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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 21, 1998
--------------
FIRST EVERGREEN CORPORATION
- -----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 2-94209 36-2952700
- -----------------------------------------------------------------
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) No.)
3101 W. 95th Street Evergreen Park, Illinois 60805
- -----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 422-6700
N/A
- -----------------------------------------------------------------
(Former name or former address, if changed since last report.)
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Item 5. Other Events.
On April 21, 1998, First Evergreen Corporation, a Delaware corporation
("First Evergreen"), and Old Kent Financial Corporation, a Michigan
corporation ("Old Kent"), entered into an Agreement and Plan of Merger (the
"Merger Agreement") pursuant to which First Evergreen will be merged with and
into Old Kent, with Old Kent as the surviving corporation (the "Merger").
Under the Merger Agreement, each share of the common stock, par value $25 per
share, of First Evergreen ("First Evergreen Common Stock") outstanding
immediately prior to the effective time of the Merger will be converted into
the right to receive 30.5059 shares of the common stock, par value $1 per
share, of Old Kent ("Old Kent Common Stock").
The Merger is intended to qualify as a reorganization under the
provisions of Section 368 of the Internal Revenue Code of 1986, as amended,
and to be accounted for under the pooling-of-
interests method of accounting.
Consummation of the Merger is subject to various conditions, including:
(i) approval of the Merger Agreement by the stockholders of First Evergreen;
(ii) receipt of requisite regulatory approvals; (iii) receipt by each of First
Evergreen and Old Kent of an opinion of counsel as to the tax treatment of
certain aspects of the Merger; (iv) receipt by Old Kent of a letter from First
Evergreen's independent accountants to the effect that First Evergreen is
eligible to participate in a pooling-of-interests combination and a letter
from its independent accountants to the effect that the Merger should be
treated as a pooling-of-interests for accounting purposes; and (v)
satisfaction of certain other conditions.
The preceding description of the Merger Agreement is qualified in its
entirety by reference to the copy of the Merger Agreement included as Exhibit
2.1 hereto and which is incorporated by reference herein.
In connection with the Merger Agreement, First Evergreen and Old Kent
entered into a Stock Option Agreement, dated April 21, 1998 (the "Stock Option
Agreement") pursuant to which First Evergreen granted to Old Kent an option
(the "Option") to purchase, under certain circumstances, up to 80,012 shares
of First Evergreen Common Stock at a price, subject to certain adjustments, of
$1,067.00 per share. The Stock Option Agreement provides that in no event may
the number of shares for which the Option is exercisable exceed 19.99% of the
issued and outstanding shares of First Evergreen Common Stock. The Option was
granted by First Evergreen as a condition and inducement to Old Kent to enter
into the Merger Agreement. Under certain circumstances, First Evergreen may
be required to repurchase the Option or the shares acquired pursuant to the
exercise of the Option.
The preceding description of the Stock Option Agreement is qualified in
its entirety by reference to the copy of the Stock Option Agreement included
as Exhibit 2.2 hereto and which is incorporated by reference herein.
Item 7. Financial Statements and Exhibits
(c) Exhibits
2.1 Agreement and Plan of Merger, dated as of April 21,
1998, between Old Kent Financial Corporation and First
Evergreen Corporation.
2.2 Stock Option Agreement, dated as of April 21, 1998, by
and between Old Kent Financial Corporation, as grantee,
and First Evergreen Corporation, as issuer.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
FIRST EVERGREEN CORPORATION
Date: April 27, 1998 By: /s/ Stephen M. Hallenbeck
------------------------------
Stephen M. Hallenbeck
Secretary/Treasurer
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EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
2.1 Agreement and Plan of Merger, dated as of April
21,1998, between Old Kent Financial Corporation
and First Evergreen Corporation.
2.2 Stock Option Agreement, dated as of April 21,
1998, by and between Old Kent Financial
Corporation, as grantee, and First Evergreen
Corporation, as issuer.
EXHIBIT 2.1<PAGE>
<PAGE>
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BETWEEN
FIRST EVERGREEN CORPORATION
AND
OLD KENT FINANCIAL CORPORATION
Dated as of April 21, 1998
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TABLE OF CONTENTS
PAGE
Article I - The Transaction. . . . . . . . . . . . . . . . . . . . . . . .1
1.1 Approval of Plan of Merger . . . . . . . . . . . . . . . . . . .1
1.2 The Closing. . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.3 Effective Time of the Merger . . . . . . . . . . . . . . . . . .2
1.4 Merger of First Evergreen with and into Old Kent . . . . . . . .3
1.5 Effects of the Merger. . . . . . . . . . . . . . . . . . . . . .3
1.6 Bank Consolidation . . . . . . . . . . . . . . . . . . . . . . .3
1.7 Additional Actions . . . . . . . . . . . . . . . . . . . . . . .3
1.8 Surviving Corporation. . . . . . . . . . . . . . . . . . . . . .3
Article II - Conversion and Exchange of Shares . . . . . . . . . . . . . .4
2.1 Conversion of Shares . . . . . . . . . . . . . . . . . . . . . .4
2.2 Upset Provision. . . . . . . . . . . . . . . . . . . . . . . . .5
2.3 Adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.4 Cessation of Stockholder Status. . . . . . . . . . . . . . . . .7
2.5 Surrender of Old Certificates and Distribution of
Old Kent Common Stock. . . . . . . . . . . . . . . . . . . . . .7
2.6 No Fractional Shares . . . . . . . . . . . . . . . . . . . . . .8
Article III - Old Kent's Representations and Warranties. . . . . . . . . .9
3.1 Authorization, No Conflicts, Etc.. . . . . . . . . . . . . . . .9
3.2 Organization and Good Standing . . . . . . . . . . . . . . . . 10
3.3 Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . . 10
3.4 Old Kent Common Stock. . . . . . . . . . . . . . . . . . . . . 11
3.5 Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.6 Financial Statements . . . . . . . . . . . . . . . . . . . . . 11
3.7 Call Reports . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.8 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . 12
3.9 Absence of Material Adverse Change . . . . . . . . . . . . . . 12
3.10 Absence of Litigation. . . . . . . . . . . . . . . . . . . . . 12
3.11 Regulatory Filings . . . . . . . . . . . . . . . . . . . . . . 13
3.12 Agreements With Bank Regulators. . . . . . . . . . . . . . . . 13
3.13 Registration Statement, Etc. . . . . . . . . . . . . . . . . . 13
3.14 Investment Bankers and Brokers . . . . . . . . . . . . . . . . 14
3.15 Accounting and Tax Treatment . . . . . . . . . . . . . . . . . 14
3.16 No Known Breach. . . . . . . . . . . . . . . . . . . . . . . 14
3.17 True and Complete Information. . . . . . . . . . . . . . . . . 14
3.18 Representations and Warranties at Closing. . . . . . . . . . . 14
Article IV - First Evergreen's Representations and Warranties. . . . . . 14
4.1 Authorization, No Conflicts, Etc.. . . . . . . . . . . . . . . 14
4.2 Organization and Good Standing . . . . . . . . . . . . . . . . 16
4.3 Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.4 Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . . 17
i
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4.5 Financial Statements . . . . . . . . . . . . . . . . . . . . . 17
4.6 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . 18
4.7 Absence of Material Adverse Change . . . . . . . . . . . . . . 18
4.8 Absence of Litigation. . . . . . . . . . . . . . . . . . . . . 18
4.9 Conduct of Business. . . . . . . . . . . . . . . . . . . . . . 18
4.10 Absence of Defaults Under Contracts. . . . . . . . . . . . . . 19
4.11 Regulatory Filings. . . . . . . . . . . . . . . . . . . . . . 19
4.12 Registration Statement, Etc. . . . . . . . . . . . . . . . . . 19
4.13 Agreements With Bank Regulators. . . . . . . . . . . . . . . . 19
4.14 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.15 Title to Properties. . . . . . . . . . . . . . . . . . . . . . 21
4.16 Condition of Real Property . . . . . . . . . . . . . . . . . . 21
4.17 Real and Personal Property Leases. . . . . . . . . . . . . . . 22
4.18 Required Licenses, Permits, Etc. . . . . . . . . . . . . . . . 22
4.19 Certain Employment Matters . . . . . . . . . . . . . . . . . . 22
4.20 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . 23
4.21 Environmental Matters. . . . . . . . . . . . . . . . . . . . . 25
4.22 Duties as Fiduciary. . . . . . . . . . . . . . . . . . . . . . 26
4.23 Investment Bankers and Brokers . . . . . . . . . . . . . . . . 27
4.24 First Evergreen-Related Persons. . . . . . . . . . . . . . . . 27
4.25 Change in Business Relationships . . . . . . . . . . . . . . . 27
4.26 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.27 Books and Records. . . . . . . . . . . . . . . . . . . . . . . 28
4.28 Loan Guarantees. . . . . . . . . . . . . . . . . . . . . . . . 28
4.29 Events Since December 31, 1997 . . . . . . . . . . . . . . . . 28
4.30 Reserve for Loan Losses. . . . . . . . . . . . . . . . . . . . 29
4.31 Loan Origination and Servicing . . . . . . . . . . . . . . . . 29
4.32 Public Communications; Securities Offering . . . . . . . . . . 29
4.33 No Insider Trading . . . . . . . . . . . . . . . . . . . . . . 29
4.34 Data Processing Contracts. . . . . . . . . . . . . . . . . . . 29
4.35 Year 2000 Compliance . . . . . . . . . . . . . . . . . . . . . 29
4.36 Accounting and Tax Treatment . . . . . . . . . . . . . . . . . 30
4.37 True and Complete Information. . . . . . . . . . . . . . . . . 30
4.38 Representations and Warranties at Closing. . . . . . . . . . . 30
Article V - Covenants Pending Closing. . . . . . . . . . . . . . . . . . 30
5.1 First Evergreen Disclosure Statement . . . . . . . . . . . . . 30
5.2 Old Kent Disclosure Statement. . . . . . . . . . . . . . . . . 31
5.3 Breaches of Representations. . . . . . . . . . . . . . . . . . 31
5.4 Conduct of Business Pending the Effective Time--Old Kent . . . 32
5.5 Conduct of Business Pending the Effective Time--First
Evergreen. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.6 Regular Dividends. . . . . . . . . . . . . . . . . . . . . . . 35
5.7 Data Processing and Related Contracts. . . . . . . . . . . . . 35
ii
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5.8 Affiliates -- Compliance with Accounting and
Securities Rules. . . . . . . . . . . . . . . . . . . . . . . 35
5.9 Indemnification and Insurance. . . . . . . . . . . . . . . . . 36
5.10 Exclusive Commitment . . . . . . . . . . . . . . . . . . . . . 36
5.11 Registration Statement . . . . . . . . . . . . . . . . . . . . 37
5.12 Other Filings. . . . . . . . . . . . . . . . . . . . . . . . . 38
5.13 Miscellaneous Agreements and Consents. . . . . . . . . . . . . 38
5.14 Access and Investigation . . . . . . . . . . . . . . . . . . . 38
5.15 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . 38
5.16 Environmental Investigation. . . . . . . . . . . . . . . . . . 39
5.17 Dissenting Stockholders' Appraisal Rights. . . . . . . . . . . 40
5.18 Employment Agreements. . . . . . . . . . . . . . . . . . . . . 40
5.19 Accounting and Tax Treatment . . . . . . . . . . . . . . . . . 40
Article VI - Conditions Precedent to Old Kent's Obligations. . . . . . . 40
6.1 Renewal of Representations and Warranties, Etc.. . . . . . . . 41
6.2 Opinion of Legal Counsel . . . . . . . . . . . . . . . . . . . 41
6.3 Required Regulatory Approvals. . . . . . . . . . . . . . . . . 41
6.4 Stockholder Approval . . . . . . . . . . . . . . . . . . . . . 41
6.5 Order, Decree, Etc.. . . . . . . . . . . . . . . . . . . . . . 41
6.6 Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.7 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.8 Registration Statement . . . . . . . . . . . . . . . . . . . . 42
6.9 Certificate as to Outstanding Shares . . . . . . . . . . . . . 42
6.10 Change of Control Waivers. . . . . . . . . . . . . . . . . . . 42
6.11 Pooling Assurances . . . . . . . . . . . . . . . . . . . . . . 43
Article VII - Conditions Precedent to First Evergreen's Obligations. . . 43
7.1 Renewal of Representations and Warranties, Etc.. . . . . . . . 43
7.2 Opinion of Legal Counsel . . . . . . . . . . . . . . . . . . . 43
7.3 Required Regulatory Approvals. . . . . . . . . . . . . . . . . 44
7.4 Stockholder Approval . . . . . . . . . . . . . . . . . . . . . 44
7.5 Order, Decree, Etc.. . . . . . . . . . . . . . . . . . . . . . 44
7.6 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.7 Registration Statement . . . . . . . . . . . . . . . . . . . . 44
7.8 Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . 44
7.9 Nasdaq Listing . . . . . . . . . . . . . . . . . . . . . . . . 45
Article VIII - Abandonment of Merger . . . . . . . . . . . . . . . . . . 45
8.1 Mutual Abandonment . . . . . . . . . . . . . . . . . . . . . . 45
8.2 Upset Date . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.3 Old Kent's Rights to Terminate . . . . . . . . . . . . . . . . 45
8.4 First Evergreen's Rights to Terminate. . . . . . . . . . . . . 46
8.5 Effect of Termination. . . . . . . . . . . . . . . . . . . . . 46
iii
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Article IX - Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 46
9.1 "Material Adverse Effect" Defined. . . . . . . . . . . . . . . 46
9.2 Nonsurvival of Representations, Warranties, and
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.3 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.4 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.5 Specific Enforcement . . . . . . . . . . . . . . . . . . . . . 47
9.6 Jurisdiction; Venue; Jury. . . . . . . . . . . . . . . . . . . 47
9.7 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.9 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 48
9.10 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 48
9.11 Third Party Beneficiaries. . . . . . . . . . . . . . . . . . . 48
9.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.13 Further Assurances; Privileges . . . . . . . . . . . . . . . . 49
9.14 Headings, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 49
9.15 Calculation of Dates and Deadlines.. . . . . . . . . . . . . . 49
9.16 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 49
DEFINITIONS
Affiliate Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Bank Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Bank Consolidation Agreement . . . . . . . . . . . . . . . . . . . . . . .3
Banking Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Breaching Party. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Business Combination . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Call Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
CERCLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Certificates of Merger . . . . . . . . . . . . . . . . . . . . . . . . . .2
Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Constituent Corporation. . . . . . . . . . . . . . . . . . . . . . . . . .3
Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Designated Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . 15
DGCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Employee Benefit Plan. . . . . . . . . . . . . . . . . . . . . . . . . . 23
Employment Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . 40
Employment-Related Payments. . . . . . . . . . . . . . . . . . . . . . . 23
Environmental Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
iv
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ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Exchange Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
FDIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Federal Bank Holding Company Act . . . . . . . . . . . . . . . . . . . . 10
Federal Reserve Board. . . . . . . . . . . . . . . . . . . . . . . . . . 10
Fiduciary Event. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Final Old Kent Price . . . . . . . . . . . . . . . . . . . . . . . . . . .5
First Evergreen Bank . . . . . . . . . . . . . . . . . . . . . . . . . . .1
First Evergreen Common Stock . . . . . . . . . . . . . . . . . . . . . . .4
First Evergreen. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
First Evergreen-Related Person . . . . . . . . . . . . . . . . . . . . . 27
First Evergreen's Financial Statements . . . . . . . . . . . . . . . . . 17
First Evergreen's Leases . . . . . . . . . . . . . . . . . . . . . . . . 22
First Evergreen's Real Property. . . . . . . . . . . . . . . . . . . . . 21
First Evergreen Disclosure Statement . . . . . . . . . . . . . . . . . . 14
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Hazardous Substance. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Hospital Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Insurance Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Internal Revenue Code. . . . . . . . . . . . . . . . . . . . . . . . . . .1
IRS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Material Adverse Effect. . . . . . . . . . . . . . . . . . . . . . . . . 46
Merger.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Michigan Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Old Kent Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . . .4
Old Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Old Kent Disclosure Statement. . . . . . . . . . . . . . . . . . . . . . .9
Old Kent Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Old Kent Rights Agreement. . . . . . . . . . . . . . . . . . . . . . . . 10
Old Kent's Financial Statements. . . . . . . . . . . . . . . . . . . . . 11
Old Kent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
PBGC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Phase I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Plan of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Pricing Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Prospectus and Proxy Statement . . . . . . . . . . . . . . . . . . . . . 13
v
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Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . 13
SEC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Stockholders' Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . .1
Superior Proposal. . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Surviving Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . .3
Technology Products. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Transaction Documents. . . . . . . . . . . . . . . . . . . . . . . . . . 13
Upset Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
EXHIBITS
A - First Evergreen Option Agreement . . . . . . . . . . . . . . . .A-1
B - Form of First Evergreen's Disclosure Statement . . . . . . . . .B-1
C - Form of Old Kent's Disclosure Statement. . . . . . . . . . . . .C-1
D - Form of Affiliate Agreement. . . . . . . . . . . . . . . . . . .D-1
E - Form of First Evergreen's Counsel's Legal Opinion. . . . . . . .E-1
F - Form of Old Kent's Counsel's Legal Opinion . . . . . . . . . . .F-1
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "PLAN OF MERGER") is made as of
April 21, 1998, between First Evergreen Corporation, a Delaware corporation
headquartered at 3101 W. 95th Street, Evergreen Park, Illinois 60805
("FIRST EVERGREEN"), and Old Kent Financial Corporation, a Michigan
corporation headquartered at 111 Lyon Street NW, Grand Rapids, Michigan
49503 ("OLD KENT").
