EXHIBIT 2.1
PLAN OF REORGANIZATION AND MERGER AGREEMENT
This Plan of Reorganization and Merger Agreement ("Agreement") is entered
into as of September 17, 2001, by and between STURGIS BANK & TRUST COMPANY
("Sturgis"), STURGIS BANCORP, INC. ("Holding Company") and SBT INTERIM BANK
("Interim Bank") to be joined in upon its formation, for the sole purpose of
consummating the reorganization provided for herein.
RECITALS AND UNDERTAKINGS
A. Sturgis is a state savings bank subject to regulation and supervision by
the Federal Deposit Insurance Corporation ("FDIC") and the Michigan Consumer and
Industry Services, Office of Financial and Insurance Savings, Division of
Financial Institutions ("DFI") with its principal office in Sturgis, Michigan.
Interim Bank, upon its formation, shall be a state savings bank with its
principal offices in Sturgis, Michigan. Holding Company is a corporation
organized and existing under the laws of the State of Michigan with its
principal offices in Sturgis, Michigan.
B. As of the date hereof, Sturgis has 4,000,000 shares of common stock
$1.00 par value per share ("Sturgis Common Stock") authorized and 3,101,534
shares issued and outstanding.
C. As of the date hereof, Interim Bank has 10 shares of common stock $1.00
par value per share ("Interim Bank Common Stock") authorized, all of which will
be outstanding with all outstanding shares owned by Holding Company at the time
of the Merger.
D. As of the date hereof, Holding Company has 9,000,000 shares common stock
$1.00 par value per share and 1,000,000 shares of preferred stock $1.00 par
value per share ("Holding Company Common Stock") authorized of which three (300)
hundred shares of Holding Company Common Stock will be outstanding at the time
of the Merger referred to herein.
E. The Boards of Directors of Sturgis, Interim Bank and Holding Company
believe that the Reorganization will permit greater flexibility in responding to
the changing financial requirements of banking customers and in meeting the
competition of other financial institutions.
NOW, THEREFORE, in consideration of the promises and mutual covenants,
agreements and undertakings of the parties herein set forth and for the purposes
of prescribing the terms and conditions of the Merger, the parties agree as
follows:
SECTION 1.
GENERAL
1.1 The Merger. On the Effective Date as defined in Section 1.2, Interim
Bank shall be merged with and into Sturgis (the "Merger") with Sturgis being the
surviving bank (the "Surviving State Savings Bank") and a subsidiary of Holding
Company (collectively the "Reorganization"). The business of the Surviving State
Savings Bank shall be that of a state savings bank and the name of the Surviving
State Savings Bank shall be Sturgis Bank & Trust Company. The business shall be
conducted by the Surviving State Savings Bank at its principal office located at
125 E. Chicago Road, P.O. Box 600, Sturgis, Michigan 49091 and at the legally
established offices of Sturgis prior to the Merger.
1.2 Effective Date. The Merger described herein shall become effective,
as amended if necessary, to conform to any requirements of law or governmental
authority or agency which requirements are not materially in contravention of
any of the substantive terms hereon. At the date and time specified in a merger
approval issued by the DFI (the "Effective Date") the Merger shall be in
accordance with the provisions of the Michigan Savings Bank Act.
1.3 Articles of Association, Bylaws, Certificate of Authority and Deposit
Insurance Coverage. At the close of business on the Effective Date, the
Articles of Incorporation of Sturgis as in effect immediately prior
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to such time on the Effective Date, shall be the Articles of Incorporation of
the Surviving State Savings Bank, without change or amendment (until amended or
repealed as provided by law), the Bylaws of Sturgis shall be the bylaws of the
Surviving State Savings Bank, without change or amendment (until amended or
repealed as provided by law), and the insurance of deposit coverage of Sturgis
by the FDIC shall be the deposit insurance of the Surviving State Savings Bank.
1.4 Directors and Officers of the Surviving State Savings Bank. At the
close of business on the Effective Date, the directors and officers of Sturgis
immediately prior to such time on the Effective Date shall be the directors and
officers of the Surviving State Savings Bank. Directors of the Surviving State
Savings Bank shall serve until the next annual meeting of shareholders of the
Surviving State Savings Bank or until such time as their successors are elected
and have qualified.
