<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 26, 1994
First Financial Corporation
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(Exact name of registrant as specified in its
charter)
Wisconsin 0-11889 9-1471963
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(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
1305 Main Street, Stevens Point, Wisconsin 54481
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (715) 341-0400
----------------
Not Applicable
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(Former name or former address, if changed since last report)
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This Current Report consists of 83 pages.
The Exhibit Index is at page 5.
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Item 5. Other Events.
On October 26, 1994, First Financial Corporation ("FFC") announced that it
had entered into an Agreement and Plan of Reorganization dated October 26, 1994
(the "Agreement") among FFC, First Financial Acquisition Company, a wholly owned
subsidiary of FFC ("Acquisition Company"), and FirstRock Bancorp, Inc.
("FirstRock") pursuant to which FFC will acquire FirstRock (the "Acquisition")
through the merger of FirstRock and Acquisition Company. The Agreement is filed
as an exhibit hereto and is incorporated by reference herein. As part of the
Acquisition, FirstRock's wholly owned subsidiary, First Federal Savings Bank,
F.S.B. ("First Federal"), will be merged into FFC's wholly owned subsidiary,
First Financial Bank, FSB ("First Financial"). At September 30, 1994, FirstRock
reported total assets of $408.0 million, deposits of $302.5 million and
stockholders' equity of $48.6 million.
Pursuant to the Agreement, the Acquisition is to be accounted for as a
pooling of interests, and each share of issued and outstanding FirstRock common
stock will convert into the right to receive FFC common stock valued at $27.10,
based upon the average of the closing prices of the FFC common stock on The
Nasdaq Stock Market during the fifteen trading days on which reportable sales of
FFC common stock took place ("Average Trading Price") immediately prior to the
third business day before the closing of the Acquisition. Outstanding employee
and director options to acquire FirstRock common stock shall be converted into
options to acquire FFC common stock. The Agreement may be terminated by FFC if
the Average Trading Price of FFC common stock is less than $13.25 (unless
FirstRock determines to accept an exchange ratio of 2.06 shares of FFC common
stock for each issued and outstanding share of FirstRock common stock) and by
FirstRock if the Average Trading Price of FFC Common Stock is greater than
$20.00 (unless FFC determines to issue 1.365 shares of FFC common stock for each
issued and outstanding share of FirstRock common stock).
In connection with the Agreement, FirstRock issued a Warrant to FFC (the
"Warrant") pursuant to which FFC has the right to acquire up to 475,246 shares
of FirstRock common stock at $22.50 per share (the market price of FirstRock
common stock on the trading day immediately prior to execution of the
Agreement). The Warrant is exercisable only under certain circumstances related
primarily to third-party offers for FirstRock or if the transaction is not
completed. A copy of the Warrant is filed as an exhibit hereto and is
incorporated herein by reference.
FFC anticipates that the Acquisition will be consummated in the first
quarter of 1995 and that at such time, FFC will take an estimated one-time
after-tax charge of $4.0 million for restructuring and transaction costs. The
Acquisition is subject to receipt of necessary corporate and regulatory
approvals and other conditions.
<PAGE>
Item 7. Financial Statements and Exhibits
c. Exhibits.
Exhibit No. Description
------------ ------------
2.1 Agreement and Plan of Reorganization
dated October 26, 1994 among First
Financial Corporation, First
Financial Acquisition Company and
FirstRock Bancorp, Inc.
2.2 Warrant Agreement dated October 26,
1994 between FirstRock Bancorp, Inc.
and First Financial Corporation.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIRST FINANCIAL CORPORATION
Dated: November 3, 1994 By: /s/ John C. Seramur
-----------------------------
John C. Seramur
President and Chief
Executive Officer
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Exhibit Description Page
- --------- ----------------------- ----
2.1 Agreement and Plan of Reorganization
dated October 26, 1994 among First Financial
Corporation, First Financial Acquisition
Company and FirstRock Bancorp, Inc.
2.2 Warrant Agreement dated October 26, 1994
between FirstRock Bancorp, Inc. and First
Financial Corporation.
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
Among
FIRST FINANCIAL CORPORATION,
FIRST FINANCIAL ACQUISITION COMPANY
And
FIRSTROCK BANCORP, INC.
Dated as of October 26, 1994
<PAGE>
TABLE OF CONTENTS
ARTICLE ONE
The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Plan of Merger. . . . . . . . . . . . . . . . . . . . . . . . . .1
1.02 Manner of Merger. . . . . . . . . . . . . . . . . . . . . . . . .1
1.03 Effect of Merger. . . . . . . . . . . . . . . . . . . . . . . . .2
1.04 Bank Merger . . . . . . . . . . . . . . . . . . . . . . . . . . .4
1.05 Effective Time. . . . . . . . . . . . . . . . . . . . . . . . . .4
1.06 Modification of Structure . . . . . . . . . . . . . . . . . . . .4
ARTICLE TWO
Representations and Warranties of First Financial. . . . . . . . . . . . . . .5
2.01 Organization; Qualification; Good Standing; Corporate Power . . .5
2.02 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.03 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . .6
2.04 Financial Statements. . . . . . . . . . . . . . . . . . . . . . .6
2.05 Absence of Undisclosed Liabilities. . . . . . . . . . . . . . . .7
2.06 No Violation, Consents. . . . . . . . . . . . . . . . . . . . . .7
2.07 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . .8
2.08 Regulatory Filings. . . . . . . . . . . . . . . . . . . . . . . .8
2.09 Compliance With ERISA . . . . . . . . . . . . . . . . . . . . . .9
2.10 Advice of Changes . . . . . . . . . . . . . . . . . . . . . . . .9
2.11 Shares to be Issued in Merger . . . . . . . . . . . . . . . . . .9
2.12 Orders, Injunctions, Decrees, Etc.. . . . . . . . . . . . . . . .9
2.13 Environmental Matters . . . . . . . . . . . . . . . . . . . . . .9
2.14 Community Reinvestment Act Compliance . . . . . . . . . . . . . .9
2.15 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.16 No Sensitive Transactions . . . . . . . . . . . . . . . . . . . 10
ARTICLE THREE
Representations and Warranties of The Company. . . . . . . . . . . . . . . . 10
3.01 Organization; Qualification; Good Standing; Corporate Power . . 10
3.02 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.03 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . 11
3.04 Financial Statements. . . . . . . . . . . . . . . . . . . . . . 12
3.05 Absence of Undisclosed Liabilities. . . . . . . . . . . . . . . 13
3.06 No Violation, Consents. . . . . . . . . . . . . . . . . . . . . 13
3.07 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.08 Taxes, Returns and Reports . . . . . . . . . . . . . . . . . . 14
3.09 Corporate Properties. . . . . . . . . . . . . . . . . . . . . . 15
3.10 Obligations to Employees. . . . . . . . . . . . . . . . . . . . 15
3.11 Brokerage Commissions, Fees, Etc. . . . . . . . . . . . . . . . 16
3.12 Certain Agreements . . . . . . . . . . . . . . . . . . . . . . 17
3.13 Articles of Incorporation, Articles of Association, Bylaws, Etc 18
3.14 Orders, Injunctions, Decrees, Etc.. . . . . . . . . . . . . . . 18
3.15 Stockholders of the Company . . . . . . . . . . . . . . . . . . 18
3.16 Regulatory Filings . . . . . . . . . . . . . . . . . . . . . . 18
3.17 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.18 Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.19 Fiduciary Responsibilities. . . . . . . . . . . . . . . . . . . 20
3.20 Compliance With Environmental and Safety Laws . . . . . . . . . 20
3.21 Other Information . . . . . . . . . . . . . . . . . . . . . . . 21
3.22 Insider Interests . . . . . . . . . . . . . . . . . . . . . . . 21
3.23 No Sensitive Transactions . . . . . . . . . . . . . . . . . . . 21
3.24 Delaware Law . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.25 Community Reinvestment Act Compliance . . . . . . . . . . . . . 21
3.26 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.27 Qualified Thrift Lender . . . . . . . . . . . . . . . . . . . . 22
3.28 The ESOP. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.29 Advice of Changes . . . . . . . . . . . . . . . . . . . . . . . 22
3.30 Liquidation Account . . . . . . . . . . . . . . . . . . . . . . 22
3.31 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.32 Option and RRP Shares . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE FOUR
Covenants of First Financial . . . . . . . . . . . . . . . . . . . . . . . . 23
4.01 Conduct Of Business; Certain Covenants. . . . . . . . . . . . . 23
4.02 SEC Registration . . . . . . . . . . . . . . . . . . . . . . . 23
4.03 Authorization, Reservation, and Stock Exchange Listing of Common
Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.04 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . 24
4.05 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 24
4.06 Required Approvals . . . . . . . . . . . . . . . . . . . . . . 24
4.07 Employment Agreements and Directors . . . . . . . . . . . . . . 25
4.08 Severance Policy for Terminated Employees . . . . . . . . . . . 25
4.09 Retirement Plans. . . . . . . . . . . . . . . . . . . . . . . . 25
4.10 Information, Access Thereto . . . . . . . . . . . . . . . . . . 25
4.11 Negative Covenant . . . . . . . . . . . . . . . . . . . . . . . 26
4.12 Resolution of Company Benefit Plans . . . . . . . . . . . . . . 26
ARTICLE FIVE
Covenants of The Company . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.01 Stockholders' Meeting . . . . . . . . . . . . . . . . . . . . . 28
5.02 Conduct Of Business; Certain Covenants . . . . . . . . . . . . 29
5.03 Affiliate Agreements. . . . . . . . . . . . . . . . . . . . . . 32
5.04 Information, Access Thereto . . . . . . . . . . . . . . . . . . 32
5.05 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . 33
5.06 Recommendation of Merger to Stockholders. . . . . . . . . . . . 33
5.07 Litigation Matters. . . . . . . . . . . . . . . . . . . . . . . 33
5.08 Bank Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.09 Warrant Agreement . . . . . . . . . . . . . . . . . . . . . . . 33
5.10 Severance Compensation Plans. . . . . . . . . . . . . . . . . . 34
5.11 Company Plans . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.12 No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . 34
5.13 Other Approvals . . . . . . . . . . . . . . . . . . . . . . . . 35
5.14 Best Efforts. . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.15 Termination and other Payments. . . . . . . . . . . . . . . . . 35
ARTICLE SIX
Conditions to Obligations of Each of the Parties . . . . . . . . . . . . . . 35
6.01 Approval by Affirmative Vote of Stockholders. . . . . . . . . . 35
6.02 Approval of Merger. . . . . . . . . . . . . . . . . . . . . . . 35
6.03 Approval of Bank Merger . . . . . . . . . . . . . . . . . . . . 35
6.04 Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.05 Registration Statement. . . . . . . . . . . . . . . . . . . . . 36
6.06 Blue Sky. . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.07 Other Approvals . . . . . . . . . . . . . . . . . . . . . . . . 36
6.08 Orders, Decrees and Judgments . . . . . . . . . . . . . . . . . 36
6.09 Pooling Letter. . . . . . . . . . . . . . . . . . . . . . . . . 36
6.10 Fairness Opinion. . . . . . . . . . . . . . . . . . . . . . . . 36
6.11 Consents and Approvals. . . . . . . . . . . . . . . . . . . . . 37
6.12 Schedules and Investigations. . . . . . . . . . . . . . . . . . 37
6.13 No Burdensome Condition . . . . . . . . . . . . . . . . . . . . 37
6.14 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE SEVEN
Further Conditions to the Obligations of The Company . . . . . . . . . . . . 38
7.01 Compliance by First Financial . . . . . . . . . . . . . . . . . 38
7.02 Accuracy of Financial Statements . . . . . . . . . . . . . . . 38
7.03 Sufficiency of Documents. . . . . . . . . . . . . . . . . . . . 38
7.04 Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . . 38
7.05 Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 40
7.06 Absence of Certain Changes or Events. . . . . . . . . . . . . . 40
7.07 Consents and Approvals . . . . . . . . . . . . . . . . . . . . 41
7.08 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE EIGHT
Further Conditions to the Obligations of First Financial . . . . . . . . . . 41
8.01 Compliance by the Company . . . . . . . . . . . . . . . . . . . 41
8.02 Accuracy of Financial Statements. . . . . . . . . . . . . . . . 41
8.03 Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.04 Sufficiency of Documents, Proceedings . . . . . . . . . . . . . 42
8.05 Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . . 42
8.06 Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 44
8.07 Absence of Certain Changes or Events. . . . . . . . . . . . . . 44
8.08 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.09 Transfer by Affiliates . . . . . . . . . . . . . . . . . . . . 45
8.10 Bank Merger Agreement . . . . . . . . . . . . . . . . . . . . . 45
8.11 Pooling of Interests. . . . . . . . . . . . . . . . . . . . . . 45
8.12 Affiliation Audit . . . . . . . . . . . . . . . . . . . . . . . 45
8.13 No Parachute Payments . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE NINE
Abandonment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
9.01 Abandonment . . . . . . . . . . . . . . . . . . . . . . . . . . 45
9.02 Effect of Abandonment . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE TEN
Modifications, Amendments and Waiver . . . . . . . . . . . . . . . . . . . . 47
10.01 Modifications, Amendments and Waiver . . . . . . . . . . . . . 47
ARTICLE ELEVEN
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.01 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.02 Certificate of Merger . . . . . . . . . . . . . . . . . . . . . 48
11.03 Procurement of Approvals . . . . . . . . . . . . . . . . . . . 48
11.04 Further Acts . . . . . . . . . . . . . . . . . . . . . . . . . 48
11.05 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
11.06 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11.07 Nonsurvival of Representations and Warranties . . . . . . . . . 49
11.08 Discussions With Other Banks, Bank Holding Companies,
Savings Associations and Bank-Related Businesses. . . . . . . . 50
11.09 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . 50
11.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.11 Binding Effect and Parties in Interest . . . . . . . . . . . . 50
11.12 Captions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.14 Severability Clause . . . . . . . . . . . . . . . . . . . . . . 50
11.15 Identification. . . . . . . . . . . . . . . . . . . . . . . . . 51
EXHIBIT A Agreement and Plan of Merger
EXHIBIT B Affiliates Letter
EXHIBIT C Warrant Agreement
EXHIBIT D Bank Merger Agreement
APPENDIX I Schedules
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION by and among FIRST FINANCIAL
CORPORATION, a Wisconsin corporation ("First Financial"), FIRST FINANCIAL
ACQUISITION COMPANY, a Delaware corporation and a wholly owned subsidiary of
First Financial ("FFC-Acquisition"), and FIRSTROCK BANCORP, INC., a Delaware
corporation (the "Company").
W I T N E S S E T H:
WHEREAS, FFC-Acquisition is a wholly owned subsidiary of First Financial,
and First Financial and the Company desire that FFC-Acquisition shall be merged
with and into the Company in accordance with the applicable statutes of the
State of Delaware and in accordance with an Agreement and Plan of Merger (the
"Plan of Merger") substantially on the terms and in the form attached hereto as
Exhibit A (the merger provided for therein being herein called the "Merger");
and
WHEREAS, immediately upon the Merger, First Federal Savings Bank, F.S.B.,
a wholly owned subsidiary of the Company ("First Federal"), shall merge (the
"Bank Merger," and such transaction together with the Merger, the
"Reorganization") with and into First Financial Bank, FSB, a wholly owned
subsidiary of First Financial ("FF-Bank");
NOW, THEREFORE, in consideration of the premises and the mutual and
dependent promises hereinafter contained, the parties do represent, warrant,
covenant and agree as follows:
ARTICLE ONE
The Merger
1.01 Plan of Merger. FFC-Acquisition, the Company and First Financial
hereby adopt and agree to execute the Plan of Merger substantially in the form
attached hereto as Exhibit A.
1.02 Manner of Merger. At the Effective Time, as hereinafter defined, FFC-
Acquisition shall be merged with and into the Company in accordance with
applicable provisions of the Delaware General Corporation Law (the "Delaware
Law") and on the terms and subject to the conditions contained in this Agreement
and the Plan of Merger. Simultaneously with the effectiveness of the Merger, (a)
the separate existence of FFC- Acquisition shall cease and (b) the Company, as
the surviving corporation (the "Surviving Corporation"), shall continue to exist
<PAGE>
under and be governed by the Delaware Law. Upon the effectiveness of the Merger,
the certificate of incorporation and bylaws of the Surviving Corporation shall
be amended to be in the form of the certificate of incorporation and bylaws of
FFC-Acquisition as in effect immediately prior to the Merger. Upon the
effectiveness of the Merger, the directors and officers of the Surviving
Corporation shall be the persons serving in such positions at FFC-Acquisition
immediately prior to such effectiveness.
1.03 Effect of Merger. Upon the Merger becoming effective:
(a) The separate existence of FFC-Acquisition shall cease and be
merged into the Surviving Corporation, which shall possess all of the rights,
privileges, immunities, powers and franchises of a public as well as of a
private nature, and shall be subject to all of the restrictions, disabilities
and duties, of each of the Company and FFC-Acquisition; and all singular rights,
privileges, immunities, powers and franchises of each of the Company and
FFC-Acquisition, and all property, real, personal and mixed, and all debts due
to either the Company or FFC-Acquisition in whatever account, including
subscriptions to shares, and all other things in action or belonging to each of
the Company and FFC-Acquisition shall be vested in the Surviving Corporation;
and all property, rights, privileges, immunities, powers and franchises, and all
and every interest, shall be thereafter as effectually the property of the
Surviving Corporation as they were of the Company and FFC-Acquisition and the
title to any real estate, or interest therein, vested by deed or otherwise, in
either of the Company and FFC-Acquisition shall not revert or be in any way
impaired by reason of the Merger.
(b) All rights of creditors and all liens upon any property of the
Company or FFC-Acquisition shall be preserved unimpaired and all debts,
liabilities and duties of the Company or FFC-Acquisition shall thenceforth
attach to the Surviving Corporation and may be enforced against the Surviving
Corporation to the same extent as if said debts, liabilities and duties had been
incurred or contracted by it; provided, however, that all such liens shall
attach only to those assets to which they were attached prior to the Effective
Time.
(c) Any action or proceeding, whether civil, criminal or
administrative, instituted, pending or threatened by or against either the
Company or FFC-Acquisition or relating to their assets, liabilities or shares of
common stock shall be prosecuted as if the Merger had not taken place, and the
Surviving Corporation may be substituted as a party in such action or proceeding
in place of FFC-Acquisition.
(d) Each share of stock of FFC-Acquisition issued and outstanding
immediately prior to the Merger shall, by virtue of the Merger, automatically
and without any action on the part of the holder thereof, be converted into the
right to receive the same number of shares of common stock of the Surviving
Corporation.
(e) Subject to Sections 9.01(g) and (h) of this Agreement each share
of the Company's Common Stock issued and outstanding immediately prior to the
Merger (other than shares of Company Common Stock held (x) in the Company's
treasury or (y) directly or indirectly by First Financial or any of its
subsidiaries, except for any shares held in trust accounts, managed accounts,
custodial accounts or in any similar manner that are beneficially owned by third
parties or shares held as collateral or in lieu of a debt previously contracted)
<PAGE>
shall be converted into and represent the right to receive and be exchangeable
for such number of shares (rounded to the nearest ten thousandth of a share) of
First Financial Common Stock as shall be equal to (i) Twenty-Seven Dollars and
Ten Cents ($27.10) divided by (ii) the average of the closing trade prices
("Average Price") of First Financial Common Stock on The Nasdaq Stock Market
during the last fifteen trading days on which reportable sales of First
Financial Common Stock took place immediately prior to, but not including, the
third business day prior to the Effective Time as defined below (the "Exchange
Ratio"). Fractions of shares of First Financial Common Stock will not be issued.
In lieu of a fraction of a share of First Financial Common Stock, each holder of
Company Common Stock otherwise entitled to a fraction of a share of First
Financial Common Stock shall be entitled to receive an amount of cash equal to
(i) the fraction of a share of First Financial Common Stock to which such holder
would otherwise be entitled, multiplied by (ii) the actual market value of First
Financial Common Stock which shall be deemed to be the last per share sales
price of the First Financial Common Stock as reported on The Nasdaq Stock Market
on the fourth trading day immediately preceding the Closing Date (as defined
below). Following consummation of the Merger, no holder of Company Common Stock
shall be entitled to dividends or any other rights in respect of any such
fraction.
(f) Each of the Option Rights (as hereinafter defined) which is
outstanding immediately prior to the Merger shall be converted automatically
into an option to purchase shares of First Financial Common Stock in an amount
and at an exercise price determined as provided below and otherwise subject to
the terms (including those terms, if any, providing for accelerated vesting) of
the Company's 1992 Incentive Stock Option Plan (the "Employee Plan") and the
Company's 1992 Stock Option Plan for Outside Directors (the "Director Plan"),
(the option rights granted under the Employee Plan and the Director Plan are
sometimes collectively referred to herein as the "Option Rights"):
(1) The number of shares of First Financial Common Stock to be
subject to the new option shall be equal to the product of the number of shares
of FirstRock Common Stock subject to the original option and the Exchange Ratio,
provided that any fractional shares of First Financial Common Stock resulting
from such multiplication shall be rounded down to the nearest share; and
(2) The exercise price per share of First Financial Common
Stock under the new option shall be equal to the exercise price per share of
FirstRock Common Stock under the original option divided by the Exchange Ratio,
provided that such exercise price shall be rounded up to the nearest cent.
The adjustment provided herein with respect to any options which are
"incentive stock options" (as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code")) shall be and is intended to be effected
in a manner which is consistent with Section 424(a) of the Code. The duration
and other terms of the new option shall be the same as the original option,
except that all references to the Company shall be deemed to be references to
<PAGE>
First Financial. Notwithstanding anything to the contrary contained herein, all
Limited Rights (as such term is defined in the Employee Plan) granted under the
Employee Plan shall terminate and be of no further force or effect upon receipt
of consent to such termination from the grantees of such Limited Rights. The
Company will use its best efforts to obtain such consents from all holders of
Limited Rights.
For purposes of determining Option Rights outstanding immediately prior to
the Merger, all Option Rights which have been granted as of the date hereof, as
described in Section 3.03 hereof, shall be deemed outstanding unless they shall
have been exercised prior to the Effective Time or shall have expired or
otherwise have been terminated prior thereto.
(g) In the event of any increase or reduction in the number of shares
of First Financial Common Stock issued and outstanding caused by split-up,
reverse split, reclassification, distribution of stock dividends or change of
par or stated value, the parties agree to amend the Plan of Merger to cause a
proportionate adjustment to be made to the Exchange Ratio and the Option
Exchange Ratio and the ratio specified in Section 9.01(g) and (h).
(h) The Reorganization shall constitute a tax-free reorganization
within the meaning of Section 368(a) of the Code and except for cash received in
lieu of fractional shares, no gain or loss will be recognized by the holders of
Company Common Stock upon receipt of shares of First Financial Common Stock in
exchange for their shares of Company Common Stock.
1.04 Bank Merger. Immediately after the Merger, as part of the
Reorganization and in accordance with the terms and conditions of the Bank
Merger Agreement attached as Appendix 1 hereto, First Federal shall be merged
with and into FF-Bank, which will be the "Surviving Bank" of the Bank Merger.
1.05 Effective Time. The Merger shall be consummated upon the filing of
appropriate Certificate of Merger with the Secretary of State of the State of
Delaware in the form and manner required by the Delaware Law. The close of
business on the date on which such Certificate of Merger shall have been filed
is herein referred to as the "Effective Time," unless some other date is agreed
upon by the parties hereto and is specified therein.
1.06 Modification of Structure. Notwithstanding any provision of this
Agreement to the contrary, First Financial may elect to modify the structure of
the transactions contemplated hereby so long as (i) there are no material
adverse federal or state income tax consequences to the Company and its
stockholders or to holders of options under the Employee Plan or the Director
Plan as a result of such modification; (ii) the consideration to be paid to
holders of Company Common Stock under this Agreement is not thereby reduced in
amount because of such modification; and (iii) such modification will not be
likely to delay materially or jeopardize receipt of any required regulatory
approvals.
<PAGE>
ARTICLE TWO
Representations and Warranties of First Financial
First Financial represents and warrants to the Company as follows:
2.01 Organization; Qualification; Good Standing; Corporate Power.
(a) First Financial is a corporation duly organized, validly existing
and in good standing under the laws of the State of Wisconsin and each direct or
indirect subsidiary of First Financial is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction in which the
subsidiary is incorporated, and First Financial and each of its subsidiaries is
duly qualified to do business and is in good standing in each jurisdiction in
which the nature of the business conducted or the properties or assets owned or
leased by it makes such qualification necessary. First Financial is a registered
savings and loan holding company under the Home Owners' Loan Act. First
Financial and each of its Subsidiaries has the corporate power and authority to
carry on its business as it is now conducted, and to own, lease and operate its
properties. First Financial has the corporate power and authority to execute and
deliver this Agreement and the power to consummate the transactions contemplated
hereby. The Certificate of Incorporation and Bylaws of First Financial, copies
of which have previously been made available to the Company, are true, correct
and complete copies of such documents as in effect as of the date of this
Agreement.
(b) FFC-Acquisition is a corporation in organization and before the
Effective Time will be duly organized, validly existing and in good standing
under the laws of the State of Delaware and will be duly qualified to do
business and in good standing in each jurisdiction in which the nature of the
business conducted or the properties or assets owned or leased by it makes such
qualification necessary. FFC-Acquisition will have the corporate power and
authority to carry on the business of the Company as it is now conducted, to
own, lease and operate its properties, to execute and deliver this Agreement and
the power to consummate the transactions contemplated hereby.
