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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20579
_________________________
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 15, 1994
SUBURBAN BANCORP, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-11138 36-3150316
(State of other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
50 North Brockway, Palatine, Illinois 60067
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(708) 359-1077
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Item 5. Other Events
On April 15, 1994, the Registrant entered into a
Merger Agreement by and among Bank of Montreal ("BMO"), Harris
Bankmont, Inc. ("HBI") and the Registrant (the "Merger
Agreement"). Pursuant to the Merger Agreement, the Registrant
will be merged (the "Merger") with and into HBI, a subsidiary
of BMO (the "Surviving Corporation"). In the Merger, each
share of the Registrant's Class A Common Stock and Class B
Common Stock, each $1.00 par value, issued and outstanding
immediately prior to the time when the Merger shall become
effective, other than any shares of Dissenting Company Stock
(as defined in the Merger Agreement), shall be converted into
the right to receive either (i) if the BMO Stock Price (as
defined in the Merger Agreement) is greater than or equal to
U.S. $18.1059 (the "Floor Price") and less than or equal to
U.S. $20.9646 (the "Ceiling Price"), 3.9352 Common Shares, no
par value, of BMO Common Stock; (ii) if the BMO Stock Price is
greater than the Ceiling Price, the number of shares of BMO
Common Stock equal to U.S. $82.50 divided by the BMO Stock
Price; or (iii) if the BMO Stock Price is less than the Floor
Price, the number of shares of BMO Common Stock equal to U.S.
$71.25 divided by the BMO Stock Price. It is expected that
the Merger will qualify as a tax-free reorganization under
Section 368(a) of the Internal Revenue Code. The consummation
of the Merger is subject to receipt of the approval of the
stockholders of the Registrant and all applicable regulatory
approvals.
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Also on April 15, 1994, certain Stockholders of the
Registrant entered into the Voting Agreement (the "Voting
Agreement"), among BMO and the Stockholders of the Registrant
parties thereto, pursuant to which such Stockholders, owning
shares representing more than a majority of the voting power
of the Registrant, agreed, among other things, to vote their
shares in favor of the Merger Agreement and against certain
other transactions.
The foregoing is qualified in its entirety by
reference to the Merger Agreement, the Voting Agreement and
the Registrant's press release dated April 15, 1994, copies of
which are attached as exhibits hereto and which are hereby
incorporated by reference herein. The Merger Agreement
contains provisions with respect to the definition of BMO
Stock Price, conditions to closing and termination provisions.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
(2) (a) Merger Agreement, dated as of April 15, 1994, by and
among Bank of Montreal, Harris Bankmont, Inc. and
the Registrant
(b) Voting Agreement, dated as of April 15, 1994, by and
among Bank of Montreal and the Stockholders of the
Registrant parties thereto
(20)(a) Press release, dated April 15, 1994
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SIGNATURE
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 thereunto
duly authorized.
SUBURBAN BANCORP, INC.
Date: April 18, 1994 By: /s/ Gerald F. Fitzgerald Jr.
Name: Gerald F. Fitzgerald Jr.
Title: President
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EXHIBIT INDEX
Sequentially
Exhibit Description Numbered Page
(2) (a) Merger Agreement, dated as of
April 15, 1994, by and among
Bank of Montreal, Harris
Bankmont, Inc. and the
Registrant
(b) Voting Agreement, dated as of
April 15, 1994, by and among
Bank of Montreal and the
Stockholders of the Registrant
parties thereto
(20)(a) Press Release, dated April 15,
1994
<PAGE> COVER
Merger Agreement
by and among
Bank of Montreal, Harris Bankmont, Inc.
and
Suburban Bancorp, Inc.
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Table of Contents
Article I
The Merger
Section 1.1. Merger and the Surviving Corporation . . . . . . . . 1
Section 1.2. Conversion of Stock . . . . . . . . . . . . . . . . . 3
Section 1.3. Adjustments for Dilution and Other
Matters . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.4. Conversion of Dissenting Company Stock . . . . . . . 6
Section 1.5. Exchange Procedures . . . . . . . . . . . . . . . . . 6
Section 1.6. Cash Payments in Lieu of Fractional
Shares and Dividends . . . . . . . . . . . . . . . . 8
Section 1.7. Withholding Rights . . . . . . . . . . . . . . . . . 8
Article II
Representations, Warranties and
Agreements of the Company
Section 2.1. Organization, Standing and Power . . . . . . . . 9
Section 2.2. Capital Structure . . . . . . . . . . . . . . . . 10
Section 2.3. Authority; Non-Contravention . . . . . . . . . . 10
Section 2.4. SEC Documents . . . . . . . . . . . . . . . . . . 12
Section 2.5. Absence of Material Adverse Change . . . . . . . 12
Section 2.6. Reorganization . . . . . . . . . . . . . . . . . 13
Section 2.7. Brokers . . . . . . . . . . . . . . . . . . . . . 13
Section 2.8. Governmental Regulations . . . . . . . . . . . . 13
Section 2.9. Regulatory Approvals . . . . . . . . . . . . . . 14
Section 2.10. Litigation . . . . . . . . . . . . . . . . . . . 14
Section 2.11. Environmental Compliance . . . . . . . . . . . . 14
Section 2.12. Employee Matters . . . . . . . . . . . . . . . . 15
Section 2.13. Taxes . . . . . . . . . . . . . . . . . . . . . . 15
Section 2.14. Conduct of Business Pending Merger . . . . . . . 16
Section 2.15. Other Acquisition Proposals . . . . . . . . . . . 17
Section 2.16. Loans . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.17. Material Interests of Certain Persons . . . . . . 18
Section 2.18. Opinion of Financial Advisor . . . . . . . . . . 18
Section 2.19. Disclosure . . . . . . . . . . . . . . . . . . . 18
Article III
Representations, Warranties and
Agreements of BMO and HBI
Section 3.1. Organization, Standing and Power . . . . . . . . 19
Section 3.2. Capital Structure . . . . . . . . . . . . . . . . 19
Section 3.3. Corporate Authorization . . . . . . . . . . . . . 19
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Section 3.4. Securities Documents . . . . . . . . . . . . . . 20
Section 3.5. Absence of Material Adverse Change . . . . . . . 20
Section 3.6. Reports and Filings . . . . . . . . . . . . . . . 21
Section 3.7. Litigation . . . . . . . . . . . . . . . . . . . 21
Section 3.8. Environmental Compliance . . . . . . . . . . . . 21
Section 3.9. Taxes . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.10. Loans . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.11. Regulatory Approvals . . . . . . . . . . . . . . 22
Section 3.12. Reorganization . . . . . . . . . . . . . . . . . 22
Section 3.13. Disclosure . . . . . . . . . . . . . . . . . . . 22
Article IV
Additional Agreements
Section 4.1. Regulatory Approvals . . . . . . . . . . . . . . 23
Section 4.2. Company Stockholder Approval . . . . . . . . . . 23
Section 4.3. Preparation of Company Proxy Materials
and F-4 Registration Statement . . . . . . . . . 23
Section 4.4. Access and Information . . . . . . . . . . . . . 25
Section 4.5. Lists of Company Stockholders . . . . . . . . . . 27
Section 4.6. Termination Payment. . . . . . . . . . . . . . . 27
Section 4.7. Best Efforts . . . . . . . . . . . . . . . . . . 28
Section 4.8. Letters of Company's Accountants. . . . . . . . . 28
Section 4.9. Letter of BMO's Accountants. . . . . . . . . . . 28
Section 4.10. Affiliates . . . . . . . . . . . . . . . . . . . 28
Section 4.11. Company Accruals and Reserves . . . . . . . . . . 29
Section 4.12. Indemnification; Directors' and Officers'
Insurance . . . . . . . . . . . . . . . . . . . . 29
Section 4.13. NYSE Exchange Listing . . . . . . . . . . . . . . 29
Section 4.14. Employee Benefits . . . . . . . . . . . . . . . . 29
Article V
Conditions Precedent to Obligations of
BMO, HBI and the Company
Section 5.1. Company Stockholder Approval . . . . . . . . . . 30
Section 5.2. Regulatory Approvals and Legal
Requirements . . . . . . . . . . . . . . . . . . 30
Section 5.3. Effectiveness of F-4 . . . . . . . . . . . . . . 30
Section 5.4. Blue Sky Compliance . . . . . . . . . . . . . . . 31
Section 5.5. Canadian Exchange Listing . . . . . . . . . . . . 31
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Article VI
Conditions Precedent to Obligations
of BMO and HBI
Section 6.1. Representations, Warranties and
Covenants . . . . . . . . . . . . . . . . . . . . 31
Section 6.2. Adverse Changes . . . . . . . . . . . . . . . . . 31
Section 6.3. Litigation . . . . . . . . . . . . . . . . . . . 31
Section 6.4. Dissenting Company Stock . . . . . . . . . . . . 32
Section 6.5. Opinion of the Company's Counsel . . . . . . . . 32
Section 6.6. Corporate Records . . . . . . . . . . . . . . . . 32
Section 6.7. Voting Agreement . . . . . . . . . . . . . . . . 32
Section 6.8. Employment Agreements . . . . . . . . . . . . . . 32
Section 6.9. Affiliate Agreements . . . . . . . . . . . . . . 32
Section 6.10. Tax Opinion . . . . . . . . . . . . . . . . . . . 32
Article VII
Conditions Precedent to Obligation
of the Company
Section 7.1. Representations, Warranties and
Covenants . . . . . . . . . . . . . . . . . . . . 33
Section 7.2. Adverse Changes . . . . . . . . . . . . . . . . . 33
Section 7.3. Litigation . . . . . . . . . . . . . . . . . . . 33
Section 7.4. Opinion of Counsel to BMO . . . . . . . . . . . . 33
Section 7.5. Corporate Records . . . . . . . . . . . . . . . . 34
Section 7.6. Tax Opinion . . . . . . . . . . . . . . . . . . . 34
Article VIII
Closing
Section 8.1. Date, Time and Place of Closing . . . . . . . . . 34
Section 8.2. Deliveries of Documents . . . . . . . . . . . . . 34
Section 8.3. Merger to Be Made Effective . . . . . . . . . . . 34
Article IX
Amendment and Termination
Section 9.1. Amendment . . . . . . . . . . . . . . . . . . . . 35
Section 9.2. Termination . . . . . . . . . . . . . . . . . . . 35
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Article X
General Provisions
Section 10.1. Survival of Representations,
Warranties and Agreements . . . . . . . . . . . . 37
Section 10.2. Notices . . . . . . . . . . . . . . . . . . . . . 37
Section 10.3. Expenses . . . . . . . . . . . . . . . . . . . . 39
Section 10.4. Further Assurances . . . . . . . . . . . . . . . 39
Section 10.5. Publicity . . . . . . . . . . . . . . . . . . . . 40
Section 10.6. Waivers . . . . . . . . . . . . . . . . . . . . . 40
Section 10.7. Entire Agreement and Binding Effect . . . . . . . 40
Section 10.8. Governing Law . . . . . . . . . . . . . . . . . . 40
Section 10.9. Counterparts . . . . . . . . . . . . . . . . . . 40
Section 10.10. Dollars . . . . . . . . . . . . . . . . . . . . . 40
Section 10.11. Interpretation . . . . . . . . . . . . . . . . . 40
Exhibits
A -- List and Description of Company Subsidiaries
B -- Opinion of Counsel to the Company
C-1 -- Opinion of Counsel to BMO and HBI
C-2 -- Opinion of Counsel to BMO
D -- Definitions
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Merger Agreement
This Agreement is made and entered into as of the 15th day of
April, 1994, by and between Bank of Montreal, a Canadian chartered bank
(hereinafter referred to as "BMO"), Harris Bankmont, Inc., a Delaware
corporation (hereinafter referred to as "HBI"), and Suburban Bancorp, Inc.,
a Delaware corporation (hereinafter referred to as the "Company");
W i t n e s s e t h:
Whereas, BMO is engaged in the business of banking in Canada
and elsewhere, and each of BMO and the Company is a registered bank holding
company under the Bank Holding Company Act of 1956, as amended (hereinafter
referred to as the "BHC Act"); and
Whereas, the respective Boards of Directors of BMO, HBI and the
Company have approved this Agreement, providing for the business
combination transaction contemplated herein in which the Company will merge
into HBI in accordance with the terms hereof (hereinafter referred to as
the "Merger"), and have determined that the Merger is in their respective
best interests and the best interests of their respective stockholders; and
Whereas, as a condition and inducement to BMO's and HBI's
willingness to enter into this Agreement, BMO and certain stockholders of
the Company are entering into, immediately following the execution and
delivery hereof, a Voting Agreement dated as of the date hereof
(hereinafter referred to as the "Voting Agreement"), pursuant to which such
stockholders shall make certain agreements with respect to the voting of
their shares of the Common Stock of the Company; and
Whereas, for Federal income tax purposes, it is intended that
the Merger shall qualify as a tax-free reorganization under the provisions
of the Internal Revenue Code of 1986, as amended (the "Code");
Now, Therefore, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties
hereto hereby agree as follows:
Article I
The Merger
Section 1.1. Merger and the Surviving Corporation.
(a) Subject to the terms and conditions of this Agreement, the Company
shall be merged with and into HBI (which shall be the surviving corporation
in the Merger) in accordance with the Delaware General Corporation Law;
provided, however, that at any time prior to the Effective Time (as
hereinafter defined), BMO
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may, at its option, cause any corporation wholly-owned, directly, by it,
other than HBI, to become a party to this Agreement in replacement of, and
in substitution for, HBI as a constituent corporation to the Merger, and
the parties agree, in such event, to execute and deliver an appropriate
amendment to this Agreement in order to reflect the foregoing. The Merger
shall become effective upon the filing with the Secretary of State of
Delaware of a properly executed certificate of merger with respect thereto
in accordance with the Delaware General Corporation Law (hereinafter
referred to as the "Certificate of Merger") or at such later time, if any,
as may be agreed to by the parties hereto and specified in the Certificate
of Merger. The time when the Merger shall become effective is hereinafter
referred to as the "Effective Time." For purposes hereof, the term
"Constituent Corporations" shall mean HBI (or any substitute subsidiary of
BMO as provided in this Section 1.1(a)) and the Company and the term
"Surviving Corporation" shall mean HBI as the corporation surviving in the
Merger (or any substitute subsidiary of BMO as provided in this Section
1.1(a)).
(b) At the Effective Time, by virtue of the Merger, the
separate existence of the Company shall cease and the Company shall be
merged with and into HBI and all the rights, privileges, powers and
franchises, as well of a public as of a private nature, of each of HBI and
the Company and all property, real, personal and mixed, and all debts due
on whatever account, including things in action, and all and every other
interest of or belonging to or due to each of HBI and the Company shall be
vested in the Surviving Corporation and shall be as effectually the
property of the Surviving Corporation as they were of HBI and the Company
without further act or deed, and the Surviving Corporation shall be
responsible and liable for all the debts, liabilities and duties of each of
HBI and the Company, all with the full effect provided for in the Delaware
General Corporation Law. If at any time the Surviving Corporation shall
determine or be advised that any further action is necessary or desirable
to vest in the Surviving Corporation, according to the terms hereof, title
to any property or any rights of the Constituent Corporations or to carry
out the purposes of this Agreement, the last acting officers and directors
of the Company to the extent such persons are available, or the
corresponding officers and directors of the Surviving Corporation, as the
case may be, shall be authorized to take such action.
(c) The certificate of incorporation of HBI in effect
immediately prior to the Effective Time shall be the certificate of
incorporation of the Surviving Corporation at and after the Effective Time,
until amended in accordance with the provisions thereof and the Delaware
General Corporation Law. The Surviving Corporation shall be governed by
the laws of the State of Delaware.
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(d) The by-laws of HBI in effect immediately prior to the
Effective Time shall be the by-laws of the Surviving Corporation at and
after the Effective Time, until altered, amended or repealed as provided
therein and in the certificate of incorporation of the Surviving
Corporation.
(e) The directors of HBI in office immediately prior to the
Effective Time shall be the directors of the Surviving Corporation at and
after the Effective Time, until their successors are elected in accordance
with the by-laws of the Surviving Corporation.
(f) The officers of HBI in office immediately prior to the
Effective Time shall be the officers of the Surviving Corporation at and
after the Effective Time, holding the offices in the Surviving Corporation
which they held in HBI immediately prior thereto, until their successors
are elected or appointed in accordance with the by-laws of the Surviving
Corporation.
Section 1.2. Conversion of Stock. Subject to the provisions
of this Article I, at the Effective Time, by virtue of the Merger and
without any action on the part of the holders thereof, the shares of the
capital stock of the Constituent Corporations shall be converted as
follows:
(a) Each share of the Common Stock, $.01 par value, of HBI
which is issued and outstanding immediately prior to the Effective Time
shall, by virtue of the Merger, remain outstanding as one share of Common
Stock, $.01 par value, of the Surviving Corporation.
