Exhibit 10.1
STATE OF MINNESOTA DISTRICT COURT
COUNTY OF HENNEPIN FOURTH JUDICIAL DISTRICT
CASE TYPE: OTHER CIVIL
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SBM Company, a Minnesota
corporation, File No. CT 95-003703
Plaintiff,
SETTLEMENT AGREEMENT
v. AND RELEASE OF CLAIMS
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Firstar Trust Company of
Minnesota, a Minnesota trust
company, as Trustee of the
SBM Company Profit Sharing
Stock Plan and the SBM Company
Thrift Plan; The Trust under the
Will of T. H. Schonlau, a
Minnesota trust,
Defendants.
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THIS SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS (the "SETTLEMENT
AGREEMENT") is made this 6th day of June, 1997, by and among SBM Company, now
known as 1150 Liquidating Corporation ("SBM"), Firstar Trust Company of
Minnesota, now known as Firstar Bank of Minnesota, National Association
("FIRSTAR"), as Trustee of the SBM Company Profit Sharing Stock Plan and SBM
Company Thrift Plan (collectively referred to as the "PLANS"), and the Trust
created under Paragraph II of the Last Will and Testament of Theodore H.
Schonlau, deceased, and the Trust created under Paragraph VI of the Last Will
and Testament of Theodore H. Schonlau, deceased, acting individually,
derivatively, and as putative
Co-Class Representatives on behalf of all non-Plan shareholders of SBM Company
common stock (the "SCHONLAU TRUSTS"). (The parties to this Agreement are
collectively referred to herein as the "PARTIES.")
RECITALS
WHEREAS, SBM is a corporation organized under the laws of the State of
Minnesota that, on June 14, 1995, sold substantially all its assets to ARM
Financial Group, Inc. and is currently in the process of dissolving and paying
distributions to its shareholders; and
WHEREAS, there are 2,179,714 shares of SBM Company common stock ("SBM
STOCK") issued and outstanding; and
WHEREAS, SBM sponsors the Plans, which collectively hold 304,693 shares
of SBM Stock, which is 13.97858% of all issued and outstanding shares; and
WHEREAS, Firstar is a national banking association that, as the trustee
of the Plans, is the record owner of the shares of SBM Stock held by the Plans;
and
WHEREAS, the Schonlau Trusts are trusts existing under the laws of the
State of Minnesota that together own 352,800 shares of SBM Stock, which is
16.1856% of all issued and outstanding shares, making the Schonlau Trusts
collectively the largest single holder of SBM Stock; and
WHEREAS, SBM and Firstar are parties to a Stock Agreement dated
September 1, 1993 (the "STOCK AGREEMENT") which allows Firstar to "put" shares
of SBM Stock held by the Plans back to SBM at the greater of fair market value
or Book Value, all as is more fully set out in the terms of the Stock Agreement;
and
WHEREAS, by letter dated January 30, 1995, Firstar attempted to put all
of the SBM Stock held by the Plans back to SBM at a claimed Book Value of
approximately $14.50 per share; and
WHEREAS, by letter dated February 7, 1995, SBM replied that Firstar's
attempted put was invalid and that Firstar's methodology for computing Book
Value under the Stock Agreement was incorrect; and
WHEREAS, by letter dated February 17, 1995, the Schonlau Trusts
objected to Firstar's attempted put and alleged that SBM would violate Minnesota
law if it honored the put; and
WHEREAS, on March 8, 1995, SBM filed its Amended Complaint for
Declaratory Judgment and Related Relief in the above-captioned action (the
"ACTION") seeking declaratory judgment that: (1) Book Value as defined in
paragraph 3 of the Stock Agreement must take into account unrealized losses on
debt securities held by SBM and its subsidiaries; (2) the Stock Agreement only
allowed Firstar to make "liquidity puts" as necessary to pay benefits to
retiring Plan participants and did not allow Firstar to put all of the SBM Stock
held by the Plans back to SBM at one time; (3) Firstar's attempted put was void
and unenforceable pursuant to paragraph 6 of the Stock Agreement because SBM was
in the process of selling substantially all its assets and dissolving at the
time of Firstar's attempted put; (4) if SBM was required to honor the attempted
put, it would not violate Minnesota law in doing so; and (5) Firstar waived
and/or was estopped from asserting its purported interpretation of Book Value;
and
WHEREAS, on March 27, 1995, Firstar filed its Separate Answer and
Counterclaim generally denying that SBM was entitled to the declaratory relief
it sought in its Complaint, and asserting counterclaims against SBM alleging
that: (1) SBM breached the terms of the Stock Agreement by refusing to honor
Firstar's put of all the SBM Stock held by the Plans at the Book
Value price claimed by Firstar; (2) SBM was estopped from asserting the various
interpretations of the Stock Agreement alleged in SBM's Complaint; (3) SBM was a
fiduciary of the Plans and was in breach of its fiduciary duty under the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"); and (4)
SBM was also in breach of other fiduciary duties it owed outside of ERISA; and