(c) FF-Bank is a federally chartered stock savings association duly
organized and in existence under the laws of the United States.
(d) First Financial and each of its subsidiaries holds all licenses,
certificates, permits, franchises and rights from all appropriate federal, state
or other public authorities necessary for the conduct of its businesses. First
Financial and each of its subsidiaries has conducted its business so as to
comply with all applicable federal, state and local statutes, ordinances,
regulations or rules, and First Financial and each of its subsidiaries is not
presently charged with, or, to its knowledge, under governmental investigation
with respect to, any actual or alleged violations of any statute, ordinance,
regulation or rule; and First Financial and each of its subsidiaries is not the
subject of any pending or, to its knowledge, threatened proceeding by any
regulatory authority having jurisdiction over its business, properties or
operations.
<PAGE>
2.02 Authorization. The execution, delivery and performance of this
Agreement and the Plan of Merger by First Financial and FFC-Acquisition will
have been duly authorized and approved by all necessary corporate action, and
this Agreement and the Plan of Merger will be legally binding on and enforceable
against First Financial and FFC-Acquisition in accordance with their terms,
subject to the receipt of all required regulatory or other governmental
approvals and except as enforceability may be limited by bankruptcy laws,
insolvency laws or other laws affecting creditors' rights generally. The
execution and delivery of this Agreement and the Plan of Merger do not, and the
consummation of the Merger will not, violate the provisions of First Financial's
or FFC-Acquisition's respective Articles of Incorporation, as amended, or
Bylaws, as amended.
2.03 Capitalization. As of September 30, 1994, the authorized
capitalization of First Financial consisted of 75,000,000 shares of First
Financial Common Stock, par value $1.00 per share , of which 24,698,852 shares
were outstanding; and 3,000,000 shares of Preferred Stock, par value $1.00 per
share ("First Financial Preferred Stock") of which none were outstanding. Except
pursuant hereto, and pursuant to the stock option plans of First Financial,
there are as of the date hereof, no outstanding warrants, options, rights, calls
or other commitments of any nature relating to the issuance of authorized but
unissued shares of First Financial Common Stock or First Financial Preferred
Stock or concerning the authorization, issuance or sale of any other class of
equity securities of First Financial. Except pursuant to the foregoing, between
September 30, 1994, and the date of this Agreement, there has been no change in
the capitalization of First Financial. The number of shares set forth above is
subject to change before the Effective Time by purchase, sale, issuance,
redemption, conversion, distribution or other transaction. A vote of the shares
set forth above is not required to approve this Agreement or any of the
above-referenced agreements. All of the outstanding shares set forth above are
duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights except as found under Section 180.0622(2)(b) of the Wisconsin
Business Corporation Law.
2.04 Financial Statements.
(a) First Financial has furnished to the Company true, correct and
complete copies of: (i) the audited Consolidated Balance Sheets of First
Financial as of December 31, 1992, and December 31, 1993, and the related
Consolidated Statements of Income, Consolidated Statements of Changes in
Shareholders' Equity and the Consolidated Statements of Cash Flows for each of
the three years ending December 31, 1993, including the respective notes
thereto, together with the reports of Ernst & Young relating thereto; and (ii)
the unaudited Consolidated Balance Sheet as of September 30, 1994, and the
related unaudited Consolidated Statement of Income for the period then ended
(the "Financial Statements"). Such Financial Statements fairly present the
consolidated financial position of First Financial as of and for the periods
<PAGE>
ended on their respective dates and the consolidated operating results and
changes in financial position of First Financial for the indicated periods in
conformity with generally accepted accounting principles applied on a consistent
basis. Since September 30, 1994, there have not been any changes in First
Financial's consolidated financial condition, assets, liabilities or business,
other than changes in the ordinary course of business.
(b) First Financial will furnish the Company with copies of its
audited and unaudited Consolidated Balance Sheets, and related reports, for each
annual and quarterly period subsequent to September 30, 1994, and each financial
report it or the Subsidiaries file with the Office of Thrift Supervision (the
"OTS") until the Closing Date (as hereinafter defined) ("Subsequent Financial
Statements").
(c) All of the aforesaid Financial Statements have been, and, with
respect to the Subsequent Financial Statements, will be, prepared in accordance
with generally accepted accounting principles (except with respect to reports
filed with the OTS which have, in each case, been prepared in accordance with
OTS requirements), utilizing accounting practices consistent with prior years
except as otherwise disclosed. All of the aforesaid Financial Statements present
fairly, and all of the Subsequent Financial Statements will present fairly, the
consolidated financial position of First Financial and the results of its
operations and changes in its financial position as of and for the periods
ending on their respective dates. Subject to such changes which may result from
an audit which includes the nine months ended September 30, 1994, or an audit of
any Subsequent Financial Statements (which changes, in the aggregate, will not
be material), the allowance for loan losses in such Financial Statements is, and
with respect to the Subsequent Financial Statements will be, adequate under the
standards applied by the OTS and based on past loan loss experiences and
potential losses in current portfolios to cover all known or anticipated loan
losses.
2.05 Absence of Undisclosed Liabilities. Except as and to the extent
reflected or reserved against in the Financial Statements or the Subsequent
Financial Statements, neither First Financial nor any of its subsidiaries have,
and with respect to the Subsequent Financial Statements will not have, any
liabilities or obligations, of any nature, secured or unsecured, (whether
accrued, absolute, contingent or otherwise) including, without limitation, any
tax liabilities due or to become due. First Financial further represents and
warrants that it does not know or have any reason to believe that there is or
will be any basis for assertion against it or any of its subsidiaries as of
December 31, 1993, or September 30, 1994, or as of the date of any Subsequent
Financial Statements, of any liability or obligation of any nature or any amount
not fully reflected or reserved against in the Consolidated Balance Sheets as of
said dates or as of such subsequent dates and for such subsequent periods or in
the footnotes thereto.
2.06 No Violation, Consents. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby, with or
without the giving of notice or the lapse of time, or both, will: (i) violate,
conflict with, result in the breach or termination of, constitute a default
under, accelerate the performance required by, or result in the creation of any
material lien, charge or encumbrance upon any of the properties or assets of
First Financial or its subsidiaries, taken as a whole, pursuant to any
indenture, mortgage, deed of trust, license, lease or other agreement (including
borrowing agreements) or instrument to which First Financial or any of its
subsidiaries is a party or by which it or any of its properties or assets may be
<PAGE>
bound; or (ii) violate any statute, rule or regulation, judgment, order, writ,
decree or injunction applicable to First Financial or any of its subsidiaries.
No consent, approval, authorization, order, registration or qualification of or
with any court, regulatory authority or other governmental body, or of any
lender or purchaser under any borrowing agreement, other than as specifically
contemplated by this Agreement, is required for the consummation by First
Financial of the transactions contemplated by this Agreement.
2.07 Litigation. As of the date of this Agreement, there are no legal,
quasijudicial, administrative, or other actions, suits, proceedings or
investigations of any kind or nature pending or, to the knowledge of First
Financial, threatened against First Financial or any of its subsidiaries that
challenge the validity or propriety of the transactions contemplated by this
Agreement or which would have a material adverse effect on First Financial's
consolidated financial condition, assets, liabilities or business. Neither First
Financial nor any of its subsidiaries is subject to, or in default with respect
to, nor are any of their assets subject to, any outstanding judgment, order or
decree of any court or of any governmental agency or instrumentality.
2.08 Regulatory Filings. First Financial and each of its subsidiaries has
filed and will continue to file in a timely manner all required filings with (i)
the Securities and Exchange Commission ("SEC"), including all reports on Form
10-K, Form 10-Q, Form 8-K and proxy statements and will furnish the Company with
copies of all such SEC filings made subsequent to the date hereof until the
Effective Time; (ii) the OTS and (iii) the Federal Deposit Insurance Corporation
("FDIC") and, to the best knowledge of First Financial, all such filings
(including as such filings that have been or will be amended) were or will be
complete and accurate in all material respects as of the dates of the filings,
and no such filing made or will make any untrue statement of a material fact or
omitted or omit to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which they were made,
not misleading. Except for normal examinations conducted by the IRS or various
banking regulatory authorities in the regular course of the business of First
Financial and its subsidiaries, no federal, state or local governmental agency,
commission or other entity has initiated any proceeding or, to the best of the
knowledge and belief of the First Financial, investigation into the business or
operations of the First Financial and its subsidiaries within the past five
years. To First Financial's knowledge, there is no unresolved violation,
criticism or exception of a material nature by the SEC or the OTS or the FDIC or
other agency, commission or entity with respect to any report or statement
referred to herein. Since the date of any such filings there has been no
material change in First Financial's condition, financial or otherwise, such
that had such change occurred prior to any such filing, such change would have
been required to be disclosed or described therein.
<PAGE>
2.09 Compliance With ERISA. All employee benefit plans (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974 ("ERISA"))
established or maintained by First Financial or its subsidiaries or to which
First Financial or its subsidiaries contributes ("First Financial Employee
Plans") are in compliance in all material respects with all applicable
requirements of ERISA, and are in compliance in all material respects with all
applicable requirements (including qualification and nondiscrimination
requirements in effect as of the Effective Time) of the Internal Revenue Code of
1986, as amended (the "Code"), for obtaining the tax benefits the Code thereupon
permits with respect to such First Financial Employee Plans.
2.10 Advice of Changes. Between the date hereof and the Effective Time,
First Financial shall promptly advise the Company in writing of any fact which,
if existing or known at the date hereof, would have been required to be set
forth or disclosed in or pursuant to this Agreement or of any fact which, if
existing or known at the date hereof, would have made any of the representations
contained herein materially untrue.
2.11 Shares to be Issued in Merger. The First Financial Common Stock which
the stockholders of the Company will be entitled to receive upon consummation of
the Merger pursuant to the Plan of Merger will, at the Effective Time, be duly
authorized and will, when issued pursuant to the Plan of Merger, be validly
issued, fully paid and nonassessable (except pursuant to Section 180.0622(2)(b)
of the Wisconsin Business Corporation Law), will have been registered under the
Securities Act and will not be subject to pre-emptive rights.
2.12 Orders, Injunctions, Decrees, Etc. First Financial is not subject to
any order, injunction, or decree, written agreement, consent agreement or
memorandum of understanding of any governmental body or court, or in violation
of any order, injunction, or decree, written agreement, consent agreement or
memorandum of understanding or any other requirement of any governmental body or
court.
2.13 Environmental Matters. Except as and to the extent reflected or
reserved against in the Financial Statements or the Subsequent Financial
Statements, neither First Financial or any of its subsidiaries have, and with
respect to the Subsequent Financial Statements will not have, any liabilities or
obligations, of any nature, resulting from the violation or application of any
environmental law which would have a materially adverse effect on the
consolidated financial position, business or operations of First Financial.
2.14 Community Reinvestment Act Compliance. First Financial Bank, FSB is
in substantial compliance with the applicable provisions of the Community
Reinvestment Act of 1977 ("CRA") and the regulations promulgated thereunder. As
of the date of this Agreement, First Financial Bank, FSB has not been advised of
the existence of any act or circumstance or set of facts or circumstances which,
if true, would cause it to fail to be in substantial compliance with the CRA or
any federal or state fair lending laws. First Financial Bank, FSB has not
received a CRA rating from its principal banking regulator which is less than
"satisfactory."
<PAGE>
2.15 Approvals. First Financial knows of no reason why all regulatory
approvals necessary to permit it to consummate the transactions contemplated
hereby in the manner provided herein should not be obtained or why the opinion
letter referred to in Section 8.11 hereof cannot be obtained.
2.16 No Sensitive Transactions. Within the past five (5) years, neither
First Financial nor any of its subsidiaries nor, to First Financial's knowledge,
any director, employee or agent of First Financial or any of its subsidiaries,
has directly or indirectly used funds or other assets of First Financial or any
of its Subsidiaries for (a) illegal contributions, gifts, entertainment, or
other expenses related to political activities; (b) payments to or for the
benefit of any governmental official or employee, other than payments required
or permitted by law; (c) illegal payments to or for the benefit of any person,
firm, corporation, or other entity, or any officer, employee, agent, or
representative thereof; or (d) the establishment or maintenance of an illegal
secret or unrecorded fund.
ARTICLE THREE
Representations and Warranties of The Company
The Company represents and warrants to First Financial as follows: (For
purposes of this Article Three a "Company Schedule" is defined as a schedule
prepared and executed by an Officer of the Company and delivered to First
Financial not later than twenty (20) days after the date of the execution of
this Agreement).
3.01 Organization; Qualification; Good Standing; Corporate Power.
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and each direct or
indirect subsidiary of the Company ("Subsidiary") is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which the subsidiary is incorporated, and the Company and each
of its Subsidiaries is duly qualified to do business and is in good standing in
Illinois and in each other jurisdiction in which the nature of the business
conducted or the properties or assets owned or leased by it makes such
qualification necessary. The Company is a registered savings association holding
company under the Home Owners Loan Act. The Company and each of its Subsidiaries
has the corporate power and authority to carry on its business as it is now
conducted and to own, lease and operate its properties. The Company has the
corporate power and authority to execute and deliver this Agreement and the
power to consummate the transactions contemplated hereby.
(b) First Federal is a federally chartered stock savings association
duly organized and in existence under the laws of the United States. First
Service Corporation ("First Service"), Megarock Corporation ("Megarock"), FFS
Funding Corporation, Inc. ("FFS"), Megavest Corporation ("Megavest I") and
Megavest Financial Services, Inc. ("Megavest II") are wholly owned Subsidiaries
of First Federal and are corporations duly organized, validly existing and in
good standing under the laws of the State of Illinois. The Subsidiaries each
have the corporate power and authority to carry on its business as it is now
<PAGE>
conducted and to own, lease and operate its properties, and is duly qualified to
do business and is in good standing in each jurisdiction in which the nature of
the business conducted or the properties or assets owned or leased by it makes
such qualification necessary.
(c) The Company and the Subsidiaries hold all licenses, certificates,
permits, franchises and rights from all appropriate federal, state or other
public authorities necessary for the conduct of its and their respective
business. The Company and the Subsidiaries have each conducted its business so
as to comply with all applicable federal, state and local statutes, ordinances,
regulations or rules, and neither the Company nor any of the Subsidiaries is
presently charged with, or, to the Company's knowledge, under governmental
investigation with respect to, any actual or alleged material violations of any
statute, ordinance, regulation or rule; and neither the Company nor either of
the Subsidiaries is the subject of any pending or, to the Company's knowledge,
threatened material proceeding by any regulatory authority having jurisdiction
over its business, properties or operations.
3.02 Authorization. The execution, delivery and performance of this
Agreement and the Plan of Merger by the Company have been duly authorized and
approved by all necessary corporate action, and this Agreement and the Plan of
Merger are legally binding on and enforceable against the Company in accordance
with their terms, subject to the approval of the stockholders of the Company and
subject to the receipt of all required regulatory and other government approvals
and except as enforceability may be limited by bankruptcy laws, insolvency laws
or other laws affecting creditors' rights generally. The execution and delivery
of this Agreement and of the Plan of Merger do not, and the consummation of the
Merger will not violate the Company's Certificate of Incorporation, as amended,
or Bylaws, as amended.
3.03 Capitalization.
(a) As of the date of this Agreement, the authorized capitalization
of the Company consists of (i) 3,500,000 shares of Company Common Stock , $.01
par value per share, of which 2,645,000 are issued of which 2,388,171 shares are
outstanding, which includes 185,150 shares which are held by the First Federal
Savings Bank, F.S.B. Employee Stock Ownership Plan and Trust (the "ESOP"), and
256,829 shares are held by the Company as treasury shares and (ii) 1,000,000
shares of Preferred Stock, $.01 par value per share, of which no shares are
issued and outstanding. The Company has no other class of stock and there are,
and as of the Effective Time there will be, no fractional shares of Company
Common Stock issued or outstanding. In addition, there are outstanding options
for the purchase of 189,911 shares of Company Common Stock, each at an exercise
price of $8.75 per share granted to certain employees of the Company pursuant to
the FirstRock Bancorp, Inc. 1992 Incentive Stock Option Plan (the "Employee
Plan") and there are outstanding options for the purchase of 66,125 shares of
Company Common Stock at an exercise price of Eight and 75/100 Dollars ($8.75)
per share granted to directors of the Company pursuant to the FirstRock Bancorp,
Inc. 1992 Stock Option Plan for Outside Directors (the "Director Plan") (the
option rights granted pursuant to the Employee Plan and the Director Plan are
sometimes collectively referred to herein as the "Option Rights"). In addition,
<PAGE>
the Company has made certain restricted stock awards to certain officers of the
Company pursuant to the First Federal Savings Bank, F.S.B. Recognition and
Retention Plan and Trusts which purchased 105,800 shares of Company Common Stock
(the "Restricted Stock"). Except with respect to the Option Rights , neither the
Company nor the Subsidiaries have granted any outstanding warrants, options,
rights, calls, agreements, understandings or other commitments of any nature
relating to the authorization, issuance, sale or repurchase of any equity
securities of the Company or the Subsidiaries. Except in connection with the
exercise of the Option Rights and stock issued in connection with the Warrant
Agreement referred to in Section 5.09 hereof, the number of shares set forth
above is not subject to change before the Effective Time. Except as otherwise
provided in the Certificate of Incorporation of the Company and except as set
forth in Schedule 3.03(a), all of the issued and outstanding shares of Company
Common Stock will be entitled to vote to approve this Agreement and the Plan of
Merger.
(b) The Company owns directly or indirectly all of the issued and
outstanding shares of capital stock of the Subsidiaries. Company Schedule
3.03(b) accurately identifies the number of shares of authorized and outstanding
capital stock of the Subsidiaries. Except as set forth in Company Schedule
3.03(b), neither the Company nor the Subsidiaries owns directly or indirectly
any debt, equity or other proprietary interest in any other corporation, joint
venture, partnership, entity, association or other business.
(c) All of the outstanding shares of the Company and the Subsidiaries
are validly issued, fully paid and nonassessable and, in the case of the shares
of the Subsidiaries, are owned free and clear of all liens, charges or
encumbrances.
3.04 Financial Statements.
(a) The Company has furnished to First Financial true, correct and
complete copies of: (i) the audited Consolidated Statements of Financial
Condition of the Company as of June 30, 1993 and June 30, 1994, and the related
Consolidated Statements of Earnings, Consolidated Statements of Stockholders'
Equity and Consolidated Statements of Cash Flows for each of the three fiscal
years ending June 30, 1994, including the respective notes thereto, together
with the reports of KPMG Peat Marwick relating thereto; (ii) the unaudited
Consolidated Statement of Financial Condition as of September 30, 1994, and the
related, unaudited Consolidated Statement of Earnings for the period then ended
("Company Financial Statements"). Such Company Financial Statements fairly
present the financial position of the Company and the Subsidiaries taken as a
whole as of and for the periods ended on their respective dates and the
operating results of the Company and the Subsidiaries taken as a whole for the
indicated periods in conformity with generally accepted accounting principles
applied on a consistent basis. Since September 30, 1994, there have not been any
changes in the Company's or the Subsidiaries' consolidated financial condition,
assets, liabilities or business, other than changes in the ordinary course of
business.
<PAGE>
(b) The Company will furnish First Financial with copies of its
audited and unaudited Consolidated Statements of Financial Condition, and
related reports, for each annual and quarterly period, and each financial report
it or the Subsidiaries file with the OTS, subsequent to September 30, 1994,
until the Effective Time ("Subsequent Company Financial Statements").
(c) All of the aforesaid Company Financial Statements have been, and,
with respect to the Subsequent Company Financial Statements, will be, prepared
in accordance with generally accepted accounting principles (except with respect
to reports filed with the OTS which have, in each case, been prepared in
accordance with OTS requirements), utilizing accounting practices consistent
with prior years except as otherwise disclosed. All of the aforesaid Company
Financial Statements present fairly, and all of the Subsequent Company Financial
Statements will present fairly, the financial position of the Company and the
Subsidiaries taken as a whole and the results of its and their operations and
changes in its and their financial position as of and for the periods ending on
their respective dates. Subject to such changes which may result from an audit
of any Subsequent Company Financial Statements (which changes in the aggregate
will not be material), the allowance for loan losses in such Company Financial
Statements is, and, with respect to the Subsequent Company Financial Statements
will be, adequate to cover all known or anticipated loan losses. Except with
respect to this Agreement and the transactions contemplated herein, there are,
and with respect to the Subsequent Financial Statements will be, no agreements,
contracts or other instruments to which the Company or the Subsidiaries are a
party or by which it or they or (to the knowledge of the Company) any of the
officers, directors, employees or stockholders of the Company or the
Subsidiaries have rights which would have a materially adverse effect on the
consolidated financial position of the Company or the financial position of
First Federal which are not disclosed herein or reflected in the Company
Financial Statements and the Subsequent Company Financial Statements.
3.05 Absence of Undisclosed Liabilities. Except as and to the extent
reflected or reserved against in the Company Financial Statements or the
Subsequent Company Financial Statements, neither the Company nor the
Subsidiaries had, nor with respect to the Subsequent Company Financial
Statements will have, any liabilities or obligations, of any nature, secured or
unsecured, (whether accrued, absolute, contingent or otherwise) including,
without limitation, any tax liabilities due or to become due. Except as set
forth in Schedule 3.05, the Company further represents and warrants that it does
not know or have reason to believe that there is or will be any basis for
assertion against it or the Subsidiaries as of September 30, 1994, or as of the
date of any Subsequent Company Financial Statements, of any liability or
obligation of any nature or any amount not fully reflected or reserved against
in the Company Financial Statements as of said dates and for subsequent periods
or in the footnotes thereto.
3.06 No Violation, Consents. Neither the execution and delivery of this
Agreement nor, subject to the approval of this Agreement by the stockholders of
the Company, the consummation of the transactions contemplated hereby, with or
without the giving of notice or the lapse of time, or both, will: (i) violate,
conflict with, result in the breach or termination of, constitute a default
<PAGE>
under, accelerate the performance required by, or result in the creation of any
material lien, charge or encumbrance upon any of the properties or assets of the
Company or the Subsidiaries pursuant to any indenture, mortgage, deed of trust,
license, lease or other material agreement (including borrowing agreements) or
instrument to which the Company or the Subsidiaries is a party or by which it or
the Subsidiaries or any of their properties or assets may be bound; or (ii)
violate any statute, rule or regulation, judgment, order, writ, decree or
injunction applicable to the Company or the Subsidiaries. Other than as
specifically contemplated by this Agreement, no consent, approval,
authorization, order, registration or qualification of or with any court,
regulatory authority or other governmental body, or of any lender or purchaser
under any borrowing agreement, is required for the consummation by the Company
and the Subsidiaries of the transactions contemplated by this Agreement.
3.07 Litigation. There are no legal, quasijudicial, administrative, or
other actions, suits, proceedings, or investigations of any kind or nature
pending or, to the knowledge of the Company, threatened against the Company or
the Subsidiaries that challenge the validity or legality of the transactions
contemplated by this Agreement or which would have a material adverse effect on
the financial condition, assets, liabilities or business of the Company or the
Subsidiaries. Company Schedule 3.07 accurately describes all litigation against
the Company or its Subsidiaries in which the amount claimed is in excess of
$25,000 which is pending or, to the knowledge of the Company, threatened against
the Company or the Subsidiaries. Neither the Company nor the Subsidiaries is
subject to or in default with respect to, nor are any of its or their assets
subject to, any outstanding judgment, order or decree of any court or of any
governmental agency or instrumentality.
3.08 Taxes, Returns and Reports. The Company and the Subsidiaries have
duly and timely filed all material tax returns required to be filed. The reserve
for taxes in the Company September 30, 1994 Consolidated Statement of Financial
Condition is adequate to cover all tax liabilities of the Company and the
Subsidiaries (including, without limitation, income taxes and franchise fees)
that may become payable in future years in respect to any transactions
consummated prior to June 30, 1994. Neither the Company nor the Subsidiaries has
or, to the best of the Company's knowledge, will have any liability for taxes of
any nature for or in respect of the operation of its business or ownership of
its or their assets from September 30, 1994, up to and including the Effective
Time, except to the extent reflected in the Subsequent Company Financial
Statements, or otherwise reflected in the books and records of the Company for
the period following the then most recent Company Subsequent Financial
Statements. The federal income tax returns of the Company have been audited by
the Internal Revenue Service ("IRS") through 1982. Except as set forth on
Schedule 3.08, neither the Company nor any of its Subsidiaries is a party to any
action or proceeding, nor is any such action proceeding, to the Company's
knowledge, threatened, by any governmental entity for the assessment or
collection of any taxes, and no deficiency notices or reports have been received
by the Company or any of its Subsidiaries in respect of any deficiencies for any
tax, assessment, or government charges.