(b) Each share of the Common Stock, $.01 par value, of HBI
which is held in the treasury of HBI immediately prior to the Effective
Time, if any, shall be converted into one share of Common Stock, $.01 par
value, of the Surviving Corporation held in the treasury of the Surviving
Corporation.
(c) Subject to the provisions of Section 1.3 hereof, each
share of the Class A Common Stock, $1.00 par value, and Class B Common
Stock, $1.00 par value, of the Company (hereinafter sometimes referred to,
respectively, as the "Company Class A Common" and the "Company Class B
Common" and, collectively, as the "Company Common Stock") issued and
outstanding immediately prior to the Effective Time, other than any shares
of Dissenting Company Stock (as hereinafter defined), shall be converted
into the right to receive either (i) if the BMO Stock Price (as hereinafter
defined) is greater than or equal to $18.1059 (hereinafter referred to as
the "Floor Price") and less than or equal to $20.9646 (hereinafter referred
to as the "Ceiling Price"), 3.9352 shares of the Common Stock, no par
value, of BMO (hereinafter referred to as "BMO Common Stock"); (ii) if the
BMO Stock Price is greater than the Ceiling Price,
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the number of shares of BMO Common Stock equal to $82.50 divided by BMO
Stock Price; or (iii) if the BMO Stock Price is less than the Floor Price,
the number of shares of BMO Common Stock equal to $71.25 divided by BMO
Stock Price (hereinafter the number of shares of BMO Common Stock
determined pursuant to the application of the foregoing clauses (i), (ii)
and (iii) is referred to as the "Per Share Stock Consideration"). As used
herein, the term "BMO Stock Price" shall mean the average (weighted
according to reported daily trading volume on The Toronto Stock Exchange
and rounded to the nearest one thousandth) of the closing prices of BMO
Common Stock on the twenty (20) days immediately prior to the fourth day
prior to the Closing Date that BMO Common Stock is traded on The Toronto
Stock Exchange and for which closing prices are reported converted into
United States dollars using the exchange rate reported in The Wall Street
Journal, Midwest Edition (or such other publication mutually agreed to by
BMO and the Company) on the fourth day prior to the Closing Date.
(d) Each outstanding share of the Company Class B Common as to
which a written demand for appraisal is filed in accordance with Section
262 of the Delaware General Corporation Law at or prior to the Meeting (as
such term is defined in Section 4.2 hereof) and not withdrawn at or prior
to the Meeting and which is not voted in favor of the Merger shall not be
converted into or represent a right to receive the Per Share Stock
Consideration unless and until the holder thereof shall have failed to
perfect, or shall have effectively withdrawn or lost his or her right to
appraisal of and payment for his or her Company Class B Common under said
Section 262, at which time his or her shares shall be converted into BMO
Common Stock as set forth in Section 1.2(c) hereof in accordance with
Section 1.4 hereof. All such shares of Company Class B Common as to which
such a written demand for appraisal is so filed and not withdrawn at or
prior to the Meeting and which are not voted in favor of the Merger, except
any such shares of Company Class B Common the holder of which, prior to the
Effective Time, shall have effectively withdrawn or lost his or her right
to appraisal and payment for his or her shares of Company Class B Common
under said Section 262, are hereinafter referred to as "Dissenting Company
Stock." The Company shall give BMO prompt notice upon receipt by the
Company of any written demands for appraisal rights, withdrawal of such
demands, and any other written communications delivered to the Company
pursuant to said Section 262, and the Company shall give BMO the
opportunity, to the extent permitted by law, to direct all negotiations and
proceedings with respect to such demands. The Company shall not
voluntarily make any payment with respect to any demands for appraisal
rights and shall not, except with the prior written consent of BMO, settle
or offer to settle any such demands. Each holder of Company Class B Common
who becomes entitled, pursuant to provisions of said Section 262, to
payment for his or her shares of Company Class B Common under the
provisions of said
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Section 262 shall receive payment therefor from the Surviving Corporation
and such shares of Company Class B Common shall be cancelled.
(e) Each of the shares of capital stock of the Company held by
BMO or any of its wholly-owned subsidiaries or the Company or any of its
wholly-owned subsidiaries, other than shares held by BMO or any of its
wholly-owned subsidiaries or the Company or any of its wholly-owned
subsidiaries in a fiduciary capacity or as a result of debts previously
contracted, shall be cancelled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
(f) Notwithstanding any other provisions of this Agreement,
each holder of shares of Company Common Stock exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a
share of BMO Common Stock (after taking into account all certificates
delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to such fractional part of a share of BMO
Common Stock multiplied by BMO Stock Price. No such holder will be
entitled to dividends, voting rights or any other rights as a stockholder
in respect of any fractional share.
(g) At the Effective Time, the stock transfer books of the
Company shall be closed as to the holders of capital stock of the Company
immediately prior to the Effective Time and no transfer of capital stock of
the Company by any such holder shall thereafter be made or recognized. If,
after the Effective Time, certificates which represented shares of Company
Common Stock immediately prior to the Effective Time are properly presented
in accordance with Section 1.5 hereof to the exchange agent, First National
Bank of Chicago (hereinafter, together with any substitute exchange agent
mutually agreed to by BMO and the Company, referred to as the "Exchange
Agent"), such certificates shall be cancelled and exchanged for
certificates representing the number of whole shares of BMO Common Stock
into which the Company Common Stock represented thereby was converted in
the Merger, together with a check representing the amount of cash, if any,
payable with respect to any fractional share as provided in Section 1.2(f)
hereof. Any other provision of this Agreement notwithstanding, neither
BMO, HBI, the Company, the Surviving Corporation nor the Exchange Agent
shall be liable to a holder of Company Common Stock for any amount paid or
property delivered in good faith to a public official pursuant to any
applicable abandoned property, escheat or similar law.
Section 1.3. Adjustments for Dilution and Other Matters. If
prior to the Effective Time, the Company shall declare a stock dividend or
distribution upon or subdivide, split up, reclassify or combine the Company
Common Stock, or declare a dividend or make a distribution on the Company
Common Stock in
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any security convertible into Company Common Stock (provided that no such
action may be taken by the Company without BMO's prior written consent as
so provided in Section 2.14 hereof), appropriate adjustment or adjustments
will be made to the Per Share Stock Consideration. If prior to the
Effective Time, BMO shall declare a stock dividend or distribution upon or
subdivide, split up, reclassify or combine BMO Common Stock, or declare a
dividend or make a distribution on BMO Common Stock in any security
convertible into BMO Common Stock, appropriate adjustment or adjustments
will be made to the Per Share Stock Consideration. If at the Effective
Time, the Company shall have outstanding more shares of Company Common
Stock than are contemplated to be outstanding by the representation and
warranty contained in Section 2.2 hereof, then, at BMO's election and
notwithstanding other provisions hereof, and without limiting any of its
other rights hereunder, the Per Share Stock Consideration shall be
appropriately adjusted.
Section 1.4. Conversion of Dissenting Company Stock. If prior
to the Effective Time, any stockholder of the Company shall fail to
perfect, or shall effectively withdraw or lose, his or her right to
appraisal of and payment for his or her shares of Dissenting Company Stock
under Section 262 of the Delaware General Corporation Law, the Dissenting
Company Stock of such holder shall be treated for purposes of this Article
I like any other shares of outstanding Company Common Stock. If after the
Effective Time, any holder of Company Common Stock shall fail to perfect,
or shall effectively withdraw or lose, his or her right to appraisal of and
payment for his or her Dissenting Company Stock under Section 262 of the
Delaware General Corporation Law, each share of Dissenting Company Stock of
such holder shall be converted into the right to receive the Per Share
Stock Consideration pursuant to the provisions of this Article I and in
accordance with the procedures, and subject to the conditions, set forth in
Section 1.5 hereof.
Section 1.5. Exchange Procedures. (a) As of the Effective
Time, BMO shall deposit, or shall cause to be deposited, with the Exchange
Agent, for the benefit of the holders of Company Common Stock, for exchange
in accordance with this Article I, through the Exchange Agent, certificates
representing the shares of BMO Common Stock issuable in connection with the
Merger pursuant to Section 1.2(c) hereof in exchange for Company Common
Stock (such certificates for shares of BMO Common Stock, together with any
dividends or distributions with respect thereto which may be deposited with
the Exchange Agent, are hereinafter referred to as the "Exchange Fund").
(b) As soon as reasonably practicable after the Effective
Time, the Exchange Agent shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented shares of Company Common Stock
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(hereinafter referred to in this Section 1.5 as the "Certificate" or
"Certificates"), whose shares were converted pursuant to the Merger into
the right to receive shares of BMO Common Stock pursuant to Section 1.2(c)
hereof, (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Exchange Agent and
shall be in such form and have such other provisions as BMO may reasonably
specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for certificates representing shares of BMO Common
Stock. Upon surrender of a Certificate for cancellation to the Exchange
Agent together with such letter of transmittal, duly executed, the holder
of such Certificate shall be entitled to receive in exchange therefor a
certificate representing that number of whole shares of BMO Common Stock
which such holder has the right to receive pursuant to the Merger in
respect of the Certificate surrendered pursuant to the provisions of this
Article I (after taking into account all shares of Company Common Stock
then held by such holder), and the Certificate so surrendered shall
forthwith be cancelled. In the event of a transfer of ownership of shares
of Company Common Stock which is not registered in the transfer records of
the Company, a certificate representing the appropriate number of shares of
BMO Common Stock may be issued to a transferee if the Certificate
representing such shares of Company Common Stock is presented to the
Exchange Agent, accompanied by all documents required to evidence and
effect such transfer and by evidence that any applicable stock transfer
taxes have been paid. In the event any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and the
posting by such person of a bond in such reasonable amount as BMO may
direct as indemnity against any claim that may be made against it or the
Exchange Agent with respect to such Certificate, the Exchange Agent will
issue in exchange for such lost, stolen or destroyed Certificate a
certificate representing the appropriate number of shares of BMO Common
Stock. Certificates surrendered for exchange by any person constituting an
"affiliate" of the Company as defined in Rule 405 under the Securities Act
of 1933, as amended (the "Securities Act"), shall not be exchanged for
certificates representing whole shares of BMO Common Stock until BMO has
received a written agreement from such person as provided in Section 4.10
hereof.
(c) Any portion of the Exchange Fund which remains
undistributed to the former stockholders of the Company for six months
after the Effective Time shall be delivered to BMO, upon demand, and any
former stockholder of the Company who has not theretofore complied with
this Article I shall thereafter look only to BMO to claim their shares of
BMO Common Stock, any cash in lieu of a fractional share and any dividends
or distributions with respect to BMO Common Stock, in each case without
interest
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<PAGE> 8
thereon, and in all cases subject to the last sentence of Section 1.2(g)
hereof.
Section 1.6. Cash Payments in Lieu of Fractional Shares and
Dividends. Until surrendered for exchange in accordance with the
provisions of this Section 1.6, each certificate theretofore
representing shares of Company Common Stock (other than shares to be
cancelled pursuant to Section 1.2(e) hereof and shares of Dissenting
Company Stock) shall from and after the Effective Time represent for all
purposes only the right to receive whole shares of BMO Common Stock and
cash in lieu of fractional shares as provided in this Article I. No
dividends or other distributions declared or made after the Effective Time
with respect to BMO Common Stock with a record date after the Effective
Time shall be paid to the holder of any unsurrendered certificate of
Company Common Stock with respect to the shares of BMO Common Stock
represented thereby, and no cash payment in lieu of fractional shares shall
be paid to any such holder pursuant to Section 1.2(f) hereof, until the
holder of such certificate representing shares of Company Common Stock
shall surrender such certificate. Subject to the effect of applicable
laws, following surrender of any such certificate of Company Common Stock,
there shall be paid to the holder of the certificates representing whole
shares of BMO Common Stock issued in exchange therefor, without interest,
(i) the amount of any cash payable with respect to a fractional share of
BMO Common Stock to which such holder is entitled pursuant to Section
1.2(f) hereof and the amount of dividends or other distributions with a
record date after the Effective Time theretofore paid with respect to such
whole shares of BMO Common Stock and (ii) at the appropriate payment date,
the amount of dividends or other distributions with a record date after the
Effective Time but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole shares of BMO Common Stock.
Section 1.7. Withholding Rights. BMO or the Exchange Agent
shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of Company
Common Stock such amounts as BMO or the Exchange Agent is required to
deduct and withhold with respect to the making of such payment under the
Code, or any provision of state or local tax law. To the extent that
amounts are so withheld by BMO or the Exchange Agent, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to
the holder of the shares of Company Common Stock in respect to which such
deduction and withholding was made by BMO or the Exchange Agent.
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<PAGE> 9
Article II
Representations, Warranties and
Agreements of the Company
As an inducement to BMO and HBI to enter into and perform this
Agreement, the Company represents and warrants to, and agrees with, BMO and
HBI as follows:
Section 2.1. Organization, Standing and Power. The Company is
a corporation duly incorporated, validly existing and in good standing
under the laws of the State of Delaware and has the requisite corporate
power and authority to carry on its business as now being conducted.
Exhibit A attached hereto and hereby made a part hereof contains a list of
each corporation, partnership, joint venture or other entity which is
controlled by the Company for purposes of the BHC Act (hereinafter each of
such corporations, partnerships and other entities is sometimes referred to
individually as a "Company Subsidiary" and collectively as the "Company
Subsidiaries"), a description of the legal nature of each Company
Subsidiary, and the percentage equity ownership of the Company or any
Company Subsidiaries in each Company Subsidiary and the legal nature of
such ownership. Exhibit A also contains a description of the
capitalization of each of the Company Subsidiaries (including, without
limitation, a listing of the authorized, issued and outstanding shares of
capital stock of each Company Subsidiary). Except as disclosed in Exhibit
A, all of the capital stock of each Company Subsidiary is owned of record
and beneficially by the Company or another Company Subsidiary. Each of the
Company Subsidiaries which is a bank is duly organized, validly existing
and in good standing as an Illinois banking corporation under the laws of
the State of Illinois or, if a national bank, as a national banking
association under the laws of the United States. Each of the Company
Subsidiaries which is not a bank is duly organized, validly existing and in
good standing under the laws of its state of incorporation. Each of the
Company Subsidiaries has the requisite corporate power and authority to
carry on its business as now conducted. The Company and each Company
Subsidiary is duly qualified to do business, and is in good standing, in
each jurisdiction where the character of its properties owned or held under
lease or the nature of its activities makes such qualification necessary,
except as disclosed in the Disclosure Statement delivered to BMO by the
Company on the date hereof (hereinafter referred to as the "Disclosure
Statement"), which failures to be so qualified would not, individually or
in the aggregate, have a Material Adverse Effect (as such term is
hereinafter defined) on the Company. The Company is registered as a bank
holding company under the BHC Act. For purposes of this Agreement the term
"Significant Subsidiary" means for the Company or BMO, as applicable, any
"Significant Subsidiary" within the meaning of Rule 1-02 of Regulation S-X
of the
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<PAGE> 10
Securities and Exchange Commission (hereinafter referred to as the "SEC").
For purposes of this Agreement, the term "Material Adverse Effect" shall
mean, with respect to the Company, an effect which would be materially
adverse to the results of operations, condition (financial or otherwise),
properties, assets or business of the Company and the Company Subsidiaries
taken as a whole.
Section 2.2. Capital Structure. The authorized capital stock
of the Company consists of 6,000,000 shares of Company Class A Common,
3,000,000 shares of Company Class B Common and 500,000 shares of Preferred
Stock, no par value (hereinafter referred to as the "Company Preferred
Stock"), of which (i) 2,113,514 shares of Company Class A Common are issued
and outstanding and 1,028,320 shares of Company Class A Common are held in
the Company's treasury, (ii) 1,256,486 shares of Company Class B Common are
issued and outstanding and 35,764 shares of Company Class B Common are held
in the Company's treasury, and (iii) no shares of Company Preferred Stock
are issued and outstanding or held in the Company's treasury. There are no
options, warrants, rights, convertible or exchangeable securities,
commitments, agreements, arrangements or undertakings of any kind to which
the Company or any Company Subsidiary is a party or by which any of them is
bound obligating the Company or any Company Subsidiary to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of
capital stock or other voting securities, or securities convertible into or
exchangeable for shares of capital stock or voting securities, of the
Company or of any Company Subsidiary. All shares of the issued and
outstanding capital stock of the Company and each of the Company
Subsidiaries are validly issued, fully paid and non-assessable, were not
issued in violation of the preemptive rights of any person, and were issued
in full compliance with all applicable state and Federal laws.