1.5 Capitalization of Holding Company. For the purposes of facilitating
the transactions required for the Reorganization and pursuant to the
Shareholders Agreement, each of Raymond H. Dresser, Jr., Leonard L. Eishen and
Lawrence A. Franks (the "Initial Holding Company Shareholders") shall purchase
100 shares of the capital stock of Holding Company at a purchase price of one
dollar ($1.00) per share. The total amount of each purchase shall be one hundred
dollars ($100.00) and the aggregate amount of the initial capitalization of
Holding Company shall be three hundred dollars ($300.00). Upon the consummation
of the Reorganization, Holding Company will be obligated to repurchase for cash
each of the Initial Holding Company Shareholders shares and the Initial Holding
Company Shareholders will be obligated to resell to the Holding Company the
above mentioned three hundred shares at the repurchased price of one dollar
($1.00) per share for a total repurchase price of three hundred dollars
($300.00). The aggregate amount to be paid for the three hundred shares
repurchased is three hundred dollars ($300.00).
1.6 Capitalization of Interim Bank. For the purposes of facilitating the
transactions required for the Reorganization, Holding Company shall purchase 10
shares of capital stock of Interim Bank at a purchase price of one dollar per
share. The total amount of the purchase shall be ten dollars and the aggregate
amount of the initial capitalization of the Interim Bank shall be ten dollars.
Upon the consummation of the Reorganization, Holding Company will be obligated
to repurchase for cash the initial Interim Bank shares for a total repurchase
price of ten dollars ($10.00). The aggregate amount to be paid for the ten
shares repurchased is ten dollars ($10.00).
1.7 Effect of the Merger.
(a) Rights and Privileges. On or after the Effective Date, all of the
rights, privileges, powers, franchises, facilities and immunities, as well as
all of the properties, real, personal and mixed, tangible and intangible of
Sturgis shall continue unaffected and unimpaired by the Merger. On or after the
Effective Date, the Surviving State Savings Bank shall without further transfer,
possess all of the rights, privileges, powers, franchises, facilities, and
immunities, as well as all of the properties, real, personal and mixed, tangible
and intangible of Sturgis and Interim Bank.
(b) Assumption of Liabilities. On or after the Effective Date, the
Surviving State Savings Bank shall succeed to and be liable for all debts,
liabilities and other obligations, known or unknown, contingent or otherwise, of
Interim Bank and Sturgis, in any nature whatsoever, existing on the Effective
Date or attributable to the operations of Interim Bank or Sturgis as though the
Surviving State Savings Bank had incurred them.
1.8 Further Assurances. Sturgis and Interim Bank each agree that at any
time or from time to time, as when requested by the Surviving State Savings
Bank, or by its successors and assigns, it will execute and deliver, or cause to
be executed and delivered, in its name by its last acting officers, or by the
corresponding officers of the Surviving State Savings Bank, all such
conveyances, assignments, transfers, deeds or other instruments, and will take
or cause to be taken such further or other action as the Surviving State Savings
Bank, or its successors or assigns, may deem necessary or desirable in order to
have evidenced the transfer, vesting or devolution of any property right,
privilege or franchise or to vest or perfect in or confirm to the Surviving
State Savings Bank, or its successors and assigns, title to and possession of
all of the property rights, privileges, powers, immunities, franchises and
interest referred to in this Section 1 or otherwise to carry out the intent and
purposes of this Agreement.
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SECTION 2
TREATMENT OF CAPITAL STOCK
2.1 Stock of Interim Bank. At the close of business on the Effective
Date, each share of the Interim Bank Common Stock issued and outstanding
immediately prior thereto shall, by virtue of the Merger, be cancelled.
2.2 Stock of Sturgis. At the close of business on the Effective Date,
each share of Sturgis Common Stock issued and outstanding immediately prior
thereto shall, by virtue of the Merger described herein be exchanged for one
share of fully paid nonassessable Holding Company Stock in accordance with the
provisions of Section 2.3.