<PAGE>
3.09 Corporate Properties.
(a) Company Schedule 3.09 accurately identifies: (i) all real
property owned or leased by the Company or the Subsidiaries, including a brief
description of any buildings located thereon; and (ii) all known copyrights,
patents, trademarks, trade names, franchises, and related applications and all
other similar intangible assets owned by the Company or the Subsidiaries. Except
as set forth in said Company Schedule 3.09, all of the Company's or the
Subsidiaries' properties, leasehold improvements, and equipment are in
reasonable operating condition, and all known copyrights, patents, trademarks,
trade names, franchises, and related applications are valid and in full force
and effect in accordance with their terms. No complaints have been received by
the Company or the Subsidiaries and, to the best of the Company's knowledge,
none are threatened that the Company or the Subsidiaries are in violation of
applicable building, zoning, environmental, safety, or similar laws, ordinances,
or regulations in respect of their buildings or equipment, or the operation
thereof, and to the best of the Company's knowledge, the Company and the
Subsidiaries are not in violation of any such law, ordinance, or regulation,
except as disclosed in said Company Schedule. To the knowledge of the Company,
no proceedings to take all or any part of the properties of the Company or the
Subsidiaries (whether leased or owned) by condemnation or right of eminent
domain are pending or threatened.
(b) Except as set forth in said Company Schedule 3.09, the Company
and the Subsidiaries have good and marketable title to all their real and
personal property, free, clear, and discharged of, and from, any and all liens,
charges, encumbrances, security interests, and/or equities.
3.10 Obligations to Employees. Except as set forth in Company Schedule
3.10, all accrued obligations of the Company and the Subsidiaries, whether
arising by operation of law or by contract, for payments to trusts or other
funds or to any governmental agency or to any individual director, officer,
employee or agent (or his or her heirs, legatees or legal representatives) with
respect to unemployment compensation benefits, profit sharing, pension or
retirement benefits or social security benefits have been paid, or adequate
actuarial accruals on the Company Financial Statements for such payments have
been and are being made, by the Company and the Subsidiaries. All obligations of
the Company and the Subsidiaries, whether arising by operation of law or by
contract, for bonuses and other forms of compensation which are or may become
payable to their directors, officers, employees or agents have been paid, or
adequate accruals for payment therefor have been and are being made to the
extent required in accordance with generally accepted accounting principles, all
of which accruals are reflected in the books and records of the Company. Company
Schedule 3.10 includes a list of all of the pension, profit sharing, ESOP,
health, accident, welfare, life insurance, deferred compensation, bonus,
restricted stock, stock option and other plans and arrangements for the
compensation of employees, including employee benefit plans within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974 as
<PAGE>
amended ("ERISA") maintained, sponsored, or contributed to by the Company, any
Subsidiary or any ERISA Affiliate, or under which any of them has any
liability.("Company Employee Plans"). All such Company Employee Plans
established or maintained by the Company or the Subsidiaries or to which the
Company or the Subsidiaries contribute are in compliance with all applicable
requirements of ERISA, and are in compliance with all applicable requirements
(including qualification and nondiscrimination requirements in effect as of the
Effective Time) of the Code, for obtaining the tax benefits the Code thereupon
permits with respect to such Company Employee Plans. Except as disclosed on
Schedule 3.10, no Company Employee Plan has, or as of the Effective Time will
have, any amount of unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA) for which the Company or the Subsidiaries would be liable
to any person under Title IV of ERISA if the Company Employee Plans were
terminated as of the Effective Time, which amounts would be material to the
Company or the Subsidiaries. The Employee Plans are funded in accordance with
Section 412 of the Code (if applicable). Neither the Company, the Subsidiaries
nor any ERISA Affiliate has engaged in a transaction in connection with which
the Company, the Subsidiaries or any ERISA Affiliate could be subject to either
a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed
pursuant to Section 4975 or 4976 of the Code. There are no pending, or, to the
best knowledge of the Company, threatened or anticipated claims (other than
routine claims for benefits) by, on behalf of or against any of the Company
Employee Plans or any trusts related thereto and the consummation of the
transactions contemplated by this Agreement will not entitle any current or
former employee or officer of the Company, the Subsidiaries or any ERISA
Affiliate to severance pay, termination pay or any other payment except as
expressly provided in this Agreement, or accelerate the time of payment or
vesting, or increase the amount of compensation due any such employee or
officer, except as expressly provided in this Agreement. Except as disclosed in
Schedule 3.10, there would be no obligations which would be material to the
Company or the Subsidiaries under Title IV of ERISA relating to any Company
Employee Plan that is a multi-employer plan as defined in Section 3(37) of ERISA
if any such plan were terminated or if the Company or the Subsidiaries withdrew
from any such plan as of the Effective Time. For purposes of this Agreement, an
ERISA Affiliate of the Company shall mean a trade or business (whether or not
incorporated) under common control with the Company within the meaning of ERISA
Section 4001(a)(14) and (b) or Code sections 414(b) or 414(c).
3.11 Brokerage Commissions, Fees, Etc. All negotiations relating to this
Agreement and the Plan of Merger and the transactions contemplated herein and
therein have been and will be carried on by the Company directly with First
Financial, its counsel, accountants and other representatives in such a manner
as not to give rise to any claim against First Financial or the Company for any
brokerage commission, finder's fee, investment advisor's fee or other like
payment, except that the Company has agreed to make payment to The Chicago
Corporation for services rendered as financial advisor in connection with the
transactions contemplated hereby pursuant to that certain letter agreement dated
June 28, 1994, between the Company and The Chicago Corporation, a copy of which
has been provided to First Financial.
<PAGE>
The Company has fee agreements with all outside attorneys, accountants,
and other independent experts and advisors it has used or plans to use in
connection with the transactions contemplated in this Agreement, which provide
that such attorneys, accountants, and other independent experts and advisors
will be compensated only at their normal hourly or per diem rates plus
reasonable out-of-pocket expenses.
3.12 Certain Agreements. Company Schedule 3.12 accurately identifies all
of the following agreements, contracts, or other instruments written or, to the
knowledge of the Company, oral, to which the Company or the Subsidiaries are a
party or by which any of them are bound or affected or, to the knowledge of the
Company, by which any of the stock, properties, or assets of the Company or the
Subsidiaries are bound or affected, or under which any of their officers,
directors, employees, or stockholders have rights: (a) all leases of real
property under which the Company or the Subsidiaries are either lessee or
sublessee; (b) all insurance policies held by the Company or the Subsidiaries
relating to their properties or operations, including but not limited to those
covering their leasehold improvements, properties, equipment, furniture,
fixtures, lives of, or performance of their duties by their directors, officers,
and employees (all such policies of insurance, including blanket bonds and
director and officer liability insurance, are in force and, until the Effective
Time, the Company will cause all such policies to continue in force or to obtain
substitute policies acceptable to First Financial with comparable coverage in
amounts deemed by First Financial to be sufficient); (c) to the extent not
disclosed in Company Schedule 3.10, all employment contracts, pension,
retirement, stock option, stock purchase, savings, profit sharing, deferred
compensation, consultant, incentive, bonus, noncompetition, or collective
bargaining agreements, group insurance contracts, or other incentive, benefit,
or welfare plans or arrangements of the Company and the Subsidiaries, including
any trust or comparable agreement or instrument relating thereto, and including
for each plan the latest actuary's report on the condition of the plan and any
determination letters issued by the IRS (except as otherwise disclosed in said
Company Schedule, all such contracts, plans, practices, or arrangements are
terminable at the will of the employer without liability on not more than 60
days' notice to any affected employee); and (d) except as entered into with
respect to loan transactions or workouts in the ordinary course of business by
the Company, any agreement, instrument, or understanding of the Company or the
Subsidiaries, whether or not made in the ordinary and regular course of business
involving an aggregate liability in excess of $25,000.00 per annum. The Company
will deliver upon request to First Financial true, complete, and correct copies
of all of the written agreements, contracts, or other instruments, and written
descriptions of the material details of any oral agreements or instruments
identified in said Company Schedule. Except as otherwise specifically disclosed
in said Company Schedule 3.12, all such agreements, contracts, or other
instruments are in full force and effect and neither the Company nor either of
the Subsidiaries is in default under any such agreement, contract, or other
instrument to which they are a party or by which they may be bound.
<PAGE>
3.13 Articles of Incorporation, Articles of Association, Bylaws, Etc. The
Company has provided complete and correct copies of the following: (a) the
Certificate of Incorporation or Charter, as the case may be, and all amendments
thereto, of the Company and the Subsidiaries; (b) the Bylaws of the Company and
the Subsidiaries, as amended to date; and (c) a specimen certificate for each
type of outstanding security of the Company and the Subsidiaries.
3.14 Orders, Injunctions, Decrees, Etc. Neither the Company nor the
Subsidiaries are subject to any order, injunction or decree, written agreement,
consent agreement, or memorandum of understanding of any governmental body or
court, or are in violation of any order, injunction, or decree, written
agreement, consent agreement or memorandum of understanding, or any other
requirement of any governmental body or court.
3.15 Stockholders of the Company. Company Schedule 3.15 accurately
identifies the names and addresses of all of the stockholders who, to the
Company's knowledge, beneficially own more than 5% of Company Common Stock and
the number of shares of stock of the Company held by each such stockholder and
by each director and senior officer of the Company. From the date hereof until
the Effective Time, the Company shall, upon request, provide First Financial
with a complete list of all of its stockholders, including the names, addresses
and number of shares of Company Common Stock held by each stockholder. Without
the advance written consent of the Company, First Financial will not disclose or
make use of the information provided by the Company pursuant hereto except as
may be required in connection with regulatory or other filings permitted by this
Agreement, the mailing of the Prospectus/Proxy Statement (as hereinafter
defined) or as is otherwise specifically permitted by this Agreement and in
accordance with applicable law.
3.16 Regulatory Filings. The Company and the Subsidiaries have filed and
will continue to file in a timely manner all required filings with (i) the SEC
(and will furnish First Financial with copies of all such filings made
subsequent to the date hereof until the Effective Time), (ii) the OTS and (iii)
the FDIC and, to the best knowledge of the Company, all such filings were or
will be, complete and accurate in all material respects as of the dates of the
filings, and no such filing made or will make any untrue statement of a material
fact or omitted or omit to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which they were made,
not misleading. Except for normal examinations conducted by the IRS or the OTS
or the FDIC in the regular course of the business of the Company or the
Subsidiaries, no federal, state or local governmental agency, commission or
other entity has initiated any proceeding or, to the best of the knowledge and
belief of the Company, investigation into the business or operations of the
Company or the Subsidiaries within the past five years. There is no unresolved
violation, criticism or exception of a material nature by the SEC or the OTS or
the FDIC or other agency, commission or entity with respect to any report or
statement referred to herein. Since the date of any such filings there has been
no material change in the Company's or First Federal's condition, financial or
otherwise, such that, had such change occurred prior to any such filing, such
change would have been required to be disclosed or described therein.
<PAGE>
3.17 Loans. All loans and loan commitments extended by the Subsidiaries
(the "Loans") have been made in accordance with customary lending standards in
the ordinary course of business. The Loans are evidenced by appropriate and
sufficient documentation and constitute valid and binding obligations of the
borrowers enforceable in accordance with their terms, except as limited by
applicable bankruptcy, insolvency, or other similar laws affecting the
enforcement of creditors' rights and remedies generally from time to time in
effect and by applicable law which may affect the availability of equitable
remedies. All such Loans are, and at the Effective Time will be, free and clear
of any security interest, lien, encumbrance or other charge and the Company and
the Subsidiaries have complied, and at the Effective Time will have complied, in
all material respects with all laws and regulations relating to such Loans. The
Loans are not subject to any offsets, or to the knowledge of the Company, claims
of offset, or claims of other liability on the part of the Company or the
Subsidiaries.
3.18 Conduct. Except as set forth in Section 4.08 or Company Schedule
3.18, since September 30, 1994, neither the Company nor any of the Subsidiaries
have: (i) conducted its business or entered into any transaction other than in
the ordinary course, or incurred or become subject to any liabilities or
obligations except liabilities incurred in the ordinary course of business; (ii)
suffered any labor trouble, or any event or condition of any character
materially adversely affecting its or their business or prospects; (iii)
discharged or satisfied any material lien or encumbrance or paid any obligation
or liability other than those presented in the Company Financial Statements or
incurred after the date thereof in the ordinary course of business; (iv)
mortgaged, pledged, or subjected to lien, charge or other encumbrance any part
of its assets, or sold or transferred any such assets, except in the ordinary
course of business; (v) made or permitted an amendment or termination of any
contract to which it is a party except in the ordinary course of business; (vi)
issued, agreed to issue or sold any of its capital stock or corporate debt
obligations (whether authorized and unissued or held in the treasury); (vii)
granted any options, warrants or other rights for the purchase of its capital
stock; (viii) declared, agreed to declare, set aside or paid any dividend or
other distribution in respect of its or their capital stock (except as permitted
by Section 5.02(b)(iii) of this Agreement) or, directly or indirectly purchased,
redeemed, or otherwise acquired or agreed to purchase or redeem or otherwise
acquire any shares of such stock; (ix) entered into any employment contract with
any officer or salaried employee, made any accrual or arrangement for or payment
of bonuses or special compensation of any kind or any severance or termination
pay to any of its or their present officers or employees, increased the rate of
compensation payable or to become payable by them to any of its or their
officers or employees, or instituted or made any increase in any employee
welfare, retirement or similar plan or arrangement, in each case other than in
the ordinary course of business or as contemplated pursuant to such contract,
plan or arrangement; or (x) entered into any other transaction other than in the
ordinary course of business.
<PAGE>
3.19 Fiduciary Responsibilities. The Company and the Subsidiaries have
performed all of their duties in their capacities as trustees, executors,
administrators, registrars, guardians, custodians, escrow agents, receivers or
any other fiduciary capacity in a manner which complies with all applicable
laws, regulations, orders, agreements, wills, instruments and common law
standards.
3.20 Compliance With Environmental and Safety Laws.
(a) The operations of the Company and the Subsidiaries comply and
have complied with all applicable federal, state, and local environmental
statutes and regulations; none of the Company's or the Subsidiaries' operations
are subject to any judicial or administrative proceedings, pending or to the
best of the Company's knowledge threatened, alleging the violation of any
federal, state, or local environmental, health or safety statute or regulation;
none of the Company's or the Subsidiaries' operations are the subject of a
federal, state or local investigation, pending or to the best of the Company's
knowledge threatened, evaluating whether any remedial action is needed to
respond to a release of any hazardous or toxic waste, substance or constituent,
or any other substance into the environment; neither the Company nor the
Subsidiaries have generated hazardous waste in the Company's or the
Subsidiaries' operations; neither the Company nor the Subsidiaries have
transported hazardous waste attributable to the Company's or the Subsidiaries'
operations for treatment, storage or disposal; and neither the Company nor the
Subsidiaries have reported a spill or release of a hazardous or toxic waste,
substance or constituent or any other substance in the environment due to the
Company's or the Subsidiaries' operations.
(b) Except as set forth in Schedule 3.20(b), all real estate owned,
beneficially or otherwise, or controlled by the Company or the Subsidiaries,
whether owned outright, as REO property as a joint venture, or owned or
controlled in a fiduciary capacity, or otherwise (the "Real Estate"), is in
compliance in all material respects with all applicable federal, state, and
local environmental statutes and regulations; the Real Estate is not subject to
any judicial or administrative proceedings alleging the violation of any
federal, state, or local environmental, health or safety statute or regulation;
to the best of the Company's knowledge, the Real Estate is not the subject of a
federal, state, or local investigation evaluating whether any remedial action is
needed to respond to a release of any hazardous or toxic waste, substance or
constituent, or any other substance into the environment; neither the Company
nor any of the Subsidiaries have generated any hazardous material on the Real
Estate; neither the Company nor any of the Subsidiaries have transported any
hazardous material from the Real Estate to any waste treatment, storage or
disposal facility.
(c) The Company's representations regarding the "operations"
referenced in this Section 3.20 do not extend to customers of the Company or of
the Subsidiaries unless the Company or the Subsidiaries influenced the
customer's use, storage, or disposal of hazardous or toxic waste.
<PAGE>
(d) For the purposes of this Section 3.20, any reference to
"hazardous" or "toxic" waste, substances, or constituents encompasses any waste,
substance, or constituent regulated by, or subject to, the provisions and
regulations of either the Comprehensive Environmental Response, Compensation,
and Liability Act, 42 USC Sec. 6901 et seq., the Toxic Substances Control Act,
15 USC Sec. 2601 et seq..
3.21 Other Information. No representation or warranty by the Company
contained in this Agreement, or disclosure in any Company Schedule, certificate
or other instrument or document furnished or to be furnished by or on behalf of
the Company pursuant to this Agreement and no information furnished or to be
furnished by the Company for use in the Prospectus/Proxy Statement (as
hereinafter defined) or the Registration Statement (as hereinafter defined) or
the regulatory filings described in Section 4.06 hereof contains or will contain
any untrue statement of a material fact or omits or will omit to state any
material fact required to be stated herein or therein which is necessary to make
the statements contained herein or therein, in light of the circumstances under
which they were made, not misleading in any material respect.
3.22 Insider Interests. All loans, extensions of credit, and other
contractual arrangements (including deposit relationships) between the Company
or the Subsidiaries and any officer or director of the Company or the
Subsidiaries, or any affiliate of any such officer or director conform to
applicable rules and regulations and requirements of all applicable regulatory
agencies. No officer or director of the Company or the Subsidiaries has any
interest in any property, real or personal, tangible or intangible, used in or
pertaining to the business of the Company or the Subsidiaries.
3.23 No Sensitive Transactions. Within the past five (5) years, neither
the Company nor the Subsidiaries nor, to the Company's knowledge, any director,
employee, or agent of the Company or the Subsidiaries, has directly or
indirectly used funds or other assets of the Company or the Subsidiaries for (a)
illegal contributions, gifts, entertainment, or other expenses related to
political activities; (b) payments to or for the benefit of any governmental
official or employee, other than payments required or permitted by law; (c)
illegal payments to or for the benefit of any person, firm, corporation, or
other entity, or any officer, employee, agent, or representative thereof; or (d)
the establishment or maintenance of an illegal secret or unrecorded fund.
3.24 Delaware Law. The provisions of Section 203 of the Delaware Law as
they relate to the Company do not and will not apply to this Agreement, the
Merger or the transactions contemplated hereby. No dissenter's rights exist with
respect to the Company Common Stock.
3.25 Community Reinvestment Act Compliance. First Federal Savings Bank,
F.S.B. is in substantial compliance with the applicable provisions of the
Community Reinvestment Act of 1977 and the regulations promulgated thereunder.
As of the date of this Agreement, First Federal Savings Bank, F.S.B. has not
been advised of the existence of any act or circumstance or set of facts or
circumstances which, if true, would cause it to fail to be in substantial
compliance with the Community Reinvestment Act ("CRA") or any federal or state
fair lending laws. First Federal Savings Bank, F.S.B. has not received a CRA
rating from the OTS which is less than "satisfactory."
<PAGE>
3.26 Approvals. The Company knows of no reason why all regulatory
approvals necessary to permit First Financial to consummate the transactions
contemplated hereby in the manner provided herein should not be obtained or why
the opinion letter referred to in Section 8.11 hereof cannot be obtained.
3.27 Qualified Thrift Lender. First Federal is a "Qualified Thrift Lender"
as defined under 12 USC Sec. 1467a(m) or Section 10(m) of the Home Owners' Loan
Act.
3.28 The ESOP. The Company is the sole lender to the First Federal
Employee Stock Ownership Plan and Trust ("the ESOP"). Accelerated cash payments
under the loan agreement entered into between the Company and the ESOP (the
"ESOP Loan") are not required by virtue of the acquisition of the Company by
First Financial.
3.29 Advice of Changes. Between the date hereof and the Closing Date, the
Company shall promptly advise First Financial in writing of any fact which, if
existing or known as of the date hereof, would have been required to be set
forth or disclosed in or pursuant to this Agreement or of any fact which, if
existing or known as of the date hereof, would have made any of the
representations contained herein materially untrue.
3.30 Liquidation Account. The liquidation account established by First
Federal in connection with its conversion from the mutual to stock form amounted
to $13,150,298 at June 30, 1994 and has been maintained since its establishment
in accordance with applicable Laws. None of the transactions contemplated by
this Agreement would constitute a complete liquidation of First Federal so as to
require the distribution of such liquidation account of First Federal to any
existing or former savings or demand account holders of First Federal.
3.31 Insurance. Section 3.31 of the Company Schedule contains a true,
correct and complete list of all insurance policies and bonds maintained by the
Company and the Subsidiaries, including the name of the insurer, the policy
number, the type of policy and any applicable deductibles, and all such
insurance policies and bonds are in full force and effect and have been in full
force and effect at all times during which the Company or any Subsidiary had any
insurable interest in the subject of such insurance policies and bonds. As of
the date hereof, neither the Company nor any Subsidiary has received any notice
of cancellation or amendment of any such policy or bond or is in default under
any such policy or bond, no coverage thereunder is being disputed and all
material claims thereunder have been filed in a timely fashion. The existing
<PAGE>
insurance carried by the Company and the Subsidiaries is and will continue to
be, in respect of the nature of the risks insured against and the amount of
coverage provided, substantially similar in kind and amount to that customarily
carried by parties similarly situated who own properties and engage in
businesses substantially similar to that of the Company and the Subsidiaries.
True and complete copies of all such policies and bonds reflected at Section
3.31 of the Company Schedule have been delivered to First Financial.
3.32 Option and RRP Shares. Company and its Subsidiaries shall not
exercise any discretionary authority which any of them may have to accelerate
the vesting for any participant under the FirstRock 1992 Incentive Stock Option
Plan (the "Employee Plan") or the First Federal Savings Bank F.S.B. Recognition
and Retention Plan and Trusts (the "RRP"), nor shall the Company or its
Subsidiaries award any additional options under the Employee Plan or shares of
Restricted Stock under the RRP.
ARTICLE FOUR
Covenants of First Financial
First Financial hereby covenants and agrees with the Company as follows:
4.01 Conduct Of Business: Certain Covenants. From and after the execution
and delivery of this Agreement and until the Effective Time, First Financial and
its subsidiaries will:
(a) conduct its and their business and operate only in accordance
with sound banking and business practices as reasonably determined by First
Financial; and
(b) remain in good standing with all applicable banking regulatory
authorities to the extent required to continue the operation of their respective
businesses.
4.02 SEC Registration. First Financial shall file with the SEC as soon as
practicable after the execution of this Agreement but in no event later than 60
days from the date of this Agreement (provided that the Company has given to
First Financial all information concerning the Company which is required for
inclusion in the Registration Statement (defined below), including the
Prospectus/Proxy Statement (defined below)), a registration statement on an
appropriate form under the Securities Act covering the First Financial Common
Stock to be issued pursuant to the Plan of Merger and shall use its best efforts
to cause the same to become effective and thereafter, until the Effective Time
or termination of this Agreement, to keep the same effective and, if necessary,
amend and supplement the same. Such registration statement and any amendments
and supplements 2thereto are referred to herein as the "Registration Statement."
The Registration Statement shall include a prospectus/proxy statement thereto
("the Prospectus/Proxy Statement"), prepared for use in connection with the
meeting of stockholders of the Company referred to in Section 5.01 of this
Agreement, all in accordance with the rules and regulations of the SEC. First
Financial shall, as soon as practicable after the execution of this Agreement,
<PAGE>
take all actions necessary to have the shares of First Financial Common Stock to
be delivered in exchange for Company Common Stock qualified or registered for
offering and sale, or to identify and perfect an exemption therefrom, under the
securities or "Blue Sky" laws of each jurisdiction within the United States in
which stockholders of the Company reside.
4.03 Authorization, Reservation, and Stock Exchange Listing of Common
Stock. By appropriate Resolution, a certified copy of which shall be provided to
the Company, the Board of Directors of First Financial shall, prior to the
Effective Time, authorize and reserve the required number of shares of First
Financial Common Stock to be issued pursuant to the Plan of Merger. First
Financial shall also use all reasonable efforts to cause the shares of First
Financial Common Stock to be issued pursuant to the Plan of Merger to be
approved for listing on The Nasdaq Stock Market, subject to official notice of
issuance, prior to the Effective Time.
4.04 Confidentiality. First Financial will cause all internal, nonpublic
financial and business information obtained by it from the Company and its
Subsidiaries to be treated confidentially (exercising the same degree of care as
it uses to preserve and safeguard its own confidential information); provided,
however, that notwithstanding the foregoing, nothing contained herein shall
prevent or restrict First Financial from making such disclosure thereof as may
be required by law in connection with the offering and sale of its Common Stock
pursuant to this Agreement or as may be required in the performance of this
Agreement. If the Merger shall not be consummated, all nonpublic financial
statements, documents and materials and all copies thereof shall be returned to
the Company, or destroyed by First Financial, and shall not be used by First
Financial in any way detrimental to the Company or any of its affiliates.
4.05 Indemnification. First Financial agrees that it will honor with
respect to the Company, and that FF-Bank will honor with respect to First
Federal, all rights to indemnification, including rights to payments of advances
for indemnification obligations, reimbursement of expenses, and amounts paid in
settlement, if any, existing in favor of the employees, agents, directors, and
officers of the Company or First Federal and each of their heirs and
representatives as provided in their Certificate of Incorporation, Charter,
Bylaws, or otherwise to the extent such rights are provided for and not in
conflict with applicable law on the date of this Agreement and that all such
rights shall survive the Effective Time and remain in full force and effect with
respect to matters occurring prior to the Effective Time. First Financial also
agrees to pay all costs of defense, judgments and settlements with respect to
the pending Stock Seizure and Boosalis litigation.