Old Kent and First Evergreen desire that First Evergreen and its
subsidiary become affiliated with Old Kent. The affiliation would be
effected through the merger of First Evergreen 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 Delaware General Corporation Law, as amended (the "DGCL"). The
transactions contemplated by and described in this Plan of Merger are
referred to as the "MERGER." Simultaneously or as soon as reasonably
practical following the consummation of the Merger, First Evergreen's
wholly owned subsidiary, First National Bank of Evergreen Park ("FIRST
EVERGREEN BANK") 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, First Evergreen 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 APPROVAL OF PLAN OF MERGER. As soon as practicable after this
Plan of Merger has been executed and delivered and the "Registration
Statement" (as defined in Section 3.13 (REGISTRATION STATEMENT, ETC.)) has
become effective, First Evergreen shall submit this Plan of Merger to its
stockholders for adoption at a meeting properly called, noticed, and held
for that purpose (the "STOCKHOLDERS' MEETING"). No shares of "Old Kent
Common Stock" (as defined below) shall be entitled to vote on approval of
this Plan of Merger.
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1.1.1 BOARD RECOMMENDATION. Except in the case of a "Fiduciary
Event" (as defined below), at the Stockholders' Meeting and in any
proxy materials used in connection with the meeting, the board of
directors of First Evergreen shall recommend that its stockholders
vote for adoption of this Plan of Merger.
1.1.2 FIDUCIARY EVENT. A "FIDUCIARY EVENT" shall have occurred
when the Board of Directors of First Evergreen has (a) received in
writing a "Superior Proposal" (as defined below), which is then
pending, (b) received the written advice of independent legal counsel
that the failure to so withdraw, modify, or change its recommendation
would more likely than not cause the Board of Directors of First
Evergreen to breach its fiduciary duties to First Evergreen's
stockholders under applicable law, (c) determined in good faith that
the failure to so withdraw, modify, or change its recommendation would
cause the Board of Directors of First Evergreen to breach its
fiduciary duties to First Evergreen's stockholders under applicable
law, and (d) determined to accept and recommend the Superior Proposal
to the stockholders of First Evergreen.
1.1.3 SUPERIOR PROPOSAL. A "SUPERIOR PROPOSAL" means any bona
fide unsolicited Proposal (as defined in Section 5.10.2 (COMMUNICATION
OF OTHER PROPOSALS)) made by a third party on terms that the Board of
Directors of First Evergreen determines in its good faith judgment,
based upon the written advice of a financial advisor of nationally
recognized reputation, to be more financially favorable to First
Evergreen's stockholders than the Plan of Merger.
1.1.4 NOTICE. First Evergreen agrees that it shall notify Old
Kent at least 48 hours 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 stockholders for
adoption of this Plan of Merger. Notwithstanding anything to the
contrary contained in this Plan of Merger, any such withdrawal,
modification, or change of recommendation in accordance with the
provisions of this Section shall not constitute a breach of this Plan
of Merger by First Evergreen.
1.2 THE CLOSING. The Merger shall be consummated following the
"CLOSING." The Closing 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,
900 Old Kent Building, 111 Lyon Street, N.W., Grand Rapids, Michigan,
commencing at 11 a.m. on a date specified by either party upon 10 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
legally required to consummate the Merger and the expiration of all
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statutory waiting periods; and (b) adoption of this Plan of Merger by First
Evergreen's stockholders. Unless otherwise agreed by Old Kent, the Closing
shall not occur prior to the last business day of September, 1998.
Scheduling or commencing the Closing shall not, however, constitute a
waiver of the conditions precedent of either Old Kent or First Evergreen as
set forth in Articles VI and VII, respectively. Upon completion of the
Closing, First Evergreen and Old Kent shall each execute and file the
certificates of merger as required by the Michigan Act and DGCL to effect
the Merger (collectively, the "CERTIFICATES OF MERGER").
1.3 EFFECTIVE TIME OF THE MERGER. The Merger shall be consummated as
promptly as possible 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 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. The parties presently
anticipate that the Effective Time will be on October 1, 1998.
1.4 MERGER OF FIRST EVERGREEN WITH AND INTO OLD KENT. At the
Effective Time, First Evergreen shall be merged with and into Old Kent.
First Evergreen 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").
1.5 EFFECTS OF THE MERGER. 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 Subchapter IX of the DGCL 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.
1.6 BANK CONSOLIDATION. After the Effective Time, Old Kent intends
to consolidate First Evergreen Bank and Old Kent Bank into a single
Michigan banking corporation where Old Kent Bank will be the consolidated
bank resulting from the transaction (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 "BANKING CODE"), and by the Federal
Deposit Insurance Act, as amended, containing terms and conditions, not
inconsistent with this Agreement, 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. In order to obtain the necessary regulatory
approval for the Bank Consolidation to occur immediately after the
Effective Time, Old Kent may request that First Evergreen and First
Evergreen Bank each 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. The effectiveness of the
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Bank Consolidation Agreement, regardless of when executed and delivered,
shall be subject to Old Kent's action, in its capacity as the sole
shareholder of First Evergreen Bank, to approve the Bank Consolidation
Agreement immediately after the Effective Time.
1.7 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 First
Evergreen 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. First Evergreen 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 limited
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 First Evergreen to take any and all such
action contemplated by this Plan of Merger.
1.8 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:
1.8.1 NAME. The name of the Surviving Corporation shall be "Old
Kent Financial Corporation."
1.8.2 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.
1.8.3 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.
1.8.4 DIRECTORS. The directors of the Surviving Corporation
shall be the same as the directors of Old Kent immediately prior to
the Effective Time.
1.8.5 OFFICERS. The officers of the Surviving Corporation shall
be the same as the officers of Old Kent immediately prior to the
Effective Time.
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ARTICLE II - CONVERSION AND EXCHANGE OF SHARES
Subject to the terms and conditions of this Plan of Merger, the
exchange of the common stock, $25 par value per share of First Evergreen
("FIRST EVERGREEN COMMON STOCK") for the common stock, $1 par value per
share of Old Kent ("OLD KENT COMMON STOCK") shall be effected as follows:
2.1 CONVERSION OF SHARES. At the Effective Time:
2.1.1 CONVERSION OF FIRST EVERGREEN COMMON STOCK. Except as
provided below, each share of First Evergreen Common Stock outstanding
immediately prior to the Effective Time shall be converted into
30.5059 (the "EXCHANGE RATIO") of validly issued, fully paid, and
nonassessable shares of Old Kent Common Stock.
2.1.2 OLD KENT RIGHTS. Each share of Old Kent Common Stock to
be issued in the Merger will 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 3.3.1) then represented by each
share of Old Kent Common Stock at the Effective Time, provided that
the Old Kent Rights are not then separately transferable.
2.1.3 CONVERSION OF OLD KENT COMMON STOCK. Each share of Old
Kent Common Stock 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 First Evergreen
Common Stock, if any, held by Old Kent or any of its subsidiaries for
its own account, and not in a fiduciary capacity for a person other
than Old Kent or any of its subsidiaries or as a result of debts
previously contracted, 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 First Evergreen Common
Stock held by First Evergreen 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. Any shares of First Evergreen Common
Stock held by a holder who shall not have voted the shares in favor of
the Merger and who shall have complied with the applicable procedures
of Section 262 of the DGCL and becomes entitled to obtain payment for
the appraised value of the shares pursuant to Section 262 of the DGCL
shall be in this Plan of Merger called "DISSENTING SHARES."
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Notwithstanding any other provision of this Plan of Merger, any
Dissenting Shares shall not, after the Effective Time, be entitled to
vote for any purpose or receive any dividends or other distributions
and shall be entitled only to the rights as are afforded in respect of
Dissenting Shares pursuant to the DGCL. All payments in respect of
Dissenting Shares shall be from funds of Old Kent and not from the
acquired assets of First Evergreen.
2.1.7 FIRST EVERGREEN COMMON STOCK NO LONGER OUTSTANDING. Each
share of First Evergreen Common Stock outstanding immediately prior to
the Effective Time shall be deemed to be no longer outstanding and to
represent solely 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), First Evergreen shall have the right to
terminate this Plan of Merger if the Final Old Kent Price is less than
$35.00 (the "UPSET PRICE"). The "FINAL OLD KENT PRICE" means the average
of the closing prices per share of Old Kent Common Stock reported on The
NASDAQ Stock Market during the 10 consecutive trading days ending on the
tenth business day prior to the date of the scheduled Closing (the "PRICING
PERIOD"), as reported in the DOW JONES NEWS/RETRIEVAL system, or other
equally reliable means.
2.3 ADJUSTMENTS. The Exchange Ratio and Upset 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:
2.3.1 STOCK DIVIDENDS AND DISTRIBUTIONS. If Old Kent declares a
stock dividend, stock split, or other general distribution of Old Kent
Common Stock to holders of Old Kent Common Stock and the ex-dividend
or ex-distribution date for such stock dividend, stock split, or
distribution occurs (a) prior to the beginning of the Pricing Period,
the Upset Price 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 outstanding immediately prior to such dividend,
split, or distribution; and (ii) the denominator of which shall be the
total number of shares of Old Kent Common Stock that are or will be
outstanding immediately after such dividend, split, or distribution;
and (b) prior to the date of the Effective Time, 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 or will be outstanding immediately after such dividend,
split, or distribution; and (ii) the denominator of which shall be the
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total number of shares of Old Kent Common Stock outstanding
immediately prior to such dividend, split, or distribution.
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 stockholders of First Evergreen in exchange for their
shares of First Evergreen 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 First Evergreen Common Stock would receive,
in lieu of each share of Old Kent Common Stock to be issued in
exchange for First Evergreen Common Stock based on the Exchange Ratio,
the kind and amount of shares of 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 POSTPONEMENT OF CLOSING. Old Kent and First Evergreen
agree not to convene the Closing at any time that would result in
there being a record date, ex-dividend date, or ex-distribution date
for any transaction described in Sections 2.3.1 (STOCK DIVIDENDS AND
DISTRIBUTIONS) or 2.3.2 (OTHER ACTION AFFECTING OLD KENT COMMON STOCK)
at any time during the Pricing Period.
2.3.4 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 benefit plans of Old Kent.
2.3.5 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
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securities pursuant to a public offering, private placement, or an
acquisition of one or more banks, corporations, or business assets for
consideration that the board of directors of Old Kent, or a duly
authorized committee thereof, determines to be fair and reasonable.
2.3.6 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 is intended to
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.
2.3.7 INCREASE IN OUTSTANDING SHARES OF FIRST EVERGREEN COMMON
STOCK. In the event that the number of shares of First Evergreen
Common Stock outstanding at the Effective Time is greater than 400,261
for any reason whatsoever (whether or not such increase constitutes a
breach of this Plan of Merger), then the Exchange Ratio shall be
adjusted by (i) the numerator of which shall be 400,261 and (ii) the
denominator of which shall be the total number of shares of First
Evergreen Common Stock outstanding at the Effective Time.
2.4 CESSATION OF STOCKHOLDER STATUS. As of the Effective Time, each
record holder of shares of First Evergreen Common Stock outstanding
immediately prior to the Effective Time shall cease to be a stockholder of
First Evergreen and shall have no rights as a First Evergreen stockholder
except to the extent provided by the DGCL to Dissenters' Shares. Except
with respect to Dissenters' Shares, each stock certificate representing
shares of First Evergreen Common Stock ("OLD CERTIFICATES") shall then be
deemed to represent only the right to receive 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 First Evergreen 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. As soon as practicable after the
Effective Time, Old Kent will deliver to Old Kent Bank, a Michigan
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banking corporation, or such other bank or trust company as Old Kent
may designate (the "EXCHANGE AGENT"), 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 persons 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 First Evergreen'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 First Evergreen stockholder, the Exchange Agent
shall have received all of the Old Certificates held by that
stockholder, or an affidavit of loss and indemnity bond for such
certificate or certificates, together with properly executed
transmittal materials; and such certificates, 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 stockholder
of First Evergreen shall be entitled to receive a distribution of any
such dividend until the physical exchange of that stockholder's Old
Certificates for new Old Kent Common Stock certificates shall have
been effected. Upon the physical exchange of that stockholder's Old
Certificates, that stockholder 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. On or after the Effective Time, there
shall be no transfers on First Evergreen's stock transfer books of the
shares of First Evergreen 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.
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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 First Evergreen Common Stock are converted in the Merger and
governing the payment for fractional shares of First Evergreen 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 (taking into account
all shares held by a particular First Evergreen stockholder) 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 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.
ARTICLE III - OLD KENT'S REPRESENTATIONS AND WARRANTIES
Old Kent represents and warrants to First Evergreen that, except as
otherwise set forth in a disclosure statement (the "OLD KENT DISCLOSURE
STATEMENT") that will be delivered to First Evergreen within 21 days after
the date of this Plan of Merger:
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 transactions contemplated by this Plan of
Merger. This Plan of Merger has been duly adopted and the
consummation of the transactions contemplated by this Plan of Merger
have 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 transactions so
contemplated. 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
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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, 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;
(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 First Evergreen to
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 DGCL, compliance with federal and state
securities laws, bylaws and rules of the National Association of
Securities Dealers, Inc. ("NASD"), and the approval required under the
Federal Bank Holding Company 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
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the Bank Holding Company Act of 1956, as amended (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 omitted would have a Material Adverse Effect on Old Kent.
3.3 CAPITAL STOCK.
3.3.1 CLASSES AND SHARES. The authorized capital stock of Old
Kent consists of 175,000,000 shares divided into two classes as
follows: (a) except as provided below, 150,000,000 shares of Common
Stock, of which, as of February 20, 1998, a total of 91,696,375 shares
were validly issued and outstanding; and (b) 25,000,000 shares of
preferred stock, without par value, of which 3,000,000 shares are
designated Series A Preferred Stock, 300,000 shares are designated
Series B Preferred Stock, 1,000,000 shares are designated Series C
Preferred Stock, none of which preferred stock were 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, between
Old Kent and Old Kent Bank (the "OLD KENT RIGHTS AGREEMENT"). On
April 20, 1998, holders of a majority of Old Kent Common Stock
approved an amendment to Old Kent's Restated Articles of Incorporation
authorizing Old Kent to increase the number of authorized shares of
Old Kent Common Stock to 300,000,000. Upon the proper filing and
acceptance of an amendment to Old Kent's Restated Articles of
Incorporation under the Michigan Act sometime after the date of this
Plan of Merger, the number of authorized shares of Old Kent Common
Stock shall equal 300,000,000.
3.3.2 NO OTHER CAPITAL STOCK. As of the execution 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 are no
outstanding subscriptions, options, warrants, or rights to acquire any
capital stock of Old Kent, or agreements 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, and other benefit plans; (iv) 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
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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 plan.
3.3.3 ISSUANCE OF SHARES. Between February 20, 1998, and the
execution 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, 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 plan.
3.3.4 VOTING RIGHTS. Neither Old Kent nor any of its
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.
3.4 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.
3.5 SUBSIDIARY. 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. There are no outstanding
subscriptions, options, warrants, rights to acquire, or any other similar
agreements pertaining to the capital stock of Old Kent Bank.
3.6 FINANCIAL STATEMENTS. The consolidated financial statements of
Old Kent and its subsidiaries as of and for the each of three years ended
December 31, 1995, 1996, and 1997, as reported on by Old Kent's independent
accountants, and the unaudited consolidated financial statements of Old
Kent and its subsidiaries as of and for the quarter ended March 31, 1998,
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 flow of Old Kent as of the respective dates of and for the
periods referred to in such financial statements, all in accordance with
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generally accepted United States accounting principles ("GAAP"), subject,
in the case of interim financial statements, to normal recurring year-end
adjustments (the effect of which will not, individually or in the
aggregate, have a Material Adverse Effect) and the absence of notes that,
if presented, would not differ materially from those included in Old Kent's
Financial Statements as of and for the period ended December 31, 1997. The
unaudited consolidated financial statements of Old Kent and its
subsidiaries as of and for each of the quarters ended March 31, 1998 and
thereafter, including all schedules and notes relating to such statements,
will be correct and complete in all material respects. Old Kent's
Financial Statements reflect the consistent application of GAAP throughout
the periods involved, except as disclosed in the notes to such financial
statements.
3.7 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:
3.7.1 The consolidated reports of condition and income of Old
Kent Bank as of and for each of the years ended December 31, 1995,
1996, and 1997, as filed with the FDIC; and
3.7.2 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, 1995, 1996, and 1997, 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.
3.8 ABSENCE OF UNDISCLOSED LIABILITIES. Except as and to the extent
reflected or reserved against in Old Kent's Financial Statements as of
December 31, 1997, 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.
3.9 ABSENCE OF MATERIAL ADVERSE CHANGE. Since December 31, 1997,
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 and
not applicable to the banking industry as a whole.
