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): September 21, 1999
PEOPLES BANCORP
(Exact name of registrant as specified in its charter)
INDIANA
(State or other jurisdiction of incorporation)
0-18991 35-1811284
(Commission File Number) (IRS Employer Identification No.)
212 West Seventh Street
Auburn, Indiana 46706
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (219) 925-2500
<PAGE>
2
Item 5. Other Events
On September 21, 1999, Peoples Bancorp (the ARegistrant@) and Three
Rivers Financial Corp. (AThree Rivers@) jointly announced the signing of a
definitive agreement (the "Agreement") pursuant to which Three Rivers will be
merged with and into Registrant (the "Merger"). The Agreement provides that upon
the effective date of the Merger (the "Effective Time"), each shareholder of
Three Rivers will receive in a tax-free exchange 1.08 shares of Registrant=s
common stock for each share of Three Rivers common stock owned by such
shareholder. Based on the closing price of Registrant on September 20, 1999
($17), the transaction is valued at $18.36 per share and has an aggregate value
of approximately $14.4 million (assuming the exchange of all outstanding stock
options).
Pursuant to General Instruction F to Form 8-K, the press release issued
September 21, 1999, concerning the Merger is incorporated herein by reference
and is attached hereto as Exhibit 20.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 2 Plan of Reorganization and Agreement and
Plan of Merger by and among Peoples Bancorp
and Three Rivers Financial Corporation dated
September 21, 1999.
Exhibit 20 Press Release dated September 21, 1999.
<PAGE>
iv
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.
By: Roger J. Wertenberger
Dated: September 23, 1999
<PAGE>
Exhibit 2
PLAN OF REORGANIZATION
AND AGREEMENT AND PLAN OF MERGER
BY AND AMONG
PEOPLES BANCORP
AND
THREE RIVERS FINANCIAL CORPORATION
Dated September 21, 1999
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I - CERTAIN DEFINITIONS................................................1
Section 1.1 Definitions..............................................1
ARTICLE II - THE MERGER........................................................6
Section 2.1 The Merger...............................................6
Section 2.2 Closing..................................................6
Section 2.3 Effective Time...........................................6
Section 2.4. Additional Activities...................................6
Section 2.5. Articles of Incorporation and Bylaws....................7
Section 2.6. Boards of Directors and Officers........................7
Section 2.7. Conversion of Securities................................7
Section 2.8. Exchange Procedures.....................................7
Section 2.9. No Fractional Shares....................................9
Section 2.10. Anti-Dilution Adjustments..............................9
Section 2.11. Treatment of Stock Options..............................9
Section 2.12. Reservation of Right to Revise Transaction............10
ARTICLE III - FIRST SAVINGS...................................................10
Section 3.1. Liquidation Account....................................10
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND FIRST SAVINGS..10
Section 4.1. Organization, Good Standing, Authority, Insurance, Etc.10
Section 4.2. Capitalization.........................................11
Section 4.3. Ownership of Subsidiaries..............................11
Section 4.4. Financial Statements and Reports.......................11
Section 4.5. Absence of Changes.....................................12
Section 4.6. No Broker's or Finder's Fees...........................12
Section 4.7. Litigation and Other Proceedings.......................12
Section 4.8. Compliance with Law....................................12
Section 4.9. Corporate Actions......................................13
Section 4.10. Authority.............................................13
Section 4.11. Employment Arrangements...............................14
Section 4.12. Employee Benefits.....................................14
Section 4.13. Information Furnished; Registration Statement.........15
Section 4.14. Property and Assets...................................15
Section 4.15. Agreements and Instruments............................16
Section 4.16. Material Contract Defaults............................17
Section 4.17. Tax Matters...........................................17
Section 4.18. Environmental Matters.................................17
Section 4.19. Loan Portfolio; Portfolio Management..................18
Section 4.20. Real Estate Loans and Investments.....................18
Section 4.21. Derivatives Contracts.................................18
Section 4.22. Insurance.............................................19
Section 4.23. Tax Treatment.........................................19
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF BANCORP AND THE BANK............19
Section 5.1. Organization, Good Standing, Authority, Insurance, Etc.19
Section 5.2. Capitalization.........................................20
Section 5.3. Ownership of Subsidiaries..............................20
Section 5.4. Financial Statements and Reports.......................20
Section 5.5 Absence of Changes......................................21
Section 5.6. No Broker's or Finder's Fees...........................21
Section 5.7. Litigation and Other Proceedings.......................21
Section 5.8. Compliance With Law....................................21
Section 5.9. Corporate Actions......................................22
Section 5.10. Authority.............................................22
Section 5.11. Information Furnished; Registration Statement.........22
Section 5.12. Property and Assets...................................23
Section 5.13. Agreements and Instruments............................23
Section 5.14. Material Contract Defaults............................24
Section 5.15. Tax Matters...........................................24
Section 5.16. Environmental Matters.................................24
Section 5.17. Loan Portfolio; Portfolio Management..................25
Section 5.18. Real Estate Loans and Investments.....................25
Section 5.19. Derivatives Contracts.................................25
Section 5.20. Insurance.............................................26
Section 5.21. Tax Treatment.........................................26
ARTICLE VI - COVENANTS........................................................26
Section 6.1. Conduct of Business by the Company.....................26
Section 6.2. Maintenance of Records.................................28
Section 6.3. Salary and Benefits....................................28
Section 6.4. Efforts of Parties to Close............................29
Section 6.5. Confidentiality and Announcements......................30
Section 6.6. Access; Certain Communications.........................30
Section 6.7. Cooperation; Preparation of Documents..................31
Section 6.8. Notification of Certain Matters........................32
Section 6.9. Expenses...............................................33
Section 6.10. Third Party Proposals.................................33
Section 6.11. Stock Listing.........................................33
Section 6.12. Integration; Conforming Entries.......................33
Section 6.13. Tax-Free Treatment....................................34
Section 6.14. Agreements of Affiliates..............................34
Section 6.15. Stockholder Approval..................................34
Section 6.16. Indemnification.......................................35
Section 6.17. D&O Insurance.........................................35
Section 6.18. Environmental Reports.................................35
ARTICLE VII - CONDITIONS TO CONSUMMATION OF THE MERGER........................36
Section 7.1. Mutual Conditions......................................36
Section 7.2. Conditions to Bancorp's Obligations....................37
Section 7.3. Conditions to the Company's Obligations................38
ARTICLE VII - TERMINATION.....................................................38
Section 8.1. Termination............................................38
Section 8.2. Survival After Termination.............................39
Section 8.3. Termination Fee........................................39
ARTICLE IX - MISCELLANEOUS....................................................40
Section 9.1. Amendments; Waiver.....................................40
Section 9.2. Entire Agreement.......................................40
Section 9.3. Non-Survival of Representations, Warranties
and Agreements....................................40
Section 9.4. Interpretation.........................................40
Section 9.5. Severability...........................................40
Section 9.6. Notices................................................40
Section 9.7. Binding Effect; Persons Benefiting; No Assignment......41
Section 9.8. Counterparts...........................................41
Section 9.9. Governing Law..........................................42
Section 9.10. Specific Performance..................................42
Section 9.11. Waiver of Jury Trial..................................42
<PAGE>
PLAN OF REORGANIZATION
AND AGREEMENT AND PLAN OF MERGER
........THIS PLAN OF REORGANIZATION AND AGREEMENT AND PLAN OF MERGER, dated as
of September 21, 1999 (the "Agreement"), is by and among Peoples Bancorp, an
Indiana corporation ("Bancorp") and Three Rivers Financial Corporation, a
Delaware corporation (the "Company").