4.06 Required Approvals. As soon as practicable after the execution of
this Agreement but in no event later than 60 days from the date of this
Agreement (subject to receipt by First Financial from the Company of all
information of the Company and First Federal as reasonably requested, First
Financial will submit all such applications as are necessary to effect the
Reorganization.
<PAGE>
4.07 Employment Agreements and Directors. First Financial agrees to honor
the Company's and First Federal's existing employment agreements with David A.
Ingrassia and Daniel J. Nicholas and the Company's and First Federal's existing
Change In Control Agreements with Donna K. Beilfuss, William H. Leefers, Robert
M. Singer and Creston B. Harris, each of which is dated June 28, 1993. (The
agreements referred to in this Section 4.07 are collectively referred to herein
as the "Employment Agreements.") First Financial also agrees to honor the Memo
of Understanding with William H. Leefers dated July 1, 1993.
4.08 Severance and Retention Pool. As of the Effective Time, First
Financial will make available an aggregate of $1.2 million, which will be used
for the following purposes: (1) payment of severance to certain employees (other
than those who are covered by employment agreements) whose employment is not
continued after the date that the Company's accounts are transferred on to First
Financial's FiServ data processing system and (2) payment of retention bonuses
to certain employees of the Company and its Subsidiaries. Prior to the Effective
Time, the Company shall develop a Severance and Retention Pool Program to
administer the $1.2 million pool pursuant to the terms of this section 4.08,
which Program shall be reasonably satisfactory to First Financial.
4.09 Retirement Plans. For purposes of crediting periods of service for
eligibility and vesting, but not for benefit accrual purposes, under the First
Financial Corporation Employees' Retirement and 401(k) Plans, and for purposes
of crediting periods of service for eligibility to participate in other employee
benefits provided to employees of First Financial and its affiliates, employees
of the Company and the Subsidiaries who otherwise would be eligible to
participate in such plans and benefit programs after the Effective Time shall be
given credit for service with the Company and the Subsidiaries prior to the
Effective Time.
4.10 Information, Access Thereto. The Company, its representatives and
agents shall, at all times during normal business hours prior to the Closing
Date, have full and continuing access to the facilities, operations, records and
properties of First Financial and its subsidiaries. The Company, its
representatives and agents may, prior to the Effective Time, make or cause to be
made such investigation of the operations, records and properties of First
Financial and its subsidiaries, and of its and their financial and legal
condition as the Company shall deem necessary or advisable to familiarize itself
with such records, properties and other matters. Upon request, First Financial
and its subsidiaries will furnish the Company or its representatives or agents,
its and their attorneys' responses to auditors' requests for information and
such financial and operating data and other information requested by the Company
developed by First Financial or its subsidiaries, its and their auditors,
accountants or attorneys, and will permit the Company, its representatives or
agents to discuss such information directly with any individual or firm
performing auditing or accounting functions for First Financial or its
<PAGE>
subsidiaries, and such auditors and accountants shall be directed to furnish
copies of any reports or financial information as developed to the Company or
its representatives or agents. No investigation by the Company shall affect the
representations and warranties made by First Financial herein. No investigation
or access provided hereunder shall interfere with the normal operations of First
Financial and its subsidiaries.
4.11 Negative Covenant. From and after the execution of this Agreement and
until the Effective Time, First Financial will not, take any action, or agree to
take any such action, which constitutes a breach or default of its obligations
under this Agreement or which is reasonably likely to delay or jeopardize the
receipt of any of the regulatory approvals required hereby or is reasonably
likely, to the best of First Financial's knowledge, to preclude the Merger from
qualifying for "pooling of interests" accounting treatment (provided, however,
First Financial shall not be precluded from engaging in stock repurchase
programs to the extent that the number of shares of First Financial Stock
repurchased in such programs does not exceed (i) the number of shares of Company
Common Stock issued pursuant to exercise of stock options after the date hereof,
times (ii) the Exchange Ratio, or taking such action in the event it shall have
first waived the condition contained in Section 8.11 hereof) or cause any of the
other conditions set forth in Articles Six, Seven or Eight hereof to fail.
4.12 Resolution of Company Benefit Plans. The Company and First Financial
shall cooperate in effecting the following treatment of the Company Benefit
Plans, except as mutually agreed upon by First Financial and the Company before
the Effective Time:
(a) After the Effective Time, First Financial, except as otherwise
provided in this Agreement or as permitted by Code or ERISA law, shall not amend
or take any other action, with respect to any Company Benefit Plan which has or
will have the effect of reducing or eliminating any: (i) accrued benefits
regardless of whether the benefits have been vested, (ii) early retirement
benefits or retirement-type subsidies, and/or (iii) optional form of benefits,
or any other benefit, right or feature of the Company Benefits Plans, which
enures or will enure to any participant, former participant and/or retired
participant or beneficiaries of such persons who are covered under the terms of
the Company Benefit Plans, as the described benefits and forms of benefits
existed under the Company Benefit Plans immediately prior to the Effective Time.
Notwithstanding anything contained herein to the contrary, First Financial shall
deem the single sum payment optional form of benefit and the early retirement
benefit known as the "Rule of 80" available in the First Federal Employees'
Defined Benefit Plan as "Protected Benefits" and shall take no action to amend
or eliminate such options for a period of 90 days after the Effective Time. In
addition, First Financial agrees to pay the accrued vacation benefits to Company
employees.
(b) On the Effective Date, First Financial or a subsidiary shall be
substituted for the Company as the sponsoring employer under those Company
Benefit Plans with respect to which the Company is a sponsoring employer
immediately prior to the Effective Time, and shall assume and be vested with all
of the powers, rights, duties, obligations and liabilities previously vested in
the Company with respect to each such Plan. Except as otherwise provided herein,
each such Plan and any Company Benefit Plan sponsored by the Company Subsidiary,
including the First Federal 401(k) Savings Plan, the First Federal Employees'
Defined Benefit Plan, the First Federal ESOP, the Deferred Compensation
Agreements entered into by the Company with certain of its officers, the
Incentive Compensation Plans and the Benefit Equalization Plan, shall be
continued in effect by First Financial or any applicable Subsidiary after the
Effective Time without a termination or discontinuance thereof as a result of
the Merger, subject to the power reserved to First Financial or any applicable
Subsidiary under each such Plan to subsequently amend or terminate such Plan;
provided, however, that First Financial shall not reduce, diminish or terminate
<PAGE>
any accrued benefit or the form of such benefit as provided by the Company
Benefit Plans as of the Effective Time unless agreed upon by the parties prior
to the Effective Time, or if after the Effective Time, permitted by the Code or
by ERISA. The Company, each Company Subsidiary, and First Financial will use all
reasonable efforts (i) to effect said substitutions and assumptions, and such
other actions contemplated under this Agreement, and (ii) to amend such plans to
the extent necessary to provide for said substitutions and assumptions, and such
other actions contemplated under this Agreement.
(c) After the Effective Time, First Financial shall provide, or cause
an applicable Subsidiary to provide, to each employee of the Company and any
Company Subsidiary as of the Effective Time ("FirstRock Employees") the
opportunity to participate in First Financial Benefit Plans offered to
similarly-situated employees. Nothing in the preceding sentence shall obligate
First Financial or any subsidiary to hire any person or retain in employment any
employee or director or to provide or cause to be provided any benefits
duplicative to those provided under any Company Benefit Plan that is continued
pursuant to Section 4.13(b) above. Except as otherwise provided in this
Agreement, the power of First Financial or any First Financial Subsidiary to
amend or terminate any benefit plan or program, including any Company Benefit
Plan shall not be altered or affected. Moreover, this Agreement shall not confer
upon any FirstRock Employee any rights or remedies hereunder and shall not
constitute a contract of employment or create any rights, to be retained or
otherwise, in employment at First Financial, the Company, any Company Subsidiary
or any First Financial Subsidiary.
(d) As of the Effective Time, all account balances under the ESOP
shall be fully vested and nonforfeitable within the meaning of Section 411 of
the Code. All shares released from the ESOP unallocated stock fund as a result
of the reduction of the ESOP loan prior to the Effective Time shall be allocated
to the Company ESOP participants prior to the Effective Time. From and after the
date of this Agreement to the Effective Time, First Financial, Company and their
respective representatives shall use their best efforts, and after the Effective
Time, First Financial and its representatives shall use their best efforts, to
cause Company and the Company Subsidiaries to: take any action necessary
(including amendment of the ESOP, if necessary) to maintain the status of the
ESOP as a separate plan qualified under Sections 401(a) and 4975 of the Code
until all shares of stock held by the ESOP have been allocated to the accounts
of participants therein.
<PAGE>
(e) All accounts under the First Federal 401(k) Savings Plan and
accrued benefits under the First Federal Employees' Defined Benefits Plan shall
as of the Effective Time become fully vested and nonforfeitable within the
meaning of Section 411 of the Code, and First Financial shall honor the terms of
the Company plans and shall not reduce the benefits accrued under such plans
except as permitted under the Code or ERISA. The benefits provided under the
Benefit Equalization Plan and the Deferred Compensation Agreements, upon the
Effective Time, shall be fully vested and such plans shall be terminated in
accordance with those plans.
(f) All outstanding stock options which have been granted pursuant to
the FirstRock Stock Option Plans will become fully vested, nonforfeitable and
100% exercisable as of the Effective Time. The FirstRock Stock Option Plans
shall continue following the Effective Time and First Financial shall assume the
rights, duties and obligations of FirstRock under the FirstRock Stock Option
Plans. Options representing FirstRock Common Stock outstanding as of the
Effective Time shall become options to purchase shares of First Financial Common
Stock, subject to adjustment as set forth in the FirstRock Stock Option Plans,
and as provided in Section 1.03(f) hereof.
(g) All awards which have been granted under the First Federal
Recognition and Retention Plans and Trusts will become fully vested and
nonforfeitable to the extent permitted by the Plans and shares representing such
awards and earnings thereon shall be distributed to participants or
beneficiaries as of the Effective Time and these plans and trusts will terminate
following such distribution as of the Effective Time.
(h) First Financial shall honor the Company's obligation to pay a
lifetime benefit of of $499.38 every biweekly pay period as a retirement benefit
to a former employee as set forth on Schedule 4.12(h), but shall not be
obligated to provide medical coverage to any retired director of the Company or
its Subsidiaries, nor shall First Financial be obligated to provide disability
insurance to any Company or Subsidiary officer who is subject to an Employment
Agreement.
ARTICLE FIVE
Covenants of The Company
The Company hereby covenants and agrees with First Financial as follows:
5.01 Registration Statement and Stockholders' Meeting. The Company shall
cause a meeting of its stockholders (the "Stockholders Meeting") to be held at
the earliest practicable date after the execution of this Agreement and
availability of the Prospectus/Proxy Statement for the purpose of acting upon
this Agreement and the Plan of Merger, and in connection therewith shall
distribute the Prospectus/Proxy Statement and any amendments or supplements
thereto and shall solicit proxies from its stockholders in accordance with
applicable law, including the rules and regulations of the SEC.
<PAGE>
5.02 Conduct Of Business, Certain Covenants.
(a) From and after the execution and delivery of this Agreement and
until the Effective Time, the Company and the Subsidiaries will:
(i) conduct its and their business and operate only in the
usual ordinary course of business and maintain its and
their properties, books, contracts, business, operations,
commitments, records, loans, investments and any trust
operations in accordance with generally accepted
accounting principles;
(ii) conduct its and their business and operate only in
accordance with sound banking practices, including
charging off all loans required to be charged off by bank
regulators and regulations, statutes and sound banking
practices as determined by the Board of Directors of the
Company and the Subsidiaries;
(iii) maintain an allowance for loan losses deemed by management
of the Company to be adequate based on past loan loss
experience and evaluation of potential losses in current
portfolios;
(iv) remain in good standing with all applicable banking
regulatory authorities and preserve each of its and their
existing banking locations;
(v) use its and their best efforts to retain the services of
such of its and their present officers and employees that
its and their goodwill and business relationships with
customers and others are not materially and adversely
affected;
(vi) maintain insurance covering the performance of its and
their duties by its and their directors, officers and
employees and maintain in full force and effect all of the
insurance policies reflected on Schedule 3.31 hereto (or
comparable policies of insurance); and
(vii) consult with First Financial prior to acquiring any
interest in real property, except in the ordinary course
of business.
(b) From and after the execution and delivery of this Agreement and
until the Effective Time, the Company and the Subsidiaries will not, without the
prior consent of First Financial:
(i) amend its or their Certificate of Incorporation, Charter,
or Bylaws;
<PAGE>
(ii) except in connection with the exercise of Option Rights or
as contemplated by Section 5.09 hereof, issue or sell any
shares of its or their capital stock, issue or grant any
stock options, warrants, rights, calls or commitments of
any character calling for or permitting the issue or sale
of its or their capital stock (or securities convertible
into or exchangeable, with or without additional
consideration, for shares of such capital stock);
(iii) pay or declare any cash dividend or other dividend or
distribution with respect to the Company's or the
Subsidiaries' capital stock;
(iv) increase or reduce the number of shares of its or their
capital stock by split-up, reverse split,
reclassification, distribution of stock dividends, or
change of par or stated value;
(v) except in connection with the exercise of Option Rights or
as contemplated by Section 5.09 hereof , purchase, permit
the conversion of or otherwise acquire or transfer for any
consideration any outstanding shares of its or their
capital stock or securities carrying the right to acquire,
or convert into or exchange for such stock, with or
without additional consideration;
(vi) except as required by Section 5.10 and 5.11 hereof and
except as agreed to by the Company and First Financial,
and except in connection with bonus plans currently in
effect which will provide for payment of prorated bonuses
for the period between July 1, 1994 and the month-end
prior to the Effective Time, adopt, amend or otherwise
modify any Company Employee Benefit Plan, the ESOP, any
bonus, pension, profit sharing, retirement or other
compensation plan or enter into any contract of employment
with any officer which is not terminable at will without
cost or other liability (other than benefits accrued as of
the date of such termination), except for the annual
renewal of the current employment contracts and change in
control agreements, and except as herein provided and
except as may be required by applicable law or regulation,
including revenue laws or regulations;
(vii) incur any obligations or liabilities except in the
ordinary course of business;
<PAGE>
(viii) mortgage, pledge (except pledges required for existing
Federal Home Loan Bank advances or pledges of such assets
as may be required to permit First Federal to accept
deposits of public funds) or subject to any material lien
(excluding mechanics liens), charge, security interest, or
any other encumbrance, any of its or their assets or
property, except for liens for taxes not yet due and
payable;
(ix) transfer or lease any of its or their assets or property
except in the ordinary course of business, or close any
banking office;
(x) transfer or grant any rights, under any leases, licenses
or agreements, other than in the ordinary course of
business;
(xi) make or grant any general or individual wage or salary
increase except for general salary and wage adjustments
now in progress, or as part of the conduct of a normal
salary administration program consistent with past
practices provided that bonuses may be paid as provided in
Section 4.08 and in Subsection (b)(vi) of this Section
5.02;
(xii) other than with respect to loan transactions (including,
without limitation, letters of credit and purchase of
leases), and other than with respect to sales of REO
property less than $250,000, and other than with respect
to payments made with respect to the ESOP Loan in 1994 and
1995 in an amount which does not exceed $57,750.00 in any
calendar quarter, make or enter into any material
transaction, contract or agreement or incur any other
material commitment which is defined for purposes of this
provision as any transaction, contract, agreement or
commitment in excess of $25,000.00;
(xiii) incur any indebtedness for borrowed money, except for
deposit liabilities and except for indebtedness incurred
in the ordinary course of business the repayment term of
which does not exceed one year;
(xiv) cancel or compromise any debt or claim, which has not
previously been charged off, other than in the ordinary
course of business in an aggregate amount which is not
materially adverse;
(xv) enter into any transaction other than in the ordinary
course of business;
<PAGE>
(xvi) invite or initiate or engage in discussions or
negotiations for the acquisition or merger of the Company
or the Subsidiaries by or with any corporation or other
entity other than First Financial or its affiliates,
except as set forth in Section 5.12;
(xvii) except as set forth in Section 5.12, take any action
which constitutes a breach or default of its obligations
under this Agreement or which is reasonably likely to
delay or jeopardize the receipt of any of the regulatory
approvals required hereby or is reasonably likely to the
best of the Company's knowledge to preclude the Merger
from qualifying for "pooling of interests" accounting
treatment or cause any of the other conditions set forth
in Articles Six, Seven, or Eight hereof to fail;
(xviii) make or commit to any commercial business loan or any
commercial real estate or construction loan secured by any
non 1-4 family residential property over $150,000;
(xix) purchase or commit to purchase any bulk loan servicing
portfolio; and
(xx) make any payment to any director, officer, employee or
independent contractor, in connection with or as a result
of the transactions contemplated by this Agreement, or
otherwise, that is not deductible under either Section
162(a)(1) or 404 of the IRC.
5.03 Affiliate Agreements. At or prior to the Closing Date, the Company
shall furnish to First Financial an agreement in the form set forth in Exhibit
B, executed by each person, other than First Financial and any of its
affiliates, who is an affiliate of the Company, as such term is defined in Rule
144 under the Securities Act.
5.04 Information, Access Thereto. First Financial, its representatives and
agents shall, at all times during normal business hours prior to the Closing
Date, have full and continuing access to the facilities, employees, operations,
records and properties of the Company and the Subsidiaries. First Financial, its
representatives and agents may, prior to the Effective Time, make or cause to be
made such investigation of the operations, records and properties of the Company
and the Subsidiaries, and of its and their financial and legal condition as
First Financial shall deem necessary or advisable to familiarize itself with
such records, properties and other matters. Upon request, the Company and the
Subsidiaries will furnish First Financial or its representatives or agents, its
and their attorneys' responses to auditors requests for information and such
financial and operating data and other information requested by First Financial
developed by the Company or the Subsidiaries, its and their auditors,
accountants or attorneys, and will permit First Financial, its representatives
<PAGE>
or agents to discuss such information directly with any individual or firm
performing auditing or accounting functions for the Company or the Subsidiaries,
and such auditors and accountants shall be directed to furnish copies of any
reports or financial information as developed to First Financial or its
representatives or agents. First Financial and First Financial's agents,
contractors and environmental consultants shall also have the right of access to
the Real Estate before the Closing Date for the purpose of undertaking such
environmental investigation and testing as First Financial deems necessary or
appropriate. First Financial and First Financial's agents, contractors and
environmental consultants shall also have the right of access to the Company's
and the Subsidiaries records or employees for the purpose of carrying out
necessary investigation and testing. Except as set forth in Section 6.12, no
investigation by First Financial shall affect the representations and warranties
made by the Company herein. No investigation or access provided hereunder shall
interfere with the normal operations of the Company and the Subsidiaries.
5.05 Confidentiality. The Company will cause all materials and other
internal, nonpublic financial and business information obtained by it from First
Financial or any of its affiliates to be treated confidentially (exercising the
same degree of care as it uses to preserve and safeguard its own confidential
information); provided, however, that notwithstanding the foregoing, nothing
contained herein shall prevent or restrict the Company from making such
disclosure thereof as may be required by law in connection with the consummation
of the Reorganization or as may be required in the performance of this
Agreement. If the Merger shall not be consummated, all nonpublic financial
statements, documents and material and all copies thereof shall be returned to
First Financial, or destroyed by the Company, and shall not be used by the
Company in any way detrimental to First Financial or any of its affiliates.
5.06 Recommendation of Merger to Stockholders. The Board of Directors of
the Company will unanimously recommend in the Prospectus/Proxy Statement
approval of the Merger by all stockholders of the Company entitled to vote
thereon.
5.07 Litigation Matters. The Company will consult with First Financial
about any proposed settlement or lack thereof, or any disposition of, any
material litigation matter in which it or either of the Subsidiaries is or
becomes involved.
5.08 Bank Merger. The Company will cause First Federal to take all such
corporate action as is reasonably required to complete the Bank Merger,
including approval by the Board of Directors of First Federal and execution by
appropriate officers of First Federal of the Bank Merger Agreement.
5.09 Warrant Agreement. Immediately following the execution of this
Agreement, the Company and First Financial shall execute a Warrant Agreement
(the "Warrant Agreement"), the form of which is attached hereto as Exhibit C,
pursuant to which the Company will issue a Warrant (the "Warrant") to First
Financial which entitles First Financial to purchase an aggregate of 475,246
shares of Company Common Stock at an exercise price per share which is equal to
the closing price for shares of the Company Common Stock traded on the business
<PAGE>
day preceding the date of this Agreement on which sales of the Company Common
Stock occurred, on the terms and conditions set forth therein. The Company will
promptly notify First Financial of the occurrence of any event giving First
Financial the right to sell, assign, transfer or exercise the Warrant, as
provided in the Warrant Agreement.
5.10 Severance Compensation Plans. At or prior to the Effective Time, the
Company shall cause all severance compensation programs (except the Employment
Agreements and the Plan specified in Section 4.08) of the Company and the
Subsidiaries to be terminated and between the date hereof and the Effective Time
no further rights shall be granted thereunder.
5.11 Company Plans. If requested by First Financial, the Company and the
Subsidiaries shall, at or prior to the Effective Time, adopt, by appropriate
resolution in form and substance acceptable to First Financial, the First
Financial Retirement Plan and the First Financial 401(k) Plan, contingent upon
consummation of the Merger, and shall take all such other action as is
reasonably requested by First Financial to permit First Financial to accomplish
the matters described in Section 4.09 of this Agreement.
5.12 No Solicitation. From and after the date hereof until the termination
of this Agreement, neither the Company and its subsidiaries, nor any of their
respective officers, directors, employees, representatives, agents or affiliates
(including, without limitation, any investment banker, attorney or accountant
retained by the Company or any of its subsidiaries), will, directly or
indirectly, initiate, solicit or knowingly encourage (including by way of
furnishing non-public information or assistance), or take any other action to
facilitate knowingly, any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition Proposal
(as defined below), or enter into or maintain or continue discussions or
negotiate with any person or entity in furtherance of such inquiries or to
obtain an Acquisition Proposal or agree to or endorse any Acquisition Proposal,
or authorize or permit any of its officers, directors or employees or any of its
subsidiaries or any investment banker, financial advisor, attorney, accountant
or other representative retained by any of its subsidiaries to take any such
action, and the Company shall notify First Financial orally (within one business
day) and in writing (as promptly as practicable) of all of the relevant details
relating to all inquiries and proposals which it or any of its subsidiaries or
any such officer, director, employee, investment banker, financial advisor,
attorney, accountant or other representative may receive relating to any of such
matters and if such inquiry or proposal is in writing, the Company shall deliver
to First Financial a copy of such inquiry or proposal promptly, provided however
that nothing in this Agreement shall prohibit the Board of Directors from
taking, or permitting any officers, employees or agents of the Company to take
any action legally required for the discharge of the fiduciary duties of the
Board of Directors of the Company. For purposes of this Agreement, "Acquisition
Proposal" shall mean any of the following (other than the transactions
contemplated hereunder) involving the Company or any of its subsidiaries: (i)
any merger, consolidation, share exchange, business combination, or other
<PAGE>
similar transaction; (ii) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition of 20% or more of the assets of the Company and its
subsidiaries, taken as a whole, in a single transaction or series of
transactions; (iii) any tender offer or exchange offer for 20% or more of the
outstanding shares of capital stock of the Company or the filing of a
registration statement under the Securities Act in connection therewith; or (iv)
any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing.
5.13 Other Approvals. The Company shall cooperate and use its best efforts
to obtain all written consents and approvals of other persons in connection with
any lease or other agreement the benefits of which cannot be retained upon
consummation of the transactions contemplated hereby without such written
consent or approval.
5.14 Best Efforts. The Company agrees to use its best efforts to cause the
conditions within its control to be satisfied and to effect the Reorganization.
5.15 Termination and Other Payments. Notwithstanding anything in this
Agreement to the contrary, all severance and termination payments, benefits,
acceleration of benefit vesting, and other compensation paid by the Company or
any Subsidiary, or First Financial or any subsidiary thereof, as provided for in
this Agreement, or otherwise, shall not exceed the level of payments and
benefits which would constitute parachute payments under Section 280G of the
IRC, giving effect to any obligations of First Financial or any subsidiary
thereof, as provided herein.
ARTICLE SIX
Conditions to Obligations of Each of the Parties
The obligation of each of the parties hereto to consummate the
transactions contemplated by this Agreement are subject to the satisfaction of
the following conditions at or prior to the Effective Time:
6.01 Approval by Affirmative Vote of Stockholders. This Agreement and the
Plan of Merger shall have been duly approved, confirmed and ratified by the
requisite vote of the stockholders of the Company.
6.02 Approval of Merger. Prior approval shall have been received from the
OTS of the acquisition by First Financial of the Company and of the Subsidiaries
without any conditions which in the reasonable opinion of First Financial or the
Company are materially adverse and such approval shall not have been withdrawn
or stayed.
6.03 Approval of Bank Merger. Prior approval shall have been received from
the OTS for the Bank Merger in the manner set forth herein and in the Bank
Merger Agreement without any conditions which in the reasonable opinion of First
Financial or the Company are materially adverse and such approval shall not have
been withdrawn or stayed.
<PAGE>
6.04 Tax Opinion. An opinion shall have been delivered by Hogan & Hartson
in form and substance reasonably satisfactory to First Financial and the Company
and to its counsel, that the Reorganization will qualify as a tax-free
reorganization under the Code and, except with regard to cash received in
exchange for fractional shares, that no gain or loss will be recognized by the
holders of Company Common Stock upon receipt of shares of First Financial Common
Stock in exchange for their shares of Company Common Stock.