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3.10 ABSENCE OF LITIGATION. Except as disclosed in Old Kent's
filings with the Securities and Exchange Commission (the "SEC"), there is
no action, suit, proceeding, claim, arbitration, or investigation pending
or 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 will 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.
3.11 REGULATORY FILINGS. In the last two years:
3.11.1 SEC FILINGS. Old Kent has filed, and 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;
3.11.2 REGULATORY FILINGS. Old Kent has filed in a timely
manner all other material filings with other regulatory bodies for
which filings are required; and
3.11.3 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.
3.12 AGREEMENTS WITH BANK REGULATORS. Neither Old Kent nor Old Kent
Bank is a party to any written 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 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 Old Kent
Bank is required by Section 32 of the Federal Deposit Insurance Act 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.
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3.13 REGISTRATION STATEMENT, ETC.
3.13.1 "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
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 First Evergreen stockholders in connection
with the Stockholders' Meeting; and (iii) any other documents to be
filed with the SEC, the Federal Reserve Board, the states of Michigan
or Delaware, or any other regulatory agency in connection with the
transactions contemplated by this Plan of Merger.
3.13.2 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 Stockholders' Meeting.
3.13.3 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.
3.14 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.
3.15 ACCOUNTING AND TAX TREATMENT. Neither Old Kent nor, to the
best of 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.
3.16 NO KNOWN BREACH. As of the date of this Plan of Merger, Old
Kent has no knowledge of any facts provided by First Evergreen to Old Kent
in writing prior to 5 p.m. on April 14, 1998, that Old Kent believes would,
in and of themselves, give Old Kent the right to terminate this Plan of
Merger in accordance with Section 8.3 (OLD KENT'S RIGHTS TO TERMINATE).
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3.17 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.
3.18 REPRESENTATIONS AND WARRANTIES AT CLOSING. Old Kent further
warrants that its representations and warranties in this Plan of Merger
will be true in all material respects at the Closing, except as otherwise
expressly contemplated by this Plan of Merger. All of such representations
and warranties made with respect to specified dates or events shall still
be true at the Closing in all material respects with respect to such dates
or events.
ARTICLE IV - FIRST EVERGREEN'S REPRESENTATIONS AND WARRANTIES
First Evergreen represents and warrants to Old Kent that, except as
otherwise set forth in a disclosure statement (the "FIRST EVERGREEN
DISCLOSURE STATEMENT") that will be delivered to Old Kent within 21 days
after the execution of this Plan of Merger:
4.1 AUTHORIZATION, NO CONFLICTS, ETC.
4.1.1 AUTHORIZATION OF AGREEMENT. First Evergreen has the
requisite corporate power and authority to execute and deliver this
Plan of Merger and, subject to adoption by First Evergreen's
stockholders, to consummate the transactions contemplated by this Plan
of Merger. This Plan of Merger has been duly approved and the
consummation of the transactions contemplated by this Plan of Merger
have been duly authorized by the Board of Directors of First Evergreen
and no other corporate proceedings on the part of First Evergreen are
necessary to authorize this Plan of Merger or to consummate the
transactions so contemplated, subject only to adoption by the
stockholders of First Evergreen. This Plan of Merger has been duly
executed and delivered by, and constitutes valid and binding
obligations of, First Evergreen and is enforceable against First
Evergreen in accordance with its terms.
4.1.2 NO CONFLICT, BREACH, VIOLATION, ETC. The execution,
delivery, and performance of this Plan of Merger by First Evergreen,
and the consummation of the Merger, do not and will not violate,
conflict with, or result in a breach of any provision of: (a) First
Evergreen's or First Evergreen Bank's Certificate of Incorporation,
Articles of Association, or By-laws; or (b) any statute, code,
ordinance, rule, regulation, judgment, order, writ, arbitral award,
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decree, or injunction applicable to First Evergreen or First Evergreen
Bank, 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 First
Evergreen, 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 First
Evergreen or First Evergreen Bank under any agreement, mortgage,
lease, commitment, indenture, other instrument, or obligation to
which First Evergreen or First Evergreen Bank is a party or by
which they are bound or affected, the result of which would have
a Material Adverse Effect on First Evergreen, other than First
Evergreen's or First Evergreen Bank's lease agreement with
respect to its property located at 4400 West 95th Street, Oak
Lawn, Illinois (the "HOSPITAL LEASE"); the Autopay Agreement,
dated October 8, 1987, as amended, between First Evergreen Bank
and SunGard Trust Systems Inc.; the Custodian Agreement, dated
November 7, 1995, as amended, between Bank of New York, First
Evergreen Bank, and SunGard Trust Services Inc.; and the Data
Processing Services Agreement, dated December 29, 1995, as
amended, between M&I Data Services and First Evergreen
(collectively, the "DESIGNATED CONTRACTS");
(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 First Evergreen or
First Evergreen Bank 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
First Evergreen other than in connection or compliance with the
provisions of the Michigan Act and DGCL, compliance with federal and
state securities laws, and the consents, authorizations, approvals, or
exemptions required under the Federal Bank Holding Company Act.
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4.2 ORGANIZATION AND GOOD STANDING. First Evergreen is a corporation
duly organized, validly existing, and in good standing under the laws of
the State of Delaware. First Evergreen 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.
First Evergreen is a bank holding company duly registered as such with the
Federal Reserve Board under the Federal Bank Holding Company Act. First
Evergreen is duly qualified and admitted to do business as a foreign
corporation in the state of Illinois and 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 have a Material Adverse Effect
on First Evergreen.
4.3 SUBSIDIARY.
4.3.1 OWNERSHIP OF FIRST EVERGREEN BANK. First Evergreen owns
all of the issued and outstanding shares of capital stock of First
Evergreen Bank, free and clear of all claims, security interests,
pledges, or liens of any kind. First Evergreen Bank is duly
organized, validly existing, and in good standing as a national bank
under the laws of the United States. First Evergreen 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
this Section.
4.3.2 RIGHTS TO CAPITAL STOCK. There are no outstanding
subscriptions, options, warrants, rights to acquire, or any other
similar agreements pertaining to the capital stock of First Evergreen
Bank.
4.3.3 QUALIFICATION AND POWER. Other than with respect to the
state of Illinois, First Evergreen Bank 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
First Evergreen. First Evergreen Bank has full corporate power and
authority to carry on its business as and where now being conducted.
4.3.4 DEPOSIT INSURANCE; OTHER ASSESSMENTS. First Evergreen
Bank maintains in full force and effect deposit insurance through the
Bank Insurance Fund of the Federal Deposit Insurance Corporation
("FDIC"). First Evergreen 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. First
Evergreen 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.
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4.4 CAPITAL STOCK.
4.4.1 CLASSES AND SHARES. The authorized capital stock of First
Evergreen consists of 2,000,000 shares of common stock, $25.00 par
value per share, of which 400,261 shares are issued and outstanding.
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 First
Evergreen and there are no outstanding subscriptions, options,
warrants, or rights to acquire any capital stock of First Evergreen,
or agreements to which First Evergreen is a party or by which it is
bound to issue capital stock.
4.4.3 ISSUANCE OF SHARES. After the execution of this Plan of
Merger, the number of issued and outstanding shares of First Evergreen
Common Stock is not subject to change before the Effective Time.
4.4.4 VOTING RIGHTS. Other than the shares of First Evergreen
Common Stock described in this Section, neither First Evergreen nor
First Evergreen Bank 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 First Evergreen and First Evergreen Bank as of and for
the each of three years ended December 31, 1995, 1996, and 1997, as
reported on by First Evergreen's independent accountants, and the
unaudited consolidated financial statements of First Evergreen and
First Evergreen Bank as of and for the quarter ended March 31, 1998,
including all schedules and notes relating to such statements, as
previously delivered to Old Kent (collectively, "FIRST EVERGREEN'S
FINANCIAL STATEMENTS") fairly present the financial condition and the
results of operations, changes in stockholders' equity, and cash flow
of First Evergreen as of the respective dates of and for the periods
referred to in such financial statements, all in accordance with GAAP,
subject, in the case of interim financial statements, to normal
recurring year-end adjustments (the effect of which will not,
individually or in the aggregate, have a Material Adverse Effect) and
the absence of notes that, if presented, would not differ materially
from those included in First Evergreen's Financial Statements as of
and for the period ended December 31, 1997. First Evergreen's
Financial Statements reflect the consistent application of GAAP
throughout the periods involved, except as disclosed in the notes to
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such financial statements. When prepared and delivered to Old Kent,
the unaudited consolidated financial statements of First Evergreen and
First Evergreen Bank as of and for each of the quarters ended March
31, 1998 and thereafter, including all schedules and notes (if any)
relating to such statements, will be correct and complete in all
material respects. No financial statements of any entity other than
First Evergreen Bank is required by GAAP to be included in the
consolidated financial statements of First Evergreen.
4.5.2 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
First Evergreen Bank as of and for each of the years ended
December 31, 1995, 1996, and 1997, as filed with the FDIC; and
(b) The FR Y-9 and FR Y-6 for First Evergreen and First
Evergreen Bank as of and for each of the years ended December 31,
1995, 1996, and 1997, as filed with the Federal Reserve Board.
All of such reports required to be filed prior to the Closing by First
Evergreen and/or First Evergreen 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 First Evergreen's Financial Statements as
of December 31, 1997, neither First Evergreen nor First Evergreen Bank 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 First
Evergreen.
4.7 ABSENCE OF MATERIAL ADVERSE CHANGE. Except for transactions
contemplated by this Plan of Merger and their related fees and expenses,
since December 31, 1997, there has been no change in the financial
condition, income, expenses, or business of First Evergreen and First
Evergreen Bank (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 First Evergreen and not
applicable to the banking industry as a whole.
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4.8 ABSENCE OF LITIGATION. There is no action, suit, proceeding,
claim, arbitration, or investigation pending or, to the knowledge of First
Evergreen, threatened by any person, including without limitation any
governmental or regulatory agency, against First Evergreen or First
Evergreen Bank, or the assets or business of First Evergreen or First
Evergreen Bank, any of which has had or may have a Material Adverse Effect
on First Evergreen. To the knowledge of First Evergreen, there is no
factual basis that presents a reasonable potential for any such action,
suit, proceeding, claim, arbitration, or investigation.
4.9 CONDUCT OF BUSINESS. First Evergreen and First Evergreen Bank
have conducted their respective businesses and used their respective
properties substantially in 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 4.21.2 (ENVIRONMENTAL LAWS));
except for violations (individually or in the aggregate) that would not
have a Material Adverse Effect on First Evergreen.
4.10 ABSENCE OF DEFAULTS UNDER CONTRACTS. There is no existing
default by First Evergreen or First Evergreen Bank, or any other party,
under any contract or agreement to which First Evergreen or First Evergreen
Bank is a party, or by which they are bound, the result of which would have
a Material Adverse Effect on First Evergreen. Excepting any ordinary and
customary banking relationships, there are no material agreements,
contracts, mortgages, deeds of trust, leases, commitments, indentures,
notes, or other instruments under which another party is in material
default under its obligations to First Evergreen or First Evergreen Bank.
4.11 REGULATORY FILINGS. In the last five years:
4.11.1 SEC FILINGS. First Evergreen has filed, and 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;
4.11.2 REGULATORY FILINGS. First Evergreen has filed in a
timely manner all other filings with other regulatory bodies for which
filings are required; and
4.11.3 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
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circumstances under which they were made, not misleading. All such
filings complied in all material respects with all regulations, forms,
and guidelines applicable to such filings.
4.12 REGISTRATION STATEMENT, ETC.
4.12.1 ACCURATE INFORMATION. The information to be supplied by
First Evergreen 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 Stockholders' Meeting.
4.12.2 COMPLIANCE OF FILINGS. All documents that First
Evergreen 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.
4.13 AGREEMENTS WITH BANK REGULATORS. Neither First Evergreen nor
First Evergreen Bank is a party to any written 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 First Evergreen 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 First
Evergreen nor First Evergreen Bank is required by Section 32 of the Federal
Deposit Insurance Act 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, First Evergreen 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.
4.14 TAX MATTERS.
4.14.1 TAX RETURNS. First Evergreen and First Evergreen Bank
have duly and timely filed all material tax returns that they have by
law been required to file, including without limitation those with
respect to income, withholding, social security, unemployment,
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franchise, real property, personal property, sales, use, and
intangibles taxes. Each such tax return, report, and statement, as
amended, is correct and complies in all material respects with all
applicable laws and regulations.
4.14.2 TAX ASSESSMENTS AND PAYMENTS. All taxes and assessments,
including any penalties, interest, and deficiencies relating to those
taxes and assessments, due and payable by First Evergreen and First
Evergreen's Bank have been paid in full as and when due, including
applicable extension periods. The provisions made for taxes on First
Evergreen's Financial Statement as of December 31, 1997, are
sufficient for the payment of all federal, state, county, and local
taxes of First Evergreen and First Evergreen Bank accrued but unpaid
as of the date indicated, whether or not disputed, with respect to all
periods through December 31, 1997.
4.14.3 TAX AUDITS. None of the federal consolidated income tax
returns of First Evergreen and First Evergreen Bank filed for any tax
year after 1990 have been audited by the Internal Revenue Service (the
"IRS"). There is no tax audit or legal or administrative proceeding
for assessment or collection of taxes pending or, to First Evergreen's
knowledge, threatened with respect to First Evergreen or First
Evergreen Bank. No claim for assessment or collection of taxes has
been asserted with respect to First Evergreen or First Evergreen Bank.
No waiver of any limitations statute or extension of any assessment or
collection period has been executed by or on behalf of First Evergreen
or First Evergreen Bank.
4.14.4 ILLINOIS NET OPERATING LOSS AMOUNTS. The First Evergreen
Disclosure Schedule accurately sets forth in all material respects the
amount of, tax year, and legal entity governing Illinois net operating
losses existing through December 31, 1997. First Evergreen has
validly succeeded to the Illinois net operating losses of any
previously acquired bank or bank holding company, the losses of which
are accurately set forth in all material respects in the First
Evergreen Disclosure Schedule.
4.15 TITLE TO PROPERTIES. First Evergreen and First Evergreen Bank
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 First
Evergreen's Financial Statements as of December 31, 1997, except as since
disposed of in the ordinary course of business), free and clear of all
liens and encumbrances, except:
4.15.1 REFLECTED ON BALANCE SHEET. As reflected on First
Evergreen's Financial Statements as of December 31, 1997 or March 31,
1998;
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4.15.2 NORMAL TO BUSINESS. Liens for current taxes not yet
delinquent, and liens or encumbrances that are normal to the business
of First Evergreen and First Evergreen Bank and that would not have a
Material Adverse Effect on First Evergreen; and
4.15.3 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.
4.16 CONDITION OF REAL PROPERTY. With respect to each parcel of real
property owned, legally and beneficially, by First Evergreen or First
Evergreen's Bank, ("FIRST EVERGREEN'S REAL PROPERTY"), to the best
knowledge of First Evergreen:
4.16.1 NO ENCROACHMENTS. No building or improvement to First
Evergreen's Real Property encroaches on any easement or property owned
by another person. No building or property owned by another person
encroaches on First Evergreen's Real Property or on any easement
benefiting First Evergreen's Real Property. None of the boundaries of
First Evergreen's Real Property deviates substantially from those
shown on the survey of such property, if any, included with the First
Evergreen 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 First Evergreen's Real
Property.
4.16.2 ZONING. Neither First Evergreen, First Evergreen Bank,
nor First Evergreen'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
First Evergreen's Real Property.
4.16.3 BUILDINGS. All buildings and improvements to First
Evergreen'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.
4.16.4 NO CONDEMNATION. None of First Evergreen'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 First Evergreen's Real Property for any governmental
purpose.
4.17 REAL AND PERSONAL PROPERTY LEASES. With respect to each lease
and license pursuant to which First Evergreen or First Evergreen Bank, as
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lessee or licensee, has possession of real or personal property, excluding
any personal property lease with payments of less than $25,000 per year
("FIRST EVERGREEN'S LEASES"):
4.17.1 VALID. Each of First Evergreen's Leases is valid,
effective, and enforceable against the lessor or licensor in
accordance with its terms.
4.17.2 NO DEFAULT. There is no existing default under any of
First Evergreen's Leases or any event that with notice or lapse of
time, or both, would constitute a default with respect to First
Evergreen, First Evergreen Bank, or any other party to the contract,
the result of such default would have a Material Adverse Effect on
First Evergreen.
4.17.3 ASSIGNMENT. None of First Evergreen's Leases, except the
lease of its Christ Hospital Facility, contain a prohibition against
assignment by First Evergreen or First Evergreen Bank, 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 First
Evergreen or First Evergreen Bank.
4.18 REQUIRED LICENSES, PERMITS, ETC.
4.18.1 LICENSES, PERMITS, ETC. First Evergreen and First
Evergreen Bank each hold all licenses, certificates, permits,
franchises, and rights from all appropriate federal, state, and other
public authorities necessary for its conduct of business as presently
conducted, the lack of which would not have a Material Adverse Effect
on First Evergreen.