.........WHEREAS, Bancorp, a unitary savings and loan holding company, with its
principal offices in Auburn, Indiana, owns all of the issued and outstanding
capital stock of Peoples Federal Savings Bank of DeKalb County, a federally
chartered savings bank and wholly-owned subsidiary of Bancorp (the "Bank"), with
its principal offices in Auburn, Indiana;
.........WHEREAS, the Company, a unitary savings and loan holding company, with
its principal offices in Three Rivers, Michigan, owns all of the issued and
outstanding capital stock of First Savings Bank, A Federal Savings Bank, a
federally chartered savings bank and wholly-owned subsidiary of ("First
Savings"), with its principal offices in Three Rivers, Michigan;
............WHEREAS, Bancorp and the Company desire to combine their
respective holding companies through a tax-free exchange so that the respective
shareholders of both Bancorp and the Company will have an equity ownership in
the combined holding company;
...........WHEREAS, to accomplish the foregoing, the Board of Directors of the
Company (the "Company Board") and the Board of Directors of Bancorp (the
"Bancorp Board") have approved the merger (the " Merger") of the Company with
and into Bancorp, pursuant to the terms and subject to the conditions of this
Agreement;
...........WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Code (as defined below) and this Agreement shall constitute a plan of
reorganization pursuant to Section 368 of the Code;
...........WHEREAS, the parties desire that First Savings shall become a
separate wholly-owned subsidiary of Bancorp, and not be merged with and into the
Bank;
...........WHEREAS, the parties desire to provide for certain undertakings,
conditions, representations, warranties, and covenants in connection with the
transactions contemplated by this Agreement.
...........NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein and subject to the conditions and other terms herein set forth, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE I
CERTAIN DEFINITIONS
.............Section 1.1. Definitions. For all purposes of this Agreement, the
following terms shall have the respective meanings set forth in this Section 1.1
(such definitions to be equally applicable to both the singular and plural forms
of the terms herein defined):
.............."Acquisition Proposal" shall have the meaning set forth in Section
6.10.
.............."Affiliate" shall mean any individual, partnership, corporation,
entity, or other Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
the Person specified.
.............."Agreement" shall have the meaning set forth on the first page
hereof.
.............."Applicable Law" shall mean any domestic or foreign federal,
state, or local statute, law, ordinance, rule, administrative interpretation,
regulation, order, writ, injunction, directive, judgment, decree, policy,
guideline, or other requirement applicable to the Company, Bancorp, or any of
their respective Affiliates, properties, assets, officers, directors, employees,
or agents, as the case may be.
.............."Approval Date" shall have the meaning set forth in Section 2.3.
.............."Asset Classification" shall have the meaning set forth in Section
4.19(b).
.............."Bancorp" has the meaning set forth on the first page hereof and
includes any direct or indirect successor or assign.
.............."Bancorp Board" has the meaning set forth on the first page
hereof.
.............."Bancorp Common Stock" shall mean the common stock, par value
$1.00 per share, of Bancorp.
.............."Bancorp Material Adverse Effect" shall mean, with respect to
Bancorp or any of its Affiliates, a material adverse effect on (i) the business,
financial condition or results of operations of Bancorp and the Bancorp
Subsidiaries taken as a whole or (ii) the ability of Bancorp or the Bank to
complete the transactions contemplated hereby; provided, however, that a Bancorp
Material Adverse Effect shall not be defined to include (w) any change
attributable to or resulting from any change in Applicable Law or GAAP or
regulatory accounting principles, in each case which affects thrift institutions
generally, or (x) the effects of any change attributable to or resulting from
changes in economic conditions applicable to depository institutions generally
or in general levels of interest rates affecting thrift institutions generally,
or (y) expenses related to consummation of the Merger which are otherwise
permitted under this Agreement (or set forth in the Bancorp Disclosure
Schedule), including, but not limited to, preparation, legal, investment banking
and auditing fees.
.............."Bancorp Plans" shall have the meaning set forth in Section 6.3.
.............."Bancorp Subsidiary" and "Bancorp Subsidiaries" shall have the
respective meanings set forth in Section 5.1 and shall include First Savings
after the Effective Time.
.............."Bank" has the meaning set forth on the first page hereof and
includes any direct or indirect successor or assign.
.............."Benefit Arrangements" shall have the meaning set forth in Section
4.12(a)
.............."Business Day" shall mean any day that the NYSE is normally open
for trading and that is not a Saturday, a Sunday or a day on which banks in the
States of Indiana and Michigan are generally closed for regular banking
business.
.............."Certificates" shall have the meaning set forth in Section 2.8.
.............."Closing" shall have the meaning set forth in Section 2.2.
.............."Closing Date" shall have the meaning set forth in Section 2.2.
.............."Code" shall mean the Internal Revenue Code of 1986, as amended,
together with the Treasury regulations thereunder.
.............."Company" has the meaning set forth on the first page hereof and
includes any direct or indirect successor or assign.
.............."Company Board" has the meaning set forth on the first page
hereof.
.............."Company Common Stock" shall mean the common stock, par value
$0.01 per share, of Company.
.............."Company Employee Benefit Plan" has the meaning set forth in
Section 4.12(a).
.............."Company Material Adverse Effect" shall mean, with respect to the
Company or any of its Affiliates, a material adverse effect on (i) the business,
financial condition or results of operations of the Company and the Company
Subsidiaries taken as a whole or (ii) the ability of the Company or First
Savings to complete the transactions contemplated hereby; provided, however,
that a Company Material Adverse Effect shall not be defined to include (w) any
change attributable to or resulting from any change in Applicable Law or GAAP or
regulatory accounting principles, in each case which affects thrift institutions
generally, or (x) the effects of any change attributable to or resulting from
changes in economic conditions applicable to depository institutions generally
or in general levels of interest rates affecting thrift institutions generally,
or (y) expenses related to consummation of the Merger which are otherwise
permitted under this Agreement (or set forth in the Company Disclosure
Schedule), including, but not limited to, preparation, legal, investment banking
and auditing fees.
.............."Company Option" shall have the meaning set forth in Section 2.11.
.............."Company Preferred Stock" shall have the meaning set forth in
Section 4.2.
.............."Company Property" shall have the meaning set forth in Section
6.18.
.............."Company Subsidiary" and "Company Subsidiaries" shall have the
respective meanings set forth in Section 4.1.
.............."Contract" has the meaning set forth in Section 10.
.............."Current Property" shall have the meaning set forth in Section
6.18.
.............."Derivatives Contract" shall mean the meaning set forth in Section
4.21.