6.05 Registration Statement. The Registration Statement filed by First
Financial with the SEC with respect to the First Financial Common Stock to be
issued pursuant to this Agreement and the Plan of Merger shall have become
effective and no stop order proceedings with respect thereto shall be pending or
threatened.
6.06 Blue Sky. First Financial shall have obtained any and all material
Blue Sky permits, authorizations, consents or approvals required for the
issuance of the First Financial Common Stock.
6.07 Other Approvals. All actions, consents or approvals, governmental or
otherwise, which are, or in the opinion of counsel for First Financial may be,
necessary to permit or enable First Financial, upon and after the Merger, and as
are or may be necessary to permit FF-Bank, upon and after the Bank Merger, to
conduct all or any part of the business of the Company and the Subsidiaries,
respectively, in the manner in which such activities and businesses are
conducted up to the Effective Time shall have been obtained without any
conditions which in the reasonable opinion of First Financial are materially
adverse, and shall not have been withdrawn or stayed.
6.08 Orders, Decrees and Judgments. Consummation of the transactions
contemplated by this Agreement shall not violate any order, decree or judgment
of any court or governmental body having competent jurisdiction.
6.09 Pooling Letter. The Company and First Financial shall have received,
within twenty-one (21) days after the execution of this Agreement, a letter from
Ernst & Young L.L.P. and KPMG Peat Marwick each of which is reasonably
satisfactory to the Company and First Financial to the effect that each of Ernst
& Young L.L.P. and KPMG Peat Marwick has reviewed the terms of this Agreement
and the transactions contemplated hereby and that nothing has come to its
attention which would render it incapable or otherwise affect its ability or
willingness to issue the opinion referred to in Section 8.11 hereof; provided,
however, in the event First Financial shall have waived prior to the expiration
of such period the condition contained in Section 8.11 hereof, this Section 6.09
shall be without any effect.
6.10 Fairness Opinion. An opinion shall have been received by the Company
from The Chicago Corporation, dated as of the date of this Agreement and
confirmed prior to distribution of the Prospectus/Proxy Statement to the
<PAGE>
stockholders of the Company as required by Section 5.01 of this Agreement, to
the effect that the consideration to be received by the Company's stockholders
pursuant to this Agreement is fair to the stockholders of the Company from a
financial point of view and such opinion shall not have been withdrawn or
materially modified prior to the vote of the stockholders.
6.11 Consents and Approvals. Any consents or approvals required to be
secured by either party by the terms of this Agreement or the Plan of Merger or
otherwise reasonably necessary in the opinion of First Financial or the Company
to consummate the transactions contemplated by this Agreement or the Plan of
Merger or the Bank Merger Agreement shall have been obtained and shall be
satisfactory to First Financial.
6.12 Schedules and Investigations. All Schedules of one party to this
Agreement which are provided to the other party to this Agreement as of the date
of this Agreement, shall modify the providing party's representations,
warranties, covenants and obligations and shall not constitute a breach or
default of any of the providing party's representations, warranties, covenants
and obligations under this Agreement. All Schedules provided after the date of
this Agreement pursuant to Article Three of this Agreement and all
investigations of the Company conducted by First Financial pursuant to Section
5.04 and all investigations of First Financial conducted by the Company pursuant
to Section 4.10 shall modify, and shall not constitute a breach or default of,
any of the representations, warranties, covenants or obligations of the party
providing the Schedule or being investigated, provided that in the event either
party learns of any information or matters from such Schedule or during any
investigation that such party believes may constitute or reveal a breach of the
other party's representations, warranties, covenants or obligations contained
herein, such party shall provide the other party with a written notice within 15
days of the provision of the Schedule or the completion of the investigation
specifying the information or matters learned and the basis upon which they may
constitute or reveal a breach of the other party's representations, warranties,
covenants or obligations and the other party shall have 30 days to respond to
such written notice. No breach of a representation, warranty, covenant or
obligation that is learned by a party contemplated by this Section 6.12 shall
constitute a breach of a representation, warranty, covenant or obligation of the
other party under any provision of or for any purpose under this Agreement,
unless the party learning of such breach provides the other party with a written
notice relating thereto delivered within the time period specified in the
immediately preceding sentence and the other party, in the reasonable opinion of
the notifying party, has not provided a sufficient response to such notice
within the time period specified in the immediately preceding sentence and the
notifying party exercises its right to terminate this Agreement on the basis
thereof in accordance with Article Nine.
6.13 No Burdensome Condition. None of the requisite regulatory approvals
referenced in Article Six shall impose any term, condition or restriction upon
First Financial, the Company, the Surviving Corporation, FF-Bank or any of their
respective Subsidiaries that First Financial or the Company, in good faith,
reasonably determines would so materially and adversely affect the economic or
business benefits of the transactions contemplated by this Agreement to First
Financial or the Company as to render inadvisable in the reasonable good faith
judgment of First Financial or the Company, the consummation of the Merger (a
"Burdensome Condition").
<PAGE>
6.14 Cooperation. The Company and First Financial will use best efforts
prior to the Effective Time to cause the closing condition at Section 8.13
hereof to be satisfied.
ARTICLE SEVEN
Further Conditions to the Obligations of The Company
The obligation of the Company to consummate the transactions contemplated
by this Agreement is further subject to the satisfaction of the following
conditions:
7.01 Compliance by First Financial. (a) All the terms, covenants and
conditions of this Agreement required to be complied with and satisfied by First
Financial at or prior to the Effective Time shall have been duly complied with
and satisfied in all material respects, and (b) the representations and
warranties made by First Financial shall be true and correct in all material
respects at and as of the Effective Time, except for those specifically relating
to a time or times other than the Effective Time (which shall be true and
correct in all material respects at such time or times), except for changes
permitted by this Agreement and the Plan of Merger, and except for those matters
which in the aggregate do not have a material adverse effect on the consolidated
financial condition and earnings of First Financial and its subsidiaries taken
as a whole, with the same force and effect as if made at and as of the Effective
Time.
7.02 Accuracy of Financial Statements. The Financial Statements and the
Subsequent Financial Statements heretofore or hereafter furnished by First
Financial to the Company shall not be inaccurate in any material respect.
7.03 Sufficiency of Documents. All documents and proceedings of First
Financial in connection with the Registration Statement, the Prospectus/Proxy
Statement, regulatory filings and the Closing, as hereinafter defined,
contemplated by this Agreement and the Plan of Merger shall be provided to
counsel to the Company for review and comment prior to filing.
7.04 Opinion of Counsel. There shall have been delivered and addressed to
the Company an opinion of Robert M. Salinger, General Counsel to First
Financial, in form and substance reasonably satisfactory to counsel to the
Company, dated the Closing Date, to the effect that:
(a) First Financial is a corporation duly organized, validly existing
and in good standing under the laws of the State of Wisconsin, and
FFC-Acquisition is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware;
<PAGE>
(b) First Financial and FFC-Acquisition have the corporate power and
authority to carry on its business as now conducted, to own, lease and operate
its properties and to consummate the transactions contemplated by this Agreement
and the Plan of Merger;
(c) this Agreement and the Plan of Merger have been duly authorized,
executed and delivered by First Financial and FFC-Acquisition and constitute the
valid and binding obligation of First Financial and FFC-Acquisition;
(d) as of the close of business on September 30, 1994, the
capitalization of First Financial was as set forth in Section 2.03 hereof;
(e) all corporate acts and other proceedings required to be taken by
or on the part of First Financial to consummate the transactions contemplated by
this Agreement and the Plan of Merger have been properly taken; neither the
execution and delivery of this Agreement or the Plan of Merger, nor the
consummation of the transactions contemplated hereby and thereby, with or
without the giving of notice or the lapse of time, or both, will (x) violate any
provision of the Articles of Incorporation or Bylaws of First Financial, or (y)
to the knowledge of such counsel, violate, conflict with, result in the breach
or termination of, constitute a default under, accelerate the performance
required by, or result in the creation of any material lien, charge or
encumbrance upon any of the properties or assets of First Financial pursuant to
any indenture, mortgage, deed of trust, or other agreement or instrument to
which it is a party or by which it or any of its properties or assets may be
bound, or violate any statute, rule or regulation applicable to First Financial,
which would have a material adverse effect on First Financial's consolidated
financial condition, assets, liabilities or business; to the knowledge of such
counsel, no consent, approval, authorization, order, registration or
qualification of or with any court, regulatory authority or other governmental
body, other than as specifically contemplated by this Agreement, is required for
the consummation by First Financial of the transactions contemplated by this
Agreement or the Plan of Merger;
(f) the First Financial Common Stock to be issued in exchange for the
Company Common Stock has been duly authorized and, when such First Financial
Common Stock is issued and delivered as contemplated by this Agreement and the
Plan of Merger, all such First Financial Common Stock will have been validly
issued, fully paid and nonassessable except as provided by Section
180.0622(2)(b) of the Wisconsin Business Corporation Code;
(g) the Registration Statement has been declared effective by the SEC
or has become effective and, to the knowledge of such counsel, no stop order
proceedings are pending or threatened with respect thereto by the SEC or state
securities authorities;
<PAGE>
(h) except as disclosed in such opinion, to the knowledge of such
counsel there are no actions, suits, proceedings or investigations of any nature
pending or threatened that challenge the validity or propriety of the
transactions contemplated by this Agreement or the Plan of Merger or which seek
or threaten to restrain, enjoin or prohibit or to obtain substantial damages in
connection with the consummation of such transactions; and
(i) the Prospectus/Proxy Statement as of the date thereof and as
amended or supplemented prior to the date of the meeting of the Company's
stockholders referred to in Section 5.01 (except as to financial statements and
other financial data contained therein, upon which such counsel need express no
opinion) complies as to form in all material respects with the requirements of
the Securities Act and the rules and regulations thereunder; such counsel has
participated in the preparation of the Prospectus/Proxy Statement, and although
such counsel has not independently verified the information contained therein,
nothing has come to the attention of such counsel to lead such counsel to
believe that the Prospectus/Proxy Statement, as of the date thereof and as
amended and supplemented prior to the date of the meeting of the Company's
stockholders referred to in Section 5.01, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading (except that such counsel need express no opinion, with
respect to financial statements and other financial data contained therein or
with respect to matters relating to the Company or its business, properties,
management, or securities), and such counsel does not know of any contracts or
other documents relating to First Financial of a character required to be filed
with the Prospectus/Proxy Statement as of such dates, or of any documents, other
contracts, statutes or legal or governmental proceedings relating to First
Financial required to be described therein which are not filed or described as
required.
(j) all regulatory and governmental approvals and consents which are
necessary to be obtained by First Financial and its subsidiaries to permit the
execution, delivery and performance of the Agreement and Plan of Reorganization,
the Agreement and Plan of Merger and the Bank Merger Agreement have been
obtained.
7.05 Officers' Certificate. First Financial shall deliver to the Company a
certificate signed by its Chairman and Chief Executive Officer or President and
Chief Operating Officer or any Executive Vice President and by its Secretary or
Assistant Secretary, dated the Closing Date, certifying to his respective best
knowledge and belief, that First Financial has met and fully complied with all
conditions necessary to make this Agreement and the Plan of Merger effective as
to it. First Financial shall have delivered all such other certificates and
documents with respect to First Financial as may reasonably have been requested
by the Company.
7.06 Absence of Certain Changes or Events. From the date hereof to the
Effective Time, there shall be and have been no material adverse change in the
consolidated capitalization, business, properties or financial condition of
First Financial.
<PAGE>
7.07 Consents and Approvals. Any consents or approvals required to be
secured by either party by the terms of this Agreement or the Plan of Merger or
otherwise reasonably necessary in the opinion of the Company to consummate the
transactions contemplated by this Agreement or the Plan of Merger shall have
been obtained and shall be satisfactory to the Company.
7.08 Litigation. First Financial shall not be made a party to, or to the
knowledge of First Financial threatened by, any actions, suits, proceedings,
litigation or legal proceedings which, in the reasonable opinion of the Company,
have or are likely to have a material adverse effect on the consolidated assets,
properties, business, operations or condition, financial or otherwise, of First
Financial. No action, suit, proceeding or claim shall have been instituted, made
or threatened by any person relating to the Merger or the validity or propriety
of the transactions contemplated by this Agreement or the Plan of Merger.
ARTICLE EIGHT
Further Conditions to the Obligations of First Financial
The obligation of First Financial to consummate the transactions
contemplated by this Agreement is further subject to satisfaction of the
following conditions:
8.01 Compliance by the Company. (a) All the terms, covenants and
conditions of this Agreement required to be complied with and satisfied by the
Company at or prior to the Effective Time shall have been duly complied with and
satisfied in all material respects, and (b) the representations and warranties
made by the Company shall be true and correct in all material respects at and as
of the Effective Time, except for those specifically relating to a time or times
other than the Effective Time (which shall be true and correct in all material
respects at such time or times) and except for changes permitted by this
Agreement and the Plan of Merger, with the same force and effect as if made at
and as of the Effective Time.
8.02 Accuracy of Financial Statements. The Company Financial Statements,
Company Schedules and Subsequent Company Financial Statements heretofore or
hereafter furnished to First Financial shall not be inaccurate in any material
respect.
8.03 Net Worth. As of the close of business on the day immediately
preceding the Effective Time and without consideration of the recognition or
payment of the fees and expenses incurred in connection with this transaction,
the Company's net worth as shown by the sum of its total stockholders' equity
plus the allowance for loan losses, but excluding unrealized losses on
securities and writedowns of certain assets set forth in Schedule 8.03, shall
not be less than such amount as set forth in the Company Consolidated Statement
of Financial Condition at September 30, 1994. The Company shall deliver to First
Financial a certificate signed by its chief financial officer, dated the Closing
Date, certifying to such effect.
<PAGE>
8.04 Sufficiency of Documents, Proceedings. All documents delivered by and
proceedings of the Company in connection with the transactions contemplated by
this Agreement and the Plan of Merger shall be reasonably satisfactory to First
Financial.
8.05 Opinion of Counsel. There shall have been delivered to First
Financial an opinion of Muldoon, Murphy & Faucette, special counsel to the
Company, in form and substance reasonably satisfactory to First Financial, dated
the Closing Date, to the effect that:
(a) the Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and First Federal
is a federally chartered stock savings association duly organized and in
existence under the laws of the United States;
(b) the Company has the corporate power and authority to carry on its
business as described in the Prospectus/Proxy Statement, to own, lease and
operate their properties and to consummate the transactions contemplated by this
Agreement and the Plan of Merger and the Subsidiaries have the corporate power
and authority to carry on their business as described in the Prospectus/Proxy
Statement and to own, lease and operate its properties and First Federal has the
authority to consummate the transactions contemplated by the Bank Merger
Agreement;
(c) this Agreement and the Plan of Merger have been duly authorized
and approved by the Company and this Agreement and the Plan of Merger and the
transactions contemplated thereby have been approved by the requisite vote of
the Company's stockholders and duly authorized, executed and delivered by the
Company and this Agreement and the Plan of Merger constitute the valid and
binding obligation of the Company;
(d) the authorized capitalization of the Company is as set forth in
Section 3.03 hereof;
(e) all corporate acts and other proceedings required to be taken by
or on the part of the Company, including the adoption of this Agreement and the
Plan of Merger by the stockholders of the Company, to consummate the
transactions contemplated by this Agreement and the Plan of Merger have been
properly taken; neither the execution and delivery of this Agreement and the
Plan of Merger nor the consummation of the transactions contemplated hereby and
thereby, with or without the giving of notice or the lapse of time, or both,
will (i) violate any provision of the Certificate or Charter or Bylaws of the
Company or the Subsidiaries; or (ii) to the best knowledge of such counsel,
violate, conflict with, result in the material breach or termination of,
constitute a material default under, accelerate the performance required by, or
result in the creation of any material lien, charge or encumbrance upon any of
the properties or assets of the Company or the Subsidiaries pursuant to any
indenture, mortgage, deed of trust, or other agreement or instrument to which
the Company or the Subsidiaries are a party or by which it or any of their
properties or assets may be bound, or violate any statute, rule or regulation
applicable to the Company or the Subsidiaries, which would have a material
adverse effect on the financial condition, assets, liabilities or business of
<PAGE>
the Company or the Subsidiaries; to the best knowledge of such counsel, no
consent, approval, authorization, order, registration or qualification of or
with any court, regulatory authority or other governmental body, other than as
specifically contemplated by this Agreement and the Bank Merger Agreement, is
required for the consummation by the Company or the Subsidiaries of the
transactions contemplated by this Agreement, the Plan of Merger or the Bank
Merger Agreement;
(f) to the knowledge of such counsel, since September 30, 1994,
neither the Company nor the Subsidiaries have granted any options, warrants,
calls, agreements or commitments of any character relating to any of the shares
of the Company or the Subsidiaries, nor has the Company or the Subsidiaries
granted any rights to purchase or otherwise acquire from the Company or the
Subsidiaries any shares of the Company's or the Subsidiaries' capital stock,
except as provided in this Agreement;
(g) except as disclosed in such opinion, to the knowledge of such
counsel there are no actions, suits, proceedings or investigations of any nature
pending or threatened that challenge the validity or legality of the
transactions contemplated by this Agreement or the Plan of Merger or the Bank
Merger Agreement or which seek or threaten to restrain, enjoin or prohibit (or
obtain substantial damages in connection with) the consummation of such
transactions;
(h) except as disclosed in said opinion, such counsel
(notwithstanding anything contained herein to the contrary, the opinion provided
in this Section 8.05(h) may be provided by legal counsel to the Company other
than Muldoon, Murphy & Faucette, provided that such other legal counsel is
reasonably acceptable to First Financial) does not know of any litigation,
appraisal or other proceeding or governmental investigation pending or
threatened against or relating to the business or property of the Company or the
Subsidiaries which would have a materially adverse effect on the consolidated
financial condition of the Company or the financial condition of First Federal,
or of any legal impediment to the continued operation of the properties and
business of the Company or the Subsidiaries in the ordinary course after the
consummation of the transactions contemplated by this Agreement and the Plan of
Merger or by the Bank Merger Agreement; and
(i) such counsel has participated in the preparation of the
Prospectus/Proxy Statement and, although such counsel has not independently
verified the information contained therein, nothing has come to the attention of
such counsel to lead such counsel to believe that the Prospectus/Proxy
Statement, as of the date thereof and as amended and supplemented prior to the
date of the meeting of the Company's stockholders referred to in Section 5.01,
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading (except that such
counsel need express no opinion with respect to financial statements and other
financial data contained therein or with respect to matters relating to First
Financial or its business, properties, management or securities), and such
counsel does not know of any contracts or other documents relating to the
Company or the Subsidiaries of a character required to be filed with the
Prospectus/Proxy Statement as of such dates, or of any documents, other
contracts, statutes or legal or governmental proceedings relating to the Company
or the Subsidiaries required to be described therein which are not filed or
described as required.
<PAGE>
8.06 Officers' Certificate. The Company shall deliver to First Financial a
certificate signed by its Chairman of the Board or President and Chief Executive
Officer and by its Secretary, dated the Effective Time, certifying in their
official capacity to their respective best knowledge and belief that the Company
has met and fully complied with all conditions necessary to make this Agreement
and the Plan of Merger effective as to the Company. The Company shall have
delivered all such other certificates and documents with respect to the Company
as may reasonably have been requested by First Financial.
8.07 Absence of Certain Changes or Events. As of the Closing Date, there
shall have been no "Material Adverse Change in the Company" (as defined below)
from that which was represented and warranted on the date of this Agreement
pursuant to this Agreement and the Schedules provided or to be provided pursuant
to Section 6.12, it being understood that any updates provided pursuant to this
Agreement does not constitute a waiver or other consent to any Material Adverse
Change in the Company, and it being further understood that no breach or default
shall occur with respect to any representation, warranty, obligation or
condition of the Company, unless any such breach or default individually, or all
such breaches and defaults in the aggregate, constitute a Material Adverse
Change in the Company (as defined below). For purposes of this Section 8.07, a
Material Adverse Change in the Company shall mean (a) any material adverse
change in the business, financial condition, operating results or prospects of
the Company and the Subsidiaries taken as a whole; or (b) the existence of any
pending or threatened litigation or administrative action which (i) creates any
reasonable possibility that the Company or the Subsidiaries may incur a material
loss that has not been reserved against; (ii) challenges any portion of the
Reorganization, and which, in the reasonable opinion of First Financial, would
be likely to enjoin consummation, or result in rescission, of the
Reorganization; or (iii) First Financial's board of directors determines, in the
exercise of its fiduciary duty, would render consummation of the Reorganization
adverse to the best interests of First Financial's stockholders.
8.08 Litigation. Except as set forth in Schedule 8.08, neither the Company
nor the Subsidiaries shall be made a party to, or, to the knowledge of the
Company, threatened by, any actions, suits, proceedings, litigation or legal
proceedings which, in the reasonable opinion of First Financial, have or are
likely to have a material adverse effect on the consolidated assets, properties,
business, operations or condition, financial or otherwise, of the Company or the
assets, properties, business, operations or condition, financial or otherwise,
of First Federal, nor shall any director or officer or former director or
officer of the Company or the Subsidiaries be made a party to, or threatened by,
any actions, suits, proceedings, litigation or legal proceedings relating to
their performance or nonperformance of their legal or fiduciary duties as
directors and officers of the Company or the Subsidiaries which in the
reasonable opinion of the Board of Directors of First Financial is likely to
<PAGE>
have a material adverse effect on the Company on a consolidated basis or First
Federal. No action, suit, proceeding or claim shall have been instituted, made
or threatened by any person relating to the Merger or the validity or propriety
of the transactions contemplated by this Agreement or the Plan of Merger or the
Bank Merger Agreement which would make consummation of the Merger or the Bank
Merger inadvisable in the reasonable opinion of First Financial.
8.09 Transfer by Affiliates. At or prior to thirty (30) days prior to the
Effective Time, the Company shall have entered into agreements with each of its
affiliates, as such term is defined in Rule 144 under the Securities Act, by
which each such affiliate shall have agreed to make no disposition of the
Company Common Stock during the thirty (30) day period immediately preceding the
Effective Time.
8.10 Bank Merger Agreement. The Bank Merger Agreement shall have been duly
authorized and approved by First Federal and the other terms and conditions of
the Bank Merger Agreement shall have been satisfied so as to permit the Bank
Merger to be consummated as contemplated thereby.
8.11 Pooling of Interests. First Financial shall have received an opinion,
dated as of the Effective Time, from Ernst & Young L.L.P. that the
Reorganization shall be accounted for as a pooling of interests.
8.12 Affiliation Audit. No later than forty-five (45) days after the
execution of this Agreement, at First Financial's expense, First Financial or,
at First Financial's option, an independent certified public accountant
designated by First Financial, shall have examined the Company's and the
Subsidiaries' operations, properties, books, contracts, commitments, and records
and, after appropriate inquiry and examination with respect to the financial
conditions, results of operations, quality of the loan and bond portfolios and
the adequacy of the allowance for loan losses of the Company and the
Subsidiaries as of the affiliation audit date, First Financial shall have
received an audit report the results of which, in the reasonable opinion of
First Financial, are satisfactory to First Financial.
8.13 No Parachute Payments. Notwithstanding anything in this Agreement to
the contrary as of the Effective Time, there shall exist no contractual or other
obligations or arrangements of the Company or any of its Subsidiaries that
provide for, or that under any circumstances would result in, payments that,
individually or in the aggregate, constitute "parachute payments" within the
meaning of Section 280G of the Code.
ARTICLE NINE
Abandonment
9.01 Abandonment. This Agreement may be terminated and the Plan of Merger
abandoned at any time prior to the filing of the Certificate of Merger as
provided in Section 11.02 hereof (whether before or after approval of this
Agreement and the Plan of Merger by the stockholders of the Company):
<PAGE>
(a) by agreement between First Financial and the Company authorized
by a majority of the entire Board of Directors of each;
(b) by either First Financial or the Company if adversely affected
and if any of the conditions set forth in Article Six hereof shall not have been
fulfilled and shall not have been waived pursuant to Section 10.01 (b) hereof or
shall become impossible of fulfillment;
(c) by the Company if any of the conditions set forth in Article
Seven hereof shall not have been fulfilled and shall not have been waived
pursuant to Section 10.01 (b) hereof or shall become impossible of fulfillment;
(d) by First Financial if any of the conditions set forth in Article
Eight hereof shall not have been fulfilled and shall have not been waived
pursuant to Section 10.01 (b) hereof or shall become impossible of fulfillment;
(e) by either First Financial or the Company in the event of a
material breach by the opposite party of any representation, warranty, covenant
or agreement contained herein which has not been cured within thirty (30) days
after written notice of such breach has been given to the party causing such
breach;
(f) by either First Financial or the Company in the event the Merger
is not consummated on or before July 31, 1995; or
(g) by First Financial in the event that the Average Price is less
than $13.25; provided, however, that no termination pursuant to this subsection
(g) shall occur in the event that First Financial shall notify the Company of
its election to terminate pursuant to this subsection (g) and within two (2)
business days thereafter the Company shall notify First Financial of its
election to consummate the Merger with the exchange ratio being 2.06 shares of
First Financial Common Stock for each outstanding share of FirstRock Common
Stock.