4.18.2 REGULATORY ACTION. Neither First Evergreen nor First
Evergreen Bank has within the last five years been charged by a
regulatory authority with, or to the best of First Evergreen's
knowledge, is under governmental investigation with respect to, any
actual or alleged violation of any statute, ordinance, rule,
regulation, guideline, or standard, except as set forth on the most
recent examination report on First Evergreen Bank by its primary bank
regulatory. Neither First Evergreen nor First Evergreen Bank is the
subject of any pending or, to First Evergreen's knowledge, threatened
proceeding by any regulatory authority having jurisdiction over its
business, properties, or operations.
4.19 CERTAIN EMPLOYMENT MATTERS.
4.19.1 EMPLOYMENT POLICIES, PROGRAMS, AND PROCEDURES. The
policies, programs and practices of First Evergreen and First
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Evergreen Bank 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
facilities.
4.19.2 RECORD OF PAYMENTS. There are no existing or outstanding
obligations of First Evergreen or First Evergreen Bank, whether
arising by operation of law, civil or common, by contract, or by past
custom, for Employment-Related Payments (as defined in Section 4.19.3
(EMPLOYMENT-RELATED PAYMENTS)) to any trust, fund, company,
governmental agency, or any person that have not been duly recorded on
the books and records of First Evergreen or First Evergreen Bank and
paid when due or duly accrued in the ordinary course of business in
accordance with GAAP.
4.19.3 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.
4.19.4 EMPLOYMENT CLAIMS. There are no disputes, claims, or
charges, pending or, to the best of First Evergreen'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. To the best knowledge of First
Evergreen, there is no factual basis for any valid claim or charge
with regard to such employment-related matters.
4.19.5 DISCLOSURE OF MATERIAL 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 First
Evergreen or First Evergreen Bank that is not terminable by First
Evergreen or First Evergreen Bank 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
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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.
4.20 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 First Evergreen or First Evergreen Bank or to which
First Evergreen or First Evergreen Bank have made payments or contributions
on behalf of its employees:
4.20.1 ERISA COMPLIANCE. First Evergreen and First Evergreen
Bank, 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.
4.20.2 INTERNAL REVENUE CODE COMPLIANCE. First Evergreen and
First Evergreen Bank, 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.
4.20.3 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.
4.20.4 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
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 such
termination, all termination procedures have been completed and there
are no pending or potential liabilities to the PBGC, to the plans, or
to participants under such terminated plans. Each such termination,
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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.
4.20.5 MULTIEMPLOYER PLAN. No Employee Benefit Plan is a
"multiemployer plan" within the meaning of Section 3(37)(A) of ERISA.
4.20.6 DEFINED BENEFIT PLAN. No Employee Benefit Plan in effect
as of December 31, 1997, is a "defined benefit plan" within the
meaning of Section 3(35) of ERISA.
4.20.7 PAYMENT OF CONTRIBUTIONS. First Evergreen and First
Evergreen Bank has made when due all contributions required under each
Employee Benefit Plan and under applicable laws and regulations.
4.20.8 PAYMENT OF BENEFITS. There are no payments that have
become due from any Employee Benefit Plan, the trusts created
thereunder, or from First Evergreen or First Evergreen Bank that have
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.
4.20.9 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).
4.20.10 FILING OF REPORTS. First Evergreen 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 or ERISA, or 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.
4.21 ENVIRONMENTAL MATTERS.
4.21.1 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.A. <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)
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and any other pollutant, contaminant, or waste, including, without
limitation, petroleum, asbestos, radon, and polychlorinated biphenyls.
4.21.2 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 air,
water, soil, or solid waste management, including the generation,
release, containment, storage, handling, transportation, disposal, or
management of Hazardous Substances; (b) regulate or prescribe
requirements for 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.
4.21.3 OWNED OR OPERATED PROPERTY. Other than the Hospital
Lease, with respect to: (i) the real estate owned or leased by First
Evergreen or First Evergreen Bank or used in the conduct of their
businesses; (ii) other real estate owned by First Evergreen Bank;
(iii) real estate held and administered in trust by First Evergreen
Bank, other than real estate held by First Evergreen Bank as trustee
of an Illinois land trust created in the ordinary course of business;
and (iv) to First Evergreen's knowledge, any real estate formerly
owned or leased by First Evergreen or First Evergreen 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 the best knowledge of
First Evergreen, 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 any applicable Environmental
Law.
(b) USES OF PREMISES. To the best knowledge of First
Evergreen, no part of the Premises has been used for the
generation, manufacture, handling, storage, disposal, or
management of Hazardous Substances.
(c) UNDERGROUND STORAGE TANKS. To the best knowledge of
First Evergreen, 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 First Evergreen
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.
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(d) ABSENCE OF CONTAMINATION. To the best knowledge of
First Evergreen, the Premises do not contain and are not
contaminated by any reportable quantity, or any quantity in
excess of applicable cleanup standards, of a Hazardous Substance
from any source.
(e) ENVIRONMENTAL SUITS AND PROCEEDINGS. To the best
knowledge of First Evergreen, there is no action, suit,
investigation, liability, inquiry, or other proceeding, ruling,
order, notice of potential liability, or citation involving First
Evergreen or First Evergreen Bank 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. Without limiting the generality of this
Section, to the best knowledge of First Evergreen, there is no
basis for any claim against or involving First Evergreen, First
Evergreen Bank, or any of their respective properties or assets
under Section 107 of CERCLA or any similar provision of any other
Environmental Law.
4.21.4 LOAN PORTFOLIO. With respect to any commercial or multi-
family 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, First Evergreen and
First Evergreen Bank have 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 First Evergreen 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. To First Evergreen's
knowledge, no such property contains or is contaminated by any
quantity of any Hazardous Substance from any source.
4.22 DUTIES AS FIDUCIARY. First Evergreen 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,
regulations, orders, agreements, wills, instruments, and common law
standards. First Evergreen Bank has not received notice of any claim,
allegation, or complaint from any person that First Evergreen Bank failed
to perform these fiduciary duties in the required manner.
4.23 INVESTMENT BANKERS AND BROKERS. First Evergreen has employed
the investment banking firm of Hovde Financial, Inc. First Evergreen's
only financial obligation with respect to investment banking firms is the
payment of fees and expenses paid to Hovde Financial, Inc. as described in
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the First Evergreen Disclosure Statement. First Evergreen has not employed
any other broker, finder, or investment banker in connection with this Plan
of Merger or the transactions contemplated by it. First Evergreen 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.
4.24 FIRST EVERGREEN-RELATED PERSONS. For purposes of this Plan of
Merger, the term "FIRST EVERGREEN-RELATED PERSON" shall mean any director
or executive officer of First Evergreen or First Evergreen Bank, 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.
4.24.1 CONTROL OF MATERIAL ASSETS. Other than in a capacity as
a stockholder, director, or executive officer of First Evergreen or
First Evergreen Bank, no First Evergreen-Related Person owns or
controls any material assets or properties that are used in the
business of First Evergreen or First Evergreen Bank.
4.24.2 CONTRACTUAL RELATIONSHIPS. Other than ordinary and
customary banking relationships, no First Evergreen-Related Person has
any contractual relationship with First Evergreen or First Evergreen
Bank.
4.24.3 LOAN RELATIONSHIPS. No First Evergreen-Related Person
has any outstanding loan or loan commitment from, or on whose behalf
an irrevocable letter of credit has been issued by, First Evergreen or
First Evergreen Bank in a principal amount of $100,000 or more.
4.25 CHANGE IN BUSINESS RELATIONSHIPS. Neither First Evergreen nor
First Evergreen Bank has notice, whether on account of the Merger or
otherwise, that: (a) any customer, agent, representative, or supplier of
First Evergreen or First Evergreen Bank intends to discontinue, diminish,
or change its relationship with First Evergreen or First Evergreen Bank,
the effect of which would have a Material Adverse Effect on First
Evergreen; or (b) any executive officer of First Evergreen or First
Evergreen Bank intends to terminate his or her employment.
4.26 INSURANCE. First Evergreen and First Evergreen Bank maintain in
full force and effect insurance on its 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 First Evergreen's or
First Evergreen Bank's assets, properties, premises, operations, or
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personnel. First Evergreen and First Evergreen Bank have given adequate
and timely notice to each insurance carrier, and has complied with all
policy provisions, with respect to any known claim for which a defense
and/or indemnification may be available to First Evergreen or First
Evergreen Bank.
4.27 BOOKS AND RECORDS. The books of account, minute books, stock
record books, and other records of First Evergreen and First Evergreen Bank
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 First
Evergreen and First Evergreen Bank contain accurate and complete records of
all meetings of, and corporate action taken by, their stockholders, boards,
and committees thereof. Since January 1, 1990, the minutes of each meeting
(or corporate action without a meeting) of any such stockholders, boards,
or committees have been duly prepared and are contained in such minute
books.
4.28 LOAN GUARANTEES. To First Evergreen's knowledge, all guarantees
of indebtedness owed to First Evergreen Bank, including but not limited to
those of the Federal Housing Administration, the Small Business
Administration, and other state and federal agencies, are valid and
enforceable.
4.29 EVENTS SINCE DECEMBER 31, 1997. Neither First Evergreen nor
First Evergreen Bank has, since December 31, 1997:
4.29.1 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.
4.29.2 STRIKES OR LABOR TROUBLE. Experienced or, to the best
knowledge of First Evergreen, 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 First
Evergreen.
4.29.3 DISCHARGE OF OBLIGATIONS. Discharged or satisfied any
lien or encumbrance, or paid any obligation or liability other than
those shown on First Evergreen's Financial Statements as of
December 31, 1997, 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.
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4.29.4 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.
4.29.5 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 First Evergreen or
First Evergreen Bank, except as may be expressly provided in this Plan
of Merger.
4.30 RESERVE FOR LOAN LOSSES. The reserve for loan and lease losses
as reflected in First Evergreen's Financial Statements and Call Reports for
the periods ended December 31, 1997 and March 31, 1998, were and will be,
as of their respective dates, (a) adequate in the reasonable opinion of
management 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.
4.31 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, First Evergreen Bank 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 First
Evergreen.
4.32 PUBLIC COMMUNICATIONS; SECURITIES OFFERING. Each annual report,
quarterly report, proxy material, press release, or other communication
previously sent or released by First Evergreen or First Evergreen Bank to
First Evergreen's stockholders 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.
4.33 NO INSIDER TRADING. First Evergreen 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, First Evergreen has not, and to the best of
First Evergreen's knowledge, (a) no director or officer of First Evergreen
or First Evergreen Bank; (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
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of these persons; has purchased or sold, or caused to be purchased or sold,
any shares of First Evergreen Common Stock during any period when First
Evergreen 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").
4.34 DATA PROCESSING CONTRACTS. Except with respect to First
Evergreen's agreements with M&I and SunGard, all material data processing
contracts of First Evergreen or First Evergreen Bank are cancelable on or
before December 31, 1998, without cost or penalty.
4.35 YEAR 2000 COMPLIANCE. First Evergreen and First Evergreen Bank
have adopted plans and procedures consistent with good business practices
and the requirements of its primary bank regulator for its "Technology
Products" (as defined below) to be timely modified, upgraded or replaced to
accurately date data (including, but not limited to, calculating, comparing
and sequencing) from, into and between the twentieth and twenty-first
centuries including leap year calculations. Set forth in the First
Evergreen Disclosure Statement are copies of all letters and responses
between First Evergreen and its vendors relating to such compliance
matters. For purposes hereof "TECHNOLOGY PRODUCTS" means hardware,
software, firmware and other information technology products used by First
Evergreen in its business. The cost of compliance referred to in this
Section would not have a Material Adverse Effect on First Evergreen. No
representation is made relating to the compatibility of the Technology
Products of First Evergreen with those of Old Kent or with respect to the
cost of integrating the Technology Products of First Evergreen with those
of Old Kent.
4.36 ACCOUNTING AND TAX TREATMENT. Neither First Evergreen nor, to
the best of its knowledge, any of its affiliates, has taken or agreed to
take any action or knows of any reason that, with respect to First
Evergreen and its affiliates, would prevent Old Kent from accounting for
the business combination to be effected by the Merger as a pooling-of-
interests. First Evergreen is aware of no reason why the Merger will
fail to qualify as a reorganization under Section 368(a) of the Code.
4.37 TRUE AND COMPLETE INFORMATION. No schedule, statement, list,
certificate, or other information furnished or to be furnished by First
Evergreen in connection with this Plan of Merger, including the First
Evergreen 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.
4.38 REPRESENTATIONS AND WARRANTIES AT CLOSING. First Evergreen
further warrants that its representations and warranties in this Plan of
Merger will be true in all material respects at the Closing, except as
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otherwise expressly contemplated by this Plan of Merger. All of such
representations and warranties made with respect to specified dates or
events shall still be true at the Closing in all material respects with
respect to such dates or events.
ARTICLE V - COVENANTS PENDING CLOSING
Subject to the terms and conditions of this Plan of Merger, First
Evergreen and Old Kent further agree that:
5.1 FIRST EVERGREEN DISCLOSURE STATEMENT. First Evergreen shall
prepare the First Evergreen Disclosure Statement, certified with respect to
Section 4.37 (TRUE AND COMPLETE INFORMATION) on behalf of First Evergreen
by its chief executive officer and its chief financial officer, and shall
deliver two copies of the First Evergreen Disclosure Statement to Old Kent
within 21 days after the execution of this Plan of Merger.
5.1.1 FORM AND CONTENT. The First Evergreen Disclosure
Statement shall be in the general form prescribed by EXHIBIT B and
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. In addition to any exceptions to First Evergreen's
representations set forth in Article IV, the First Evergreen
Disclosure Statement shall contain true and correct copies of each and
every document specified in EXHIBIT B.
5.1.2 UPDATE. Not less than six business days prior to the
Closing, First Evergreen shall deliver to Old Kent an update to the
First Evergreen Disclosure Statement describing any material changes
and containing any new or amended documents, as specified below, that
are not contained in the First Evergreen 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. The First Evergreen Disclosure Statement
and its update shall each be certified with respect to Section 4.37
(TRUE AND COMPLETE INFORMATION) on behalf of First Evergreen by its
chief executive officer and its chief financial officer.
5.2 OLD KENT DISCLOSURE STATEMENT. Old Kent shall prepare the Old
Kent Disclosure Statement, certified with respect to Section 3.17 (TRUE AND
COMPLETE INFORMATION) on behalf of Old Kent by its chief executive officer
and its chief financial officer, and shall deliver two copies of the Old
Kent Disclosure Statement to First Evergreen within 21 days after the
execution of this Plan of Merger.
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5.2.1 FORM AND CONTENT. The Old Kent Disclosure Statement shall
be in the general form prescribed by EXHIBIT C and 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.
5.2.2 UPDATE. Not less than six business days prior to the
Closing, Old Kent shall deliver to First Evergreen an update to the
Old Kent Disclosure Statement describing any material changes and
containing any new or amended documents that are not contained in the
Old Kent 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.
5.2.3 CERTIFICATION. The Old Kent Disclosure Statement and its
update shall each be certified with respect to Section 3.17 (TRUE AND
COMPLETE INFORMATION) on behalf of Old Kent by its chief executive
officer and its chief financial officer.
5.3 BREACHES OF REPRESENTATIONS. While this Plan of Merger is in
effect, if either Old Kent or First Evergreen 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 First
Evergreen 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 execution
of this Plan of Merger, then such party (the "BREACHING PARTY") shall
immediately give detailed written notice of its breach or potential breach,
including a detailed description of the underlying facts or events, to the
other party; and unless waived by the other party in writing, the Breaching
Party shall use all reasonable efforts to take remedial or preventative
action in order that such representations and warranties will be true and
complete at the Closing. No remedial action taken by a Breaching Party
shall be deemed to cure a breach of any representation or warranty given by
the Breaching Party in this Plan of Merger, unless such cure is to the
reasonable satisfaction of the non-Breaching Party.
5.4 CONDUCT OF BUSINESS PENDING THE EFFECTIVE TIME--OLD KENT. Old
Kent agrees that, until the Effective Time, except as consented to in
writing by Old Kent or as otherwise provided in this Plan of Merger, Old
Kent shall, and it shall cause Old Kent Bank to:
5.4.1 NO INCONSISTENT ACTIONS. Take no action that would be
inconsistent with or contrary to the representations, warranties, and
covenants made by Old Kent in this Plan of Merger, and take no action
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that would cause Old Kent's representations and warranties to become
untrue except as and to the extent required by applicable laws and
regulations or regulatory agencies having jurisdiction.
5.4.2 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
First Evergreen has been notified of such contest.
5.5 CONDUCT OF BUSINESS PENDING THE EFFECTIVE TIME--FIRST
EVERGREEN. First Evergreen agrees that, until the Effective Time, except
as consented to in writing by Old Kent or as otherwise provided in this
Plan of Merger, First Evergreen shall, and it shall cause First Evergreen
Bank to:
5.5.1 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 execution
of this Plan of Merger, and not make any substantial change to its
methods of management or operation in respect of such business or
property.
5.5.2 NO INCONSISTENT ACTIONS. Take no action that would be
inconsistent with or contrary to the representations, warranties, and
covenants made by First Evergreen in this Plan of Merger, and take no
action that would cause First Evergreen's representations and
warranties to become untrue except as and to the extent required by
applicable laws and regulations or regulatory agencies having
jurisdiction.
