EXHIBIT 2.2
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
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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
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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
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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
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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
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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
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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
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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
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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
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(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
(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
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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).
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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.
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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.
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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
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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,
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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.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its officers thereunto duly authorized, all as of
the date first above written.
FCB FINANCIAL CORP.
By: /s/ James J. Rothenbach
ANCHOR BANCORP WISCONSIN INC.
By: /s/ Douglas J. Timmerman
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