EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BETWEEN
PINNACLE BANC GROUP, INC.
AND
OLD KENT FINANCIAL CORPORATION
Dated as of March 18, 1999
TABLE OF CONTENTS
PAGE
ARTICLE I - THE TRANSACTION. . . . . . . . . . . . . . . . . . . . . . . .1
1.1 MERGER OF PINNACLE WITH AND INTO OLD KENT. . . . . . . . . . . .1
1.2 THE CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.3 EFFECTIVE TIME OF THE MERGER . . . . . . . . . . . . . . . . . .2
1.4 ADDITIONAL ACTIONS . . . . . . . . . . . . . . . . . . . . . . .2
1.5 SURVIVING CORPORATION. . . . . . . . . . . . . . . . . . . . . .2
1.6 BANK CONSOLIDATION . . . . . . . . . . . . . . . . . . . . . . .3
ARTICLE II - CONVERSION AND EXCHANGE OF SHARES . . . . . . . . . . . . . .3
2.1 CONVERSION OF SHARES . . . . . . . . . . . . . . . . . . . . . .3
2.2 UPSET PROVISION. . . . . . . . . . . . . . . . . . . . . . . . .4
2.3 ADJUSTMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.4 CESSATION OF SHAREHOLDER STATUS. . . . . . . . . . . . . . . . .8
2.5 SURRENDER OF OLD CERTIFICATES AND DISTRIBUTION OF OLD KENT
COMMON STOCK . . . . . . . . . . . . . . . . . . . . . . . . . .8
2.6 NO FRACTIONAL SHARES . . . . . . . . . . . . . . . . . . . . . .9
2.7 STOCK OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . .9
ARTICLE III - OLD KENT'S REPRESENTATIONS AND WARRANTIES. . . . . . . . . 10
3.1 AUTHORIZATION, NO CONFLICTS, ETC.. . . . . . . . . . . . . . . 10
3.2 ORGANIZATION AND GOOD STANDING . . . . . . . . . . . . . . . . 11
3.3 SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.4 CAPITAL STOCK. . . . . . . . . . . . . . . . . . . . . . . . . 12
3.5 OLD KENT COMMON STOCK. . . . . . . . . . . . . . . . . . . . . 13
3.6 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . 13
3.7 ABSENCE OF UNDISCLOSED LIABILITIES . . . . . . . . . . . . . . 14
3.8 ABSENCE OF MATERIAL ADVERSE CHANGE . . . . . . . . . . . . . . 14
3.9 ABSENCE OF LITIGATION. . . . . . . . . . . . . . . . . . . . . 14
3.10 REGULATORY FILINGS. . . . . . . . . . . . . . . . . . . . . . 14
3.11 REGISTRATION STATEMENT, ETC.. . . . . . . . . . . . . . . . . 14
3.12 INVESTMENT BANKERS AND BROKERS. . . . . . . . . . . . . . . . 15
3.13 ACCOUNTING AND TAX TREATMENT. . . . . . . . . . . . . . . . . 15
3.14 AGREEMENTS WITH BANK REGULATORS . . . . . . . . . . . . . . . 15
3.15 EVENTS SINCE DECEMBER 31, 1998. . . . . . . . . . . . . . . . 16
3.16 RESERVE FOR LOAN LOSSES . . . . . . . . . . . . . . . . . . . 16
3.17 PUBLIC COMMUNICATIONS; SECURITIES OFFERING. . . . . . . . . . 16
3.18 YEAR 2000 COMPLIANCE. . . . . . . . . . . . . . . . . . . . . 16
3.19 TRUE AND COMPLETE INFORMATION . . . . . . . . . . . . . . . . 16
ARTICLE IV - PINNACLE'S REPRESENTATIONS AND WARRANTIES . . . . . . . . . 16
4.1 AUTHORIZATION, NO CONFLICTS, ETC.. . . . . . . . . . . . . . . 17
4.2 ORGANIZATION AND GOOD STANDING . . . . . . . . . . . . . . . . 18
4.3 SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.4 CAPITAL STOCK. . . . . . . . . . . . . . . . . . . . . . . . . 19
4.5 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . 19
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4.6 ABSENCE OF UNDISCLOSED LIABILITIES . . . . . . . . . . . . . . 20
4.7 ABSENCE OF MATERIAL ADVERSE CHANGE . . . . . . . . . . . . . . 20
4.8 ABSENCE OF LITIGATION. . . . . . . . . . . . . . . . . . . . . 20
4.9 NO INDEMNIFICATION CLAIMS. . . . . . . . . . . . . . . . . . . 21
4.10 CONDUCT OF BUSINESS . . . . . . . . . . . . . . . . . . . . . 21
4.11 CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.12 REGULATORY FILINGS . . . . . . . . . . . . . . . . . . . . . 21
4.13 REGISTRATION STATEMENT, ETC.. . . . . . . . . . . . . . . . . 22
4.14 AGREEMENTS WITH BANK REGULATORS . . . . . . . . . . . . . . . 22
4.15 TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.16 TITLE TO PROPERTIES . . . . . . . . . . . . . . . . . . . . . 24
4.17 CONDITION OF REAL PROPERTY. . . . . . . . . . . . . . . . . . 24
4.18 REAL AND PERSONAL PROPERTY LEASES . . . . . . . . . . . . . . 25
4.20 REQUIRED LICENSES, PERMITS, ETC.. . . . . . . . . . . . . . . 25
4.21 DATA PROCESSING AND OTHER MATERIAL CONTRACTS. . . . . . . . . 26
4.22 CERTAIN EMPLOYMENT MATTERS. . . . . . . . . . . . . . . . . . 26
4.23 EMPLOYEE BENEFIT PLANS. . . . . . . . . . . . . . . . . . . . 27
4.24 ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . . . 29
4.25 DUTIES AS FIDUCIARY . . . . . . . . . . . . . . . . . . . . . 30
4.26 INVESTMENT BANKERS AND BROKERS. . . . . . . . . . . . . . . . 31
4.27 FAIRNESS OPINION. . . . . . . . . . . . . . . . . . . . . . . 31
4.28 PINNACLE-RELATED PERSONS. . . . . . . . . . . . . . . . . . . 31
4.29 CHANGE IN BUSINESS RELATIONSHIPS. . . . . . . . . . . . . . . 31
4.30 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.31 BOOKS AND RECORDS . . . . . . . . . . . . . . . . . . . . . . 32
4.32 LOAN GUARANTEES . . . . . . . . . . . . . . . . . . . . . . . 32
4.33 EVENTS SINCE DECEMBER 31, 1998. . . . . . . . . . . . . . . . 32
4.34 RESERVE FOR LOAN LOSSES . . . . . . . . . . . . . . . . . . . 33
4.35 LOAN ORIGINATION AND SERVICING. . . . . . . . . . . . . . . . 33
4.36 PUBLIC COMMUNICATIONS; SECURITIES OFFERING. . . . . . . . . . 33
4.37 NO INSIDER TRADING. . . . . . . . . . . . . . . . . . . . . . 33
4.38 YEAR 2000 COMPLIANCE. . . . . . . . . . . . . . . . . . . . . 34
4.39 SUBSIDIARIES AND JOINT VENTURES . . . . . . . . . . . . . . . 34
4.40 ACCOUNTING AND TAX TREATMENT. . . . . . . . . . . . . . . . . 34
4.41 TRUE AND COMPLETE INFORMATION . . . . . . . . . . . . . . . . 34
ARTICLE V - COVENANTS PENDING CLOSING. . . . . . . . . . . . . . . . . . 35
5.1 DISCLOSURE STATEMENTS; ADDITIONAL INFORMATION. . . . . . . . . 35
5.2 CHANGES AFFECTING REPRESENTATIONS. . . . . . . . . . . . . . . 35
5.3 PINNACLE'S CONDUCT OF BUSINESS PENDING THE EFFECTIVE TIME. . . 36
5.4 APPROVAL OF PLAN OF MERGER . . . . . . . . . . . . . . . . . . 39
5.5 REGULAR DIVIDENDS. . . . . . . . . . . . . . . . . . . . . . . 40
5.6 DATA PROCESSING AND RELATED CONTRACTS. . . . . . . . . . . . . 40
5.7 AFFILIATES -- COMPLIANCE WITH ACCOUNTING AND SECURITIES RULE 40
5.8 INDEMNIFICATION AND INSURANCE. . . . . . . . . . . . . . . . . 41
5.9 EXCLUSIVE COMMITMENT . . . . . . . . . . . . . . . . . . . . . 42
5.10 REGISTRATION STATEMENT. . . . . . . . . . . . . . . . . . . . 43
5.11 OTHER FILINGS . . . . . . . . . . . . . . . . . . . . . . . . 43
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5.12 MISCELLANEOUS AGREEMENTS AND CONSENTS . . . . . . . . . . . . 43
5.13 ACCESS AND INVESTIGATION. . . . . . . . . . . . . . . . . . . 43
5.14 CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . 44
5.15 ENVIRONMENTAL INVESTIGATION . . . . . . . . . . . . . . . . . 45
5.16 EMPLOYMENT AMENDMENTS . . . . . . . . . . . . . . . . . . . . 46
5.17 TERMINATION OF PROFIT SHARING AND 401(K) PLAN . . . . . . . . 46
5.18 ACCOUNTING AND TAX TREATMENT. . . . . . . . . . . . . . . . . 46
5.19 PUBLIC ANNOUNCEMENTS. . . . . . . . . . . . . . . . . . . . . 46
ARTICLE VI - CONDITIONS PRECEDENT TO OLD KENT'S OBLIGATIONS. . . . . . . 46
6.1 RENEWAL OF REPRESENTATIONS AND WARRANTIES, ETC.. . . . . . . . 46
6.2 OPINION OF LEGAL COUNSEL . . . . . . . . . . . . . . . . . . . 47
6.3 REQUIRED REGULATORY APPROVALS. . . . . . . . . . . . . . . . . 47
6.4 SHAREHOLDER APPROVAL . . . . . . . . . . . . . . . . . . . . . 47
6.5 ORDER, DECREE, ETC.. . . . . . . . . . . . . . . . . . . . . . 47
6.6 PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.7 TAX MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.8 REGISTRATION STATEMENT . . . . . . . . . . . . . . . . . . . . 48
6.9 CERTIFICATE AS TO OUTSTANDING SHARES . . . . . . . . . . . . . 48
6.10 CHANGE OF CONTROL WAIVERS . . . . . . . . . . . . . . . . . . 48
6.11 POOLING ASSURANCES. . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE VII - CONDITIONS PRECEDENT TO PINNACLE'S OBLIGATIONS . . . . . . 49
7.1 RENEWAL OF REPRESENTATIONS AND WARRANTIES, ETC.. . . . . . . . 49
7.2 OPINION OF LEGAL COUNSEL . . . . . . . . . . . . . . . . . . . 49
7.3 REQUIRED REGULATORY APPROVALS. . . . . . . . . . . . . . . . . 49
7.4 SHAREHOLDER APPROVAL . . . . . . . . . . . . . . . . . . . . . 49
7.5 ORDER, DECREE, ETC.. . . . . . . . . . . . . . . . . . . . . . 49
7.6 TAX MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.7 REGISTRATION STATEMENT . . . . . . . . . . . . . . . . . . . . 50
7.8 FAIRNESS OPINION . . . . . . . . . . . . . . . . . . . . . . . 50
7.9 LISTING OF SHARES . . . . . . . . . . . . . . . . . . . . . . 50
7.10 EXCHANGE AGENT CERTIFICATE. . . . . . . . . . . . . . . . . . 50
ARTICLE VIII - ABANDONMENT OF MERGER . . . . . . . . . . . . . . . . . . 51
8.1 MUTUAL ABANDONMENT . . . . . . . . . . . . . . . . . . . . . . 51
8.2 UPSET DATE . . . . . . . . . . . . . . . . . . . . . . . . . . 51
8.3 OLD KENT'S RIGHTS TO TERMINATE . . . . . . . . . . . . . . . . 51
8.4 PINNACLE'S RIGHTS TO TERMINATE . . . . . . . . . . . . . . . . 52
8.5 EFFECT OF TERMINATION. . . . . . . . . . . . . . . . . . . . . 52
ARTICLE IX - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 53
9.1 "MATERIAL ADVERSE EFFECT" DEFINED. . . . . . . . . . . . . . . 53
9.2 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES, AND AGREEMENTS . . 53
9.3 AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.4 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.5 SPECIFIC ENFORCEMENT . . . . . . . . . . . . . . . . . . . . . 54
9.6 JURISDICTION; VENUE; JURY. . . . . . . . . . . . . . . . . . . 54
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9.7 WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.8 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.9 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . 55
9.10 ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . 55
9.11 THIRD PARTY BENEFICIARIES . . . . . . . . . . . . . . . . . . 55
9.12 COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . 55
9.13 FURTHER ASSURANCES; PRIVILEGES. . . . . . . . . . . . . . . . 55
9.14 HEADINGS, ETC.. . . . . . . . . . . . . . . . . . . . . . . . 55
9.15 CALCULATION OF DATES AND DEADLINES. . . . . . . . . . . . . . 56
9.16 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . 56
DEFINITIONS
AMEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
BANK CONSOLIDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
BANK CONSOLIDATION AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 3
BUSINESS COMBINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
CALL REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
CERCLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
CERTIFICATES OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
CONSTITUENT CORPORATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
CONTROL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
DESIGNATED CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
DLJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
EFFECTIVE TIME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
EMPLOYEE BENEFIT PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
EMPLOYMENT AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
EMPLOYMENT-RELATED PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . .26
ENVIRONMENTAL LAWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
ENVIRONMENTAL RISK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
EX-DATE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
EXCHANGE ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
EXCHANGE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
EXCHANGE RATIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
FDIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
FDIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
FEDERAL BANK HOLDING COMPANY ACT . . . . . . . . . . . . . . . . . . . . . . .11
FEDERAL RESERVE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
FIB. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
FIDUCIARY EVENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
FINAL INDEX PRICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
FINAL OLD KENT PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
FLOOR OLD KENT PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
HAZARDOUS SUBSTANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
ILLINOIS ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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ILLINOIS BANK ACT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
ILLINOIS BANK HOLDING COMPANY ACT. . . . . . . . . . . . . . . . . . . . . . .11
ILLINOIS COMMISSIONER. . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
INDEX COMPANIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
INITIAL INDEX DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
INITIAL INDEX PRICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
INITIAL OLD KENT PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
INSURANCE AMOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
INTERNAL REVENUE CODE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
IRS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
MATERIAL ADVERSE EFFECT. . . . . . . . . . . . . . . . . . . . . . . . . . . .53
MERGER.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
MICHIGAN ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
MICHIGAN BANKING CODE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
NASDAQ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
NOTIFYING PARTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
NYSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
OLD CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
OLD KENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
OLD KENT COMMON STOCK. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
OLD KENT DISCLOSURE STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . .10
OLD KENT RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
OLD KENT RIGHTS AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . .12
OLD KENT'S FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . .13
OPTION AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
OPTION PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
OPTION PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
PBGC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
PHASE I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
PHASE II AND III WORK. . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
PINNACLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PINNACLE AFFILIATE AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . . .40
PINNACLE BANK. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PINNACLE BANKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PINNACLE COMMON STOCK. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
PINNACLE DISCLOSURE STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . .16
PINNACLE RETIREMENT PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . .38
PINNACLE'S FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . .20
PINNACLE'S LEASES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
PINNACLE'S REAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . .24
PINNACLE'S REPRESENTATIVES . . . . . . . . . . . . . . . . . . . . . . . . . .31
PINNACLE-RELATED PERSON. . . . . . . . . . . . . . . . . . . . . . . . . . . .31
Plan of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
PRICING PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
PROPOSAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
PROSPECTUS AND PROXY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . .15
REGISTRATION STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
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SEC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
SECURITIES ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
SHAREHOLDERS' MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
STOCK DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SUPERIOR PROPOSAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
SURVIVING CORPORATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
TAX RETURNS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
TRANSACTION DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
UNEXERCISED OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
UNEXERCISED OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
UPSET CONDITION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
YEAR 2000 ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
YEAR 2000 PROBLEM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
YEAR 2000 READY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
EXHIBITS
A --- Form of Stock Option Agreement . . . . . . . . . . . . . . . .A-1
B --- Index Companies . . . . . . . . . . . . . . . . . . . . . . .B-1
C --- Form of Disclosure Statement . . . . . . . . . . . . . . . . .C-1
D --- Schedule of Additional Information . . . . . . . . . . . . . .D-1
E --- Form of Pinnacle's Affiliate Agreement . . . . . . . . . . . .E-1
F --- Form of Pinnacle's Counsel's Legal Opinion . . . . . . . . . .F-1
G --- Form of Old Kent's Counsel's Legal Opinion . . . . . . . . . .G-1
H --- Designated Contracts . . . . . . . . . . . . . . . . . . . . .H-1
-vi-
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "PLAN OF MERGER") is made as of
March 18, 1999, between Pinnacle Banc Group, Inc., an Illinois corporation,
headquartered at 2215 York Road, Suite 306, Oak Brook, Illinois 60523
("PINNACLE"), and Old Kent Financial Corporation, a Michigan corporation,
headquartered at 111 Lyon Street, N.W., Grand Rapids, Michigan 49503 ("OLD
KENT").
Old Kent and Pinnacle desire that Pinnacle and its subsidiaries become
affiliated with Old Kent. The affiliation would be effected through the
merger of Pinnacle with and into Old Kent in accordance with this Plan of
Merger and in accordance with the Business Corporation Act of the State of
Michigan, as amended (the "MICHIGAN ACT"), and the Illinois Business
Corporation Act of 1983, as amended (the "ILLINOIS ACT"). The transactions
contemplated by, and described in, this Plan of Merger are referred to as
the "MERGER." Simultaneously with or as soon as reasonably practical
following the consummation of the Merger, Pinnacle's wholly owned
subsidiaries, Pinnacle Bank, Cicero, Illinois, and Pinnacle Bank of the
Quad-Cities, Silvis, Illinois (each a "PINNACLE BANK" and, together, the
"PINNACLE BANKS"), will be consolidated with and into Old Kent's wholly
owned subsidiary, Old Kent Bank.
It is intended that, for federal tax purposes, the Merger qualify as a
reorganization under the provisions of Section 368 of the Internal Revenue
Code of 1986, as amended (the "INTERNAL REVENUE CODE"). It is also
intended that, for accounting and financial reporting purposes, the Merger
shall be accounted for as a pooling-of-interests.
As a condition to, and concurrently with the execution of, this Plan
of Merger, Pinnacle and Old Kent are entering into a Stock Option Agreement
attached as EXHIBIT A (the "OPTION AGREEMENT").
In consideration of the representations, warranties, and covenants
contained in this Plan of Merger, the parties agree:
ARTICLE I - THE TRANSACTION
Subject to the terms and conditions of this Plan of Merger, the Merger
shall be carried out in the following manner:
1.1 MERGER OF PINNACLE WITH AND INTO OLD KENT. At the Effective
Time, Pinnacle shall be merged with and into Old Kent. Pinnacle and Old
Kent are each sometimes referred to as a "CONSTITUENT CORPORATION" prior to
the Merger. At the Effective Time, the Constituent Corporations shall
become a single corporation, which shall be Old Kent (the "SURVIVING
CORPORATION"). The effect of the Merger upon each of the Constituent
Corporations and the Surviving Corporation shall be as provided in Chapter
Seven of the Michigan Act and Chapter 805, Act 5, Article 11 of the
Illinois Act with respect to the merger of domestic and foreign
corporations, where the surviving corporation will be subject to the laws
of the State of Michigan.
1.2 THE CLOSING. The "CLOSING" for the Merger shall be held at such
time, date, and location as may be mutually agreed by the parties. In the
absence of such agreement, the Closing shall be held at the offices of
Warner Norcross & Judd LLP, 111 Lyon Street, N.W., Grand Rapids, Michigan,
commencing at 11 a.m. on the earliest date specified by either party upon
ten business days' written notice (or at the election of Old Kent, on the
last business day of the month) after the last to occur of the following
events: (a) receipt of all consents and approvals of government regulatory
authorities, and the expiration of all related statutory waiting periods,
legally required to consummate the Merger; and (b) approval of this Plan of
Merger by Pinnacle's shareholders. Scheduling or commencing the Closing
shall not, however, constitute a waiver of the conditions precedent of
either Old Kent or Pinnacle as set forth in Articles VI and VII,
respectively. Upon completion of the Closing, Pinnacle and Old Kent shall
each execute and file the certificate of merger as required by the Michigan
Act and the articles of merger as required by the Illinois Act to effect
the Merger (together, the "CERTIFICATES OF MERGER").