WHEREAS, on March 22, 1995, the Schonlau Trusts filed their Separate
Answer, Counterclaim and Crossclaim in which they generally agreed that
Firstar's attempted put was invalid and, furthermore, acting individually and
purporting to act derivatively on behalf of all persons or entities that hold
SBM Stock outside the Plans (the "NON-PLAN SHAREHOLDERS"), the Schonlau Trusts
asserted counterclaims against SBM and crossclaims against Firstar alleging
that: (1) Firstar's attempted put was void and unenforceable because SBM could
not honor the put and still pay its debts in the ordinary course of business as
required by Minn. Stat. ss. 302A.551, Subd. 1(a); (2) the Stock Agreement was
void and unenforceable because it illegally altered the common stock investment
contract between SBM and the Non-Plan Shareholders by giving a preferential
right of redemption to Firstar acting on behalf of the persons who have a
beneficial interest in the shares of SBM Stock held under the Plans (the "PLAN
SHAREHOLDERS"); and (3) the Non-Plan Shareholders were entitled to the
dissenters' rights appraisal remedy under Minn. Stat. ss. 302A.471; and
WHEREAS, on June 16, 1995, the Court heard SBM's and Firstar's
cross-motions for summary judgment and on July 5, 1995 entered an Order: (1)
dismissing Firstar's counterclaim alleging breach of fiduciary duty under ERISA
for lack of subject matter jurisdiction; (2) ruling that Firstar could put all
of the shares of common stock owned by it at one time; (3) ruling that the
provisions in the Stock Agreement dealing with dissolution were ambiguous as to
when
dissolution occurs; and (4) ruling that the Stock Agreement was ambiguous as to
the meaning of "Book Value" and as to whether "unrealized losses on debt
securities" should be included in calculating "Book Value;" and
WHEREAS, on October 16, 1995, the Court heard the Schonlau Trusts'
motion for summary judgment on their state law claims, as well as SBM's second
motion for summary judgment; after that hearing, the Parties asked the Court to
defer ruling on those motions pending settlement negotiations among the Parties,
and the Court has never issued a ruling on those motions; and
WHEREAS, on November 13, 1995, the Parties agreed upon a settlement of
the Action and executed a "Settlement Agreement in Principle;" the Settlement
Agreement in Principle contemplated a final and more formal settlement
agreement, including agreement as to a procedure for ensuring that the
settlement will fully and finally resolve all claims and liability relating to
the Action and the settlement of the Action; various drafts of the final and
more formal settlement papers were prepared and circulated among the Parties;
and
WHEREAS, on June 5, 1996, before the settlement papers were finalized,
the Department of Labor ("DOL") sent SBM a letter setting forth its preliminary
view that, subject to the possibility that additional information might lead the
DOL to revise its views, the DOL believed that SBM's refusal to honor Firstar's
attempted put and SBM's filing of this declaratory judgment action may have
violated several of the fiduciary duty and prohibited transaction provisions of
ERISA; shortly thereafter, on June 28, 1996, SBM sent the DOL a detailed letter
explaining why SBM strongly disagreed with the preliminary views expressed in
the DOL's letter, and explaining that if the DOL continued to pursue its
allegations it would, at the very least, substantially delay the settlement that
had been reached by the Parties and, at worst, might
potentially upset that settlement completely; SBM sent the DOL copies of the
Settlement Agreement in Principle and the draft settlement papers that had been
prepared and circulated among the Parties; the DOL subsequently indicated that,
if the terms of the final settlement were in all material respects similar to
those in the draft settlement papers, the DOL would issue a "no enforcement
closing letter" closing its file without taking any enforcement action with
respect to the alleged violations; and
WHEREAS, before receiving SBM's response, however, the DOL referred a
copy of its June 5 letter to the Internal Revenue Service ("IRS"); the IRS
reviewed the letter, noted the prohibited transaction allegations, and on
September 23, 1996, sent a letter to SBM stating that it was opening a
prohibited transaction excise tax audit of SBM; and
WHEREAS, the IRS subsequently informed SBM that it viewed the DOL as
having primary responsibility for determining whether any prohibited
transactions had in fact occurred, and that the IRS's role was primarily to
determine the amount of any excise taxes that should be assessed; the IRS stated
that if the DOL withdrew the prohibited transaction allegations it had made in
its letter of June 5, 1996, the IRS would close its excise tax audit; and
WHEREAS, after extensive discussions between SBM and the DOL, on
February 27, 1997, the DOL issued its no enforcement closing letter. In that
letter, the DOL formally withdrew the allegations in its June 5, 1996 letter
that could have led to the imposition of prohibited transaction excise taxes.
