute Option shall have the same terms as the Option;
provided, that the exercise price therefor and number of shares subject thereto
shall be as set forth in this Section 8; provided, further, that the Substitute
Option shall be exercisable immediately upon issuance without the occurrence of
a Triggering Event; and provided, further that if the terms of the Substitute
Option cannot, for legal reasons, be the same as the Option, such terms shall be
as similar as possible and in no event less advantageous to Grantee. The issuer
of the Substitute Option shall also enter into an agreement with Grantee in
substantially the same form as this Agreement (subject to the variations
described in the foregoing provisos), which agreement shall be applicable to the
Substitute Option.
d. The Substitute Option shall be exercisable for such number of shares
of Substitute Common Stock as is equal to the Assigned Value multiplied by the
number of shares of Issuer Common Stock for which the Option was exercisable
immediately prior to the event described in the first sentence of Section 8(a),
divided by the Average Price, rounded up to the nearest whole share. The
exercise price of the Substitute Option per share of Substitute Common Stock
shall then be equal to the Option Price multiplied by a fraction, the numerator
of which shall be the number of shares of Issuer Common Stock for which the
Option was exercisable immediately prior to the event described in the first
sentence of Section 8(a) and the denominator of which shall be the number of
shares of Substitute Common Stock for which the Substitute Option is
exercisable.
e. In no event, pursuant to any of the foregoing paragraphs, shall the
Substitute Option be exercisable for more than 19.9% of the shares of Substitute
Common Stock outstanding prior to exercise of the Substitute Option. In the
event that the Substitute Option would be exercisable for more than 19.9% of the
shares of Substitute Common Stock outstanding prior to exercise but for this
Section 8(e), the issuer of the Substitute Option (the "Substitute Option
Issuer") shall make a cash payment to Grantee equal to the excess of (i) the
value of the Substitute Option without giving effect to the limitation in this
Section 8(e) over (ii) the value of the Substitute Option after giving effect to
the limitation in this Section 8(e). This difference in value shall be
determined by a nationally recognized investment banking firm selected by
Grantee.
12
f. Issuer shall not enter into any transaction described in subsection
(a) of this Section 8 unless the Acquiring Corporation and any person that
controls the Acquiring Corporation assume in writing all the obligations of
Issuer hereunder and take all other actions that may be necessary so that the
provisions of this Section 8 are given full force and effect (including, without
limitation, any action that may be necessary so that the holders of the other
shares of common stock issued by Substitute Option Issuer are not entitled to
exercise any rights by reason of the issuance or exercise of the Substitute
Option and the shares of Substitute Common Stock are otherwise in no way
distinguishable from or have lesser economic value than other shares of common
stock issued by Substitute Option Issuer (other than any diminution in value
resulting from the fact that the shares of Substitute Common Stock are
restricted securities, as defined in Rule 144 under the 1934 Act or any
successor provision)).
9. a. At the request of the holder of the Substitute Option (the
"Substitute Option Holder"), the Substitute Option Issuer shall repurchase the
Substitute Option from the Substitute Option Holder at a price (the "Substitute
Option Repurchase Price") equal to the amount by which (i) the Highest Closing
Price (as hereinafter defined) exceeds (ii) the exercise price of the Substitute
Option, multiplied by the number of shares of Substitute Common Stock for which
the Substitute Option may then be exercised, and at the request of the owner
(the "Substitute Share Owner") of shares of Substitute Common Stock (the
"Substitute Shares"), the Substitute Option Issuer shall repurchase the
Substitute Shares at a price (the "Substitute Share Repurchase Price") equal to
the Highest Closing Price multiplied by the number of Substitute Shares so
designated. The term "Highest Closing Price" shall mean the highest closing
price for shares of Substitute Common Stock within three-month period
immediately preceding the date the Substitute Option Holder gives notice of the
required repurchase of the Substitute Option or the Substitute Share Owner gives
notice of the required repurchase of the Substitute Shares, as applicable.
b. The Substitute Option Holder and the Substitute Share Owner, as the
case may be, may exercise its respective rights to require the Substitute Option
Issuer to repurchase the Substitute Option and the Substitute Shares pursuant to
this Section 9 by surrendering for such purpose to the Substitute Option Issuer,
at its principal office, the agreement for such Substitute Option (or, in the
absence of such an agreement, this Agreement) and/or certificates for Substitute
Shares accompanied by a written notice or notices stating that the Substitute
Option Holder or the Substitute Share Owner, as the case may be, elects to
require the Substitute Option Issuer to repurchase the Substitute Option and/or
the Substitute Shares in accordance with the provisions of this Section 9. As
promptly as practicable and in any event within thirty (30) business days after
the surrender of the Substitute Option and/or certificates representing
Substitute Shares and the receipt of such notice or notices relating thereto,
the Substitute Option Issuer shall deliver or cause to be delivered to the
Substitute Option Holder the Substitute Option Repurchase Price and/or to the
Substitute Share Owner the Substitute Share Repurchase Price therefor or the
portion thereof which the Substitute Option Issuer is not then prohibited under
applicable law and regulation from so delivering.
13
c. To the extent that the Substitute Option Issuer is prohibited under
applicable law or regulation, or as a consequence of administrative policy, from
repurchasing the Substitute Option and/or the Substitute Shares in part or in
full, the Substitute Option Issuer shall so notify the Substitute Option Holder
and/or the Substitute Share Owner and thereafter deliver or cause to be
delivered, from time to time, to the Substitute Option Holder and/or the
Substitute Share Owner, as appropriate, the portion of the Substitute Option
Repurchase Price and/or the Substitute Share Repurchase Price, respectively,
which it is no longer prohibited from delivering, within ten (10) business days
after the date on which the Substitute Option Issuer is no longer so prohibited;
provided, however, that if the Substitute Option Issuer is at any time after
delivery of a notice of repurchase pursuant to subsection (b) of this Section 9
prohibited under applicable law or regulation, or as a consequence of
administrative policy, from delivering to the Substitute Option Holder and/or
the Substitute Share Owner, as appropriate, the Substitute Option Repurchase
Price and the Substitute Share Repurchase Price, respectively, in full (and the
Substitute Option Issuer shall use its reasonable efforts to receive all
required regulatory and legal approvals in order to accomplish such repurchase),
the Substitute Option Holder and/or Substitute Share Owner may revoke its notice
of repurchase of the Substitute Option or the Substitute Shares either in whole
or to the extent of prohibition, whereupon, in the latter case, the Substitute
Option Issuer shall (i) deliver to the Substitute Option Holder or Substitute
Share Owner, as appropriate, that portion of the Substitute Option Repurchase
Price or the Substitute Share Repurchase Price that the Substitute Option Issuer
is not prohibited from delivering; and (ii) deliver, as appropriate, either (A)
to the Substitute Option Holder, a new Substitute Option evidencing the right of
the Substitute Option Holder to purchase that number of shares of Substitute
Common Stock obtained by multiplying the number of shares of Substitute Common
Stock for which the surrendered Substitute Option was exercisable at the time of
delivery of the notice of repurchase by a fraction, the numerator of which is
the Substitute Option Repurchase Price less the portion thereof theretofore
delivered to the Substitute Option Holder and the denominator of which is the
Substitute Option Repurchase Price, and/or (B) to the Substitute Share Owner, a
certificate for the Substitute Option Shares it is then so prohibited from
repurchasing.
10. The specified periods for exercise of certain rights under Sections
2, 6, 7 and 9 shall be extended: (i) to the extent necessary to obtain all
regulatory approvals for the exercise of such rights (for so long as Grantee,
Substitute Option Holder or Substitute Share Owner, as the case may be, is using
all reasonable efforts to obtain such regulatory approvals), and for the
expiration of all statutory waiting periods; and (ii) to the extent necessary to
avoid liability under Section 16(b) of the 1934 Act by reason of such exercise.