1.3 EFFECTIVE TIME OF THE MERGER. The Merger shall be consummated
following the Closing by filing the Certificates of Merger in the manner
required by law. The "EFFECTIVE TIME" of the Merger shall be as of the
time and date to be elected by Old Kent and specified in the Certificates
of Merger, but not later than the first business day of the month next
following the month in which the Closing occurs.
1.4 ADDITIONAL ACTIONS. At any time after the Effective Time, the
Surviving Corporation may determine that further assignments or assurances
or any other acts are necessary or desirable to vest, perfect, or confirm,
of record or otherwise, in the Surviving Corporation its rights, title, or
interest in, to, or under any of the rights, properties, or assets of
Pinnacle acquired or to be acquired by the Surviving Corporation as a
result of, or in connection with, the Merger, or to otherwise carry out the
purposes of this Plan of Merger. Pinnacle hereby grants to the Surviving
Corporation an irrevocable power of attorney to execute and deliver all
such deeds, assignments, and assurances and to do all acts necessary,
proper, or convenient to accomplish this purpose. This irrevocable power
of attorney shall only be operative following the Effective Time. The
proper officers and directors of the Surviving Corporation shall be fully
authorized in the name of Pinnacle to take any and all such action
contemplated by this Plan of Merger.
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1.5 SURVIVING CORPORATION. Immediately after the Effective Time, the
Surviving Corporation shall have the following attributes until they are
subsequently changed in the manner provided by law:
1.5.1 NAME. The name of the Surviving Corporation shall be "Old
Kent Financial Corporation."
1.5.2 ARTICLES OF INCORPORATION. The articles of incorporation
of the Surviving Corporation shall be the articles of incorporation of
Old Kent as in effect immediately prior to the Effective Time, without
change.
1.5.3 BYLAWS. The bylaws of the Surviving Corporation shall be
the bylaws of Old Kent as in effect immediately prior to the Effective
Time, without change.
1.5.4 DIRECTORS. The directors of the Surviving Corporation
shall be the same as the directors of Old Kent immediately prior to
the Effective Time.
1.5.5 OFFICERS. The officers of the Surviving Corporation shall
be the same as the officers of Old Kent immediately prior to the
Effective Time.
1.6 BANK CONSOLIDATION. After the Effective Time, Old Kent intends
to consolidate the Pinnacle Banks with and into Old Kent Bank resulting in
a single Michigan banking corporation, which shall be Old Kent Bank (the
"BANK CONSOLIDATION"). The Bank Consolidation will be effected pursuant to
a consolidation agreement (the "BANK CONSOLIDATION AGREEMENT"), in the form
required by the Michigan Banking Code of 1969, as amended (the "MICHIGAN
BANKING CODE"), and by other applicable laws, containing terms and
conditions, not inconsistent with this Plan of Merger, as determined by Old
Kent Bank. The Bank Consolidation shall only occur if the Merger is
consummated, and it shall become effective immediately after the Effective
Time or such later time as may be determined by Old Kent. To obtain the
necessary regulatory approval for the Bank Consolidation to occur
immediately after the Effective Time, Pinnacle and each Pinnacle Bank shall
approve, adopt, execute, and deliver the Bank Consolidation Agreement and
take other reasonably required or convenient steps prior to the Effective
Time to effect the Bank Consolidation.
ARTICLE II - CONVERSION AND EXCHANGE OF SHARES
Subject to the terms and conditions of this Plan of Merger and as a
result of the Merger, all Common Stock, $3.12 par value per share, of
Pinnacle ("PINNACLE COMMON STOCK") shall be converted into Common Stock, $1
par value per share, of Old Kent ("OLD KENT COMMON STOCK") as follows:
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2.1 CONVERSION OF SHARES. As of the Effective Time:
2.1.1 CONVERSION OF PINNACLE COMMON STOCK. Except as provided
below, each share of Pinnacle Common Stock outstanding immediately
prior to the Effective Time shall be converted into .717 (the
"EXCHANGE RATIO") shares of validly issued, fully paid, and
nonassessable Old Kent Common Stock.
2.1.2 OLD KENT RIGHTS. Each share of Old Kent Common Stock to
be issued in the Merger shall have attached to it the number of "Old
Kent Rights" issuable pursuant to the "Old Kent Rights Agreement" (as
those terms are defined in Section 3.4.1) that are attached to each
issued and outstanding share of Old Kent Common Stock at the Effective
Time, provided that the Old Kent Rights are not then separately
transferable.
2.1.3 NO CONVERSION OF OLD KENT COMMON STOCK. Each share of Old
Kent Common Stock and each Old Kent Right outstanding immediately
prior to the Effective Time shall continue to be outstanding without
any change. Each shareholder of Old Kent whose shares were
outstanding immediately before the Effective Time will hold the same
number of shares of the Surviving Corporation, with identical
designations, preferences, limitations, and relative rights,
immediately after the Effective Time.
2.1.4 STOCK HELD BY OLD KENT. Each share of Pinnacle Common
Stock, if any, held by Old Kent or any of its subsidiaries for its own
account, and not in a fiduciary or representative capacity for a
person other than Old Kent or any of its subsidiaries, shall be
canceled and no consideration shall be issuable or payable with
respect to any such share.
2.1.5 TREASURY SHARES. Each share of Pinnacle Common Stock held
by Pinnacle as a treasury share, if any, shall be canceled and no Old
Kent Common Stock or other consideration shall be issuable or payable
with respect to any such share.
2.1.6 DISSENTING SHARES. Each outstanding share of Pinnacle
Common Stock as to which a legally sufficient demand has been made in
accordance with Section 5/11.70 of the Illinois Act and which was not
voted in favor of approval of the Plan of Merger (each a "DISSENTING
SHARE") shall, after the Effective Time of the Merger, represent only
the rights of a dissenting shareholder under the Illinois Act,
including the right to obtain payment for the estimated fair value of
those shares, plus accrued interest, as provided under the Illinois
Act. A Dissenting Share shall not be converted into, or represent, a
right to receive Old Kent Common Stock as provided under this Plan of
Merger. Any Dissenting Shares shall not, after the Effective Time,
-4-
be entitled to vote for any purpose or receive any dividends or other
distributions. All payments in respect of Dissenting Shares shall be
from funds of Old Kent and not from the acquired assets of Pinnacle.
If, however, the holder of such a Dissenting Share fails to properly
perfect, effectively withdraws, waives or loses, or otherwise becomes
ineligible to exercise a dissenting shareholder's rights under the
Illinois Act, then at that time the Dissenting Shares held by that
shareholder shall be converted into Old Kent Common Stock as provided
in this Section 2.1 (CONVERSION OF SHARES).
2.1.7 PINNACLE COMMON STOCK NO LONGER OUTSTANDING. Each share
of Pinnacle Common Stock outstanding immediately prior to the
Effective Time shall, as of the Effective Time, no longer be
outstanding and shall represent only the right to receive shares of
Old Kent Common Stock as provided in this Plan of Merger, together
with any dividends and other distributions payable as provided in
Section 2.5.4 (DIVIDENDS PENDING SURRENDER), but subject to the
payment of cash in lieu of fractional shares as provided in
Section 2.6 (NO FRACTIONAL SHARES).
2.2 UPSET PROVISION. After a Closing is properly called pursuant to
Section 1.2 (THE CLOSING), Pinnacle shall have the right to terminate this
Plan of Merger if the "Upset Condition" then exists.
2.2.1 UPSET CONDITION. The "UPSET CONDITION" shall exist if
both of the following conditions then exist:
(a) The Final Old Kent Price (defined below) is less than
$38.25 (the "FLOOR OLD KENT PRICE"); and
(b) The number determined by dividing the Final Old Kent
Price by $45.00 (the "INITIAL OLD KENT PRICE") is less than the
number obtained by subtracting (i) 0.15 from (ii) the quotient
obtained by dividing the Final Index Price (as defined below) by
the Initial Index Price (as defined below).
2.2.2 FINAL OLD KENT PRICE. The "FINAL OLD KENT PRICE" means
the average of the closing prices per share of Old Kent Common Stock
reported on the New York Stock Exchange ("NYSE") for the ten
consecutive full trading days ending on the eleventh business day
prior to the date of the Closing (the "PRICING PERIOD"), as reported
in the DOW JONES NEWS/RETRIEVAL system, or other equally reliable
means.
2.2.3 INITIAL INDEX PRICE. The "INITIAL INDEX PRICE" means the
average of the closing prices per share of each of the common stocks
of the Index Companies as reported on NYSE, The Nasdaq Stock Market
("NASDAQ"), or the American Stock Exchange ("AMEX") on March 18, 1999
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("INITIAL INDEX DATE"). The Initial Index Price computed as of a
recent date is presented in Exhibit B as an illustration of the method
of computation, but is subject to adjustment as provided in Sections
2.2.6 (INDEX ADJUSTMENTS).
2.2.4 FINAL INDEX PRICE. The "FINAL INDEX PRICE" means the
average of the average closing prices per share of each of the common
stocks of the Index Companies as reported on NYSE, NASDAQ, or AMEX for
each trading day during the Pricing Period.
2.2.5 INDEX COMPANIES. The term "INDEX COMPANIES" refers to the
companies listed on EXHIBIT B, as the list may be modified under
Section 2.2.7 (INDEX EXCLUSIONS).
2.2.6 INDEX ADJUSTMENTS. If any Index Company declares a stock
dividend, stock split, or stock split-up (any such event being a
"STOCK DISTRIBUTION") of its common stock for which the ex-dividend
date, ex-split date, ex-distribution date or other comparable date
(the "EX-DATE") occurs between the Initial Index Date and the end of
the Pricing Period, then for purposes of the definitions in Section
2.2 (UPSET PROVISION) the closing prices for such common stock as of
the Initial Index Date and each date during the Pricing Period prior
to the Ex-Date shall be adjusted so as to be comparable as of the
Initial Index Date and throughout the Pricing Period in the same
manner as is described in Section 2.3.1(a) (STOCK DIVIDENDS AND
DISTRIBUTIONS) for any Stock Distribution.
2.2.7 INDEX EXCLUSIONS. There shall be excluded from the list
of Index Companies any company as to which, between the date of this
Plan of Merger and the end the Pricing Period, there occurs or there
is publicly announced (a) a proposed merger, acquisition, or business
combination in which that company is not or will not be the survivor,
(b) a tender offer, exchange offer, or other transaction or involving
the acquisition of a majority of that company's common stock or
assets, or (c) a reclassification, recapitalization, subdivision,
spin-off, split-up, or combination of its common stock. If a company
is excluded from the list of Index Companies, then the Initial Index
Price and the Final Index Price shall be calculated as if the excluded
company had not originally been included in the list of companies.
2.3 ADJUSTMENTS. The Exchange Ratio, Floor Old Kent Price, Initial
Old Kent Price, and Final Old Kent Price, and the related computations
described in Sections 2.1 (CONVERSION OF SHARES) and 2.2 (UPSET PROVISION)
shall be adjusted in the manner provided in this Section upon the
occurrence of any of the following events:
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2.3.1 STOCK DIVIDENDS AND DISTRIBUTIONS. If Old Kent declares a
Stock Distribution of Old Kent Common Stock to its holders prior to
the date of the Effective Time, then:
(a) If the Ex-Date for the Stock Distribution occurs before
the end of the Pricing Period, then the Floor Old Kent Price and
the Initial Old Kent Price (and if the Ex-Date occurs during the
Pricing Period, then the closing price per share of Old Kent
Common Stock for each day during the Pricing Period prior to the
Ex-Date) shall each be adjusted by multiplying them by that ratio
(i) the numerator of which shall be the total number of shares of
Old Kent Common Stock outstanding immediately prior to the record
date for the Stock Distribution; and (ii) the denominator of
which shall be the total number of shares of Old Kent Common
Stock that are outstanding immediately prior to that record date
plus the additional number of shares to be issued in the Stock
Distribution; and
(b) If the record date for the Stock Distribution occurs
prior to the Effective Time, then the Exchange Ratio shall be
adjusted by multiplying it by that ratio (i) the numerator of
which shall be the total number of shares of Old Kent Common
Stock that are outstanding as of the record date for such Stock
Distribution plus the additional number of shares to be issued in
the Stock Distribution computed as of that record date; and (ii)
the denominator of which shall be the total number of shares of
Old Kent Common Stock outstanding as of the Stock Distribution's
record date.
2.3.2 OTHER ACTION AFFECTING OLD KENT COMMON STOCK. If there
occurs, other than as described in the preceding subsection, any
merger, business combination, recapitalization, reclassification,
subdivision, or combination that would substantially change the number
and value of outstanding shares of Old Kent Common Stock; a
distribution of warrants or rights with respect to Old Kent Common
Stock; or any other transaction that would have a substantially
similar effect; then the nature or amount of the consideration to be
received by the shareholders of Pinnacle in exchange for their shares
of Pinnacle Common Stock and the Exchange Ratio shall be adjusted in
such manner and at such time as shall be equitable under the
circumstances. It is intended that in the event of a reclassification
of outstanding shares of Old Kent Common Stock or a consolidation or
merger of Old Kent with or into another corporation, other than a
merger in which Old Kent is the surviving corporation and which merger
does not result in any reclassification of Old Kent Common Stock,
holders of Pinnacle Common Stock would receive, in lieu of each share
of Old Kent Common Stock to be issued in exchange for Pinnacle Common
Stock based on the Exchange Ratio, the kind and amount of shares of
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Old Kent stock, other securities, money, and/or property receivable
upon such reclassification, consolidation, or merger by holders of Old
Kent Common Stock with respect to each share of Old Kent Common Stock
outstanding immediately prior to such reclassification, consolidation,
or merger.
2.3.3 EMPLOYEE STOCK OPTIONS, ETC. Notwithstanding any other
provisions of this Section, no adjustment shall be made in the event
of the issuance of additional shares of Old Kent Common Stock pursuant
to Old Kent's dividend reinvestment plan, pursuant to the exercise of
stock options under stock option plans of Old Kent, or upon the grant
or sale of shares or rights to receive shares to, or for the account
of, Old Kent directors or employees pursuant to restricted stock,
deferred stock compensation, thrift, employee stock purchase, and
other compensation benefit plans of Old Kent.
2.3.4 AUTHORIZED BUT UNISSUED SHARES. Notwithstanding the other
provisions of this Section, no adjustment shall be made in the event
of the issuance of additional shares of Old Kent Common Stock or other
securities pursuant to a public offering, private placement, or an
acquisition of one or more banks, corporations, or business assets as
authorized by the board of directors of Old Kent or a duly authorized
committee of the board.
2.3.5 CHANGES IN CAPITAL. Subject only to making any adjustment
to the Exchange Ratio and related computations prescribed by this
Section, nothing contained in this Plan of Merger shall preclude Old
Kent from amending its restated articles of incorporation to change
its capital structure or from issuing additional shares of Old Kent
Common Stock, preferred stock, shares of other capital stock, or
securities that are convertible into shares of capital stock.
2.3.6 INCREASE IN OUTSTANDING SHARES OF PINNACLE COMMON STOCK.
In the event that the number of shares of Pinnacle Common Stock
outstanding is greater than 7,399,343 for any reason whatsoever
(whether or not such increase constitutes a breach of this Plan of
Merger), other than the issuance of not more than 118,000 shares upon
the exercise of Pinnacle stock options identified in Section 4.4
(CAPITAL STOCK), then the Exchange Ratio shall be adjusted by
multiplying it by a fraction (i) the numerator of which shall be
7,399,343 (the total number of shares of Pinnacle Common Stock
outstanding as of the date of this Plan of Merger); and (ii) the
denominator of which shall be the total number of shares of Pinnacle
Common Stock outstanding as of the Effective Time of the Merger,
excluding not more than 118,000 shares, if any, issued after the date
of this Plan of Merger upon the exercise of Pinnacle stock options
identified in Section 4.4 (CAPITAL STOCK).
-8-
2.4 CESSATION OF SHAREHOLDER STATUS. As of the Effective Time, each
record holder of shares of Pinnacle Common Stock outstanding immediately
prior to the Effective Time shall cease to be a shareholder of Pinnacle and
shall have no rights as a Pinnacle shareholder, except to the extent
provided by the Illinois Act with respect to Dissenting Shares. Except
with respect to Dissenting Shares, each stock certificate representing
shares of Pinnacle Common Stock ("OLD CERTIFICATES") shall then be
considered to represent shares of Old Kent Common Stock and the right to
receive cash in lieu of fractional shares, all as provided in this Plan of
Merger.
2.5 SURRENDER OF OLD CERTIFICATES AND DISTRIBUTION OF OLD KENT COMMON
STOCK. After the Effective Time, Old Certificates shall be exchangeable by
the holders thereof for new stock certificates representing the number of
shares of Old Kent Common Stock to which such holders shall be entitled in
the following manner:
2.5.1 TRANSMITTAL MATERIALS. As soon as practicable after the
Effective Time, Old Kent shall send or cause to be sent to each record
holder of Pinnacle Common Stock as of the Effective Time transmittal
materials for use in exchanging that holder's Old Certificates for Old
Kent Common Stock certificates. The transmittal materials will
contain instructions with respect to the surrender of Old
Certificates.
2.5.2 EXCHANGE AGENT. On or prior to the Effective Time, Old
Kent will deliver to Old Kent Bank, a Michigan banking corporation, or
such other bank or trust company as Old Kent may designate (the
"EXCHANGE AGENT"), certificates representing the number of shares of
Old Kent Common Stock issuable and the amount of cash payable for
fractional shares in the Merger. The Exchange Agent shall not be
entitled to vote or exercise any rights of ownership with respect to
such shares of Old Kent Common Stock, except that it shall receive and
hold all dividends or other distributions paid or distributed with
respect to such shares for the account of the record holders entitled
to such shares.
2.5.3 DELIVERY OF NEW CERTIFICATES. Old Kent shall cause the
Exchange Agent to promptly issue and deliver stock certificates in the
names and to the addresses that appear on Pinnacle's stock records as
of the Effective Time, or in such other name or to such other address
as may be specified by the holder of record in transmittal documents
received by the Exchange Agent; PROVIDED, that with respect to each
Pinnacle shareholder, the Exchange Agent shall have received all of
the Old Certificates held by that shareholder, or an affidavit of loss
and indemnity bond for such certificate or certificates, together with
properly executed transmittal materials; and such certificates,
-9-
transmittal materials, affidavits, and bonds are in a form and
condition reasonably acceptable to Old Kent and the Exchange Agent.
2.5.4 DIVIDENDS PENDING SURRENDER. Whenever a dividend is
declared by Old Kent on Old Kent Common Stock that is payable to
shareholders of record of Old Kent as of a record date on or after the
date of the Effective Time, the declaration shall include dividends on
all shares issuable under this Plan of Merger. No former shareholder
of Pinnacle shall be entitled to receive a distribution of any such
dividend until the physical exchange of that shareholder's Old
Certificates (or an affidavit of loss and indemnity bond for such
certificates) for new Old Kent Common Stock certificates shall have
been effected. Upon the physical exchange of that shareholder's Old
Certificates (or an affidavit of loss and indemnity bond for such
certificates), that shareholder shall be entitled to receive from Old
Kent an amount equal to all such dividends (without interest thereon
and less the amount of taxes, if any, that may have been imposed or
paid thereon) declared and paid with respect to the shares of Old Kent
Common Stock represented thereby.
2.5.5 STOCK TRANSFERS. After the Effective Time, there shall be
no transfers on Pinnacle's stock transfer books of the shares of
Pinnacle Common Stock that were issued and outstanding immediately
prior to the Effective Time. If, after the Effective Time, Old
Certificates are properly presented for transfer, then they shall be
canceled and exchanged for stock certificates representing shares of
Old Kent Common Stock as provided in this Plan of Merger. After the
Effective Time, ownership of such shares as are represented by any Old
Certificates may be transferred only on the stock transfer records of
Old Kent.
2.5.6 EXCHANGE AGENT'S DISCRETION. The Exchange Agent shall
have discretion to determine reasonable rules and procedures relating
to the exchange (or lack thereof) of Old Certificates and the issuance
and delivery of new certificates of Old Kent Common Stock into which
shares of Pinnacle Common Stock are converted in the Merger and
governing the payment for fractional shares of Pinnacle Common Stock.
2.6 NO FRACTIONAL SHARES. Notwithstanding any other provision of
this Article II, no certificates or scrip representing fractional shares of
Old Kent Common Stock shall be issued in the Merger upon the surrender of
Old Certificates. No fractional interest in any share of Old Kent Common
Stock resulting from the Merger shall be entitled to any part of a
dividend, distribution, or stock split with respect to shares of Old Kent
Common Stock nor entitle the record holder to vote or exercise any rights
of a shareholder with respect to that fractional interest. In lieu of
issuing any fractional share, each holder of an Old Certificate who would
otherwise have been entitled to a fractional share of Old Kent Common Stock
-10-
upon surrender of all Old Certificates for exchange shall be paid an amount
in cash (without interest) equal to such fraction of a share multiplied by
the Final Old Kent Price.