5.5.3 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.
5.5.4 NO AMENDMENTS. Make no change in its Certificate of
Incorporation or its By-laws.
5.5.5 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.
5.5.6 NO CHANGE IN STOCK. Make no change in the number of
shares of its capital stock issued and outstanding; grant no warrant,
option, or commitment relating to its capital stock; enter into no
agreement relating to its capital stock except as contemplated by this
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Plan of Merger or the Option Agreement; and issue no securities
convertible into its capital stock except as contemplated by this Plan
of Merger or the Option Agreement.
5.5.7 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.
5.5.8 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.
5.5.9 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.
5.5.10 CHARGE-OFFS. Charge off loans and maintain its reserve
for loan and lease losses, in each case in a manner in conformity with
the prior practices of First Evergreen and First Evergreen Bank and
applicable industry, regulatory, and accounting standards.
5.5.11 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.
5.5.12 NEW DIRECTORS OR OFFICERS. Except to reelect persons who
are then incumbent officers and directors at annual meetings and to
elect a director to fill a current vacancy at the upcoming annual
meeting of stockholders, 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.
5.5.13 COMPENSATION AND FRINGE BENEFITS. Except for previously
planned salary increases and bonuses as set forth in the First
Evergreen Disclosure Statement and any retention bonus plan not to
exceed $100,000, take no action to increase, or agree to increase, the
salary, 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
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increases, agreements or payments that are reasonable in amount and
consistent with the prior year and that are announced or made only
after first consulting with Old Kent.
5.5.14 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.
5.5.15 NEW EMPLOYMENT AGREEMENTS. Take no action to enter into
any employment agreement that is not terminable by First Evergreen or
First Evergreen Bank without cost or penalty upon 60 days' or less
notice, except as contemplated by this Plan of Merger.
5.5.16 BORROWING. Take no action to borrow money except in the
ordinary course of business.
5.5.17 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.
5.5.18 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) First Evergreen or First
Evergreen Bank; (b) First Evergreen's or First Evergreen Bank'
directors, officers, or employees in their capacities as such;
(c) First Evergreen's or First Evergreen Bank' assets, liabilities,
businesses, or operations; or (d) the Merger or this Plan of Merger.
5.5.19 COOPERATION. Take such reasonable actions as may be
necessary to cooperate in effecting the Merger.
5.5.20 CHARITABLE CONTRIBUTIONS. Make no charitable or similar
contributions or gifts of cash or other assets except for
contributions that, in the aggregate, will have a fair market value
not greater than $800,000 for the year 1998 through the Effective
Time.
5.5.21 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 execution 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 First Evergreen
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or First Evergreen Bank, except pursuant to prior commitments or plans
made by First Evergreen or First Evergreen Bank that are disclosed in
the First Evergreen Disclosure Statement.
5.5.22 NEW SERVICE ARRANGEMENTS. Take no action to enter into,
or commit to enter into, any agreement for trust, consulting,
professional, or other services to First Evergreen or First Evergreen
Bank that is not terminable by First Evergreen or First Evergreen Bank
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, and data processing agreements
relating to Year 2000 compliance.
5.5.23 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 First
Evergreen or First Evergreen Bank that are disclosed in the First
Evergreen Disclosure Statement.
5.6 REGULAR DIVIDENDS.
5.6.1 FIRST EVERGREEN DIVIDENDS. First Evergreen 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 of any of them
other than a single cash dividend in an amount not to exceed First
Evergreen's current dividend rate, $20 per share, multiplied by the
number of full calendar months of 1998 completed or any partial
calendar month consisting of at least 20 days in 1998, prior to the
Effective Time, divided by 12, payable in a manner consistent with
First Evergreen's past dividend practice in a single payment on or
about the date of Closing, or if the Closing is not held in 1998, upon
the completion of the year. Old Kent and First Evergreen agree that
they will cooperate to assure that, during any month, there shall not
be a duplication of payment of dividends to stockholders of First
Evergreen. Notwithstanding the above, if and to the extent that the
payment of a dividend in the manner provided in this Section would,
under GAAP or the rules, regulations, or interpretations of the SEC or
its staff, disqualify the Merger for pooling-of-interests for
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.
5.6.2 OLD KENT DIVIDENDS. In the case of Old Kent only, take no
action to increase its regular quarterly cash dividend, except
consistent with past practice; and take no action to declare, set
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aside or pay any extraordinary dividend or distribution (other than a
stock dividend) with respect to Old Kent Common Stock.
5.7 DATA PROCESSING AND RELATED CONTRACTS. Until the Effective Time,
First Evergreen shall not 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 First Evergreen 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. First
Evergreen agrees to cooperate with Old Kent in negotiating with those
vendors the length of any extension or renewal term of those agreements,
that, unless otherwise agreed with Old Kent, shall not exceed one year from
the date of renewal. First Evergreen 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 First Evergreen and Old
Kent.
5.8 AFFILIATES -- COMPLIANCE WITH ACCOUNTING AND SECURITIES RULES.
First Evergreen 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 Exchange Act, and (b) qualifying the Merger for
pooling-of-interests accounting treatment) of First Evergreen to deliver to
Old Kent, as soon as practicable after the date of this Plan of Merger, and
prior to the date of the Stockholders' Meetings, a written agreement, in
the form of EXHIBIT D (the "AFFILIATE AGREEMENTS"). Old Kent shall use its
best efforts to publish as promptly as reasonably practical but in no event
later than 45 days after the end of the first 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. 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 Stockholders' 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.
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5.9 INDEMNIFICATION AND INSURANCE.
5.9.1 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 First Evergreen and First Evergreen
Bank under their respective Certificate of Incorporation, Articles of
Association, or By-laws which survive the Merger and continue with
respect to acts or omissions occurring before the Effective Time with
the same force and effect as prior to the Effective Time.
5.9.2 INSURANCE. Old Kent shall use all reasonable efforts to
cause the persons serving as officers and directors of First Evergreen
and First Evergreen Bank immediately prior to the Effective Time to be
covered for a period of at least four years from the Effective Time by
the directors' and officers' liability insurance policy maintained by
First Evergreen and First Evergreen Bank (provided that Old Kent may
substitute therefor policies of at least the same coverage and amounts
containing terms and conditions that are not materially less
advantageous than such policy) 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; provided, however,
that in no event shall Old Kent be required to expend more than
$140,000 (the "INSURANCE AMOUNT") to maintain or procure insurance
coverage pursuant hereto. If Old Kent does not advise First Evergreen
in writing prior to the commencement of the Pricing Period that it has
procured such coverage for at least four years or agrees to do so
without regard to the Insurance Amount, First Evergreen shall be
permitted, 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.
5.10 EXCLUSIVE COMMITMENT. Except as provided below, neither First
Evergreen nor First Evergreen Bank, nor any of their directors, officers,
employees, investment bankers, representatives, 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:
5.10.1 NO SOLICITATION. Neither First Evergreen nor First
Evergreen Bank, nor any of their respective directors, officers,
employees, investment bankers, representatives, 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
First Evergreen, at that time, has yet to determine to accept and
recommend the Superior Proposal to the stockholders of First
Evergreen), negotiate with any other party, any proposals, offers, or
expressions of interest concerning any tender offer, exchange offer,
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merger, consolidation, sale of shares, sale of assets, or assumption
of liabilities not in the ordinary course, or other business
combination involving First Evergreen or First Evergreen Bank other
than the Merger (a "BUSINESS COMBINATION").
5.10.2 COMMUNICATION OF OTHER PROPOSALS. First Evergreen 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 First Evergreen's unequivocal
rejection of the Proposal in the form actually delivered to the person
from whom the Proposal was received. Thereafter, First Evergreen
shall promptly notify Old Kent of any material changes in the terms,
conditions, and status of any Proposal.
5.10.3 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 First Evergreen, at that time,
has yet to determine to accept and recommend the Superior Proposal to
the stockholders of First Evergreen), neither First Evergreen nor
First Evergreen Bank, nor any of their respective directors, officers,
employees, investment bankers, representatives, or agents, shall
furnish any nonpublic information concerning First Evergreen or First
Evergreen Bank to any person who is not affiliated or under contract
with First Evergreen or Old Kent, except as required by applicable law
or regulations and prior to furnishing such information to such
person, First Evergreen shall receive from such person an executed
confidentiality agreement with terms no less favorable to First
Evergreen than those contained in its confidentiality agreement with
Old Kent and First Evergreen shall provide only such information as
had been so furnished previously to Old Kent.
5.11 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 First Evergreen with reasonable opportunities to
review 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 First Evergreen, 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 First Evergreen of
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any stop orders or threatened stop orders with respect to the Registration
Statement. First Evergreen agrees to provide all necessary information
pertaining to First Evergreen and First Evergreen Bank promptly upon
request, and to use all reasonable efforts to obtain the cooperation of
First Evergreen's independent accountants and attorneys in connection with
the preparation of the Registration Statement.
5.12 OTHER FILINGS. Old Kent agrees to prepare and file with the
Federal Reserve Board and each other regulatory agency having jurisdiction
all documents reasonably required to obtain approval of or consent to
consummate the Merger. Old Kent agrees to provide First Evergreen with
reasonable opportunities to review and comment upon such documents before
filing and to make such amendments and file such supplements thereto as
First Evergreen may reasonably request. Old Kent shall provide First
Evergreen with copies of all correspondence received from these agencies
and all responsive correspondence sent to these agencies.
5.13 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
transactions contemplated by this Plan of Merger. Old Kent and First
Evergreen will use all reasonable efforts to obtain consents of all third
parties and governmental bodies necessary or desirable for the consummation
of the Merger.
5.14 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: (a) permit, and shall cause each of
their respective subsidiaries to permit, full access to their respective
properties, books, and records at reasonable times; (b) use reasonable
efforts to cause its and each of 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; and (c) furnish to the other, upon reasonable request, any
information reasonably requested respecting its and each of its
subsidiaries' properties, assets, business, and affairs. 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. In the event of termination of this Plan of Merger, Old Kent and
First Evergreen 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
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written materials. Old Kent and First Evergreen each agree to preserve
intact all such materials that are returned to them and to make such
materials reasonably available upon request or subpoena for a period of not
less than six years from the termination of this Plan of Merger.
5.15 CONFIDENTIALITY. Except as provided below, Old Kent and First
Evergreen each agree:
5.15.1 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.
5.15.2 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.
5.15.3 EXCEPTED INFORMATION. The provisions of this
Section shall not preclude Old Kent or First Evergreen, 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.
5.15.4 PROHIBIT INSIDER TRADING. Old Kent and First Evergreen
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 other
persons to buy or sell, the other party's stock until such information
is properly disclosed to the public.
5.16 ENVIRONMENTAL INVESTIGATION. Old Kent shall be permitted to
conduct an environmental assessment of each parcel of First Evergreen's
Real Property and, at Old Kent's option, (a) any other real estate formerly
owned by First Evergreen or First Evergreen Bank, and (b) acquired by First
Evergreen Bank in satisfaction of a debt previously contracted. As to each
such property:
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5.16.1 PRELIMINARY ENVIRONMENTAL ASSESSMENTS. Old Kent may, at
its expense, engage an environmental consultant to conduct a
preliminary ("PHASE I") assessment of the property or rely upon any
First Evergreen Phase I assessment recertified to Old Kent as of a
recent date. First Evergreen and First Evergreen Bank shall provide
reasonable assistance, including site access and a knowledgeable
contact person, to the consultant for purposes of conducting the Phase
I assessments.
5.16.2 ENVIRONMENTAL RISKS. If there are any facts or
conditions identified in a Phase I assessment that, in its reasonable
discretion, Old Kent believes could potentially pose a current or
future risk of a material liability, interference with use, or
material diminution of value of the property, then Old Kent shall
identify that risk to First Evergreen, identify the facts or
conditions underlying that risk, and provide First Evergreen with a
copy of the Phase I assessment for that property (an "ENVIRONMENTAL
RISK").
5.16.3 ESTIMATES. Old Kent shall obtain one or more
professional estimates of the proposed scope of work and maximum
foreseeable cost of any further environmental investigation,
remediation, or other follow-up work it reasonably deems necessary or
appropriate to assess and, if necessary or appropriate, remediate an
Environmental Risk. Such estimates shall, if appropriate, be based on
field investigations. Old Kent shall provide copies of those
estimates to First Evergreen.
5.16.4 OPTIONAL REMEDIATION. Old Kent and First Evergreen shall
cooperate in the review, approval, and implementation of all work
plans for investigation and remediation. All work plans for any
investigation and remediation shall be mutually satisfactory to Old
Kent and First Evergreen. First Evergreen may, at its option and
expense, undertake mutually agreed upon investigation and remediation
to be completed prior to the Closing.
5.16.5 OLD KENT'S TERMINATION RIGHTS. If (a) Old Kent and First
Evergreen are unable to agree upon a course of action to promptly
complete any investigation and remediation and/or a mutually
acceptable modification to this Plan of Merger, and (b) Old Kent
cannot be reasonably assured that the after-tax cost of the sum of (i)
the actual cost of all investigative and remedial or other corrective
actions or measures undertaken pursuant to Section 5.16.4 (OPTIONAL
REMEDIATION), (ii) the estimated cost of all investigative and
remedial or other corrective actions or measures not undertaken but
required by law or necessary to avoid future exposure to material
liability, and (iii) all diminution of the value of such properties;
in the aggregate, will not exceed $1,000,000; then Old Kent may
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terminate this Plan of Merger as provided in Section 8.3.3
(ENVIRONMENTAL RISKS).
5.17 DISSENTING STOCKHOLDERS' APPRAISAL RIGHTS. Old Kent and First
Evergreen, as applicable, will comply with all applicable notification and
other provisions of regulations or statutes relating to Dissenting Shares.
5.18 EMPLOYMENT AGREEMENTS. Recognizing that continuity of key
management personnel is essential to ensure the continuity of the franchise
value of First Evergreen Bank, First Evergreen shall cause First Evergreen
Bank, and Old Kent shall cause Old Kent Bank, prior to the Closing, to
offer employment agreements effective upon the Effective Time to 14 key
senior officers of First Evergreen or First Evergreen Bank, with the terms
and conditions of such employment to be agreed upon by Old Kent and First
Evergreen (the "EMPLOYMENT AGREEMENTS").
5.19 ACCOUNTING AND TAX TREATMENT. During the Term of this Plan of
Merger, Old Kent and First Evergreen each agree not to take any action that
would adversely affect the ability of Old Kent to treat the Merger as a
pooling-of-interests for accounting purposes or as a "reorganization"
within the meaning of Section 368(a) of the Code; provided, however, that
nothing in this Plan of Merger shall limit Old Kent's ability to exercise
its rights under the Option Agreement. Old Kent and First Evergreen 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.
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 First Evergreen contained in this Plan of Merger shall
be true and correct when made and as of the Effective Time 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.
6.1.2 COMPLIANCE WITH AGREEMENTS. First Evergreen shall have
performed and complied with all agreements, conditions, and covenants
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required by this Plan of Merger to be performed or complied with by
First Evergreen 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 First Evergreen, 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. First Evergreen shall have delivered
to Old Kent an opinion of Ruff, Weidenaar & Reidy, Ltd., counsel for First
Evergreen, dated as of the date of the Closing and substantially in the
form contained in EXHIBIT E, 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 First Evergreen 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.
6.4 STOCKHOLDER APPROVAL. The stockholders of First Evergreen shall
have adopted this Plan of Merger.
6.5 ORDER, DECREE, ETC. Neither Old Kent nor First Evergreen 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: (a) against
or relating to First Evergreen, First Evergreen Bank, 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 to
First Evergreen or First Evergreen Bank that could have a Material Adverse
Effect on First Evergreen.
6.7 TAX MATTERS. Old Kent shall have received a tax opinion from its
counsel, reasonably satisfactory in form and substance, that Old Kent shall
use reasonable efforts to obtain. 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 First Evergreen. The
tax opinion shall be substantially to the effect that:
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6.7.1 REORGANIZATION. The Merger of First Evergreen with and
into Old Kent will constitute a reorganization within the meaning of
Section 368(a)(1)(A) of the Internal Revenue Code, and Old Kent and
First Evergreen 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 First Evergreen
assets in the hands of Old Kent will be the same as the basis of those
assets in the hands of First Evergreen 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 First Evergreen
in exchange for Old Kent Common Stock and the assumption by Old Kent
of the liabilities of First Evergreen.
6.7.4 HOLDING PERIOD. The holding period of the assets of First
Evergreen in the hands of Old Kent will include the holding period
during which such assets were held by First Evergreen.
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
by the secretary of First Evergreen on behalf of First Evergreen, and by
the transfer agent for First Evergreen Common Stock, certifying (a) the
total number of shares of capital stock of First Evergreen 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 First Evergreen 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 First Evergreen upon consummation of the Merger under
the Designated Contracts and any other 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 First Evergreen; all in form and substance
reasonably satisfactory to Old Kent.
6.11 POOLING ASSURANCES. Old Kent shall have received a letter from
First Evergreen's independent accountants, as of a date reasonably
approximate to the date of the Closing, to the effect that, as of such
date, First Evergreen is eligible to participate in a pooling-of-interests
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combination and a letter from its independent accountants, satisfactory in
form and substance, to the effect that (based in part on the letter from
First Evergreen's independent accountants) the Merger should be treated as
a pooling-of-interests for accounting purposes, subject to satisfaction of
post-Merger conditions.