Accordingly, on March 25, 1997, the IRS issued a letter closing its excise tax
audit without assessing any taxes; and
WHEREAS, the Parties have been involved in lengthy and expensive
litigation over the numerous issues raised in the pleadings in the Action; and
WHEREAS, the Parties have engaged in vigorous and arm's-length debate
concerning the facts, legal theories, likelihood of success for each Party and
potential relief that might be granted by the Court in the Action; and
WHEREAS, the Parties have on two separate occasions engaged in
mediation in an attempt to resolve their dispute; and
WHEREAS, as discussed above, after extensive negotiations the Parties
have finally reached an agreement and desire to settle and completely resolve
the Action and any and all claims arising out of the subject matter of the
Action on the terms set out below; and
WHEREAS, the Parties agree that class certification as a mandatory non
opt-out class under Minn. R. Civ. P. Rules 23.02(a)(2) and (b) for settlement
purposes only of the claims asserted by the Schonlau Trusts on behalf of the
Non-Plan Shareholders (the "SETTLEMENT CLASS"), is substantively and
procedurally appropriate as an element of the proposed settlement of the Action;
and
WHEREAS, the Parties agree that this Settlement Agreement is contingent
upon the Settlement Agreement being submitted to the Court for a hearing on the
fairness of the settlement, and the proposed entry of an order in the form of
Exhibit A hereto (the "ORDER APPROVING SETTLEMENT"), certifying for settlement
purposes only under Minn. R. Civ. P. Rules 23.02(a)(2) and (b) the claims
asserted by the Schonlau Trusts on behalf of the Non-Plan Shareholders and
barring all claims against the Parties by the Non-Plan Shareholders and the Plan
Shareholders relating to the subject matter of the Action or the settlement of
the Action as more fully described below;
NOW, THEREFORE, for the consideration described below, the receipt and
sufficiency of which is expressly acknowledged, the Parties agree as
follows: SETTLEMENT
AGREEMENT
AND RELEASE OF CLAIMS
1. Settlement Agreement Is Not Effective Until Completion Of Fairness
Hearing Procedure. This Settlement Agreement shall be unenforceable and of no
force and effect until the completion of the fairness hearing procedure
described in numbered paragraph 6 below (the "FAIRNESS HEARING PROCEDURE").
2. Special Payments. SBM will make special payments to Firstar and to
the Schonlau Trusts as follows:
(a) Payment to Plans. SBM will pay $1,000,000 to Firstar for the
benefit of Plan Shareholders in settlement of the Action.
(b) Payment of attorneys' fees and costs of Firstar and the
Schonlau Trusts. SBM will pay $150,000 to Firstar as partial
payment of the actual attorneys' fees and costs incurred by
Firstar in the Action and the settlement of the Action. SBM
will also pay $100,000 to the Schonlau Trusts as partial
payment of the actual attorneys' fees and costs incurred by
the Schonlau Trusts in the Action and the settlement of the
Action. These payments shall represent the full extent of
SBM's obligation to pay the attorneys' fees and costs of the
Plans, Firstar, or the Schonlau Trusts in connection with the
Action or the settlement of the Action.
(c) Time of payment. The special payments described in
subparagraphs (a) and (b) above shall be made by SBM within
fifteen (15) days after the Settlement Agreement becomes
effective as set forth in numbered paragraph 6 below.
(d) Special payments shall be charged solely against the amounts
otherwise distributable to Non-Plan Shareholders. The special
payments described in subparagraphs (a) and (b) above shall be
charged solely against the amounts
otherwise distributable to Non-Plan Shareholders. No part of
the special payments shall be charged against the amounts
otherwise distributable to Plan Shareholders.