2.7 STOCK OPTIONS.
2.7.1 PLAN AMENDMENT. Prior to the Closing, Pinnacle shall
amend, or cause to be amended, the Pinnacle Banc Group, Inc., 1990
Incentive Stock Option Plan (the "OPTION PLAN") for the purpose of
removing those provisions of the Option Plan that provide for the
automatic termination of the outstanding stock options granted by
Pinnacle ("UNEXERCISED OPTIONS") pursuant to the Option Plan upon
consummation of the Merger and to provide that the Unexercised Options
shall become, at the Effective Time, options to purchase that number
of shares of Old Kent Common Stock equal to the number of shares of
Pinnacle Common Stock subject to the Unexercised Options multiplied by
the Exchange Ratio, rounded to the nearest whole share.
2.7.2 OPTION EXERCISES. The exercise price per share of Old
Kent Common Stock under the option shall be equal to the exercise
price per share of the Pinnacle Common Stock that was purchasable
under each Unexercised Option divided by the Exchange Ratio (rounded
to the nearest whole cent). In addition, each option that is an
"incentive stock option" as defined in Section 422 of the Internal
Revenue Code shall be adjusted as required by Section 424 of the
Internal Revenue Code and the regulations issued thereunder so as not
to constitute a modification, extension or renewal of the option
within the meaning of section 424 of the Internal Revenue Code. The
duration and other terms and conditions of the assumed options shall
be the same as the original Pinnacle options, except that any
reference to Pinnacle shall be considered to be references to Old
Kent.
2.7.3 REGISTRATION. Old Kent shall use its best efforts to file
as soon as possible after the Effective Time, and in no event later
than 30 days after the Effective Time, and use its best efforts to
maintain the effectiveness of, a registration statement with the SEC
covering such options and the sale of the Old Kent Common Stock
issuable upon exercise of such options so long as unexercised options
remain outstanding.
2.7.4 NO NEW OPTIONS. At the Effective Time, the Option Plan
shall be terminated with respect to the granting of any additional
options or option rights.
2.7.5 NO CASH SURRENDER. In no event and at no time shall
Pinnacle (including its board of directors or any committee thereof)
permit or allow the holder of any outstanding stock options granted by
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Pinnacle ("UNEXERCISED OPTIONS") pursuant to the Pinnacle Banc Group,
Inc., 1990 Incentive Stock Option Plan (the "OPTION PLAN") to receive
cash in exchange for the cancellation of any Unexercised Option.
ARTICLE III - OLD KENT'S REPRESENTATIONS AND WARRANTIES
Old Kent represents and warrants to Pinnacle that, except as otherwise
set forth in a disclosure statement furnished to Pinnacle by Old Kent (the
"OLD KENT DISCLOSURE STATEMENT") not later than 6 p.m. on March 26, 1999:
3.1 AUTHORIZATION, NO CONFLICTS, ETC.
3.1.1 AUTHORIZATION OF AGREEMENT. Old Kent has the requisite
corporate power and authority to execute and deliver this Plan of
Merger and to consummate the Merger. This Plan of Merger has been
duly approved and adopted and the consummation of the Merger has been
duly authorized by the board of directors of Old Kent and no other
corporate proceedings on the part of Old Kent are necessary to
authorize this Plan of Merger or to consummate the Merger. This Plan
of Merger has been duly executed and delivered by, and constitutes
valid and binding obligations of, Old Kent and is enforceable against
Old Kent in accordance with its terms.
3.1.2 NO CONFLICT, BREACH, VIOLATION, ETC. The execution,
delivery, and performance of this Plan of Merger by Old Kent, and the
consummation of the Merger, do not and will not violate, conflict
with, or result in a breach of: (a) any provision of Old Kent's
restated articles of incorporation or bylaws; or (b) any statute,
code, ordinance, rule, regulation, judgment, order, writ, memorandum
of understanding, arbitral award, decree, or injunction applicable to
Old Kent or its subsidiaries, assuming the timely receipt of each of
the approvals referred to in Section 3.1.4 (REQUIRED APPROVALS).
3.1.3 NO CONTRACTUAL BREACH, DEFAULT, LIABILITY, ETC. The
execution, delivery, and performance of this Plan of Merger by Old
Kent, and the consummation of the Merger, do not and will not:
(a) AGREEMENTS, ETC. Violate, conflict with, result in a
breach of, constitute a default under, require any consent,
approval, waiver, extension, amendment, authorization, notice or
filing under, or extinguish any material contract right of Old
Kent or any of its subsidiaries under any agreement, mortgage,
lease, commitment, indenture, other instrument, or obligation to
which Old Kent or any of its subsidiaries is a party or by which
they are bound or affected, the result of which would have a
"Material Adverse Effect" (as defined in Section 9.1 ("MATERIAL
ADVERSE EFFECT" DEFINED)) on Old Kent;
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(b) REGULATORY RESTRICTIONS. Violate, conflict with,
result in a breach of, constitute a default under, or require any
consent, approval, waiver, extension, amendment, authorization,
notice, or filing under, any memorandum of understanding or
similar regulatory consent agreement to which Old Kent is a party
or subject, or by which it is bound or affected; or
(c) TORTIOUS INTERFERENCE. Subject Pinnacle to material
liability for tortious interference with contractual rights.
3.1.4 REQUIRED APPROVALS. No notice to, filing with,
authorization of, exemption by, or consent or approval of, any public
body or authority is necessary for the consummation of the Merger by
Old Kent other than in connection or compliance with the provisions of
the Michigan Act and the Illinois Act, compliance with federal and
state securities laws, bylaws and rules of the New York Stock
Exchange, and the approvals required under the Bank Holding Company
Act of 1956, as amended (the "FEDERAL BANK HOLDING COMPANY ACT"), the
Federal Deposit Insurance Act, as amended the ("FDIA"), the Michigan
Banking Code, the Illinois Bank Holding Company Act, as amended (the
"ILLINOIS BANK HOLDING COMPANY ACT"), and the Illinois Bank Act, as
amended (the "ILLINOIS BANK ACT").
3.2 ORGANIZATION AND GOOD STANDING. Old Kent is a corporation duly
organized, validly existing, and in good standing under the laws of the
State of Michigan. Old Kent possesses all requisite corporate power and
authority to own, operate, and lease its properties and to carry on its
business as it is now being conducted in all material respects. Old Kent
is a bank holding company duly registered as such with the Board of
Governors of the Federal Reserve System (the "FEDERAL RESERVE BOARD") under
the Federal Bank Holding Company Act. Old Kent is qualified or admitted to
conduct business as a foreign corporation in each state in which the
failure to be so qualified or admitted would have a Material Adverse Effect
on Old Kent.
3.3 SUBSIDIARIES. Old Kent owns all of the issued and outstanding
shares of capital stock of Old Kent Bank free and clear of all claims,
security interests, pledges, or liens of any kind. Old Kent Bank is duly
organized, validly existing, and in good standing as a banking corporation
under the laws of the state of Michigan.
3.4 CAPITAL STOCK.
3.4.1 CLASSES AND SHARES. The authorized capital stock of Old
Kent consists of 325,000,000 shares divided into two classes as
follows: (a) 300,000,000 shares of Old Kent Common Stock, of which,
as of March 11, 1999, a total of 103,760,063 shares were validly
issued and outstanding; and (b) 25,000,000 shares of preferred stock,
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without par value, of which 3,000,000 shares are designated Series A
Preferred Stock, 500,000 shares are designated Series B Preferred
Stock, and 1,000,000 shares are designated Series C Preferred Stock,
none of which preferred stock was issued and outstanding as of the
date of this Plan of Merger. The 1,000,000 shares of Series C
Preferred Stock are reserved for issuance pursuant to Series C
Preferred Stock Purchase Rights (the "OLD KENT RIGHTS") governed by a
Rights Agreement, dated as of January 20, 1997, as amended, between
Old Kent and Old Kent Bank (the "OLD KENT RIGHTS AGREEMENT").
3.4.2 NO OTHER CAPITAL STOCK. As of the date of this Plan of
Merger: (a) other than Old Kent Common Stock, there is no security or
class of securities issued and outstanding that represents or is
convertible into capital stock of Old Kent; and (b) there is no
outstanding subscription, option, warrant, or right to acquire any
capital stock of Old Kent, or agreement to which Old Kent is a party
or by which it is bound to issue capital stock, except as set forth
in, or as contemplated by, this Plan of Merger, and except (i) the Old
Kent Rights (which as of the date of this Plan of Merger are
represented by and transferable only with certificates representing
shares of Old Kent Common Stock); (ii) stock options awarded pursuant
to stock option plans; (iii) provisions for the grant or sale of
shares or the right to receive shares to, or for the account of,
employees and directors pursuant to restricted stock, deferred stock
compensation, stock purchase and other benefit plans; (iv) shares of
Old Kent Common Stock issuable under agreements entered into in
connection with mergers or acquisitions of direct or indirect
subsidiaries or assets in transactions approved by the Old Kent board
of directors or a committee of such board; and (v) shares of Old Kent
Common Stock issuable under Old Kent's dividend reinvestment plan and
employee stock purchase plans.
. 3.4.3 ISSUANCE OF SHARES. Between March 11, 1999, and the date
of this Plan of Merger, no additional shares of capital stock have
been issued by Old Kent, except as described in this Plan of Merger,
and except for shares issued or issuable pursuant to (a) the exercise
of employee stock options under employee stock option plans; (b) the
grant or sale of shares to, or for the account of, employees and
directors pursuant to restricted stock, deferred stock compensation,
stock purchase or other benefit plans; (c) the grant or sale of shares
of Old Kent Common Stock issuable under agreements entered into in
connection with acquisitions of direct or indirect subsidiaries or
assets of such subsidiaries in transactions approved by the Old Kent
board of directors or committee thereof; and (d) Old Kent's dividend
reinvestment plan and employee stock purchase plans.
3.4.4 VOTING RIGHTS. Neither Old Kent nor any of its
subsidiaries has outstanding any security or issue of securities the
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holder or holders of which have the right to vote on the approval of
the Merger or this Plan of Merger, or that entitle the holder or
holders to consent to, or withhold consent on, the Merger or this Plan
of Merger.
3.5 OLD KENT COMMON STOCK. The shares of Old Kent Common Stock to be
issued in the Merger in accordance with this Plan of Merger have been duly
authorized and reserved and, when issued as contemplated by this Plan of
Merger, will be validly issued, fully paid, and nonassessable shares.
3.6 FINANCIAL STATEMENTS.
3.6.1 FINANCIAL STATEMENTS. The consolidated financial
statements of Old Kent and its subsidiaries as of and for the each of
three years ended December 31, 1996, 1997, and 1998, as reported on by
Old Kent's independent accountants, including all schedules and notes
relating to such statements (collectively, "OLD KENT'S FINANCIAL
STATEMENTS"), fairly present the financial condition and the results
of operations, changes in shareholders' equity, and cash flows of Old
Kent as of the respective dates of and for the periods referred to in
such financial statements, all in accordance with generally accepted
United States accounting principles ("GAAP") consistently applied.
The unaudited consolidated financial statements of Old Kent and its
subsidiaries as of and for each quarter ending after the date of this
Plan of Merger, until the Effective Time, including all schedules and
notes relating to such statements, will be correct and complete, in
all material respects.
3.6.2 CALL REPORTS. The following reports (including all
related schedules, notes, and exhibits) were prepared and filed in
conformity with applicable regulatory requirements and were correct
and complete in all material respects when filed:
(a) The consolidated reports of condition and income of Old
Kent Bank as of and for each of the years ended December 31,
1996, 1997, and 1998, as filed with the Federal Deposit Insurance
Corporation ("FDIC"); and
(b) The FR Y-9 and FR Y-6 for Old Kent and Old Kent Bank as
of and for each of the years ended December 31, 1996, 1997, and
1998, as filed with the Federal Reserve Board.
All of such reports required to be filed prior to the Closing by Old
Kent and/or Old Kent Bank will be prepared and filed in conformity
with applicable regulatory requirements applied consistently
throughout their respective periods (except as otherwise noted in such
reports) and will be correct and complete in all material respects
when filed.
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3.7 ABSENCE OF UNDISCLOSED LIABILITIES. Except as and to the extent
reflected or reserved against in Old Kent's Financial Statements as of
December 31, 1998, as of such date, neither Old Kent nor any of its
subsidiaries had liabilities or obligations, secured or unsecured (whether
accrued, absolute, or contingent) as to which there is a reasonable
probability that they could have a Material Adverse Effect on Old Kent.
3.8 ABSENCE OF MATERIAL ADVERSE CHANGE. Since December 31, 1998,
there has been no change in the financial condition, income, expenses, or
business of Old Kent and its subsidiaries (and not the banking industry as
a whole) that had or in the future will have a Material Adverse Effect on
Old Kent. No facts or circumstances have been discovered from which it
reasonably appears that there is a significant risk and reasonable
probability that there will occur a Material Adverse Effect on Old Kent
that is not applicable to the banking industry as a whole.
3.9 ABSENCE OF LITIGATION. There is no action, suit, proceeding,
claim, arbitration, or investigation pending or, to Old Kent's knowledge,
threatened by any person, including without limitation any governmental or
regulatory agency, against Old Kent or any of its subsidiaries, or the
assets or business of Old Kent or any of its subsidiaries, any of which has
had or in the future would have a Material Adverse Effect on Old Kent.
There is no factual basis known to Old Kent that presents a reasonable
potential for any such action, suit, proceeding, claim, arbitration, or
investigation.
3.10 REGULATORY FILINGS. In the last two years:
3.10.1 SEC FILINGS. Old Kent has filed, and will in the future
continue to file, in a timely manner all required filings with the
Securities and Exchange Commission (the "SEC"), including without
limitation all reports on Form 10-K and Form 10-Q;
3.10.2 REGULATORY FILINGS. Old Kent has filed in a timely
manner all other material filings with other regulatory bodies for
which filings are required; and
3.10.3 COMPLETE AND ACCURATE. All such filings, as of their
respective filing dates, did not contain any untrue statement of
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3.11 REGISTRATION STATEMENT, ETC.
3.11.1 "TRANSACTION DOCUMENTS." The term "TRANSACTION
DOCUMENTS" shall collectively mean: (i) the registration statement to
be filed by Old Kent with the SEC (the "REGISTRATION STATEMENT") in
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connection with the Old Kent Common Stock to be issued in the Merger;
(ii) the prospectus and proxy statement (the "PROSPECTUS AND PROXY
STATEMENT") to be mailed to Pinnacle shareholders in connection with
the Shareholders' Meeting (as defined below); and (iii) any other
documents to be filed with the SEC, the Federal Reserve Board, the
Michigan Financial Institutions Bureau ("FIB"), the Illinois
Commissioner of Banks and Real Estate ("ILLINOIS COMMISSIONER"), the
states of Michigan or Illinois, or any other regulatory agency in
connection with the Merger.
3.11.2 ACCURATE INFORMATION. The information to be supplied by
Old Kent for inclusion or incorporation by reference in any
Transaction Document will not contain any untrue statement of material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (a) at the
respective times such Transaction Documents are filed; (b) with
respect to the Registration Statement, when it becomes effective; and
(c) with respect to the Prospectus and Proxy Statement, when it is
mailed and at the time of the Shareholders' Meeting.
3.11.3 COMPLIANCE OF FILINGS. All documents that Old Kent is
responsible for filing with the SEC or any regulatory agency in
connection with the Merger will comply as to form in all material
respects with the provisions of applicable law and regulation.
3.12 INVESTMENT BANKERS AND BROKERS. Old Kent has not employed any
broker, finder, or investment banker in connection with the Merger. Old
Kent has no express or implied agreement with any other person or company
relative to any commission or finder's fee payable with respect to this
Plan of Merger or the transactions contemplated by it.
3.13 ACCOUNTING AND TAX TREATMENT. Neither Old Kent nor, to its
knowledge, any of its affiliates, has taken or agreed to take any action or
knows of any reason that, with respect to Old Kent and its affiliates,
would prevent Old Kent from accounting for the business combination to be
effected by the Merger as a pooling-of-interests. Old Kent is aware of no
reason why the Merger will fail to qualify as a reorganization under
Section 368(a) of the Internal Revenue Code.
3.14 AGREEMENTS WITH BANK REGULATORS. Neither Old Kent nor any of
Old Kent's subsidiaries is a party to any agreement or memorandum of
understanding with, or a party to any commitment letter, board resolution
or similar undertaking to, or is subject to any order or directive by, or
is a recipient of any extraordinary supervisory letter from, any
governmental authority that restricts materially the conduct of its
business, or in any manner relates to its capital adequacy, its credit or
reserve policies or its management, nor has Old Kent been advised by any
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governmental authority that it is contemplating issuing or requesting (or
is considering the appropriateness of issuing or requesting) any such
order, decree, agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter or similar submission. Neither Old
Kent nor any of Old Kent's subsidiaries is required by applicable law to
give prior notice to a federal banking agency of the proposed addition of
an individual to its board of directors or the employment of an individual
as a senior or executive officer. As of the date of this Plan of Merger,
Old Kent knows of no reason why the regulatory approvals referred to in
Sections 3.1.4 and 4.1.4 (REQUIRED APPROVALS) should not be obtained.
3.15 EVENTS SINCE DECEMBER 31, 1998. Neither Old Kent nor any of Old
Kent's subsidiaries has, since December 31, 1998, conducted its business
other than in the ordinary course or as contemplated by this Plan of
Merger.
3.16 RESERVE FOR LOAN LOSSES. The reserve for credit losses as
reflected in Old Kent's Financial Statements was (a) adequate to meet all
reasonably anticipated credit losses, net of recoveries related to assets
previously charged off as of those dates, and (b) consistent with GAAP and
safe and sound banking practices.
3.17 PUBLIC COMMUNICATIONS; SECURITIES OFFERING. Each annual report,
quarterly report, proxy material, press release, or other communication
previously sent or released by Old Kent to Old Kent's shareholders or the
public did not contain any untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under that they were
made, not misleading.
3.18 YEAR 2000 COMPLIANCE. Old Kent has: (i) initiated a review and
assessment of all areas within the business and operations (including those
affected by material suppliers and vendors) of Old Kent and each of its
subsidiaries that could be adversely affected by the "YEAR 2000 PROBLEM,"
meaning the risk that computer applications used by Old Kent or any of its
subsidiaries (or material suppliers and vendors) may be unable to recognize
and perform properly date-sensitive functions involving certain dates prior
to and any date after December 31, 1999; (ii) developed a plan and time
line for addressing the Year 2000 Problem on a timely basis; and (iii) to
date, implemented that plan in accordance with that timetable. Old Kent
believes that all computer applications (including those of its material
suppliers and vendors) that are material to the business and operations of
Old Kent or any of its subsidiaries will on a timely basis be able to
perform properly date-sensitive functions for all dates before and after
January 1, 2000, except to the extent that a failure to do so would not
have a Material Adverse Effect on Old Kent.
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3.19 TRUE AND COMPLETE INFORMATION. No schedule, statement, list,
certificate, or other information furnished or to be furnished by Old Kent
in connection with this Plan of Merger, including the Old Kent Disclosure
Statement, contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact necessary to make the
statements contained therein, in light of the circumstances in which they
are made, not misleading.
ARTICLE IV - PINNACLE'S REPRESENTATIONS AND WARRANTIES
Pinnacle represents and warrants to Old Kent that, except as otherwise
set forth in a disclosure statement furnished to Old Kent by Pinnacle (the
"PINNACLE DISCLOSURE STATEMENT") not later than 6 p.m. on March 26, 1999:
4.1 AUTHORIZATION, NO CONFLICTS, ETC.
4.1.1 AUTHORIZATION OF AGREEMENT. Pinnacle has the requisite
corporate power and authority to execute and deliver this Plan of
Merger and, subject to approval and adoption by Pinnacle's
shareholders, to consummate the Merger. This Plan of Merger has been
duly approved and adopted and the consummation of the Merger have been
duly authorized by the board of directors of Pinnacle and no other
corporate proceedings on the part of Pinnacle are necessary to
authorize this Plan of Merger or to consummate the Merger, subject
only to approval and adoption by the shareholders of Pinnacle. This
Plan of Merger has been duly executed and delivered by, and
constitutes valid and binding obligations of, Pinnacle and is
enforceable against Pinnacle in accordance with its terms.