(h) by the Company in the event that the Average Price is greater
than $20.00; provided, however, that no termination pursuant to the Subsection
(h) shall occur in the event that the Company shall notify First Financial of
its election to terminate pursuant to this Subsection (h) and within two (2)
business days thereafter First Financial shall notify the Company of its
election to consummate the Merger with the exchange ratio being 1.365 shares of
First Financial Common Stock for each outstanding share of FirstRock Common
Stock.
9.02 Effect of Abandonment. In the event this Agreement is terminated and
the Plan of Merger abandoned as provided in Section 9.01, this Agreement and the
Plan of Merger shall become void and of no further force and effect without any
liability on the part of the terminating party or parties or their respective
stockholders, directors or officers; provided, however, that Section 4.04 and
<PAGE>
Section 5.05 of this Agreement shall survive any such abandonment. In the event
of termination of this Agreement and abandonment of the Plan of Merger as
provided in Section 9.01, written notice thereof and the reasons therefor shall
be given to the other parties by the terminating party.
ARTICLE TEN
Modifications, Amendments and Waiver
10.01 Modifications, Amendments and Waiver. At any time prior to the
Effective Time and before or after stockholder approval of this Agreement or the
Plan of Merger, the Company, First Financial and FFC-Acquisition may, (a) by
written agreement executed by a duly authorized officer of each, and in the case
of the Company approved by its Board of Directors, extend the time for the
performance of any of the obligations or other acts of the parties hereto, (b)
by written notice executed by a duly authorized officer of the party adversely
affected waive compliance in whole or in part with any of the covenants,
agreements or conditions contained in this Agreement or the Plan of Merger, or
(c) by written agreement executed by a duly authorized officer of each, make any
other amendment or modification of this Agreement or the Plan of Merger;
provided, however, that, after stockholder approval of this Agreement, no such
extension, waiver, amendment or modification shall adversely affect the amount
of the consideration to be received in the Merger by the stockholders of the
Company. Any such extension, waiver, amendment or modification shall be
conclusively evidenced by the execution and delivery of the same by the Chairman
and Chief Executive Officer, the President and Chief Operating Officer or any
Executive Vice President in the case of First Financial or FFC-Acquisition, or
the Chairman of the Board or the President and Chief Executive Officer in the
case of the Company, attested to by the Secretary or Assistant Secretary of each
party. The failure of any party at any time or times to require performance of
any provision hereof shall in no manner affect such party's right at a later
time to enforce the same. No waiver by any party of any condition or of the
breach of any term contained in this Agreement or the Plan of Merger, whether by
conduct or otherwise, in any one or more instances shall be deemed to be or
construed as a further or continuing waiver of any such condition or a waiver of
any other condition or of the breach of any other term of this Agreement or the
Plan of Merger.
ARTICLE ELEVEN
Miscellaneous
11.01 Closing. A closing (the "Closing") of the transactions provided for
herein shall take place without a meeting on the first business day after all
approvals required hereby have been received and all applicable waiting periods
have expired, or on such later day and at such other place as the parties may
agree (the "Closing Date"). In the event the Closing does not take place on the
date referred to in the preceding sentence because any condition to the
<PAGE>
obligations of any party under this Agreement and the Plan of Merger is not met
on that date, the other parties to this Agreement may postpone the Closing to
any designated subsequent business day by giving the nonperforming party to this
Agreement notice of the postponed date. At the Closing the parties will exchange
the certificates, opinions, and other documents called for herein. Subject to
the terms and conditions hereof, consummation of the Merger in the manner
described herein shall be accomplished as soon as practicable after the exchange
of the documents at the Closing has been completed.
11.02 Certificate of Merger. Subject to the provisions of this Agreement,
on the Closing Date, as herein defined, the Certificate of Merger described in
Section 1.06, shall be signed, verified and affirmed as required by the Delaware
Law and duly filed with the Secretary of State of the State of Delaware.
11.03 Procurement of Approvals. First Financial, FFC-Acquisition and the
Company shall each use its best efforts to proceed as expeditiously as possible
and cooperate fully in the procurement of any required consents and approvals
and in the taking of any other action, and the satisfaction of all other
requirements prescribed by law or otherwise, necessary for the consummation of
the Merger on the terms provided herein and in the Plan of Merger and in the
Bank Merger Agreement, including, without being limited to, preparation by First
Financial and submission of any required application for prior approval of the
OTS, an application for prior approval of the Bank Merger by the OTS,
preparation by First Financial and submission under the Securities Act of the
Registration Statement, the preparation of the Prospectus/Proxy Statement by the
Company and First Financial and the distribution of the Prospectus/Proxy
Statement and the solicitation of proxies by the Company.
11.04 Further Acts. Each of the parties (a) shall perform such further
acts and execute such further documents as may be reasonably required to effect
the Merger (including, without limitation, the certification, execution,
acknowledgement and filing of the Plan of Merger) and to effect the Bank Merger
and (b) shall use all reasonable efforts to satisfy or obtain the satisfaction
of the conditions set forth in Articles Six, Seven and Eight hereof.
11.05 Notices. All documents, notices, requests, demands and other
communications that are required or permitted to be delivered or given under
this Agreement and the Plan of Merger shall be in writing and shall be deemed to
have been duly delivered or given upon the delivery or mailing thereof, as the
case may be, if delivered personally or sent by registered or certified mail,
return receipt requested, postage prepaid:
(a) if to the Company, to:
FIRSTROCK BANCORP, INC.
612 North Main Street
Rockford, Illinois 61103
ATTENTION: David Ingrassia
President and Chief Executive Officer
<PAGE>
with a copy to: Muldoon, Murphy & Faucette
5101 Wisconsin Avenue, N.W.
Washington, D.C. 20016
ATTENTION: John Bruno, Esq.
(b) and if to First Financial or FFC-Acquisition to:
FIRST FINANCIAL CORPORATION
1305 Main Street
Stevens Point, WI 54481
ATTENTION: John C. Seramur, President and
Chief Executive Officer
with a copy to: Hogan & Hartson L.L.P.
555 Thirteenth Street, N.W.
Washington, DC 20004-1109
ATTENTION: Stuart G. Stein, Esq.
or to such other person or address as a party hereto shall specify hereunder.
11.06 Expenses. The Company and First Financial shall each pay all of
their own fees and expenses incident to the negotiation, preparation, execution
and performance of this Agreement, the Bank Merger Agreement, shareholders'
meetings, including the fees and expenses of their own counsel, accountants,
investment bankers and other experts, whether or not the transactions
contemplated by this Agreement are consummated; provided, however, in the event
this Agreement is terminated by either party hereto as a result of a
misrepresentation or a breach of any representation, warranty, or covenant
contained herein, the terminating party shall be entitled to recover from the
other party the fees and expenses incurred by the terminating party incident
hereto. First Financial and the Company each agree to indemnify and hold the
other harmless, and their respective officers, directors and affiliates, against
and in respect of any and all claims made by, and losses incurred with respect
to, third parties that arise out of or are based upon any misrepresentation or
breach by the indemnifying party of any representation, warranty or covenant
contained herein, including but not limited to, damages, judgments, settlements,
attorneys' fees and costs; provided, however, that neither First Financial nor
the Company shall be held liable for false statements made in the
Prospectus/Proxy Statement, Registration Statement or any application filed in
connection with this Agreement to the extent such false statement was based upon
information provided in writing by the other.
11.07 Nonsurvival of Representations and Warranties. No representation or
warranty contained in this Agreement or the Plan of Merger (other than contained
in Section 2.08 relating to regulatory filings, Section 2.11 relating to shares
of First Financial Common Stock to be issued pursuant to the Plan of Merger,
Section 4.05 relating to indemnification, Section 11.06 relating to expenses and
Article III of the Plan of Merger relating to the issuance of the First
Financial Common Stock to stockholders of the Company) shall survive the Merger.
<PAGE>
11.08 Discussions With Other Banks, Bank Holding Companies, Savings
Associations and Bank-Related Businesses. First Financial now or in the future
may be discussing possible affiliation with other financial institutions or
their holding companies or bank-related businesses but such discussions, if any,
are preliminary in nature and there can be no assurance at this time that
agreements for affiliation will be reached, or if reached, will be consummated.
However, it is agreed that additional financial institutions or their holding
companies or bank-related businesses may become affiliated with First Financial
prior to, concurrently with, or after the date hereof, on such terms as First
Financial and any such other financial institutions or their holding company or
bank-related business may in their discretion agree. First Financial agrees that
any affiliation between First Financial and any financial institutions or their
holding companies or banking related business, currently in process or which may
be proposed in the future, shall not result in the undue delay in the
affiliation of First Financial and the Company.
11.09 Entire Agreement. This Agreement, the Plan of Merger, the Company
Schedules and the Bank Merger Agreement constitute the entire agreement and
understanding of the parties with respect to the transactions contemplated
hereby and thereby, supersede any and all prior agreements and understandings
relating to the subject matter hereof and thereof and may not be modified,
amended or terminated except in writing signed by each of the parties hereto.
11.10 Governing Law. This Agreement and the Plan of Merger shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware as such laws are applied to contracts entered into to be
performed entirely within Delaware.
11.11 Binding Effect and Parties in Interest. This Agreement and the Plan
of Merger may not be assigned by any party hereto without the written consent of
the other parties. This Agreement and the Plan of Merger shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, expressed or
implied, is intended to confer upon any other person any rights or remedies of
any nature whatsoever under or by reason of this Agreement and the Plan of
Merger otherwise than as specifically provided herein.
11.12 Captions. The caption headings of the Articles, Sections and
subsections of this Agreement are for convenience of reference only and are not
intended to be, and should not be construed as, a part of this Agreement or the
Plan of Merger.
11.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original instrument and all
of which together shall constitute a single agreement.
11.14 Severability Clause. If any provision of this Agreement or the Plan
of Merger shall be held invalid, the remainder shall nevertheless, be deemed
valid and effective.
<PAGE>
11.15 Identification. This Agreement may be identified by date of
execution of the last to sign of First Financial, FFC-Acquisition and the
Company.
IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement as of the date set forth hereafter.
FIRSTROCK BANCORP, INC.
By: /s/ David A. Ingrassia
________________________________
David A. Ingrassia, President
Dated: October 26, 1994
Attest: /s/ Donna Beilfuss
_________________________________
Donna Beilfuss, Secretary
FIRST FINANCIAL CORPORATION
By: /s/ John C. Seramur
_________________________________
John C. Seramur, President
Dated: October 26, 1994
Attest: /s/ Robert M. Salinger
_________________________________
Robert M. Salinger, Secretary
FIRST FINANCIAL ACQUISITION COMPANY
By: /s/ John C. Seramur
________________________________
John C. Seramur, President
Dated: October 26, 1994
Attest: /s/ Robert M. Salinger
_________________________________
Robert M. Salinger, Secretary
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger is made and entered into as of ____,
1994, between First Financial Acquisition Company, a Delaware corporation
("FFC-Acquisition"), and FirstRock Bancorp, Inc., a Delaware corporation, (the
"Company"), joined in by First Financial Corporation, a Wisconsin corporation
("First Financial"). FFC-Acquisition and the Company are hereinafter sometimes
collectively referred to as the "Constituent Corporations." First Financial is a
party to this Agreement and Plan of Merger as a parent party corporation and not
as a constituent corporation.
RECITALS
FFC-Acquisition is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. As of the date hereof,
the authorized capital stock of FFC-Acquisition consists of 1000 shares of
Common Stock, $0.01 par value per share, all of which are owned by First
Financial.
The Company is a corporation duly organized and validly existing under the
laws of the State of Delaware. As of the date hereof, the authorized capital of
the Company consists of 3,500,000 shares of Company common stock, $.01 par value
per share ("Company Common Stock"), of which 2,388,171 shares are issued and
outstanding and of which 256,829 shares are held in the treasury of the Company.
FFC-Acquisition, the Company and First Financial have entered into an
Agreement and Plan of Reorganization dated as of October 26, 1994 (the
"Agreement"), setting forth certain representations, warranties, covenants and
agreements in connection with the transactions therein and herein contemplated
and which contemplates the merger of the Company with and into FFC-Acquisition
with and into the Company (the "Merger") in accordance with this Agreement and
Plan of Merger.
First Financial will authorize the issuance of shares of its Common Stock,
par value $1.00 per share (the "First Financial Common Stock"), for the purposes
of the Agreement and this Agreement and Plan of Merger.
The respective Boards of Directors of the Company, First Financial and
FFC-Acquisition deem the Merger advisable and in the best interests of each such
corporation and their respective shareholders. The respective Boards of
Directors of the Company, First Financial and FFC-Acquisition, by resolutions
duly adopted, have approved the Agreement and approved this Agreement and Plan
of Merger, and this Agreement and Plan of Merger has been submitted to and
approved by the requisite vote of the Company's and FFC-Acquisition's
stockholders.
<PAGE>
Therefore, in consideration of the premises and the mutual covenants and
agreements herein contained, the parties hereto hereby covenant and agree as
follows:
ARTICLE I
1.01 Merger of the Company into FFC-Acquisition. The Company
FFC-Acquisition shall be merged into FFC-Acquisition the Company at the
Effective Time as that term is defined in the Agreement. The separate corporate
existence of the Company shall thereupon cease and FFC-Acquisition shall be the
surviving corporation. FFC-Acquisition is herein sometimes referred to as the
"Surviving Corporation." FFC-Acquisition shall be merged with and into the
Company in accordance with applicable provisions of the Delaware General
Corporation Law (the "Delaware Law") and on the terms and subject to the
conditions contained in the Agreement. Simultaneously with the effectiveness of
the Merger, (a) the separate existence of FFC-Acquisition shall cease and (b)
the Company, as the surviving corporation (the "Surviving Corporation"), shall
continue to exist under and be governed by the Delaware Law.
1.02 Effect of the Merger. From and after the Effective Time:
(a) The separate existence of the Company FFC-Acquisition shall cease
and be merged into the Surviving Corporation, which shall possess all of the
rights, privileges, immunities, powers and franchises of a public as well as of
a private nature, and shall be subject to all of the restrictions, disabilities
and duties, of each of the Company and FFC-Acquisition; and all singular rights,
privileges, immunities, powers and franchises of each of the Company and
FFC-Acquisition, and all property, real, personal and mixed, and all debts due
to either the Company or FFC-Acquisition on whatever account, including
subscriptions to shares, and all other things in action or belonging to each of
the Company and FFC-Acquisition shall be vested in FFC-Acquisition as the
Surviving Corporation; and all property, rights, privileges, immunities, powers
and franchises, and all and every interest, shall be thereafter as effectually
the property of FFC-Acquisition as the Surviving Corporation as they were of the
Company and FFC-Acquisition and the title to any real estate, or interest
therein, vested by deed or otherwise, in either of the Company and
FFC-Acquisition shall not revert or be in any way impaired by reason of the
Merger.
(b) All rights of creditors and all liens upon any property of the
Company or FFC-Acquisition shall be preserved unimpaired and all debts,
liabilities and duties of the Company or FFC-Acquisition shall thenceforth
attach to FFC-Acquisition as the Surviving Corporation and may be enforced
against FFC-Acquisition as the Surviving Corporation to the same extent as if
said debts, liabilities and duties had been incurred or contracted by it;
provided, however, that all such liens shall attach only to those assets to
which they were attached prior to the Effective Time.
(c) Any action or proceeding, whether civil, criminal or
administrative, instituted, pending or threatened by or against either the
Company or FFC-Acquisition or relating to their assets, liabilities or shares of
common stock shall be prosecuted as if the Merger had not taken place, and
FFC-Acquisition as the Surviving Corporation may be substituted as a party in
such action or proceeding in place of the Company FFC-Acquisition.
<PAGE>
1.03 Additional Actions. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any further assignments
or assurances in law or any other acts are necessary or desirable to (a) vest,
perfect or confirm, of record or otherwise, in the Surviving Corporation its
rights, title or interest in, to or under any of the rights, properties or
assets of the Company acquired or to be acquired by the Surviving Corporation as
a result of, or in connection with, the Merger, or (b) otherwise carry out the
purposes of the Agreement and this Agreement and Plan of Merger, the Company and
its proper officers and directors shall be deemed to have granted to the
Surviving Corporation an irrevocable power of attorney to execute and deliver
all such proper deeds, assignments and assurances in law and to do all acts
necessary or proper to vest, perfect or confirm title to and possession of such
rights, properties or assets in the Surviving Corporation and otherwise to carry
out the purposes of the Agreement and this Agreement and Plan of Merger; and the
proper officers and directors of the Surviving Corporation are fully authorized
in the name of the Company or otherwise to take any and all such action.
ARTICLE II
2.01 Name. The name of the Surviving Corporation shall be "First Financial
Acquisition Company."
2.02 Articles of Incorporation. From and after the Effective Time, the
Articles of Incorporation of FFC-Acquisition the Surviving Corporation shall be
amended to be in the form of the Articles of Incorporation of the Surviving
Corporation FFC-Acquisition in effect immediately prior to the Merger.
2.03 Bylaws. The Bylaws of FFC-Acquisition, as in effect immediately prior
to the Effective Time, shall be the Bylaws of the Surviving Corporation until
duly amended in accordance with law.
2.04 Directors and Officers. The directors and officers of FFC-Acquisition
immediately prior to the Effective Time shall be the sole directors and officers
of the Surviving Corporation.
ARTICLE III
3.01 Manner and Basis of Converting Shares of FFC-Acquisition. At the
Effective Time, each share of FFC-Acquisition Common Stock which is outstanding
immediately prior to the Effective Time shall continue to be outstanding without
any change therein shall, by virtue of the Merger, automatically and without any
action on the part of the holder thereof, be converted into the right to receive
the same number of shares of common stock of the Surviving Corporation.
3.02 Manner and Basis of Converting Shares of Company Stock.
(a) Any shares of Company Common Stock or any other class or series
of stock of the Company held in the treasury of the Company immediately prior to
the Effective Time shall be canceled, and no First Financial Common Stock shall
be issuable or exchangeable with respect thereto.
<PAGE>
(b) Subject to Sections 9.01(g) and (h) of the Agreement, each share
of the Company's Common Stock issued and outstanding immediately prior to the
Effective Time shall be converted into and represent the right to receive and be
exchangeable for such number of shares (rounded to the nearest ten thousandth of
a share) of First Financial Common Stock as shall be equal to (i) Twenty Seven
Dollars and Ten Cents ($27.10) divided by (ii) the average of the closing trade
prices ("Average Price") of First Financial Common Stock on the Nasdaq National
Stock Market during the last fifteen trading days on which reportable sales of
First Financial Common Stock took place immediately prior to, but not including,
the third business day prior to the Effective Time as defined below (the
"Exchange Ratio"). Fractions of shares of First Financial Common Stock will not
be issued. In lieu of a fraction of a share of First Financial Common Stock,
each holder of Company Common Stock otherwise entitled to a fraction of a share
of First Financial common Stock shall be entitled to receive an amount of cash
equal to (i) the fraction of a share of First Financial Common Stock to which
such holder would otherwise be entitled, multiplied by (ii) the actual market
value of First Financial Common Stock which shall be deemed to be the last per
share sales price of the First Financial Common Stock as reported on The Nasdaq
Stock Market on the fourth trading day immediately preceding the Closing Date
(as defined below). Following consummation of the Merger, no holder of Company
Common Stock shall be entitled to dividends or any other rights in respect of
any such fraction.
(c) Each of the Option Rights (as defined in the Agreement) which is
outstanding immediately prior to the Effective Time shall be converted
automatically into an option to purchase shares of First Financial Common Stock
in an amount and at an exercise price determined as provided below (and
otherwise subject to the terms (including those terms, if any, providing for
accelerated vesting) of the Company's 1992 Incentive Stock Option Plan (the
"Employee Plan") and the Company's 1992 Stock Option Plan for Outside Directors
(the "Director Plan"), (the option rights granted to under the Employee Plan and
the Director Plan are sometimes collectively referred to herein as the "Option
Rights"):
(1) The number of shares of First Financial Common Stock to be
subject to the new option shall be equal to the product of the number of shares
of FirstRock Common Stock subject to the original option and the Exchange Ratio,
provided that any fractional shares of First Financial Common Stock resulting
from such multiplication shall be rounded down to the nearest share; and
(2) The exercise price per share of First Financial Common
Stock under the new option shall be equal to the exercise price per share of
FirstRock Common Stock under the original option divided by the Exchange Ratio,
provided that such exercise price shall be rounded up to the nearest cent.
The adjustment provided herein with respect to any options which are
"incentive stock options" (as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code")) shall be and is intended to be effected
in a manner which is consistent with Section 424(a) of the Code. The duration
and other terms of the new option shall be the same as the original option,
except that all references to the Company shall be deemed to be references to
First Financial. Notwithstanding anything to the contrary contained herein, all
Limited Rights (as such term is defined in the Employee Plan) granted under the
Employee Plan shall terminate and be of no further force or effect upon receipt
of consent to such termination from the grantees of such Limited Rights. The
Company will use its best efforts to obtain such consents from all holders of
Limited Rights.
<PAGE>
3.03 Description of First Financial Common Stock. The First Financial
Common Stock has a $1.00 par value. Holders of First Financial Common Stock are
entitled to receive such dividends as are declared by the Board of Directors of
First Financial. Each share of First Financial Common Stock is entitled to one
vote. Holders of First Financial Common Stock have no cumulative voting rights
in the election of directors. In the event of liquidation, holders of First
Financial Common Stock are entitled to receive on a pro rata basis any assets
distributed to common shareholders.
3.04 Surrender Of Company Stock Certificates In Exchange For First
Financial Common Stock.
(a) After the Effective Time, each holder of a certificate or
certificates that prior thereto represented validly issued and outstanding
shares of Company Common Stock shall surrender such certificate or certificates
to Norwest Bank Minnesota, N.A., the exchange agent for such shares, or another
exchange agent selected by First Financial (the "Exchange Agent"), and shall
receive in exchange therefor the applicable number of whole shares of First
Financial Common Stock, and the cash for fractional shares (without interest
thereon), if any, as provided in this Agreement and Plan of Merger.
The holder of a certificate or certificates that prior to the Merger
represented issued and outstanding shares of Company Common Stock shall have no
rights, after the Effective Time, with respect to such shares except to
surrender the certificate or certificates in exchange for the applicable number
of whole shares of First Financial Common Stock, and the cash for fractional
shares, if any. The Exchange Agent shall mark all certificates delivered
pursuant to this Section 3.05(a) as canceled and shall promptly thereafter
deliver the same to First Financial for disposal.
(b) First Financial dividends or other distributions otherwise
payable subsequent to the Effective Time on any whole shares of First Financial
Common Stock for which a Company certificate or certificates have not been
surrendered for exchange pursuant to this Agreement and Plan of Merger shall be
withheld until such Company outstanding certificate or certificates shall be
surrendered for exchange. Upon such surrender, there shall be paid to the record
holder of the new certificate or certificates of First Financial Common Stock
the amount of all dividends, without interest thereon, withheld with respect to
such shares as above provided.
<PAGE>
(c) If a certificate of Company Common Stock is lost, stolen or
destroyed, the registered owner thereof shall be entitled to receive the
applicable number of whole shares of First Financial Common Stock, and the cash
for fractional shares, if any, to which he or she would be otherwise entitled on
surrender of such certificate of Company Common Stock, by notifying First
Financial in writing of such lost, stolen or destroyed certificate and giving
First Financial evidence of loss and, at First Financial's option, a bond
adequate in the opinion of First Financial to indemnify it and the Exchange
Agent against any claim that may be made against it on account of the alleged
lost, stolen and destroyed certificate and the issuance of the applicable number
of whole shares of First Financial Common Stock, and the cash for fractional
shares, if any.
(d) Promptly after the Effective Time, First Financial shall cause
the Exchange Agent to mail to each holder of record of a certificate or
certificates which as of the Effective Time represented outstanding shares of
Company Common Stock (the "Certificates") (i) a form 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 and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for First Financial Common Stock.
ARTICLE IV
4.01 Counterparts. This Agreement and Plan of Merger 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 agreement.
4.02 Governing Law. This Agreement and Plan of Merger shall be governed in
all respects, including, but not limited to, validity, interpretation, effect
and performance, by the laws of the State of Illinois Delaware.
4.03 Amendment. Subject to applicable law, this Agreement and Plan of
Merger may be amended, modified or supplemented only by written agreement of
First Financial, FFC-Acquisition and the Company, by their respective officers
thereunto duly authorized, at any time prior to the Effective Time.
4.04 Waiver. Any of the terms or conditions of this Agreement and Plan of
Merger may be waived at any time by whichever of the Constituent Corporations
is, or the shareholders or stockholders of which are, entitled to the benefit
thereof by action taken by the Board of Directors of such Constituent
Corporation.
4.05 Termination. This Agreement and Plan of Merger shall terminate upon
the termination of the Agreement and there shall be no liability on the part of
any of the parties hereto (or any of their respective directors or officers)
except as otherwise provided in the Agreement.
<PAGE>
IN WITNESS WHEREOF, each of the Constituent Corporations and First
Financial have caused this Agreement and Plan of Merger to be executed on their
behalf by their officers hereunto duly authorized and their respective corporate
seals to be affixed hereto, all as of the date first above written.
