Exhibit 2.2
STOCK OPTION AGREEMENT
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STOCK OPTION AGREEMENT ("Option Agreement") dated as of October 29,
1997, by and between MERCANTILE BANCORPORATION INC. ("Buyer"), a Missouri
corporation registered as a bank holding company under the Bank Holding Company
Act of 1956, as amended (the "Holding Company Act"), and HOMECORP, INC.
("Seller"), a Delaware corporation registered as a savings and loan holding
company under the Home Owners' Loan Act of 1933, as amended (the "HOLA").
W I T N E S S E T H:
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WHEREAS, Buyer and Seller are prepared to execute and deliver an
Agreement and Plan of Merger dated as of even date herewith (the "Merger
Agreement") providing for the merger of Seller with and into a wholly owned
subsidiary of Buyer; and
WHEREAS, as a condition to Buyer's entering into the Merger Agreement,
Buyer has required that Seller agree, and Seller has agreed, to grant to Buyer
the option set forth herein to purchase authorized but unissued shares of the
common stock, $0.01 par value, of Seller ("Seller Common Stock").
NOW, THEREFORE, in consideration of the premises herein contained, the
parties agree as follows:
1. Definitions.
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Capitalized terms used but not defined herein shall have the same
meanings as in the Merger Agreement.
2. Grant of Option.
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Subject to the terms and conditions set forth herein, Seller hereby
grants to Buyer an option (the "Option") to purchase up to 424,470 shares of
Seller Common Stock at a price per share equal to $19.75 (the "Purchase Price")
payable in cash as provided in Section 4 hereof.
3. Exercise of Option.
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(a) If not then in material breach of the Merger Agreement, Buyer may
exercise the Option, in whole or in part, at any time or from time to time if a
Purchase Event (as defined below) shall have occurred; provided, however, that:
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(i) to the extent the Option shall not have been exercised, it shall terminate
and be of no further force and effect upon the earlier to occur of (A) the
Effective Time of the Merger and (B) the termination of the Merger Agreement in
accordance with Article VII thereof, provided that in the case of a termination
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by Buyer pursuant to Section 7.01(d) arising from the volitional breach by
Seller of any of its representations, warranties or covenants in the Merger
Agreement, the Option shall not terminate until the date that is 12 months
following such termination; (ii) if the Option cannot be exercised on such day
because of any injunction, order or similar restraint issued by a court of
competent jurisdiction, the Option shall expire on the 30th business day after
such injunction, order or restraint shall have been dissolved or when such
injunction, order or restraint shall have become permanent and no longer subject
to appeal, as the case may be; and (iii) that any such exercise shall be subject
to compliance with applicable law, including the Holding Company Act and the
HOLA.
(b) As used herein, a "Purchase Event" shall mean any of the
following events:
(i) Seller or any of its Subsidiaries, without having
received prior written consent from Buyer, shall have entered into,
authorized, recommended, proposed or publicly announced its intention
to enter into, authorize, recommend or propose, an agreement,
arrangement or understanding with any person (other than Buyer or any
of its Subsidiaries) to (A) effect a merger or consolidation or
similar transaction involving the acquisition of Seller or any of its
Subsidiaries, (B) purchase, lease or otherwise acquire 15% or more of
the assets of Seller or any of its Subsidiaries or (C) purchase or
otherwise acquire (including by way of merger, consolidation, share
exchange or similar transaction) Beneficial Ownership of securities
representing 15% or more of the voting power of Seller or any of its
Subsidiaries;
(ii) any person (other than Buyer or any Subsidiary of
Buyer, or Seller or any Subsidiary of Seller in a fiduciary capacity)
shall have acquired Beneficial Ownership or the right to acquire
Beneficial Ownership of 15% or more of the voting power of Seller; or
(iii) the holders of Seller Common Stock shall not have
approved the Merger Agreement at the meeting of such stockholders held
for the purpose of voting on the Merger Agreement, such meeting shall
not have been held or shall have been canceled prior to termination of
the Merger Agreement in accordance with its terms or Seller's Board of
Directors shall have withdrawn or modified in a manner adverse to
Buyer the recommendation of Seller's Board of Directors with respect
to the Merger Agreement, in each case after an Extension Event.