11. a. Issuer hereby represents and warrants to Grantee as follows:
i. Issuer has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Issuer Board prior to the date hereof and no other corporate proceedings on the
part of Issuer are necessary to authorize
14
this Agreement or to consummate the transactions so contemplated. This Agreement
has been duly and validly executed and delivered by Issuer.
ii. Issuer has taken all necessary corporate action to authorize and
reserve and to permit it to issue, and at all times from the date hereof through
the termination of this Agreement in accordance with its terms will have
reserved for issuance upon the exercise of the Option, that number of shares of
Issuer Common Stock equal to the maximum number of shares of Issuer Common Stock
at any time and from time to time issuable hereunder, and all such shares, upon
issuance pursuant thereto, will be duly authorized, validly issued, fully paid,
nonassessable (except as provided in Section 180.0622(2)(b) of the WBCL), and
will be delivered free and clear of all claims, liens, encumbrances and security
interests and not subject to any preemptive rights.
iii. The Issuer Board has approved the granting of the Option and the
issuance of shares of Issuer Common Stock to Grantee for purposes of Section
180.1141 of the WBCL.
b. Grantee hereby represents and warrants to Issuer as follows:
i. Grantee has corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement by Grantee and the performance of its obligations
hereunder by Grantee have been duly and validly authorized by the Board of
Directors of Grantee and no other corporate proceedings on the part of Grantee
are necessary to authorize this Agreement or for Grantee to perform its
obligations hereunder. This Agreement has been duly and validly executed and
delivered by Grantee.
ii. Grantee is an "accredited investor" as such term is defined in
the 1933 Act and the regulations promulgated thereunder. Any Option Shares
acquired upon exercise of this Option by Grantee will be acquired for Grantee's
own account and for investment purposes only. This Option is not being, and any
Option Shares or other securities acquired by Grantee upon exercise of the
Option will not be, acquired with a view to the public distribution thereof and
will not be transferred or otherwise disposed of except in a transaction
registered or exempt from registration under the 1933 Act.
12. Neither of the parties hereto may assign any of its rights or
obligations under this Agreement or the Option created hereunder, and Grantee
may not transfer the Option to any other person, without the express written
consent of the other party.
13. Each of Grantee and Issuer will use its reasonable efforts to make
all filings with, and to obtain consents of, all third parties and governmental
authorities necessary for the consummation of the transactions contemplated by
this Agreement, including, without limitation, applying to the OTS for approval
to acquire the shares issuable hereunder.
14. 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,
15
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. If for any reason such
court or regulatory agency determines that Grantee is not permitted to acquire,
or Issuer is not permitted to repurchase pursuant to Section 7, the full number
of shares of Issuer Common Stock provided in Section l(a) hereof (as adjusted
pursuant to Section l(b) or Section 5 hereof), 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.
15. All notices, requests, claims, demands and other communications
hereunder shall be deemed to have been duly given when delivered in person, by
fax, telecopy, or by registered or certified mail (postage prepaid, return
receipt requested) at the respective addresses of the parties set forth in the
Merger Agreement.
16. This Agreement shall be governed by and construed in accordance with
the laws of the State of Wisconsin, without regard to the conflict of law
principles thereof.
17. 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.
18. 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.
19. 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. The terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assignees.
Nothing in this Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto, and their respective successors except as
assignees, any rights, remedies, obligations or liabilities under or by reason
of this Agreement, except as expressly provided herein.
20. Each party shall execute and deliver such other documents and
instruments and take such further action that may be necessary in order to
consummate the transactions contemplated hereby.
21. Capitalized terms used in this Agreement and not defined herein shall
have the meanings assigned thereto in the Merger Agreement.
16
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:________________________
ANCHOR BANCORP WISCONSIN INC.
By:_______________________
17
EXHIBIT B
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is effective as of the _______ day of
_________________, 1999 between Anchor BanCorp Wisconsin Inc. (the "Company"), a
Wisconsin-chartered corporation, AnchorBank, S.S.B. (the "Bank"), a
Wisconsin-chartered savings association and wholly-owned subsidiary of the
Company, their respective successors and assigns, and James J. Rothenbach (the
"Executive").
RECITALS
WHEREAS, the Company and FCB Financial Corp ("FCB Financial") entered
into an Agreement and Plan of Merger, dated January 5, 1999 (the "Merger
Agreement"), providing for the combination of the Company and FCB Financial and
a concurrent combination of the Bank and Fox Cities Bank ("FCB Bank") in a
strategic merger, wherein the Company and the Bank survive the merger
(collectively, the "Merger");
WHEREAS, prior to the Merger, FCB Financial and FCB Bank employed the
Executive as President and Chief Executive Officer;
WHEREAS, Executive previously entered into an Employment Agreement,
dated May 1, 1998, by and among Executive, FCB Financial and FCB Bank (the
"Prior Agreement);
WHEREAS, consummation of the Merger contemplated by the Merger
Agreement is conditioned upon the Company, the Bank and the Executive entering
into an Employment Agreement conforming to the terms hereof and the termination
of the Prior Agreement;
WHEREAS, Executive's skills and extensive experience and knowledge in
the financial institutions industry will substantially benefit the Company and
the Bank;
WHEREAS, the Company and the Bank desire to retain the services of
Executive in connection with the business activities of the Company and the Bank
following the Merger.
NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements of the parties herein contained, it is
agreed as follows:
1. Employment and Termination of Prior Agreement.
(i) The Bank and Company shall employ Executive and Executive shall
serve the Bank and Company on the terms, conditions and for the period set forth
in Section 2 of this Agreement.
(ii) Executive hereby acknowledges (a) receipt of the amounts due
Executive under the Prior Agreement in connection with the Merger, which amount
has been calculated in
accordance with Section 2.6 of the Prior Agreement, and (b) termination of the
Prior Agreement in its entirety. Company and Bank acknowledge termination of the
Prior Agreement in its entirety.
(iii) Pursuant to the terms of the Prior Agreement, the amounts due
Executive thereunder as well as under any other agreement or plan were to be
limited such that no portion of said payments would be deemed an "excess
parachute payment" as defined in Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"). The parties hereto are in agreement that the
present value of any payment (including payments made under the Prior Agreement,
after giving effect to the limitation referred to in the preceding sentence) to
or for the benefit of Executive in the nature of compensation, receipt of which
is contingent on the occurrence of the Merger, and to which Section 280G of the
Code applies (in the aggregate "Total Payments"), is equal to an amount that is
one dollar less than the maximum amount that may be paid without the loss of
deduction under Section 280G(a) of the Code. Present value of the Total Payments
for purposes of this Agreement has been calculated in accordance with Section
280G(d)(4) of the Code. Notwithstanding the foregoing, if it is ultimately
determined by a court or pursuant to a final determination by the Internal
Revenue Service that any portion of the Total Payments is subject to the tax
("Excise Tax") imposed by Section 4999 of the Code (or any successor thereto),
then Company and Bank shall pay to Executive an additional amount (the "Gross-Up
Payment") such that the net amount retained by Executive after deduction of (1)
any Excise Tax and any interest charges or penalties in respect to the
imposition of such Excise Tax (but not any federal, state or local income tax)
on the Total Payments, and (2) any federal, state and local income tax and
Excise Tax upon the payment provided for by this Section 1(iii) shall be equal
to the Total Payments. For purposes of determining the amount of the Gross-Up
Payment, Executive shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation in the calendar year in which the
Gross-Up Payment is to be made and state and local income taxes at the highest
marginal rate of taxation in the state and locality of Executive's domicile for
income tax purposes on the date the Gross-Up Payment is made, net of the maximum
reduction of federal income taxes that could be obtained from deduction of such
state and local taxes.