ATTEST: FIRST FINANCIAL ACQUISITION COMPANY
By: By: _________________________________
John C. Seramur, President
State of Wisconsin)
) ss:
County of Portage)
On this ____________ day of ________________, 199__, before me appeared
the above signed officers, who being first duly sworn, deposed and said that
they are officers of First Financial Acquisition Company, and are duly
authorized by its Board of Directors to sign, affirm and verify this Agreement
and Plan of Merger and that this Agreement and Plan of Merger has been approved
by all requisite action of the Board of Directors of First Financial Acquisition
Company and this Agreement and Plan of Merger is the act and deed of the
Corporation and the facts stated herein are true to the best of their knowledge.
---------------------------------
Notary Public
State of Wisconsin
My Commission Expires:
(SEAL)
<PAGE>
ATTEST: FIRSTROCK BANCORP, INC.
By: By: _________________________________
David A. Ingrassia
President and Chief Executive Officer
State of Illinois )
) ss:
County of Winnebago )
On this____day of _____________________, 199__, before me appeared the
above signed officers, who being first duly sworn, deposed and said that they
are officers of FirstRock Bancorp, Inc. and are duly authorized by its Board of
Directors to sign, affirm and verify this Agreement and Plan of Merger and that
this Agreement and Plan of Merger has been approved by all requisite action of
the Board of Directors of FirstRock Bancorp, Inc. and this Agreement and Plan of
Merger is the act and deed of the Corporation and the facts stated herein are
true to the best of their knowledge.
---------------------------------
Notary Public
______, Illinois
My Commission Expires:
My County of Residence:
(SEAL)
ATTEST:
By:
<PAGE>
ATTEST: FIRST FINANCIAL CORPORATION
By: By: _________________________________
John C. Seramur, President
State of Wisconsin)
) ss:
County of Portage)
On this ____________ day of ________________, 199__, before me appeared
the above signed officers, who being first duly sworn, deposed and said that
they are officers of First Financial Corporation, and are duly authorized by its
Board of Directors to sign, affirm and verify this Agreement and Plan of Merger
and that this Agreement and Plan of Merger has been approved by all requisite
action of the Board of Directors of First Financial Corporation and this
Agreement and Plan of Merger is the act and deed of the Corporation and the
facts stated herein are true to the best of their knowledge.
---------------------------------
Notary Public
State of Wisconsin
My Commission Expires:
(SEAL)
<PAGE>
EXHIBIT B
First Financial Corporation
1303 Main Street
Stevens Point, Wisconsin 54481
Gentlemen:
I have been advised that I may be deemed an "affiliate" within the meaning
of paragraph (c) of Rule 145 of the Rules and Regulations of the Securities and
Exchange Commission ("SEC") under the Securities Act of 1933 (the "Act") of
FirstRock Bancorp, Inc., a Delaware corporation (the "Company"), and may be
deemed such at the time of the merger ("Merger") of First Financial Acquisition
Company, a Delaware corporation ("FFC-Acquisition") with the Company. Pursuant
to the Merger, I will acquire shares of the Common Stock ("First Financial
Common Stock") of First Financial Corporation ("First Financial") in exchange
for each share of common stock of the Company ("Company Common Stock") held by
me. I agree that I will not make any sale, transfer or other disposition of the
First Financial Common Stock or Company Common Stock in violation of the Act or
the rules and regulations promulgated thereunder by the SEC.
I have been advised that the issuance of the First Financial Common Stock
to me pursuant to the Merger has been registered under the Act by First
Financial by the filing of a Registration Statement with the SEC. I have also
been advised that such registration does not apply to any distribution by me of
the First Financial Common Stock received by me in the Merger. I have also been
advised that, since at the effective time of the Merger, I may be deemed to have
been an "affiliate" of the Company, any offering or sale by me of any of the
First Financial Common Stock will, under current law, require either (i) the
further registration under the Act of the First Financial Common Stock to be
sold; (ii) compliance with Rule 145 promulgated under the Act; or (iii) the
availability of another exemption from such registration. In addition, I have
been advised that any transferee in a private offering or other similar
disposition will be subject to the same limitations as those imposed on me.
I represent and warrant to First Financial that:
1. I have carefully read this letter and discussed its requirements and
other applicable limitations upon the sale, transfer or other disposition of the
First Financial Common Stock to the extent I felt necessary, with my counsel or
counsel for the Company.
<PAGE>
2. I have been informed by First Financial that the First Financial Common
Stock must be held by me indefinitely unless (i) any of the First Financial
Common Stock received by me in the Merger and to be distributed by me is first
registered under the Act other than by the registration by First Financial
referred to above; (ii) a sale of the First Financial Common Stock is made in
conformity with the volume and other applicable limitations of paragraph (d) of
Rule 145 (which incorporates by reference paragraphs (c), (e), (f) and (g) of
Rule 144); or (iii) some other exemption from registration is available with
respect to any such proposed sale, transfer or other disposition of the First
Financial Common Stock. I will be required to deliver to First Financial
evidence of compliance with such requirements in connection with any proposed
sale, transfer or other disposition by me which may include, in the case of a
distribution under some other exemption from registration, an opinion of counsel
reasonably satisfactory to counsel for First Financial that such exemption is
available.
3. I understand that First Financial is under no obligation to register
the First Financial Common Stock that I may wish to sell, transfer, or otherwise
dispose of or to take any other action necessary in order to make compliance
with an exemption from registration available.
4. If I rely on the exemption from the registration provisions contained
in Section 4 of the Act (other than that contained in Rule 144 or 145), I will
obtain and deliver to First Financial a copy of a letter from any prospective
transferee which will contain (a) representations reasonably satisfactory to
First Financial as to the nondistributive intent, sophistication, ability to
bear risk, and access to information of such transferee; (b) an acknowledgment
concerning restrictions on transfer of the First Financial Common Stock; and (c)
an assumption of the obligations of the undersigned under this paragraph 4.
5. I understand that First Financial expects that the Merger will be
accounted for as a pooling-of-interests and that Topic 2-E of staff accounting
bulletin of the SEC provides that the risk sharing requirement for the
applicability of pooling-of-interests accounting will have occurred if no
affiliate of either First Financial or the Company sells or in any other way
reduces his or her risk relative to (i) Company Common Stock within thirty (30)
days prior to the effective time of the Merger and (ii) any First Financial
Common Stock received in the Merger until such time as financial results
covering at least 30 days of post-Merger combined operations have been
published. I agree, in order to preserve pooling-of-interests accounting for the
Merger, to make no disposition of (i) any shares of Company Common Stock within
thirty (30) days prior to the effective time of the Merger, which First
Financial or the Company shall advise me in writing, and (ii) any shares of
First Financial Common Stock received in the Merger, or in any other way reduce
my risk relative to the shares of First Financial received in the Merger, until
publication by First Financial of financial results covering at least 30 days of
post-Merger combined operations in the form of a Form 10-Q or Form 8-K filing
with the SEC, the issuance of a quarterly earnings report, or any other public
issuance which includes combined net sales and net income.
<PAGE>
6. I also understand that to enforce the foregoing commitments, stop
transfer instructions will be given to the Company's transfer agent with respect
to the Company Common Stock and to First Financial's transfer agent with respect
to the First Financial Common Stock and that there will be placed on the
certificates for the First Financial Common Stock, or any substitutions
therefor, a legend stating in substance:
7. I have no present plan or intent, and as of the effective time of the
Merger shall have no present plan or intent, to engage in a sale, exchange,
transfer (other than an intrafamily gift), distribution (including a
distribution by a corporation to its shareholders), redemption, pledge (other
than a pledge replacing an existing pledge of Company Common Stock) or reduction
in any way of my risk of ownership by short sale or otherwise, or other
disposition, directly or indirectly (collectively a "Sale") with respect to any
of the shares of First Financial Common Stock to be received by me upon the
Merger. I am not aware of, or participating in any plan or intent on the part of
Company shareholders (a "Plan") to engage in Sales of the First Financial Common
Stock to be issued in the Merger such that the aggregate fair market value, as
the effective time of the Merger, of the shares subject to such Sales would
exceed 50% of the aggregate fair market value of all outstanding Company Common
Stock immediately prior to the Merger (the "Outstanding Company Common Stock").
A Sale of First Financial Common Stock shall be considered to have occurred
pursuant to a Plan if, for example, such Sale occurs in a transaction that is in
contemplation of, or related or pursuant to, the Merger (a "Related
Transaction"). In addition, Company Common Stock (i) exchanged for cash in lieu
of fractional shares of First Financial Common Stock, and (ii) with respect to
which a pre-Merger Sale occurs in a Related Transaction, shall be considered to
be shares of Outstanding Company Common Stock that are exchanged for shares of
First Financial Common Stock which are disposed of pursuant to a Plan.
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION
EFFECTED ON ________________, 199__, TO WHICH RULE 145 PROMULGATED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") APPLIES, HAVE BEEN DELIVERED IN
RELIANCE UPON THE REPRESENTATION OF THE REGISTERED HOLDER HEREOF THAT THEY HAVE
BEEN ACQUIRED FOR SUCH HOLDER'S ACCOUNT, AND MAY BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF, WHETHER IN WHOLE OR IN PART, ONLY IN COMPLIANCE WITH THE
APPLICABLE REQUIREMENTS OF RULE 145 OR PURSUANT TO A REGISTRATION STATEMENT
UNDER THE ACT OR AN EXEMPTION FROM SUCH REGISTRATION AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNTIL SUCH TIME AS FINANCIAL STATEMENTS OF FIRST FINANCIAL
CORPORATION COVERING AT LEAST THIRTY (30) DAYS OF COMBINED OPERATIONS FOLLOWING
THE ACQUISITION OF FIRSTROCK BANCORP, INC. SHALL HAVE BEEN PUBLISHED.
Very truly yours,
<PAGE>
WARRANT AGREEMENT
(Filed as Exhibit 2.2 hereto)
<PAGE>
BANK MERGER AGREEMENT
This Bank Merger Agreement is made and entered into this ____ day of
________ 199_, between First Financial Bank, FSB, a federally chartered stock
savings bank ("Bank"), and First Federal Savings Bank, F.S.B., a federally
chartered stock savings and loan association ("First Federal").
W I T N E S S E T H:
WHEREAS, First Financial Corporation, a Wisconsin corporation and the
parent of the Bank ("Buyer"), First Financial Acquisition Company ("FFAC"), and
FirstRock Bancorp, Inc., a Delaware corporation and the parent of First Federal
("FirstRock") entered into an Agreement and Plan of Reorganization, dated
October __, 1994 (the "Agreement");
WHEREAS, pursuant to the Agreement, Buyer will acquire FirstRock through
the merger of FFAC into FirstRock, and thereafter cause First Federal to be
merged into the Bank;
WHEREAS, the Bank has ______ shares of common stock outstanding, $1.00 par
value per share, and First Federal has _______ shares of common stock
outstanding, $_____ par value per share; and
WHEREAS, all of the issued and outstanding shares of common stock of the
Bank, and all of the shares of common stock of First Federal were voted in favor
of the combination of the Bank and First Federal;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and in the Agreement, the parties hereto do
mutually agree, intending to be legally bound, as follows:
ARTICLE I
DEFINITIONS
Except as otherwise provided herein, the capitalized terms set forth
below shall have the following meanings:
1.1 "Effective Time" shall mean the date and time at which the merger
contemplated by this Bank Merger Agreement becomes effective as provided in
Section 2.2 of this Bank Merger Agreement.
1.2 "Merger" shall refer to the merger of First Federal with and into
the Bank as provided in Section 2.1 of this Bank Merger Agreement.
<PAGE>
1.3 "Merging Corporations" shall collectively refer to First Federal
and the Bank.
1.4 "OTS" shall mean the Office of Thrift Supervision.
1.5 "Surviving Corporation" shall refer to the Bank as the surviving
corporation of the Merger. The location of the home office and any other offices
of the Surviving Corporation shall be as set forth at Exhibit A hereto.
ARTICLE II
TERMS OF THE MERGER
2.1 The Merger.
(a) Subject to the terms and conditions set forth in the Agreement, at
the Effective Time, First Federal shall be merged with and into the Bank
pursuant to 12 C.F.R. Sec. 552.13. The Bank shall be the Surviving Corporation
of the Merger and shall continue to be regulated by the OTS.
(b) As a result of the Merger, (i) each share of common stock, par
value $_____ per share, of First Federal issued and outstanding immediately
prior to the Effective Time shall be cancelled and (ii) each share of common
stock, par value $1.00 per share, of the Bank issued and outstanding immediately
prior to the Effective Time shall remain issued and outstanding and shall
constitute the only shares of capital stock of the Surviving Corporation issued
and outstanding immediately after the Effective Time.
(c) Upon the Effective Time, all assets and property of the Merging
Corporations shall immediately, without any further act, become the property of
the Surviving Corporation to the same extent as they were the property of the
Merging Corporations, and the Surviving Corporation shall be a continuation of
the entity that absorbed the Merging Corporations. All rights and obligations of
the Merging Corporations shall remain unimpaired, and the Surviving Corporation
shall, upon the Effective Time, succeed to all those rights and obligations.
(d) Without limiting the terms and provisions of Section 2.1(c) above,
as a result of the Merger, the Surviving Corporation shall assume and succeed,
in accordance with 12 C.F.R. Sec. 563b.3(f)(3), to all of the rights and
obligations of each of First Federal and the Bank relating to their respective
liquidation accounts, which liquidation accounts were established in connection
with the respective conversions of First Federal and the Bank from the mutual to
stock form of organization.
<PAGE>
2.2 Effective Time. The Merger shall become effective on the date
specified by the OTS in its approval of the Merger. The Merger shall not be
effective unless and until approved by the OTS.
2.3 Name of the Surviving Corporation. The name of the Surviving
Corporation shall be "First Financial Bank, FSB."
2.4 Charter. On and after the Effective Time, the Charter of the Bank
shall be the Charter of the Surviving Corporation, until amended in accordance
with applicable law.
2.5 Bylaws. On and after the Effective Time, the Bylaws of the Bank
shall be the Bylaws of the Surviving Corporation, until amended in accordance
with applicable law.
2.6 Directors and Officers. On and after the Effective Time, until
changed in accordance with the Charter and Bylaws of the Surviving Corporation,
(i) the directors of the Surviving Corporation shall be the directors of the
Bank immediately prior to the Effective Time; and (ii) the officers of the
Surviving Corporation shall be the officers of the Bank immediately prior to the
Effective Time. The directors and officers of the Surviving Corporation shall
hold office in accordance with the Charter and Bylaws of the Surviving
Corporation. The number, names and residence addresses, and terms of directors
of the Surviving Corporation are as set forth at Exhibit C hereto.
2.7 Savings Accounts. The savings accounts of the Surviving Corporation
issued after the Effective Time shall be issued on the same basis as savings
accounts had been issued by the Bank prior to the Merger.
ARTICLE III
MISCELLANEOUS
3.1 Conditions Precedent. The respective obligations of each party
under this Bank Merger Agreement shall be subject to the approval of this Bank
Merger Agreement by Buyer, in its capacity as sole stockholder of the Bank and
by FirstRock in its capacity as sole stockholder of First Federal.
3.2 Amendments. To the extent permitted by law, this Bank Merger
Agreement may be amended by a subsequent writing signed by the parties hereto
upon the approval of the board of directors of each of the parties hereto.
3.3 Successors. This Bank Merger Agreement shall be binding
on the successors of the Bank and First Federal.
<PAGE>
In accordance with the procedures set forth in the rules and
regulations of the OTS and other applicable law, the Bank and First Federal have
caused this Bank Merger Agreement to be executed by their duly authorized
representatives on the date indicated.
FIRST FINANCIAL BANK, FSB
ATTEST:
By:______________________________ By:_______________________________
Robert M. Salinger John C. Seramur
General Counsel and President and Chief Executive
Corporate Secretary Officer
Date: _________________ Date: _________________
FIRST FEDERAL SAVINGS BANK, F.S.B.
ATTEST:
By_________________________________ By_________________________________
Date: _________________ Date: _________________
<PAGE>
WARRANT AGREEMENT
THE TRANSFER OF THE WARRANT GRANTED
BY THIS AGREEMENT IS SUBJECT TO RESALE RESTRICTIONS.
WARRANT AGREEMENT, dated as of October 26, 1994 (this "Agreement"),
between FirstRock Bancorp, Inc, a Delaware corporation ("Issuer"), and First
Financial Corporation, a Wisconsin corporation ("Grantee").
WITNESSETH:
WHEREAS, Grantee and Issuer have entered into an Agreement and Plan of
Reorganization, dated as of October 26, 1994 (the "Plan"), which was executed by
the parties hereto prior to the execution of this Agreement; and
WHEREAS, as a condition and inducement to Grantee's entering into the
Plan and in consideration therefor, Issuer has agreed to grant Grantee the
Option (as defined below).
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein and in the Plan, the parties hereto
agree as follows:
SECTION 1. Issuer hereby grants to Grantee an unconditional,
irrevocable warrant (the "Warrant") to purchase, subject to the terms hereof, up
to 475,246 fully paid and non-assessable shares of common stock, par value $.01
per share of Issuer ("Issuer Common Stock") ( which number of shares is equal to
19.9% of the number of outstanding shares of Issuer Common Stock on the date
hereof), at a price per share of $22.50 (the "Initial Price"); provided,
however, that in the event Issuer issues or agrees to issue any additional
shares of Issuer Common Stock at a price less than the Initial Price, as
adjusted pursuant to Section 5(b) hereof, such price shall be equal to such
lesser price (such price, as adjusted, is hereinafter referred to as the
"Warrant Price"). The number of shares of Issuer Common Stock that may be
received upon the exercise of the Warrant and the Warrant Price are subject to
adjustment as herein set forth.
SECTION 2. (a) Grantee may exercise the Warrant, in whole or part, at
any time and from time to time following the occurrence of a Purchase Event (as
defined below); provided that the Warrant shall terminate and be of no further
force and effect upon the earliest to occur of (i) the time immediately prior to
the Effective Time, (ii) 18 months after the first occurrence of a Purchase
Event, (iii) 18 months after the termination of the Plan following the
occurrence of a Preliminary Purchase Event (as defined below), (iv) upon the
termination of the Plan, prior to the occurrence of a Purchase Event or
Preliminary Purchase Event, by either party pursuant to Section [9.01(a)] of the
Plan, or by Grantee pursuant to Section [9.01(d)] of the Plan (if the "Material
Adverse Change in the Company" (as defined in the Plan) did not result from a
default by the Company under the Plan or Section [9.01(e)] of the Plan), or by
Issuer pursuant to Section 9.01(c) of the Plan, (v) six months after the
termination of the Plan in accordance with the terms thereof, prior to the
occurrence of a Purchase Event or a Preliminary Purchase Event, except for a
termination by either party pursuant to Section [9.01(a)] of the Plan, or by
Grantee pursuant to Section [9.01(e)] of the Plan, or by Grantee pursuant to
Section [9.01(d)] of the Plan (if the Material Adverse Change in the Company did
not result from a default by the Company under the Plan), or by Issuer pursuant
to Section 9.01(c) of the Plan, (vi) 18 months after the termination of the
Plan by Grantee pursuant to Section 9.01(d) thereof as a result of any default
under the Plan by Issuer, if such default was not a willful or intentional
default by Issuer, or (vii) 24 months after the termination of the Plan by
Grantee pursuant to Section [9.01(a)] thereof as a result of any default under
the Plan by Issuer, if such default was a willful or intentional default under
the Plan by Issuer. The events described in clauses (i) - (vii) in the preceding
sentence are hereinafter collectively referred to as an "Exercise Termination
Event."
<PAGE>
(b) The term "Preliminary Purchase Event" shall mean any of the
following events or transactions occurring on or after the date hereof and prior
to an Exercise Termination Event:
(i) Issuer without having received Grantee's prior written consent,
shall have entered into any letter of intent or definitive agreement to
engage in an Acquisition Transaction (as defined below) with any person (as
defined below) other than Grantee or any of its subsidiaries (each a
"Grantee Subsidiary") or the Board of Directors of Issuer shall have
recommended that the shareholders of Issuer approve or accept any
Acquisition Transaction with any Person (as the term "person" is defined in
Section 3(a)9 and 13(d)(3) of the Securities Exchange Act of 1934 (the
"Exchange Act") and the rules and regulations thereunder) other than
Grantee or any Grantee Subsidiary. For purposes of this Agreement,
"Acquisition Transaction" shall mean (x) a merger, consolidation or other
business combination involving Issuer or First Federal Savings Bank,
F.S.B., a wholly owned subsidiary of Issuer (the "Bank"), (y) a purchase,
lease or other acquisition of all or substantially all of the assets of
Issuer or the Bank, (z) a purchase or other acquisition (including by way
of merger, consolidation, share exchange or otherwise) of Beneficial
Ownership (as the term "beneficial ownership" is defined in Regulation
13d-3(a) of the Exchange Act) of securities representing 20% or more of the
voting power of Issuer or the Bank;
(ii) Any Person (other than Grantee or any Grantee Subsidiary)
shall have acquired Beneficial Ownership of 20% or more of the outstanding
shares of Issuer Common Stock or the voting stock of the Bank ("Bank
Stock"); (iii) Any Person (other than Grantee or any Grantee Subsidiary)
shall have made a bona fide proposal to Issuer or, by a public announcement
or written communication that is or becomes the subject of public
disclosure, to Issuer's shareholders to engage in an Acquisition
Transaction (including, without limitation, any situation in which any
Person other than Grantee or any Grantee Subsidiary shall have commenced
(as such term is defined in Rule 14d-2 under the Exchange Act), or shall
have made a filing under applicable securities laws, with respect to a
tender offer or exchange offer to purchase any shares of Issuer Common
Stock such that, upon consummation of such offer, such person would have
Beneficial Ownership of 20% or more of the then outstanding shares of
Issuer Common Stock (such an offer being referred to herein as a "Tender
Offer" or an "Exchange Offer", respectively));
(iv) There shall exist a default under the Plan by Issuer and
such default would entitle Grantee to terminate the Plan;
(v) The holders of Issuer Common Stock shall not have approved
the Plan at the meeting of such shareholders held for the purpose of voting
on the Plan after the public announcement by any person (other than First
Financial or any subsidiary thereof) of an offer or proposal to acquire
(after giving effect to the shares of Common Stock of the Company already
owned by such person) 20 percent or more of the Common Stock, or to
acquire, merge or consolidate with the Company or to purchase all or
substantially all of the Company's assets; or such meeting of shareholders
shall not have been held or shall have been canceled prior to termination
of the Plan, or Issuer's Board of Directors shall have withdrawn or
modified in a manner adverse to Grantee the recommendation of Issuer's
Board of Directors that Issuer's shareholders approve the Plan;
<PAGE>
(vi) Any Person (other than Grantee or any Grantee Subsidiary)
shall have filed an application or notice with the Office of Thrift
Supervision ("OTS"), or other regulatory or administrative agency or
commission (each, a "Governmental Authority") for approval to engage in an
Acquisition Transaction.
(c) The term "Purchase Event" shall mean any of the following events
or transactions occurring on or after the date hereof and prior to an Exercise
Termination Event:
(i) The acquisition by any Person (other than Grantee or any
Grantee Subsidiary) of Beneficial Ownership (other than on behalf of the
Issuer) of 25% or more of the then outstanding Issuer Common Stock or Bank
Stock; or
(ii) The occurrence of a Preliminary Purchase Event described in
Section 2(b)(i) except that the percentage referred to in clause (z)
thereof shall be 25%.
(d) Issuer shall notify Grantee promptly in writing of the occurrence
of any Preliminary Purchase Event or Purchase Event; provided, however, that the
giving of such notice by Issuer shall not be a condition to the right of Grantee
to exercise the Warrant.
(e) In the event that Grantee is entitled to and wishes to exercise
the Warrant, it shall send to Issuer a written notice (the "Warrant Notice" and
the date of which being hereinafter referred to as the "Notice Date") specifying
(i) the total number of shares of Issuer Common Stock it will purchase pursuant
to such exercise and (ii) the time (which shall be on a business day that is not
less than three nor more than ten business days from the Notice Date) on which
the closing of such purchase shall take place (the "Closing Date"); such closing
to take place at the principal office of the Issuer; provided, that, if prior
notification to or approval of the OTS, the Federal Deposit Insurance
Corporation ("FDIC") or any other Governmental Authority is required in
connection with such purchase (each, a "Notification" or an "Approval," as the
case may be), (a) Grantee shall promptly file the required notice or application
for approval ("Notice/Application"), (b) Grantee shall expeditiously process the
Notice/Application and (c) for the purpose of determining the Closing Date
pursuant to clause (ii) of this sentence, the period of time that otherwise
would run from the Notice Date shall instead run from the later of (x) in
connection with any Notification, the date on which any required notification
periods have expired or been terminated and (y) in connection with any Approval,
the date on which such approval has been obtained and any requisite waiting
period or periods shall have expired. For purposes of Section 2(a) hereof, any
exercise of the Warrant shall be deemed to occur on the Notice Date relating
thereto. On or prior to the Closing Date, Grantee shall have the right to revoke
its exercise of the Warrant by written notice to the Issuer given not less than
three business days prior to the Closing Date.
(f) At the closing referred to in Section 2(e) hereof, Grantee shall
pay to Issuer the aggregate purchase price for the number of shares of Issuer
Common Stock specified in the Warrant Notice in immediately available funds by
wire transfer to a bank account designated by Issuer; provided, however, that
failure or refusal of Issuer to designate such a bank account shall not preclude
Grantee from exercising the Warrant.