4.1.2 NO CONFLICT, BREACH, VIOLATION, ETC. The execution,
delivery, and performance of this Plan of Merger by Pinnacle, and the
consummation of the Merger, do not and will not violate, conflict
with, or result in a breach of any provision of: (a) Pinnacle's or
any of Pinnacle's subsidiaries' articles of incorporation, by-laws, or
similar organization documents; or (b) any statute, code, ordinance,
rule, regulation, judgment, order, writ, memorandum of understanding,
arbitral award, decree, or injunction applicable to Pinnacle or any of
Pinnacle's subsidiaries, assuming the timely receipt of each of the
approvals referred to in Section 4.1.4 (REQUIRED APPROVALS).
4.1.3 NO CONTRACTUAL BREACH, DEFAULT, LIABILITY, ETC. The
execution, delivery, and performance of this Plan of Merger by
Pinnacle, and the consummation of the Merger, do not and will not:
(a) AGREEMENTS, ETC. Violate, conflict with, result in a
breach of, constitute a default under, require any consent,
approval, waiver, extension, amendment, authorization, notice or
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filing under, or extinguish any material contract right of
Pinnacle or any of Pinnacle's subsidiaries under any agreement,
mortgage, lease, commitment, indenture, other instrument, or
obligation to which Pinnacle or any of Pinnacle's subsidiaries is
a party or by which they are bound or affected, the result of
which would have a Material Adverse Effect on Pinnacle or
Pinnacle's subsidiaries;
(b) REGULATORY RESTRICTIONS. Violate, conflict with,
result in a breach of, constitute a default under, or require any
consent, approval, waiver, extension, amendment, authorization,
notice, or filing under, any memorandum of understanding or
similar regulatory consent agreement to which Pinnacle or any of
its subsidiaries is a party or subject, or by which it is bound
or affected; or
(c) TORTIOUS INTERFERENCE. Subject Old Kent or its
subsidiaries to liability for tortious interference with
contractual rights.
4.1.4 REQUIRED APPROVALS. No notice to, filing with,
authorization of, exemption by, or consent or approval of, any public
body or authority is necessary for the consummation of the Merger by
Pinnacle other than in connection or compliance with the provisions of
the Michigan Act and Illinois Act, compliance with federal and state
securities laws, and the consents, authorizations, approvals, or
exemptions required under the Federal Bank Holding Company Act, the
FDIA, the Michigan Banking Code, the Illinois Bank Holding Company
Act, and the Illinois Bank Act.
4.2 ORGANIZATION AND GOOD STANDING. Pinnacle is a corporation duly
organized, validly existing, and in good standing under the laws of the
State of Illinois. Pinnacle possesses all requisite corporate power and
authority to own, operate, and lease its properties and to carry on its
business as it is now being conducted in all material respects. Pinnacle
is bank holding company duly registered as such with the Federal Reserve
Board under the Federal Bank Holding Company Act. Pinnacle is not, and is
not required to be, qualified or admitted to conduct business as a foreign
corporation in any other state, except where such failure would not have a
Material Adverse Effect on Pinnacle.
4.3 SUBSIDIARIES.
4.3.1 OWNERSHIP. Pinnacle owns all of the issued and
outstanding shares of capital stock of each of its subsidiaries, free
and clear of any claim, security interest, pledge, or lien of any
kind. Each Pinnacle Bank is duly organized, validly existing, and in
good standing as a bank under the laws of the state of Illinois. Each
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of Pinnacle's other subsidiaries (as listed in the Pinnacle Disclosure
Statement) is duly incorporated, validly existing, and in good
standing in its state of incorporation. Pinnacle does not have
"CONTROL" (as defined in Section 2(a)(2) of the Federal Bank Holding
Company Act, using 5 percent rather than 25 percent), either directly
or indirectly, of any corporation engaged in an active trade or
business or that holds any significant assets other than as stated in
or disclosed under this Section.
4.3.2 RIGHTS TO CAPITAL STOCK. There is no legally binding and
enforceable subscription, option, warrant, right to acquire, or any
other similar agreement pertaining to the capital stock of any of
Pinnacle's subsidiaries.
4.3.3 QUALIFICATION AND POWER. Each of Pinnacle's subsidiaries
is qualified or admitted to conduct business in each state where such
qualification or admission is required except that state or those
states where the failure to be so qualified or admitted would not have
a Material Adverse Effect on Pinnacle or Pinnacle's subsidiaries.
Each of Pinnacle's subsidiaries has full corporate power and authority
to carry on its business as and where now being conducted.
4.3.4 DEPOSIT INSURANCE; OTHER ASSESSMENTS. Each Pinnacle Bank
maintains in full force and effect deposit insurance through the Bank
Insurance Fund of the FDIC. Each Pinnacle Bank has fully paid to the
FDIC as and when due all assessments with respect to its deposits as
are required to maintain such deposit insurance in full force and
effect. Each Pinnacle Bank has paid as and when due all material
fees, charges, assessments, and the like to each and every
governmental or regulatory agency having jurisdiction as required by
law, regulation, or rule.
4.3.5 NO ACQUISITION OR MERGER RESTRICTIONS. Each of the
Pinnacle Banks has existed and operated under the Illinois Bank Act
for more than five years and qualifies under the Illinois Bank Holding
Company Act to be acquired by an out of state bank holding company,
and, immediately thereafter, to be merged or consolidated with and
into an out of state bank.
4.4 CAPITAL STOCK.
4.4.1 CLASSES AND SHARES. The authorized capital stock of
Pinnacle consists of 20,000,000 shares of common stock, $3.12 par
value per share, of which 7,399,343 shares are issued and outstanding
as of March 18, 1999, and 369,999 shares were reserved for issuance
under the Option Plan, of which options on 118,000 shares were
exercisable as of the date of this Plan of Merger.
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4.4.2 NO OTHER CAPITAL STOCK. Except for the Option
Agreement, there is no security or class of securities authorized or
issued that represents or is convertible into capital stock of
Pinnacle and, except for Unexercised Options to acquire up to 118,000
shares of Pinnacle Common Stock under the Option Plan, there is no
outstanding subscription, option, warrant, or right to acquire any
capital stock of Pinnacle, or agreements to which Pinnacle is a party
or by which it is bound to issue capital stock. No stock option
agreement issued under the Option Plan requires the payout of cash in
exchange for the cancellation of such Unexercised Option.
4.4.3 ISSUANCE OF SHARES. After the date of this Plan of
Merger, the number of issued and outstanding shares of Pinnacle Common
Stock is not subject to change before the Effective Time except for
issuance of up to 118,000 additional shares of Pinnacle Common Stock
pursuant to the exercise of Unexercised Options issued under the
Option Plan.
4.4.4 VOTING RIGHTS. Other than the shares of Pinnacle Common
Stock described in this Section, neither Pinnacle nor any of
Pinnacle's subsidiaries has outstanding any security or issue of
securities the holder or holders of which have the right to vote on
the approval of the Merger or this Plan of Merger or that entitle the
holder or holders to consent to, or withhold consent on, the Merger or
this Plan of Merger.
4.5 FINANCIAL STATEMENTS.
4.5.1 FINANCIAL STATEMENTS. The consolidated financial
statements of Pinnacle as of and for the each of three years ended
December 31, 1996, 1997, and 1998, as reported on by Pinnacle's
independent accountants, including all schedules and notes relating to
such statements, as previously delivered to Old Kent (collectively,
"PINNACLE'S FINANCIAL STATEMENTS"), fairly present the financial
condition and the results of operations, changes in shareholders'
equity, and cash flows of Pinnacle as of the respective dates of and
for the periods referred to in such financial statements, all in
accordance with GAAP, consistently applied. The unaudited
consolidated financial statements of Pinnacle and its subsidiaries as
of and for each quarter ending after the date of this Plan Merger
until the Effective Time, including all schedules and notes relating
to such statements, will be correct and complete, in all material
respects. No financial statements of any entity other than the
Pinnacle Banks is required by GAAP to be included in the consolidated
financial statements of Pinnacle.
4.5.2 CALL REPORTS. The following reports (including all
related schedules, notes, and exhibits) were prepared and filed in
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conformity with applicable regulatory requirements and were correct
and complete in all material respects when filed:
(a) The consolidated reports of condition and income of
each Pinnacle Bank as of and for each of the years ended
December 31, 1996, 1997, and 1998, as filed with the FDIC; and
(b) The FR Y-9 and FR Y-6 for Pinnacle as of and for each
of the years ended December 31, 1996, 1997, and 1998, as filed
with the Federal Reserve Board.
All of such reports required to be filed prior to the Closing by
Pinnacle and/or each Pinnacle Bank will be prepared and filed in
conformity with applicable regulatory requirements applied
consistently throughout their respective periods (except as otherwise
noted in such reports) and will be correct and complete in all
material respects when filed. All of the reports identified in this
Section are collectively referred to as the "CALL REPORTS."
4.6 ABSENCE OF UNDISCLOSED LIABILITIES. Except as and to the extent
reflected or reserved against in Pinnacle's Financial Statements as of
December 31, 1998, neither Pinnacle nor any of Pinnacle's subsidiaries had,
as of such date, liabilities or obligations, secured or unsecured (whether
accrued, absolute, or contingent) as to which there is a reasonable
probability that they could have a Material Adverse Effect on Pinnacle.
4.7 ABSENCE OF MATERIAL ADVERSE CHANGE. Since December 31, 1998,
there has been no change in the financial condition, income, expenses,
assets, liabilities, business, or prospects of Pinnacle (and not the
banking industry as a whole) that had or in the future will have a Material
Adverse Effect. No facts or circumstances have been discovered from which
it reasonably appears that there is a significant risk and reasonable
probability that there will occur a change that would have a Material
Adverse Effect on Pinnacle that is not applicable to the banking industry
as a whole.
4.8 ABSENCE OF LITIGATION. There is no action, suit, proceeding,
claim, arbitration, or investigation pending or, to the knowledge of
Pinnacle, threatened by any person, including without limitation any
governmental or regulatory agency, against Pinnacle or any of Pinnacle's
subsidiaries, or the assets or business of Pinnacle or any of Pinnacle's
subsidiaries, any of which has had or may have a Material Adverse Effect on
Pinnacle or Pinnacle's subsidiaries. There is no factual basis that
presents a reasonable potential for any such action, suit, proceeding,
claim, arbitration, or investigation.
4.9 NO INDEMNIFICATION CLAIMS. To the knowledge of Pinnacle, there
has been no event, action, or omission by or with respect to any director,
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officer, employee, trustee, agent, or other person who may be entitled to
receive indemnification or reimbursement of any claim, loss, or expense
under any agreement, contract, or arrangement providing for corporate
indemnification or reimbursement of any such person, which is reasonably
likely, either individually or in the aggregate, to have a Material Adverse
Effect on Pinnacle or Pinnacle's subsidiaries.
4.10 CONDUCT OF BUSINESS. Pinnacle and each of Pinnacle's
subsidiaries have conducted their respective businesses and used their
respective properties in substantial compliance with all federal, state,
and local laws, civil or common, ordinances and regulations, including
without limitation applicable federal and state laws and regulations
concerning banking, securities, truth-in-lending, truth-in-savings,
mortgage origination and servicing, usury, fair credit reporting, consumer
protection, occupational safety, civil rights, employee protection, fair
employment practices, fair labor standards, and insurance; and
Environmental Laws (as defined in Section 4.24.2 (ENVIRONMENTAL LAWS));
except for violations (individually or in the aggregate) that would not
have a Material Adverse Effect on Pinnacle.
4.11 CONTRACTS. There is no existing default by Pinnacle or any of
Pinnacle's subsidiaries, or any other party, under any contract or
agreement to which Pinnacle or any of Pinnacle's subsidiaries is a party,
or by which they are bound, the result of which would have a Material
Adverse Effect on Pinnacle or Pinnacle's subsidiaries. Excepting any
ordinary and customary banking relationships, there is no material
agreement, contract, mortgage, deed of trust, lease, commitment, indenture,
note, or other instrument under which another party is in material default
under its obligations to Pinnacle or its subsidiaries. Pinnacle is not
party to any contract, agreement, arrangement, or understanding (other than
ordinary and customary banking relationships) that would require Pinnacle
or any of its subsidiaries to make payments or make expenditures in excess
of $200,000 per year or that would require any payment to another party
upon termination in excess of $50,000.
4.12 REGULATORY FILINGS. In the last five years:
4.12.1 SEC FILINGS. Pinnacle has filed, and in the future will
continue to file, in a timely manner all required filings with the
SEC, including without limitation all reports on Form 10-K and Form
10-Q;
4.12.2 REGULATORY FILINGS. Pinnacle has filed in a timely
manner all other filings with other regulatory bodies for which
filings are required; and
4.12.3 COMPLETE AND ACCURATE. All such filings, as of their
respective filing dates, did not contain any untrue statement of
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material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. All such
filings complied in all material respects with all laws, regulations,
forms, and guidelines applicable to such filings.
4.13 REGISTRATION STATEMENT, ETC.
4.13.1 ACCURATE INFORMATION. The information to be supplied by
Pinnacle for inclusion or incorporation by reference in any
Transaction Document will not contain any untrue statement of material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (a) at the
respective times such Transaction Documents are filed; (b) with
respect to the Registration Statement, when it becomes effective; and
(c) with respect to the Prospectus and Proxy Statement, when it is
mailed and at the time of the Shareholders' Meeting.
4.13.2 COMPLIANCE OF FILINGS. All documents that Pinnacle is
responsible for filing with the SEC or any regulatory agency in
connection with the Merger will comply as to form in all material
respects with the provisions of applicable law and regulation.
4.14 AGREEMENTS WITH BANK REGULATORS. Neither Pinnacle nor any of
Pinnacle's subsidiaries is a party to any agreement or memorandum of
understanding with, or a party to any commitment letter, board resolution
or similar undertaking to, or is subject to any order or directive by, or
is a recipient of any extraordinary supervisory letter from, any
governmental authority that restricts materially the conduct of its
business, or in any manner relates to its capital adequacy, its credit or
reserve policies or its management, nor has Pinnacle been advised by any
governmental authority that it is contemplating issuing or requesting (or
is considering the appropriateness of issuing or requesting) any such
order, decree, agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter or similar submission. Neither
Pinnacle nor any of Pinnacle's subsidiaries is required by applicable law
to give prior notice to a Federal banking agency of the proposed addition
of an individual to its board of directors or the employment of an
individual as a senior or executive officer. As of the date of this Plan
of Merger, Pinnacle knows of no reason why the regulatory approvals
referred to in Sections 3.1.4 and 4.1.4 (REQUIRED APPROVALS) cannot be
obtained or why the process would be materially impeded.
4.15 TAX MATTERS.
4.15.1 TAXES DEFINED. "TAXES" means any federal, state, county,
local, or foreign taxes, charges, assessments, levies, deficiencies,
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or other governmental fees, charges, or amounts required to be
collected, withheld, or paid to any government, agency, or political
subdivision of any government in respect to any tax or governmental
fee or charge, together with any penalties, additions to tax or
interest, due under any applicable law, regulation, rule, or ordinance
to any governmental unit or agency, including, without limitation,
taxes with respect to income, profits, gross receipts, value added, AD
VALOREM, employment, unemployment, withholding, backup withholding,
nonresident alien withholding, social security, real property,
personal property, sales, use, excise, intangibles, license,
franchise, capital stock, and disability, and payments based on
occupation, services rendered, real property, personal property or
transfer.
4.15.2 TAX RETURNS. Pinnacle and its subsidiaries have each
duly and timely filed or delivered, and if necessary amended, all tax
returns, information returns, estimates, declarations, reports,
statements and other filings that are required by law, regulation,
rule, or ordinance (collectively, "TAX RETURNS"). Each such Tax
Return, as amended, is correct, complete and complies in all material
respects with all applicable laws, regulations, rules, and ordinances.
Pinnacle and its subsidiaries have each maintained all necessary and
appropriate accounting records to support the positions taken on all
filed Tax Returns and all exemptions from filing Tax Returns.
4.15.3 TAX ASSESSMENTS AND PAYMENTS. All Taxes due and payable
by Pinnacle and Pinnacle's subsidiaries have been paid or deposited in
full as and when due, including applicable extension periods. Each of
Pinnacle and Pinnacle's subsidiaries have withheld and paid over all
Taxes required to have been withheld and paid over, and complied with
all information reporting and backup withholding requirements,
including maintenance of required records with respect thereto, in
connection with amounts paid or owing to any employee, creditor,
independent contractor or other third parties. The provisions made
for Taxes on Pinnacle's Financial Statements as of December 31, 1998,
are sufficient for the payment of all accrued but unpaid Taxes as of
the date indicated, whether or not disputed, with respect to all
periods through December 31, 1998. There is no lien on any of
Pinnacle's or its subsidiaries' assets or properties with respect to
Taxes, except for liens for Taxes not yet due and payable.
4.15.4 TAX AUDITS. None of the Tax Returns of Pinnacle and its
subsidiaries filed for any tax year after 1989 have been audited by
the Internal Revenue Service (the "IRS") or any state or local taxing
authority. There is no tax audit or legal or administrative
proceeding concerning the accuracy of tax or information returns or
the assessment or collection of Taxes pending or, to Pinnacle's
knowledge, threatened with respect to Pinnacle or its subsidiaries.
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No claim concerning the calculation, assessment or collection of taxes
has been asserted with respect to Pinnacle or its subsidiaries. No
waiver or extension of any statute of limitations is in effect with
respect to Taxes or Tax Returns of Pinnacle or its subsidiaries.
4.15.5 TAX ACCOUNTING. Neither Pinnacle nor its subsidiaries
have been required to include in income any adjustment pursuant to
Section 481 of the Internal Revenue Code by reason of a voluntary
change in accounting method initiated by Pinnacle or its subsidiaries
and the IRS has not initiated or proposed any such adjustment or
change in accounting method. Neither Pinnacle nor its subsidiaries
has entered into a transaction which is being accounted for as an
installment obligation under Section 453 of the Internal Revenue Code.
4.15.6 EXCESS PARACHUTE PAYMENTS. No compensation that could be
payable (whether in cash, stock, options, or other property or the
vesting of property or other rights) by Pinnacle, its subsidiaries,
its affiliates, or any of their respective successors under any
employment, option, benefit plan, severance, termination or other
compensation arrangement currently in effect is, or will be, an
"excess parachute payment" (as defined in Section 280G of the Internal
Revenue Code).
4.16 TITLE TO PROPERTIES. Pinnacle and each of its subsidiaries have
good, sufficient, and marketable title to all of their properties and
assets, whether real, personal, or a combination thereof, reflected in
their books and records as being owned (including those reflected in
Pinnacle's Financial Statements as of December 31, 1998, except as since
disposed of in the ordinary course of business), free and clear of all
liens and encumbrances, except:
4.16.1 REFLECTED ON BALANCE SHEET. As reflected on Pinnacle's
Financial Statements as of December 31, 1998;
4.16.2 NORMAL TO BUSINESS. Liens for current Taxes not yet
delinquent, and liens or encumbrances that are normal to the business
of Pinnacle and that would not have a Material Adverse Effect on
Pinnacle; and
4.16.3 IMMATERIAL IMPERFECTIONS. Such imperfections of title,
easements, restrictions, and encumbrances, if any, as are not material
in character, amount, or extent, and do not materially detract from
the value, or materially interfere with the present use, of the
properties subject thereto or affected thereby.
4.17 CONDITION OF REAL PROPERTY. With respect to each parcel of real
property owned, legally and beneficially, by Pinnacle or Pinnacle's
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subsidiaries, including other real estate owned ("PINNACLE'S REAL
PROPERTY"), to its knowledge:
4.17.1 NO ENCROACHMENTS. Except for those encroachments that
have been insured over by a policy of title insurance, no building or
improvement to Pinnacle's Real Property encroaches on any easement or
property owned by another person. No building or property owned by
another person encroaches on Pinnacle's Real Property or on any
easement benefitting Pinnacle's Real Property. None of the boundaries
of Pinnacle's Real Property deviates substantially from those shown on
the survey of such property, if any, included with the Pinnacle
Disclosure Statement or from what the boundaries appear to be through
visual inspection. No claim of encroachment has been asserted by any
person with respect to Pinnacle's Real Property.
4.17.2 ZONING. Neither Pinnacle, any of Pinnacle's
subsidiaries, nor Pinnacle's Real Property is in material violation of
any zoning regulation, building restriction, restrictive covenant,
ordinance, or other law, order, regulation, or requirement relating to
Pinnacle's Real Property.
4.17.3 BUILDINGS. All buildings and improvements to Pinnacle's
Real Property are in good condition (normal wear and tear excepted),
are structurally sound and are not in need of material repairs, are
fit for their intended purposes, and are adequately serviced by all
utilities necessary for the effective operation of business as
presently conducted at that location.
4.17.4 NO CONDEMNATION. None of Pinnacle's Real Property is the
subject of any condemnation action. There is no proposal under active
consideration by any public or governmental authority or entity to
acquire Pinnacle's Real Property for any governmental purpose.