ARTICLE VII - CONDITIONS PRECEDENT TO FIRST EVERGREEN'S OBLIGATIONS
All obligations of First Evergreen under this Plan of Merger are
subject to the fulfillment (or waiver in writing by a duly authorized
officer of First Evergreen), 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 Effective Time 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.
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 First
Evergreen 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 F, with only such changes as may be reasonably
satisfactory to counsel for First Evergreen.
7.3 REQUIRED REGULATORY APPROVALS. First Evergreen or Old Kent shall
have received all such approvals, consents, authorizations, and licenses of
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all regulatory and other governmental authorities having jurisdiction as
may be required to permit the performance by First Evergreen and Old Kent
of their respective obligations under this Plan of Merger and the
consummation of the Merger.
7.4 STOCKHOLDER APPROVAL. First Evergreen shall have received the
requisite approval of the stockholders of First Evergreen of this Plan of
Merger.
7.5 ORDER, DECREE, ETC. Neither Old Kent nor First Evergreen 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. First Evergreen shall have received a tax opinion
from counsel for Old Kent, reasonably satisfactory in form and substance to
First Evergreen's counsel. 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. The tax opinion
shall be substantially to the effect that:
7.6.1 NO GAIN OR LOSS. No gain or loss will be recognized by
the stockholders of First Evergreen who receive shares of Old Kent
Common Stock in exchange for all of their shares of First Evergreen
Common Stock, except to the extent of any cash received in lieu of a
fractional share of Old Kent Common Stock.
7.6.2 STOCK TAX BASIS. The basis of the Old Kent Common Stock
to be received by stockholders of First Evergreen will, in each
instance, be the same as the basis of the respective shares of First
Evergreen Common Stock surrendered in exchange therefor.
7.6.3 HOLDING PERIOD. The holding period of the Old Kent Common
Stock received by stockholders of First Evergreen will, in each
instance, include the period during which the First Evergreen Common
Stock surrendered in exchange therefor was held, provided that the
First Evergreen Common Stock was, in each instance, held as a capital
asset in the hands of the stockholder of First Evergreen at the
Effective Time.
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. First Evergreen shall have received an opinion
from Hovde Financial, Inc., 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 First
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Evergreen's stockholders from a financial point of view as of that date and
such opinion shall not have been subsequently withdrawn.
7.9 NASDAQ LISTING. The shares of Old Kent Common Stock that shall
be issued to the stockholders of First Evergreen upon consummation of the
Merger shall have been authorized for listing on The Nasdaq Stock Market.
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
Plan of Merger by the stockholders of First Evergreen 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 First
Evergreen.
8.2 UPSET DATE. By either Old Kent or First Evergreen if the Merger
shall not have been consummated on or before March 31, 1999.
8.3 OLD KENT'S RIGHTS TO TERMINATE. By Old Kent under any of the
following circumstances:
8.3.1 FIRST EVERGREEN DISCLOSURE STATEMENT; PRECLOSING
INVESTIGATION, ETC. Old Kent shall have reasonably determined that:
(a) any exception to First Evergreen's representations and warranties
or any other information set forth in the First Evergreen Disclosure
Statement fairly indicate that the financial value of First Evergreen
is materially less than indicated by information provided by or on
behalf of First Evergreen to Old Kent in writing prior to 5:00 p.m. on
April 14, 1998; (b) based upon Old Kent's preclosing investigation of
First Evergreen, there exists any set of facts or circumstances that
would have a Material Adverse Effect on First Evergreen; or (c) First
Evergreen or First Evergreen Bank is exposed to risks, or the Merger
could expose Old Kent to risks, that in the reasonable judgment of Old
Kent could result in a Material Adverse Effect; provided that in each
case, Old Kent notifies First Evergreen of such abandonment and
termination not later than 14 days after Old Kent receives the First
Evergreen Disclosure Statement.
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.
8.3.3 ENVIRONMENTAL RISKS. If Old Kent has given First
Evergreen notice of an unacceptable Environmental Risk as provided in
Section 5.16.5 (OLD KENT'S RIGHT TO TERMINATE).
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8.3.4 POOLING QUALIFICATION. At any time after Old Kent
independent accountants shall have advised Old Kent that the Merger
is unlikely to qualify for treatment as a pooling-of-interests for
accounting purposes.
8.3.5 APPROVAL OF FIRST EVERGREEN'S STOCKHOLDERS. This Plan of
Merger is not approved by First Evergreen's stockholders at the
Stockholders' Meeting.
8.4 FIRST EVERGREEN'S RIGHTS TO TERMINATE. By the board of
directors, or a duly authorized committee thereof, of First Evergreen under
any of the following circumstances:
8.4.1 UPSET CONDITION. If the Final Old Kent Price is less than
the Upset Price, in accordance with Section 2.2 (UPSET PROVISION).
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 First
Evergreen notifies Old Kent of such abandonment and termination not
later than 14 days after First Evergreen receives the Old Kent
Disclosure Statement.
8.4.3 FAILURE TO SATISFY CLOSING CONDITIONS. If any of the
conditions specified in Article VII have not been met or waived by
First Evergreen at such time as such condition can no longer be
satisfied.
8.5 EFFECT OF TERMINATION. In the event of termination of this Plan
of Merger by either First Evergreen or Old Kent as provided in this
Article, this Plan of Merger shall forthwith become void and have no
effect, and none of First Evergreen'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 whatsoever hereunder, or in connection with the
transactions contemplated hereby (other than the Option Agreement), except
that (a) Sections 5.15 (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 First Evergreen nor Old Kent shall be relieved or released
from any liabilities or damages arising out of its willful 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 First Evergreen further agree as follows:
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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, First Evergreen and First Evergreen Bank, taken as
a whole; or (b) the ability of Old Kent or First Evergreen, 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, 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) shall not be included in any determination of a
Material Adverse Effect.
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, Affiliate Agreements,
Employment Agreements, and those covenants and agreements 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 First Evergreen, 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,
First Evergreen 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
printing and 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 First Evergreen.
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 First
Evergreen, First Evergreen Bank, 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
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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 First Evergreen each
agree to the jurisdiction and venue of any state or federal court located
in Kent County, Michigan. Old Kent and First Evergreen 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
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, Esq.
111 Lyon Street N.W. 900 Old Kent Building
Grand Rapids, Michigan 49503 111 Lyon Street, N.W.
Fax: (616) 771-4698 Grand Rapids, Michigan 49503-2489
Fax: (616) 752-2500
IF TO FIRST EVERGREEN: WITH A COPY TO:
First Evergreen Corporation Ruff, Weidenaar & Reidy, Ltd.
Attention: Kenneth J. Ozinga Attention: William B. Weidenaar and
3101 W. 95th Street Timothy S. Breems
Evergreen Park, Illinois 60805 1 N. La Salle Street, Suite 4400
Fax: (708) 499-7491 Chicago, Illinois 60602
Fax: (312) 263-1345
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AND AN ADDITIONAL COPY TO:
Silver, Freedman & Taff
Attention: Barry P. Taff
1100 New York Avenue
Washington, D.C. 30005
Fax: (202) 682-0354
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 conflicts of law provisions.
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
Agreement) 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 First Evergreen and their respective successors. Nothing in this Plan
of Merger, express or implied, is intended to confer upon any person other
than these parties any rights, remedies, obligations, or liabilities under
or by reason of this Plan of Merger.
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
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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.
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In Witness Whereof, the undersigned parties hereto have duly
executed and acknowledged this Plan of Merger as of the date first written
above.
OLD KENT FINANCIAL CORPORATION
By /S/ DAVID J. WAGNER
David J. Wagner
Its Chairman of the Board, President, and
Chief Executive Officer
FIRST EVERGREEN CORPORATION
By /S/ KENNETH J. OZINGA
Kenneth J. Ozinga
Its Chairman of the Board, President, and
Chief Executive Officer
EXHIBIT 2.2
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EXHIBIT 2.2
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "AGREEMENT") is made as of April
21, 1998, by and between OLD KENT FINANCIAL CORPORATION, a Michigan
corporation ("GRANTEE"), and FIRST EVERGREEN CORPORATION, a Delaware
corporation ("ISSUER").
As a condition to, and contemporaneous with, the execution of
this Agreement, the parties are entering into an Agreement and Plan of
Merger dated April 21, 1998 (the "PLAN OF MERGER"). In consideration
therefor, and as an inducement to Grantee to pursue the transactions
contemplated by the Plan of Merger, Issuer has agreed to grant Grantee the
Option (as defined below). The board of directors of Issuer has approved
the grant of the Option and the Plan of Merger. Capitalized terms used but
not defined in this Agreement shall have the meanings given to those terms
in the Plan of Merger.
In consideration of the foregoing, and the mutual covenants and
agreements set forth in this Agreement and in the Plan of Merger, the
parties agree:
1. GRANT OF OPTION.
(a) Issuer hereby grants to Grantee an unconditional,
irrevocable option (the "OPTION") to purchase, subject to the terms of this
Agreement, up to 80,012 fully paid and nonassessable shares of Issuer
Common Stock, par value $25.00 ("COMMON STOCK"), at a price per share
equal to $1,067.00; PROVIDED that in the event Issuer issues or agrees to
issue any shares of Common Stock at a price per share less than $1,067.00
(as adjusted pursuant to Section 5(b)), such price shall be equal to such
lesser price (as adjusted, if applicable, the "OPTION PRICE"); FURTHER
PROVIDED, that in no event shall the number of shares for which this Option
is exercisable, together with the number of shares owned by Grantee other
than shares held by Grantee in a fiduciary capacity for a customer as to
which it has no beneficial interest ("FIDUCIARY SHARES"), exceed 19.99% of
the Issuer's issued and outstanding common shares.
(b) The number of shares of Common Stock subject to the Option
shall be increased or decreased, as appropriate, in the event that any
additional shares of Common Stock are issued or otherwise become
outstanding (other than pursuant to this Agreement or pursuant to an event
described in Section 5(a) of this Agreement) or existing shares are
redeemed, retired or otherwise become no longer outstanding after the date
of this Agreement so that, after any such issuance, redemption or
retirement, together with the number of shares previously issued pursuant
to this Agreement or otherwise owned by Grantee other than Fiduciary
Shares, the number of shares of Common Stock subject to the Option equals
19.99% of the number of shares of Common Stock then issued and outstanding
without giving effect to any shares subject or issued pursuant to the
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Option. Nothing contained in this Section 1(b) or elsewhere in this
Agreement shall be considered to authorize Issuer to issue shares in breach
of any provision of the Plan of Merger.
2. EXERCISE OF OPTION.
(a) The holder or holders of the Option (the "HOLDER") may
exercise the Option, in whole or part, if both an Initial Triggering Event
(as defined below) and a Subsequent Triggering Event (as defined below)
shall have occurred prior to the occurrence of an Exercise Termination
Event (as defined below), PROVIDED that the Holder shall have sent notice
of such exercise (as required by Section 2(f)) within six months following
such Subsequent Triggering Event (or such later date as provided in Section
10).
(b) Each of the following shall be an "EXERCISE TERMINATION
EVENT": (i) consummation of the Merger at the Effective Time of the Merger;
(ii) the termination of the Plan of Merger in accordance with the
provisions thereof if such termination occurs before the occurrence of an
Initial Triggering Event, except a termination by Grantee on account of a
Listed Termination (as defined below); and (iii) the passage of 18 months
(or such longer period as provided in Section 10) after termination of the
Plan of Merger if such termination follows the occurrence of an Initial
Triggering Event or is a Listed Termination. For purposes of this
Agreement, each of the following terminations of the Plan of Merger in
accordance with the provisions thereof shall constitute a "LISTED
TERMINATION": (i) termination by Grantee if Issuer's board of directors
shall have failed to recommend that the Merger be approved by Issuer's
shareholders as required by Section 1.1 of the Plan of Merger, withdrawn
such recommendation or modified or changed such recommendation in a manner
adverse in any respect to the interests of Grantee; and (ii) termination by
Grantee resulting from a material breach by Issuer of a provision of the
Plan of Merger (but only if the breach giving rise to the termination was
willful) Notwithstanding anything to the contrary in this Agreement: (i)
the Option may not be exercised at any time when Grantee shall be in
material breach of any of its covenants or agreements contained in the Plan
of Merger such that Issuer shall be entitled to terminate the Plan of
Merger as a result of a material breach; and (ii) this Agreement shall
automatically terminate upon the proper termination of the Plan of Merger
(x) by Issuer as a result of the material breach by Grantee of its
covenants or agreements contained in the Plan of Merger, or (y) by Issuer
or Grantee if the approval by any federal or state governmental agency or
authority necessary to consummate the Merger and the other transactions
contemplated by the Plan of Merger shall have been denied by final
nonappealable action of such agency or authority.
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(c) The term "INITIAL TRIGGERING EVENT" shall mean any of the
following events or transactions occurring on or after the date of this
Agreement:
(i) Issuer or its subsidiary (the "ISSUER SUBSIDIARY"),
without having received Grantee's prior written consent, shall have
entered into an agreement to engage in an Acquisition Transaction (as
defined below) with any person (for purposes of this Agreement, the
term "person" has the meaning given that term in Sections 3(a)(9) and
13(d)(3) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), and the rules and regulations thereunder) other than
Grantee or any of its subsidiaries (a "GRANTEE SUBSIDIARY") or the
board of directors of Issuer shall have recommended that the
shareholders of Issuer approve or accept any Acquisition Transaction
other than the Merger;
(ii) any person other than Grantee or any Grantee Subsidiary
shall have acquired beneficial ownership or the right to acquire
beneficial ownership of 10% or more of the outstanding shares of
Common Stock (for purposes of this Agreement, the term "beneficial
ownership" has the meaning given that term in Section 13(d) of the
Exchange Act and the rules and regulations thereunder);
(iii) the shareholders of Issuer shall have voted and failed
to approve the Plan of Merger and the Merger at a meeting which has
been held for that purpose or any adjournment or postponement thereof,
or such meeting shall not have been held in violation of the Plan of
Merger or shall have been canceled prior to termination of the Plan of
Merger if, prior to such meeting (or if such meeting shall not have
been held or shall have been canceled, prior to such termination), it
shall have been publicly announced that any person (other than Grantee
or any Grantee Subsidiary) shall have made, or publicly disclosed an
intention to make, a proposal to engage in an Acquisition Transaction;
(iv) the board of directors of Issuer shall have withdrawn
or modified (or publicly announced its intention to withdraw or
modify) in any manner adverse in any respect to Grantee its
recommendation that the shareholders of Issuer approve the
transactions contemplated by the Plan of Merger, or Issuer or the
Issuer Subsidiary shall have authorized, recommended or proposed (or
publicly announced its intention to authorize, recommend or propose)
an agreement to engage in an Acquisition Transaction with any person
other than Grantee or any Grantee Subsidiary;
(v) any person other than Grantee or any Grantee Subsidiary
shall have made a proposal to Issuer or its shareholders to engage in
an Acquisition Transaction and such proposal shall have been publicly
announced;
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(vi) any person other than Grantee or any Grantee Subsidiary
shall have filed with the Securities and Exchange Commission ("SEC") a
registration statement or tender offer materials with respect to a
potential exchange or tender offer that would constitute an
Acquisition Transaction (or filed a preliminary proxy statement with
the SEC with respect to a potential vote by its shareholders to
approve the issuance of shares to be offered in such an exchange
offer);
(vii) Issuer shall have willfully breached any covenant or
obligation contained in the Plan of Merger in anticipation of engaging
in an Acquisition Transaction, and following such breach Grantee would
be entitled to terminate the Plan of Merger (whether immediately or
after the giving of notice or passage of time, or both);
(viii) any person other than Grantee or any Grantee
Subsidiary shall have filed an application or notice with the Board of
Governors of the Federal Reserve System (the "FEDERAL RESERVE BOARD"),
the Office of the Comptroller of the Currency (the "OCC") or other
federal or state authority or regulatory or administrative agency or
commission (each a "GOVERNMENTAL ENTITY"), which application or notice
has been accepted for processing, for approval to engage in an
Acquisition Transaction; or
(ix) a Fiduciary Event shall have occurred under the Plan of
Merger.
For purposes of this Agreement, "ACQUISITION TRANSACTION" means: (a) a
merger or consolidation, or any similar transaction, involving Issuer or
the Issuer Subsidiary (other than mergers, consolidations or similar
transactions (i) involving solely Issuer and/or one or more wholly-owned
(except for directors' qualifying shares) subsidiaries of the Issuer,
PROVIDED, any such transaction is not entered into in violation of the
terms of the Plan of Merger or (ii) in which the shareholders of Issuer
immediately prior to the completion of such transaction own at least 50% of
the Common Stock of Issuer (or the resulting or surviving entity in such
transaction) immediately after completion of such transaction, PROVIDED,
any such transaction is not entered into in violation of the terms of the
Plan of Merger); (b) a purchase, lease or other acquisition of all or a
substantial part of the assets or deposits of Issuer or the Issuer
Subsidiary; (c) a purchase or other acquisition (including by way of
merger, consolidation, share exchange or otherwise) of securities
representing 10% or more of the voting power of Issuer or the Issuer
Subsidiary; or (d) any substantially similar transaction. For purposes of
this Agreement, "subsidiary" has the meaning given that term in Rule 12b-2
under the Exchange Act.