(c) As used herein, the term "Extension Event" shall mean any of
the following events:
(i) a Purchase Event;
(ii) any person (other than Buyer or any of its
Subsidiaries) shall have "commenced" (as such term is defined in Rule
14d-2 under the Exchange Act), or shall have filed a registration
statement under the Securities Act with respect to, a tender offer or
exchange offer to purchase shares of Seller Common Stock such that,
upon consummation of such offer, such person would have Beneficial
Ownership (as defined below) or the right to acquire Beneficial
Ownership of 15% or more of the voting power of Seller; or
(iii) any person (other than Buyer or any Subsidiary of
Buyer, or Seller or any Subsidiary of Seller in a fiduciary capacity)
shall have publicly announced its willingness, or shall have publicly
announced a proposal, or publicly disclosed an intention to make a
proposal, (x) to make an offer described in clause (ii) above, or (y)
to engage in a transaction described in clause (i) above.
(d) As used herein, the terms "Beneficial Ownership" and
"Beneficially Own" shall have the meanings ascribed to them in Rule 13d-3 under
the Exchange Act.
(e) In the event Buyer wishes to exercise the Option, it shall
deliver to Seller a written notice (the date of which being herein referred to
as the "Notice Date") specifying (i) the total number of shares it intends to
purchase pursuant to such exercise and (ii) a place and date not earlier than
ten business days nor later than 30 calendar days from the Notice Date for the
closing of such purchase (the "Closing Date").
4. Payment and Delivery of Certificates.
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(a) At the closing referred to in Section 3 hereof, Buyer shall
pay to Seller the aggregate Purchase Price for the shares of Seller Common Stock
purchased pursuant to the exercise of the Option in immediately available funds
by wire transfer to a bank account designated by Seller.
(b) At such closing, simultaneously with the delivery of cash as
provided in Section 4(a), Seller shall deliver to Buyer a certificate or
certificates representing the number of shares of Seller Common Stock purchased
by Buyer, registered in the name of Buyer or a nominee designated in writing by
Buyer, and Buyer shall deliver to Seller a letter agreeing that Buyer shall not
offer to sell, pledge or otherwise dispose of such shares in violation of
applicable law or the provisions of this Option Agreement.
(c) If at the time of issuance of any Seller Common Stock
pursuant to any exercise of the Option, Seller shall have issued any share
purchase rights or similar securities to holders of Seller Common Stock, then
each such share of Seller Common Stock shall also represent rights with terms
substantially the same as and at least as favorable to Buyer as those issued to
other holders of Seller Common Stock.
(d) Certificates for Seller Common Stock delivered at any
closing hereunder shall be endorsed with a restrictive legend which shall read
substantially as follows:
The transfer of the shares represented by this certificate is
subject to certain provisions of an agreement between the
registered holder hereof and HOMECORP, INC., a copy of which is
on file at the principal office of HOMECORP, INC., and to resale
restrictions arising under the Securities Act of 1933, as
amended, and any applicable state securities laws. A copy of such
agreement will be provided to the holder hereof without charge
upon receipt by HOMECORP, INC. of a written request therefor.
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificates without such legend if Buyer shall have delivered to
Seller an opinion of counsel, in form and substance reasonably satisfactory to
Seller and its counsel, to the effect that such legend is not required for
purposes of the Securities Act and any applicable state securities laws and this
Option Agreement.
5. Authorization, etc.
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(a) Seller hereby represents and warrants to Buyer that:
(i) Seller has full corporate authority to execute and
deliver this Option Agreement and, subject to Section 11(i), to
consummate the transactions contemplated hereby;
(ii) such execution, delivery and consummation have been
authorized by the Board of Directors of Seller, and no other corporate
proceedings are necessary therefor;
(iii) this Option Agreement has been duly and validly
executed and delivered and represents a valid and legally binding
obligation of Seller, enforceable against Seller in accordance with
its terms; and
(iv) Seller has taken all necessary corporate action to
authorize and reserve and, subject to Section 11(i), permit it to
issue and, at all times from the date hereof through the date of the
exercise in full or the expiration or termination of the Option, shall
have reserved for issuance upon exercise of the Option, 424,470 shares
of Seller Common Stock, all of which, upon issuance pursuant hereto,
shall be duly authorized, validly issued, fully paid and
nonassessable, and shall be delivered free and clear of all claims,
liens, encumbrances, restrictions (other than federal and state
securities restrictions) and security interests and not subject to any
preemptive rights.
(b) Buyer hereby represents and warrants to Seller that:
(i) Buyer has full corporate authority to execute and
deliver this Option Agreement and, subject to Section 11(i), to
consummate the transactions contemplated hereby;
(ii) such execution, delivery and consummation have been
authorized by all requisite corporate action by Buyer, and no other
corporate proceedings are necessary therefor;
(iii) this Option Agreement has been duly and validly
executed and delivered and represents a valid and legally binding
obligation of Buyer, enforceable against Buyer in accordance with its
terms; and
(iv) any Seller Common Stock or other securities acquired
by Buyer upon exercise of the Option will not be taken with a view to
the public distribution thereof and will not be transferred or
otherwise disposed of except in compliance with the Securities Act and
applicable state law.