Section 2.3. Authority; Non-Contravention. The Board of
Directors of the Company has declared the Merger to be in the best
interests of the Company's stockholders and the Company has all requisite
corporate power and authority to enter into this Agreement and, subject to
approval of the Merger by the stockholders of the Company, to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject to such approval of
the Merger by the stockholders of the Company. This Agreement has been
duly executed and delivered by the Company and (assuming the valid
authorization, execution and delivery of this Agreement by BMO and HBI)
constitutes a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms. The execution and
delivery of the Agreement do not, and the consummation of the transactions
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<PAGE> 11
contemplated hereby and compliance with the provisions hereof will not,
conflict with, or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to the loss
of a material benefit under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or
assets of the Company or any of its Significant Subsidiaries under, any
provision of (i) the certificate of incorporation or by-laws of the Company
(true and complete copies of which as of the date hereof have been
delivered to BMO) or any provision of the comparable charter or
organization documents of any of its Significant Subsidiaries, (ii) except
as set forth in the Disclosure Statement, any loan or credit agreement,
note, bond, mortgage, indenture, lease or other agreement, instrument,
permit, concession, franchise or license applicable to the Company or any
of the Company Subsidiaries or (iii) any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to the Company or any of the
Company Subsidiaries or any of their respective properties or assets, other
than, in the case of clause (ii) or (iii), any such conflicts, violations,
defaults, rights, liens, security interests, charges or encumbrances that,
individually or in the aggregate, would not have a Material Adverse Effect
on the Company, materially impair the ability of the Company to perform its
obligations hereunder or prevent the consummation of any of the
transactions contemplated hereby. No filing or registration with, or
authorization, consent or approval of, any governmental entity is required
by or with respect to the Company or any of the Company Subsidiaries in
connection with the execution and delivery of this Agreement by the Company
or the consummation by the Company of the transactions contemplated hereby,
except for (i) in connection, or compliance with, the provisions of the BHC
Act and the Illinois Banking Act, (ii) the filing with the SEC of (x) the
Proxy Statement (as such term is hereinafter defined), and (y) such reports
under Section 13 of the Securities Exchange Act of 1934, as amended
(hereinafter referred to as the "Exchange Act"), as may be required in
connection with this Agreement and the transactions contemplated hereby,
(iii) the filing of the Certificate of Merger with the Secretary of State
of the State of Delaware and appropriate documents with the relevant
authorities of other states in which the Company or any of the Company
Subsidiaries is qualified to do business, (iv) such filings and consents as
may be required under any environmental, health or safety law or regulation
pertaining to any notification, disclosure or required approval triggered
by the Merger or the transactions contemplated by this Agreement, (v) such
filings as may be required in connection with the taxes referred to in
Section 2.13 hereof, and (vi) such other consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of
which to be obtained or made would not, individually or in the aggregate,
have a Material Adverse Effect
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<PAGE> 12
on the Company, materially impair the ability of the Company to perform its
obligations hereunder or prevent the consummation of any of the
transactions contemplated hereby. The provisions of Section 203 of the
Delaware General Corporation Law will not apply to this Agreement, the
Voting Agreement, the Merger or the transactions contemplated hereby and
thereby. The Company has taken all steps necessary to approve and to
irrevocably exempt the transactions contemplated by this Agreement and by
the Voting Agreement from such Section 203 and any other applicable state
takeover law and from any applicable charter or contractual provision
containing change of control or anti-takeover provisions.
Section 2.4. SEC Documents. The Company has filed all
required documents with the SEC since January 1, 1993 (hereinafter referred
to as the "Company SEC Documents"). As of their respective dates, the
Company SEC Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be,
and none of the Company SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The
financial statements of the Company included in the Company SEC Documents
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally accepted
accounting principles (except, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the
period involved (except as may be indicated therein or in the notes
thereto) and fairly present the consolidated financial position of the
Company and the Company Subsidiaries as at the dates thereof and the
consolidated results of their operations and changes in financial position
for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments and to any other adjustments described
therein).
Section 2.5. Absence of Material Adverse Change. Except as
disclosed in the Company SEC Documents filed with the SEC prior to March
31, 1994, or in the Disclosure Statement, since December 31, 1993, there
has not been any changes in the results of operations, condition (financial
or otherwise), properties, assets, business or prospects of the Company or
any of the Company Subsidiaries, which, either individually or in the
aggregate, have been or could reasonably be expected to be materially
adverse to the Company and the Company Subsidiaries taken as a whole (other
than changes in banking laws or regulations, changes in generally accepted
accounting principles or interpretations thereof or changes in general
economic
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<PAGE> 13
conditions that affect the banking industry, including changes in the
general level of interest rates).
Section 2.6. Reorganization. Neither the Company nor any of
the Company Subsidiaries has taken any action or failed to take any action
which action or failure to take action would jeopardize the qualification
of the Merger as a reorganization within the meaning of Section 368(a) of
the Code.
Section 2.7. Brokers. No broker, investment banker or other
person, other than Lazard Freres & Co., the fees and expenses of which are
described in the Disclosure Statement and will be paid by the Company, is
entitled to any broker's, finder's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company.
Section 2.8. Governmental Regulations. Each of the Company
and the Company Subsidiaries holds all consents, licenses, certificates,
permits, authorizations, approvals, franchises and rights of Federal,
state, local and other public authorities and other persons and entities
required in connection with the ownership and operation of its properties
and the carrying on of its business as now being conducted, all of which
are now in full force and effect, except for such consents, licenses,
certificates, permits, authorizations, approvals, franchises and rights
which the failure to hold or maintain would not have a Material Adverse
Effect on the Company and between the date hereof and the Effective Time,
the Company will, and will cause each Company Subsidiary to, maintain all
such consents, licenses, certificates, permits, authorizations, approvals,
franchises and rights in full force and effect, except where such failure
to maintain would not have a Material Adverse Effect on the Company.
Except as disclosed in the Disclosure Statement, neither the Company nor
any Company Subsidiary which is a bank is a party or subject to any
agreement with, or directive or order issued by, the Board of Governors of
the Federal Reserve System (hereinafter referred to as the "FRB"), the
Federal Deposit Insurance Corporation (hereinafter referred to as the
"FDIC"), the Comptroller of the Currency, the Commissioner of Banks and
Trust Companies of the State of Illinois (the "Commissioner") or any other
bank regulatory authority, which imposes any restrictions or requirements
not applicable generally to bank holding companies (in the case of the
Company) or commercial banks (in the case of the Company Subsidiaries which
are banks), with respect to the conduct of its business. Each of the
Company and the Company Subsidiaries has conducted its business so as to
comply in all material respects with all applicable Federal, state and
local statutes, regulations, ordinances and rules, except where such
non-compliance would not have been a Material Adverse Effect on the
Company. Except as disclosed in the Disclosure Statement, since December
31, 1990, neither the
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<PAGE> 14
Company nor any of the Company Subsidiaries has received from any
governmental or regulatory authority any written requirement,
recommendation or suggestion of a material nature concerning their capital
structure, loan policies or portfolio, or other banking or business
practices or procedures that has not been resolved to the reasonable
satisfaction of such regulatory authority, except where such noncompliance
would not have a Material Adverse Effect on the Company. Since January 1,
1993, each of the Company and the Company Subsidiaries has filed each
report or other filing that it was required to file with any federal or
state banking or bank holding company regulatory authority having
jurisdiction over it (hereinafter, together with all exhibits thereto,
referred to as the "Company Regulatory Reports"), except for such reports
and filings which the failure to so file would not have a Material Adverse
Effect on the Company. The Company has provided BMO with copies or access
to copies of all of the Company Regulatory Reports. As of their respective
dates or as subsequently amended prior to the date hereof, each of the
Company Regulatory Reports was true and correct in all material respects
and complied in all material respects with applicable laws, rules and
regulations.
Section 2.9. Regulatory Approvals. As of the date hereof, the
Company is not aware of any reason that the regulatory approvals required
to be obtained by it as a condition to its obligation to effect the Merger
should not be obtained.
Section 2.10. Litigation. Except as disclosed in the Company
SEC Documents filed prior to March 31, 1994, or in the Disclosure
Statement, there is no investigation, claim, action, suit, arbitration or
proceeding pending, or, to the best of the Company's knowledge, threatened,
nor has the Company been advised that such claim, action, suit, arbitration
or proceeding is contemplated, against the Company, any of the Company
Subsidiaries, or any of their properties or assets (real, personal, or
mixed, tangible or intangible) which (i) would have a Material Adverse
Effect on the Company, or (ii) could have a material adverse effect on the
transactions contemplated hereby or the performance of the Company's
obligations hereunder.
Section 2.11. Environmental Compliance. All real property
owned or occupied by the Company or any of the Company Subsidiaries
(hereinafter referred to as the "Company Real Property") and all activities
of the Company and the Company Subsidiaries are in compliance with all
applicable environmental laws and regulations, except for such
noncompliance which would not have a Material Adverse Effect on the
Company. There are no outstanding citations, notices of violations, or
orders of noncompliance issued to the Company or any of the Company
Subsidiaries, nor have the Company or any of the Company Subsidiaries been
advised that any such citation, notice of violation or order of
noncompliance is contemplated, pursuant to
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<PAGE> 15
any environmental law or regulation relating to any Company Real Property
or relating to any real property no longer owned or occupied by the Company
or any of the Company Subsidiaries which would have a Material Adverse
Effect on the Company. There are no liens against Company Real Property
imposed pursuant to any environmental law or regulation which would have a
Material Adverse Effect on the Company.
Section 2.12. Employee Matters. Each employee benefit plan of
the Company and the Company Subsidiaries complies with the applicable
requirements of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), except for such noncompliance which would not have a
Material Adverse Effect on the Company, and any such plan which purports to
be a qualified plan under Section 401(a) of the Code is so qualified.
There are no existing circumstances which would adversely affect the
qualification of these plans or their compliance with the applicable
requirements of ERISA which would have a Material Adverse Effect on the
Company. All employee pension benefit plans (as defined in Section 3(2) of
ERISA) of the Company and the Company Subsidiaries, if any, comply with the
minimum funding requirement of Section 412 of the Code and except as
disclosed on the Disclosure Statement, as of the most recent valuation date
for each individual plan, the fair market value of each plan's assets
exceeds the present value of all vested nonforfeitable benefits under such
plan. All liabilities of the Company and the Company Subsidiaries related
to post-retirement benefits, including post-retirement medical benefits,
are disclosed in the Company's most recent audited consolidated financial
statements to the extent required by generally accepted accounting
principles. None of the Company or the Company Subsidiaries is bound by
any union or collective bargaining contract. A description, which is true
and correct in all material respects as of the date hereof, of employee
benefit plans of the Company and the Company Subsidiaries, or offered or
available to employees of the Company or of any of the Company
Subsidiaries, has been made available to BMO.
Section 2.13. Taxes. The Company and each of the Company
Subsidiaries have duly and timely filed all tax reports and returns
required to be filed with any jurisdiction, except for any failure to file
as would not have a Material Adverse Effect on the Company. All such
reports and returns filed by the Company and the Company Subsidiaries are
true, correct, complete and accurate in all material respects. The Company
and the Company Subsidiaries have duly and timely paid, or established
adequate reserves for the payment of, all taxes required to be paid in
respect of the periods covered by such returns. Except as disclosed in the
Disclosure Statement, the Company and each of the Company Subsidiaries are
not delinquent in the payment of any corporate income or franchise tax,
have not requested any extension of time within which to file any corporate
or franchise
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<PAGE> 16
income tax returns that have not since been filed, and have not waived or
agreed to waive any applicable statute of limitations.
Section 2.14. Conduct of Business Pending Merger. From and
after the date hereof and until the Effective Time, except with the prior
written consent of BMO each of the Company and the Company Subsidiaries
will: (a) 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 fully covered by insurance excepted; (b) maintain its books,
accounts and records in accordance with generally accepted accounting
principles and practices applied on a basis consistent with the audited
financial statements of the Company and the Company Subsidiaries referred
to in Section 2.4 hereof; (c) comply with all laws applicable to the
conduct of its business; (d) conduct its business only in the usual,
regular and ordinary course and in substantially the same manner as
heretofore conducted and in all cases consistent with prudent banking
practices, and not make any purchase or sale, except in a manner consistent
with prior practice; (e) make no change in its certificate of
incorporation, articles of incorporation, charter or articles of
association, as the case may be, or by-laws; (f) maintain and keep in full
force and effect all fire and other insurance on property and assets, all
liability insurance, and all bonds on personnel, presently carried by it;
(g) except in the ordinary course of business and consistent with past
practice, not sell or otherwise dispose of any of its investment
securities; (h) not sell, mortgage, subject to lien, pledge or encumber or
otherwise dispose of any of its property and assets otherwise than in the
ordinary course of business; (i) not redeem or otherwise acquire or agree
to redeem or otherwise acquire any shares of its capital stock; (j) make no
change in the number of shares of its capital stock issued and outstanding,
and grant no option, warrant or similar right relating to any of its
capital stock; (k) use its reasonable best 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; (l) not enter into any employment
contract which is not terminable without penalty or other liability upon 30
or fewer days' notice; (m) not declare or pay any dividend nor make any
other distribution in respect of any shares of its capital stock, except
for normal quarterly cash dividends not to exceed $.25 per share on the
Company Class A Common or $.227 per share on the Company Class B Common;
(n) not make any borrowings, except in the ordinary course of business
(indebtedness, other than deposits accepted by a Company Subsidiary which
is a bank in the ordinary course of its business, maturing more than one
year after its creation is not for purposes of this Agreement considered as
being in the "ordinary course"); (o) not purchase or invest in fixed rate
securities or obligations having a maturity of more than five years from
the date of purchase; (p)
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<PAGE> 17
not increase the hourly rates of pay of its employees or increase the fixed
compensation payable to any of its officers or employees, except for such
increases which are consistent with past salary review practices; (q) not
pay any bonus or commission, except in accordance with past practices; (r)
not establish or amend any "employee welfare benefit plan," "employee
pension benefit plan," or "fringe benefit arrangements," or any other plan
or arrangement of a similar nature; (s) except with the prior written
consent of BMO (which shall not be unreasonably withheld), not extend
additional credit or make advances in excess of $250,000 to any customer
who is listed on the problem or watch list of the Company or any Company
Subsidiary or who has any outstanding loan, advance or other credit which
is in default of payment of principal or interest or otherwise in material
default, has been placed on non-accrual status or has been classified by
examiners (regulatory or internal) as among "Other Assets Especially
Mentioned," "Substandard," "Doubtful" or "Loss" or any comparable
classification; (t) not make any tax election or take any other action
which could materially adversely affect the Federal, state, county or local
tax liability of the Company or any Company Subsidiary; (u) not enter into
any other material transaction other than in the ordinary course of
business; and (v) not take any action in anticipation of the Merger which
would have a Material Adverse Effect on the Company, the Surviving
Corporation or BMO.
Section 2.15. Other Acquisition Proposals. From and after the
date hereof and until the Effective Time, the Company and the Company
Subsidiaries shall not, and each of them shall cause its directors,
officers, employees and representatives not to, directly or indirectly,
solicit, initiate or encourage inquiries or proposals with respect to any
Acquisition Proposal (as defined below), or, except to the extent legally
required for the discharge of the fiduciary duties of the Board of
Directors of the Company to the stockholders of the Company, as so advised
by outside counsel with respect to an unsolicited offer from a third party,
which the Board of Directors of the Company, after consultation with its
financial advisors, determines is superior to the Company's stockholders,
from a financial point of view, to the Per Share Stock Consideration,
furnish any information relating to, or participate in any negotiations or
discussions concerning, any such inquiry or proposal or otherwise
facilitate any efforts to make or implement an Acquisition Proposal. For
purposes of this Agreement, an "Acquisition Proposal" shall mean any tender
or exchange offer for any of the Company's securities, proposal for a
merger, consolidation or business combination involving the Company or any
proposal or offer to acquire in any manner a substantial portion of the
assets of, or a substantial equity interest in, the Company or any of the
Company Subsidiaries other than as contemplated by this Agreement. The
Company shall promptly notify BMO and HBI of the Company's receipt of any
request for information and, to the extent
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<PAGE> 18
permissible, of the terms of any proposals, discussions, negotiations or
inquiries relating to any Acquisition Proposal.
Section 2.16. Loans. The allowance for loan losses reflected
on the consolidated balance sheet of the Company and its subsidiaries as of
December 31, 1993, which was included in the Company SEC Documents was, and
such allowance reflected on each consolidated balance sheet of the Company
and the Company Subsidiaries as of any date subsequent to the date thereof,
which is required to be furnished by the Company to BMO will be, in each
case as of the date thereof, adequate to provide for losses relating to or
inherent in the loan and lease portfolios (including accrued interest
receivables) of the Company and the Company Subsidiaries and other
extensions of credit (including letters of credit and commitments to make
loans or extend credit) by the Company and the Company Subsidiaries, except
to the extent that any such losses would not have a Material Adverse Effect
on the Company.