2. Term of Employment. The period of Executive's employment under this
Agreement shall begin as of ______________________, 1999 (the Commencement Date)
and expire on the first anniversary of the Commencement Date, unless sooner
terminated as provided herein; provided that, on a date no less than 180 days
preceding the first anniversary and, assuming renewal of this Agreement as
provided herein, on each subsequent anniversary, of the Commencement Date, the
term of employment may be extended by action of the Bank's and Company's Boards
of Directors, following an explicit review by the Boards of Executive's
performance under this Agreement (with appropriate documentation thereof and
after taking into account all relevant factors including Executive's performance
hereunder), to add one additional year to the remaining term of employment. The
Boards of Directors of the Company and the Bank shall provide Executive with at
least one hundred eighty (180) days' advance written notice of any decision on
their part not to extend the Agreement prior to the expiration of the initial
term or any renewal term hereof; in the absence of such written notice the term
of this Agreement shall automatically be so extended. The term of employment as
in effect from time to time hereunder shall be referred to as the "Employment
Term". In the event the Company
2
and Bank give notice to Executive that at the end of the initial term of this
Agreement it shall not be renewed, Executive shall nonetheless continue as an
employee of the Company and the Bank hereunder (including for purposes of all
employee benefit and other plans), and shall continue to render the services
required of him hereunder, for the remainder of such initial term; provided that
the Company and Bank will make reasonable accommodation to the Executive for the
time required for his efforts to secure other employment during such period. In
the event that Company and Bank give notice to Executive that any subsequent
renewal term of this Agreement shall not be renewed, Executive may terminate his
employment under this Agreement at any time following the receipt of such
notice; provided, however, that in such event Executive shall, as a severance
benefit, continue to receive his compensation and benefits as provided in
Section 4 through the expiration of the Employment Term and for purposes of all
employee benefit and other plans shall continue to be deemed an employee of
Company and Bank through the expiration of such Employment Term.
3. Positions and Duties. Executive shall serve as Senior Vice President of
the Bank and Company (or in such other position and with such other title as the
Board of Directors of the Bank and the Company may determine, provided that the
level of authority and responsibilities attendant to Executive's position are
not materially reduced) and as a member of the management team. As such,
Executive shall report directly to the 1st Vice President-Commercial Lending of
the Bank and be generally responsible for management services of the type
customarily performed by persons serving in similar capacities at other
institutions, together with such other duties and responsibilities as may be
appropriate to Executive's position and as may be from time to time determined
by the Bank's and Company's Boards of Directors to be necessary to their
operations and in accordance with their bylaws. Company and Bank agree that
during the Employment Term they will not reduce materially Executive's level of
authority, status or responsibilities without Executive's prior written consent.
Furthermore, Executive shall not be required, without his prior written consent,
to be based anywhere other than within the Oshkosh-Neenah/Menasha-Appleton
metropolitan areas, except for reasonable business travel in connection with the
business of Company and Bank.
4. Compensation. As compensation for services provided pursuant to this
Agreement, Executive shall receive from the Bank and the Company (collectively,
"Employers") the compensation and benefits set forth below:
(i) Base Salary. During the Employment Term, Executive shall receive
from Employers a base salary ("Base Salary") in such amount as may from time to
time be approved by their Boards of Directors. The Base Salary shall at no time
be less than $155,000 per annum. The Base Salary may be increased from time to
time as determined by the Employers' Boards of Directors, provided that no such
increase in Base Salary or other compensation shall in any way limit or reduce
any other obligation of the Employers under this Agreement. Once established at
a specified annual rate, Executive's Base Salary shall not thereafter be reduced
except as part of a general pro-rata reduction in compensation applicable to all
Executive Officers. Executive's Base Salary and other compensation shall be paid
in accordance with the Employers' regular payroll practices as from time to time
in effect. For purposes of this Agreement, the term "Executive Officers" shall
mean all officers of the Bank and/or Company having a written Employment
Agreement.
3
(ii) Bonus and Incentive Plans. Executive shall be entitled, during
the Employment Term, to participate in and receive payments from all bonus and
other incentive compensation plans (as currently in effect, as modified from
time to time, or as subsequently adopted); provided, however, that nothing
contained herein shall grant Executive the right to continue in any bonus or
other incentive compensation plan following its discontinuance by the Board or
Boards (except to the extent Executive had earned or otherwise accumulated
vested rights therein prior to such discontinuance). In addition, Executive
shall participate in all stock purchase, stock option, stock appreciation right,
stock grant, or other stock based incentive programs of any type made available
by Employers to their Executive Officers. The Employers shall not make any
changes in such plans, benefits or privileges which would adversely affect
Executive's rights or benefits thereunder, unless such change occurs pursuant to
a program applicable to all Executive Officers of the Employers and does not
result in a proportionately greater adverse change in the rights and benefits of
Executive as compared with other Executive Officers. Any stock options granted
to Executive pursuant to any of the foregoing plans shall provide that they vest
in full no later than one day prior to the end of the Employment Term hereunder;
provided that such vesting will not be accelerated if the Executive's employment
is terminated for "cause" as provided in Section 5 hereof.
(iii) Other Benefits. During the Employment Term, Employers shall
provide to Executive all other benefits of employment (or, with Executive's
consent, equivalent benefits) generally made available to other Executive
Officers. Such benefits shall include participation by Executive in any group
health, life, disability, or similar insurance program and in any pension,
profit-sharing, Employee Stock Ownership Plan ("ESOP"), 401(k) or other or
similar retirement program. Employers shall continue in effect any individual
insurance plans or deferred compensation agreements in effect as of the
Commencement Date and Executive shall be entitled to use of an automobile
provided by Employers under the terms of such corporate automobile policy as
they shall maintain in effect and as it may be amended from time to time;
provided, however, that if the Employers' corporate automobile policy is amended
in a manner adverse to Executive, or this Agreement is terminated, in either
case on or prior to the first anniversary of the Commencement Date, Executive
shall be entitled to purchase his current automobile (1998 Buick LaSabre) or a
comparable vehicle from the Employers for the lesser of $3,000 or the net book
value of such vehicle.
Executive shall receive at least four weeks of paid vacation per
annum, sick time, personal days and other perquisites in the same manner and to
the same extent as provided under the Employers' policies as in effect from time
to time for other Executive Officers. In addition, Employers shall provide
Executive with a membership in the Oshkosh Country Club or its equivalent.
Employers shall also reimburse Executive or otherwise provide for or pay all
reasonable expenses incurred by Executive in furtherance of or in connection
with the business of Employers, including but not by way of limitation, travel
expenses and all reasonable entertainment expenses (whether incurred at
Executive's residence, while traveling or otherwise) subject to such reasonable
documentation and other limitations as may be imposed by the Boards of Directors
of the Employers.
Nothing contained herein shall be construed as granting Executive the
right to continue in any benefit plan or program, or to receive any other
perquisite of employment
4
provided under this Subsection 4(iii) following termination or discontinuance of
such plan, program or perquisite by the Board (except to the extent Executive
had previously earned or accumulated vested rights therein).
5. Termination. In addition to a termination of employment by Executive as
contemplated in Section 2, this Agreement may be terminated prior to the
expiration of the Employment Term, subject to payment of the compensation and
other benefits described below, upon occurrence of any of the events described
herein. In case of such termination pursuant to this Section 5, the date on
which Executive ceases to be employed under this Agreement, after giving effect
to any prior notice requirement, is referred to as the "Termination Date".
(i) Death, Retirement. This Agreement shall terminate at the death or
retirement of Executive. As used herein, the term "retirement" shall mean
Executive's retirement in accordance with and pursuant to any retirement plan of
the Employers generally applicable to Executive Officers or in accordance with
any retirement arrangement established for Executive with his consent.
If termination occurs for such reason, no additional compensation
shall be payable to Executive under this Agreement except as specifically
provided herein. Notwithstanding anything to the contrary contained herein,
Executive shall receive all compensation and other benefits to which he was
entitled under Section 4 through the Termination Date and, in addition, shall
receive all other benefits available to him under the Bank's benefit plans and
programs to which he was entitled by reason of employment through the
Termination Date.
(ii) Disability. This Agreement shall terminate upon the disability of
Executive. As used in this Agreement, "disability" shall mean Executive's
inability, as the result of physical or mental incapacity, to substantially
perform his employment duties for a period of 90 consecutive days. Any question
as to the existence of Executive's disability upon which Executive and Employers
cannot agree shall be determined by a qualified independent physician mutually
agreeable to Executive and Employers or, if the parties are unable to agree upon
a physician within ten (10) days after notice from either to the other
suggesting a physician, by a physician designated by the then president of the
medical society for the county in which Executive maintains his principal
residence. The costs of any such medical examination shall be borne by the
Employers. If Executive is terminated due to disability, he shall be paid 100%
of his Base Salary at the rate in effect at the time notice of termination is
given for one year and thereafter an annual amount equal to 75% of such Base
Salary for any remaining portion of the Employment Term, such amounts to be paid
in substantially equal monthly installments and offset by any monthly payments
actually received by Executive during the payment period from (i) any disability
plans provided by the Employers, and/or (ii) any governmental social security or
workers compensation program.