4.18 REAL AND PERSONAL PROPERTY LEASES. With respect to each lease
and license pursuant to which Pinnacle or any of Pinnacle's subsidiaries,
as lessee or licensee, has possession of real or personal property,
excluding any personal property lease with payments of less than $25,000
per year ("PINNACLE'S LEASES"):
4.18.1 VALID. Each of Pinnacle's Leases is valid, effective,
and enforceable against the lessor or licensor in accordance with its
terms.
4.18.2 NO DEFAULT. There is no existing default under any of
Pinnacle's Leases or any event that with notice or passage of time, or
both, would constitute a default with respect to Pinnacle, any of
Pinnacle's subsidiaries, or any other party to the contract, which
default would have a Material Adverse Effect on Pinnacle.
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4.19 ASSIGNMENT. None of Pinnacle's Leases contain a prohibition
against assignment by Pinnacle or any of Pinnacle's subsidiaries, by
operation of law or otherwise, or any provision that would materially
interfere with the possession or use of the property by Old Kent or its
subsidiaries for the same purposes and upon the same rental and other terms
following consummation of the Merger as are applicable to Pinnacle or
Pinnacle's subsidiaries prior to the Effective Time.
4.20 REQUIRED LICENSES, PERMITS, ETC.
4.20.1 LICENSES, PERMITS, ETC. Pinnacle and each of Pinnacle's
subsidiaries hold all licenses, certificates, permits, franchises, and
rights from all appropriate federal, state, and other public
authorities necessary for the conduct of its business as presently
conducted, the lack of which would not have a Material Adverse Effect
on Pinnacle or Pinnacle's subsidiaries.
4.20.2 REGULATORY ACTION. Neither Pinnacle nor any of its
subsidiaries nor any of their directors has within the last five years
been charged by a regulatory authority with, or to Pinnacle's
knowledge is under governmental investigation with respect to, any
actual or alleged violation of any statute, ordinance, rule,
regulation, guideline, or standard applicable to Pinnacle or its
subsidiaries' businesses. Neither Pinnacle nor any of its
subsidiaries nor any of their directors is the subject of any pending
or, to Pinnacle's knowledge, threatened proceeding by any regulatory
authority having jurisdiction over the business, properties, or
operations of Pinnacle or its subsidiaries.
4.21 DATA PROCESSING AND OTHER MATERIAL CONTRACTS. Except as
described in the Pinnacle Disclosure Statement:
4.21.1 DATA PROCESSING. All material data processing contracts
of Pinnacle or Pinnacle's subsidiaries are cancelable on or before
December 31, 1999, without cost or penalty.
4.21.2 CHANGE OF CONTROL. There is no agreement, contract,
loan, mortgage, deed of trust, lease, commitment, indenture, note, or
other instrument under which (a) a consent or approval is required,
(b) an assignment by operation of law is prohibited, (c) a waiver or
loss of any right, or (d) acceleration of any obligation would occur,
as a result of the change of control of Pinnacle or its subsidiaries
upon consummation of the Merger where (w) the failure to obtain such
consent or approval, (x) the violation of prohibition against
assignment, (y) the waiver or loss of any right, or (z) the
acceleration of any obligation could materially interfere with the
ordinary course of business by Pinnacle or its subsidiaries (or Old
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Kent or its subsidiaries as their successors) or have a Material
Adverse Effect on Pinnacle or its subsidiaries.
4.22 CERTAIN EMPLOYMENT MATTERS.
4.22.1 EMPLOYMENT POLICIES, PROGRAMS, AND PROCEDURES. The
policies, programs, and practices of Pinnacle relating to equal
opportunity and affirmative action, wages, hours of work, employee
disabilities, and other terms and conditions of employment are in
compliance in all material respects with applicable federal, state,
and local laws, orders, regulations, and ordinances governing or
relating to employment and employer practices and facilities.
4.22.2 RECORD OF PAYMENTS. There is no existing or outstanding
obligation of Pinnacle or any of Pinnacle's subsidiaries, whether
arising by operation of law, civil or common, by contract, or by past
custom, for any Employment-Related Payment (as defined in
Section 4.22.3 (EMPLOYMENT-RELATED PAYMENTS)) to any trust, fund,
company, governmental agency, or any person that has not been duly
recorded on the books and records of Pinnacle and paid when due or
duly accrued in the ordinary course of business in accordance with
GAAP.
4.22.3 EMPLOYMENT-RELATED PAYMENTS. For purposes of this Plan
of Merger, "EMPLOYMENT-RELATED PAYMENTS" include any payment to be
made with respect to any contract for employment; unemployment
compensation benefits; profit sharing, pension, or retirement
benefits; social security benefits; fringe benefits, including
vacation, or holiday pay, bonuses, and other forms of compensation; or
for medical insurance or medical expenses; any of which are payable
with respect to any present or former director, officer, employee, or
agent, or his or her survivors, heirs, legatees, or legal
representatives.
4.22.4 EMPLOYMENT CLAIMS. There is no dispute, claim, or
charge, pending or, to Pinnacle's knowledge, threatened, alleging
breach of any express or implied employment contract or commitment, or
breach of any applicable law, order, regulation, public policy, or
ordinance relating to employment or terms and conditions of
employment. There is no factual basis for any valid claim or charge
with regard to such employment-related matters.
4.22.5 EMPLOYMENT RELATED AGREEMENTS. There is no written or
oral, express or implied:
(a) Employment contract or agreement, or guarantee of job
security, made with or to any past or present employee of
Pinnacle or any of Pinnacle's subsidiaries that is not terminable
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by Pinnacle or Pinnacle's subsidiaries upon 60 days' or less
notice without penalty or obligation;
(b) Plan, contract, arrangement, understanding, or practice
providing for bonuses, pensions, options, stock purchases,
deferred compensation, retirement payments, retirement benefits
of the type described in Statement of Financial Accounting
Standard No. 106, or profit sharing; or
(c) Plan, agreement, arrangement, or understanding with
respect to payment of medical expenses, insurance (except
insurance continuation limited to that required under provisions
of the Consolidated Omnibus Budget Reconciliation Act), or other
benefits for any former employee or any spouse, child, member of
the same household, estate, or survivor of any employee.
4.23 EMPLOYEE BENEFIT PLANS. With respect to any "employee welfare
benefit plan," any "employee pension benefit plan," or any "employee
benefit plan" within the respective meanings of Sections 3(1), 3(2), and
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (each referred to as an "EMPLOYEE BENEFIT PLAN"), maintained by
or for the benefit of Pinnacle or Pinnacle's subsidiaries or to which
Pinnacle or any of Pinnacle's subsidiaries has made payments or
contributions on behalf of its employees:
4.23.1 ERISA COMPLIANCE. Pinnacle, each of Pinnacle's
subsidiaries, each Employee Benefit Plan, and all trusts created
thereunder are in substantial compliance with ERISA, and all other
applicable laws and regulations insofar as such laws and regulations
apply to such plans and trusts.
4.23.2 INTERNAL REVENUE CODE COMPLIANCE. Pinnacle, each of
Pinnacle's subsidiaries, each Employee Benefit Plan that is intended
to be a qualified plan under Section 401(a) of the Internal Revenue
Code, and all trusts created thereunder are in substantial compliance
with the applicable provisions of the Internal Revenue Code.
4.23.3 PROHIBITED TRANSACTIONS. No Employee Benefit Plan and no
trust created thereunder has been involved, subsequent to June 30,
1974, in any nonexempt "prohibited transaction" as defined in Section
4975 of the Internal Revenue Code and in Sections 406, 407, and 408 of
ERISA.
4.23.4 PLAN TERMINATION. No Employee Benefit Plan that is a
qualified plan under Section 401(a) of the Internal Revenue Code and
no trust created thereunder has been terminated, partially terminated,
curtailed, discontinued, or merged into another plan or trust after
January 1, 1985, except in compliance with notice and disclosure to
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the Internal Revenue Service and the Pension Benefit Guaranty
Corporation (the "PBGC"), where applicable, as required by the
Internal Revenue Code and ERISA. With respect to each plan
termination, all termination procedures have been completed and there
is no pending or potential liability to the PBGC, to any plan, or to
any participant under the terminated plan. Each plan termination,
partial termination, curtailment, discontinuance, or consolidation has
been accompanied by the issuance of a current favorable determination
letter by the IRS and, where applicable, has been accompanied by plan
termination proceedings with and through the PBGC.
4.23.5 MULTIEMPLOYER PLAN. No Employee Benefit Plan is a
"multiemployer plan" within the meaning of Section 3(37)(A) of ERISA.
4.23.6 DEFINED BENEFIT PLAN. No Employee Benefit Plan in effect
as of the date of this Plan of Merger, is a "defined benefit plan"
within the meaning of Section 3(35) of ERISA.
4.23.7 PAYMENT OF CONTRIBUTIONS. Pinnacle has made when due all
contributions required under each Employee Benefit Plan and under
applicable laws and regulations.
4.23.8 PAYMENT OF BENEFITS. There is no payment that has become
due from any Employee Benefit Plan, any trust created thereunder, or
from Pinnacle or any of Pinnacle's subsidiaries that has not been paid
through normal administrative procedures to the plan participants or
beneficiaries entitled thereto, except for claims for benefits for
which administrative claims procedures under such plan have not been
exhausted.
4.23.9 ACCUMULATED FUNDING DEFICIENCY. No Employee Benefit Plan
that is intended to be a qualified plan under Section 401(a) of the
Internal Revenue Code and no trust created thereunder has incurred,
subsequent to June 30, 1974, an "accumulated funding deficiency" as
defined in Section 412(a) of the Internal Revenue Code and Section 302
of ERISA (whether or not waived).
4.23.10 FILING OF REPORTS. Pinnacle and each of Pinnacle's
subsidiaries has filed or caused to be filed, and will continue to
file or cause to be filed, in a timely manner all filings pertaining
to each Employee Benefit Plan with the IRS, the United States
Department of Labor, and the PBGC as prescribed by the Internal
Revenue Code, ERISA, and the regulations issued thereunder. All such
filings, as amended, were complete and accurate in all material
respects as of the dates of such filings, and there were no material
misstatements or omissions in any such filing.
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4.24 ENVIRONMENTAL MATTERS.
4.24.1 HAZARDOUS SUBSTANCES. For purposes of this Plan of
Merger, "HAZARDOUS SUBSTANCE" has the meaning set forth in Section
9601 of the Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended, 42 U.S.C. <Section> 9601, ET SEQ.
("CERCLA"), and also includes any substance now or in the future
regulated by or subject to any Environmental Law (as defined below)
and any other pollutant, contaminant, or waste, including, without
limitation, petroleum, asbestos, radon, and polychlorinated biphenyls.
4.24.2 ENVIRONMENTAL LAWS. For purposes of this Plan of Merger,
"ENVIRONMENTAL LAWS" means all laws (civil or common), ordinances,
rules, regulations, guidelines, and orders that: (a) regulate the
generation, manufacture, release, treatment, containment, storage,
handling, transportation, disposal, or management of Hazardous
Substances; (b) regulate or prescribe standards or requirements for
the protection of air, water, or soil quality; (c) are intended to
protect public health or the environment; or (d) establish liability
for the investigation, removal, or cleanup of, or damage caused by,
any Hazardous Substance.
4.24.3 OWNED OR OPERATED PROPERTY. With respect to: (i) the
real estate owned or leased by Pinnacle or any of Pinnacle's
subsidiaries or used in the conduct of their businesses; (ii) other
real estate owned by each Pinnacle Bank; (iii) real estate held and
administered in trust by each Pinnacle Bank; and (iv) to Pinnacle's
knowledge, any real estate formerly owned or leased by Pinnacle or
each Pinnacle Bank (for purposes of this Section, properties described
in any of (i) through (iv) are collectively referred to as
"PREMISES"):
(a) CONSTRUCTION AND CONTENT. To its knowledge after
reasonable inquiry, none of the Premises is constructed of, or
contains as a component part, any material that (either in its
present form or as it may reasonably be expected to change
through aging or normal use) releases or may release any
Hazardous Substance in violation of applicable law. Without
limiting the generality of this Section, the Premises are free of
asbestos except to the extent properly sealed or encapsulated in
compliance with all applicable Environmental Laws and all
workplace safety and health laws and regulations.
(b) USES OF PREMISES. To its knowledge after reasonable
inquiry, no part of the Premises has been used for the
generation, manufacture, handling, containment, treatment,
transportation, storage, disposal, or management of Hazardous
Substances
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(c) UNDERGROUND STORAGE TANKS. To its knowledge after
reasonable inquiry, the Premises do not contain, and have never
contained, any underground storage tanks. With respect to any
underground storage tank that is listed in the Pinnacle
Disclosure Statement as an exception to the foregoing, each such
underground storage tank presently or previously located on
Premises is or has been maintained or removed, as applicable, in
compliance with all applicable Environmental Laws, and has not
been the source of any release of a Hazardous Substance to the
environment that has not been remediated.
(d) ABSENCE OF CONTAMINATION. To its knowledge, the
Premises do not contain and are not contaminated by any
reportable quantity, or any quantity or concentration in excess
of applicable cleanup standards, of a Hazardous Substance from
any source.
(e) ENVIRONMENTAL SUITS AND PROCEEDINGS. To its knowledge
after reasonable inquiry, there is no action, suit,
investigation, liability, inquiry, or other proceeding, ruling,
order, notice of potential liability, or citation involving
Pinnacle or any of Pinnacle's subsidiaries that is pending,
threatened, or previously asserted under, or as a result of any
actual or alleged failure to comply with any requirement of, any
Environmental Law. To its knowledge, there is no basis for any
of the foregoing.
(f) NO IRPTA REAL PROPERTY. None of the Premises
constitutes "real property" within the meaning of the Illinois
Responsible Property Transfer Act, as amended.
4.24.4 LOAN PORTFOLIO. With respect to any real estate securing
any outstanding loan or related security interest and any owned real
estate acquired in full or partial satisfaction of a debt previously
contracted, Pinnacle and each of Pinnacle's subsidiaries has complied
in all material respects with their policies (as such policies may
have been in effect from time to time and as disclosed in the Pinnacle
Disclosure Statement), and all applicable laws and regulations,
concerning the investigation of each such property to determine
whether or not there exists or is reasonably likely to exist any
Hazardous Substance on, in, or under such property and whether or not
a release of a Hazardous Substance has occurred at or from such
property.
4.25 DUTIES AS FIDUCIARY. Each Pinnacle Bank has performed all of
its duties in any capacity as trustee, executor, administrator, registrar,
guardian, custodian, escrow agent, receiver, or other fiduciary in a
fashion that complies in all material respects with all applicable laws,
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regulations, orders, agreements, wills, instruments, and common law
standards. No Pinnacle Bank has received notice of any claim, allegation,
or complaint from any person that either Pinnacle Bank failed to perform
these fiduciary duties in the required manner.
4.26 INVESTMENT BANKERS AND BROKERS. Pinnacle has employed Donaldson
Lufkin & Jenrette ("DLJ") in connection with the Merger. Pinnacle,
Pinnacle's subsidiaries, and their respective affiliates, directors,
officers, and agents (collectively, "PINNACLE'S REPRESENTATIVES") have not
employed, engaged, or consulted with any broker, finder, or investment
banker other than DLJ in connection with this Plan of Merger or the Merger.
Other than the fees and expenses payable by Pinnacle to DLJ in connection
with the Merger, as described in the Pinnacle Disclosure Statement, there
is no investment banking fee, financial advisory fee, brokerage fee,
finder's fee, commission, or compensation payable by Pinnacle or any of
Pinnacle's subsidiaries to any person with respect to the Plan of Merger or
the consummation of the Merger. True and complete copies of each
agreement, arrangement, and understanding between Pinnacle and DLJ are
included in the Pinnacle Disclosure Statement. Pinnacle has no express or
implied agreement, arrangement, or understanding with any person other than
DLJ relative to the payment of any investment banking fee, financial
advisory fee, brokerage fee, finder's fee, commission, or compensation with
respect to this Plan of Merger or the consummation of the Merger.
4.27 FAIRNESS OPINION. Pinnacle's board of directors has received
the opinion of DLJ, in its capacity as Pinnacle's financial advisor,
substantially to the effect that the consideration to be received by the
holders of the Pinnacle Common Stock in the Merger is fair to the holders
from a financial point of view, a copy of which has been, or promptly will
be, provided to Old Kent.
4.28 PINNACLE-RELATED PERSONS. For purposes of this Plan of Merger,
the term "PINNACLE-RELATED PERSON" shall mean any director or executive
officer of Pinnacle or any of Pinnacle's subsidiaries, their spouses and
children, any person who is a member of the same household as such persons,
and any corporation, partnership, proprietorship, trust, or other entity of
which any such persons, alone or together, have Control.
4.28.1 CONTROL OF MATERIAL ASSETS. Other than in a capacity as
a shareholder, director, or executive officer of Pinnacle or
Pinnacle's subsidiaries, no Pinnacle-Related Person owns or controls
any material assets or properties that are used in the business of
Pinnacle or any of Pinnacle's subsidiaries.
4.28.2 CONTRACTUAL RELATIONSHIPS. Other than ordinary and
customary banking relationships, no Pinnacle-Related Person has any
contractual relationship with Pinnacle or any of Pinnacle's
subsidiaries.
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4.28.3 LOAN RELATIONSHIPS. No Pinnacle-Related Person has any
outstanding loan or loan commitment from, or on whose behalf an
irrevocable letter of credit has been issued by, Pinnacle or any of
Pinnacle's subsidiaries in a principal amount of $60,000 or more.
4.29 CHANGE IN BUSINESS RELATIONSHIPS. Neither Pinnacle nor any of
Pinnacle's subsidiaries has notice, whether on account of the Merger or
otherwise, that: (a) any customer, agent, representative, or supplier of
Pinnacle or any of Pinnacle's subsidiaries intends to discontinue,
diminish, or change its relationship with Pinnacle or any of Pinnacle's
subsidiaries, the effect of which would have a Material Adverse Effect on
Pinnacle; or (b) any executive officer of Pinnacle or any of Pinnacle's
subsidiaries intends to terminate his or her employment.
4.30 INSURANCE. Pinnacle and each of Pinnacle's subsidiaries
maintain in full force and effect insurance on their respective assets,
properties, premises, operations, and personnel in such amounts and against
such risks and losses as are customary and adequate for comparable entities
engaged in the same business and industry. There is no unsatisfied claim
of $100,000 or more under such insurance as to which the insurance carrier
has denied liability. During the last five years, no insurance company has
canceled or refused to renew a policy of insurance covering Pinnacle's or
any of Pinnacle's subsidiaries' assets, properties, premises, operations,
or personnel. Pinnacle and each of Pinnacle's subsidiaries have given
adequate and timely notice to each insurance carrier, and have complied
with all policy provisions, with respect to any known claim for which a
defense and/or indemnification may be available to Pinnacle or any of
Pinnacle's subsidiaries.
4.31 BOOKS AND RECORDS. The books of account, minute books, stock
record books, and other records of Pinnacle are complete and correct in all
material respects and have been maintained in accordance with sound
business practices, including the maintenance of an adequate internal
control system. The corporate minute books of Pinnacle and each of
Pinnacle's subsidiaries contain accurate and complete records of all
meetings of, and corporate action taken by, their shareholders, boards, and
committees thereof. Since January 1, 1990, the minutes of each meeting (or
corporate action without a meeting) of any such shareholders, boards, or
committees have been duly prepared and are contained in such minute books.
Upon Old Kent's request, all such minute books and related exhibits or
attachments have been or will be made available for Old Kent's review.
4.32 LOAN GUARANTEES. All guarantees of indebtedness owed to
Pinnacle or any of Pinnacle's subsidiaries, including without limitation
those of the Federal Housing Administration, the Small Business
Administration, and other state and federal agencies, are valid and
enforceable.
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4.33 EVENTS SINCE DECEMBER 31, 1998. Neither Pinnacle nor any of
Pinnacle's subsidiaries has, since December 31, 1998:
4.33.1 BUSINESS IN ORDINARY COURSE. Other than as contemplated
by this Plan of Merger, conducted its business other than in the
ordinary course, or incurred or become subject to any liability or
obligation, except liabilities incurred in the ordinary course of
business, and except for any single liability or for the aggregate of
any group of related liabilities that do not exceed $100,000.
4.33.2 STRIKES OR LABOR TROUBLE. Experienced or, to its
knowledge, been threatened by any strike, work stoppage,
organizational effort, or other labor trouble, or any other event or
condition of any similar character that has had or could reasonably be
expected to have a Material Adverse Effect on Pinnacle.
4.33.3 DISCHARGE OF OBLIGATIONS. Discharged or satisfied any
lien or encumbrance, or paid any obligation or liability other than
those shown on Pinnacle's Financial Statements as of December 31,
1998, or incurred after that date, other than in the ordinary course
of business, except for such liens, encumbrances, liabilities, and
obligations that do not in the aggregate exceed $100,000.