2.3 Exchange of Stock by Sturgis Shareholders. The exchange of the shares
of Sturgis provided in Section 2.2 above shall occur automatically at the close
of business on the Effective Date without action by the holders thereof. Each
share or certificate evidencing ownership of shares of Sturgis Common Stock
thereupon shall be deemed to evidence one share of Holding Company Common Stock.
Each holder of shares of Sturgis Common Stock may, but is not required, to
surrender such holder's share certificate or certificates to Holding Company, or
an exchange agent appointed by Holding Company, and shall be entitled to receive
in exchange therefor a certificate or certificates representing the number of
shares and to which such holders shares theretofore represented by a certificate
or certificates so surrendered shall have been converted.
2.4 Stock of Holding Company. At the close of business on the Effective
Date, and after the occurrence described in Section 2.2 above, the three hundred
shares of Holding Company Common Stock issued and outstanding immediately prior
thereto shall, by virtue of the Merger described herein, be repurchased and
cancelled.
2.5 Sturgis Stock Options. On the date of this Agreement, options to
purchase Sturgis Common Stock (the "Sturgis Stock Options") were previously
granted pursuant to the Sturgis Stock Option Plan dated April 28, 1989 and the
Sturgis Director's Option Plan dated April 28, 1989 (collectively the "Sturgis
Option Plans"). On the Effective Date, each Sturgis Stock Option which is
outstanding and unexercised immediately prior thereto shall cease to represent a
right to acquire shares of Sturgis Common Stock and shall be converted
automatically into an option to purchase an equal number of shares of Holding
Company Common Stock. The exercise price per share of Holding Company Common
Stock under the Sturgis Option Plans shall be equal to the exercise price per
share of Sturgis Common Stock under the original Sturgis Option Plan.
SECTION 3
APPROVALS
3.1 Shareholder Approvals. As soon as practicable, this Agreement shall
be duly submitted to the shareholders of Sturgis, Interim Bank and Holding
Company (the "Shareholders") for the purpose of considering and acting upon this
Agreement in the manner required by law. The approval of this Agreement by the
Shareholders shall be deemed to include approval of all such changes to this
Agreement, if any, as may be required from time to time by any bank regulatory
agency or department.
3.2 Regulatory Approvals. Each of the parties hereto shall execute and
file with the appropriate regulatory authorities all necessary documents and
instruments and shall take every reasonable and necessary step and action to
comply with and to secure such regulatory approval of this Agreement and the
transactions contemplated herein as may be required by all applicable statutes,
rules and regulations, including without limitation the consents and approvals
referred to in Section 4.
3.3 Registration Statement. Pursuant to Section 3(a)(12) of the
Securities Exchange Act of 1934 ("Exchange Act"), the securities issued in
connection with the reorganization by Sturgis Bancorp are exempt from
registration with the Securities and Exchange Commission. As part of the
transaction, however, Sturgis will file a Prospectus/Proxy Statement with the
Federal Deposit Insurance Corporation ("FDIC") outlining the details of the
reorganization and setting the Special Meeting of the Sturgis shareholders to
vote on the
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reorganization. Upon completion of the reorganization, Sturgis Bancorp will file
a registration statement on Exchange Act Form 8-A for the registration of
Sturgis Bancorp securities.
SECTION 4
CONDITIONS PRECEDENT
Conditions Precedent to the Merger. Consummation of the Merger described
herein is subject to satisfaction of the following conditions.
4.1 Ratification and approval of this Agreement by the holders of not less
than two-thirds of the outstanding shares of Sturgis and Interim Bank and a
majority of the Holding Company, in accordance with applicable provisions of
law.
4.2 Obtaining all other consents and approvals, satisfying all other
requirements, prescribed by law or otherwise, which are necessary for the Merger
described herein to be consummated, including without limitation, approvals from
the FDIC, the DFI and the Board of Governors of the Federal Reserve System under
the Bank Holding Company Act of 1956 as amended and Regulation Y promulgated
pursuant thereto, and authorizations, to the extent necessary, under applicable
Blue Sky Laws with respect to the securities of Holding Company issued upon
consummation of the Merger.
4.3 Issuance of a favorable opinion in a form and substance satisfactory to
each of the parties hereto and their counsel, with respect to the tax
consequences on the parties and their stockholders of the Merger described
herein.