6. Adjustment Upon Changes in Capitalization.
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In the event of any change in Seller Common Stock by reason of stock
dividends, split-ups, recapitalizations or the like, the type and number of
shares subject to the Option, and the Purchase Price per share, as the case may
be, shall be adjusted appropriately. In the event that any additional shares of
Seller Common Stock are issued after the date of this Option Agreement (other
than pursuant to an event described
in the preceding sentence or pursuant to this Option Agreement), the number of
shares of Seller Common Stock subject to the Option shall be adjusted so that,
after such issuance, it equals at least 19.9% of the number of shares of Seller
Common Stock then issued and outstanding.
7. Repurchase.
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(a) Subject to the giving of any notices and the receipt of any
approvals as contemplated by Section 11(i), at the request of Buyer at any time
commencing upon the first occurrence of a Purchase Event described in Section
3(b) hereof and ending 13 months immediately thereafter (the "Repurchase
Period"), Seller (or any successor entity thereof) shall repurchase the Option
but not later than the termination of the Option pursuant to Section 3(a) hereof
from Buyer together with all (but not less than all, subject to Section 10)
shares of Seller Common Stock purchased by Buyer pursuant hereto with respect to
which Buyer then has Beneficial Ownership, at an aggregate price (per share, the
"Per Share Repurchase Price") equal to the sum of:
(i) The exercise price paid by Buyer for any shares of
Seller Common Stock acquired pursuant to the Option;
(ii) The difference between (A) the "Market/Tender Offer
Price" for shares of Seller Common Stock (defined as the higher (x) of
the highest price per share at which a tender or exchange offer has
been made for shares of Seller Common Stock or (y) the highest closing
mean of the "bid" and the "ask" price per share of Seller Common Stock
reported by the Nasdaq National Market, in each case for any day
within that portion of the Repurchase Period that precedes the date
Buyer gives notice of the required repurchase under this Section 7)
and (B) the exercise price as determined pursuant to Section 2 hereof
(subject to adjustment as provided in Section 6), multiplied by the
number of shares of Seller Common Stock with respect to which the
Option has not been exercised, but only if the Market/Tender Offer
Price is greater than such exercise price; and
(iii) The difference between the Market/Tender Offer Price
and the exercise price paid by Buyer for any shares of Seller Common
Stock purchased pursuant to the exercise of the Option, multiplied by
the number of shares so purchased, but only if the Market/Tender Offer
Price is greater than such exercise price.
(b) In the event Buyer exercises its rights under this Section
7, Seller shall, within 10 business days thereafter, pay the required amount to
Buyer by wire transfer of immediately available funds to an account designated
by Buyer and Buyer shall surrender to Seller the Option and the certificates
evidencing the shares of Seller Common Stock purchased thereunder with respect
to which Buyer then has Beneficial Ownership, and Buyer shall warrant that it
has sole record and Beneficial Ownership of such shares and that the same are
free and clear of all liens, claims, charges, restrictions and encumbrances of
any kind whatsoever.
(c) In determining the Market/Tender Offer Price, the value of
any consideration other than cash shall be determined by an independent
nationally recognized investment banking firm selected by Buyer and reasonably
acceptable to Seller.
8. Repurchase at Option of Seller and First Refusal.
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(a) Except to the extent that Buyer shall have previously
exercised its rights under Section 7, at the request of Seller during the six-
month period commencing 13 months following the first occurrence of a Purchase
Event, Seller may repurchase from Buyer, and Buyer shall sell to Seller, all
(but not less than all, subject to Section 10) of the Seller Common Stock
acquired by Buyer pursuant hereto and with respect to which Buyer has Beneficial
Ownership at the time of such repurchase at a price per share equal to the
greater of (i) the Per Share Repurchase Price or (ii) the sum of (A) the
aggregate Purchase Price of the shares so repurchased plus (B) interest on the
aggregate Purchase Price paid for the shares so repurchased from the date of
purchase to the date of repurchase at the highest rate of interest announced by
Buyer as its prime or base lending or reference rate during such period, less
any dividends received on the shares so repurchased. Any repurchase under this
Section 8(a) shall be consummated in accordance with Section 7(b).