(g) At such closing, simultaneously with the delivery of immediately
available funds as provided in Section 2(f) hereof, Issuer shall deliver to
Grantee a certificate or certificates representing the number of shares of
Issuer Common Stock specified in the Warrant Notice and, if the Warrant should
be exercised in part only, a new Warrant evidencing the rights of Grantee
thereof to purchase the balance of the shares of Issuer Common Stock purchasable
hereunder.
<PAGE>
(h) Certificates for Issuer Common Stock delivered at a closing
hereunder shall be endorsed with a restrictive legend substantially as follows:
The transfer of the shares represented by this certificate is subject
to resale restrictions arising under applicable federal and state
securities laws and to certain provisions of an agreement between FirstRock
Bancorp, Inc. and First Financial Corporation dated as of October 26, 1994.
A copy of such agreement is on file at the principal office of FirstRock
Bancorp, Inc. and will be provided to the holder hereof without charge upon
receipt by FirstRock Bancorp, Inc. of a written request therefor.
It is understood and agreed that: (i) the reference to the resale restrictions
in the above legend shall be removed by delivery of substitute certificate(s)
without such reference if Grantee shall have delivered to Issuer a copy of a
letter from the staff of the Governmental Authority responsible for
administering any applicable state securities laws or an opinion of counsel to
the effect that such legend is not required for purposes of applicable federal
or state securities laws; (ii) the reference to the provisions of this Agreement
in the above legend shall be removed by delivery of substitute certificate(s)
without such reference if the shares have been sold or transferred in compliance
with the provisions of this Agreement and under circumstances that do not
require the retention of such reference; and (iii) the legend shall be removed
in its entirety if the conditions in the preceding clauses (i) and (ii) are both
satisfied. In addition, such certificates shall bear any other legend as may be
required by law.
(i) Upon the giving by Grantee to Issuer of a Warrant Notice and the
tender of the applicable purchase price in immediately available funds on the
Closing Date, unless prohibited by applicable law, Grantee shall be deemed to be
the holder of record of the number of shares of Issuer Common Stock specified in
the Warrant Notice, notwithstanding that the stock transfer books of Issuer
shall then be closed or that certificates representing such shares of Issuer
Common Stock shall not then actually be delivered to Grantee. Issuer shall pay
all expenses and other charges that may be payable in connection with the
preparation, issuance and delivery of stock certificates under this Section 2 in
the name of Grantee.
SECTION 3. Issuer agrees: (i) that it shall at all times until the
termination of this Agreement have reserved for issuance upon the exercise of
the Warrant that number of authorized and reserved shares of Issuer Common Stock
equal to the maximum number of shares of Issuer Common Stock at any time and
from time to time issuable hereunder, all of which shares will, upon issuance
pursuant hereto, be duly authorized, validly issued, fully paid, non-assessable,
and delivered free and clear of all claims, liens, encumbrances and security
interests and not subject to any preemptive rights; (ii) that it will not, by
amendment of its certificate of incorporation or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any other voluntary
act, avoid or seek to avoid the observance or performance of any of the
covenants, stipulations or conditions to be observed or performed hereunder by
Issuer; (iii) promptly to take all reasonable action as may from time to time be
requested by the Grantee, at Grantee's expense including (x) complying with all
premerger notification, reporting and waiting period requirements specified in
15 U.S.C. Sec. 18a and regulations promulgated thereunder and (y) in the event
prior approval of or notice to the OTS, the FDIC or any other Governmental
Authority, under the Home Owners' Loan Act of 1933, as amended, the Change in
Bank Control Act of 1978, as amended, or any other applicable federal or state
banking law, is necessary before the Warrant may be exercised, cooperating with
Grantee in preparing such applications or notices and providing such information
to each such Governmental Authority as it may require in order to permit Grantee
to exercise the Warrant and Issuer duly and effectively to issue shares of
Issuer Common Stock pursuant hereto; and (iv) to take all action provided herein
to protect the rights of Grantee against dilution.
SECTION 4. This Agreement (and the Warrant granted hereby) are
exchangeable, without expense, at the option of Grantee, upon presentation and
surrender of this Agreement at the principal office of Issuer, for other
agreements providing for Warrants of different denominations entitling the
holder thereof to purchase, on the same terms and subject to the same conditions
as are set forth herein, in the aggregate the same number of shares of Issuer
Common Stock purchasable hereunder. The terms "Agreement" and "Warrant" as used
herein include any agreements and related warrants and options for which this
Agreement (and the Warrant granted hereby) may be exchanged. Upon receipt by
Issuer of evidence reasonably satisfactory to it of the loss, theft, destruction
or mutilation of this Agreement, and (in the case of loss, theft or destruction)
of reasonably satisfactory indemnification, and upon surrender and cancellation
of this Agreement, if mutilated, Issuer will execute and deliver a new Agreement
of like tenor and date.
SECTION 5. The number of shares of Issuer Common Stock purchasable
upon the exercise of the Warrant shall be subject to adjustment from time to
time as follows:
(a) In the event of any change in the Issuer Common Stock by
reason of stock dividends, split-ups, mergers, recapitalizations,
combinations, subdivisions, conversions, exchanges of shares or the like,
the type and number of shares of Issuer Common Stock purchasable upon
exercise hereof shall be appropriately adjusted and proper provision shall
be made so that, in the event that any additional shares of Issuer Common
Stock are to be issued or otherwise become outstanding as a result of any
such change (other than pursuant to an exercise of the Warrant), the number
of shares of Issuer Common Stock that remain subject to the Warrant shall
be increased so that, after such issuance and together with shares of
Issuer Common Stock previously issued pursuant to the exercise of the
Warrant (as adjusted on account of any of the foregoing changes in the
Issuer Common Stock), it equals 19.9% of the number of shares of Issuer
Common Stock then issued and outstanding.
(b) Whenever the number of shares of Issuer Common Stock
purchasable upon exercise hereof is adjusted as provided in this Section 5,
the Warrant Price shall be adjusted by multiplying the Warrant Price by a
fraction, the numerator of which shall be equal to the number of shares of
Issuer Common Stock purchasable prior to the adjustment and the denominator
of which shall be equal to the number of shares of Issuer Common Stock
purchasable after the adjustment.
SECTION 6. (a) Upon the occurrence of a Purchase Event that occurs
prior to an Exercise Termination Event, Issuer shall, at the request of Grantee
(whether on its own behalf or on behalf of any subsequent holder of the Warrant
(or part thereof) or of any of the shares of Issuer Common Stock issued pursuant
hereto), promptly prepare, file and keep current a shelf registration statement
under applicable federal securities laws covering any shares issued and issuable
pursuant to the Warrant and shall use its best efforts to cause such
registration statement to become effective, and to remain current and effective
for a period not in excess of 180 days from the day such registration statement
first becomes effective, in order to permit the sale or other disposition of any
shares of Issuer Common Stock issued upon total or partial exercise of the
Warrant ("Warrant Shares") in accordance with any plan of disposition requested
<PAGE>
by Grantee. Grantee shall have the right to demand two such registrations.
Grantee shall provide all information reasonably requested by Issuer for
inclusion in any registration statement to be filed hereunder. In connection
with any such registration, Issuer and Grantee shall provide each other with
representations, warranties, indemnities and other agreements customarily given
in connection with such registrations. If requested by Grantee in connection
with any such registration, Issuer and Grantee shall become a party to any
underwriting agreement relating to the sale of such shares, but only to the
extent of obligating themselves in respect of representations, warranties,
indemnities and other agreements customarily included in such underwriting
agreements. Notwithstanding the foregoing, if Grantee revokes any exercise
notice or fails to exercise any Warrant with respect to any exercise notice
pursuant to Section 2(e) hereof, Issuer shall not be obligated to continue any
registration process with respect to the sale of Warrant Shares issuable upon
the exercise of such Warrant and Grantee shall not be deemed to have demanded
registration of Warrant Shares.
(b) In the event that Grantee requests Issuer to file a registration
statement following the failure to obtain any approval required to exercise the
Warrant as described in Section 9 hereof, the closing of the sale or other
disposition of the Issuer Common Stock or other securities pursuant to such
registration statement shall occur substantially simultaneously with the
exercise of the Warrant.
(c) Concurrently with the filing of a registration statement under
Section 6(a) hereof, Issuer shall also make all filings required to comply with
state securities laws in such number of states as Grantee may reasonably
request.
SECTION 7. (a) Upon the occurrence of a Purchase Event that occurs
prior to an Exercise Termination Event, (i) at the request (the date of such
request being the "Warrant Repurchase Request Date") of Grantee, Issuer shall
repurchase the Warrant from Grantee at a price (the "Warrant Repurchase Price")
equal to the amount by which (A) the market/offer price (as defined below)
exceeds (B) the Warrant Price, multiplied by the number of shares for which the
Warrant may then be exercised and (ii) at the request (the date of such request
being the "Warrant Share Repurchase Request Date") of the owner of Warrant
Shares from time to time (the "Owner"), Issuer shall repurchase such number of
the Warrant Shares from the Owner as the Owner shall designate at a price (the
"Warrant Share Repurchase Price") equal to the market/offer price multiplied by
the number of Warrant Shares so designated. The term "market/offer price" shall
mean the highest of (i) the price per share of Issuer Common Stock at which a
tender offer or exchange offer therefor has been made after the date hereof and
on or prior to the Warrant Repurchase Request Date or the Warrant Share
Repurchase Request Date, as the case may be, (ii) the price per share of Issuer
Common Stock paid or to be paid by any third party pursuant to an agreement with
Issuer (whether by way of a merger, consolidation or otherwise), (iii) the
average of the highest last sale prices for shares of Issuer Common Stock as
reported within the 10-day period ending on the Warrant Repurchase Request Date
or the Warrant Share Repurchase Request Date, as the case may be, and (iv) in
the event of a sale of all or substantially all of Issuer's assets, the sum of
the price paid in such sale for such assets and the current market value of the
remaining assets of Issuer as determined by an investment banking firm selected
by Grantee or the Owner, as the case may be, and reasonably acceptable to
Issuer, divided by the number of shares of Issuer Common Stock outstanding at
the time of such sale. In determining the market/offer price, the value of
consideration other than cash shall be the value determined by an investment
banking firm selected by Grantee or the Owner, as the case may be, and
reasonably acceptable to Issuer. The investment banking firm's determination
shall be conclusive and binding on all parties.
<PAGE>
(b) Grantee or the Owner, as the case may be, may exercise its right
to require Issuer to repurchase the Warrant and/or any Warrant Shares pursuant
to this Section 7 by surrendering for such purpose to Issuer, at its principal
office, a copy of this Agreement or certificates for Warrant Shares, as
applicable, accompanied by a written notice or notices stating that Grantee or
the Owner, as the case may be, elects to require Issuer to repurchase the
Warrant and/or the Warrant Shares in accordance with the provisions of this
Section 7. As promptly as practicable, and in any event within 30 business days
after the surrender of the Warrant and/or certificates representing Warrant
Shares and the receipt of such notice or notices relating thereto, Issuer shall
deliver or cause to be delivered to Grantee the Warrant Repurchase Price or to
the Owner the Warrant Share Repurchase Price or the portion thereof that Issuer
is not then prohibited from so delivering under applicable law and regulation or
as a consequence of administrative policy (including policies relating to the
maintenance of capital levels and a sound financial condition).
(c) Issuer hereby undertakes to use its best efforts to obtain all
required regulatory, shareholder and legal approvals and to file any required
notices as promptly as practicable in order to accomplish any repurchase
contemplated by this Section 7. Nonetheless, to the extent that Issuer is
prohibited under applicable law or regulation, or as a consequence of
administrative policy (including policies relating to the maintenance of capital
levels and a sound financial condition), from repurchasing any Warrant and/or
any Warrant Shares in full, Issuer shall promptly so notify Grantee and/or the
Owner and thereafter deliver or cause to be delivered, from time to time, to
Grantee and/or the Owner, as appropriate, the portion of the Warrant Repurchase
Price and the Warrant Share Repurchase Price, respectively, that it is no longer
prohibited from delivering, within five business days after the date on which
Issuer is no longer so prohibited; provided, however, that if Issuer at any time
after delivery of a notice of repurchase pursuant to Section 7(b) hereof is
prohibited under applicable law or regulation, or as a consequence of
administrative policy (including policies relating to the maintenance of capital
levels and a sound financial condition), from delivering to Grantee and/or the
Owner, as appropriate, the Warrant Repurchase Price or the Warrant Share
Repurchase Price, respectively, in full, Grantee or the Owner, as appropriate,
may revoke its notice of repurchase of the Warrant or the Warrant Shares either
in whole or in part whereupon, in the case of a revocation in part, Issuer shall
promptly (i) deliver to Grantee and/or the Owner, as appropriate, that portion
of the Warrant Purchase Price or the Warrant Share Repurchase Price that Issuer
is not prohibited from delivering after taking into account any such revocation
and (ii) deliver, as appropriate, either (A) to Grantee, a new Agreement
evidencing the right of Grantee to purchase that number of shares of Issuer
Common Stock equal to the number of shares of Issuer Common Stock purchasable
immediately prior to the delivery of the notice of repurchase less the number of
shares of Issuer Common Stock covered by the portion of the Warrant repurchased
or (B) to the Owner, a certificate for the number of Warrant Shares covered by
the revocation.
(d) Issuer shall not enter into any agreement with any Person (other
than Grantee or a Grantee Subsidiary) for an Acquisition Transaction unless the
other Person assumes all the obligations of Issuer pursuant to this Section 7 in
the event that Grantee or the Owner elects, in its sole discretion, to require
such other Person to perform such obligations.
(e) Notwithstanding anything to the contrary in this Section 7, the
maximum aggregate Warrant Repurchase Price or Warrant Share Repurchase Price to
be paid by Issuer pursuant to this Section 7 shall be $3,000,000.
<PAGE>
SECTION 8. (a) In the event that prior to an Exercise Termination
Event, Issuer shall enter into a letter of intent or definitive agreement (i) to
consolidate or merge with any Person (other than Grantee or a Grantee
Subsidiary), and Issuer shall not be the continuing or surviving corporation of
such consolidation or merger, (ii) to permit any Person (other than Grantee or a
Grantee Subsidiary) to merge into Issuer, and Issuer shall be the continuing or
surviving corporation, but, in connection with such merger, the then outstanding
shares of Issuer Common Stock shall be changed into or exchanged for stock or
other securities of any other Person or cash or any other property or the then
outstanding shares of Issuer Common Stock shall after such merger represent less
than 50% of the outstanding shares and share equivalents of the merged company,
or (iii) to sell or otherwise transfer all or substantially all of its assets to
any Person (other than Grantee or a Grantee Subsidiary) then, and in each such
case, such letter of intent or definitive agreement governing such transaction
shall make proper provision so that the Warrant shall, upon the consummation of
such transaction and upon the terms and conditions set forth herein, be
converted into, or exchanged for, an option (the "Substitute Warrant"), at the
election of Grantee, of either (x) the Acquiring Corporation (as defined below)
or (y) any person that controls the Acquiring Corporation (the Acquiring
Corporation and any such controlling person being hereinafter referred to as the
"Substitute Warrant Issuer").
(b) The Substitute Warrant shall be exercisable for such number of
shares of Substitute Common Stock (as is hereinafter defined) as is equal to the
market/offer price (as defined in Section 7 hereof) multiplied by the number of
shares of Issuer Common Stock for which the Warrant was theretofore exercisable,
divided by the Average Price (as hereinafter defined). The exercise price of the
Substitute Warrant per share of the Substitute Common Stock (the "Substitute
Purchase Price") shall then be equal to the Warrant Price multiplied by a
fraction in which the numerator is the number of shares of Issuer Common Stock
for which the Warrant was theretofore exercisable and the denominator is the
number of shares for which the Substitute Warrant is exercisable.
(c) The Substitute Warrant shall otherwise have the same terms as the
Warrant, provided that if the terms of the Substitute Warrant cannot, for legal
reasons, be the same as the Warrant, such terms shall be as similar as possible
and in no event less advantageous to Grantee, provided further that the terms of
the Substitute Warrant shall include (by way of example and not limitation)
provisions for the repurchase of the Substitute Warrant and Substitute Common
Stock by the Substitute Warrant Issuer on the same terms and conditions as
provided in Section 7 hereof.
(d) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (i) the continuing
or surviving corporation of a consolidation or merger with Issuer (if other
than Issuer), (ii) Issuer in a merger in which Issuer is the continuing or
surviving corporation, and (iii) the transferee of all or any substantial
part of Issuer's assets.
(ii) "Substitute Common Stock" shall mean the common stock issued
by the Substitute Warrant Issuer upon exercise of the Substitute Warrant.
(iii) "Average Price" shall mean the average closing price of a
share of Substitute Common Stock for the one year immediately preceding the
consolidation, merger or sale in question, but in no event higher than the
closing price of the shares of Substitute Common Stock on the day preceding
such consolidation, merger or sale; provided that if Issuer is the issuer
of the Substitute Warrant, the Average Price shall be computed with respect
to a share of Issuer Common Stock issued by Issuer, the corporation merging
into Issuer or by any company which controls or is controlled by such
merging corporation, as Grantee may elect.
<PAGE>
(e) In no event, pursuant to any of the foregoing paragraphs, shall
the Substitute Warrant be exercisable for more than 19.9% of the aggregate of
the shares of Substitute Common Stock outstanding immediately prior to the
issuance of the Substitute Warrant. In the event that the Substitute Warrant
would be exercisable for more than 19.9% of the aggregate of the shares of
Substitute Common Stock but for this clause (e), the Substitute Warrant Issuer
shall make a cash payment to Grantee equal to the excess of (i) the value of the
Substitute Warrant without giving effect to the limitation in this clause (e)
over (ii) the value of the Substitute Warrant after giving effect to the
limitation in this clause (e). This difference in value shall be determined by a
nationally recognized investment banking firm selected by Grantee and the
Substitute Warrant Issuer. In addition, the provisions of Section 5(a) hereof
shall not apply to the issuance of any Substitute Warrant and for purposes of
applying Section 5(a) hereof thereafter to any Substitute Warrant the percentage
referred to in Section 5(a) hereof shall thereafter equal the percentage that
the percentage of the shares of Substitute Common Stock subject to the
Substitute Warrant bears to the number of shares of Substitute Common Stock
outstanding.
SECTION 9. Notwithstanding Sections 2, 6 and 7 hereof, if Grantee has
given the notice referred to in one or more of such Sections, the exercise of
the rights specified in any such Section shall be extended (a) if the exercise
of such rights requires obtaining regulatory approvals (including any required
waiting periods) to the extent necessary to obtain all regulatory approvals for
the exercise of such rights, and (b) to the extent necessary to avoid liability
under Section 16(b) of the Exchange Act by reason of such exercise; provided
that in no event shall any closing date occur more than 18 months after the
related notice date, and, if the closing date shall not have occurred within
such period due to the failure to obtain any required approval by the OTS, the
FDIC or any other Governmental Authority despite the best efforts of Issuer or
the Substitute Warrant Issuer, as the case may be, to obtain such approvals, the
exercise of the rights shall be deemed to have been rescinded as of the related
notice date. In the event (a) Grantee receives official notice that an approval
of the OTS, the FDIC or any other Governmental Authority required for the
purchase and sale of the Warrant Shares will not be issued or granted or (b) a
closing date has not occurred within 18 months after the related notice date due
to the failure to obtain any such required approval, Grantee shall be entitled
to exercise the Warrant in connection with the concurrent resale of the Warrant
Shares pursuant to a registration statement as provided in Section 6 hereof.
Nothing contained in this Agreement shall restrict Grantee from specifying
alternative means of exercising rights pursuant to Sections 2, 6 or 7 hereof in
the event that the exercising of any such rights shall not have occurred due to
the failure to obtain any required approval referred to in this Section 9.
SECTION 10. Issuer hereby represents and warrants to Grantee as
follows:
(a) Issuer has the requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly approved by the Board of
Directors of Issuer and no other corporate proceedings on the part of Issuer are
necessary to authorize this Agreement or to consummate the transactions so
contemplated. This Agreement has been duly executed and delivered by, and
constitutes a valid and binding obligation of, Issuer, enforceable against
Issuer in accordance with its terms, subject to any required Governmental
Approval, and except as enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought.
<PAGE>
(b) Issuer has taken all necessary corporate action to authorize and
reserve and to permit it to issue, and at all times from the date hereof through
the termination of this Agreement in accordance with its terms will have
reserved for issuance upon the exercise of the Warrant, that number of shares of
Issuer Common Stock equal to the maximum number of shares of Issuer Common Stock
at any time and from time to time issuable hereunder, and all such shares, upon
issuance pursuant hereto, will be duly authorized, validly issued, fully paid,
non-assessable, and will be delivered free and clear of all claims, liens,
encumbrances and security interests and not subject to any preemptive rights.
SECTION 11. (a) Neither of the parties hereto may assign any of its
rights or delegate any of its obligations under this Agreement or the Warrant
created hereunder to any other Person without the express written consent of the
other party, except that Grantee may assign this Agreement to a wholly owned
subsidiary of Grantee and Grantee may assign its rights hereunder in whole or in
part after the occurrence of a Preliminary Purchase Event. The term "Grantee" as
used in this Agreement shall also be deemed to refer to Grantee's permitted
assigns.
(b) Any assignment of rights of Grantee to any permitted assignee of
Grantee hereunder shall bear the restrictive legend at the beginning thereof
substantially as follows:
The transfer of the option represented by this assignment and the
related option agreement is subject to resale restrictions arising under
applicable federal and state securities laws and to certain provisions of
an agreement between FirstRock Bancorp, Inc. and First Financial
Corporation dated as of October 26, 1994. A copy of such agreement is on
file at the principal office of FirstRock Bancorp, Inc. and will be
provided to any permitted assignee of the Warrant without charge upon
receipt of a written request therefor.
SECTION 12. Each of Grantee and Issuer will use its reasonable efforts
to make all filings with, and to obtain consents of, all third parties and
Governmental Authorities necessary to the consummation of the transactions
contemplated by this Agreement, including, without limitation, applying to the
OTS, the FDIC and any other Governmental Authority for approval to acquire the
shares issuable hereunder.
SECTION 13. The parties hereto acknowledge that damages would be an
inadequate remedy for a breach of this Agreement by either party hereto and that
the obligations of the parties hereto shall be enforceable by either party
hereto through injunctive or other equitable relief. Both parties further agree
to waive any requirement for the securing or posting of any bond in connection
with the obtaining of any such equitable relief and that this provision is
without prejudice to any other rights that the parties hereto may have for any
failure to perform this Agreement.
SECTION 14. If any term, provision, covenant or restriction contained
in this Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions and covenants and restrictions contained in this Agreement
shall remain in full force and effect, and shall in no way be affected, impaired
or invalidated. If for any reason such court or regulatory agency determines
that Grantee is not permitted to acquire, or Issuer is not permitted to
repurchase pursuant to Section 7 hereof, the full number of shares of Issuer
Common Stock provided in Section 1(a) hereof (as adjusted pursuant hereto), it
is the express intention of Issuer to allow Grantee to acquire or to require
Issuer to repurchase such lesser number of shares as may be permissible, without
any amendment or modification hereof.
<PAGE>
SECTION 15. All notices, requests, claims, demands and other
communications hereunder shall be deemed to have been duly given when delivered
in person, by cable, telegram, telecopy or telex, or by registered or certified
mail (postage prepaid, return receipt requested) at the respective addresses of
the parties set forth in the Plan.
SECTION 16. This Agreement, the rights and obligations of the parties
hereto, and any claims or disputes relating thereto shall be governed by and
construed in accordance with the laws of the State of Delaware (but not
including the choice of law rules thereof).
SECTION 17. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement and shall be effective at the time
of execution and delivery.
SECTION 18. Except as otherwise expressly provided herein, each of the
parties hereto shall bear and pay all costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated hereunder.
SECTION 19. Except as otherwise expressly provided herein or in the
Plan, this Agreement contains the entire agreement between the parties with
respect to the transactions contemplated hereunder and supersedes all prior
arrangements or understandings with respect thereof, written or oral. The terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assigns.
Nothing in this Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto, and their respective successors except as
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided herein.
SECTION 20. Capitalized terms used in this Agreement and not defined
herein but defined in the Plan shall have the meanings assigned thereto in the
Plan.
SECTION 21. Nothing contained in this Agreement shall be deemed to
authorize or require Issuer or Grantee to breach any provision of the Plan or
any provision of law applicable to the Grantee or Issuer.
SECTION 22. In the event that any selection or determination is to be
made by Grantee or the Owner hereunder and at the time of such selection or
determination there is more than one Grantee or Owner, such selection shall be
made by a majority in interest of such Grantees or Owners.
SECTION 23. In the event of any exercise of the option by Grantee,
Issuer and such Grantee shall execute and deliver all other documents and
instruments and take all other action that may be reasonably necessary in order
to consummate the transactions provided for by such exercise.
SECTION 24. Except to the extent Grantee exercises the Warrant,
Grantee shall have no rights to vote or receive dividends or have any other
rights as a shareholder with respect to shares of Issuer Common Stock covered
hereby.
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Warrant
Agreement to be executed on its behalf by their officers thereunto duly
authorized, all as of the date first above written.
FIRSTROCK BANCORP, INC.
By: /s/ David A. Ingrassia
___________________________________
Name: David A. Ingrassia, President
FIRST FINANCIAL CORPORATION
By: /s/ John C. Seramur
___________________________________
Name: John C. Seramur, President
<PAGE>