4.4 Procuring all other consents or approvals, governmental or otherwise,
which in the opinion of counsel for Sturgis are or may be necessary to permit or
to enable the Surviving State Savings Bank to conduct, upon and after the Merger
described herein, all or any part of the business and other activities in which
Sturgis will be engaged up to the time of such Merger, in the same manner and to
the same extent Sturgis engages in such businesses and other activities
immediately prior to such Merger.
4.5 Performance by each of the parties hereto of all obligations under this
Agreement which are to be performed prior to the consummation of the Merger
described herein.
SECTION 5
TERMINATION
5.1 Termination of the Merger. This Agreement may be terminated at any
time before the Merger becomes effective if any condition specified in Section 4
has not been fulfilled within a reasonable period of time (as determined by a
majority of the Board of Directors of any of the parties), or prior to the
Effective Date, a majority of the members of the Board of Directors of any of
the parties hereto has determined that:
(a) The number of shares of Sturgis Common Stock voting against the
Merger makes consummation of the Merger inadvisable;
(b) Any action, suit, proceeding or claim relating to the Merger
described herein has been instituted, made or threatened which makes
consummation of the Merger inadvisable; or
(c) For any other reason consummation of the Merger is inadvisable.
Upon termination, this Agreement shall be void and of no further effect, and
there shall be no liability by reason of this Agreement or the termination
thereof on the part of the parties or their respective directors, officers,
employees, agents or shareholders.
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SECTION 6
AMENDMENT, MODIFICATION, ETC.
6.1 Amendment, Modification, Etc. Sturgis, Holding Company and Interim
Bank, by mutual consent of their respective Boards of Directors, to the extent
permitted by applicable law, may amend, modify, supplement and interpret this
Agreement in such manner as may be mutually agreed upon by them in writing at
any time, before or after adoption thereof by the shareholders of Sturgis,
Holding Company and Interim Bank, as applicable; provided, however, that no such
amendment, modification or supplementation shall change the number or kind of
securities to be issued by Holding Company exchanged for each security of
Sturgis, or any other principal terms, except: (1) by the affirmative action of
such shareholders as required by law, or (2) the initial approval of this
Agreement by Sturgis' shareholders shall be deemed to include approval of such
changes to this Agreement, if any, as may be required from time to time by bank
regulatory agencies or departments or other governmental authorities.
SECTION 7
EXPENSES OF MERGER
7.1 Expenses of the Merger. All expenses of the Merger, described herein,
without limitation, filing fees, printing costs, mailing costs, accountants
fees, legal fees and proxy solicitation fees shall be paid by Sturgis.
7.2 Tax Consequences. It is intended that (i) the Reorganization shall
constitute a reorganization within the meaning of Section 368 of the Internal
Revenue Code and (ii) this Agreement constitutes a "plan of reorganization" for
purposes of Section 368 of the Internal Revenue Code.
SECTION 8
DISSENTERS RIGHTS
8.1 Dissenter Rights. Any shareholder of Sturgis who votes against the
Merger, or has given notice in writing to Sturgis at or prior to the
shareholders' meeting to be held for the purpose of considering the Merger that
he or she dissents from the Merger, shall be entitled to receive in cash from
Sturgis the fair value of all shares held by him or her if and when the Merger
is consummated in accordance with applicable law.
SECTION 9
EMPLOYMENT
9.1 Employment Arrangements. All employees, officers, and directors of
Sturgis will remain employees, officers, and directors of Sturgis after the
Effective Date and the consummation of the Reorganization contemplated by this
Agreement. As a result of this Agreement and the Reorganization contemplated by
this Agreement:
(a) No Payments and benefits to current or former directors, officers
and employees of Sturgis will result from the transactions contemplated
hereby or the termination of such persons' service or employment within two
years after completion of the Reorganization will cause the imposition of
excise taxes under Section 4999 of the Internal Revenue Code or the
disallowance of a deduction to it pursuant to Section 162, 280G or any
other Section of the Internal Revenue Code; and
(b) Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby will (A) constitute a
stated "Triggering Event" under any employee benefit plan of Sturgis that
will result in any material payment (including, without limitation,
severance, unemployment compensation, golden parachute or otherwise)
becoming due to any director, officer, stockholder or employee of Sturgis;
(B) materially increase any benefits otherwise payable under any
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employee benefit plan of Sturgis; or (C) result in any acceleration of the
time of payment or vesting of any such benefits to any material extent.