Section 2.17. Material Interests of Certain Persons. Except
as disclosed in the Disclosure Statement, no officer or director of the
Company, or any "associate" (as such term is defined in Rule 14a-1 under
the Exchange Act) of any such officer or director, has any material
interest in any material contract or property (real or personal), tangible
or intangible, used in or pertaining to the business of the Company or any
of the Company Subsidiaries.
Section 2.18. Opinion of Financial Advisor. The Company has
received the opinion of Lazard Freres & Co. on the date of this Agreement
to the effect that, as of the date of this Agreement, the consideration to
be received in the Merger by the Company's stockholders is fair to the
Company's stockholders from a financial point of view, and the Company will
promptly deliver a copy of such written opinion to BMO when such written
opinion is received by the Company.
Section 2.19. Disclosure. No representation or warranty made
herein by the Company and no written statement or certificate concerning or
relating to the Company or any of the Company Subsidiaries, considered in
their entirety, given or to be given by the Company or any of the Company
Subsidiaries to BMO or HBI pursuant to this Agreement 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 herein or
therein, under the circumstances under which they were made, not
misleading.
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<PAGE> 19
Article III
Representations, Warranties and
Agreements of BMO and HBI
As an inducement to the Company to enter into and perform this
Agreement, BMO and, where the following representations and warranties
apply to it, HBI each represents and warrants to, and agrees with, the
Company as follows:
Section 3.1. Organization, Standing and Power. BMO is validly
existing as a bank under the laws of Canada and has full power and
authority to engage in such business in Canada and elsewhere. HBI is duly
organized, validly existing and in good standing as a corporation under the
laws of the State of Delaware and has full power and authority to engage in
its business in each jurisdiction in which it conducts business. BMO and
each of BMO's subsidiaries is duly qualified to do business, and is in good
standing, in each jurisdiction where the character of its properties owned
or held under lease or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified would
not, individually or in the aggregate, have a Material Adverse Effect on
BMO. BMO is registered as a bank holding company under the BHC Act. For
purposes of this Agreement, the term "Material Adverse Effect" shall mean,
with respect to BMO, an effect which would be materially adverse to the
results of operations, condition (financial or otherwise), properties,
assets or business of BMO and its subsidiaries taken as a whole.
Section 3.2. Capital Structure. As of October 31, 1993, the
authorized capital stock of BMO consisted of an unlimited number of
authorized BMO Common Stock, an unlimited number of authorized Class A
Preferred Stock, no par value (hereinafter referred to as "BMO Class A
Preferred Stock") and an unlimited number of authorized Class B Preferred
Stock, no par value (hereinafter referred to as "BMO Class B Preferred
Stock"), of which (i) 249,093,914 shares of BMO Common Stock were issued
and outstanding, (ii) 8,000,228 shares of BMO Class A Preferred Stock were
issued and outstanding and (iii) 20,000,000 shares of BMO Class B Preferred
Stock were issued and outstanding. All of the shares of BMO Common Stock
issuable in exchange for Company Common Stock at the Effective Time in
accordance with this Agreement will be, when so issued, duly authorized,
validly issued, fully paid and nonassessable and free of preemptive rights.
Section 3.3. Corporate Authorization. The execution, delivery
and performance of this Agreement by BMO and HBI have been duly and validly
authorized and approved by the Board of Directors of BMO and HBI and do not
and will not violate or conflict with, in the case of BMO, the Bank Act of
Canada or the
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<PAGE> 20
by-laws of BMO or, in the case of HBI, the certificate of incorporation or
by-laws of HBI and do not and will not violate or conflict with or result
in any material default, any acceleration of required performance or any
loss of a material benefit under any note, bond, mortgage, indenture,
lease, franchise, license, permit, approval, contract, agreement or other
instrument or document or any order, writ, injunction, decree, judgment,
statute, rule or regulation to which BMO or HBI is a party or subject or by
which BMO or HBI is bound, except to the extent that, individually or in
the aggregate, such violation, conflict, default or other circumstance
would not have a Material Adverse Effect with respect to BMO. BMO agrees
to approve and adopt this Agreement as the sole stockholder of HBI. No
consent of any third party (other than the regulatory approvals referred to
in Section 4.1 hereof) is necessary to enable BMO or HBI to perform its
obligations under this Agreement. Without limiting the foregoing, no vote
or approval by the stockholders of BMO of this Agreement, of the issuance
of stock in the transactions contemplated hereby or of such transactions is
required pursuant to statute, BMO's by-laws, contract or otherwise.
Section 3.4. Securities Documents. BMO has filed all required
documents with the provincial and territorial securities regulatory
authorities in Canada (the "Canadian Securities Authorities"), since
October 31, 1993 (the "BMO Securities Documents"). As of their respective
dates, BMO Securities Documents complied in all material respects with the
requirements of the Canadian Securities Authorities and none of BMO
Securities Documents contained any untrue statement of a material fact or
omitted 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. The financial statements of BMO
incorporated by reference into BMO Securities Documents comply as to form
in all material respects with applicable accounting requirements and the
published rules and regulations of the Canadian Superintendent of Banking
with respect thereto, have been prepared in accordance with Canadian
generally accepted accounting principles (except, in the case of the
unaudited statements, as permitted by the Canadian Superintendent of
Banking) applied on a consistent basis during the periods involved (except
as may be indicated therein or in the notes thereto) and fairly present the
consolidated financial position of BMO and its consolidated subsidiaries as
at the dates thereof and the consolidated results of their operations and
statements of cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit adjustments and to any
other adjustments described therein).
Section 3.5. Absence of Material Adverse Change. Except as
disclosed in BMO's Securities Documents filed with the Canadian Securities
Authorities prior to March 31, 1994, since
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<PAGE> 21
October 31, 1993, there have not been any changes in the results of
operations, condition (financial or otherwise), properties, assets,
business or prospects of BMO or its subsidiaries, which either individually
or in the aggregate, have been or could reasonably be expected to be
materially adverse to BMO and its subsidiaries taken as a whole (other than
changes in banking laws or regulations, changes in generally accepted
accounting principles or interpretations thereof or changes in general
economic conditions that affect the banking industry, including changes in
the general level of interest rates).
Section 3.6. Reports and Filings. Since October 31, 1993, BMO
and each of its subsidiaries has filed each report or other filing it was
required to file with any Canadian or U.S. federal or state or provincial
banking or bank holding company regulatory authority having jurisdiction
over it, except for such reports and filings which the failure to so file
would not have a material adverse effect on BMO. As of their respective
dates or as subsequently amended prior to the date hereof, each such report
or other filing was true and correct in all material respects and complied
in all material respects with applicable laws, rules and regulations.
Section 3.7. Litigation. Except as disclosed in the BMO
Securities Documents, there is no investigation, claim, action, suit, or
proceeding pending, or threatened, nor has BMO been advised that such
claim, action, suit or proceeding is contemplated, against BMO, any of its
subsidiaries, or any of their properties or assets (real, personal, or
mixed, tangible or intangible) which (i) would have a Material Adverse
Effect with respect to BMO, or (ii) would have a material adverse effect on
the transactions contemplated hereby or the performance of BMO's
obligations hereunder.
Section 3.8. Environmental Compliance. All real property
owned or occupied by BMO or any of its subsidiaries is in compliance with
all applicable environmental laws and regulations, except for such
noncompliance as would not have a Material Adverse Effect with respect to
BMO. There are no outstanding citations, notices of violation, or orders
of noncompliance issued to BMO or any of its subsidiaries, nor have BMO or
any of its subsidiaries been advised that any such citation, notice of
violation or order of noncompliance is contemplated, pursuant to any
environmental law or regulation relating to any such real property owned or
occupied by BMO or any of its subsidiaries or relating to any real property
no longer owned or occupied by BMO or any of its subsidiaries where the
failure to cure the subject of such citation, notice of violation or order
of noncompliance could reasonably be expected to have a material adverse
effect on BMO. There are no liens against any real property owned or
occupied by BMO or any of its subsidiaries imposed pursuant to any
environmental law or
<PAGE>
<PAGE> 22
regulation which would have a Material Adverse Effect with respect to BMO.
Section 3.9. Taxes. BMO and each of its subsidiaries have
duly and timely filed all tax reports and returns required to be filed with
any jurisdiction, except for any failure to file as would not have a Material
Adverse Effect with respect to BMO. All such reports and returns filed by
BMO and its subsidiaries are true, correct, complete and accurate in all
material respects. BMO and its subsidiaries have duly and timely paid, or
established adequate reserves for the payment of, all taxes required to be
paid in respect of the periods covered by such returns. BMO and its
subsidiaries are not delinquent in the payment of any corporate income tax,
have not requested any extension of time within which to file any corporate
income tax returns that have not since been filed, and have not waived or
agreed to waive any applicable statute of limitations.
Section 3.10. Loans. The allowance for credit losses
reflected on the consolidated balance sheet of BMO and its subsidiaries as
of October 31, 1993, which was included in BMO's Securities Documents was,
as of the date thereof, adequate to absorb credit losses existing in BMO's
portfolio of on and off-balance sheet items of BMO and its subsidiaries,
except to the extent that any such losses would not have a Material Adverse
Effect with respect to BMO.
Section 3.11. Regulatory Approvals. As of the date hereof,
neither BMO nor HBI is aware of any reason that the regulatory approvals
required to be obtained by it as a condition to its obligation to effect
the Merger should not be obtained.
Section 3.12. Reorganization. Neither BMO nor HBI has taken
any action or failed to take any action which action or failure to take
action would jeopardize the qualification of the Merger as a reorganization
within the meaning of Section 368(a) of the Code.
Section 3.13. Disclosure. No representation or warranty made
herein by BMO or HBI and no written statement or certificate concerning or
relating to BMO, considered in their entirety, given or to be given by BMO
or HBI to the Company pursuant to this Agreement 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 herein or therein,
under the circumstances under which they were made, not misleading.
<PAGE>
<PAGE> 23
Article IV
Additional Agreements
Section 4.1. Regulatory Approvals. As promptly as
practicable, but not later than July 15, 1994, BMO and HBI (or either of
them, as appropriate) shall prepare and file applications for required
approvals in connection with the Merger with the Minister of Finance of
Canada pursuant to the Bank Act of Canada, the FRB pursuant to the BHC Act,
and the Commissioner pursuant to the Illinois Banking Act. BMO and HBI (or
either of them, as appropriate) shall provide the Company with drafts of
such applications (except for any portions thereof designated by BMO or HBI
as confidential) prior to filing the same and provide the Company an
opportunity to comment thereon. The Company will, and will cause each
Company Subsidiary to, cooperate fully in the preparation and submission of
such applications, and without limiting the foregoing, the Company will
promptly furnish BMO and HBI with any information relating to the Company
or any of the Company Subsidiaries which is required under any applicable
law or regulation, or by any regulatory or governmental authority, for
inclusion in any such application. Each party agrees to prepare and file
applications for (or otherwise to request) any other regulatory or
governmental approvals, and (in addition to the F-4 hereinafter mentioned)
to make any other filings with regulatory or governmental authorities,
which are necessary or appropriate in connection with the Merger.
Section 4.2. Company Stockholder Approval. The Company shall
take all steps necessary to duly call, give notice of, convene and hold a
meeting (hereinafter referred to as the "Meeting") of its stockholders to
be held as promptly as practicable after the F-4 becomes effective, for the
purpose of presenting this Agreement for the approval of, and adoption by,
its stockholders. The Company shall, through its Board of Directors,
except to the extent legally prohibited from doing so in connection with
the discharge of the fiduciary duties of such Board as advised by its
outside counsel, recommend to its stockholders approval of this Agreement
and of the transactions contemplated hereby. If this Agreement shall be
approved and adopted by the requisite vote of the Company's stockholders,
the Company shall immediately thereafter cause its Secretary to certify the
fact of such approval and adoption on this Agreement, pursuant to the
requirement of Section 251(c) of the Delaware General Corporation Law.
Section 4.3. Preparation of Company Proxy Materials and F-4
Registration Statement. (a) As promptly as practicable, the Company will
prepare and file with the SEC, and, as soon as permitted under applicable
regulations of the SEC and provided the F-4 has become effective, will mail
to the stockholders of the Company, appropriate proxy materials (hereinafter
referred to
<PAGE>
<PAGE> 24
as the "Proxy Materials"), including a notice of the Meeting, proxy
statement (hereinafter referred to as the "Proxy Statement") and form of
proxy which comply with the Exchange Act and the applicable regulations of
the SEC thereunder. BMO and HBI will furnish to the Company all
information concerning BMO and HBI as the Company or its counsel may
reasonably request and which is required or customary for inclusion in the
Proxy Materials. The Company shall file the Proxy Materials in preliminary
form with the SEC as promptly as practicable and respond as promptly as
practicable to all comments thereon of the SEC with a view toward mailing
definitive Proxy Materials at the earliest practicable date (the date of
such mailing herein referred to as the "Proxy Mailing Date"). In the Proxy
Materials, the Company shall present this Agreement and the transactions
contemplated hereby for approval by the holders of the Company Common Stock
at the Meeting and, except to the extent provided in Section 4.2, the
Company shall include in the Proxy Materials a recommendation by its Board
of Directors to the holders of the Company Common Stock that this Agreement
and the Merger be approved and adopted. Prior to submitting the Proxy
Materials and any amendment, supplement or revision thereof to the SEC or
the stockholders of the Company, and once a reasonably final draft of the
Proxy Materials or any such amendment, supplement or revision has been
prepared, the Company shall distribute such draft and successive drafts of
such materials to BMO, HBI and their counsel at the same time as such
drafts are distributed to persons within the Company or the Company
Subsidiaries and shall provide BMO, HBI and their counsel with the same
opportunity to review and comment upon such drafts as the other persons to
whom the drafts are distributed. Prior to responding to any comments of
the SEC or any other regulatory or supervisory authority relating to the
Proxy Materials, the Company shall review any proposed responses with BMO,
HBI and their counsel. The Company represents to BMO and HBI that the
Proxy Materials (i) will comply in all material respects with the
provisions of the Exchange Act and the rules and regulations of the SEC
thereunder and (ii) will not contain any untrue statement of a material
fact, or omit to state any material fact necessary in order to make the
statements therein not false or misleading; provided, however, that in no
event, shall the Company be liable for any untrue statement of a material
fact or omission to state a material fact in the Proxy Materials made in
reliance upon, and in conformity with, written information concerning BMO
or HBI which was furnished by BMO or HBI to the Company.
(b) As promptly as practicable, BMO will prepare and file with
the SEC a registration statement on Form F-4 under the Securities Act of
1933, as amended, in which the Proxy Statement will be included as a
prospectus, with respect to BMO Common Stock to be issued in connection
with the Merger (hereinafter referred to as the "F-4"). Each of BMO and
the Company shall use all reasonable efforts to have the F-4 declared
effective under
<PAGE>
<PAGE> 25
the Securities Act as promptly as practicable after its filing with the
SEC. BMO shall also take any action (other than qualifying to do business
in any jurisdiction in which it is now not so qualified) reasonably
required to be taken under any applicable state securities laws in
connection with the issuance of BMO Common Stock in the Merger and the
Company shall furnish all information concerning the Company, the Company
Subsidiaries and the holders of Company Common Stock as may be reasonably
requested in connection with any such action. BMO represents to the
Company that the F-4 (i) will comply in all material respects with the
provisions of the Securities Act and the rules and regulations of the SEC
thereunder and (ii) will not contain any untrue statement of a material
fact, or omit to state any material fact necessary in order to make the
statements therein not false or misleading; provided, however, that in no
event, shall BMO or HBI be liable for any untrue statement of a material
fact or omission to state a material fact in the F-4 made in reliance upon,
and in conformity with, written information concerning the Company which
was furnished by the Company to BMO.
Section 4.4. Access and Information. (a) The Company shall,
and shall cause each Company Subsidiary to, afford to BMO and HBI, and
their respective directors, officers, employees, accountants, counsel and
other representatives (hereinafter referred to as the "BMO
Representatives") reasonable access, during the period from the date hereof
to the Effective Time, to the properties, assets, books, contracts,
returns, reports and records of the Company and the Company Subsidiaries,
and the Company shall, and shall cause the Company Subsidiaries to, furnish
to BMO and HBI such other information concerning the respective businesses,
properties and personnel of the Company and each Company Subsidiary as BMO
or HBI may reasonably request. BMO and HBI shall keep confidential, and
shall cause BMO Representatives to keep confidential, any such information
so obtained from the Company and the Company Subsidiaries, including lists
of the Company's stockholders furnished to BMO or HBI in accordance with
the terms of Section 4.5 hereof; provided, however, that the foregoing
restriction shall not apply to any such information which is or comes into
the public domain otherwise than as a result of a breach of the provisions
of this paragraph (a), was in the possession of BMO or HBI or any BMO
Representative prior to the negotiations with the Company relating to this
Agreement or at any time comes into the possession of BMO or any BMO
Representative from third parties who have the right to disclose such
information otherwise than in connection with this Agreement. In the event
that this Agreement is terminated without the Merger having been
consummated, BMO and HBI shall, and shall cause BMO Representatives to,
return promptly to the Company all such information, which was obtained by
BMO or HBI in written form, in their possession.