.............."DGCL" shall have the meaning set forth in Section 2.1.
.............."Effective Time" shall have the meaning set forth in Section 2.3.
.............."Encumbrance" shall mean any lien, pledge, security interest,
claim, charge, easement, limitation, commitment, encroachment, restriction, or
encumbrance of any kind or nature whatsoever.
.............."Environmental Firm" shall have the meaning set forth in Section
6.18.
.............."ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations thereunder.
.............."Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder.
.............."Exchange Agent" shall have the meaning set forth in Section 2.8.
.............."Exchange Option" shall have the meaning set forth in Section
2.11.
.............."Exchange Ratio" shall mean, subject to Section 2.10, 1.08 shares
of Bancorp Common Stock for each one share of Company Common Stock.
.............."Facility Property" shall have the meaning set forth in Section
6.18.
.............."FDIC" shall mean the Federal Deposit Insurance Corporation and
any successor thereto.
.............."GAAP" shall mean generally accepted accounting principles as used
in the United States of America as in effect at the time any applicable
financial statements were prepared or any act requiring the application of GAAP
was performed.
.............."Governmental Approval" shall have the meaning set forth in
Section 4.10.
.............."Governmental Authority" shall mean any government, any state or
other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including any government agency, department, board, commission,
or instrumentality of the United States, any state of the United States or any
political subdivision thereof, and any court or tribunal of competent
jurisdiction, and any governmental or nongovernmental self-regulatory
organization, agency, or authority (including the NASDAQ NMS and the National
Association of Securities Dealers, Inc.).
.............."HOLA" shall mean the Home Owners' Loan Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
.............."IBCL" shall have the meaning set forth in Section 2.1.
.............."Injunction" shall have the meaning set forth in Section 7.1(a).
.............."IRS" shall mean the Internal Revenue Service and any successor
thereto.
.............."Insurance Policies" shall have the meaning set forth in Section
4.22.
.............."Merger" has the meaning set forth on the first page hereof.
.............."Merger Consideration" shall have the meaning set forth in Section
2.12.
.............."NASDAQ NMS" means the Nasdaq National Market and any successor
thereto.
.............."NYSE" means the New York Stock Exchange, Inc. and any successor
thereto.
.............."OTS" shall mean the Office of Thrift Supervision and any
successor thereto.
.............."Person" shall mean any individual, corporation, company,
partnership (limited or general), joint venture, association, trust or other
entity or similar contractual arrangement or relationship.
.............."Previously Disclosed" by a party shall mean information set forth
in a schedule (with respect to Bancorp, the "Bancorp Disclosure Schedule"; and
with respect to the Company, the "Company Disclosure Schedule"), correspondingly
enumerated to the representations, warranties, or covenants to which such
information relates, that is delivered by such party to the other party
contemporaneously with the execution of this Agreement and specifically
designated as information "Previously Disclosed" pursuant to this Agreement.
.............."Prospectus" shall have the meaning set forth in Section 4.13.
.............."Proxy Statement" shall have the meaning set forth in Section
4.13.
.............."Records" shall mean, with respect to any Person, all records and
original documents (and copies thereof) in the Person's possession, or in the
possession of an Affiliate of such Person, as of the Closing Date (a) which
pertain to or are utilized by such Person or Affiliate to administer, reflect,
monitor, evidence or record information respecting the business or conduct of
the Company or the Company Subsidiaries or Bancorp or the Bancorp Subsidiaries,
or (b) necessary or appropriate for the Company or the Company Subsidiaries or
Bancorp and the Bancorp Subsidiaries to comply with any Applicable Law, and
shall include in the case of (a) and (b) above, all such records maintained on
electronic or magnetic media, or in the electronic data base system of or used
by such Person or Affiliate.
.............."Registration Statement" shall have the meaning set forth in
Section 4.13.
.............."Regulatory Documents" shall mean, with respect to a Person, all
forms, reports, registration statements, schedules, and other documents filed,
or required to be filed by such Person with any Governmental Authority or
pursuant to any Applicable Law.
.............."Representatives" shall have the meaning set forth in Section
6.10.
.............."Right" shall have the meaning set forth in Section 6.1(ii).
.............."SAIF" shall have the meaning set forth in Section 4.1 and any
successor thereto.
.............."SEC" shall mean the Securities and Exchange Commission and any
successor thereto.
.............."Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the SEC thereunder.
.............."Surviving Corporation" shall have the meaning set forth in
Section 2.1.
.............."Tax Return" shall mean any return, report, information statement,
schedule or other document (including any related or supporting information and
including any Form 1099 or other document or report required to be provided to
third parties) with respect to Taxes, including any document required to be
retained or provided to any Governmental Authority pursuant to 31 U.S.C.
Sections 5311-5328 and regulations promulgated thereunder.
.............."Taxes" shall mean all federal, provincial, territorial, state,
municipal, local, foreign or other taxes, imposts, rates, levies, assessments
and other charges (and all interest and penalties thereon), including, without
limitation, all income, excise, franchise, gains, real property, value added,
severance, ad valorem, personal property, sales, use, license, employment,
payroll, social security, unemployment, disability, estimated or withholding
taxes, and all customs and import duties, and all interest, penalties, and
losses thereon or associated therewith or associated with any Tax Return.
.............."Transferred Employees" shall have the meaning set forth in
Section 6.3.
ARTICLE II
THE MERGER
..............Section 2.1. The Merger. Subject to the terms and conditions of
this Agreement and to the HOLA, the Company shall be merged with and into
Bancorp in accordance with the Indiana Business Corporation Law (the "IBCL") and
the Delaware General Corporation Law (the "DGCL"), and thereafter the separate
corporate existence of the Company shall cease. Bancorp shall be the surviving
corporation of the Merger (sometimes referred to herein as the "Surviving
Corporation") and shall continue to be governed by the laws of the State of
Indiana. The Merger shall have the effects set forth in the applicable
provisions of the IBCL and the DGCL.
..............Section 2.2. Closing. The closing (the "Closing") of the Merger
shall take place at the offices of Barnes & Thornburg, 11 South Meridian Street,
Indianapolis, Indiana 46204, counsel to Bancorp (including by mail, fax, or
otherwise as reasonably agreed to by the parties hereto) or such other time and
place as the parties shall agree, prior to the Effective Time on the date that
the Effective Time occurs (the "Closing Date").
..............Section 2.3. Effective Time. The Merger shall become effective on
the date and at the time (the "Effective Time") on which appropriate documents
in respect of the Merger are filed with the Secretaries of State of the States
of Indiana and Delaware in such form as required by, and in accordance with, the
relevant provisions of the DGCL and IBCL, respectively. Subject to the terms and
conditions of this Agreement, the Effective Time shall occur on such date as
Bancorp shall notify the Company in writing (such notice to be at least five
full trading days in advance of the Effective Time) but (i) not earlier than the
satisfaction or waiver of all conditions set forth in Article VII (such date
being referred to herein as the "Approval Date") and (ii) subject to clause (i),
not later than the first Business Day of the first full calendar month
commencing at least five full trading days after the Approval Date, or at such
other time as Bancorp and the Company shall agree.