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(d) The term "SUBSEQUENT TRIGGERING EVENT" shall mean either of
the following events or transactions occurring after the date of this
Agreement:
(i) the acquisition by any person (other than Grantee or
any Grantee Subsidiary) of beneficial ownership of 25% or more of the
then outstanding Common Stock; or
(ii) occurrence of the Initial Triggering Event described in
clause (i) of Section 2(c), except that the percentage referred to for
purposes of defining "Acquisition Transaction" in clause (c) shall be
25%.
(e) Issuer shall notify Grantee promptly in writing of the
occurrence of any Initial Triggering Event or Subsequent Triggering Event
(collectively, "TRIGGERING EVENTS"), it being understood that the giving of
such notice by Issuer shall not be a condition to the right of Holder to
exercise the Option.
(f) In the event Holder is entitled and wishes to exercise the
Option (or any portion thereof), it shall send to Issuer a written notice
(the date of such notice is referred to as the "NOTICE DATE") specifying:
(i) the total number of shares it will purchase pursuant to such exercise;
and (ii) a place and date not earlier than three business days nor later
than 60 business days from the Notice Date for the closing of such purchase
(the "CLOSING DATE"); PROVIDED, that if prior notification to or approval
of the Federal Reserve Board, the OCC or any other Governmental Entity is
required in connection with such purchase, Holder shall promptly file the
required notice or application for approval, shall notify Issuer of such
filing, and shall expeditiously process the same and the period of time
that otherwise would run pursuant to this sentence shall run instead from
the date on which any required notification periods have expired or been
terminated or such approvals have been obtained and any requisite waiting
period or periods shall have passed. Any exercise of the Option shall be
considered to occur on the Notice Date relating thereto.
(g) At the closing referred to in Section 2(f), Holder shall (i)
pay to Issuer the aggregate purchase price for the shares of Common Stock
purchased pursuant to the exercise of the Option in immediately available
funds by wire transfer to a bank account designated by Issuer and (ii)
present and surrender this Agreement to Issuer at its principal executive
offices; PROVIDED, that failure or refusal of Issuer to designate such a
bank account or accept surrender of this Agreement shall not preclude
Holder from exercising the Option.
(h) At the closing, simultaneously with the delivery of
immediately available funds as provided in Section 2(g), Issuer shall
deliver to Holder a certificate or certificates representing the number of
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shares of Common Stock purchased by Holder and, if the Option should be
exercised in part only, a new Option evidencing the rights of Holder to
purchase the balance of the shares subject to this Option.
(i) Certificates for Common Stock delivered at a closing under
this Agreement may be endorsed with a restrictive legend that shall read
substantially as follows:
"The transfer of the shares represented by this certificate is
subject to certain provisions of an agreement, dated as of April
21, 1998, between the registered holder hereof and Issuer and to
resale restrictions arising under the Securities Act of 1933, as
amended. A copy of such agreement is on file at the principal
office of Issuer and will be provided to the holder hereof
without charge upon receipt by Issuer of a written request
therefor."
It is understood and agreed that: (i) the reference to the resale
restrictions of the Securities Act of 1933, as amended (the "SECURITIES
ACT"), in the above legend shall be removed by delivery of substitute
certificate(s) without such reference if Holder shall have delivered to
Issuer a copy of a letter from the staff of the SEC, or an opinion of
counsel, in form and substance reasonably satisfactory to Issuer, to the
effect that such legend is not required for purposes of the Securities Act;
(ii) the reference to the provisions of this Agreement in the above legend
shall be removed by delivery of substitute certificate(s) without such
reference if the shares have been sold or transferred in compliance with
the provisions of this Agreement and under circumstances that do not
require the retention of such reference in the opinion of counsel to
Holder; and (iii) the legend shall be removed in its entirety if the
conditions in the preceding clauses (i) and (ii) are both satisfied. In
addition, such certificates shall bear any other legend as may be required
by law.
(j) Upon the giving by Holder to Issuer of the written notice of
exercise of the Option provided for under Section 2(f) and the tender of
the applicable purchase price in immediately available funds, Holder shall
be considered, subject to the receipt of any necessary regulatory
approvals, to be the holder of record of the shares of Common Stock
issuable upon such exercise, notwithstanding that the stock transfer books
of Issuer shall then be closed or that certificates representing such
shares of Common Stock shall not then be actually delivered to Holder.
Issuer shall pay all expenses, and any and all federal, state and local
taxes and other charges that may be payable in connection with the
preparation, issuance and delivery of stock certificates under this Section
2 in the name of Holder or its assignee, transferee or designee.
3. COVENANTS OF ISSUER. Issuer agrees: (i) that it shall at all
times maintain, free from preemptive rights, sufficient authorized but
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unissued or treasury shares of Common Stock so that the Option may be
exercised without additional authorization of Common Stock after giving
effect to all other options, warrants, convertible securities and other
rights to purchase Common Stock; (ii) that it will not, by charter
amendment or through reorganization, consolidation, merger, dissolution or
sale of assets, or by any other voluntary act, avoid or seek to avoid the
observance or performance of any of the covenants, stipulations or
conditions to be observed or performed under this Agreement by Issuer;
(iii) promptly to take all action as may from time to time be required
(including (x) complying with all applicable premerger notification,
reporting and waiting period requirements and (y) in the event, under the
Bank Holding Company Act of 1956, as amended, or the Change in Bank Control
Act of 1978, as amended, or any state or other federal banking law, prior
approval of or notice to the Federal Reserve Board, OCC or any other
Governmental Entity is necessary before the Option may be exercised,
cooperating fully with Holder in preparing such applications or notices and
providing such information to the Federal Reserve Board, the OCC and/or
each such Governmental Entity as they may require) in order to permit
Holder to exercise the Option and Issuer duly and effectively to issue
shares of Common Stock pursuant to this Agreement; and (iv) promptly to
take all action provided in this Agreement to protect the rights of Holder
against dilution.
4. EXCHANGE OF OPTION. This Agreement (and the Option granted by
this Agreement) are exchangeable, without expense, at the option of Holder,
upon presentation and surrender of this Agreement at the principal office
of Issuer, for other Agreements providing for Options of different
denominations entitling Holder to purchase, on the same terms and subject
to the same conditions as are set forth in this Agreement, in the aggregate
the same number of shares of Common Stock subject to this Option. The terms
"Agreement" and "Option" as used in this Agreement include any stock option
agreements and related options for which this Agreement (and the Option
granted by this Agreement) may be exchanged. Upon receipt by Issuer of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon surrender
and cancellation of this Agreement, if mutilated, Issuer will execute and
deliver a new Agreement of like tenor and date. Any such new Agreement
executed and delivered shall constitute an additional contractual
obligation on the part of Issuer, whether or not the Agreement so lost,
stolen, destroyed or mutilated shall at any time be enforceable by anyone.
5. ADJUSTMENTS. In addition to the adjustment in the number of
shares of Common Stock that are subject to the Option pursuant to Section 1
of this Agreement, the number of shares of Common Stock subject to the
Option and the Option Price shall be subject to adjustment from time to
time as provided in this Section 5.
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(a) In the event of any change in, or distributions in respect
of, Common Stock by reason of stock dividends, stock splits, mergers,
recapitalizations, combinations, subdivisions, conversions, exchanges of
shares or the like, the type and number of shares of Common Stock subject
to the Option shall be appropriately adjusted and proper provision shall be
made so that, in the event that any additional shares of Common Stock are
to be issued or otherwise become outstanding as a result of any such change
(other than pursuant to an exercise of the Option), the number of shares of
Common Stock that remain subject to the Option shall be increased so that,
after such issuance and together with shares of Common Stock previously
issued pursuant to the exercise of the Option (as adjusted on account of
any of the foregoing changes in the Common Stock), such number equals
19.99% of the number of Common Stock then issued and outstanding.
(b) Whenever the number of shares of Common Stock subject to the
Option is adjusted as provided in this Section 5, the Option Price shall be
adjusted by multiplying the Option Price by a fraction, the numerator of
which shall be equal to the number of shares of Common Stock subject to the
Option prior to the adjustment and the denominator of which shall be equal
to the number of shares of Common Stock subject to the Option after the
adjustment.
6. REGISTRATION RIGHTS. Upon the occurrence of a Subsequent
Triggering Event that occurs prior to an Exercise Termination Event, Issuer
shall, at the request of Grantee delivered within 12 months (or such later
period as provided in Section 10) of such Subsequent Triggering Event
(whether on its own behalf or on behalf of any subsequent holder of this
Option (or part thereof) or any of the shares of Common Stock issued
pursuant hereto), promptly prepare, file and keep current a shelf
registration statement under the Securities Act covering any shares issued
and/or issuable pursuant to this Option and shall use its best efforts to
cause such registration statement to become effective and remain current to
permit the sale or other disposition of any shares of Common Stock issued
upon total or partial exercise of this Option ("OPTION SHARES") in
accordance with any plan of disposition requested by Grantee. Issuer will
use its best efforts to cause such registration statement promptly to
become effective and then to remain effective for such period not in excess
of 180 days from the day such registration statement first becomes
effective or such shorter time as may be reasonably necessary to effect
such sales or other dispositions. Grantee shall have the right to demand
two such registrations. The Issuer shall bear the costs of such
registrations (including, without limitation, Issuer's attorneys' fees,
printing costs and filing fees, except for underwriting discounts or
commissions, brokers' fees and the fees and disbursements of Grantee's
counsel related thereto). Notwithstanding the above, if, at the time of
any request by Grantee for registration of Option Shares as provided above,
Issuer is in the process of registration with respect to an underwritten
public offering by Issuer of shares of Common Stock, and if in the good
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faith judgment of the managing underwriter or managing underwriters (or, if
none, the sole underwriter or underwriters) of such offering the offer and
sale of the Option Shares would interfere with the successful marketing of
the shares of Common Stock offered by Issuer, the number of Option Shares
otherwise to be covered in the registration statement contemplated by this
Section 6 may be reduced; PROVIDED, that, after any such required
reduction, the number of Option Shares included in such offering for the
account of Holder shall constitute at least 25% of the total number of
shares to be sold by Holder and Issuer in the aggregate; PROVIDED FURTHER,
that if such reduction occurs, then the Issuer shall file a registration
statement for the balance of the Option Shares subject to the registration
demand as promptly as practical as to which no reduction pursuant to this
Section 6 shall be permitted or occur and the Holder shall thereafter be
entitled to one additional registration and the 12 month period referred to
in the first sentence of this Section shall be increased to 24 months.
Each such Holder shall provide all information reasonably requested by
Issuer for inclusion in any registration statement to be filed to register
Option Shares. If requested by any such Holder in connection with such
registration, Issuer 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 Issuer.
Upon receiving any request under this Section 6 from any Holder, Issuer
agrees to send a copy thereof to any other person known to Issuer to be
entitled to registration rights under this Section 6, in each case by
promptly mailing the same, postage prepaid, to the address of record of the
persons entitled to receive such copies. Notwithstanding anything to the
contrary in this Agreement, in no event shall the number of registrations
that Issuer is obligated to effect be increased by reason of the fact that
there shall be more than one Holder as a result of any assignment or
division of this Agreement.
7. REPURCHASE OF OPTION.
(a) At any time after the occurrence of a Repurchase Event
(defined below): (i) at the request of Holder, delivered prior to an
Exercise Termination Event (or such later period as provided in Section
10), Issuer (or any successor to Issuer) shall repurchase the Option from
Holder at a price (the "OPTION REPURCHASE PRICE") equal to the amount by
which (x) the market/offer price (as defined below) exceeds (y) the Option
Price, multiplied by the number of shares for which this Option may then be
exercised; and (ii) at the request of the owner of Option Shares from time
to time (the "OWNER"), delivered prior to an Exercise Termination Event (or
such later period as provided in Section 10), Issuer (or any successor to
Issuer) shall repurchase such number of the Option Shares from Owner as
Owner shall designate at a price (the "OPTION SHARE REPURCHASE PRICE")
equal to the market/offer price multiplied by the number of Option Shares
so designated. The term "MARKET/OFFER PRICE" shall mean the highest of:
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(i) the price per share of Common Stock at which a tender or exchange offer
therefor has been made; (ii) the price per share of Common Stock to be paid
by any third party pursuant to an agreement with Issuer; (iii) the highest
sale price for shares of Common Stock within the six-month period
immediately preceding the date Holder gives notice of the required
repurchase of this Option or Owner gives notice of the required repurchase
of Option Shares, as the case may be; or (iv) in the event of a sale of all
or any substantial part of Issuer's assets or deposits, the sum of the net
price paid in such sale for such assets or deposits and the current market
value of the remaining assets of Issuer as determined by a nationally
recognized investment banking firm selected by Holder or Owner, as the case
may be, and reasonably acceptable to Issuer, divided by the number of
shares of Common Stock of Issuer outstanding at the time of such sale. In
determining the market/offer price, the value of consideration other than
cash shall be determined by a nationally recognized investment banking firm
selected by Holder or Owner, as the case may be, and reasonably acceptable
to Issuer.
(b) Holder or Owner, as the case may be, may exercise its right
to require Issuer to repurchase the Option and any Option Shares pursuant
to this Section 7 by surrendering for such purpose to Issuer, at its
principal office, a copy of this Agreement or certificates for Option
Shares, as applicable, accompanied by a written notice or notices stating
that Holder or Owner, as the case may be, elects to require Issuer to
repurchase this Option and/or the Option Shares in accordance with the
provisions of this Section 7. As promptly as practicable, and in any event
within five business days after the surrender of the Option and/or
certificates representing Option Shares and the receipt of such notice or
notices relating thereto, Issuer shall deliver or cause to be delivered to
Holder the Option Repurchase Price and/or to Owner the Option Share
Repurchase Price therefor or the portion thereof that Issuer is not then
prohibited under applicable law and regulation from so delivering.
(c) To the extent that Issuer is prohibited under applicable law
or regulation, or as a consequence of administrative policy, from
repurchasing the Option and/or the Option Shares in full, Issuer shall
immediately so notify Holder and/or Owner and thereafter deliver or cause
to be delivered, from time to time, to Holder and/or Owner, as appropriate,
the portion of the Option Repurchase Price and the Option Share Repurchase
Price, respectively, that it is no longer prohibited from delivering,
within five business days after the date on which Issuer is no longer so
prohibited; PROVIDED, that if Issuer at any time after delivery of a notice
of repurchase pursuant to this Section 7(b) is prohibited under applicable
law or regulation, or as a consequence of administrative policy, from
delivering to Holder and/or Owner, as appropriate, the Option Repurchase
Price and the Option Share Repurchase Price, respectively, in full (and
Issuer hereby undertakes to use its best efforts to obtain all required
regulatory and legal approvals and to file any required notices as promptly
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as practicable in order to accomplish such repurchase), Holder or Owner may
revoke its notice of repurchase of the Option or the Option Shares either
in whole or to the extent of the prohibition, whereupon, in the latter
case, Issuer shall promptly: (i) deliver to Holder and/or Owner, as
appropriate, that portion of the Option Repurchase Price or the Option
Share Repurchase Price that Issuer is not prohibited from delivering; and
(ii) deliver, as appropriate, either (A) to Holder, a new Agreement
evidencing the right of Holder to purchase that number of shares of Common
Stock obtained by multiplying the number of shares of Common Stock for
which the surrendered Agreement was exercisable at the time of delivery of
the notice of repurchase by a fraction, the numerator of which is the
Option Repurchase Price less the portion of the Option Repurchase Price
previously delivered to Holder and the denominator of which is the Option
Repurchase Price, and/or (B) to Owner, a certificate for the Option Shares
it is then so prohibited from repurchasing. If an Exercise Termination
Event shall have occurred prior to the date of the notice by Issuer
described in the first sentence of this Section 7(c), or shall be scheduled
to occur at any time before the expiration of a period ending on the
thirtieth day after such date, Holder shall nonetheless have the right to
exercise the Option until the expiration of such 30-day period.
(d) For purposes of this Section 7, a "REPURCHASE EVENT" shall
be considered to have occurred upon the occurrence of any of the following
events or transactions after the date of this Agreement:
(i) the acquisition by any person (other than Grantee or
any Grantee Subsidiary) of beneficial ownership of 50% or more of the
then outstanding Common Stock; or
(ii) the consummation of any Acquisition Transaction
described in Section 2(c)(i), except that the percentage referred to
for purposes of defining "Acquisition Transaction" in clause (c) shall
be 50%.