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<PAGE> 26
(b) During the period from the date hereof to the Effective
Time, the Company will use reasonable efforts to cause its appropriate
officers to confer on a regular and frequent basis with appropriate
officers of BMO and HBI and to report the general status of the ongoing
operations of the Company and the Company Subsidiaries. The Company will
use reasonable efforts to promptly notify BMO and HBI of (i) any material
change in the normal course of its business or the business of any of the
Company Subsidiaries or in the operation of its properties or the
properties of any of the Company Subsidiaries; (ii) any material
complaints, investigations or hearings (or communications indicating that
the same may be contemplated) of any governmental entity; (iii) the
institution or the threat of material litigation involving the Company or
any of the Company Subsidiaries; or (iv) any event or condition that might
reasonably be expected to cause any of the Company's representations or
warranties set forth herein not to be true and correct in all material
respects, or cause the Company not to be in full compliance with any of its
covenants set forth herein, as of the Effective Time. As used in the
preceding sentence, "material litigation" shall mean any case, arbitration
or other adversary proceeding or other matter which would have been
required to be disclosed in the Disclosure Statement pursuant to Section
2.10 hereof if in existence on the date hereof or in respect of which the
legal fees and other costs of the Company or any of the Company
Subsidiaries might reasonably be expected to exceed $1,000,000 over the
entire life of such matter. The Company will also use reasonable efforts
to promptly notify BMO and HBI of any material adverse development
involving any matter disclosed on the Disclosure Statement in response to
Section 2.10 hereof which shall occur after the date hereof and which might
reasonably be expected to increase the financial exposure of the Company or
any of the Company Subsidiaries thereof in an amount exceeding $1,000,000
and in any event the Company will regularly advise BMO of significant
changes in the status of any such matters.
(c) BMO shall afford to the Company and its directors,
officers, employees, accountants, counsel and other representatives
(hereinafter referred to as the "Company Representatives") reasonable
access, during the period from the date hereof to the Effective Time, to
the properties, assets, books, contracts, returns, reports and records of
BMO, and BMO shall furnish to the Company such other information concerning
the businesses, properties and personnel of BMO as the Company may
reasonably request. The Company shall keep confidential, and shall cause
the Company Representatives to keep confidential, any such information so
obtained from BMO; provided, however, that the foregoing restriction shall
not apply to any such information which is or comes into the public domain
otherwise than as a result of a breach of the provisions of this paragraph
(c), was in the possession of the Company or any Company Representative
<PAGE>
<PAGE> 27
prior to the negotiations with BMO relating to this Agreement or at any
time comes into the possession of the Company or any Company Representative
from third parties who have the right to disclose such information
otherwise than in connection with this Agreement. In the event that this
Agreement is terminated without the Merger having been consummated, the
Company shall, and shall cause the Company Representatives to, return
promptly to BMO all such information, which was obtained by the Company in
written form, in its possession.
(d) During the period from the date hereof to the Effective
Time, BMO will use reasonable efforts to cause its appropriate officers to
confer on a regular and frequent basis with appropriate officers of the
Company and to report the general status of the ongoing operations of BMO.
BMO will use reasonable efforts to promptly notify the Company of (i) any
material change in the normal course of its business or in the operation of
its properties; (ii) any material complaints, investigations or hearings
(or communications indicating that the same may be contemplated) of any
governmental entity; (iii) the institution or the threat of material
litigation involving BMO; or (iv) any event or condition that might
reasonably be expected to cause any of BMO's representations or warranties
set forth herein not to be true and correct in all material respects, or
cause BMO not to be in full compliance with any of its covenants set forth
herein, as of the Effective Time. As used in the preceding sentence,
"material litigation" shall mean any case, arbitration or other adversary
proceeding or other matter which would have been required to be disclosed
in BMO's Securities Documents if in existence prior to the last filing date
thereof or in respect of which the legal fees and other costs of the
Company or any of the Company Subsidiaries might reasonably be expected to
exceed $25,000,000 over the entire life of such matter.
Section 4.5. Lists of Company Stockholders. Upon BMO's
request from time to time, for the purpose of giving effect to the Merger
as provided for herein, the Company shall deliver to BMO or HBI such lists
of the holders of record of the outstanding Company Stock as of the
respective dates which BMO or HBI shall designate.
Section 4.6. Termination Payment. If this Agreement is
terminated by BMO pursuant to Section 9.2(a)(iii)(A) hereof or by the
Company pursuant to Section 9.2(a)(iv)(B) hereof the Company shall pay to
BMO (a) within two business days after the occurrence of any termination
pursuant to Section 9.2(a)(iii)(A) or (b) immediately prior to any
termination pursuant to Section 9.2(a)(iv)(B) $3,000,000 by wire transfer
of immediately available Federal funds to such account as BMO shall
designate.
<PAGE>
<PAGE> 28
Section 4.7. Best Efforts. Each of the parties hereto agrees
to use its best 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
and in compliance with applicable laws and regulations to consummate and
make effective the transactions contemplated by this Agreement as
expeditiously as reasonably practicable; provided, however, that nothing in
this Section shall in any event require any party to commence a legal
action or proceeding against any bank regulatory authority or other
governmental entity deemed by it not to be advisable for any reason or to
take, or cause to be taken, any action which would have a Material Adverse
Effect with respect to it.
Section 4.8. Letters of Company's Accountants. The Company
shall use all reasonable efforts to cause to be delivered to BMO and HBI
letters of Deloitte & Touche, the Company's independent auditors, dated a
date within two business days before the date on which the F-4 shall become
effective and two business days before the Closing Date and addressed to
BMO and HBI, in form and substance reasonably satisfactory to BMO and HBI,
and in scope and substance consistent with applicable professional
standards for letters delivered by independent public accountants in
connection with registration statements similar to the F-4.
Section 4.9. Letter of BMO's Accountants. BMO shall use all
reasonable efforts to cause to be delivered to the Company a letter of
either KPMG Peat Marwick or Coopers & Lybrand, BMO's independent auditors,
dated a date within two business days before the date on which the F-4
shall become effective and two business days before the Closing Date and
addressed to the Company, in form and substance reasonably satisfactory to
the Company, and in scope and substance consistent with applicable
professional standards for letters delivered by independent public
accountants in connection with registration statements similar to the F-4.
Section 4.10. Affiliates. At least 20 days prior to the day
of the Effective Time, the Company shall deliver to BMO and HBI a letter
identifying all persons who are or will be, at the time this Agreement is
submitted for approval to the stockholders of the Company, "affiliates" of
the Company for purposes of Rule 145 under the Securities Act. The Company
shall use all reasonable efforts to cause each person named in the letter
delivered by it to deliver to BMO and HBI prior to the Closing Date a
written "Affiliates" agreement, in customary form, providing that such
person shall dispose of BMO Common Stock to be received by such person in
the Merger only in accordance with applicable law and that such person has
no present plan or intention to dispose of any such shares of BMO Common
Stock.
<PAGE>
<PAGE> 29
Section 4.11. Company Accruals and Reserves. Prior to the day
of the Effective Time, the Company shall, consistent with generally
accepted accounting principles and the accounting rules, regulations and
interpretations of the SEC and its staff, modify and change its loan,
accrual and reserve policies and practices (including loan classifications,
levels of reserves and accruals and asset disposition strategies to (i)
reflect BMO's plans with respect to the conduct of the Company's business
following the Merger and (ii) make adequate provision for the costs and
expenses relating thereto) so as to be applied consistently on a mutually
satisfactory basis with those of BMO; provided, however, that the Company
shall not be obligated to take in any respect any such action pursuant to
this Section 4.11 unless and until BMO acknowledges that all conditions to
its obligation to consummate the Merger have been satisfied or waived and
the Company acknowledges that all conditions to its obligation to
consummate the Merger have been satisfied or waived.
Section 4.12. Indemnification; Directors' and Officers'
Insurance. From and after the Effective Time, BMO agrees to indemnify and
hold harmless all past and present officers and directors of the Company
and of the Company Subsidiaries to the same extent such persons are
currently indemnified by the Company pursuant to the Company's certificate
of incorporation and by-laws and by the existing indemnification agreements
between the Company and such persons (true and complete copies of which
have been provided to BMO by the Company prior to the date hereof) for acts
or omissions occurring prior to the Effective Time. BMO will provide, or
cause to be provided, for one or more periods which, in the aggregate, will
be not less than five years from the Effective Time, the Company's current
directors and officers, an insurance and indemnification policy that
provides such officers and directors coverage for events occurring prior to
the Effective Time (the "D&O Insurance") that is in the aggregate no less
favorable than the existing policy or, if substantially equivalent
insurance coverage is commercially unavailable, the best available
coverage; provided, however, that BMO shall not be required to pay annual
premiums for the D&O Insurance required under this Section in excess of
$150,000, but in such case shall purchase as much coverage as possible for
such amount.
Section 4.13. NYSE Exchange Listing. It is the present
intention of BMO to effect, either at or prior to the Effective Time or as
promptly as practicable thereafter, the listing on the New York Stock
Exchange of the shares of BMO Common Stock to be issued in the Merger
pursuant to this Agreement.
Section 4.14. Employee Benefits. As soon as practicable after
the Effective Time and to the extent reasonably
<PAGE>
<PAGE> 30
feasible and subject to satisfying any legal, contractual or other
requirement without the incurrence of material expense, BMO shall cause the
employee benefits which are offered to the employees of the Surviving
Corporation and its subsidiaries to be generally comparable to the employee
benefits offered to Harris Bankcorp, Inc. and its subsidiaries, including,
without limitation, health insurance, vacation and sick pay, profit sharing
and severance pay. Employees of the Surviving Corporation and its
subsidiaries shall be given credit for prior service with the Company and
each Company Subsidiary for purposes of crediting periods of service for
eligibility, waiting periods and vesting of all such benefits offered by
Harris Bankcorp, Inc., except that no credit for any such prior service
shall be given for benefit accrual purposes under any retirement or pension
plan of Harris Bankcorp, Inc. All current participants in the Stock
Appreciation Rights Plan of the Company and the Company Subsidiaries, to
the extent eligible thereunder and consistent with past practices, shall be
granted a performance based SAR award for calendar year 1994.
Article V
Conditions Precedent to Obligations of
BMO, HBI and the Company
The obligations of BMO, HBI and the Company to effect the
Merger are subject to the satisfaction of the following conditions
precedent:
Section 5.1. Company Stockholder Approval. This Agreement and
the Merger shall have been duly approved and adopted by the requisite vote
of the stockholders of the Company under applicable law.
Section 5.2. Regulatory Approvals and Legal Requirements. All
approvals and consents required by law to be received in connection with
the Merger, including (without limitation) the approvals of the Minister of
Finance of Canada, the FRB and the Commissioner referred to in Section 4.1
hereof, shall have been received, shall be on terms and conditions that
would not have a Material Adverse Effect on BMO and shall be in effect, and
all conditions or requirements prescribed by any such approval or consent
(or by law in connection therewith), including (without limitation) the
expiration of all applicable waiting periods shall have been satisfied.
All other requirements prescribed by law which are necessary to the lawful
consummation of the Merger shall have been satisfied.
Section 5.3. Effectiveness of F-4. The F-4 shall have been
declared effective and shall not be subject to a stop order issued by the
SEC that remains in effect.
<PAGE>
<PAGE> 31
Section 5.4. Blue Sky Compliance. BMO shall have received all
state securities and "blue sky" permits and other authorizations necessary
to consummate the transactions contemplated hereby.
Section 5.5. Canadian Exchange Listing. The shares of BMO
Common Stock to be issued in the Merger pursuant to this Agreement will
have been accepted for listing and listed on the Toronto Stock Exchange and
freely tradeable in Canada.
Article VI
Conditions Precedent to Obligations
of BMO and HBI
The obligations of BMO and HBI to effect the Merger are subject
to the satisfaction of the following further conditions precedent, unless
waived in writing by BMO and HBI:
Section 6.1. Representations, Warranties and Covenants. The
representations and warranties of the Company contained in Article II of
this Agreement shall be true and accurate as of the date hereof and as of
the time immediately prior to the Effective Time as though made at and as
of such time, except as otherwise contemplated by this Agreement and except
for inaccuracies relating to circumstances which either individually or in
the aggregate would not have a Material Adverse Effect with respect to the
Company. The Company shall have duly performed and complied with, in all
material respects, all agreements, covenants and conditions required by
this Agreement to be performed or complied with by it. The Company shall
have delivered to BMO and HBI a certificate dated the day of the Effective
Time and signed by an authorized officer of the Company to the effect set
forth in the first sentence of this Section.
Section 6.2. Adverse Changes. There shall have been no
changes after December 31, 1993, in the results of operations, condition
(financial or otherwise), properties, assets or business of the Company or
any of the Company Subsidiaries, which either individually or in the
aggregate would be materially adverse to the Company and the Company
Subsidiaries taken as a whole. The Company shall have delivered to BMO and
HBI a certificate dated the day of the Effective Time and signed by an
authorized officer of the Company to the effect set forth in the first
sentence of this Section.
Section 6.3. Litigation. No litigation, proceeding or
investigation shall be pending, and no order, notice or regulation of any
court or governmental agency shall be in
<PAGE>
<PAGE> 32
effect, which prohibits, or which seeks to prohibit the consummation of the
Merger.
Section 6.4. Dissenting Company Stock. The aggregate number
of shares of Dissenting Company Stock shall not exceed 5% of the Company
Common Stock outstanding immediately prior to the Effective Time. The
Company shall have delivered to BMO and HBI a certificate dated the day of
the Effective Time and signed by an authorized officer of the Company to
the effect set forth in the first sentence of this Section.
Section 6.5. Opinion of the Company's Counsel. BMO and HBI
shall have received the opinion of Freeborn & Peters, counsel to the
Company, dated the day of the Effective Time, addressed to BMO and
substantially to the effect set forth in Exhibit B attached hereto and
hereby made a part hereof.
Section 6.6. Corporate Records. There shall have been
furnished to counsel for BMO and HBI by the Company certified copies of
such corporate records of the Company and each of the Company Subsidiaries
and copies of such other documents as such counsel may reasonably have
requested for such purpose.
Section 6.7. Voting Agreement. Immediately following the
execution and delivery of this Agreement, BMO and the stockholders of the
Company who are parties thereto shall have executed and delivered the
Voting Agreement.
Section 6.8. Employment Agreements. Employment Agreements
shall have been entered into by HBI with Gerald Fitzgerald, Jr., and James
Fitzgerald, respectively, substantially in the respective forms thereof
previously agreed to by the parties thereto.
Section 6.9. Affiliate Agreements. BMO and HBI shall have
received from each person who has been identified by the Company to BMO and
HBI as an "affiliate," pursuant to Section 4.10 hereof, a signed
"Affiliates" agreement as contemplated by such Section.
Section 6.10. Tax Opinion. BMO and HBI shall have received
the opinion of Chapman and Cutler, dated on or about the date that is two
business days prior to the Proxy Mailing Date, based upon receipt of
customary representations, and substantially to the effect that the Merger
will constitute a reorganization under Section 368(a) of the Code, and that
BMO, HBI and the Company, and the respective stockholders of BMO and the
Company (except to the extent any Company stockholders have perfected
dissenters' appraisal rights under applicable law or have received cash in
lieu of fractional shares), will recognize no gain or loss for United
States Federal income tax purposes as a result of consummation of the
Merger. Such opinion shall have
<PAGE>
<PAGE> 33
been delivered and shall not have been withdrawn or modified in any
material respect.
Article VII
Conditions Precedent to Obligation
of the Company
The obligation of the Company to effect the Merger is subject
to the satisfaction of the following further conditions precedent, unless
waived in writing by the Company:
Section 7.1. Representations, Warranties and Covenants. The
representations and warranties of BMO and HBI contained in Article III of
this Agreement shall be true in all material respects as of the date hereof
and as of the time immediately prior to the Effective Time as though made
at and as of such time, except as otherwise contemplated by this Agreement
and except for inaccuracies relating to circumstances which either
individually or in the aggregate would not have a Material Adverse Effect
with respect to BMO. BMO and HBI shall have duly performed and complied
with, in all material respects, all agreements, covenants and conditions
required by this Agreement to be performed or complied with by them. BMO
and HBI shall have delivered to the Company a certificate dated the day of
the Effective Time and signed by authorized officers of BMO and HBI to the
effect set forth in the first sentence of this Section.