..............Section 2.4. Additional Actions. If, at any time after the
Effective Time, the Surviving Corporation shall consider or be advised that any
further deeds, assignments, or assurances or any other acts are necessary or
desirable to (i) vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation its right, title, or interest in, to, or under any of the
rights, properties, or assets of Bancorp or the Company. or (ii) otherwise carry
out the purposes of this Agreement, the Company and each of its officers and
directors shall be deemed to have granted to the Surviving Corporation an
irrevocable power of attorney to execute and deliver all such deeds,
assignments, or assurances and to do all acts necessary or desirable to vest,
perfect or confirm title and possession to such rights, properties, or assets in
the Surviving Corporation and otherwise to carry out the purposes of this
Agreement, and the officers and directors of the Surviving Corporation are
authorized in the name of the Company or otherwise to take any and all such
action.
..............Section 2.5. Articles of Incorporation and Bylaws. The Articles of
Incorporation and Bylaws of Bancorp in effect immediately prior to the Effective
Time shall be the Articles of Incorporation and Bylaws of the Surviving
Corporation following the Merger until otherwise amended or repealed.
..............Section 2.6. Boards of Directors and Officers. At the Effective
Time, the directors and officers of Bancorp immediately prior to the Effective
Time shall continue to be directors and officers, respectively, of the Surviving
Corporation following the Merger; such directors and officers shall hold office
in accordance with the Surviving Corporation's Bylaws and applicable law.
Promptly following the Effective Time, (i) Richard Gatton, President, CEO, and
Chairman of the Company, and one other representative of the Company, shall be
invited to serve as additional members of the Bancorp Board and, upon acceptance
thereof and appointment thereon, shall be entitled to receive director fees and
other benefits on the same basis as other directors of Bancorp, and (ii) two
representatives of Bancorp shall be appointed to the Board of Directors of First
Savings. Each director serving on the Board of Directors of First Savings as of
the date hereof and as of the Effective Time shall remain a director of First
Savings for a period of not less than sixty (60) months following the Effective
Time. Directors of First Savings shall be entitled to be compensated at the same
rate following the Effective Time as the Board of Directors is currently being
compensated, subject to increases in accordance with the policies of Bancorp
related to the compensation of directors of the Bank.
..............Section 2.7. Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of Bancorp, the Company,
or the holder of any of the following securities:
.............. (a) Each share of Bancorp Common Stock that is issued and
outstanding immediately prior to the Effective Time shall remain outstanding and
shall be unchanged after the Merger; and
.............. (b) Subject to Sections 2.9, and 2.10 hereof:
.............. (i) each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time shall cease to be outstanding and shall
be converted into and become the right to receive a number of shares of Bancorp
Common Stock equal to the Exchange Ratio, provided, however, that any shares of
Company Common Stock held by the Company, Bancorp, or any of their respective
Subsidiaries, in each case other than in a fiduciary capacity or as a result of
debts previously contracted, shall be canceled and shall not be exchanged for
shares of Bancorp Common Stock; and
.............. (ii) each share of Company Common Stock issued and outstanding
pursuant to the Company's recognition and retention plan immediately prior to
the Effective Time shall cease to be outstanding and shall be converted into and
become the right to receive a number of shares of Bancorp Common Stock equal to
the Exchange Ratio and shall continue to be subject to the same conditions and
limitations as such Company Common Stock was subject immediately prior to the
Effective Time.
..............Section 2.8. Exchange Procedures. (a) At or prior to the Effective
Time, Bancorp shall deposit, or shall cause to be deposited, with the Exchange
Agent, for the benefit of the holders of certificates of Company Common Stock
for exchange in accordance with this Article II, certificates representing the
shares of Bancorp Common Stock and an estimated amount of cash to be paid in
lieu of fractional shares to be paid pursuant to this Article II in exchange for
outstanding shares of Company Common Stock.
.............. (b) Holders of record of certificates which immediately prior to
the Effective Time represented outstanding shares of Company Common Stock (the
"Certificates") shall be instructed to tender such Certificates to Bancorp, or
to an exchange agent designated by Bancorp (the "Exchange Agent"), pursuant to a
letter of transmittal that Bancorp shall deliver or cause to be delivered to
such holders as promptly as practicable following the Effective Time. Such
letter of transmittal shall specify that risk of loss and title to Certificates
shall pass only upon delivery of such Certificates to Bancorp or the Exchange
Agent.
.............. (c) Subject to Section 2.9, after the Effective Time, each holder
of a Certificate(s) that surrenders such Certificate(s) to Bancorp, or to the
Exchange Agent, will, upon acceptance thereof by Bancorp or the Exchange Agent,
be entitled to (x) a certificate or certificates representing the number of
whole shares of Bancorp Common Stock into which the shares represented by the
Certificate(s) so surrendered (aggregating all Certificates surrendered by such
holder) shall have been converted pursuant to this Agreement and (y) a check
representing the amount of any cash in lieu of fractional shares, if any, and
dividends and distributions, if any, which such holder has the right to receive
hereunder with respect to the Certificate(s) so surrendered, in each case after
giving effect to any required withholding tax.
.............. (d) Bancorp or, at the election of Bancorp, the Exchange Agent,
shall accept Certificates upon compliance with such reasonable terms and
conditions as Bancorp or the Exchange Agent may impose to effect an orderly
exchange thereof in accordance with customary exchange practices. Certificates
shall be appropriately endorsed or accompanied by such instruments of transfer
as Bancorp or the Exchange Agent may reasonably require.
.............. (e) All shares of Bancorp Common Stock issued upon surrender of
Certificates in accordance with the terms hereof (including any cash paid
pursuant to this Article II) shall be deemed to have been in full satisfaction
of all rights pertaining to such shares of Company Common Stock represented
thereby. After the Effective Time, holders of Certificates shall cease to have
rights with respect to the shares previously represented by such Certificates,
and their sole rights shall be to exchange such Certificates for the
consideration provided for in this Agreement.
.............. (f) After the Effective Time, there shall be no further transfer
on the records of the Company of Certificates, and if such Certificates are
presented to the Company for transfer, they shall be canceled against delivery
of the consideration provided therefor in this Agreement. Bancorp shall not be
obligated to deliver the consideration to which any former holder of Company
Common Stock is entitled as a result of the Merger until such holder surrenders
the Certificates as provided herein. Certificates surrendered for exchange by
any person constituting an "affiliate" of the Company for purposes of Rule 145
of the Securities Act, shall not be exchanged for certificates representing
Bancorp Common Stock until Bancorp has received a written agreement from such
person in the form attached hereto as Exhibit A. Neither the Exchange Agent nor
any party to this Agreement nor any Affiliate thereof shall be liable to any
holder of stock represented by any Certificate for any consideration paid to a
public official pursuant to applicable abandoned property, escheat or similar
laws. Bancorp and the Exchange Agent shall be entitled to rely upon the stock
transfer books of the Company to establish the identity of those persons
entitled to receive consideration specified in this Agreement, which books shall
be conclusive with respect thereto. In the event of a dispute with respect to
ownership of stock represented by any Certificate, Bancorp and the Exchange
Agent shall be entitled to deposit any consideration represented thereby in
escrow with an independent third party and thereafter be relieved with respect
to any claims thereto.