8. SUBSTITUTE OPTION.
(a) In the event that prior to an Exercise Termination Event,
Issuer shall enter into an agreement to (i) consolidate with or merge into
any person, other than Grantee or any Grantee Subsidiary, or engage in a
plan of exchange with any person, other than Grantee or any Grantee
Subsidiary and Issuer shall not be the continuing or surviving corporation
of such consolidation or merger or the acquirer in such plan of exchange,
(ii) permit any person, other than Grantee or any Grantee Subsidiary, to
merge into Issuer or be acquired by Issuer in a plan of exchange and Issuer
shall be the continuing or surviving corporation, but, in connection with
such merger or plan of exchange, the then outstanding shares of Common
Stock shall be changed into or exchanged for stock or other securities of
any other person or cash or any other property or the then outstanding
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shares of Common Stock shall after such merger or plan of exchange
represent less than 50% of the outstanding shares and share equivalents of
the merged or acquiring company, or (iii) sell or otherwise transfer all or
a substantial part of its or the Issuer's assets or deposits to any person,
other than Grantee or any Grantee Subsidiary, then, and in each such case,
the agreement governing such transaction shall make proper provision so
that the Option shall, upon the consummation of any such transaction and
upon the terms and conditions set forth in this Agreement, be converted
into, or exchanged for, an option (the "SUBSTITUTE OPTION"), at the
election of Holder, of either (x) the Acquiring Corporation (as defined
below) or (y) any person that controls the Acquiring Corporation.
(b) The following terms have the following meanings:
(i) "ACQUIRING CORPORATION" means: (i) the continuing
or surviving person of a consolidation or merger with Issuer
(if other than Issuer); (ii) the acquiring person in a plan
of exchange in which Issuer is acquired; (iii) Issuer in a
merger or plan of exchange in which Issuer is the continuing
or surviving or acquiring person; and (iv) the transferee of
all or a substantial part of Issuer's assets or deposits (or
the assets or deposits of the Issuer Subsidiary).
(ii) "SUBSTITUTE COMMON STOCK" means the common stock
to be issued by the issuer of the Substitute Option upon
exercise of the Substitute Option.
(iii) "ASSIGNED VALUE" means the market/offer price, as
defined in Section 7.
(iv) "AVERAGE PRICE" means the average closing price of
a share of the Substitute Common Stock for the one year
immediately preceding the consolidation, merger or sale in
question, but in no event higher than the closing price of
the shares of Substitute Common Stock on the day preceding
such consolidation, merger or sale; PROVIDED, that if Issuer
is the issuer of the Substitute Option, the Average Price
shall be computed with respect to a share of common stock
issued by the person merging into Issuer or by any company
which controls or is controlled by such person, as Holder
may elect.
(c) The Substitute Option shall have the same terms as the
Option; PROVIDED, that if the terms of the Substitute Option cannot, for
legal reasons, be the same as the Option, such terms shall be as similar as
possible and in no event less advantageous to Holder. The issuer of the
Substitute Option shall also enter into an agreement with the then Holder
or Holders of the Substitute Option in substantially the same form as this
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Agreement (after giving effect for such purpose to the provisions of
Section 9), which agreement shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number
of shares of Substitute Common Stock as is equal to the Assigned Value
multiplied by the number of shares of Common Stock for which the Option was
exercisable immediately prior to the event described in the first sentence
of Section 8(a), divided by the Average Price. The exercise price of the
Substitute Option per share of Substitute Common Stock shall then be equal
to the Option Price multiplied by a fraction, the numerator of which shall
be the number of shares of Common Stock for which the Option was
exercisable immediately prior to the event described in the first sentence
of Section 8(a) and the denominator of which shall be the number of shares
of Substitute Common Stock for which the Substitute Option is exercisable.
(e) In no event, pursuant to any of the subsections above, shall
the Substitute Option be exercisable for a number of shares that, together
with the number of shares owned by Grantee other than Fiduciary Shares, is
more than 19.99% of the shares of Substitute Common Stock outstanding prior
to exercise of the Substitute Option. In the event that the Substitute
Option would be exercisable for more than 19.99% of the shares of
Substitute Common Stock outstanding prior to exercise but for this Section
8(e), the issuer of the Substitute Option (the "SUBSTITUTE OPTION ISSUER")
shall make a cash payment to Holder equal to the excess of (i) the value of
the Substitute Option without giving effect to the limitation in this
Section 8(e) over (ii) the value of the Substitute Option after giving
effect to the limitation in this Section 8(e). This difference in value
shall be determined by a nationally recognized investment banking firm
selected by Holder.
(f) Issuer shall not enter into any transaction described in
Section 8(a) unless the Acquiring Corporation and any person that controls
the Acquiring Corporation assume in writing all the obligations of Issuer
under this Agreement.
9. REPURCHASE OF SUBSTITUTE OPTION.
(a) At the request of the holder of the Substitute Option (the
"SUBSTITUTE OPTION HOLDER"), the Substitute Option Issuer shall repurchase
the Substitute Option from the Substitute Option Holder at a price (the
"SUBSTITUTE OPTION REPURCHASE PRICE") equal to the amount by which (i) the
Highest Closing Price (as defined below) exceeds (ii) the exercise price of
the Substitute Option, multiplied by the number of shares of Substitute
Common Stock for which the Substitute Option may then be exercised, and at
the request of the owner (the "SUBSTITUTE SHARE OWNER") of shares of
Substitute Common Stock, the Substitute Option Issuer shall repurchase the
Substitute Common Stock at a price (the "SUBSTITUTE SHARE REPURCHASE
PRICE") equal to the Highest Closing Price multiplied by the number of
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Substitute Shares so designated. The term "HIGHEST CLOSING PRICE" shall
mean the highest closing price for shares of Substitute Common Stock within
the six-month period immediately preceding the date the Substitute Option
Holder gives notice of the required repurchase of the Substitute Option or
the Substitute Share Owner gives notice of the required repurchase of the
Substitute Common Stock, as applicable.
(b) The Substitute Option Holder and the Substitute Share Owner,
as the case may be, may exercise its respective rights to require the
Substitute Option Issuer to repurchase the Substitute Option and the
Substitute Common Stock pursuant to this Section 9 by surrendering for such
purpose to the Substitute Option Issuer, at its principal office, the
agreement for such Substitute Option (or, in the absence of such an
agreement, a copy of this Agreement) and certificates for Substitute Common
Stock accompanied by a written notice or notices stating that the
Substitute Option Holder or the Substitute Share Owner, as the case may be,
elects to require the Substitute Option Issuer to repurchase the Substitute
Option and/or the Substitute Common Stock in accordance with the provisions
of this Section 9. As promptly as practicable, and in any event within five
business days after the surrender of the Substitute Option and/or
certificates representing Substitute Common Stock and the receipt of such
notice or notices relating thereto, the Substitute Option Issuer shall
deliver or cause to be delivered to the Substitute Option Holder the
Substitute Option Repurchase Price and/or to the Substitute Share Owner the
Substitute Share Repurchase Price therefor or the portion thereof that the
Substitute Option Issuer is not then prohibited under applicable law and
regulation from so delivering.
(c) To the extent that the Substitute Option Issuer is
prohibited under applicable law or regulation, or as a consequence of
administrative policy, from repurchasing the Substitute Option and/or the
Substitute Common Stock in part or in full, the Substitute Option Issuer
shall immediately so notify the Substitute Option Holder and/or the
Substitute Share Owner and thereafter deliver or cause to be delivered,
from time to time, to the Substitute Option Holder and/or the Substitute
Share Owner, as appropriate, the portion of the Substitute Option
Repurchase Price and the Substitute Share Repurchase Price, respectively,
which it is no longer prohibited from delivering, within five business days
after the date on which the Substitute Option Issuer is no longer so
prohibited; PROVIDED, that if the Substitute Option Issuer is at any time
after delivery of a notice of repurchase pursuant to Section 9(b)
prohibited under applicable law or regulation, or as a consequence of
administrative policy, from delivering to the Substitute Option Holder
and/or the Substitute Share Owner, as appropriate, the Substitute Option
Repurchase Price and the Substitute Share Repurchase Price, respectively,
in full (and the Substitute Option Issuer shall use its best efforts to
obtain all required regulatory and legal approvals as promptly as
practicable to accomplish such repurchase), the Substitute Option Holder or
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Substitute Share Owner may revoke its notice of repurchase of the
Substitute Option or the Substitute Common Stock either in whole or to the
extent of the prohibition, whereupon, in the latter case, the Substitute
Option Issuer shall promptly: (i) deliver to the Substitute Option Holder
or Substitute Share Owner, as appropriate, that portion of the Substitute
Option Repurchase Price or the Substitute Share Repurchase Price that the
Substitute Option Issuer is not prohibited from delivering; and (ii)
deliver, as appropriate, either (x) to the Substitute Option Holder, a new
Substitute Option evidencing the right of the Substitute Option Holder to
purchase that number of shares of Substitute Common Stock obtained by
multiplying the number of shares of Substitute Common Stock for which the
surrendered Substitute Option was exercisable at the time of delivery of
the notice of repurchase by a fraction, the numerator of which is the
Substitute Option Repurchase Price less the portion of the Substitute
Option Repurchase Price previously delivered to the Substitute Option
Holder and the denominator of which is the Substitute Option Repurchase
Price, and/or (y) to the Substitute Share Owner, a certificate for the
Substitute Common Stock it is then so prohibited from repurchasing. If an
Exercise Termination Event shall have occurred prior to the date of the
notice by the Substitute Option Issuer described in the first sentence of
the Section 8(c), or shall be scheduled to occur at any time before the
expiration of a period ending on the thirtieth day after such date, the
Substitute Option Holder shall nevertheless have the right to exercise the
Substitute Option until the expiration of such 30-day period
10. EXTENTION OF EXERCISE PROVISIONS. The 30-day, six-month,
12-month, 18-month or 24-month periods for the exercise of certain rights
under Sections 2, 6, 7, 9, 12 and 14 shall be extended: (i) to the extent
necessary to obtain all regulatory approvals for the exercise of such
rights (for so long as the Holder, Owner, Substitute Option Holder or
Substitute Common Stock Owner, as the case may be, is using commercially
reasonable efforts to obtain such regulatory approvals), and for the
expiration of all statutory waiting periods; and (ii) to the extent
necessary to avoid liability under Section 16(b) of the Exchange Act by
reason of such exercise.
11. REPRESENTATIONS AND WARRANTIES OF ISSUER. Issuer hereby
represents and warrants to Grantee as follows:
(a) Issuer has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated by
this Agreement. The execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement have been
duly and validly authorized by the board of directors of Issuer prior to
the date of this Agreement and no other corporate proceedings on the part
of Issuer are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly
executed and delivered by Issuer. This Agreement is the valid and legally
binding obligation of Issuer.
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(b) Issuer has taken all necessary corporate action to
authorize, reserve and permit it to issue, and at all times from the date
of this Agreement through the termination of this Agreement in accordance
with its terms will have reserved for issuance upon the exercise of the
Option, that number of shares of Common Stock equal to the maximum number
of shares of Common Stock at any time and from time to time issuable under
this Agreement, and all such shares, upon issuance pursuant to this
Agreement, will be duly authorized, validly issued, fully paid,
nonassessable and will be delivered free and clear of all claims, liens,
encumbrances and security interests and not subject to any preemptive
rights.
12. ASSIGNMENT. Neither party to this Agreement may assign any of
its rights or obligations under this Agreement or the Option created under
this Agreement to any other person without the express written consent of
the other party, except that in the event a Subsequent Triggering Event
shall have occurred prior to an Exercise Termination Event, Grantee,
subject to the express provisions of this Agreement, may assign in whole or
in part its rights and obligations under this Agreement; PROVIDED, that
until the date 15 days following the date on which the Federal Reserve
Board has approved an application by Grantee to acquire the shares of
Common Stock subject to the Option, Grantee may not assign its rights under
the Option except in: (i) a widely dispersed public distribution; (ii) a
private placement in which no one party acquires the right to purchase in
excess of 2% of the voting shares of Issuer; (iii) an assignment to a
single party (such as a broker or investment banker) for the purpose of
conducting a widely dispersed public distribution on Grantee's behalf; or
(iv) any other manner approved by the Federal Reserve Board.
13. COOPERATION. Grantee and Issuer each will use its best efforts
to make all filings with, and to obtain consents of, all third parties and
Governmental Entities necessary to the consummation of the transactions
contemplated by this Agreement, including without limitation applying to
the Federal Reserve Board for approval to acquire the shares issuable under
this Agreement, but Grantee shall not be obligated to apply to state
banking authorities for approval to acquire the shares of Common Stock
issuable under this Agreement until such time, if ever, as it considers
appropriate to do so.
14. MINIMUM REPURCHASE PROCEEDS.
(a) Grantee may, at any time following a Repurchase Event and prior
to the occurrence of an Exercise Termination Event (or such later period as
provided in Section 10), relinquish the Option (together with any Option
Shares issued to and then owned by Grantee) to Issuer in exchange for a
cash fee equal to the Surrender Price; PROVIDED, that Grantee may not
exercise its rights pursuant to this Section 14 if Issuer has repurchased
the Option (or any portion thereof) or any Option Shares pursuant to
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Section 7. The "Surrender Price" shall be equal to $23,350,000.00, (i)
plus, if applicable, Grantee's purchase price with respect to any Option
Shares and (ii) minus, if applicable, the excess of (A) the net cash
amounts, if any, received by Grantee pursuant to the arms' length sale of
Option Shares (or any other securities into which such Option Shares were
converted or exchanged) to any unaffiliated party, over (B) the Option
Price.
(b) Grantee may exercise its right to relinquish the Option and any
Option Shares pursuant to this Section 14 by surrendering to Issuer, at its
principal office, a copy of this Agreement together with certificates for
Option Shares, if any, accompanied by a written notice stating (i) that
Grantee elects to relinquish the Option and Option Shares, if any, in
accordance with the provisions of this Section 14 and (ii) the Surrender
Price. The Surrender Price shall be payable in immediately available
funds on or before the second business day following receipt of such notice
by Issuer.
(c) To the extent that Issuer is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from paying the
Surrender Price to Grantee in full, Issuer shall immediately so notify
Grantee and thereafter deliver or cause to be delivered, from time to time,
to Grantee, the portion of the Surrender Price that it is no longer
prohibited from paying, within five business days after the date on which
Issuer is no longer so prohibited; PROVIDED, that if Issuer at any time
after delivery of a notice of surrender pursuant to this Section 14(b) is
prohibited under applicable law or regulation, or as a consequence of
administrative policy, from paying to Grantee the Surrender Price in full:
(i) Issuer shall (A) use its best efforts to obtain all required regulatory
and legal approvals and to file any required notices as promptly as
practicable in order to make such payments, (B) within five days of the
submission or receipt of any documents relating to any such regulatory and
legal approvals, provide Grantee with copies of the same, and (c) keep
Grantee advised of both the status of any such request for regulatory and
legal approvals, as well as any discussions with any relevant regulatory or
other third party reasonably related to the same; and (ii) Grantee may
revoke such notice of surrender by delivery of a notice of revocation to
Issuer and, upon delivery of such notice of revocation, the date of the
Exercise Termination Event shall be extended to a date six months from the
date on which the Exercise Termination Event would have occurred if not for
the provisions of this Section 14(c) (during which period Grantee may
exercise any of its rights under this Agreement, including any and all
rights pursuant to this Section 14).
15. REMEDIES. The parties acknowledge that damages would be an
inadequate remedy for a breach of this Agreement by either party and that
the obligations of the parties shall be enforceable by either party through
injunctive or other equitable relief. In connection therewith, the parties
waive the posting of any bond or similar requirement.
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16. SEVERABILITY. If any term, provision, covenant or restriction
contained in this Agreement is held by a court or a federal or state
regulatory agency of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions contained in this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. If for any
reason such court or regulatory agency determines that Holder is not
permitted to acquire, or Issuer is not permitted to repurchase pursuant to
Section 7, the full number of shares of Common Stock provided in Section
1(a) (as adjusted pursuant to Sections 1(b) or 5), it is the express
intention of Issuer to allow Holder to acquire or to require Issuer to
repurchase such lesser number of shares as may be permissible, without any
amendment or modification of this Agreement.
17. NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be considered to have been duly
given when delivered in person, by fax, telecopy, or by registered or
certified mail (postage prepaid, return receipt requested) at the
respective addresses of the parties set forth in the Plan of Merger.
18. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Michigan, regardless of the
laws that might otherwise govern under applicable principles of conflicts
of laws.
19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
20. FEES AND EXPENSES. Except as otherwise expressly provided in
this Agreement, each party shall bear and pay all costs and expenses
incurred by it or on its behalf in connection with the transactions
contemplated under this Agreement, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
21. ENTIRE AGREEMENT. Except as otherwise expressly provided in this
Agreement or in the Plan of Merger, this Agreement contains the entire
agreement between the parties with respect to the transactions contemplated
under this Agreement and supersedes all prior arrangements or
understandings with respect thereof, written or oral. The terms and
conditions of this Agreement shall inure to the benefit of and be binding
upon the parties to this Agreement and their respective successors and
permitted assigns. Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties to this
Agreement, and their respective successors except as assignees, any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
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IN WITNESS WHEREOF, the parties has caused this Stock Option
Agreement to be executed by their officers, thereunto duly authorized, as
of the date first written above.
OLD KENT FINANCIAL CORPORATION
By: /S/ DAVID J. WAGNER
David J. Wagner
Chairman, President and Chief Executive
Officer
FIRST EVERGREEN CORPORATION
By: /S/ KENNETH J. OZINGA
Kenneth J. Ozinga
Chairman, President and Chief Executive
Officer