Section 7.2. Adverse Changes. There shall have been no
changes after October 31, 1993, in the results of operations, condition
(financial or otherwise), properties, assets or business of BMO or any of
its subsidiaries, which either individually or in the aggregate would be
materially adverse to BMO and its subsidiaries, taken as a whole. BMO
shall have delivered to the Company a certificate dated the day of the
Effective Time and signed by an authorized officer of BMO to the effect set
forth in the first sentence of this Section.
Section 7.3. Litigation. No litigation, proceeding or
investigation shall be pending, and no order, notice or regulation of any
court or governmental agency shall be in effect, which prohibits, or which
seeks to prohibit the consummation of the Merger.
Section 7.4. Opinion of Counsel to BMO. The Company shall
have received the opinions of Chapman and Cutler, counsel to BMO and HBI,
and McMaster Meighen, counsel to BMO, dated the day of the Effective Time,
addressed to the Company and substantially to the effect set forth in
Exhibits C-1 and C-2, respectively, attached hereto.
<PAGE>
<PAGE> 34
Section 7.5. Corporate Records. There shall have been
furnished to counsel for the Company by BMO and HBI certified copies of
such corporate records of BMO and HBI and copies of such other documents as
such counsel may reasonably have requested for such purpose.
Section 7.6. Tax Opinion. The Company shall have received the
opinion of Sullivan & Cromwell, dated on or about the date that is two
business days prior to the Proxy Mailing Date, based upon receipt of
customary representations, and substantially to the effect that the Merger
will constitute a reorganization under Section 368(a) of the Code, and that
the stockholders of the Company (except to the extent any Company
stockholders have perfected dissenters' appraisal rights under applicable
law or have received cash in lieu of fractional shares) will recognize no
gain or loss for Federal income tax purposes as a result of consummation of
the Merger. Such opinion shall have been delivered and shall not have been
withdrawn or modified in any material respect.
Article VIII
Closing
Section 8.1. Date, Time and Place of Closing. The closing in
respect of the Merger (herein referred to as the "Closing") shall be held
at the offices of Chapman and Cutler, 111 West Monroe Street, Chicago,
Illinois, at 9:00 A.M., Chicago time, on the first date which is (i) the
last business day of a calendar month (unless BMO agrees to waive this
clause (i), or unless the conditions set forth in Article V of this
Agreement shall not all have been satisfied on or prior to March 31, 1995,
in either of which cases this clause (i) shall not be applicable) and (ii)
at least five days after satisfaction of each of the conditions set forth
in Article V of this Agreement, or such other date mutually agreed to by
the parties, which date (unless otherwise mutually agreed by the parties)
shall be the day of the Effective Time.
Section 8.2. Deliveries of Documents. At the Closing, the
certificates and other documents required to be delivered by this Agreement
shall be delivered.
Section 8.3. Merger to Be Made Effective. At the Closing,
subject to the terms and conditions of this Agreement, BMO, HBI and the
Company shall instruct their respective representatives to make or confirm
such filings (including, without limitation, the filing with the Secretary
of State of the State of Delaware of the Certificate of Merger properly
executed on behalf of HBI and the Company and otherwise in the form
contemplated by the Delaware General Corporation Law), and to
<PAGE>
<PAGE> 35
take all such other actions, as shall be required to give effect to the
Merger.
Article IX
Amendment and Termination
Section 9.1. Amendment. This Agreement may be amended by the
parties hereto, with the approval of their respective Boards of Directors
(or, in the case of BMO, the Executive Committee of its Board of
Directors), at any time prior to the Effective Time, whether before or
after approval hereof by the stockholder of HBI or the stockholders of the
Company, but, after such approval by the stockholders of HBI and the
Company, no amendment shall be made without the further approval of such
stockholders which (i) alters or changes the amount or kind of
consideration to be received by such stockholders in exchange for or on
conversion of all or any of the shares of the capital stock of HBI or the
Company as a result of the Merger; (ii) alters or changes any term of the
certificate of incorporation of the Surviving Corporation provided for by
this Agreement; or (iii) adversely affects such stockholders. This
Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
Section 9.2. Termination. (a) This Agreement may be
terminated at any time prior to the Effective Time, whether before or after
approval of this Agreement by the stockholder of HBI or the stockholders of
the Company:
(i) by mutual consent in writing of BMO, HBI and the Company
(with the approval of their respective Boards of Directors or, in the
case of BMO, the Executive Committee of its Board of Directors); or
(ii) by BMO (with the approval of its Board of Directors or the
Executive Committee thereof) or by the Company (with the approval of
its Board of Directors), by giving written notice of such termination
to the other party or parties if, upon the taking of the vote of the
stockholders of the Company contemplated by Section 4.2 hereof, the
required approval of such stockholders shall not be obtained; or
(iii) by BMO (with the approval of its Board of Directors or the
Executive Committee thereof), by giving written notice of such
termination to the Company, (A) if there has been (I) a material
breach of any agreement herein on the part of the Company which has
not been cured or adequate assurance of cure given, in either case
within 10 business days following notice of such breach from BMO, or
<PAGE>
<PAGE> 36
(II) a breach of a representation or warranty of the Company herein
which (individually or, together with other such breaches, in the
aggregate) would reasonably be expected to have a Material Adverse
Effect on the Company and which, in the opinion of BMO, by its nature
cannot be cured prior to the date specified in Section 9.2(a)(v)
hereof, (B) if any Acquisition Proposal other than as contemplated by
this Agreement, shall have been proposed by any third party (and such
proposal is not opposed in writing by the Company within ten business
days after the Company or any of the Company Subsidiaries shall have
first received or become aware of such proposal, or the Company or
its Board of Directors at any time shall cease to oppose such
proposal or shall take, or permit any Company Subsidiaries to take,
any action which is not consistent with opposition to such proposal)
or shall have been announced, commenced, agreed to or consummated,
(C) if there shall have occurred or been proposed, after the date of
this Agreement, any change in any law, rule or regulation, or after
the date of this Agreement there shall have been any decision or
action by any court, government or governmental agency (including,
without limitation, any bank regulatory authority) that could
reasonably be expected to prevent or delay consummation of the Merger
beyond April 15, 1995 or that would have a Material Adverse Effect
with respect to the Company, or (D) if BMO Stock Price is less than
$14.2939; or
(iv) by the Company (with the approval of its Board of
Directors), by giving written notice of such termination to BMO and
HBI, (A) if there has been (I) a material breach of any agreement
herein on the part of BMO or HBI which has not been cured or adequate
assurance of cure given, in either case within five business days
following notice of such breach from the Company, or (II) a breach of
a representation or warranty of BMO or HBI herein which (individually
or, together with other such breaches, in the aggregate) would
reasonably be expected to have a Material Adverse Effect on BMO and
which, in the opinion of the Company, by its nature cannot be cured
prior to the date specified in Section 9.2(a)(v) hereof, (B) if prior
to the approval of the Merger by the Company's stockholders, the
Company receives an Acquisition Proposal on terms which the Board of
Directors determines, after consultation with its financial advisor
and based upon the advice of its outside counsel, (y) that to proceed
with the Merger, notwithstanding the receipt of such Proposal, would
violate the fiduciary duties of the Board of Directors to the
Company's stockholders and (z) to accept such Proposal; provided,
however, that the Company shall not be permitted to terminate this
Agreement pursuant to this clause (B) unless it has provided BMO with
five business days prior written notice of its intent to so terminate
this Agreement (together with a summary of the
<PAGE>
<PAGE> 37
terms of such Acquisition Proposal), or (C) if BMO Stock Price is
greater than $23.8232 or less than $14.2939; or
(v) by BMO (with the approval of its Board of Directors or the
Executive Committee thereof) or by the Company (with the approval of
its Board of Directors), by giving written notice of such termination
to the other party or parties, if the Merger shall not have been
consummated on or before April 15, 1995, unless the failure of the
Closing to occur by such date shall be due to the failure of the
party seeking to terminate this Agreement to perform or observe the
covenants and agreements of such party set forth herein.
(b) If this Agreement is terminated for any reason, no party
to this Agreement shall have any further liability hereunder of any nature
whatsoever to the other parties hereto; provided, however, that,
notwithstanding the foregoing, (i) this Section 9.2(b) shall not preclude
liability from attaching to a party who has caused the termination hereof
by a willful act or a willful failure to act in violation of the terms and
provisions hereof, and (ii) termination of this Agreement shall not
terminate or affect the agreements of the parties contained in this Section
9.2(b), in Section 4.4 hereof (with respect to confidentiality), in Section
4.6 (with respect to a termination payment), or in Section 10.3 hereof
(with respect to the payment of certain expenses), the provisions of all of
which Sections shall survive any termination of this Agreement.
Article X
General Provisions
Section 10.1. Survival of Representations, Warranties and
Agreements. The agreements contained in Article I and Sections 4.12, 4.14
and Section 10.4 hereof (but only to the extent such agreements relate to
actions to be taken or matters to occur after the Effective Time) shall
survive the Merger. All other representations, warranties and agreements
contained in this Agreement and in any certificate or other document
delivered pursuant to this Agreement (other than the Certificate of Merger)
shall not survive the Merger.
Section 10.2. Notices. Each notice, request, demand, approval
or other communication which may be or is required to be given under this
Agreement shall be in writing and shall be deemed to have been properly
given when delivered personally at the address set forth below for the
intended party during normal business hours at such address, when sent by
facsimile or other electronic transmission to the respective facsimile
transmission numbers of the parties set forth below with telephone
<PAGE>
<PAGE> 38
confirmation of receipt, or when sent by recognized overnight courier or by
the United States registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
(a) if to BMO, at:
Bank of Montreal
First Bank Tower
First Canadian Place
Toronto, Ontario M5X1A1, Canada
Attention: Mr. Derek Jones
Senior Vice President, General
Counsel and Secretary
with a copy to:
Charles S. Hughes, Esq.
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
and
R. Jamie Plant, Esq.
McMaster Meighen
630 Rene Levesque, Blvd. West
Montreal, Quebec H3B4L7, Canada
(b) if to the HBI , at:
Harris Bankmont, Inc.
c/o Harris Bankcorp, Inc.
111 West Monroe Street
Chicago, Illinois 60690
Attention: Mr. Thomas Sizer, Secretary
with a copy to:
Charles S. Hughes, Esq.
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
(c) if to the Company, at:
Suburban Bancorp, Inc.
50 North Brockway Street
Palatine, Illinois 60067-5064
Attention: Mr. Gerald Fitzgerald, President
<PAGE>
<PAGE> 39
with copies to:
H. Rodgin Cohen, Esq. and
Francis J. Aquila, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
and
Robert A. McWilliams, Esq.
Freeborn & Peters
311 South Wacker Drive - Suite 3000
Chicago, Illinois 60606-6677
Notices shall be given to such other addressee or address, or both, or by
way of such other facsimile transmission number, as a particular party may
from time to time designate by written notice to the other parties hereto.
Each notice, request, demand, approval or other communication which is sent
in accordance with this Section shall be deemed given and received for all
purposes of this Agreement as of two business days after the date of
deposit thereof for mailing in a duly constituted United States post office
or branch thereof, one business day after deposit with a recognized
overnight courier service or upon confirmation of receipt of any facsimile
transmission. Notice given to a party hereto by any other method shall
only be deemed to be given and received when actually received in writing
by such party.
Section 10.3. Expenses. Whether or not the Merger is
consummated, each of BMO, HBI and the Company shall, and the Company shall
cause each of the Company Subsidiaries to, bear its own legal, accounting
and other expenses incurred in connection with this Agreement and the
Merger.
Section 10.4. Further Assurances. From time to time after the
Effective Time, as and when requested by the Surviving Corporation and to
the extent permitted by law, the officers and directors of each of BMO, HBI
and the Company last in office shall execute and deliver such assignments,
deeds and other instruments and shall take or cause to be taken such
further or other actions as shall be necessary in order to vest or perfect
in or to confirm of record or otherwise to the Surviving Corporation title
to and possession of, all of the assets, rights, franchises and interests
of each of HBI and the Company in and to every type of property (real,
personal and mixed) and things in action, and otherwise to carry out the
intent and purposes of this Agreement, and the proper officers and
directors of the Surviving Corporation are fully authorized to take any and
all such actions in the name of HBI or the Company or otherwise.
<PAGE>
<PAGE> 40
Section 10.5. Publicity. Neither BMO, HBI nor the Company
shall, nor shall any of them permit its directors, officers, employees or
agents to, issue or cause the publication of any press release or other
announcement with respect to this Agreement or the Merger or otherwise make
any disclosures relating thereto to the press or any third parties without
the prior consent of the other parties, which consent shall not be
unreasonably withheld; provided, however, that such consent shall not be
required where such release, announcement or disclosure is required by
applicable law or the rules or regulations of a securities exchange, other
self-regulatory authority or governmental agency (including, without
limitation, the rules and regulations of bank regulatory authorities with
respect to the publication of notice of the Merger in connection with the
applications for required approvals thereof).
Section 10.6. Waivers. No waiver by any of the parties to
this Agreement of any condition, term or provision hereof shall be valid
unless set forth in an instrument in writing signed on behalf of such
party, and no such waiver shall be deemed a waiver of any preceding or
subsequent breach of the same or any other condition, term or provision of
this Agreement.
Section 10.7. Entire Agreement and Binding Effect. This
Agreement (i) constitutes the entire agreement and supersedes all other
prior agreements and understandings, both written and oral, among the
parties hereto with respect to the subject matter hereof; (ii) shall be
binding upon and inure for the benefit of BMO, HBI and the Company and
their respective successors and is not intended to confer upon any other
person any rights or remedies hereunder; and (iii) shall not be assigned or
transferred by operation of law or otherwise.
Section 10.8. Governing Law. This Agreement shall in all
respects be governed by and construed in accordance with the laws of the
State of Delaware.
Section 10.9. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to constitute an
original, but all of which together shall constitute one and the same
instrument.
Section 10.10. Dollars. All references in this Agreement to
dollars (including references by means of the dollar sign "$") are to
United States dollars.
Section 10.11. Interpretation. The captions contained in this
Agreement, and Exhibit D hereto (with respect to certain definitions), are
for reference purposes only and shall not
<PAGE>
<PAGE> 41
affect in any way the meaning or interpretation of this Agreement.
In Witness Whereof, BMO, HBI and the Company have caused this
Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
Bank of Montreal
Attest: By
Its
By _______________________
Its ______________________
Harris Bankmont, Inc.
Attest: By
Its
By _______________________
Its ______________________
Suburban Bancorp, Inc.
Attest: By
Its
By _______________________
Its ______________________
<PAGE>
<PAGE> 1
Certificate of the Secretary of Harris Bankmont, Inc.
Attached to Merger Agreement pursuant to Section 251(c)
of the Delaware General Corporation Law
I, _________________, Secretary of Harris Bankmont, Inc., a
Delaware corporation ("HBI"), hereby certify that the Merger Agreement
dated as of April 15, 1994, among Bank of Montreal, HBI and Suburban
Bancorp, Inc., a Delaware corporation, to which this Certificate is
attached, has been duly approved and adopted by the sole holder of all of
the outstanding stock of HBI entitled to vote thereon, by written consent
pursuant to the By-laws of HBI and the Delaware General Corporation Law.
In Witness Whereof, I have hereunto set my hand, this ___ day
of ____________, 19___.
Secretary as aforesaid
<PAGE>
<PAGE> 1
Certificate of the Secretary of Suburban Bancorp, Inc.
Attached to Merger Agreement pursuant to Section 251(c)
of the Delaware General Corporation Law
I, ____________________________, Secretary of Suburban Bancorp,
Inc., a Delaware corporation (the "Company"), hereby certify that the
Merger Agreement dated as of April 15, 1994, among Bank of Montreal, the
Company, and Harris Bankmont, Inc., a Delaware corporation, to which this
Certificate is attached, has been duly approved and adopted by the holders
of not less than a majority of the outstanding stock of the Company
entitled to vote thereon, at a meeting of the stockholders of the Company
duly called and held pursuant to the By-laws of the Company and the
Delaware General Corporation Law.
In Witness Whereof, I have hereunto set my hand, this ___ day
of ____________, 19___.
Secretary as aforesaid
<PAGE>
<PAGE> A-1
List and Description of Company Subsidiaries
<PAGE>
<PAGE> B-1
Opinion of Counsel to the Company
The opinion of Freeborn & Peters, counsel to the Company,
referred to in Section 6.5 of this Agreement, shall be substantially to the
effect that:
1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and
is duly qualified to do business in, and in good standing under the laws
of, the State of Illinois. The Company has adequate corporate power and
authority, and all necessary licenses, permits, franchises and rights, to
own its property and conduct its business and to enter into and perform
this Agreement.