If termination occurs for such reason, no additional compensation
shall be payable to Executive except as specifically provided herein.
Notwithstanding anything to the contrary contained herein, Executive shall
receive all compensation and other benefits to which he was entitled under
Section 4 through the Termination Date and, in addition, shall receive all
5
other benefits under the Employers' benefit plans and programs to which he was
entitled by reason of employment through the Termination Date.
(iii) Cause. Employers may terminate Executive's employment under this
Agreement for cause at any time, and thereafter their obligations under this
Agreement shall cease and terminate. Notwithstanding anything to the contrary
contained herein, Executive shall receive all compensation and other benefits in
which he was vested or to which he was otherwise entitled under Section 4, and
the plans and programs provided therein, by reason of employment through the
Termination Date.
For purposes of this Agreement, "Cause" shall mean: (i) the
intentional failure by Executive to substantially perform his duties (other than
any such failure resulting from the Executive's incapacity due to physical or
mental illness) after a written demand for substantial performance is delivered
to Executive by Employers, which demand specifically identifies the manner in
which they believe Executive has not substantially performed his duties, (ii)
any willful act of misconduct by Executive, (iii) a criminal conviction of
Executive for any act involving dishonesty, breach of trust or a violation of
the banking or savings and loan laws of the United States, (iv) a criminal
conviction of Executive for the commission of any felony, (v) a breach of
fiduciary duty involving personal profit, (vi) a willful violation of any law,
rule or regulation (other than a traffic violation or similar offenses) or final
cease and desist order; or (vii) personal dishonesty or material breach by
Executive of any provision of this Agreement.
For purposes of this Subsection 5(iii), no act, or failure to act, on
Executive's part shall be deemed "willful" unless done, or omitted to be done,
by Executive not in good faith and without reasonable belief that the action or
omission was in the best interest of the Employers.
(iv) Voluntary Termination by Executive. In addition to the right to
terminate employment following a nonrenewal of this Agreement as provided in
Section 2, Executive may voluntarily terminate his employment under this
Agreement at any time by giving at least thirty (30) days prior written notice
to Employers. In the event of a termination pursuant to this Section 5(iv),
Executive shall receive all compensation and other benefits in which he was
vested or to which he was otherwise entitled under Section 4 through the
Termination Date, in addition to all other benefits available to him under
benefit plans and programs to which he was entitled by reason of employment
through the Termination Date.
(v) Suspension or Termination Required by the OTS
(A) If Executive is suspended and/or temporarily prohibited
from participating in the conduct of the Employers'
affairs by a notice served under Section 8(e)(3), or
Section 8(g)(1), of the Federal Deposit Insurance Act [12
U.S.C.ss.1818(e)(3) and (g)(1)], the Employers'
obligations under the Agreement shall be suspended as of
the date of service of the notice unless stayed by
appropriate proceedings. If the charges in the notice are
dismissed, the Employers shall (i) pay Executive all of
the compensation withheld while their obligations under
this Agreement were suspended, and (ii) reinstate such
obligations as were suspended.
6
(B) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Employers' affairs by
an order issued under Section 8(e)(4) or Section 8(g)(1)
of the Federal Deposit Insurance Act [12 U.S.C. ss.
1818(e)(4) or (g)(1)], the obligations of the Employers
under the Agreement shall terminate as of the effective
date of the order, but vested rights of the contracting
parties shall not be affected.
(C) If the Bank is in default as defined in Section 3(x)(1) of
the Federal Deposit Insurance Act [12 U.S.C. 1813 (x)(1)],
all obligations under the Agreement shall terminate as of
the date of default, but this paragraph shall not affect
any vested rights of the Executive.
(D) All obligations under the Agreement shall be terminated,
except to the extent determined that continuation of the
contract is necessary for the Employers' continued
operations (i) by the Director of the Office of Thrift
Supervision ("OTS"), or his or her designee at the time
the Federal Deposit Insurance Corporation ("FDIC") or
Resolution Trust Corporation ("RTC") enters into an
agreement to provide assistance to or on behalf of the
Employers under the authority contained in Section 13(c)
of the Federal Deposit Insurance Act; or (ii) by the
Director of the OTS, or his or her designee, at the time
it approves a supervisory merger to resolve problems
related to operation of the Employers or when the
Employers are determined by the Director of the OTS to be
in an unsafe or unsound condition. Any rights of the
parties that have already vested, however, shall not be
affected by such action.
(E) In the event that 12 C.F.R. ss. 563.39, or any successor
regulation, is repealed, this Section 5(v) shall cease to
be effective on the effective date of such repeal. In the
event that 12 C.F.R. ss. 563.39, or any successor
regulation, is amended or modified, this Agreement shall
be revised to reflect the amended or modified provisions
if: (1) the amended or modified provision is required to
be included in this Agreement; or (2) if not so required,
the Executive requests that the Agreement be so revised.
(vi) Other Termination. If this Agreement is terminated by the
Employers (1) other than for cause, death, disability or retirement, or (2) by
Executive due to a failure by Employers to comply with any material provision of
this Agreement, which failure has not been cured within thirty (30) days after
notice of such non-compliance has been given by Executive to Employers, then
following the Termination Date the Executive shall receive (a) his Base Salary
through the end of the Employment Term, (b) his theretofore unpaid Base Salary
for the period of employment up to the Termination Date, (c) medical, dental and
life insurance through the end of the Employment Term and the other employee
benefits contemplated by Section 4 through the end of the Employment Term, and
(d) any other benefits to which Executive is entitled by law or the specific
terms of the Bank's policies in effect at the time of termination of employment.
7
6. General Provisions.
(i) Successors; Binding Agreement.
(A) Employers will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets
of the Employers ("successor organization") to expressly
assume and agree to perform this Agreement in the same
manner and to the same extent that Employers would have
been required to perform if no such succession had taken
place.
As used in this Agreement "Employers" shall mean the
Employers as hereinbefore defined (and any successor to
their business and/or assets) which executes and delivers
the agreement provided for in this Section 6 or which
otherwise becomes bound by the terms and provisions of
this Agreement by operation of this Agreement or law.
Failure of the Employers to obtain such agreement prior to
the effectiveness of any such succession shall be a breach
of this Agreement and shall entitle Executive, if he
elects to terminate this Agreement, to compensation from
the Employers in the same amount and on the same terms as
he would be entitled to under this Agreement if he
terminated his employment under Section 5(vi). For
purposes of implementing the foregoing, the date on which
any such succession becomes effective shall be deemed the
Termination Date.
(B) No right or interest to or in any payments or benefits
under this Agreement shall be assignable or transferable
in any respect by the Executive, nor shall any such
payment, right or interest be subject to seizure,
attachment or creditor's process for payment of any debts,
judgments, or obligations of Executive.
(C) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by (1) Executive and his
heirs, beneficiaries and personal representatives, and (2)
the Employers and any successor organization.
(ii) Noncompetition Provision. Executive acknowledges that the
development of personal contacts and relationships is an essential element of
the savings and loan business, that FCB Financial and FCB Bank have invested and
Employers will during the Employment Term invest considerable time and money in
his development of such contacts and relationships, that Employers could suffer
irreparable harm if he were to leave employment and solicit the business of the
Employers customers, and that it is reasonable to protect the Employers against
competitive activities by Executive. Executive covenants and agrees, in mutual
promises contained herein, that in the event of any termination or cessation of
his employment hereunder (regardless of the reason for such termination or
cessation), Executive shall not accept employment with or render services (in
any capacity, whether as employee, officer, director, partner, trustee
consultant or otherwise) to any Significant Competitor of Bank for a period of
8
one (1) year following such termination. For purposes of this Agreement, the
term Significant Competitor means any financial institution including, but not
limited to, any commercial bank, savings bank, savings and loan association,
credit union, or mortgage banking corporation which, at the time of termination
of Executive's employment, or during the period of this covenant not to compete,
has a home, branch or other office in the Wisconsin counties of Winnebago and
Outagamie or which has, during the twelve (12) months preceding Executive's
termination, originated, or which during the period of this covenant not to
compete originates, more than $5,000,000 in commercial or mortgage loans secured
by real property in any such county; provided, however, that Executive shall not
be deemed to have breached this covenant not to compete (a) solely by reason of
his rendering services otherwise prohibited by this Section 6(ii) for a
financial institution which has its home office located outside of the Wisconsin
counties of Winnebago and Outagamie if he renders such services from a
full-service banking office of such financial institution which is located
outside these same Wisconsin counties or (b) if his sole relationship with any
other such entity consists of his holding, directly or indirectly, an equity
interest in such entity not greater than five percent (5%) of such entity's
outstanding equity interests.