4.33.4 MORTGAGE OF ASSETS. Mortgaged, pledged, or subjected to
lien, charge, or other encumbrance any of its assets, or sold or
transferred any such assets, except in the ordinary course of
business, except for such mortgages, pledges, liens, charges, and
encumbrances for indebtedness that do not in the aggregate exceed
$100,000.
4.33.5 CONTRACT AMENDMENT OR TERMINATION. Made or permitted any
amendment or early termination of any contract to which it is a party
and that is material to the financial condition, income, expenses,
business, properties, operations, or prospects of Pinnacle, except as
may be expressly provided in this Plan of Merger.
4.34 RESERVE FOR LOAN LOSSES. The allowance for loan losses as
reflected in Pinnacle's Financial Statements and Call Reports for the
periods ended December 31, 1998, was and will be, as of their respective
dates, (a) adequate to meet all reasonably anticipated loan and lease
losses, net of recoveries related to loans previously charged off as of
those dates, and (b) consistent with GAAP and safe and sound banking
practices.
4.35 LOAN ORIGINATION AND SERVICING. In originating, underwriting,
servicing, purchasing, selling, transferring, and discharging loans,
mortgages, land contracts, and other contractual obligations, either for
its own account or for the account of others, each of Pinnacle's
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subsidiaries has complied with all applicable terms and conditions of such
obligations and with all applicable laws, regulations, rules, contractual
requirements, and procedures, except for incidents of noncompliance that
would not, individually or in the aggregate, have a Material Adverse Effect
on Pinnacle or Pinnacle's subsidiaries.
4.36 PUBLIC COMMUNICATIONS; SECURITIES OFFERING. Each annual report,
quarterly report, proxy material, press release, or other communication
previously sent or released by Pinnacle to Pinnacle's shareholders or the
public did not contain any untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under that they were
made, not misleading.
4.37 NO INSIDER TRADING. Pinnacle has reviewed its stock transfer
records since December 31, 1995, and has questioned its directors and
executive officers concerning known stock transfers since that date. Based
upon that investigation, Pinnacle has not, and to Pinnacle's knowledge (a)
no director or officer of Pinnacle; (b) no person related to any such
director or officer by blood or marriage and residing in the same
household, and (c) no person knowingly provided material nonpublic
information by any one or more of these persons; has purchased or sold, or
caused to be purchased or sold, any shares of Pinnacle Common Stock during
any period when Pinnacle was in possession of material nonpublic
information or in violation of any applicable provision of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT").
4.38 YEAR 2000 COMPLIANCE. Pinnacle and Pinnacle Bank have adopted
plans and procedures consistent with good business practices and the
requirements of their primary bank regulator for their Year 2000 Assets (as
defined below) to be timely modified, upgraded or replaced to become Year
2000 Ready (as defined below). Set forth in the Pinnacle Disclosure
Statement are copies of all letters and responses between Pinnacle or
Pinnacle's subsidiaries and their vendors relating to such compliance
matters. The cost of achieving Year 2000 Readiness for any Year 2000
Assets that are not Year 2000 Ready would not have a Material Adverse
Effect on Pinnacle or Pinnacle's subsidiaries. No representation is made
relating to the compatibility of the technology used by Pinnacle or
Pinnacle's subsidiaries with that used by Old Kent or with respect to the
cost of integrating the technology of Pinnacle or Pinnacle's subsidiaries
with that used by Old Kent. "YEAR 2000 ASSETS" means all buildings,
plants, structures, machinery, equipment, software, hardware, computer
systems and other property owned, leased, licensed or used by Pinnacle or
Pinnacle's subsidiaries in their business. "YEAR 2000 READY" means that
the Year 2000 Asset accurately processes and handles date and time data,
including but not limited to performing all leap year calculations and
calculating, comparing and sequencing during and between the years 1999 and
2000 and all other years, and will not malfunction, cease to function or
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provide invalid or incorrect results or data as a result of date or time
data, including when a Year 2000 Asset is used in combination with or is
interfacing with any other Year 2000 Asset or with any other asset or
information technology.
4.39 SUBSIDIARIES AND JOINT VENTURES. Neither Pinnacle nor any of
its subsidiaries is, directly or indirectly, a party to or bound by any
joint venture or strategic alliance agreement or arrangement with any
unaffiliated person providing for their cooperative development, marketing,
referrals, or sales of banking, securities, insurance, or other financial
products or services.
4.40 ACCOUNTING AND TAX TREATMENT. Neither Pinnacle nor, to its
knowledge, any of its affiliates, has taken or agreed to take any action or
knows of any reason that, with respect to Pinnacle and its affiliates,
would prevent Old Kent from accounting for the business combination to be
effected by the Merger as a pooling-of-interests. Pinnacle is aware of no
reason why the Merger will fail to qualify as a reorganization under
Section 368(a) of the Internal Revenue Code.
4.41 TRUE AND COMPLETE INFORMATION. No schedule, statement, list,
certificate, or other information furnished or to be furnished by Pinnacle
in connection with this Plan of Merger, including the Pinnacle Disclosure
Statement, contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact necessary to make the
statements contained therein, in light of the circumstances in which they
are made, not misleading.
ARTICLE V - COVENANTS PENDING CLOSING
Subject to the terms and conditions of this Plan of Merger, Pinnacle
and Old Kent further agree that:
5.1 DISCLOSURE STATEMENTS; ADDITIONAL INFORMATION.
5.1.1 FORM AND CONTENT. Each party's Disclosure Statement shall
be substantially in the form contained in EXHIBIT C. It shall contain
appropriate references and cross-references with respect to
disclosures, and appropriate identifying markings with respect to
documents, that pertain to one or more sections or articles of this
Plan of Merger. Each party shall deliver two complete copies of its
Disclosure Statement.
5.1.2 UPDATE. Not less than six business days prior to the
Closing, each party shall deliver to the other an update to its
Disclosure Statement describing any material changes and containing
any new or amended documents, as specified below, that are not
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contained in its Disclosure Statement as initially delivered. This
update shall not cure any breach of a representation or warranty
occurring at the time of execution of this Plan of Merger.
5.1.3 CERTIFICATION. Each party's Disclosure Statement and its
update shall each be certified on its behalf by its chief executive
officer and its chief financial officer (or, in the case of Old Kent,
such other executive officer(s) as may be appropriate) that such
Disclosure Statement contains no untrue statement of a material fact,
or fails to omit to state a material fact necessary to make the
statements contained therein, in light of the circumstances in which
they are made, not misleading.
5.1.4 PINNACLE'S SCHEDULE OF ADDITIONAL INFORMATION. Pinnacle
shall prepare and, within 45 days after the date of the Plan of
Merger, deliver to Old Kent two copies of the Schedule of Additional
Information attached as EXHIBIT D. The Schedule of Additional
Information shall contain the information described in EXHIBIT D with
appropriate references and cross-references with respect to
disclosures and appropriate identifying marking with respect to
documents. In addition, the Schedule of Additional Information shall
contain true and correct copies of each and every document specified
in EXHIBIT D.
5.2 CHANGES AFFECTING REPRESENTATIONS. While this Plan of Merger is
in effect, if either Old Kent or Pinnacle becomes aware of any facts or of
the occurrence or impending occurrence of any event that (a) would cause
one or more of the representations and warranties it has given in Article
III or IV, respectively, subject to the exceptions contained in the
Pinnacle Disclosure Statement or the Old Kent Disclosure Statement,
respectively, to become untrue or incomplete; or (b) would have caused one
or more of such representations and warranties to be untrue or incomplete
had such facts been known or had such event occurred prior to the date of
this Plan of Merger, then such party (the "NOTIFYING PARTY") shall
immediately give detailed written notice of such discovery or change,
including a detailed description of the underlying facts or events, to the
other party; and unless waived by the other party in writing, the Notifying
Party shall use all reasonable efforts to take remedial or preventative
action, if possible, in order that such representations and warranties will
be true and complete at the Closing. No remedial action taken by a
Notifying Party shall be deemed to cure a breach of any representation or
warranty given by the Notifying Party in this Plan of Merger, unless such
cure is to the reasonable satisfaction of the other party.
5.3 PINNACLE'S CONDUCT OF BUSINESS PENDING THE EFFECTIVE
TIME. Pinnacle agrees that, until the Effective Time, except as consented
to in writing by Old Kent or as otherwise provided in this Plan of Merger,
Pinnacle shall, and it shall cause each of its subsidiaries to:
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5.3.1 ORDINARY COURSE. Conduct its business and manage its
property only in the usual, regular, and ordinary course and not
otherwise, in substantially the same manner as prior to the date of
this Plan of Merger, and not make any substantial change to its
expenditures or methods of management or operation in respect of such
business or property.
5.3.2 NO INCONSISTENT ACTIONS. Take no action that would be
inconsistent with or contrary to the representations, warranties, and
covenants made by Pinnacle in this Plan of Merger, and take no action
that would cause Pinnacle's representations and warranties to become
untrue except as and to the extent required by applicable laws and
regulations or regulatory agencies having jurisdiction or this Plan of
Merger.
5.3.3 COMPLIANCE. Comply in all material respects with all
laws, regulations, agreements, court orders, and administrative orders
applicable to the conduct of its business unless the application of
such laws, regulations, or orders is being contested in good faith and
Old Kent has been notified of such contest.
5.3.4 NO AMENDMENTS. Make no change in its articles of
incorporation or its by-laws.
5.3.5 BOOKS AND RECORDS. Maintain its books, accounts, and
records in the usual and regular manner, and in material compliance
with all applicable laws and accounting standards.
5.3.6 NO CHANGE IN STOCK. Except as contemplated by this Plan
of Merger or the Option Agreement: (a) make no change in the number
of shares of its capital stock issued and outstanding other than
pursuant to the exercise of outstanding options awarded prior to the
date of this Plan of Merger under the Option Plan; (b) grant no
warrant, option, or commitment relating to its capital stock; (c)
enter into no agreement relating to its capital stock; and (d) issue
no securities convertible into its capital stock.
5.3.7 MAINTENANCE. Use all reasonable efforts to maintain its
property and assets in their present state of repair, order, and
condition, reasonable wear and tear and damage by fire or other
casualty excepted.
5.3.8 PRESERVATION OF GOODWILL. Use all reasonable efforts to
preserve its business organization intact, to keep available the
services of its present officers and employees, and to preserve the
goodwill of its customers and others having business relations with
it.
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5.3.9 INSURANCE POLICIES. Use all reasonable efforts to
maintain and keep in full force and effect insurance coverage, so long
as such insurance is reasonably available, on its assets, properties,
premises, operations, and personnel in such amounts, against such
risks and losses, and with such self-insurance requirements as are
presently in force.
5.3.10 CHARGE-OFFS. Charge off loans and maintain its allowance
for loan losses, in each case in a manner in conformity with the prior
practices of Pinnacle and the Pinnacle Banks and applicable industry,
regulatory, and accounting standards.
5.3.11 POLICIES AND PROCEDURES. Make no material change in any
policies and procedures applicable to the conduct of its business,
including without limitation any loan and underwriting policies, loan
loss and charge-off policies, investment policies, and employment
policies, except as and to the extent required by law or regulatory
agencies having jurisdiction.
5.3.12 NEW DIRECTORS OR EXECUTIVE OFFICERS. Except to reelect
persons who are then incumbent officers and directors at annual
meetings, not (a) increase the number of directors or fill any vacancy
on the board of directors, or (b) elect or appoint any person to an
executive office.
5.3.13 COMPENSATION AND FRINGE BENEFITS. Take no action to
increase, or agree to increase, the salary, severance, or other
compensation payable to, or fringe benefits of, or pay or agree to pay
any bonus to, any officer or director, or any other class or group of
employees as a class or group, except for: (a) increases, agreements,
or payments that are reasonable in amount, consistent with the prior
year, announced or made only after first advising Old Kent, and which
shall not exceed eight percent (8%) in any individual instance or an
average of four percent (4%) for all employees collectively; (b)
previously planned salary increases that have been disclosed in
writing to Old Kent prior to the date of this Plan of Merger; and (c)
incentive compensation plan awards, as generally described in the
Pinnacle Disclosure Statement and mutually agreed by Pinnacle and Old
Kent; each of which shall be paid or become effective, as the case may
be, not later than the Effective Time; PROVIDED, that the payment of
all such compensation shall be subject to the limitations prescribed
for pooling-of-interests accounting treatment of the Merger.
5.3.14 BENEFIT PLANS. Take no action to introduce, change, or
agree to introduce or change, any pension, profit-sharing, or employee
benefit plan, fringe benefit program, or other plan or program of any
kind for the benefit of its employees unless required by law or this
Plan of Merger; make no contribution to any employee pension plan
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other than profit sharing contributions to the Pinnacle Banc Group,
Inc. Profit Sharing Plan and Trust (the "PINNACLE RETIREMENT PLAN")
and matching employer contributions to the Pinnacle Retirement Plan as
mutually agreed by Pinnacle and Old Kent.
5.3.15 NEW EMPLOYMENT AGREEMENTS. Take no action to enter into
any employment agreement that is not terminable by Pinnacle or any of
Pinnacle's subsidiaries, as the case may be, without cost or penalty
upon 60 days' or less notice, except as contemplated by this Plan of
Merger.
5.3.16 BORROWING. Take no action to borrow money except in the
ordinary course of business.
5.3.17 MORTGAGING ASSETS. Take no action to sell, mortgage,
pledge, encumber, or otherwise dispose of, or agree to sell, mortgage,
pledge, encumber, or otherwise dispose of, any of its property or
assets, except in the ordinary course of business, except for property
or assets, or any group of related properties or assets, that have a
fair market value of less than $100,000.
5.3.18 NOTICE OF ACTIONS. Notify Old Kent of the threat or
commencement of any action, suit, proceeding, claim, arbitration, or
investigation against or relating to: (a) Pinnacle or any of
Pinnacle's subsidiaries; (b) their respective directors, officers, or
employees in their capacities as such; (c) Pinnacle's or Pinnacle's
subsidiaries' assets, liabilities, businesses, or operations; or
(d) the Merger or this Plan of Merger.
5.3.19 COOPERATION. Take such reasonable actions as may be
necessary to cooperate in effecting the Merger.
5.3.20 CHARITABLE CONTRIBUTIONS. Neither make nor renew any
charitable contributions, gifts, commitments, or pledges of cash or
other assets except for contributions that, in the aggregate, will
have a fair market value not greater than $100,000 prorated for the
year 1999 through the Effective Time.
5.3.21 LARGE EXPENDITURES. Take no action to pay, agree to pay,
or incur any liability, excepting such liabilities that have been
accrued on its books as of the date of this Plan of Merger, for the
purchase or lease of any item of real property, fixtures, equipment,
or other capital asset in excess of $50,000 individually or in excess
of $100,000 in the aggregate with respect to Pinnacle, except pursuant
to prior commitments or plans made by Pinnacle that are disclosed in
the Pinnacle Disclosure Statement.
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5.3.22 NEW SERVICE ARRANGEMENTS. Take no action to enter into,
or commit to enter into, any agreement for trust, consulting,
professional, or other services to Pinnacle or any of Pinnacle's
subsidiaries that is not terminable by Pinnacle without penalty upon
60 days' or less notice, except for contracts for services under which
the aggregate required payments do not exceed $50,000, except for
legal, accounting, and other ordinary expenses related to this Plan of
Merger.
5.3.23 CAPITAL IMPROVEMENTS. Take no action to open, enlarge,
or materially remodel any bank or other facility, and not lease,
purchase, or otherwise acquire any real property for use as a branch
bank, or apply for regulatory approval of any new branch bank,
excepting pursuant to prior commitments or plans made by Pinnacle or
the Pinnacle Banks that are disclosed in the Pinnacle Disclosure
Statement.
5.4 APPROVAL OF PLAN OF MERGER. Pinnacle, acting through its board
of directors, shall, in accordance with the Illinois Act and its articles
of incorporation and by-laws, promptly and duly call, give notice of,
convene, and hold as soon as practicable following the date upon which the
Registration Statement becomes effective, a shareholders meeting for the
purpose of approving this Plan of Merger (the "SHAREHOLDERS' MEETING").
5.4.1 BOARD RECOMMENDATION. Except while a "Fiduciary Event"
(as defined below) has occurred and continues, at the Shareholders'
Meeting and in any proxy materials used in connection with the
meeting, the board of directors of Pinnacle shall recommend that its
shareholders vote for approval of this Plan of Merger.
5.4.2 SOLICITATION OF PROXIES. Except while a Fiduciary Event
has occurred and continues:
(a) Pinnacle shall use its best efforts to solicit from its
shareholders proxies to vote on the proposal to approve this Plan
of Merger and to secure a quorum at the Shareholders' Meeting.
(b) Pinnacle shall use its best efforts to secure the vote
of shareholders required by the Illinois Act and Pinnacle's
articles of incorporation and by-laws to approve this Plan of
Merger.
5.4.3 FIDUCIARY EVENT. A "FIDUCIARY EVENT" shall have occurred
when the board of directors of Pinnacle has (a) received in writing a
"Superior Proposal" (as defined below), which is then pending, (b)
determined in good faith (based on the advice of legal counsel) that
the failure to so withdraw, modify, or change its recommendation would
cause the board of directors of Pinnacle to breach its fiduciary
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duties to Pinnacle's shareholders under applicable law, and (c)
determined to accept and recommend the Superior Proposal to the
shareholders of Pinnacle.
5.4.4 SUPERIOR PROPOSAL. A "SUPERIOR PROPOSAL" means any bona
fide unsolicited Proposal (as defined in Section 5.9.2 (COMMUNICATION
OF OTHER PROPOSALS)) made by a third party on terms that the board of
directors of Pinnacle determines in its good faith judgment, based
upon the written advice of DLJ or such other financial advisor of
nationally recognized reputation, to be more financially favorable to
Pinnacle's shareholders than the Plan of Merger.
5.4.5 NOTICE. Pinnacle agrees that it shall notify Old Kent at
least two business days prior to taking any action with respect to
such Superior Proposal or taking any action with respect to the
withdrawal, modification, or change of its recommendation to
shareholders for adoption of this Plan of Merger. Notwithstanding
anything to the contrary contained in this Plan of Merger, any
withdrawal, modification, or change of recommendation upon a Fiduciary
Event in accordance with the provisions of this Section shall not
constitute a breach of this Plan of Merger by Pinnacle.
5.5 REGULAR DIVIDENDS. Pinnacle shall not declare, set aside, pay,
or make any dividend or other distribution or payment (whether in cash,
stock, or property) with respect to, or purchase or redeem, any shares of
the capital stock other than regular quarterly cash dividends in an amount
not to exceed $0.25 per share per quarter of Pinnacle Common Stock payable
on the regular historical payment dates, all in a manner consistent with
Pinnacle's past dividend practice. Old Kent and Pinnacle agree that they
will cooperate to assure that, during any calendar quarter, there shall not
be a duplication of payment of dividends to shareholders of Pinnacle.
Notwithstanding the preceding sentences, if and to the extent that the
payment of a dividend in the manner provided in this Section would, in Old
Kent's reasonable judgment, present a significant risk that under GAAP or
the rules, regulations, or interpretations of the SEC or its staff, the
Merger would not qualify for pooling-of-interests accounting treatment,
that dividend shall not be paid, but an equitable adjustment shall be made
to the Exchange Ratio for the amount of the dividend not paid.
5.6 DATA PROCESSING AND RELATED CONTRACTS. Neither Pinnacle nor
Pinnacle's subsidiaries shall enter into any new data processing agreement
without the consent of Old Kent (which consent shall not be unreasonably
withheld or delayed if such agreement is necessary for Pinnacle or
Pinnacle's subsidiaries to conduct business in the ordinary course) and
shall advise Old Kent of all anticipated renewals or extensions of existing
data processing service agreements, data processing software license
agreements, and data processing hardware lease agreements with independent
vendors. Pinnacle agrees to cooperate with Old Kent in negotiating with
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those vendors the length of any extension or renewal term of those
agreements, which, unless otherwise agreed by Old Kent, shall not exceed
one year from the date of renewal. Pinnacle agrees to send to each vendor,
as and when due, such notices of nonrenewal as may be necessary or
appropriate under the terms of the applicable agreements to prevent those
agreements from automatically renewing for a term of more than one year
from the date of renewal, except as otherwise agreed between Pinnacle and
Old Kent.