2. This Agreement has been duly authorized and approved by
all requisite corporate actions on the part of the Company and its
stockholders. This Agreement has been duly executed by authorized officers
of the Company and delivered, and constitutes the legal, valid and binding
contract and agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency and similar laws affecting the
enforcement of creditors' rights generally and except as the availability
of equitable remedies may be limited by equitable principles of general
applicability.
3. The Company has authorized capital stock consisting of
6,000,000 shares of Company Class A Common, 3,000,000 shares of Company
Class B Common and 500,000 shares of Company Preferred Stock, of which (i)
2,113,514 shares of Company Class A Common are issued and outstanding and
1,028,320 shares of Company Class A Common are held in the Company's
treasury, (ii) 1,256,486 shares of Company Class B Common are issued and
outstanding and 35,764 shares of Company Class B Common are held in the
Company's treasury, and (iii) no shares of Company Preferred Stock are
issued and outstanding or held in the Company's treasury. The Company has
no other authorized stock of any class, series, designation or description.
All of such issued and outstanding shares of Company Common Stock were duly
and validly issued, are fully paid and nonassessable, were not issued in
violation of the preemptive rights of any person, and were issued in full
compliance with all applicable state and federal laws.
4. Each of the Company Subsidiaries which is a bank is duly
organized, validly existing and in good standing as an Illinois banking
corporation under the laws of the State of Illinois or, if a national bank,
as a national banking association under the laws of the United States.
Each of the Company Subsidiaries which is not a bank is duly organized,
validly existing and in good standing under the laws of its state of
incorporation. Each of the Company Subsidiaries has full corporate power
and authority, and all necessary licenses,
<PAGE>
<PAGE> B-2
permits, franchises and rights, to own its properties and carry on its
business as now being conducted, and each is qualified to do business as a
foreign corporation in each state where the charter and location of its
properties or the nature of the business conducted by it requires
qualification.
5. The authorized, issued and outstanding capital stock of
each Company Subsidiary is as set forth in Exhibit B to this Agreement.
All of the issued and outstanding shares of capital stock of each Company
Subsidiary were duly and validly issued, are fully paid and (except, in the
case of each Company Subsidiary which is a national bank, as provided in 12
U.S.C. Section 55) non-assessable, were not issued in violation of the
preemptive rights of any person, and were issued in full compliance with
all applicable state and Federal laws. The Company and each Company
Subsidiary shown on Exhibit A to this Agreement as an equity owner in a
Company Subsidiary is the registered holder of the issued and outstanding
shares of capital stock of each such Company Subsidiary in the percentage
set forth on such Exhibit A and, to the best of such counsel's knowledge
and belief (after due investigation), the Company and each such Company
Subsidiary is the owner of good title to such shares of capital stock of
each Company Subsidiary, free and clear of any liens, claims, charges or
encumbrances whatsoever. As set forth on such Exhibit A, the Company owns
directly or indirectly through one or more Company Subsidiaries all of the
issued and outstanding capital stock of each Company Subsidiary.
6. The execution and delivery by the Company of this
Agreement and the performance by the Company of its obligations hereunder:
(a) do not and will not violate the certificate of incorporation or by-laws
of the Company; (b) do not and will not violate the certificate of
incorporation, articles of incorporation, charter or articles of
association, as the case may be, or by-laws of any Company Subsidiary; (c)
to the best of such counsel's knowledge and belief (after due
investigation), do not and will not violate, result in any acceleration of
required performance or (with due notice or lapse of time or both)
constitute a default under, and do not and will not result in the loss of a
material benefit under, any indenture, mortgage, lease, agreement or other
instrument to which the Company or any of the Company Subsidiaries is a
party or by which the Company or any of the Company Subsidiaries is bound;
and (d) do not and will not violate any provision of law or any order of
any court or governmental agency.
7. To the best of such counsel's knowledge and belief (after
due investigation), there are no legal, quasi-judicial or administrative
proceedings of any kind or nature now pending or threatened, affecting or
involving the Company or any of the Company Subsidiaries or any of their
respective properties, which may have a material adverse effect on the
Company or any of the
<PAGE>
<PAGE> B-3
Company Subsidiaries or the assets, operations or earnings of any of them
or the transaction contemplated by this Agreement.
8. None of the restrictions contained in Section 203 of the
Delaware General Corporation Law applies to this Agreement or any party
hereto, the Merger, the Voting Agreement or any party thereto or the
Surviving Corporation.
In addition, in such opinion, such counsel shall also state
that:
As counsel to the Company, such counsel reviewed the F-4 and
the prospectus included therein, participated in discussions with
representatives of the Company and its accountants, and
representatives of BMO, HBI and their counsel and accountants, and
advised the Company as to the requirements of the Securities Act and
the Exchange Act and the applicable rules and regulations thereunder.
Between the effectiveness of the F-4 and the time of the delivery of
this letter, such counsel participated in further discussions with
representatives of the Company, BMO and HBI (and their respective
counsel and accountants) concerning the contents of certain portions
of such prospectus and such counsel reviewed certificates of certain
officers of the Company, BMO, and HBI letters from the accountants
for the Company and BMO and a legal opinion from counsel to BMO and
HBI. On the basis of the information such counsel gained in the
course of the performance of the services referred to above,
considered in the light of such counsel's understanding of the
applicable law (including the requirements of Form F-4 and the
character of the prospectus contemplated thereby) and the experience
such counsel has gained through their practice under the Securities
Act and the Exchange Act, such counsel advised BMO and HBI and now
confirm that, in their opinion, the F-4 and the prospectus included
therein, as of the effective date of the F-4, appeared on their face
to be appropriately responsive in all material respects to the
requirements of the Securities Act and the Exchange Act and the
applicable rules and regulations of the SEC thereunder insofar as
they relate to the Company. Further, nothing that came to such
counsel's attention in the course of such review has caused such
counsel to believe that, insofar as they relate to the Company, the
F-4 or such prospectus, as of such effective date, contained any
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading. Also, nothing that has come to
such counsel's attention in carrying out the procedures described in
the second sentence of this paragraph has caused such counsel to
believe that, insofar as it relates to the Company, such prospectus,
as of the time of the meeting of stockholders of
<PAGE>
<PAGE> 4
the Company with respect to the Merger, contained any untrue
statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
The limitations inherent in the independent verification of
factual matters and the character of determinations involved in the
registration process are such, however, that such counsel do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the F-4 or such prospectus except for those made under the
caption "Description of Capital Stock of the Company" in such prospectus
insofar as they relate to provisions of documents therein described. Also,
such counsel do not express any opinion or belief as to the F-4 or such
prospectus insofar as they include or reflect any information relating to
or supplied by BMO or HBI or as to any financial statements or other
financial data contained in the F-4 or such prospectus.
<PAGE>
<PAGE> C-1-1
Opinion of Counsel to BMO and HBI
The opinion of Chapman and Cutler, counsel to BMO and HBI,
referred to in Section 7.4 of this Agreement, shall be substantially to the
effect that:
1. HBI is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. HBI has adequate
corporate power and authority, and all necessary licenses, permits,
franchises and rights, to own its property and conduct its business and to
enter into and perform this Agreement.
2. This Agreement has been duly authorized and approved by
all requisite corporate actions on the part of HBI and its stockholder.
This Agreement has been duly executed by authorized officers of HBI and
delivered, and constitutes the legal, valid and binding contract and
agreement of HBI, enforceable against HBI in accordance with its terms,
except as enforcement of such terms may be limited by bankruptcy,
insolvency and similar laws affecting the enforcement of creditors' rights
generally and except as the availability of equitable remedies may be
limited by equitable principles of general applicability.
3. The execution and delivery by HBI of this Agreement and
the performance by HBI of its obligations hereunder: (a) do not and will
not violate the certificate of incorporation or by-laws of HBI; (b) to the
best of such counsel's knowledge and belief (after due investigation), do
not and will not violate, result in any acceleration of required
performance or (with due notice or lapse of time or both) constitute a
default under, and do not and will not result in the loss of a material
benefit under, any indenture, mortgage, lease, agreement or other
instrument to which HBI is a party or by which HBI is bound; and (c) do not
and will not violate any provision of law or any order of any court or
governmental agency.
4. To the best of such counsel's knowledge and belief (after
due investigation), there are no legal, quasi-judicial or administrative
proceedings of any kind or nature now pending or threatened, affecting or
involving HBI or any subsidiary of HBI or any of their respective
properties, which may have a material adverse effect on HBI or the assets,
operations or earnings of HBI or the transaction contemplated by this
Agreement.
In addition, in such opinion, such counsel shall also state
that:
As counsel to BMO and HBI, such counsel reviewed the F-4 and
the prospectus included therein, participated in discussions with
representatives of BMO and HBI and their accountants, and
representatives of the Company and its counsel and accountants, and
advised BMO and HBI as to the
<PAGE>
<PAGE> C-1-2
requirements of the Securities Act and the applicable rules and
regulations thereunder. Between the effectiveness of the F-4 and the
time of the delivery of this letter, such counsel participated in
further discussions with representatives of BMO, HBI and the Company
(and their respective counsel and accountants) concerning the
contents of certain portions of such prospectus and such counsel
reviewed certificates of certain officers of BMO, HBI and the
Company, letters from the accountants for BMO, HBI and the Company
and a legal opinion from counsel to the Company. On the basis of the
information such counsel gained in the course of the performance of
the services referred to above, considered in the light of such
counsel's understanding of the applicable law (including the
requirements of Form F-4 and the character of the prospectus
contemplated thereby) and the experience such counsel have gained
through such counsel's practice under the Securities Act, such
counsel advised the Company and now confirm that, in their opinion,
the F-4 and the prospectus included therein, as of the effective date
of the F-4, appeared on their face to be appropriately responsive in
all material respects to the requirements of the Securities Act and
the applicable rules and regulations of the SEC thereunder insofar as
they relate to BMO and HBI. Further, nothing that came to such
counsel's attention in the course of such review has caused such
counsel to believe that, insofar as they relate to BMO and HBI, the
F-4 or such prospectus, as of such effective date, contained any
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading. Also, nothing that has come to
such counsel's attention in carrying out the procedures described in
the second sentence of this paragraph has caused such counsel to
believe that, insofar as it relates to BMO and HBI, such prospectus,
as of the time of the meeting of stockholders of the Company with
respect to the Merger, contained any untrue statement of a material
fact or omitted to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
The limitations inherent in the independent verification of
factual matters and the character of determinations involved in the
registration process are such, however, that such counsel do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the F-4 or such prospectus. Also, such counsel do not express
any opinion or belief as to the F-4 or such prospectus insofar as they
include or reflect any information relating to or supplied by the Company
or as to any financial statements or other financial data contained in the
F-4 or such prospectus.
<PAGE>
<PAGE> C-1-3
In rendering the foregoing opinions, such counsel may rely on
the opinions of such other attorneys as shall be satisfactory to them, as
to matters involving laws other than the Federal laws of the United States,
the corporate laws of the State of Delaware and the laws of the State of
Illinois.
<PAGE>
<PAGE> C-2-1
Opinion of Counsel to BMO
The opinion of McMaster Meighen, counsel to BMO, referred to in
Section 7.4 of this Agreement, shall be substantially to the effect that:
1. BMO is validly existing as a bank under the laws of
Canada and has full power and authority to engage in such business in
Canada and elsewhere.
2. This Agreement has been duly authorized and approved by
all requisite corporate actions on the part of BMO. This Agreement has
been duly executed by authorized officers of BMO and delivered and,
constitutes the legal, valid and binding contract and agreement of BMO
enforceable against BMO in accordance with its terms, except as enforcement
may be limited by laws of general application affecting creditors' rights
as the same would be applied to BMO and by general equitable principles.
3. The shares of BMO Common Stock to be issued in the Merger
pursuant to this Agreement will be, when issued, duly and validly
authorized, fully paid and non-assessable.
4. The execution and delivery by BMO of this Agreement and
the performance by BMO of its obligations hereunder: (a) do not and will
not violate the by-laws of BMO; (b) to the best of such counsel's knowledge
and belief (after due investigation), do not and will not violate, result
in any acceleration of required performance or (with due notice or lapse of
time or both) constitute a default under, and do not and will not result in
the loss of a material benefit under, any indenture, mortgage, lease,
agreement or other instrument, material to BMO, to which BMO is a party or
by which BMO is bound; and (c) do not and will not violate any provision of
law or any order of any court or governmental agency.
5. To the best of such counsel's knowledge and belief (after
due investigation), there are no legal, quasi-judicial or administrative
proceedings of any kind or nature now pending or threatened, affecting or
involving BMO or any of its respective properties, which may have a
material adverse effect on BMO or the assets, operations or earnings of BMO
or the transaction contemplated by this Agreement.
In addition, in such opinion, such counsel shall also state
that:
As counsel to BMO, such counsel reviewed the F-4 and the
prospectus included therein, participated in discussions with
representatives of BMO and its accountants, and representatives of
the Company and its counsel and accountants. Between the
effectiveness of the F-4 and the time of the delivery of this letter,
such counsel participated in further discussions with representatives
of
<PAGE>
<PAGE> C-2-2
BMO and the Company (and their respective counsel and accountants)
concerning the contents of certain portions of such prospectus and
such counsel reviewed certificates of certain officers of BMO and the
Company, letters from the accountants for BMO and the Company and a
legal opinion from counsel to the Company. Nothing that came to such
counsel's attention in the course of such review has caused such
counsel to believe that, insofar as they relate to BMO, the F-4 or
such prospectus, as of such effective date, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading. Also, nothing that has come to such
counsel's attention in carrying out the procedures described in the
second sentence of this paragraph has caused such counsel to believe
that, insofar as it relates to BMO, such prospectus, as of the time
of the meeting of stockholders of the Company with respect to the
Merger, contained any untrue statement of a material fact or omitted
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
The limitations inherent in the independent verification of
factual matters and the character of determinations involved in the
registration process are such, however, that such counsel do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the F-4 or such prospectus except for those made under the
caption "Description of Capital Stock of BMO" in such prospectus insofar as
they relate to provisions of documents therein described. Also, such
counsel do not express any opinion or belief as to the F-4 or such
prospectus insofar as they include or reflect any information relating to
or supplied by the Company or as to any financial statements or other
financial data contained in the F-4 or such prospectus.
In rendering the foregoing opinions, such counsel may rely on
the opinions of such other attorneys as shall be satisfactory to them, as
to matters involving laws other than the laws of Canada.
<PAGE>
<PAGE> D-1
Definitions
Acquisition Proposal, 17
BHC Act, 1
BMO, 1
BMO Class A Preferred Stock, 19
BMO Class B Preferred Stock, 19
BMO Common Stock, 3
BMO Representatives, 25
BMO Securities Documents, 20
BMO Stock Price, 4
Canadian Securities Authorities, 20
Ceiling Price, 3
Certificate of Merger, 2
Certificate, 7
Certificates, 7
Closing, 34
Code, 1
Commissioner, 13
Company, 1
Company Class A Common, 3
Company Class B Common, 3
Company Common Stock, 3
Company Preferred Stock, 10
Company Real Property, 14
Company Regulatory Reports, 12
Company Representatives, 26
Company SEC Documents, 12
Company Subsidiaries, 9
Company Subsidiary, 9
Constituent Corporations, 2
D&O Insurance, 29
Disclosure Statement, 9
Dissenting Company Stock, 4
Effective Time, 2
ERISA, 15
Exchange Act, 11
Exchange Agent, 5
Exchange Fund, 6
F-4, 24
FDIC, 13
Floor Price, 3
FRB, 13
HBI, 1
Material Adverse Affect, 10, 19
Meeting, 23
Merger, 1
Per Share Stock Consideration, 4
Proxy Mailing Date, 24
Proxy Materials, 24
Proxy Statement, 24
SEC, 10
Securities Act, 7, 12, 24
Significant Subsidiary, 9
Surviving Corporation, 2
Voting Agreement, 1
<PAGE> 1
VOTING AGREEMENT
VOTING AGREEMENT (the "Agreement"), dated as of April 15,
1994, among the undersigned stockholders (the "Stockholders")
of SUBURBAN BANCORP, INC., a Delaware corporation (the
"Company"), and BANK OF MONTREAL, a Canadian chartered bank
("Buyer").
WHEREAS, immediately prior to the execution of this
Agreement, the Company, Buyer and HARRIS BANKMONT, INC., a
Delaware corporation and a wholly owned subsidiary of Buyer
("Sub"), have entered into a Merger Agreement (as the same may
be amended from time to time, the "Merger Agreement"),
providing for the business combination transaction
contemplated therein in which the Company will merge with and
into Sub pursuant to the terms and conditions of the Merger
Agreement (the "Merger");
WHEREAS, upon consummation of the Merger, the
stockholders of the Company will receive the Per Share Stock
Consideration (as defined in the Merger Agreement) for each
share of Class A Common Stock, par value $1.00 per share (the
"Class A Common Stock"), or Class B Common Stock, par value
$1.00 per share (the "Class B Common Stock"), of the Company
owned by them;
WHEREAS, the Stockholders own the shares of Class A
Common Stock and Class B Common Stock set forth opposite such
Stockholders' respective names on Exhibit A hereto (such
shares set forth on Exhibit A, and together with all shares of
Class A Common Stock and Class B Common Stock subsequently
acquired by any Stockholder during the term of this Agreement,
being referred to as the "Shares");
WHEREAS, in order to induce Buyer to enter into the
Merger Agreement and in consideration of the substantial
expenses incurred and to be incurred by Buyer in connection
therewith, the Stockholders have agreed to enter into and
perform this Voting Agreement.