(b) If, at any time after the occurrence of a Purchase Event and
prior to the earlier of (i) the expiration of 18 months immediately following
such Purchase Event or (ii) the expiration or termination of the Option, Buyer
shall desire to sell, assign, transfer or otherwise dispose of the Option or all
or any of the shares of Seller Common Stock acquired by it pursuant to the
Option, it shall give Seller written notice of the proposed transaction (an
"Offeror's Notice"), identifying the proposed transferee, and setting forth the
terms of the proposed transaction. An Offeror's Notice shall be deemed an offer
by Buyer to Seller, which may be accepted within 10 business days of the receipt
of such Offeror's Notice, on the same terms and conditions and at the same price
at which Buyer is proposing to transfer the Option or such shares to a third
party. In the event the proposed transaction involves the sale of the Option or
the shares of Seller Common Stock purchased pursuant to the exercise of the
Option for consideration other than cash, the value of such consideration shall
be determined by an independent nationally recognized investment banking firm
selected by Buyer and reasonably acceptable to Seller. The purchase of the
Option or any such shares by Seller shall be closed within 10 business days of
the date of the acceptance of the offer and the purchase price shall be
paid to Buyer by wire transfer of immediately available funds to an account
designated by Buyer. In the event of the failure or refusal of Seller to
purchase the Option or all the shares covered by the Offeror's Notice or if the
Federal Reserve Board or any other Regulatory Authority disapproves Seller's
proposed purchase of the Option or such shares, Buyer may, within 60 days from
the date of the Offeror's Notice, sell all, but not less than all, of the Option
or such shares to such third party at no less than the price specified and on
terms no more favorable to the purchaser than those set forth in the Offeror's
Notice. The requirements of this Section 8(b) shall not apply to (i) any
disposition as a result of which the proposed transferee would Beneficially Own
not more than 2% of the voting power of Seller or (ii) any disposition of Seller
Common Stock by a person to whom Buyer has sold shares of Seller Common Stock
issued upon exercise of the Option.
9. Registration Rights.
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At any time after the exercise of the Option by Buyer for an aggregate
of at least 50% of the shares subject thereto, Seller shall, if requested by
Buyer, as expeditiously as practicable file a registration statement on a form
for general use under the Securities Act if necessary in order to permit the
sale or other disposition of the shares of Seller Common Stock that have been
acquired upon exercise of the Option in accordance with the intended method of
sale or other disposition requested by Buyer (it being understood and agreed
that any such sale or other disposition shall be effected on a widely
distributed basis so that, upon consummation thereof, no purchaser or transferee
shall Beneficially Own more than 2% of the shares of Seller Common Stock then
outstanding). Buyer shall provide all information reasonably requested by
Seller for inclusion in any registration statement to be filed hereunder.
Seller shall use its reasonable best efforts to cause such registration
statement first to become effective and then to remain effective for such period
not in excess of 90 days from the day such registration statement first becomes
effective as may be reasonably necessary to effect such sales or other
dispositions. The registration effected under this Section 9 shall be at
Seller's expense except for underwriting discounts and commissions and the fees
and disbursements of Buyer's counsel attributable to the registration of such
Seller Common Stock. In no event shall Seller be
required to effect more than one registration hereunder. The filing of the
registration statement hereunder may be delayed for such period of time as may
reasonably be required to facilitate any public distribution by Seller of Seller
Common Stock or if a special audit of Seller would otherwise be required in
connection therewith. If requested by Buyer in connection with such
registration, Seller shall become a party to any underwriting agreement relating
to the sale of such shares, but only to the extent of obligating itself in
respect of representations, warranties, indemnities and other agreements
customarily included in such underwriting agreements for parties similarly
situated.
10. Severability.
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Any term, provision, covenant or restriction contained in this Option
Agreement held by a court or a Regulatory Authority of competent jurisdiction to
be invalid, void or unenforceable, shall be ineffective to the extent of such
invalidity, voidness or unenforceability, but neither the remaining terms,
provisions, covenants or restrictions contained in this Option Agreement nor the
validity or enforceability thereof in any other jurisdiction shall be affected
or impaired thereby. Any term, provision, covenant or restriction contained in
this Option Agreement that is so found to be so broad as to be unenforceable
shall be interpreted to be as broad as is enforceable. If for any reason such
court or Regulatory Authority determines that applicable law will not permit
Buyer or any other person to acquire, or Seller to repurchase or purchase, the
full number of shares of Seller Common Stock provided in Section 2 hereof (as
adjusted pursuant to Section 6 hereof), it is the express intention of the
parties hereto to allow Buyer or such other person to acquire, or Seller to
repurchase or purchase, such lesser number of shares as may be permissible,
without any amendment or modification hereof.