Executive agrees that the non-competition provisions set forth herein
are necessary for the protection of the Employers and are reasonably limited as
to (i) the scope of activities affected, (ii) their duration and geographic
scope, and (iii) their effect on Executive and the public. In the event
Executive violates the non-competition provisions set forth herein, the
Employers shall be entitled, in addition to its other legal remedies, to enjoin
the employment of Executive with any Significant Competitor for the period set
forth herein. If Executive violates this covenant and the Employers bring legal
action for injunctive or other relief, the Employers shall not, as a result of
the time involved in obtaining such relief, be deprived of the benefit of the
full period of the restrictive covenant. Accordingly, the covenant shall be
deemed to have the duration specified herein, computed from the date such relief
is granted, but reduced by any period between commencement of the period and the
date of the first violation.
(iii) Notice. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, posted prepaid, addressed as follows:
If to the Bank Anchor BanCorp Wisconsin Inc./
AnchorBank, S.S.B.
25 West Main Street
Madison, Wisconsin 53703
If to the Executive James J. Rothenbach
or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of address
shall be effective only upon receipt.
9
(iv) Expenses. If any legal proceeding is necessary to enforce or
interpret the terms of this Agreement (or to recover damages for breach of it),
the prevailing party shall be entitled to recover from the other party
reasonable attorneys' fees and necessary costs and disbursements incurred in
such litigation, in addition to any other relief to which such prevailing party
may be entitled.
(v) Withholding. Employers shall be entitled to withhold from amounts
to be paid to Executive under this Agreement any federal, state, or local
withholding or other taxes or charges which it is from time to time required to
withhold. Employers shall be entitled to rely on an opinion of counsel if any
question as to the amount or requirement of any such withholding shall arise.
(vi) Notice of Termination. Any purported termination by the Employers
under Section 5(i) (in the case of retirement), (ii), (iii) or (vi), or by
Executive under Sections 2, 5(i) (in the case of retirement) (iii), (iv) or (vi)
shall be communicated by written "Notice of Termination" to the other party. For
purposes of this Agreement, a "Notice of Termination" shall mean a dated notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination under the provision so indicated, (iii)
specifies a Date of Termination, which shall be not less than thirty (30) nor
more than ninety (90) days after such Notice of Termination is given, except in
the case of termination of Executive's employment for Cause or termination by
Executive pursuant to Section 2; and (iv) is given in the manner specified in
Section 6(iii) of this Agreement.
(vii) Miscellaneous. No provision of this Agreement may be amended,
waived or discharged unless such amendment, waiver or discharge is agreed to in
writing and signed by Executive and such officers of the Employers as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this
Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Wisconsin.
(viii) Mitigation; Exclusivity of Benefits. The Executive shall not be
required to mitigate the amount of any benefits hereunder by seeking other
employment or otherwise, nor shall the amount of any such benefits be reduced by
any compensation earned by the Executive as a result of employment by another
employer after the Termination Date or otherwise.
(ix) Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
(x) Counterparts. This Agreement may be executed in several
counterparts, each of which together will constitute one and the same
instrument.
10
(xi) Headings. Headings contained in this Agreement are for reference
only and shall not affect the meaning or interpretation of any provision of this
Agreement.
(xii) Effective Date. The effective date of this Agreement shall be
the date indicated in the first section of this Agreement, notwithstanding the
actual date of execution by any party.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of
the date first above written.
Executive:
James J. Rothenbach
ANCHOR BANCORP WISCONSIN INC.
(CORPORATE SEAL)
By:
Its:
ANCHORBANK, S.S.B.
(CORPORATE SEAL)
By:
Its:
11
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EXHIBIT C
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into this _______
day of ________________ 1999, between Anchor BanCorp Wisconsin Inc., a Wisconsin
corporation (the "Company"), AnchorBank, S.S.B., a Wisconsin-chartered savings
bank which is wholly-owned by the Company ("AnchorBank") and Donald D. Parker
(the "Executive").
WHEREAS, FCB Financial Corp., a Wisconsin corporation ("FCB"), entered
into an Agreement and Plan of Merger, dated January 5, 1999 (the "Merger
Agreement"), providing for the combination of the Company and FCB and a
concurrent combination of AnchorBank and Fox Cities Bank ("Fox Cities") in a
merger, wherein the Company and AnchorBank survive the merger (collectively, the
"Merger"); and
WHEREAS, prior to the Merger, the Executive was employed as Chairman of
the Board of FCB and Fox Cities pursuant to an Employment Agreement, dated May
1, 1997, between FCB, Fox Cities and the Executive (the "Prior Agreement"); and
WHEREAS, consummation of the Merger contemplated by the Merger Agreement
is conditioned upon the Company, AnchorBank and the Executive entering into an
Employment Agreement conforming to the terms hereof and superseding the Prior
Agreement; and
WHEREAS, the Executive's skills and extensive experience and knowledge in
the financial institutions industry will substantially benefit the Company and
AnchorBank; and
WHEREAS, the Company and AnchorBank desire to retain the services of the
Executive in connection with the business activities of the Company and
AnchorBank following the Merger.
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, it is agreed as
follows:
ARTICLE I
EMPLOYMENT
1.1 Term of Employment; Termination of Prior Agreement.
The Company and AnchorBank hereby agree to employ the Executive for a
period commencing on ___________, 1999 (the "Commencement Date") and terminating
upon the Executive's retirement on October 31, 1999, subject to earlier
termination as provided in Article II hereof. This Agreement shall supersede the
Prior Agreement and the parties hereto agree and acknowledge that, following
execution of this Agreement, the Prior Agreement shall be of no further force or
effect.
1.2 Duties of the Executive.
The Company and AnchorBank hereby employ the Executive, and the Executive
hereby accepts employment with the Company and AnchorBank, upon the terms and
conditions hereinafter set forth for the term of this Agreement. The Executive
is employed by AnchorBank to
perform the duties of Senior Vice President of AnchorBank, and the Company shall
cause AnchorBank to appoint the Executive to such position. As part of the
Executive's employment by AnchorBank hereunder, the Executive shall also serve
as, and the Company hereby appoints the Executive during the term of his
employment by AnchorBank hereunder to serve as, Senior Vice President of the
Company. The services to be performed by the Executive shall include those
normally performed by the Senior Vice President of similar banking organizations
and as directed by the Board of Directors of the Company and AnchorBank,
respectively, which are not inconsistent with the foregoing; provided, however,
that in no event shall the Executive be obligated to perform duties
substantially different from those the Executive performed under the Prior
Agreement. The Executive agrees to devote his full business time to the
rendition of such services, subject to absences for customary vacations and for
temporary illnesses and except as otherwise provided by the Board of Directors
of each of the Company and AnchorBank. The Company and AnchorBank each agree
that during the term of this Agreement it will not reduce the Executive's
current job title, status or responsibilities without the Executive's prior
written consent. Furthermore, the Executive shall not be required, without his
express written consent, to be based anywhere other than within the
Oshkosh-Neenah/Menasha-Appleton metropolitan area, except for reasonable
business travel in connection with the business of the Company and AnchorBank
1.3 Compensation.
Upon execution of this Agreement, the Company and AnchorBank shall pay
the Executive a lump sum amount equal to $____________ as a signing bonus and as
consideration for termination of the Prior Agreement, and, thereafter,
AnchorBank agrees to compensate, and the Company agrees to cause AnchorBank to
compensate, the Executive for his services hereunder during the term of this
Agreement by payment of a salary at the annual rate of $_____________ in such
monthly, semi-monthly or other payments as are from time to time applicable to
other executive officers of AnchorBank. In order to determine the salary paid
the Executive hereunder for purposes of calculating benefits under employee
benefit plans in which the Executive participates, the aggregate of the signing
bonus and the salary provided in the preceding sentence shall be used. The
Executive's salary may be increased from time to time during the term of this
Agreement in the sole discretion of the Board of Directors of AnchorBank, but
the Executive's salary shall not be reduced below the level then in effect. In
addition, the Executive shall be entitled to participate in incentive
compensation plans as may from time to time be established by the Company or
AnchorBank on an equivalent basis as other executive officers of the Company or
AnchorBank (but recognizing differences in responsibilities among executive
officers). All advisory director fees in respect to the Company and AnchorBank
received by the Executive shall be included along with his salary for purposes
of computing any amount to which he may become entitled under any employee
benefit plan of the Company and AnchorBank.