NOW, THEREFORE, for good and valuable consideration, the
receipt, sufficiency and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. Agreement to Vote Shares. Each of the
Stockholders shall vote or cause to be voted, or express
a written consent with respect to, all of such
Stockholder's Shares (a) in favor of adoption and
approval of the Merger Agreement and the Merger at every
meeting of the stockholders of the Company at which such
matters are considered and at every adjournment thereof
and in connection with every proposal to take action by
written consent with respect thereto, and (b) against any
other Acquisition Proposal
<PAGE>
<PAGE> 2
(as such term is defined in the Merger Agreement) at
every meeting of the stockholders of the Company at which
such matters are considered and at every adjournment
thereof and in connection with every proposal to take
action by written consent with respect thereto.
2. Stockholder Payment. In the event that (i) if
at any time following the receipt by the Company of an
Acquisition Proposal by any third party, the Merger
Agreement is amended to increase the Per Share Stock
Consideration or (ii) the Merger Agreement is terminated
by the Company pursuant to Section 9.2(a)(iv)(B) thereof
and within eighteen months thereafter the Company enters
into a business combination or other transaction with a
third party pursuant to which the Stockholders receive
consideration having a value of more than $75 per Share,
then, Buyer shall have the right to require each
Stockholder to pay Buyer, in cash (unless otherwise
agreed by Buyer), within ten business days following the
consummation of the Merger or such business combination
or other transaction, an amount equal to the product of
(A) in the case of an event described in clause (i)
above, the number of Shares owned by such Stockholder
immediately prior to consummation of the Merger or, in
the case of an event described in clause (ii) above, the
number of Shares owned by such Stockholder on the date
the Merger Agreement is terminated and (B) the amount (if
any) by which the value per Share actually received by
the Stockholder in connection with the Merger or such
business combination or other transaction, as the case
may be, exceeds $75 (less, in the case of any business
combination or other transaction described in clause (ii)
above that does not qualify as a tax free transaction,
all federal, state and local taxes (collectively,
"Taxes") payable on any consideration in excess of $75
per Share and, in the case of any such business
combination or other transaction that qualifies as a
tax-free transaction, all taxes payable upon the sale of
securities received in such business combination or other
transaction and sold by such Stockholder solely for the
purpose of making the payment set forth in this Paragraph
2); provided, however, that no Stockholder shall be
required to make the foregoing payment to Buyer unless
Buyer has entered into a reasonably satisfactory
agreement with the Stockholders providing for the
indemnification of the Stockholders by Buyer for any
adverse tax consequences resulting solely from such
payment. The parties hereto agree to use their
<PAGE>
<PAGE> 3
respective best efforts to negotiate and enter into a
reasonably satisfactory tax indemnification agreement and
to attempt to satisfy the Stockholders' obligation
hereunder in the most tax efficient manner practicable.
3. No Voting Trusts. Each of the Stockholders
agrees that such Stockholder will not, nor will such
Stockholder permit any entity under such Stockholder's
control to, deposit any of such Stockholder's Shares in a
voting trust or subject any of their Shares to any
agreement, arrangement or understanding with respect to
the voting of such Shares inconsistent with this
Agreement.
4. Limitation on Sales. During the term of this
Agreement, each Stockholder agrees not to sell, assign,
transfer or dispose of any of such Stockholder's Shares,
except for the disposition of up to an aggregate of
75,000 Shares by all Stockholders; provided, however,
that the foregoing shall not preclude the pledge of any
Stockholder's Shares so long as such Stockholder retains
all voting rights with respect thereto.
5. Additional Agreement. The Stockholders agree
to use their reasonable best efforts to cause all members
of the Gerald F. Fitzgerald Family (as hereinafter
defined) who or which own Shares and are not parties
hereto to enter into this Agreement as soon as
practicable after the date hereof. For purposes hereof,
the "Gerald F. Fitzgerald Family" shall include Mr.
Gerald F. Fitzgerald, his wife, and children and their
spouses and all trusts controlled by any of the
foregoing.
6. Stockholder's Representations. Each
Stockholder severally represents that: (i) such
Stockholder has the complete and unrestricted power and
unqualified right to enter into and perform the terms of
this Agreement; (ii) this Agreement constitutes a valid
and binding agreement with respect to such Stockholder,
enforceable against such Stockholder in accordance with
its terms; and (iii) such Stockholder owns the number of
Shares indicated opposite such Stockholder's name on
Exhibit A hereto, and has the sole and unrestricted
voting power with respect to such Shares.
7. Specific Performance and Remedies. Each party
hereto acknowledges that it will be impossible to measure
in money the damage to the other party if a
<PAGE>
<PAGE> 4
party hereto fails to comply with the obligations imposed
by this Agreement, that, in the event of any such
failure, the other party will not have an adequate remedy
at law or in damages. Accordingly, each party hereto
agrees that injunctive relief or other equitable remedy,
in addition to remedies at law or in damages, is the
appropriate remedy for any such failure and will not
oppose the granting of such relief on the basis that the
other party has an adequate remedy at law. Each party
hereto agrees that it will not seek, and agrees to waive
any requirement for, the securing or posting of a bond in
connection with any other party's seeking or obtaining
such equitable relief. In addition to all other rights
or remedies with which any party hereto may have against
any party hereto who defaults in the performance of such
party's obligations under the Agreement, such defaulting
party shall be liable to the non-defaulting party for all
litigation costs and attorneys' fees incurred by the
non-defaulting party in connection with the enforcement
of any of the non-defaulting party's rights or remedies
against the defaulting party.
8. Term of Agreement; Termination. The term of
this Agreement shall commence on the date hereof and such
term and this Agreement shall terminate upon the earlier
to occur of (i) the Effective Time (as defined in the
Merger Agreement), and (ii) the date on which the Merger
Agreement is terminated in accordance with its terms;
provided, however, that in the event that the Merger
Agreement is terminated by the Company pursuant to
Section 9.2(a)(iv)(B) thereof, this Agreement shall
continue in full force and effect for a period of 180
days thereafter. Upon such termination, no party shall
have any further obligations or liabilities hereunder;
provided, that such termination shall not relieve any
party from liability for any breach of this Agreement
prior to such termination. Notwithstanding the
foregoing, the provisions of Sections 2 and 7 hereof
shall survive any termination of this Agreement as a
result of the termination of the Merger Agreement
pursuant to Section 9.2(a)(iv)(B) thereof.
9. Entire Agreement. This Agreement supersedes
all prior agreements, written or oral, among the parties
hereto with respect to the subject matter hereof and
contains the entire agreement among the parties with
respect to the subject matter hereof. This Agreement may
not be amended, supplemented or modified, and no
provisions hereof may be modified or
<PAGE>
<PAGE> 5
waived, except by an instrument in writing signed by all
parties hereto. No waiver of any provisions hereof by
any party shall be deemed a waiver of any other
provisions hereof by any such party, nor shall any such
waiver be deemed a continuing waiver of any provision
hereof by such party.
10. Notices. All notices, requests, claims,
demands or other communications hereunder shall be in
writing and shall be deemed given when delivered
personally, upon receipt of a transmission confirmation
if sent by telecopy or like transmission and on the next
business day when sent by Federal Express, Express Mail
or other reputable overnight courier service to the
parties at the following addresses (or at such other
address for a party as shall be specified by like
notice):
If to Buyer:
Bank of Montreal
First Bank Tower
First Canadian Place
Toronto, Ontario M5X 1A1
Telecopy: (416) 867-7191
Attention: General Counsel
With a copy to:
Charles S. Hughes, Esq.
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
If to a Stockholder, to the address or telecopy number
set forth for such Stockholder on the signature page hereof:
With a copy to:
Thomas G. Fitzgerald, Esq.
Freeborn & Peters
311 South Wacker Drive - Suite 3000
Chicago, Illinois 60606-6677
Telecopy: (312) 360-6570
11. Miscellaneous.
(a) This Agreement shall be deemed a contract made
under, and for all purposes shall be construed in accordance
with, the laws of the State of Delaware, without reference to
its conflicts of law principles.
<PAGE>
<PAGE> 6
(b) If any provision of this Agreement or the
application of such provision to any person or circumstances
shall be held invalid or unenforceable by a court of competent
jurisdiction, such provision or application shall be
unenforceable only to the extent of such invalidity or
unenforceability, and the remainder of the provision held
invalid or unenforceable and the application of such provision
to persons or circumstances, other than the party as to which
it is held invalid, and the remainder of this Agreement, shall
not be affected.
(c) This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original
but all of which together shall constitute one and the same
instrument.
(d) All Section headings herein are for convenience of
reference only and are not part of this Agreement, and no
construction or reference shall be derived therefrom.
(e) All references in this Agreement to dollars or $
shall refer to U.S. dollars.
<PAGE>
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first written above.
_____________________________ _____________________________
Gerald F. Fitzgerald
By:__________________________
Its:_________________________ _____________________________
Marjorie G. Fitzgerald
_____________________________
Gerald F. Fitzgerald, Jr.
_____________________________
Denise M. Fitzgerald
_____________________________
James G. Fitzgerald
_____________________________
Jane M. Fitzgerald
_____________________________
Peter G. Fitzgerald
_____________________________
C. Nina Fitzgerald
_____________________________
Thomas G. Fitzgerald
_____________________________
Julie F. Schauer
<PAGE>
<PAGE> 8
CELINE MCMAHON FITZGERALD TRUST
By:_______________________________
Gerald F. Fitzgerald, Jr.,
Trustee
MARGUERITE G. SCHAUER TRUST
By:_______________________________
Gerald F. Fitzgerald, Jr.,
Trustee
ANDREW J. FITZGERALD TRUST
By:_______________________________
James G. Fitzgerald, Trustee
TIMOTHY E. FITZGERALD TRUST
By:_______________________________
James G. Fitzgerald, Trustee
JAKE BUCHANAN FITZGERALD TRUST
By:_______________________________
Peter G. Fitzgerald, Trustee
FITZGERALD DESCENDANTS TRUST
By:_______________________________
Peter G. Fitzgerald, Trustee
<PAGE>
<PAGE> 9
FITZGERALD CHILDREN TRUST
By:_______________________________
Peter G. Fitzgerald, Trustee
ELYSE IVES SCHAUER TRUST
By:_______________________________
Peter G. Fitzgerald, Trustee
LAUREN WEBB FITZGERALD TRUST
By:_______________________________
Thomas G. Fitzgerald,
Trustee
THOMAS G. FITZGERALD, JR. TRUST
By:_______________________________
Thomas G. Fitzgerald,
Trustee
ELYSE IVES SCHAUER TRUST
By:_______________________________
Julie F. Schauer, Trustee
<PAGE>
<PAGE> 10
EXHIBIT A
SUBURBAN BANCORP, INC.
Fitzgerald Family Stock Ownership
<TABLE>
<CAPTION>
Class A Class B
Common Stock Common Stock
Number Percent Number Percent
of of of of
Name and Address Shares* Class** Shares* Class**
<S> <C> <C> <C> <C>
Gerald F. Fitzgerald . . . . . . . . . . . . 7,950 .36% 110,872 8.82%
Marjorie G. Fitzgerald . . . . . . . . . . . 51,062 2.33 120,204 9.57
19 Creekside
Barrington Hills, Illinois 60010
Gerald F. Fitzgerald, Jr. . . . . . . . . . . 43,663 1.99 113,090 9.00
Denise M. Fitzgerald . . . . . . . . . . . . 0 0 20,521 1.63
1470 Pheasant Trail
Inverness, Illinois 60067
Celine McMahon Fitzgerald Trust . . . . . . . 1,950 .09 43,587 3.47
(Gerald F. Fitzgerald, Jr., Trustee)
Marguerite G. Schauer Trust . . . . . . . . . 450 .02 0 0
(Gerald F. Fitzgerald, Jr., Trustee)
James G. Fitzgerald . . . . . . . . . . . . . 19,829 .91 113,792 9.06
Jane M. Fitzgerald . . . . . . . . . . . . . 10,944 .50 8,938 .71
227 Otis Road
Barrington, Illinois 60010
Andrew J. Fitzgerald Trust . . . . . . . . . 5,900 .27 27,913 2.22
(James G. Fitzgerald, Trustee)
Timothy E. Fitzgerald Trust . . . . . . . . . 5,900 .27 27,913 2.22
(James G. Fitzgerald, Trustee)
Peter G. Fitzgerald . . . . . . . . . . . . . 37,036 1.69 110,520 8.80
C. Nina Fitzgerald . . . . . . . . . . . . . 4,215 .19 24,555 1.95
1897 W. Stuart Lane
Inverness, Illinois 60067
Jake Buchanan Fitzgerald Trust . . . . . . . 1,010 .05 1,633 .13
(Peter G. Fitzgerald, Trustee)
Fitzgerald Descendants Trust . . . . . . . . 0 0 15,000 1.19
(Peter G. Fitzgerald, Trustee)
Fitzgerald Children Trust . . . . . . . . . . 0 0 20,000 1.59
(Peter G. Fitzgerald, Trustee)
Shannon McMahon Fitzgerald
Exclusion Trust . . . . . . . . . . . . . . 906 .04% 937 .07%
(Peter G. Fitzgerald, Trustee)
<PAGE>
<PAGE> 11
Class A Class B
Common Stock Common Stock
Number Percent Number Percent
of of of of
Name and Address Shares* Class** Shares* Class**
<S> <C> <C> <C> <C>
Shannon McMahon Fitzgerald
Primary Trust . . . . . . . . . . . . . . . 0 0 13,793 1.10
(Peter G. Fitzgerald, Trustee)
Elyse Ives Schauer Trust . . . . . . . . . . 450 .02 0 0
(Peter G. Fitzgerald, Trustee)
Thomas G. Fitzgerald . . . . . . . . . . . . 20,094 .92 130,450 10.38
Joyce M. Fitzgerald . . . . . . . . . . . . . 0 0 0 0
87 Hawley Woods Road
Barrington Hills, Illinois 60010
Lauren Webb Fitzgerald Trust . . . . . . . . 11,950 .55 26,895 2.14
(Thomas G. Fitzgerald, Trustee)
Thomas G. Fitzgerald, Jr. Trust . . . . . . . 11,950 .55 26,895 2.14
(Thomas G. Fitzgerald, Trustee)
Julie F. Schauer . . . . . . . . . . . . . . 38,325 1.75 164,782 13.11
754 North Main Street
Glen Ellyn, Illinois 60173
Elyse Ives Schauer Trust . . . . . . . . . . 3,981 .18 18,069 1.44
(Julie F. Schauer, Trustee)
</TABLE>
____________________________
* As of April 14, 1994
** As of March 31, 1994
<PAGE> 1
Harris, Bank of Montreal and Suburban Bancorp Announce
Merger Agreement News Conference at 9:30 A.M., CST.,
Monday, April 18
Chicago, April 15, 1994 -- Harris Bankcorp, Bank of
Montreal and Suburban Bancorp, Inc. (NASDAQ: SUBBA) today
announced the signing of a definitive agreement providing for
the combination of Harris and Suburban Bancorp under the
Harris name.
Under the agreement 100 percent of Suburban Bancorp stock
will be exchanged for Bank of Montreal (BMO) common shares
based on the conversion rate of 3.9352 BMO shares per Suburban
Bancorp share, subject to adjustment. Based on yesterday's
closing BMO price, the value of the transaction would be
US$73.08 per share, or an aggregate of approximately US$246
million. Harris Bankcorp is a wholly-owned subsidiary of Bank
of Montreal.
The agreement is subject to certain conditions, including
approval by regulators and shareholders of Suburban Bancorp.
Members of the Gerald F. Fitzgerald family, who own shares
representing more than a majority of the voting power of
Suburban Bancorp, have agreed to vote their shares in favor of
this transaction.
A NEWS CONFERENCE WILL BE HELD MONDAY MORNING, APRIL 18,
AT 9:30 A.M., AT HARRIS BANK, 115 S. LASALLE, 37TH FLOOR,
ROOM C.
###
THE BANK OF MONTREAL COMMON STOCK TO BE EXCHANGED WILL BE
OFFERED ONLY BY MEANS OF A PROSPECTUS FILED WITH THE SEC.