5.7 AFFILIATES -- COMPLIANCE WITH ACCOUNTING AND SECURITIES RULES.
5.7.1 PINNACLE'S AFFILIATES. Pinnacle shall use its best
efforts to cause each director, executive officer, and other person
who is an "affiliate" (for purposes of (a) Rule 145 under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and (b)
qualifying the Merger for pooling-of-interests accounting treatment)
of Pinnacle to deliver to Old Kent, as soon as practicable after the
date of this Plan of Merger, and prior to the date of the
Shareholders' Meetings, a written agreement, in the form of EXHIBIT E
(the "PINNACLE AFFILIATE AGREEMENTS"). Pinnacle shall provide a list
of such affiliates within seven days of its execution of this Plan
Merger and shall update such list as necessary upon the reasonable
request of Old Kent.
5.7.2 OLD KENT'S AFFILIATES. Old Kent use all reasonable
efforts to cause each director, executive officer, and other person
who is an "affiliate" (for the purpose of qualifying the Merger for
pooling-of-interests accounting treatment) of Old Kent, as soon as
practicable after the date of this Plan of Merger, and prior to the
date of the Shareholders' Meetings, to execute and deliver a written
agreement under which such affiliate agrees not to sell, pledge,
transfer, or otherwise dispose of his or her Old Kent Common Stock
during any period that any such disposition would, under GAAP or the
rules, regulations, or interpretations of the SEC or its staff,
disqualify the Merger for pooling-of-interests accounting treatment.
5.7.3 PUBLISHING OPERATING RESULTS. Old Kent shall use all
reasonable efforts to publish as promptly as reasonably practical but
in no event later than 30 days after the end of the first full month
after the Effective Time in which there are at least 30 days of
post-Merger combined operations (which month may be the month in which
the Effective Time occurs), combined sales and net income figures as
contemplated by and in accordance with the terms of SEC Accounting
Series Release No. 135.
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5.8 INDEMNIFICATION AND INSURANCE.
5.8.1 INDEMNIFICATION. Old Kent shall honor any and all rights
to indemnification and advancement of expenses now existing in favor
of the directors and officers of Pinnacle and Pinnacle's subsidiaries
under their articles of incorporation or bylaws which, as enforceable
contractual rights, shall survive the Merger and shall, as contractual
rights, continue with respect to acts or omissions occurring before
the Effective Time with the same force and effect as prior to the
Effective Time.
5.8.2 INSURANCE. Old Kent shall use all reasonable efforts to
cause the persons serving as officers and directors of Pinnacle
immediately prior to the Effective Time to be covered for a period of
at least two years from the Effective Time by the directors' and
officers' liability insurance policy maintained by Pinnacle with
respect to acts or omissions occurring prior to the Effective Time
that were committed by such officers and directors in their capacity
as such. Old Kent may substitute for Pinnacle's current coverage new
coverage under policies offering at least comparable coverage and
amounts containing terms and conditions that are not materially less
advantageous than Pinnacle's current policy. In no event shall Old
Kent be required to spend, directly or indirectly through Pinnacle or
its subsidiaries, more than $70,000 per annum (the "INSURANCE AMOUNT")
to either maintain or procure insurance coverage pursuant to this Plan
of Merger. If Old Kent does not advise Pinnacle in writing prior to
the commencement of the Pricing Period that it has procured such
coverage for at least two years or agrees to do so without regard to
the Insurance Amount, Pinnacle shall be permitted (after giving Old
Kent three business days prior written notice and an additional two
business day period to purchase such coverage), in lieu of receiving
the foregoing insurance coverage, to procure tail coverage for past
acts and omissions for a single premium amount not in excess of the
Insurance Amount.
5.9 EXCLUSIVE COMMITMENT. Except as provided below, neither Pinnacle
nor any of Pinnacle's Representatives, investment bankers, or agents, shall
take any action inconsistent with the intent to consummate the Merger upon
the terms and conditions of this Plan of Merger. Without limiting the
foregoing:
5.9.1 NO SOLICITATION. Neither Pinnacle nor any of Pinnacle's
Representatives, investment bankers, or agents shall, directly or
indirectly, invite, initiate, solicit, encourage, or unless a
Fiduciary Event has occurred and continues (or a Superior Proposal
has been presented and such Superior Proposal would otherwise give
rise to a Fiduciary Event except that the board of directors of
Pinnacle, at that time, has yet to determine to accept and recommend
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the Superior Proposal to the shareholders of Pinnacle), negotiate with
any other party, any proposals, offers, or expressions of interest
concerning any tender offer, exchange offer, merger, consolidation,
sale of shares, sale of assets, or assumption of liabilities not in
the ordinary course, or other business combination involving Pinnacle
or any of Pinnacle's subsidiaries other than the Merger (a "BUSINESS
COMBINATION").
5.9.2 COMMUNICATION OF OTHER PROPOSALS. Pinnacle shall cause
written notice to be delivered to Old Kent promptly upon receipt of
any solicitation, offer, proposal, or expression of interest (a
"PROPOSAL") concerning a Business Combination. Such notice shall
contain the material terms and conditions of the Proposal to which
such notice relates and shall, unless a Fiduciary Event has occurred
and continues, contain a copy of Pinnacle's unequivocal rejection of
the Proposal in the form actually delivered to the person from whom
the Proposal was received. Thereafter, Pinnacle shall promptly notify
Old Kent of any material changes in the terms, conditions, and status
of any Proposal.
5.9.3 FURNISHING INFORMATION. Unless a Fiduciary Event has
occurred and continues (or a Superior Proposal has been presented and
such Superior Proposal would otherwise give rise to a Fiduciary Event
except that the board of directors of Pinnacle, at that time, has yet
to determine to accept and recommend the Superior Proposal to the
shareholders of Pinnacle), neither Pinnacle nor any of Pinnacle's
Representatives, investment bankers, or agents shall furnish any
nonpublic information concerning Pinnacle to any person who is not
affiliated or under contract with Pinnacle or Old Kent, except as
required by applicable law or regulations and prior to furnishing such
information to such person, Pinnacle shall receive from such person an
executed confidentiality agreement with terms no less favorable to
Pinnacle than those contained in its confidentiality agreement with
Old Kent and Pinnacle shall then provide only such information as has
been furnished previously to Old Kent.
5.9.4 CORPORATE LIABILITY FOR INDIVIDUAL'S BREACH. For the
purposes of this Section, any breach of this Section by an executive
officer or director of Pinnacle in his or her individual capacity
shall be deemed to be a breach by Pinnacle.
5.10 REGISTRATION STATEMENT. Old Kent agrees to prepare and file
with the SEC under the Securities Act, the Registration Statement and the
related Prospectus and Proxy Statement included as a part thereof covering
the issuance by Old Kent of the shares of Old Kent Common Stock as
contemplated by this Plan of Merger, together with such amendments as may
reasonably be required for the Registration Statement to become effective.
Old Kent agrees to provide Pinnacle with reasonable opportunities to review
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and comment upon the Registration Statement, each amendment to the
Registration Statement, and each form of the Prospectus and Proxy Statement
before filing. Old Kent agrees to provide Pinnacle, upon request, with
copies of all correspondence received from the SEC with respect to the
Registration Statement and its amendments and with all responsive
correspondence to the SEC. Old Kent agrees to notify Pinnacle of any stop
orders or threatened stop orders with respect to the Registration
Statement. Pinnacle agrees to provide all necessary information pertaining
to Pinnacle promptly upon request, and to use all reasonable efforts to
obtain the cooperation of Pinnacle's independent accountants and attorneys
in connection with the preparation of the Registration Statement.
5.11 OTHER FILINGS. Old Kent agrees to prepare and file with the
Federal Reserve Board, the Illinois Commissioner, and each other regulatory
agency having jurisdiction all documents reasonably required to obtain each
necessary approval of or consent to consummate the Merger. Old Kent agrees
to provide Pinnacle with reasonable opportunities to review and comment
upon such documents before filing and to make such amendments and file such
supplements thereto as Pinnacle may reasonably request. Old Kent shall
provide Pinnacle with copies of all correspondence received from these
agencies and all responsive correspondence sent to these agencies.
5.12 MISCELLANEOUS AGREEMENTS AND CONSENTS. Subject to the terms and
conditions of this Plan of Merger, each of the parties agrees to use all
reasonable efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper, or advisable under
applicable laws and regulations to consummate and make effective the
Merger. Old Kent and Pinnacle will use all reasonable efforts to obtain
consents of all third parties and governmental bodies necessary or
desirable for the consummation of the Merger.
5.13 ACCESS AND INVESTIGATION. For the purpose of permitting an
examination of one party by the other's officers, attorneys, accountants,
and representatives, each party shall:
5.13.1 ACCESS. Permit, and shall cause each of their respective
subsidiaries to permit, full access to their respective properties,
books, and records at reasonable times;
5.13.2 COOPERATION. Use reasonable efforts to cause its and each
of their respective subsidiaries' officers, directors, employees,
accountants, and attorneys to cooperate fully, for the purpose of
permitting a complete and detailed examination of such matters by the
other party's officers, attorneys, accountants, and representatives;
5.13.3 INFORMATION. Furnish to the other, upon reasonable
request, any information reasonably requested respecting its and each
of its subsidiaries' properties, assets, business, and affairs;
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5.13.4 CONSENTS. Each party acknowledges that certain
information may not be disclosed by the other without the prior
written consent of persons not affiliated with that party. If such
information is requested, then the other party shall use reasonable
efforts to obtain such prior consent and shall not be required to
disclose such information unless and until such prior consent has been
obtained.
5.13.5 RETURN AND RETENTION. In the event of termination of
this Plan of Merger, Old Kent and Pinnacle each agree to promptly
return to the other party or to destroy all written materials
furnished to it by the other party and the other party's subsidiaries,
and all copies, notes, and summaries of such written materials. Old
Kent and Pinnacle each agree to preserve intact all such materials
that are returned to them and to make such materials reasonably
available upon reasonable request or subpoena for a period of not less
than six years from the termination of this Plan of Merger.
5.14 CONFIDENTIALITY. Except as provided below, Old Kent and
Pinnacle each agree:
5.14.1 TREATMENT; RESTRICTED ACCESS. All information furnished
to the other party pursuant to this Plan of Merger shall be treated as
strictly confidential and shall not be disclosed to any other person,
natural or corporate, except for its employees, attorneys,
accountants, regulators, and financial advisers who are reasonably
believed to have a need for such information in connection with the
Merger.
5.14.2 NO OTHER USE. Neither party shall make any use, other
than related to the Merger, of any information it may come to know as
a direct result of a disclosure by the other party, its subsidiaries,
directors, officers, employees, attorneys, accountants, or advisers or
that may come into its possession from any other confidential source
during the course of its investigation.
5.14.3 EXCEPTED INFORMATION. The provisions of this
Section shall not preclude Old Kent or Pinnacle, or their respective
subsidiaries, from using or disclosing information that is readily
ascertainable from public information or trade sources, known by it
before the commencement of discussions between the parties or
subsequently developed by it or its subsidiaries independent of any
investigation under this Plan of Merger, received from any other
person who is not affiliated with a party and who is not under any
obligation to keep such information confidential, or reasonably
required to be included in any filing or application required by any
governmental or regulatory agency.
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5.14.4 PROHIBIT INSIDER TRADING. Old Kent and Pinnacle shall
each take responsible steps to assure that any person who receives
nonpublic information concerning the Merger or the other party will
treat the information confidentially as provided in this Section and
not directly or indirectly buy or sell, or advise or encourage other
persons to buy or sell, the other party's stock until such information
is properly disclosed to the public.
5.15 ENVIRONMENTAL INVESTIGATION. Old Kent shall be permitted to
conduct an environmental assessment of each parcel of Pinnacle's Real
Property and, at Old Kent's option, (a) any other real estate formerly
owned by Pinnacle or any of Pinnacle's subsidiaries, and (b) any other real
estate acquired by any of Pinnacle's subsidiaries in satisfaction of a debt
previously contracted. As to each such property:
5.15.1 PRELIMINARY ENVIRONMENTAL ASSESSMENTS. Old Kent may, at
its expense, engage an environmental consultant to conduct a
preliminary ("PHASE I") assessment of the property. Pinnacle and
Pinnacle's subsidiaries shall provide reasonable assistance, including
site access and a knowledgeable contact person, to the consultant for
purposes of conducting the Phase I assessments.
5.15.2 ENVIRONMENTAL RISKS. If there are any facts or
conditions identified in a Phase I assessment that Old Kent believes
could pose a current or future risk of a material liability,
interference with use, or diminution of value of the property, then
Old Kent shall identify that risk to Pinnacle, identify the facts or
conditions underlying that risk, and provide Pinnacle with a copy of
the Phase I assessment for that property (an "ENVIRONMENTAL RISK").
5.15.3 PHASE II AND III WORK. Old Kent may obtain one or more
estimates of the proposed scope of work and cost of any further
environmental investigation, remediation, or other follow-up work it
reasonably considers necessary or appropriate to assess and, if
necessary or appropriate, remediate an Environmental Risk ("PHASE II
AND III WORK"). Old Kent shall provide copies of those estimates to
Pinnacle. The fees and expenses of any Phase II and III Work shall be
paid by Pinnacle. Old Kent and Pinnacle shall cooperate in the
review, approval, and implementation of all work plans for Phase II
and III Work. All work plans for any Phase II and III Work shall be
mutually satisfactory to Old Kent and Pinnacle. Mutually agreed upon
Phase II and III Work shall be undertaken and completed as quickly as
possible and shall be completed prior to the Closing.
5.15.4 OLD KENT'S TERMINATION RIGHTS. If (a) Old Kent and
Pinnacle are unable to agree upon a course of action to complete any
Phase II and III Work and/or a mutually acceptable modification to
this Plan of Merger, and (b) Old Kent cannot be reasonably assured
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that the after-tax cost of the sum of (i) the actual cost of all
investigative and remedial or other corrective actions or measures
taken pursuant to Section 5.15.3 (PHASE II AND III WORK); (ii) the
estimated cost of all investigative actions and remedial or other
corrective actions or measures not undertaken but required by
Environmental Laws, or necessary to avoid future exposure to material
liability under Environmental Laws; and (iii) all diminutions of the
value of such properties; in the aggregate will not exceed $1,000,000
on an after federal income tax basis, then Old Kent may terminate this
Plan of Merger as provided in Section 8.3.3 (ENVIRONMENTAL RISKS).
5.16 EMPLOYMENT AMENDMENTS. Pinnacle shall cause the Pinnacle Banks,
prior to execution of this Plan of Merger, to obtain executed amendments
(in the form previously agreed to by Old Kent and Pinnacle) to the three
existing employment agreements with Pinnacle's senior officers providing
for, among other things, mutually agreeable no-compete and non-solicitation
covenants from those employees, which shall only become effective upon
consummation of the Merger at the Effective Time (the "EMPLOYMENT
AMENDMENTS").
5.17 TERMINATION OF PROFIT SHARING AND 401(K) PLAN. Upon request by
Old Kent, Pinnacle shall, and shall cause Pinnacle Bank to, take all action
that is necessary and appropriate in the judgment of Old Kent to terminate
the Pinnacle Retirement Plan on a mutually agreed date that is as close as
practicable to, but not more than 30 days before, the Effective Time.
5.18 ACCOUNTING AND TAX TREATMENT. During the Term of this Plan of
Merger, Old Kent and Pinnacle each agree not to take any action that would
prevent Old Kent from qualifying, or materially increase the risk of
disqualifying, the Merger as a pooling-of-interests for accounting purposes
or as a "reorganization" within the meaning of Section 368(a) of the
Internal Revenue Code; PROVIDED, that nothing in this Plan of Merger shall
limit Old Kent's ability to exercise its rights under the Option Agreement.
Old Kent and Pinnacle each agree to take such action as may be reasonably
required to negate the impact of any past actions that might adversely
impact the ability of Old Kent to treat the Merger as a pooling-of-interests.
5.19 PUBLIC ANNOUNCEMENTS. Old Kent and Pinnacle shall cooperate
with each other in the development and distribution of all news releases
and other public information disclosures with respect to this Plan of
Merger, except as may be otherwise required by law, and neither Old Kent
nor Pinnacle shall issue any news releases with respect to this Plan of
Merger or the Merger unless such news releases have been mutually agreed
upon by the parties, except as required by law.
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ARTICLE VI - CONDITIONS PRECEDENT TO OLD KENT'S OBLIGATIONS
All obligations of Old Kent under this Plan of Merger are subject to
the fulfillment (or waiver in writing by a duly authorized officer of Old
Kent), prior to or at the Closing, of each of the following conditions:
6.1 RENEWAL OF REPRESENTATIONS AND WARRANTIES, ETC.
6.1.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Pinnacle contained in this Plan of Merger shall be true
and correct when made and as of the Closing as if made at and as of
such time, except (a) as expressly contemplated or permitted by this
Plan of Merger; (b) for representations and warranties relating to a
time or times other than the Closing that were or will be true and
correct at such time or times; and (c) where the failure or failures
of such representations and warranties to be so true and correct,
individually or in the aggregate, does not result or would not result
in a Material Adverse Effect.
6.1.2 COMPLIANCE WITH AGREEMENTS. Pinnacle shall have performed
and complied with all agreements, conditions, and covenants required
by this Plan of Merger to be performed or complied with by Pinnacle
prior to or at the Closing in all material respects.
6.1.3 CERTIFICATES. Compliance with Sections 6.1.1
(REPRESENTATIONS AND WARRANTIES) and 6.1.2 (COMPLIANCE WITH
AGREEMENTS) shall be evidenced by one or more certificates signed by
appropriate officers of Pinnacle, dated as of the date of the Closing,
certifying the foregoing in such detail as Old Kent may reasonably
request, describing any exceptions to such compliance in such
certificates.
6.2 OPINION OF LEGAL COUNSEL. Pinnacle shall have delivered to Old
Kent an opinion of Burke, Warren, MacKay & Serritella, P.C., counsel for
Pinnacle, dated as of the date of the Closing and substantially in the form
contained in EXHIBIT F, with only such changes as may be reasonably
satisfactory to counsel for Old Kent.
6.3 REQUIRED REGULATORY APPROVALS. Old Kent shall have received all
such approvals, consents, authorizations, and licenses of all regulatory
and other governmental and self-regulatory authorities having jurisdiction
as may be required to permit the performance by Pinnacle and Old Kent of
their respective obligations under this Plan of Merger and the consummation
of the Merger, without the regulating authority's imposition of non-
standard conditions on approval that are not reasonably acceptable to Old
Kent.
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6.4 SHAREHOLDER APPROVAL. The shareholders of Pinnacle shall have
approved this Plan of Merger.
6.5 ORDER, DECREE, ETC. Neither Old Kent nor Pinnacle shall be
subject to any order, decree, or injunction of a court or agency of
competent jurisdiction that enjoins or prohibits the consummation of the
Merger.
6.6 PROCEEDINGS. There shall not be any action, suit, proceeding,
claim, arbitration, or investigation pending or threatened against or
relating to Pinnacle, any of Pinnacle's subsidiaries, or its or their
respective directors (in the capacity as such), officers (in the capacity
as such), properties, or businesses that may result in any liability that
could have a Material Adverse Effect on Pinnacle.
6.7 TAX MATTERS. Old Kent shall have received a tax opinion from its
counsel, reasonably satisfactory in form and substance to Old Kent,
substantially to the effect that:
6.7.1 REORGANIZATION. The Merger of Pinnacle with and into Old
Kent will constitute a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code, and Old Kent and Pinnacle
will each be a "party to a reorganization" within the meaning of
Section 368(b) of the Internal Revenue Code.
6.7.2 ASSETS' TAX BASIS. The basis of the Pinnacle assets in
the hands of Old Kent will be the same as the basis of those assets in
the hands of Pinnacle immediately prior to the Merger.
6.7.3 NO GAIN OR LOSS. No gain or loss will be recognized to
Old Kent on the receipt by Old Kent of the assets of Pinnacle in
exchange for Old Kent Common Stock and the assumption by Old Kent of
the liabilities of Pinnacle.
6.7.4 HOLDING PERIOD. The holding period of the assets of
Pinnacle in the hands of Old Kent will include the holding period
during which such assets were held by Pinnacle.
The tax opinion shall be supported by one or more fact certificates or
affidavits in such form and content as may be reasonably requested by Old
Kent's counsel from Pinnacle and its subsidiaries.
6.8 REGISTRATION STATEMENT. The Registration Statement shall have
been declared effective by the SEC and shall not be subject to a stop order
or any threatened stop order.
6.9 CERTIFICATE AS TO OUTSTANDING SHARES. Old Kent shall have
received one or more certificates dated as of the Closing date and signed
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by the secretary of Pinnacle on behalf of Pinnacle, and by the transfer
agent for Pinnacle Common Stock, certifying (a) the total number of shares
of capital stock of Pinnacle issued and outstanding as of the close of
business on the day immediately preceding the Closing; and (b) with respect
to the secretary's certification, the number of shares of Pinnacle Common
Stock, if any, that are issuable on or after that date, all in such form as
Old Kent may reasonably request.