1.4 Benefits.
(a) The Executive shall be provided the following additional benefits,
(i) participation in any pension, profit-sharing, deferred compensation or other
retirement plan, (ii) medical, dental and life insurance coverage consistent
with coverages provided to other executive officers of AnchorBank, (iii) the use
of an automobile and membership or appropriate affiliation with a service club
and a recreational club, (iv) reimbursement of business expenses reasonably
incurred in connection with his employment and expenses incurred by his spouse
when
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accompanying the Executive, (v) paid vacations and sick leave in accordance with
prevailing policies of AnchorBank, provided that allowed vacations shall in no
event be less than five weeks per annum (determined pro rata based on the term
of this Agreement), and (vi) such other benefits as are provided to other
executive officers of AnchorBank; provided that amounts allocated to the
Executive's personal use under clause (iii) above and additional charges for the
Executive's spouse pursuant to clause (iv) above shall be treated as taxable
income to the Executive in accordance with applicable AnchorBank policies.
(b) If the Executive shall become temporarily disabled or incapacitated
to the extent that he is unable to perform the duties of Senior Vice President
of the Company or AnchorBank for three (3) consecutive months, he shall
nevertheless be entitled to receive 100 percent of his compensation and benefits
under Sections 1.3 and 1.4 of this Agreement for the period of his disability up
to three (3) months, less any amount paid to the Executive under any other
disability program maintained by the Company or AnchorBank or disability
insurance policy maintained for the benefit of the Executive by the Company or
AnchorBank. Upon returning to active full-time employment, the Executive's full
compensation as set forth in this Agreement shall be reinstated. In the event
that the Executive returns to active employment on other than a full-time basis
with the approval of the Board of Directors of AnchorBank, then any future
compensation to be paid the Executive (as set forth in Section 1.3 of this
Agreement) shall be reduced proportionately based upon the fraction of full-time
employment devoted by the Executive to his employment and responsibilities at
AnchorBank and the Company. But, if he is again unable to perform the duties of
Senior Vice President of the Company and AnchorBank hereunder due to disability
or incapacity, he must have been engaged in active full-time employment (which
period of full-time employment shall also include employment with FCB and Fox
Cities) for at least twelve (12) consecutive months immediately prior to such
later absence or inability in order to qualify for the full or partial
continuance of his salary under this Section (b).
1.5 Covenant Not to Compete.
The Executive acknowledges that the Company and AnchorBank would be
substantially damaged by an association of the Executive with a depository
institution that competes for customers with the Company and AnchorBank. Without
the consent of the Company, the Executive shall not at any time during the term
of this Agreement or the Executive's employment by the Company and AnchorBank,
and for a period of one year thereafter (regardless of the reason for
termination), (i) on behalf of himself or as agent of any other person solicit
any person who was a customer of the Company or AnchorBank (or the former FCB or
Fox Cities) or any of their subsidiaries during the two year period prior to the
termination of this Agreement or the Executive's employment hereunder or under
the Prior Agreement for the purpose of offering the same products or rendering
the same services to such customer as were provided or proposed to be provided
by the Company or AnchorBank (or the former FCB or Fox Cities) or any of their
subsidiaries to such customer as of the time of termination of the Executive's
employment, (ii) directly or indirectly, on the Executive's behalf or in the
service or on the behalf of others, render or be retained to render similar
services as described in Section 1.2 hereof, whether as an officer, partner,
trustee, consultant, or employee for any depository institution, which has a
banking office located within 10 miles of any office of the Company, AnchorBank,
the former Fox Cities or any banking office of the former FCB (in the case of
Fox Cities or FCB in existence immediately prior to the Commencement Date),
provided, however, that the Executive shall not be deemed to have
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breached this undertaking if (a) he renders services otherwise prohibited by
this paragraph (ii) for a depository institution which has its home office
located outside of the Wisconsin counties of Winnebago and Outagamie and he
renders such services from a full-service banking office of such depository
institution which is located outside these same Wisconsin counties, or (b) his
sole relationship with any other such entity consists of his holding, directly
or indirectly, an equity interest in such entity not greater than three percent
(3%) of such entity's outstanding equity interest, or (iii) actively induce or
solicit any employees of the Company or AnchorBank (including former employees
of Fox Cities or FCB who are then employed by the Company or AnchorBank) to
leave such employ. For purposes of this Section 1.5, "person" shall include any
individual, corporation, partnership, trust, firm, proprietorship, venture or
other entity of any nature whatsoever.
ARTICLE II
TERMINATION OF EMPLOYMENT
2.1 Voluntary Termination of Employment by the Executive.
The Executive may terminate his employment hereunder at any time for any
reason upon giving the Company and AnchorBank written notice, at least ninety
(90) days prior to termination of employment. Upon such termination, the
Executive shall be entitled to receive the Executive's theretofore unpaid base
salary in effect at the date such written notice is given for the period of
employment up to the date of termination, and the Executive and his spouse and
dependents will be entitled to further medical coverage, at his and/or their
expense, to the extent required by COBRA.
2.2 Termination of Employment for Death.
If the Executive's employment is terminated by reason of the Executive's
death, then the Executive's personal representative shall be entitled to receive
the Executive's theretofore unpaid base salary for the period of employment up
to the date of death. The Executive's spouse and dependent children shall
continue to be entitled, at the expense of AnchorBank (subject to then existing
co-payment features applicable under AnchorBank's medical insurance plan) if it
is an insured plan, to further medical coverage to the extent permitted by
COBRA; provided that, if AnchorBank's plan is not insured, AnchorBank will pay
to the Executive's spouse an additional monthly death benefit during the
applicable COBRA period, based upon COBRA rates in effect at the time of the
Executive's death, in an amount equal to the COBRA rate plus taxes due on such
cash payment; provided further that this benefit shall cease if the spouse and
dependents cease to be eligible for COBRA coverage.
2.3 Termination of Employment for Disability.
If the Executive becomes Totally and Permanently Disabled (as defined
below) during the term of this Agreement, the Company and AnchorBank may
terminate the Executive's employment and this Agreement, except Section 1.5 and
Article IV hereof, by giving the Executive written notice of such termination
not less than 5 days before the effective date thereof. If the Executive's
employment and this Agreement are terminated pursuant to this Section 2.3, the
Company and AnchorBank shall pay to the Executive his theretofore unpaid base
salary for the
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period of employment up to the date of termination, and the Company and
AnchorBank shall have no further obligations to the Executive under this
Agreement, except for any COBRA obligations. The Executive is Totally and
Permanently Disabled for purposes of this Section 2.3 if he is disabled or
incapacitated to the extent that he is unable to perform the duties of Senior
Vice President of the Company or AnchorBank for more than three (3) consecutive
months, and such disability or incapacity (i) is expected to continue for more
than three (3) additional months as certified by a medical doctor of the
Company's choosing which is not contradicted by a doctor of the Executive's
choosing or (ii) shall have in fact continued for more than three (3) additional
months.