(e) Balance of Firstar's attorneys' fees and costs. To the extent
Firstar has incurred attorneys' fees and costs in the Action
and the Settlement of the Action that exceed the $150,000
described in subparagraph (b), then notwithstanding any
language in the Plans to the contrary, Firstar shall have sole
discretionary authority as trustee to determine whether to pay
those fees and costs out of the assets of the Plans.
3. Release of Claims. Each Party, including Firstar on its own behalf
and on behalf of the Plans and the Plan Shareholders (solely to the extent of
their interest as Plan Shareholders), and the Schonlau Trusts on their own
behalf and on behalf of the Non-Plan Shareholders (solely to the extent of their
interest as Non-Plan Shareholders), for good and valuable consideration, the
receipt and sufficiency of which is expressly acknowledged, hereby releases and
forever discharges the other Parties, and each of them, and each and every one
of their respective past or present parents, subsidiaries, affiliates, related
corporations, predecessors, successors, heirs, assigns, partners, associates,
directors, officers, employees, agents, representatives, attorneys, insurers,
trustees and indemnitors, and the Plans, the Administrative Committees for the
Plans and the individual members of the Administrative Committees, past and
present, of and from any and all rights, claims, demands, causes of action,
liabilities, damages, costs of litigation, attorneys' fees, and judgments,
whether in law or equity, legally binding or not, known or unknown, written or
unwritten, asserted or unasserted, liquidated or unliquidated, absolute or
contingent, of any kind whatsoever that each Party may ever have had,
presently has, or may in the future claim to have against any other Party which
arise out of, relate to, or exist by reason of the subject matter of the Action,
including, but not limited to, all claims relating to:
(a) Firstar's attempted put on January 30, 1995 and SBM's refusal
to honor that put;
(b) the Stock Agreement or any prior version of the Stock
Agreement, including the proper method for calculating the
value of SBM Stock under the Stock Agreement or any prior
version of the Stock Agreement;
(c) the decision by SBM or its Board of Directors to enter into
the Stock Agreement or any prior version of the Stock
Agreement;
(d) the alleged acts, omissions, or negligence of any Party in
violation of contract, the Minnesota Business Corporation Act,
ERISA, state or federal securities laws, any other state or
federal statute, and any other state or federal common law, in
connection with the facts and events described in
subparagraphs (a), (b), and (c) immediately above;
(e) the alleged facts, circumstances, transactions, events,
occurrences, acts or omissions, or failures to act, of
whatever kind or character whatsoever, which were asserted,
referred to, alluded to, or reflected in the Action; and
(f) the conduct and settlement of the Action (except for actions
to implement or enforce this Settlement Agreement or the
Exhibits hereto).
4. Certain Claims Expressly Preserved. Nothing herein shall release,
waive or otherwise affect any claims not released in paragraph number 3 which
any Party hereto, or any person or entity on whose behalf any such Party is
purporting to act or may act or purport to act, may ever have had, presently has
or may in the future claim to have against any person or entity
(including without limiting the generality of the foregoing, any of SBM's
current or former officers, directors, employees, shareholders, representatives,
agents, auditors, accountants, attorneys or anyone acting or purporting to act
on SBM's behalf, but specifically excluding Firstar, the Schonlau Trusts, the
Plans, the Administrative Committees for the Plans, and the individual members
of the Administrative Committees for the Plans acting in their capacity as such)
as follows:
(a) any claims which may arise from or relate to any agreements,
understandings or transactions of any nature between or among
ARM Financial, Inc. and/or the holders, controllers or owners
of SBM's Series A preferred stock relating to or arising from
the sale by the holders, controllers or owners of SBM's Series
A preferred stock of such Series A preferred stock to ARM
Financial, Inc.;
(b) any claims which may arise from or relate to the purchase or
sale by SBM and/or any of its affiliated companies of mortgage
backed securities (including but not limited to collateralized
mortgage obligations ("CMOS") and stripped mortgage backed
securities ("DERIVATIVES")), including but not limited to any
claims against the issuers, sellers or purchasers of such
securities;
(c) any claims against SBM's auditors or accountants which may
arise from or relate to the purchase, sale or holding by SBM
and/or any of its affiliated companies of mortgage backed
securities (including but not limited to CMOs and
derivatives); and
(d) any claims which may arise from or relate to the sale in 1994
by Roman Schmid of certain shares of SBM common stock then
owned, held or controlled by him to
certain persons or entities which then owned, held or
controlled SBM's Series A preferred stock.