6.10 CHANGE OF CONTROL WAIVERS. Old Kent shall have received
evidence of the consents or other waivers of any material rights and the
waiver of the loss of any material rights that may be triggered by the
change of control of Pinnacle upon consummation of the Merger under (a) any
agreement, contract, mortgage, deed of trust, lease, commitment, indenture,
note, or other instrument, under which the failure to obtain such consent
or waiver could result in a Material Adverse Effect on Pinnacle; and (b)
each contract identified in EXHIBIT H (collectively, the "DESIGNATED
CONTRACTS"); all in form and substance reasonably satisfactory to Old Kent.
6.11 POOLING ASSURANCES. Old Kent shall have received a letter
addressed to Old Kent and Pinnacle, from Pinnacle's independent
accountants, as of a date reasonably approximate to the date of the
Closing, to the effect that, as of such date, Pinnacle is eligible to
participate in a pooling-of-interests combination and a letter from Old
Kent's independent accountants, satisfactory in form and substance, to the
effect that (based in part on the letter from Pinnacle's independent
accountants) the Merger should be treated as a pooling-of-interests for
accounting and financial reporting purposes, subject to satisfaction of
post-Merger conditions.
ARTICLE VII - CONDITIONS PRECEDENT TO PINNACLE'S OBLIGATIONS
All obligations of Pinnacle under this Plan of Merger are subject to
the fulfillment (or waiver in writing by a duly authorized officer of
Pinnacle), prior to or at the Closing, of each of the following conditions:
7.1 RENEWAL OF REPRESENTATIONS AND WARRANTIES, ETC.
7.1.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Old Kent contained in this Plan of Merger shall be true
and correct when made and as of the Closing as if made at and as of
such time, except (a) as expressly contemplated or permitted by this
Plan of Merger; (b) for representations and warranties relating to a
time or times other than the Effective Time that were or will be true
and correct at such time or times; and (c) where the failure or
failures of such representations and warranties to be so true and
correct, individually or in the aggregate, does not result or would
not result in a Material Adverse Effect.
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7.1.2 COMPLIANCE WITH AGREEMENTS. Old Kent shall have performed
and complied with all agreements, conditions, and covenants required
by this Plan of Merger to be performed or complied with by Old Kent
prior to or at the Closing in all material respects.
7.1.3 CERTIFICATES. Compliance with Sections 7.1.1
(REPRESENTATIONS AND WARRANTIES) and 7.1.2 (COMPLIANCE WITH
AGREEMENTS) shall be evidenced by one or more certificates signed by
appropriate officers of Old Kent, dated as of the date of the Closing,
certifying the foregoing in such detail as Old Kent may reasonably
request, describing any exceptions to such compliance in such
certificates.
7.2 OPINION OF LEGAL COUNSEL. Old Kent shall have delivered to
Pinnacle an opinion of Warner Norcross & Judd LLP, counsel for Old Kent,
dated as of the date of the Closing and substantially in the form contained
in EXHIBIT G, with only such changes as may be reasonably satisfactory to
counsel for Pinnacle.
7.3 REQUIRED REGULATORY APPROVALS. Pinnacle or Old Kent shall have
received all such approvals, consents, authorizations, and licenses of all
regulatory and other governmental authorities having jurisdiction as may be
required to permit the performance by Pinnacle and Old Kent of their
respective obligations under this Plan of Merger and the consummation of
the Merger.
7.4 SHAREHOLDER APPROVAL. Pinnacle shall have received the requisite
approval of the shareholders of Pinnacle of this Plan of Merger.
7.5 ORDER, DECREE, ETC. Neither Old Kent nor Pinnacle shall be
subject to any applicable order, decree, or injunction of a court or agency
of competent jurisdiction that enjoins or prohibits the consummation of the
Merger.
7.6 TAX MATTERS. Pinnacle shall have received a tax opinion from Old
Kent's counsel, reasonably satisfactory in form and substance to Pinnacle,
substantially to the effect that:
7.6.1 REORGANIZATION. The Merger of Pinnacle with and into Old
Kent will constitute a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code, and Old Kent and Pinnacle
will each be a "party to a reorganization" within the meaning of
Section 368(b) of the Internal Revenue Code.
7.6.2 NO GAIN OR LOSS. No gain or loss will be recognized by
the shareholders of Pinnacle who receive shares of Old Kent Common
Stock in exchange for all of their shares of Pinnacle Common Stock,
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except to the extent of any cash received in lieu of a fractional
share of Old Kent Common Stock.
7.6.3 STOCK TAX BASIS. The basis of the Old Kent Common Stock
to be received by shareholders of Pinnacle will, in each instance, be
the same as the basis of the respective shares of Pinnacle Common
Stock surrendered in exchange therefor.
7.6.4 HOLDING PERIOD. The holding period of the Old Kent Common
Stock received by shareholders of Pinnacle will, in each instance,
include the period during which the Pinnacle Common Stock surrendered
in exchange therefor was held, PROVIDED, that the Pinnacle Common
Stock was, in each instance, held as a capital asset in the hands of
the shareholder of Pinnacle at the Effective Time.
The tax opinion shall be supported by one or more fact certificates or
affidavits in such form and content as may be reasonably requested by Old
Kent's counsel from Old Kent and its subsidiaries.
7.7 REGISTRATION STATEMENT. The Registration Statement shall have
been declared effective by the SEC and shall not be subject to a stop order
or any threatened stop order.
7.8 FAIRNESS OPINION. Pinnacle shall have received an opinion from a
nationally recognized financial advisor reasonably acceptable to Old Kent,
dated as of the date of this Plan of Merger and renewed as of a date
approximately the date of the Prospectus and Proxy Statement, to the effect
that the terms of the Merger are fair to Pinnacle's shareholders from a
financial point of view as of that date and such opinion shall not have
been subsequently withdrawn; PROVIDED, that Pinnacle shall have used all
reasonable efforts to obtain such a fairness opinion.
7.9 LISTING OF SHARES. The shares of Old Kent Common Stock that
shall be issued to the shareholders of Pinnacle upon consummation of the
Merger shall have been authorized for listing on the New York Stock
Exchange upon official notice of issuance.
7.10 EXCHANGE AGENT CERTIFICATE. Pinnacle shall have received a
certificate from the Exchange Agent certifying to receipt of certificates
for shares of Old Kent Common Stock to be issued and sufficient cash to
make payments in lieu of fractional shares as contemplated by this Plan of
Merger.
ARTICLE VIII - ABANDONMENT OF MERGER
This Plan of Merger may be terminated and the Merger abandoned at any
time prior to the Effective Time (notwithstanding that approval of this
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Plan of Merger by the shareholders of Pinnacle may have previously been
obtained) as follows:
8.1 MUTUAL ABANDONMENT. By mutual consent of the boards of
directors, or duly authorized committees thereof, of Old Kent and Pinnacle.
8.2 UPSET DATE. By either Old Kent or Pinnacle if the Merger shall
not have been consummated on or before January 31, 2000.
8.3 OLD KENT'S RIGHTS TO TERMINATE. By Old Kent under any of the
following circumstances:
8.3.1 PINNACLE DISCLOSURE STATEMENT. Old Kent shall have
reasonably determined that: (a) any exception to Pinnacle's
representations and warranties or any other information set forth in
the Pinnacle Disclosure Statement fairly indicate that the financial
value of Pinnacle is materially less than indicated by information
provided by or on behalf of Pinnacle to Old Kent in writing prior to
5:00 p.m. on March 18, 1999; (b) based upon Old Kent's preclosing
investigation of Pinnacle, there exists any set of facts or
circumstances that would have a Material Adverse Effect on Pinnacle;
or (c) Pinnacle or Pinnacle Bank is exposed to risks, or the Merger
would be likely to expose Old Kent to risks, that in the reasonable
judgment of Old Kent could result in a Material Adverse Effect with
respect to Pinnacle and Pinnacle's subsidiaries; PROVIDED, that with
respect to taking action under clauses (a), (b), or (c) of this
Subsection, Old Kent notifies Pinnacle of such abandonment and
termination not later than 6 p.m. on April 2, 1999, assuming Old
Kent's timely receipt of the Pinnacle Disclosure Statement as provided
under this Plan of Merger.
8.3.2 FAILURE TO SATISFY CLOSING CONDITIONS. If any of the
conditions specified in Article VI have not been met or waived by Old
Kent, at such time as such condition can no longer be satisfied
notwithstanding Old Kent's best efforts to comply with those covenants
given by Old Kent in this Plan of Merger.
8.3.3 ENVIRONMENTAL RISKS. If Old Kent has given Pinnacle
notice of an unacceptable Environmental Risk as provided in
Section 5.15.4 (OLD KENT'S TERMINATION RIGHTS).
8.3.4 POOLING QUALIFICATION. At any time after Old Kent's
independent accountants have advised Old Kent that they are not of the
opinion that the Merger is likely to qualify for treatment as a
pooling-of-interests for accounting and financial reporting purposes;
PROVIDED, that Old Kent shall not have wilfully taken any action to
disqualify the Merger as a pooling-of-interests for accounting and
financial reporting purposes.
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8.3.5 APPROVAL OF PINNACLE'S SHAREHOLDERS. This Plan of Merger
is not approved by the requisite vote of Pinnacle's shareholders at
the Shareholders' Meeting.
8.3.6 OCCURRENCE OF A FIDUCIARY EVENT. At any time after there
has occurred a Fiduciary Event.
8.3.7 MATERIAL ADVERSE EVENT. If there shall have occurred one
or more events that shall have caused or are reasonably likely to
cause a Material Adverse Effect on Pinnacle.
8.4 PINNACLE'S RIGHTS TO TERMINATE. By the board of directors, or a
duly authorized committee thereof, of Pinnacle under any of the following
circumstances:
8.4.1 UPSET CONDITION. If the Upset Condition exists in
accordance with Section 2.2 (UPSET PROVISION) during the time period
provided for in such Section.
8.4.2 OLD KENT DISCLOSURE STATEMENT. The cumulative effect of
any exceptions to Old Kent's representations and warranties or any
other information set forth in the Old Kent Disclosure Statement would
have a Material Adverse Effect on Old Kent; PROVIDED, that Pinnacle
notifies Old Kent of such abandonment and termination not later than 6
p.m. on April 2, 1999, assuming Pinnacle's timely receipt of the Old
Kent Disclosure Statement as provided under this Plan of Merger.
8.4.3 FAILURE TO SATISFY CLOSING CONDITIONS. If any of the
conditions specified in Article VII have not been met or waived by
Pinnacle at such time as such condition can no longer be satisfied
notwithstanding Pinnacle's best efforts to comply with those covenants
given by Pinnacle in this Plan of Merger.
8.4.4 APPROVAL OF PINNACLE'S SHAREHOLDERS. This Plan of Merger
is not approved by the requisite vote of Pinnacle's shareholders at
the Shareholders' Meeting and Pinnacle's board of directors has
advised Old Kent that it does not believe that such vote can be
obtained through reasonable further efforts.
8.4.5 MATERIAL ADVERSE EVENT. If there shall have occurred one
or more events that shall have caused or are reasonably likely to
cause a Material Adverse Effect on Old Kent.
8.5 EFFECT OF TERMINATION. In the event of termination of this Plan
of Merger by either Pinnacle or Old Kent as provided in this Article, this
Plan of Merger shall forthwith become void and have no effect, and none of
Pinnacle's, Old Kent's, any of their respective subsidiaries, or any of the
officers or directors of any of them shall have any liability of any nature
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whatsoever hereunder, or in connection with the transactions contemplated
hereby (other than the Option Agreement), except that (a) the Option
Agreement and Sections 5.14 (CONFIDENTIALITY), 8.5 (EFFECT OF TERMINATION),
9.2 (NONSURVIVAL OF REPRESENTATIONS, WARRANTIES, AND AGREEMENTS), and 9.4
(EXPENSES), shall survive any termination of this Plan of Merger, and
(b) notwithstanding anything to the contrary contained in this Plan of
Merger, neither Pinnacle nor Old Kent shall be relieved or released from
any liabilities or damages arising out of its breach of any provision of
this Plan of Merger.
ARTICLE IX - MISCELLANEOUS
Subject to the terms and conditions of this Plan of Merger, Old Kent
and Pinnacle further agree as follows:
9.1 "MATERIAL ADVERSE EFFECT" DEFINED. As used in this Plan of
Merger, the term "MATERIAL ADVERSE EFFECT" means any change or effect that,
individually or when taken together with all other such changes or effects
that have occurred prior to the date of determination of the occurrence of
the Material Adverse Effect, is or is reasonably likely to have a material
negative impact on (a) the business, assets, financial condition, results
of operations, or value of Old Kent and its subsidiaries, taken as a whole,
or, as the case may be, Pinnacle and the Pinnacle Banks, taken as a whole;
or (b) the ability of Old Kent or Pinnacle, as the case may be, to satisfy
the applicable closing conditions or consummate the Merger or perform its
obligations under the Option Agreement. Notwithstanding the above, the
impact of the following shall not be included in any determination of a
Material Adverse Effect: (a) changes in GAAP, generally applicable to
financial institutions and their holding companies, however, excluding from
this exception any material change to pooling-of-interests accounting
rules; (b) actions and omissions of a party (or any of its subsidiaries)
taken with the prior written consent of the other party; (c) changes in
economic conditions (including changes in the level of interest rates)
generally affecting financial institutions; and (d) fees and expenses
reasonably related to this transaction (such as any additional insurance
coverages, employment and consulting services, legal, accounting, and
investment banking fees and expenses, and severance and retention
provisions).
9.2 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES, AND AGREEMENTS. None
of the representations, warranties, covenants, and agreements in this Plan
of Merger or in any other agreement or instrument delivered pursuant to
this Plan of Merger, including any rights arising out of any breach of such
representations, warranties, covenants, and agreements, shall survive the
Effective Time, except for the Option Agreement, Pinnacle Affiliate
Agreements, Employment Amendments, and those covenants and agreements
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contained herein and therein that, by their terms, apply or are to be
performed in whole or in part after the Effective Time.
9.3 AMENDMENT. Subject to applicable law, this Plan of Merger may be
amended, modified, or supplemented by, and only by, written agreement of
Old Kent and Pinnacle, or by the respective officers thereunto duly
authorized, at any time prior to the Effective Time.
9.4 EXPENSES. Except as otherwise provided in this Plan of Merger,
Pinnacle and Old Kent shall each pay its own expenses incident to preparing
for, entering into, and carrying out this Plan of Merger, and incident to
the consummation of the Merger. Each party shall pay the fees and expenses
of any investment banker engaged by that party. The costs of all filing
fees pertaining to the Registration Statement shall be paid by Old Kent.
The costs of printing and mailing the Prospectus and Proxy Statement shall
be paid by Pinnacle.
9.5 SPECIFIC ENFORCEMENT. The parties each agree that, consistent
with the terms and conditions of this Plan of Merger, in the event of a
breach by a party to this Plan of Merger, money damages will be inadequate
and not susceptible of computation because of the unique nature of
Pinnacle, the Pinnacle Banks, and the Merger. Therefore, the parties each
agree that a federal or state court of competent jurisdiction shall have
authority, subject to the rules of law and equity, to specifically enforce
the provisions of this Plan of Merger by injunctive order or such other
equitable means as may be determined in the court's discretion.
9.6 JURISDICTION; VENUE; JURY. Old Kent and Pinnacle each agree to
the jurisdiction and venue of any state or federal court located in Kent
County, Michigan. Old Kent and Pinnacle each hereby waive their right to a
trial by jury.
9.7 WAIVER. Any of the terms or conditions of this Plan of Merger
may be waived in writing at any time by action taken by the board of
directors of a party, a duly authorized committee thereof, or a duly
authorized officer of such party. The failure of any party at any time or
times to require performance of any provision of this Plan of Merger shall
in no manner affect such party's right at a later time to enforce the same
provision. No waiver by any party of any condition, or of the breach of
any term, covenant, representation, or warranty contained in this Plan of
Merger, whether by conduct or otherwise, in any one or more instances shall
be deemed to be or construed as a further or continuing waiver of any such
condition or breach, or as a waiver of any other condition or of the breach
of any other term, covenant, representation, or warranty.
9.8 NOTICES. All notices, requests, demands, and other
communications under this Plan of Merger shall be in writing and shall be
deemed to have been duly given if delivered or sent and received by a fax
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transmission (if receipt by the intended recipient is confirmed by
telephone and if hard copy is delivered by overnight delivery service the
next day), a hand delivery, or a nationwide overnight delivery service (all
fees prepaid) to the following addresses:
IF TO OLD KENT: WITH A COPY TO:
Old Kent Financial Corporation Warner Norcross & Judd LLP
Attention: Mary E. Tuuk, Attention: Gordon R. Lewis
Senior Vice President and Legal 900 Old Kent Building
Coordinator 111 Lyon Street, N.W.
111 Lyon Street, N.W., Suite 100 Grand Rapids, Michigan 49503-2489
Grand Rapids, Michigan 49503
Facsimile: (616) 771-4698 Facsimile: (616) 752-2500
Telephone: (616) 771-5272 Telephone: (616) 752-2000
IF TO PINNACLE: WITH A COPY TO:
Pinnacle Banc Group, Inc. Burke, Warren, MacKay & Serritella, P.C.
Attention: John J. Gleason, Jr. Attention: Richard W. Burke
Vice Chairman and Chief Executive IBM Plaza, 22nd Floor
Officer 330 North Wabash Avenue
2215 York Road, Suite 306 Chicago, Illinois 60611-3607
Oak Brook, Illinois 60523
Facsimile: (630) 571-3012 Facsimile: (312) 840-7900
Telephone: (630) 574-3550 Telephone: (312) 840-7000
9.9 GOVERNING LAW. This Plan of Merger shall be governed, construed,
and enforced in accordance with the laws of the State of Michigan, without
regard to principles of conflicts of laws.
9.10 ENTIRE AGREEMENT. This Plan of Merger supersedes all prior
agreements between the parties with respect to its subject matter and
constitutes (along with the agreements and documents referred to in this
Plan of Merger) a complete and exclusive statement of the terms of the
agreement between the parties with respect to its subject matter; except
for matters set forth in any written instrument concurrently or
contemporaneously executed by the parties. Neither party may assign any of
its rights or obligations under this Plan of Merger to any other person.
9.11 THIRD PARTY BENEFICIARIES. The terms and conditions of this
Plan of Merger shall inure to the benefit of and be binding upon Old Kent
and Pinnacle and their respective successors. Nothing in this Plan of
Merger, express or implied, is intended to confer upon any person other
than Old Kent and Pinnacle any rights, remedies, obligations, or
liabilities under or by reason of this Plan of Merger.
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9.12 COUNTERPARTS. This Plan of Merger may be executed in one or
more counterparts, which taken together shall constitute one and the same
instrument. Executed counterparts of this Plan of Merger shall be deemed
to have been fully delivered and shall become legally binding if and when
executed signature pages are received by fax from a party. If so delivered
by fax, the parties agree to promptly send original, manually executed
copies by nationwide overnight delivery service.
9.13 FURTHER ASSURANCES; PRIVILEGES. Either party to this Plan of
Merger shall, at the request of the other party, execute and deliver such
additional documents and instruments and take such other actions as may be
reasonably requested to carry out the terms and provisions of this Plan of
Merger.
9.14 HEADINGS, ETC. The article headings and section headings
contained in this Plan of Merger are inserted for convenience only and
shall not affect in any way the meaning or interpretation of this Plan of
Merger.
9.15 CALCULATION OF DATES AND DEADLINES. Unless otherwise
specified, any period of time to be determined under this Plan of Merger
shall be deemed to commence at 12:01 a.m. on the first full day after the
specified starting date, event, or occurrence. Any deadline, due date,
expiration date, or period-end to be calculated under this Plan of Merger
shall be deemed to end at 5 p.m. on the last day of the specified period.
The time of day shall be determined with reference to the then current
local time in Grand Rapids, Michigan.
9.16 SEVERABILITY. If any term, provision, covenant, or restriction
contained in this Plan of Merger is held by a final and unappealable order
of a court of competent jurisdiction to be invalid, void, or unenforceable,
then the remainder of the terms, provisions, covenants, and restrictions
contained in this Plan of Merger shall remain in full force and effect, and
shall in no way be affected, impaired, or invalidated unless the effect
would be to cause this Plan of Merger to not achieve its essential
purposes.
[BALANCE OF THIS PAGE INTENTIONALLY BLANK]
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In Witness Whereof, the undersigned parties have duly executed
and acknowledged this Plan of Merger as of the date first written above.
Old Kent Financial Corporation
By /S/ MARK F. FURLONG
Mark F. Furlong,
Executive Vice President
Pinnacle Banc Group, Inc.
By /S/ JOHN J. GLEASON, JR.
John J. Gleason, Jr., Vice Chairman
and Chief Executive Officer
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