.............. (g) Notwithstanding any other provisions of this Agreement, no
dividends or other distributions declared or made after the Effective Time with
respect to Bancorp Common Stock having a record date after the Effective Time
shall be paid to the holder of any unsurrendered Certificate, and no cash
payment in lieu of fractional shares shall be paid to any such holder, until the
holder shall surrender such Certificate as provided in this Section 2.8. Subject
to the effect of Applicable Laws, following surrender of any such Certificate,
there shall be paid to the holder of the certificates representing whole shares
of Bancorp Common Stock issued in exchange therefor, without interest, (i) at
the time of such surrender, the amount of dividends or other distributions with
a record date on or after the Effective Time theretofore payable with respect to
such whole shares of Bancorp Common Stock and not paid, less the amount of any
withholding taxes which may be required thereon, and (ii) at the appropriate
payment date subsequent to surrender, the amount of dividends or other
distributions with a record date on or after the Effective Time but prior to
surrender and a payment date subsequent to surrender payable with respect to
such whole shares of Bancorp Common Stock, less the amount of any withholding
taxes which may be required thereon.
..............Section 2.9. No Fractional Shares. Notwithstanding any other
provision of this Agreement, neither certificates nor scrip for fractional
shares of Bancorp Common Stock shall be issued in the Merger. Each holder who
otherwise would have been entitled to a fraction of a share of Bancorp Common
Stock shall receive in lieu thereof cash (without interest) in an amount
determined by multiplying the fractional share interest to which such holder
would otherwise be entitled by the average of the closing prices per share of
Bancorp Common Stock for the five full trading days immediately preceding the
Closing Date as reported on the NASDAQ NMS (as reported in The Wall Street
Journal or, if not reported therein, in another mutually agreed upon
authoritative source). No such holder shall be entitled to dividends, voting
rights, or any other rights in respect of any fractional share.
..............Section 2.10. Anti-Dilution Adjustments. In the event that prior
to the Effective Time Bancorp shall (or shall establish a record date prior to
the Effective Time for the following) declare a stock dividend or other
distribution payable in Bancorp Common Stock or securities convertible into
Bancorp Common Stock or a distribution otherwise Previously Disclosed, or effect
a stock split, reclassification, combination, or other change with respect to
Bancorp Common Stock, the Exchange Ratio or the Merger Consideration, as the
case may be, shall be appropriately adjusted to reflect such dividend,
distribution, stock split, reclassification, combination, or other change, such
that the shareholders of the Company shall be entitled to same as if the
Effective Time had occurred prior thereto.
..............Section 2.11. Treatment of Stock Options. (a) Prior to the
Effective Time, Bancorp and the Company shall take all such actions as may be
necessary to cause each unexpired and unexercised option under stock option
plans of the Company in effect on the date hereof which has been granted to
current or former directors, officers, or employees of the Company by the
Company (each, a "Company Option") to be automatically converted at the
Effective Time into an option (an "Exchange Option") to purchase that number of
shares of Bancorp Common Stock equal to the number of shares of Company Common
Stock issuable immediately prior to the Effective Time upon exercise of the
Company Option (without regard to actual restrictions on exercisability)
multiplied by the Exchange Ratio (fractional shares as a result thereof to be
subject to the terms of the respective Company Options and the terms of the
plans governing same), with an exercise price equal to the exercise price which
existed under the corresponding Company Option divided by the Exchange Ratio,
and with other terms and conditions that are the same as the terms and
conditions of such Company Option immediately before the Effective Time,
provided that with respect to any Company Option that is an "incentive stock
option" within the meaning of Section 422 of the Code, the foregoing conversion
shall be carried out in a manner satisfying the requirements of Section 424(a)
of the Code. In connection with the issuance of Exchange Options, Bancorp shall
(i) reserve for issuance the number of shares of Bancorp Common Stock that will
become subject to Exchange Options pursuant to this Section 2.11 and (ii) from
and after the Effective Time, upon exercise of Exchange Options, make available
for issuance all shares of Bancorp Common Stock covered thereby, subject to the
terms and conditions applicable thereto.
.............. (b) The Company agrees to issue treasury shares of the Company,
to the extent available, upon the exercise of Company Options prior to the
Effective Time.
.............. (c) Bancorp agrees to file with the SEC within one month after
the Closing Date a registration statement on Form S-8 or other appropriate form
under the Securities Act to register shares of Bancorp Common Stock issuable
upon exercise of the Exchange Options and use its reasonable efforts to cause
such registration statement to remain effective until the exercise or expiration
of all of such Exchange Options. Such registration statement may be in the form
of either an initial filing or a post-effective amendment to the registration
statement on Form S-4 filed in connection with this Agreement and the
transactions contemplated hereby.
..............Section 2.12. Reservation of Right to Revise Transaction. Bancorp
may at any time change the method of effecting the acquisition of the Company or
the Company Subsidiaries by Bancorp, and the Company shall cooperate in such
efforts, if and to the extent Bancorp deems such change to be desirable and
subject to the Company's approval (which approval shall not be unreasonably
withheld); provided, however, that no such change shall (A) alter or change the
amount or kind of consideration to be issued to holders of Company Common Stock
as provided for in this Agreement (the "Merger Consideration"), (B) adversely
affect the tax treatment to the Company's shareholders as a result of receiving
the Merger Consideration, or (C) materially delay the consummation of the
transactions contemplated by this Agreement.
ARTICLE III
FIRST SAVINGS
..............Section 3.1. Liquidation Account. The liquidation account
established by First Savings pursuant to the plan of conversion adopted in
connection with its conversion from mutual to stock form shall, to the extent
required by Applicable Law, continue to be maintained by First Savings after the
Effective Time for the benefit of those persons and entities who were savings
account holders of First Savings on the eligibility and supplemental eligibility
record dates for such conversion and who continue from time to time to have
rights therein.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND FIRST SAVINGS
..............The Company and First Savings jointly and severally represent and
warrant to Bancorp and the Bank, except as otherwise Previously Disclosed, as
follows:
..............Section 4.1. Organization, Good Standing, Authority, Insurance,
Etc. (a) The Company is a corporation organized, existing, and in good standing
under the laws of the State of Delaware, and is registered as a savings and loan
holding company with the OTS under the HOLA. First Savings is a federal savings
association. Each "subsidiary" of the Company within the meaning of Section
10(a)(1)(G) of HOLA (individually a "Company Subsidiary" and collectively the
"Company Subsidiaries"), has been Previously Disclosed. Each of the Company
Subsidiaries is organized, existing and in good standing under the laws of the
respective jurisdiction under which it is organized, as set forth in the Company
Disclosure Schedule. Each of the Company and the Company Subsidiaries has all
requisite corporate power and corporate authority and is qualified and licensed
to own, lease and operate its properties and conduct its business as it is now
being conducted, except for such failure or failures to be so qualified or
licensed as would not, in the aggregate, have a Company Material Adverse Effect.