5. Release Of Initial Distribution On Deposit With The Court. After the
execution of this Settlement Agreement but prior to the completion of the
Fairness Hearing Procedure, Firstar may if it so desires prepare a petition for
submission to the Court seeking release of the funds currently on deposit with
the Court; provided, however, that those funds shall not be released until the
Court issues an order satisfactory to all Parties barring all of the claims that
could be asserted against the Parties relating to the escrow or the release of
those funds.
6. Fairness Hearing Procedure. Immediately upon the execution of this
Settlement Agreement, the Parties shall institute the following procedure
intended to establish the fairness of the settlement and to result in the entry
of the Order Approving Settlement.
(a) Motion to approve form of Notice of Settlement Hearing. A
proposed Notice of Settlement Hearing (the "NOTICE") is
attached hereto as Exhibit B. The Parties agree to cooperate
in seeking the Court's approval of the proposed Notice and the
Court's execution of the proposed Order Approving Notice of
Settlement Hearing (the "ORDER APPROVING NOTICE") attached
hereto as Exhibit C.
(b) Mailing of Notice of Settlement Hearing. After the Court
enters the Order Approving Notice, SBM shall mail the Notice
to all Plan and Non-Plan Shareholders and to the attorneys for
the Parties. SBM shall bear all costs and expenses attendant
with the preparation, reproduction, mailing, and service of
the Notice.
(c) Memorandum in support of Order Approving Settlement. Prior to
the date of the hearing on the proposed settlement (the
"SETTLEMENT HEARING"), the Parties shall
prepare and submit to the Court a joint memorandum of law
describing the need for the Order Approving Settlement and the
legal basis therefor. SBM shall prepare and bear the cost of
preparing a draft of such memorandum for approval by the
Parties.
(d) Settlement Hearing and Order Approving Settlement. Either
prior to or as part of the Settlement Hearing, the Parties
shall use their best efforts to present such evidence as may
be necessary to prove to the Court that the proposed
settlement is fair, reasonable and adequate, and in the best
interests of both Plan Shareholders and Non-Plan Shareholders.
The Parties shall also use their best efforts to explain to
the Court the need for the Order Approving Settlement and the
legal basis therefor.
(e) Settlement Agreement becomes effective when Order Approving
Settlement becomes final. Except as provided below, this
Settlement Agreement shall be unenforceable and of no force or
effect until such time as:
(1) the Court executes the Order Approving Settlement
attached hereto as Exhibit A, without modification,
within 180 days of the date appearing on the first
page of this Settlement Agreement or such reasonable
time thereafter as may be agreed to by the Parties;
(2) the Order Approving Settlement becomes a final
judgment of the Court within 60 days of its
execution; and
(3) one of the following alternatives occurs:
(i) the time for filing an appeal from the
judgment has lapsed and no appeal has been
filed in the Action within that time; or
(ii) the judgment appealed from has been affirmed
on appeal, without modification, and one of
the following alternatives occurs:
(1) the time for filing a petition for
review to the Minnesota Supreme
Court has lapsed and no petition
for review has been filed within
that time; or
(2) the petition for review to the
Minnesota Supreme Court is denied
or the Minnesota Supreme Court
affirms the judgment without
modification, and:
a) the time for filing a
petition for certiorari to
the United States Supreme
Court has lapsed; or
b) the petition for certiorari
to the United States
Supreme Court is denied or
the United States Supreme
Court affirms the judgment
without modification.
In the event the Order Approving Settlement is modified by the
Court or any appellate court, the Parties hereto may, in their
individual discretion, agree to accept such modification and
further agree that the Settlement Agreement may become fully
enforceable despite the modification by expressing such
agreement in a writing duly executed on behalf of each Party
hereto.
(f) Probate Court Approval of Schonlau Trusts' execution of
Settlement Agreement. Notwithstanding the terms of paragraph
6(e) above, this Settlement Agreement shall be unenforceable
and of no force or effect until such time as the Brown County
District Court, State of Minnesota, Fifth Judicial District
("PROBATE
COURT") shall enter Orders approving the Schonlau Trusts'
participation in, and execution of, this Settlement Agreement
in In the Matter of the Trust Created under Paragraph II of
the Last Will and Testament of Theodore H. Schonlau, Deceased,
Court file no. 15743 and In the Matter of the Trust Created
under Paragraph VI of the Last Will and Testament of Theodore
H. Schonlau, Deceased, Court file no. 15744. The Schonlau
Trusts shall seek such approval immediately upon the execution
of this Settlement Agreement. The Schonlau Trusts shall
promptly notify SBM and Firstar upon either obtaining such
approval or failing to obtain such approval.