11. Miscellaneous.
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(a) Expenses. Each of the parties hereto shall pay all costs
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and expenses incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and
expenses of its own financial consultants, investment bankers, accountants and
counsel, except as otherwise provided herein.
(b) Entire Agreement. Except as otherwise expressly provided
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herein, this Option Agreement and the Merger Agreement contain the entire
agreement between the parties with respect to the transactions contemplated
hereunder and supersedes all prior arrangements or understandings with respect
thereto, written or oral.
(c) Successors; No Third Party Beneficiaries. The terms and
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conditions of this Option Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assigns.
Nothing in this Option Agreement, expressed or implied, is intended to confer
upon any party, other than the parties hereto, and their respective successors
and assigns, any rights, remedies, obligations or liabilities under or by reason
of this Option Agreement, except as expressly provided herein.
(d) Assignment. Other than as provided in Section 8 hereof,
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neither of the parties hereto may sell, transfer, assign or otherwise dispose of
any of its rights or obligations under this Option Agreement or the Option
created hereunder to any other person (whether by operation of law or
otherwise), without the express written consent of the other party.
(e) Notices. All notices or other communications that are
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required or permitted hereunder shall be in writing and sufficient if delivered
in accordance with Section 8.08 of the Merger Agreement (which is incorporated
herein by reference).
(f) Counterparts. This Option Agreement may be executed in
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counterparts, and each such counterpart shall be deemed to be an original
instrument, but both such counterparts together shall constitute but one
agreement.
(g) Specific Performance. The parties hereto agree that if for
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any reason Buyer or Seller shall have failed to perform its obligations under
this Option Agreement, then either party hereto
seeking to enforce this Option Agreement against such non-performing party shall
be entitled to specific performance and injunctive and other equitable relief,
and the parties hereto further agree to waive any requirement for the securing
or posting of any bond in connection with the obtaining of any such injunctive
or other equitable relief. This provision is without prejudice to any other
rights that either party hereto may have against the other party hereto for any
failure to perform its obligations under this Option Agreement.
(h) Governing Law. This Option Agreement shall be governed by
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and construed in accordance with the laws of the State of Missouri applicable to
agreements made and entirely to be performed within such state.
(i) Regulatory Approvals; Section 16(b). If, in connection with
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(A) the exercise of the Option under Section 3 or a sale by Buyer to a third
party under Section 8, (B) a repurchase by Seller under Section 7 or a
repurchase or purchase by Seller under Section 8, prior notification to or
approval of the Federal Reserve Board, the OTS or any other Regulatory Authority
is required, then the required notice or application for approval shall be
promptly filed and expeditiously processed and periods of time that otherwise
would run pursuant to such Sections shall run instead from the date on which any
such required notification period has expired or been terminated or such
approval has been obtained, and in either event, any requisite waiting period
shall have passed. In the case of clause (A) of this subsection (i), such filing
shall be made by Buyer, and in the case of clause (B) of this subsection (i),
such filing shall be made by Seller, provided that each of Buyer and Seller
shall use its best efforts to make all filings with, and to obtain consents of,
all third parties and Regulatory Authorities necessary to the consummation of
the transactions contemplated hereby, including, without limitation, applying to
the Federal Reserve Board under the Holding Company Act for approval to acquire
the shares issuable hereunder. Periods of time that otherwise would run pursuant
to Sections 3, 7 or 8 shall also be extended to the extent necessary to avoid
liability under Section 16(b) of the Exchange Act.
(j) No Breach of Merger Agreement Authorized. Nothing contained
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in this Option Agreement shall be deemed to authorize Seller to issue any shares
of Seller Common Stock in breach of, or otherwise breach any of, the provisions
of the Merger Agreement nor shall any action taken hereunder by Seller
constitute a breach of any of the provisions of the Merger Agreement.
(k) Waiver and Amendment. Any provision of this Option
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Agreement may be waived at any time by the party that is entitled to the
benefits of such provision. This Option Agreement may not be modified, amended,
altered or supplemented except upon the execution and delivery of a written
agreement executed by the parties hereto.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Option Agreement as of the date first written above.
MERCANTILE BANCORPORATION INC.
By: /s/ John W. Rowe
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John W. Rowe
Executive Vice President, Mercantile Bank
National Association, Authorized Officer
HOMECORP, INC.
By: /s/ C. Steven Sjogren
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C. Steven Sjogren
President and Chief Executive Officer