The Company has made available to Bancorp a true, complete and correct copy of
the articles of incorporation, charter, or other organizing documents and of the
bylaws of the Company and each Company Subsidiary as in effect on the date of
this Agreement. Each of the Company and the Company Subsidiaries is qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction in which qualification is necessary under Applicable Law, except to
the extent that any failures to so qualify would not, in the aggregate, have a
Company Material Adverse Effect. First Savings is a member in good standing of
the Federal Home Loan Bank of Indianapolis, and all eligible accounts issued by
First Savings are insured by the Savings Association Insurance Fund ("SAIF") as
administered by the FDIC to the maximum extent permitted under Applicable Law,
and all premiums and assessments required in connection therewith have been paid
by First Savings. First Savings is a "domestic building and loan association" as
defined in Section 7701(a)(19) of the Code, and is a "qualified thrift lender"
as defined in Section 10(m) of the HOLA.
.............. (b) The minute books of the Company and the Company Subsidiaries
contain records of all meetings and other corporate actions held or taken of
their respective shareholders and Boards of Directors (including the committees
of such Boards) since January 1, 1996, which records are complete and accurate
in all material respects and have been made available to Bancorp.
..............Section 4.2. Capitalization. The authorized capital stock of the
Company consists of 2,000,000 shares of Company Common Stock, of which 702,734
shares were issued and outstanding as of the date of this Agreement, and 500,000
shares of preferred stock, par value of $0.01 per share ("Company Preferred
Stock"), of which no shares were outstanding as of the date of this Agreement.
No other class or series of capital stock of the Company is or has been
authorized. As of the date of this Agreement, there were no shares of Company
Common Stock and no shares of Company Preferred Stock held in the Company's
treasury and, except as Previously Disclosed, there were no shares of Company
Common Stock reserved for issuance. All issued and outstanding shares of Company
Common Stock are duly authorized, validly issued, fully paid, nonassessable, and
free of preemptive rights. As of the date of this Agreement, except as
Previously Disclosed, there are no outstanding Rights to purchase or acquire any
capital stock of the Company and no oral or written agreement, contract,
arrangement, understanding, plan, or instrument of any kind to which the Company
or any of its Affiliates is subject with respect to the issuance, voting or sale
of issued or unissued shares of the capital stock of the Company.
..............Section 4.3. Ownership of Subsidiaries. All the outstanding shares
of the capital stock or other ownership interests in all of the Company
Subsidiaries are validly issued, fully paid, nonassessable and owned
beneficially and of record by the Company or a Company Subsidiary free and clear
of any Encumbrance. There are no outstanding Rights to purchase or acquire any
capital stock of any Company Subsidiary and no oral or written agreement,
contract, arrangement, understanding, plan, or instrument of any kind to which
any of the Company or any of its Affiliates is subject with respect to the
issuance, voting or sale of issued or unissued shares of the capital stock of
any of the Company Subsidiaries. Neither the Company nor any Company Subsidiary
owns any of the capital stock or other equity securities (including any Rights
with respect to such securities) of or profit participations in any Person or
"company" (as defined in Section 10(a)(1)(C) of the HOLA) other than the Federal
Home Loan Bank of Indianapolis and the Company Subsidiaries.
..............Section 4.4. Financial Statements and Reports. For the past three
years, the Company and the Company Subsidiaries have timely filed all Regulatory
Documents required to be filed by them, except to the extent that all failures
to so file, in the aggregate, would not have a Company Material Adverse Effect;
and all such documents, as finally amended, complied in all material respects
with applicable requirements of Applicable Law and, as of their respective date
or the date as amended, did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Except to the extent stated therein, all financial
statements and schedules included in the documents referred to in the preceding
sentences (i) are in accordance with the Company's books and records and those
of any of the Company Subsidiaries, which books and records are complete and
accurate in all material respects and have been maintained in all material
respects in accordance with Applicable Law, and (ii) present fairly the
consolidated financial position and the consolidated results of operations and
cash flows of the Company as of the dates and for the periods indicated in
accordance with GAAP consistently applied during the periods involved (except
for the omission of notes to unaudited statements, year-end adjustments to
interim results normal in nature and amount, and changes in GAAP and except
where regulatory reporting requirements provide otherwise). The audited
consolidated financial statements of the Company as of June 30, 1999 and for the
three years then ended last filed by the Company as part of a publicly available
Regulatory Document disclose all liabilities (whether accrued, absolute,
contingent, unliquidated, or otherwise, whether due or to become due and
regardless of when asserted), as of their respective dates, of the Company and
the Company Subsidiaries required to be reflected in such financial statements
according to GAAP, other than liabilities which are not, in the aggregate,
material to the Company and the Company Subsidiaries, taken as a whole, and
contain in the opinion of management, adequate reserves for losses on loans and
properties acquired in settlement of loans, Taxes, and all other material
accrued liabilities and for all reasonably anticipated material losses in
accordance with GAAP, if any, as of such date. Except for (i) those liabilities
that are fully reflected or reserved against on the Company's audited
consolidated balance sheet last filed by the Company as part of a publicly
available Regulatory Document and (ii) liabilities incurred in the ordinary
course of business since the date of such audited consolidated balance sheet and
which would not have, individually or in the aggregate, a Company Material
Adverse Effect, the Company has no liabilities or obligations of any nature,
whether absolute, accrued, contingent, or otherwise and whether due or to become
due, which are or would be required by GAAP to be shown on its consolidated
balance sheet.
..............Section 4.5. Absence of Changes. (a) Except as disclosed in
publicly available Regulatory Documents filed by the Company prior to the date
of this Agreement, since June 30, 1999, there has been no event, occurrence,
development, fact, or set of circumstances of any nature existing or, to the
knowledge of the Company, threatened which, individually or in the aggregate,
has had or could reasonably be expected to have a Company Material Adverse
Effect.
.............(b) Except as Previously Disclosed, since June 30, 1999, each
of the Company and the Company Subsidiaries has owned and operated its
respectiveassets, properties, and businesses in the ordinary course of business
and consistent with past practice and has not taken any action or suffered any
event that if taken or suffered after the date hereof would violate Section
6.1 of this Agreement.
..............Section 4.6. No Broker's or Finder's Fees. No agent, broker,
investment banker, Person, or firm acting on behalf or under authority of the
Company or any of the Company Subsidiaries is or will be entitled to any
broker's or finder's fee or any other commission or similar fee directly or
indirectly in connection with the Merger or any other transaction contemplated
hereby, except the Company has engaged Trident Securities, a Division of
McDonald Investments, Inc., an investment banking firm, to provide financial
advisory services.
..............Section 4.7. Litigation and Other Proceedings. (a) Except for
matters which would not have, in the aggregate, a Company Material Adverse
Effect, neither the Company nor any Company Subsidiary is a defendant in, nor is
any of its property subject to, any pending or, to the knowledge of the Company,
threatened claim, action, suit, investigation, or proceeding. There is no
judicial order, judgment, or decree to which any of the Company, the Company
Subsidiaries, or their respective properties is subject which has had or could
reasonably be expected to have a Company Material Adverse Effect.