2.4 Termination of Employment by the Company for Just Cause.
The Company and AnchorBank may terminate the Executive's employment
hereunder for Just Cause (as such term is defined below), in which case the
Executive shall be entitled to receive the Executive's theretofore unpaid base
salary for the period of employment up to the date of termination, but shall not
be entitled to any compensation or employment benefits pursuant to this
Agreement for any period after the date of termination, or the continuation of
any benefits except as may be required by law, including, at his own expense,
COBRA.
"Just Cause" shall mean personal dishonesty, incompetence, willful
misconduct or breach of a fiduciary duty involving personal profit in the
performance of his duties under this Agreement, intentional failure to perform
stated duties (provided that such nonperformance has continued for 10 days after
the Company and AnchorBank has given written notice of such nonperformance to
the Executive and its intention to terminate the Executive's employment
hereunder because of such nonperformance), willful violation of any law, rule or
regulation (other than a law, rule or regulation relating to a traffic violation
or similar offense), final cease-and-desist order, termination under the
provisions of Section 2.7(b) and (c) or material breach of any provision of this
Agreement.
2.5 Termination of Employment by the Company and AnchorBank Without Cause.
The Company and AnchorBank may terminate the Executive's employment
hereunder without cause, in which case the Executive shall receive (a) his base
salary under Section 1.3 hereof through the then remaining term of employment
under Section 1.1, (b) his theretofore unpaid base salary for the period of
employment up to the date of termination, (c) medical, dental and life insurance
and all other benefits through the then remaining term of employment under
Section 1.1 consistent with the terms and conditions set forth in Section 1.4,
(d) any other benefits to which the Executive is entitled by law or the specific
terms of the Company's and AnchorBank's policies in effect at the time of
termination of employment and (e) an amount equal to the product of the
Company's and AnchorBank's annual aggregate contribution, for the benefit of the
Executive, to all qualified retirement plans in which the Executive participated
multiplied by the fraction of a year remaining in the term of employment under
Section 1.1. The benefit in (e) under this Section 2.5 shall be in addition to
any benefit payable from any qualified or non-qualified plans or programs
maintained by the Company or AnchorBank at the time of termination. If
AnchorBank's medical and dental plans are not insured, the medical and dental
benefit in (c) shall be accomplished by AnchorBank paying to the Executive an
additional cash amount equal to the COBRA premium for such coverage, plus taxes
on such amount, so that the Executive may purchase the coverage on an after-tax
basis. Notwithstanding the foregoing, in the event that the
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Executive is terminated pursuant to this Section 2.5, the Executive shall
nonetheless be deemed to continue as an employee of the Company through the term
of this Agreement for the sole purpose of determining his rights under his
outstanding stock options.
2.6 Definition of Termination of Employment.
The terms "termination" or "involuntarily terminated" in this Agreement
shall refer to the termination of the employment of the Executive by the Company
or AnchorBank without his express written consent. In addition, for purposes of
this Agreement, a material diminution or interference with the Executive's
duties, responsibilities and benefits as Senior Vice President of the Company or
AnchorBank shall be deemed and shall constitute an involuntary termination of
employment to the same extent as express notice of such involuntary termination.
By way of example and not by way of limitation, any of the following actions
shall constitute such diminution or interference unless consented to in writing
by the Executive: (1) a change in the principal work place of the Executive to a
location outside a twenty-five mile radius from 420 South Koeller Street,
Oshkosh, Wisconsin; (2) a material reduction in the secretarial or other
administrative support of the Executive; (3) a material demotion of the
Executive; and (4) a reduction or adverse change in the salary, perquisites,
benefits, contingent benefits or vacation time which had theretofore been
provided to the Executive, other than as part of an overall program applied
uniformly and with equitable effect to all executive officers of the Company or
AnchorBank.
2.7 Termination or Suspension of Employment as Required by Law.
Notwithstanding anything in this Agreement to the contrary, the following
provisions shall limit the obligation of AnchorBank to continue employing the
Executive, but only to the extent required by the applicable regulations of the
OTS (12 C.F.R. ss.563.39), or similar succeeding regulations:
(a) If the Executive is suspended and/or temporarily prohibited from
participating in the conduct of AnchorBank's affairs by a notice served under
Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
ss.1818(e)(3) and (g)(1)) AnchorBank's obligations under this Agreement shall be
suspended as of the date of service of notice, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, AnchorBank shall (i)
pay the Executive all or part of the compensation withheld while its contract
obligations hereunder were suspended and (ii) reinstate (in whole or in part)
any of its obligations which were suspended.
(b) If the Executive is removed and/or permanently prohibited from
participating in the conduct of AnchorBank's affairs by an order issued under
Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
ss.1818(e)(4) or (g)(1)) all obligations of AnchorBank under this Agreement
shall terminate as of the effective date of the order.
(c) If AnchorBank is in default (as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act), the obligation to the Executive hereunder shall
terminate as of the date of default.
(d) All obligations under this Agreement may be terminated: (i) by the
Director of the Office of Thrift Supervision (the "Director") or his or her
designee at the time the Federal
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Deposit Insurance Company enters into an agreement to provide assistance to or
on behalf of AnchorBank under the authority contained in Section 13(c) of the
Federal Deposit Insurance Act and (ii) by the Director, or his or her designee
at the time the Director or such designee approves a supervisory merger to
resolve problems related to operation of AnchorBank or when AnchorBank is
determined by the Director to be in an unsafe or unsound condition.
(e) Termination pursuant to subparagraph (d) of this Section 2.7 shall be
treated as a termination by AnchorBank without cause entitling the Executive to
benefits payable under Section 2.5. Termination pursuant to subparagraph (a),
(b) or (c) shall be treated as a termination for Just Cause under Section 2.4.
Termination under this Section 2.7 shall not affect other rights hereunder which
are vested at the time of termination.
2.8 Limitation on Termination or Disability Pay.
Any payments made to the Executive pursuant to this Agreement or
otherwise are subject to and conditioned upon their compliance with 12 U.S.C.ss.
1828(k) and any regulations promulgated thereunder. Total compensation paid to
the Executive upon termination shall not exceed the limitations set forth in OTS
Regulatory Bulletin RB-27a, dated March 5, 1993. If any provision regarding
termination contained herein conflicts with 12 C.F.R. ss.563.39(b), the latter
shall prevail.
ARTICLE III
LEGAL FEES AND EXPENSES
The Company shall pay, or shall cause AnchorBank to pay, all legal fees
and expenses which the Executive may incur as a result of the Company or
AnchorBank contesting the validity or enforceability of this Agreement, provided
that the Executive is the prevailing party in such contest or that any dispute
may otherwise be settled in favor of the Executive. The Executive shall be
entitled to receive interest thereon for the period of any delay in payment from
the date such payment was due at the rate determined by adding two hundred basis
points to the six-month Treasury Bill rate.
ARTICLE IV
CONFIDENTIALITY
The Executive acknowledges that he now has, and in the course of his
employment will have, access to important and confidential information regarding
the business and services of the Company, AnchorBank and their subsidiaries, as
well as similar information regarding FCB and its subsidiaries and that the
disclosure to, or the use of such information by, any business in competition
with the Company, AnchorBank or their subsidiaries shall result in substantial
and undeterminable harm to the Company, AnchorBank and their subsidiaries. In
order to protect the Company, AnchorBank and their subsidiaries against such
harm and from unfair competition, the Executive agrees with the Company and
AnchorBank that while employed by the Company and AnchorBank and at any time
thereafter, the Executive will not disclose, communicate or divulge to anyone,
or use in any manner adverse to the Company, AnchorBank or their subsidiaries
any information concerning customers, methods of business, financial information
or other confidential information of the Company, AnchorBank, their subsidiaries
or similar information regarding FCB
and its subsidiaries, except for information as is in the public domain or
ascertainable through common sources of public information (otherwise than as a
result of any breach of this covenant by the Executive).
ARTICLE V
GENERAL PROVISIONS
5.1 Inquiries Regarding Proposed Activities.
In the event the Executive shall inquire in writing of the Company
whether any proposed action on the part of the Executive would be considered by
the Company or AnchorBank to be prohibited by or in breach of the terms of this
Agreement, the Company shall have 30 days after receipt of such notice to
express in writing to the Executive its position with respect thereof and in the
event such writing shall not be given to the Executive, such proposed action, as
set forth in the writing of the Executive, shall not be deemed to be a violation
of or breach of this Agreement.