7. Compromise of Disputed Claims. This Settlement Agreement constitutes
the settlement of doubtful and disputed claims; no Party admits liability to any
other Party or any other person or entity; and every Party released herein
specifically denies any such liability. This Settlement Agreement constitutes an
offer to compromise within the meaning of Rule 408 of the Rules of Evidence and
is not admissible in evidence or as impeachment in any proceeding; provided,
however, that this Settlement Agreement may be used for purposes of the
Settlement Hearing, any appeals which may result from the entry of the proposed
Order Approving Settlement, and any proceeding to implement or enforce this
Settlement Agreement.
8. Consultation with Counsel. Each Party acknowledges and agrees that
it has carefully read this Settlement Agreement and the Exhibits attached
hereto, has discussed them with its counsel, and understands all of their terms.
9. Entire Agreement. This Settlement Agreement, including the Exhibits
hereto, constitutes the entire agreement of the Parties. In agreeing to sign
this Settlement Agreement, each Party acknowledges and agrees that it has not
relied on any statements or explanations made
by another Party or their attorneys other than those set forth in this
Settlement Agreement and the Exhibits hereto.
10. Modification or Amendment. Except as otherwise specifically
provided herein, this Settlement Agreement and the Exhibits hereto may be
modified or amended only by a written agreement signed by all the Parties.
11. Settlement Agreement Binding on Successors. This Settlement
Agreement shall bind, and the rights hereunder shall inure to, the respective
heirs, successors and assigns of the Parties.
12. Drafting. The Parties agree that the drafting of this Settlement
Agreement and the Exhibits hereto was a collaborative effort of all the Parties
and the normal rules of construction providing that ambiguities are construed
against the drafter are suspended. In the event there is a dispute concerning
the proper interpretation of this Settlement Agreement or any of the Exhibits
hereto, the doctrine of contra proferentum shall not apply.
13. Cooperation. The Parties shall cooperate in presenting all papers,
affidavits, and/or testimony to the Court as may be necessary to effectuate the
purposes and intent of this Settlement Agreement.
14. Fair and Reasonable. This Settlement Agreement is fair, reasonable
and adequate, and the Parties have arrived at this settlement as a result of
arms-length negotiations.
15. Governing Law. This Settlement Agreement shall be construed in
accordance with, and governed by, the laws of the State of Minnesota.
16. Retention of Jurisdiction. The Court shall retain continuing
jurisdiction over the Action and the Parties until all transactions contemplated
herein are completed, and thereafter for purposes of interpreting, implementing
and enforcing the terms of this Settlement Agreement.
17. Counterparts. This Settlement Agreement may be executed in two or
more counterparts, each of which when so executed and delivered shall be deemed
an original, but all of which together shall constitute one and the same
document.
1150 LIQUIDATING CORPORATION, FORMERLY
KNOWN AS SBM COMPANY
By /s/ Charles A. Geer
----------------------------------------------
Its President
----------------------------------------------
FIRSTAR BANK OF MINNESOTA, NATIONAL ASSOCIATION,
FORMERLY KNOWN AS FIRSTAR TRUST COMPANY OF MINNESOTA,
AS TRUSTEE OF THE SBM COMPANY PROFIT SHARING STOCK
PLAN AND THE SBM COMPANY THRIFT PLAN AND ON BEHALF OF
ALL PLAN SHAREHOLDERS
By /s/ Karen B. Lewis
----------------------------------------------
Its Senior Vice President
----------------------------------------------
THE TRUST CREATED UNDER PARAGRAPH II OF THE LAST WILL
AND TESTAMENT OF THEODORE H. SCHONLAU, DECEASED,
INDIVIDUALLY, DERIVATIVELY, AND AS PUTATIVE CO-CLASS
REPRESENTATIVE ON BEHALF OF ALL NON-PLAN SHAREHOLDERS
BY ITS CO-TRUSTEES:
FIRST BANK, NATIONAL ASSOCIATION, AS CO-TRUSTEE
By /s/ Duane M. Feragan
-------------------------------------------------
Duane M. Feragan
Its Vice President
/s/ Robert J. Struyk
-------------------------------------------------
Mr. Robert J. Struyk, as Co-Trustee
INDEX TO EXHIBITS
Exhibit A -- Order Approving Settlement
Exhibit B -- Notice of Settlement Hearing
Exhibit C -- Order Approving Notice