.............. (b) All pending claims, actions, suits, investigations, and
proceedings in which the Company or any Company Subsidiary is a defendant and
all judicial orders, judgments, or decrees to which the Company or any Company
Subsidiary is subject have been Previously Disclosed.
..............Section 4.8. Compliance with Law. The Company and the Company
Subsidiaries have been in compliance in all respects with all Applicable Laws,
except where such noncompliance would not have, in the aggregate, a Company
Material Adverse Effect, and neither the Company nor any Company Subsidiary has
received notice from any Governmental Authority of any material violation of,
and does not know of any material violations of, any Applicable Law.
..............Section 4.9. Corporate Actions. The Board of Directors of the
Company by at least a two-thirds vote of the Continuing Directors (as such term
is defined in Article XV of the Company's Certificate of Incorporation) has
authorized its appropriate officers to execute and deliver this Agreement and to
take all action necessary to consummate the Merger and the other transactions
contemplated hereby. Except for obtaining the requisite approval of the
Company's shareholders as contemplated hereby, all corporate authorization by
the Board of Directors and shareholders of the Company required for the
consummation of the Merger and the transactions contemplated hereby has been
obtained.
..............Section 4.10. Authority. Except as Previously Disclosed, the
execution, delivery, and performance by the Company of its obligations under
this Agreement and the consummation thereby of the transactions contemplated
hereby do not, and will not, violate or conflict with any of the provisions of,
or constitute a breach or default (or an event which, with notice or lapse of
time, or both, would constitute a breach or default) under, terminate, give any
Person the right to terminate, modify or accelerate payment or performance under
or result in the creation of any Encumbrance upon any of the respective
properties or assets of the Company or any Company Subsidiary under (i) the
articles of incorporation, charter or bylaws of the Company or any Company
Subsidiary, (ii) subject to the Governmental Approvals and the approval of the
Company's shareholders described below, any Applicable Law to which the Company
or any of the Company Subsidiaries is subject or (iii) except, in each case,
where such violation, conflict, breach, default, termination (or right to
terminate), modification, acceleration or Encumbrance would not, individually or
in the aggregate, have a Company Material Adverse Effect, any agreement, lease,
contract, note, mortgage, indenture, arrangement or other obligation or
instrument, whether oral or written ("Contract"), to which the Company or any of
the Company Subsidiaries is a party or is subject or by which any of their
properties or assets is bound or affected. The parties acknowledge that the
consummation of the Merger is subject to various regulatory approvals. The
Company has all requisite corporate power and corporate authority to enter into
this Agreement and to perform its obligations hereunder. Other than the filings,
notices, approvals, and consents with or of the Governmental Authorities as
Previously Disclosed (the "Governmental Approvals") and the requisite approval
of the Company's shareholders as contemplated hereby, no filings, notices,
approvals, or consents are required on behalf of the Company or any Company
Subsidiary in connection with the consummation of the transactions contemplated
by this Agreement. The Company has no knowledge of any reason why the
Governmental Approvals cannot be obtained or granted on a timely basis. This
Agreement constitutes the valid and binding obligation of the Company and is
enforceable in accordance with its terms, except as enforceability may be
limited by Applicable Laws relating to bankruptcy, insolvency or creditors
rights generally, the rights of creditors of insured depository institutions,
and general principles of equity.
.............Section 4.11. Employment Arrangements. Except as Previously
Disclosed, there are no employment, incentive compensation, severance, or other
agreements, plans, or arrangements with any current or former directors,
officers, or employees of the Company or any Company Subsidiary which may not be
terminated without penalty or liability (including any augmentation or
acceleration of benefits) on thirty (30) days or less notice to such Person.
Except as Previously Disclosed, neither the execution of this Agreement nor the
consummation of the transactions contemplated hereby will (either alone or upon
the occurrence of additional events or acts) result in, cause the accelerated
vesting or delivery of, or increase the amount or value of, any payment or
benefit to any employee, officer, or director of the Company or any Company
Subsidiary. Except as Previously Disclosed, no amount paid or payable to
directors, officers, or employees of the Company or the Company Subsidiaries in
connection with the transactions contemplated hereby (either solely as a result
of such transactions or as a result of such transactions in conjunction with any
other event) will cause the imposition of excise taxes under Section 4999 of the
Code or the disallowance of a deduction pursuant to Sections 162, 280G, or any
other section of the Code.
..............Section 4.12. Employee Benefits. (a) Neither the Company nor any
of the Company Subsidiaries maintains, contributes to, or sponsors any funded
deferred compensation plans (including profit sharing, pension, savings, or
stock bonus plans), unfunded deferred compensation arrangements, or employee
benefit plans as defined in Section 3(3) of ERISA, other than any plans
("Company Employee Benefit Plans") Previously Disclosed (true and correct copies
of which have been delivered to Bancorp). Except as Previously Disclosed,
neither the Company nor any of the Company Subsidiaries (i) provides health,
medical, death, or survivor benefits to any former employee or beneficiary
thereof, or (ii) maintains any form of current (exclusive of base salary and
base wages) or deferred compensation, bonus, stock option, stock appreciation
right, benefit, severance pay, retirement, incentive, group, or individual
health insurance, welfare, or similar plan or arrangement for the benefit of any
single or class of directors, officers, or employees, whether active or retired
(collectively "Benefit Arrangements").
.............. (b) All Company Employee Benefit Plans and Benefit Arrangements
which are in effect were in effect for substantially all of calendar year 1998
and, except as Previously Disclosed, there has been no material amendment
thereof (other than amendments required to comply with Applicable Law) and,
except as disclosed in publicly available Regulatory Documents filed by the
Company prior to the date of this Agreement, no material increase in the cost
thereof, or benefits payable thereunder on or after January 1, 1999.
............. (c) To the knowledge of the Company, with respect to all Company
Employee Benefit Plans and Benefit Arrangements, the Company and each Company
Subsidiary are in substantial compliance with the requirements prescribed by any
and all Applicable Laws currently in effect, including but not limited to ERISA
and the Code, applicable to such Company Employee Benefit Plans or Benefit
Arrangements. None of the Company Employee Benefit Plans which are defined
benefit pension plans have incurred any "accumulated funding deficiency"
(whether or not waived) as that term is defined in Section 412 of the Code and
the fair market value of the assets of each such plan equals or exceeds the
accrued liabilities of such plan. To the knowledge of the Company, there are not
now nor have there been any non-exempt "prohibited transactions," as such term
is defined in Section 4975 of the Code or Section 406 of ERISA, involving the
Company Employee Benefit Plans which could subject Company or any of the Company
Subsidiaries to the penalty or Tax imposed under Section 502(i) of ERISA or
Section 4975 of the Code.
............. (d) No Company Employee Benefit Plan which is subject to Title IV
of ERISA has been completely or partially terminated; no proceedings to
completely or partially terminate any Company Employee Benefit Plan have been
instituted within the meaning of Subtitle C of said Title IV of ERISA; and no
reportable event, within the meaning of Section 4043(c) of said Subtitle C for
which the 30-day notice requirement of ERISA has not been waived, has occurred
with respect to any Company Employee Benefit Plan.