SECTION 10
MISCELLANEOUS
10.1 Entire Agreement. This Agreement embodies the entire agreement among
the parties and there have been and are no agreements, representations or
warranties among the parties with respect to the subject matter of this
Agreement other than those set forth herein or those provided for herein.
10.2 Broker's or Finder's Fees. Neither Sturgis, Holding Company nor
Interim Bank has incurred or will incur any liability for brokerage, finders',
agents' or investment bankers' fees or commissions in connection with this
Agreement or the transactions contemplated hereby.
10.3 No Assignment. This Agreement may not be assigned by any party
hereto, by operation of law or otherwise, except as contemplated hereby.
10.4 Headings. The description of the Sections of this Agreement are
inserted for convenience only and are not a part of this Agreement.
10.5 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if such provision in this Agreement is held to be prohibited
by or invalid under applicable law, then such provision will be ineffective only
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
10.6 No Third Party Beneficiaries. Nothing in this Agreement shall
entitle any person (other than the parties hereto and their respective
successors and assigns) permitted hereby, to any claim, cause of action, remedy
or right of any kind.
10.7 Governing Law. This Agreement has been executed in the State of
Michigan and the law of the State of Michigan shall govern the validity and the
interpretation hereof and the performance by the parties except to the extent
that federal law is applicable.
10.8 Counterparts. To facilitate the filing of this Agreement, any number
of counterparts hereof may be executed (including facsimile signature) and each
such counterpart shall be deemed to be an original instrument but all such
counterparts together shall constitute but one instrument.
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IN WITNESS WHEREOF, the parties have caused this Plan of Reorganization and
Merger Agreement to be executed by their duly authorized officers as of the day
and year first above written.
STURGIS BANCORP, INC.
/s/ LAWRENCE A. FRANKS
--------------------------------------
LAWRENCE A. FRANKS, Chairman of the
Board
STURGIS BANK & TRUST COMPANY
/s/ LEONARD L. EISHEN
--------------------------------------
LEONARD L. EISHEN, President & CEO
SBT INTERIM BANK
/s/ LEONARD L. EISHEN
--------------------------------------
LEONARD L. EISHEN, President
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AMENDMENT TO PLAN OF REORGANIZATION AND MERGER AGREEMENT
This Amendment to the Plan of Reorganization and Merger Agreement
("Reorganization Agreement") dated September 17, 2001, by and between STURGIS
BANK & TRUST COMPANY ("Sturgis"), STURGIS BANCORP, INC. ("Holding Company") and
SBT INTERIM BANK ("Interim Bank") is entered into as of November 15, 2001.
Pursuant to SECTION 6.1 of the Reorganization Agreement, Sturgis, Holding
Company and Interim Bank hereby amend the Reorganization Agreement by deleting
the condition set forth in Section 4.3 which states:
4.3 Issuance of a favorable opinion in a form and substance
satisfactory to each of the parties hereto and their counsel, with respect
to the tax consequences on the parties and their stockholders of the Merger
described herein.
Consistent with SECTION 6.1 of the Reorganization Agreement, this amendment does
not change the number or kind of securities to be issued by Holding Company
exchanged for each security of Sturgis, or any other principal terms.
IN WITNESS WHEREOF, the parties have caused this Amendment to the Plan of
Reorganization and Merger Agreement to be executed by their duly authorized
officers as of the day and year first above written.
STURGIS BANCORP, INC.
/s/ LAWRENCE A. FRANKS
--------------------------------------
LAWRENCE A. FRANKS, Chairman of the
Board
STURGIS BANK & TRUST COMPANY
/s/ LEONARD L. EISHEN
--------------------------------------
LEONARD L. EISHEN, President & CEO
SBT INTERIM BANK
/s/ LEONARD L. EISHEN
--------------------------------------
LEONARD L. EISHEN, President
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