5.2 No Duty of Mitigation.
The Executive shall not be required to mitigate the amount of any payment
or benefit provided for in this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Agreement be reduced by any compensation earned by the Executive as the result
of employment by another employer, by retirement benefits after the date of
termination of this Agreement or otherwise.
5.3 Successors.
This Agreement may be assigned by the Company or AnchorBank to any other
business entity that is directly or indirectly controlled by the Company or
AnchorBank. This Agreement may not be assigned by the Company or AnchorBank
except in connection with a merger involving the Company or AnchorBank or a sale
of substantially all of the assets of the Company or AnchorBank, and the
respective obligations of the Company and AnchorBank provided for in this
Agreement shall be the binding legal obligations of any successor to the Company
or AnchorBank by purchase, merger, consolidation, or otherwise and such
successor shall be obligated to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company and
AnchorBank would have been required to perform if no such succession had taken
place. Failure of the Company and/or AnchorBank to obtain such agreement prior
to the effectiveness of any such succession shall be a breach of this Agreement
and shall entitle the Executive, if he elects to terminate this Agreement, to
treat such termination as though it was a termination without cause by the
Company and AnchorBank pursuant to Section 2.5 hereof. This Agreement may not be
assigned by the Executive during his life, and upon his death will be binding
upon and inure to the benefit of his heirs, legatees and the legal
representatives of his estate.
5.4 Notice.
For the purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when
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personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses set forth on the
signature page of this Agreement (provided that all notices to the Company and
AnchorBank shall be directed to the attention of the Board of Directors of the
Company and/or AnchorBank, as the case may be, with a copy to the Secretary of
the Company and/or AnchorBank, as the case may be), or to such other address as
either party may have furnished to the other in writing in accordance herewith.
5.5 Amendments.
No amendment or additions to this Agreement shall be binding unless in
writing and signed by all parties, except as herein otherwise provided.
5.6 Severability.
The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
5.7 Governing Law.
This Agreement shall be governed by the laws of the United States to the
extent applicable and otherwise by the internal laws of the State of Wisconsin.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
ANCHOR BANCORP WISCONSIN INC.
By: _______________________________
Address: 25 West Main Street
Madison, Wisconsin 53703
ANCHORBANK, S.S.B.
By: _______________________________
Address: 25 West Main Street
Madison, Wisconsin 53703
EXECUTIVE
By: _______________________________
Donald D. Parker
Address:
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EXHIBIT D
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Index Group
1. Flagstar (FLGS)
2. Metropolitan Financial (METF)
3. TCF Financial (TCB)
4. 1st Federal Capital (FTFC)
5. Community First Bankshares (CFBX)
6. CFSB (CFSB)
7. Corus Bankshares (CORS)
8. 1st Financial (FFBC)
9. Brenton Banaks (BRBK)
10. F&M (FMBK)
11. MAF (MAFB)
12. 1st Midwest (FMBI)
13. 1st Indiana (FISB)
14. St. Paul (SPBC)
15. Chemical Financial (CHFC)
16. AMCORE (AMFI)
17. St. Francis (STFR)
18. Alliance (ABCL)
19. Hallmark Capital (HALL)
20. Grand Premier (GPFI)
21. 1st Northern (FNGB)
22. Associated (ASBC)
23. Mutual Bancorp (MSBK)
24. Ottawa Financial (OFCP)
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EXHIBIT E
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AFFILIATE LETTER
Anchor BanCorp Wisconsin Inc.
25 West Main Street
Madison, Wisconsin 53703
Gentlemen:
I have been advised that as of the date of this letter I may be deemed to
be an "affiliate" of FCB Financial Corp., a Wisconsin corporation (the
"Company"), as the term "affiliate" is (i) defined for purposes of paragraphs
(c) and (d) of Rule 145 of the Rules and Regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Act"), and/or (ii) used in and for
the purposes of Accounting Series, Releases 130 and 135, as amended, of the
Commission. Pursuant to the terms of the Agreement and Plan of Merger, dated as
of January 5, 1999 (the "Agreement"), between Anchor BanCorp Wisconsin Inc., a
Wisconsin corporation (the "Buyer"), and the Company, the Company will be merged
with and into the Buyer (the "Merger").
As a result of the Merger, I may receive shares of Buyer Common Stock,
par value $.10 per share (the "Buyer Securities"). I would receive such shares
in exchange for shares owned by me of Company Common Stock, par value $.01 per
share (the "Company Securities").
I represent, warrant and covenant to the Buyer that in the event I
receive any Buyer Securities as a result of the Merger:
A. I shall not make any sale, transfer or other disposition of the
Buyer Securities in violation of the Act or the Rules and Regulations.
B. I have carefully read this letter and the Agreement and
discussed its requirements and other applicable limitations upon my
ability to sell, transfer or otherwise dispose of Buyer Securities to the
extent I felt necessary, with my counsel or counsel for the Company.
C. I have been advised that the issuance of Buyer Securities to me
pursuant to the Merger has been registered with the Commission under the
Act on a Registration Statement on Form S-4. However, I have also been
advised that, since at the time the Merger was submitted for a vote of
the shareholders of the Company, I may be deemed to have been an
affiliate of the Company and the distribution by me of the Buyer
Securities has not been registered under the Act, and that I may not
sell, transfer or otherwise dispose of Buyer Securities issued to me in
the Merger unless (i) such sale, transfer or other disposition has been
registered under the Act, (ii) such sale, transfer or other disposition
is made in conformity with the volume and other limitations of Rule 145
promulgated by the Commission under the Act, or (ii) in the opinion of
counsel
reasonably acceptable to the Buyer, such sale, transfer or other
disposition is otherwise exempt from registration under the Act.
D. I understand that the Buyer is under no obligation to register
the sale, transfer or other disposition of the Buyer Securities by me or
on my behalf under the Act or to take any other action necessary in order
to make compliance with an exemption from such registration available.
E. I also understand that stop transfer instructions will be given
to the Buyer's transfer agent with respect to the Buyer Securities and
that there will be placed on the certificates for the Buyer Securities
issued to me, or any substitutions therefor, a legend stating in
substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION
TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES.
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE TRANSFERRED IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT DATED , 1999 BETWEEN THE
REGISTERED HOLDER HEREOF AND THE BUYER, A COPY OF WHICH AGREEMENT IS ON
FILE AT THE PRINCIPAL OFFICES OF THE BUYER."
F. I also understand that unless the transfer by me of my Buyer
Securities has been registered under the Act or is a sale made in
conformity with the provisions of Rule 145, the Buyer reserves the right
to put the following legend on the certificates issued to my transferee:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED FROM A PERSON WHO
RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER
THE SECURITIES ACT OF 1933 APPLIES. THE SHARES HAVE BEEN ACQUIRED BY THE
HOLDER NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY
DISTRIBUTION THEREOF WITHIN THE MEANING OF SECURITIES ACT OF 1933 AND MAY
NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF
1933.
It is understood and agreed that the legends set forth in paragraphs E
and F above shall be removed by delivery of substitute certificates without such
legend if the undersigned shall have delivered to the Buyer a copy of a letter
from the staff of the Commission, or an opinion of counsel in form and substance
reasonably satisfactory to the Buyer, to the effect that such legend is not
required for purposes of the Act.
I further represent to and covenant with the Buyer that I have not,
within the 30 days prior to the Effective Time (as defined in the Agreement),
sold, transferred or otherwise disposed of any shares of Company Securities or
shares of the capital stock of the Buyer held
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by me and that I will not sell, transfer or otherwise dispose of any shares of
Buyer Securities received by me in the Merger or other shares of the capital
stock of the Buyer until after such time as results covering at least 30 days of
combined operations of the Company and the Buyer have been published by the
Buyer, in the form of a quarterly earnings report, an effective registration
statement filed with the Commission, a report to the Commission on Form 10-K,
10-Q, or 8-K, or any other public filing or announcement which includes the
combined results of operations.
Very truly yours,
Accepted this day of
, 1999 by
ANCHOR BANCORP WISCONSIN INC.
By:
Name:
Title:
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