............. (e) No Company Employee Benefit Plan or Benefit Arrangement is a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA or a plan
that has two or more contributing sponsors at least two of whom are not under
common control, within the meaning of Section 4063 of ERISA.
............. (f) Neither the Company nor any Company Subsidiary has engaged in
any transaction described in Section 4069 of ERISA within the last five years.
There does not now exist, nor do any circumstances exist that could result in,
any liability of the Company or any Company Subsidiary (or any entity, trade, or
business that is or was at any time required to be aggregated with the Company
or any Company Subsidiary under Section 414(b), (c), (m), or (o) of the Code)
under Title IV of ERISA, Section 302 of ERISA, Sections 412 and 4971 of the
Code, the continuation coverage requirements of Section 601 et seq. of ERISA and
Section 4980B of the Code, other than such liabilities that arise solely out of,
or relate solely to, the Company Employee Benefit Plans or Benefit Arrangements,
that would be a liability of Bancorp, a Bancorp Subsidiary, the Company, or a
Company Subsidiary following consummation of the Merger.
............. (g) Neither the Company nor any Company Subsidiary has failed to
make any contribution or pay any amount due and owing as required by the terms
of any Company Employee Benefit Plan or Benefit Arrangement. None of the Company
or any of the Company Subsidiaries has incurred or reasonably expects to incur
any liability to the Pension Benefit Guaranty Corporation except for required
premium payments which, to the extent due and payable, have been paid. To the
knowledge of the Company, the Company Employee Benefit Plans intended to be
qualified under Section 401(a) of the Code are so qualified, and the Company is
not aware of any fact which would adversely affect the qualified status of such
plans.
..............Section 4.13. Information Furnished; Registration Statement. (a)
To the knowledge of the Company, no statement contained in any schedule,
certificate or other document furnished (whether prior to or subsequent to the
date of this Agreement) or to be furnished in writing by or on behalf of the
Company or any of its Affiliates to Bancorp pursuant to this Agreement contains
or will contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
.............. (b) None of the information provided by the Company or any
Company Subsidiary for inclusion in the registration statement on Form S-4 to be
filed with the SEC by Bancorp under the Securities Act relating to shares of
Bancorp Common Stock to be issued in the Merger, including the prospectus (the
"Prospectus") relating to such issuance and the joint proxy statement and forms
of proxy relating to the vote of Bancorp shareholders and Bancorp shareholders
with respect to the Merger (as amended, supplemented or modified, the "Proxy
Statement") contained therein (such registration statement as amended,
supplemented or modified, the "Registration Statement"), at the time the
Registration Statement becomes effective or, in the case of the Proxy Statement,
at the date of mailing, will contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. Each of the Registration Statement and Proxy
Statement, except for such portions thereof that relate only to Bancorp or a
Bancorp Subsidiary, will comply as to form in all material respects with the
provisions of the Securities Act and Exchange Act, as applicable.
..............Section 4.14. Property and Assets. The Company and the Company
Subsidiaries have good and marketable title to all of their real property
reflected in the consolidated financial statements last filed by the Company as
part of a publicly available Regulatory Document or acquired subsequent thereto,
free and clear of all Encumbrances, except for (a) such items reflected in such
financial statements or in the notes thereto, (b) liens for current taxes not
yet delinquent, (c) customary title exceptions that have no material adverse
effect upon the current use of such property, (d) property sold or transferred
in the ordinary course of business consistent with past practice since the date
of such financial statements and (e) as otherwise Previously Disclosed. The
Company and the Company Subsidiaries enjoy peaceful and undisturbed possession
under all material leases for the use of real property under which they are the
lessee; all of such leases are valid and binding and in full force and effect
and neither the Company nor any Company Subsidiary is in default in any respect
under any such lease, except where such failure to be valid and binding and in
full force and effect, or where such default, would not have, in the aggregate,
a Company Material Adverse Effect. There has been no physical loss, damage or
destruction, whether or not covered by insurance, affecting the real properties
of the Company and the Company Subsidiaries since June 30, 1999, except such
loss, damage or destruction which would not have, in the aggregate, a Company
Material Adverse Effect. All property and assets material to their businesses
and currently used by the Company and the Company Subsidiaries are, in all
material respects, in good operating condition and repair, normal wear and tear
excepted.
..............Section 4.15. Agreements and Instruments. Except as Previously
Disclosed, neither the Company nor any Company Subsidiary is a party to:
............. (a) any material Contract;
............. (b) any Contract relating to the borrowing of money by the Company
or any Company Subsidiary or the guarantee by the Company or any Company
Subsidiary of any such obligation (other than Federal Home Loan Bank advances
with a maturity of one year or less from the date hereof);
............. (c) any Contract to make loans or for the provision, purchase, or
sale of goods, services or property between the Company or any Company
Subsidiary and any director or officer of the Company or any Company Subsidiary,
or any member of the immediate family or Affiliate of any of the foregoing
(other than loans or deposits made on an arms-length basis in the ordinary
course of business);
............. (d) any Contract with or concerning any labor or employee
organization;
............. (e) any Contract between the Company or any Company Subsidiary and
any Affiliate thereof (other than Contracts solely between the Company and a
Company Subsidiary or solely between Company Subsidiaries);
............. (f) any agreements, directives, orders, or similar arrangements
between or involving the Company or any Company Subsidiary and any Governmental
Authority;
............. (g) any Contract with respect to the employment, retention, or
severance of any directors, officers, employees, or consultants;
............. (h) any Contract which materially restricts the conduct of any
line of business by the Company or any current or future Affiliates thereof; or
............. (i) any Contract pursuant to which the Company or any Company
Subsidiary is or may become obligated to invest in or contribute capital to any
Company Subsidiary.
..............Section 4.16. Material Contract Defaults. Neither the Company nor
any Company Subsidiary nor, to the knowledge of the Company, the other party
thereto is in default in any respect under any Contract to which any of the
Company or the Company Subsidiaries is a party or by which its respective
assets, business, or operations may be bound or affected or under which it or
its respective assets, business, or operations receives benefits, other than any
such default or defaults which would not have, in the aggregate, a Company
Material Adverse Effect, and there has not occurred any event that, with the
lapse of time or the giving of notice or both, would constitute such a default.
To the knowledge of the Company, all material Contracts to which the Company or
any of the Company Subsidiaries is a party are valid, binding, and in full force
and effect.
..............Section 4.17. Tax Matters. (a) The Company, each of the Company
Subsidiaries, and any affiliated group (within the meaning of Section 1504(a) of
the Code) of which the Company or any of the Company Subsidiaries is a member
have filed all Tax Returns required to be filed by them and have made timely
payments of all Taxes due and payable, whether disputed or not; such Tax Returns
are true, correct, and complete in all material respects; the current status of
audits of such Tax Returns by the IRS and other applicable agencies has been
Previously Disclosed; and there is no agreement by the Company or any Company
Subsidiary for the waiver or extension of time for the assessment or payment of
any Taxes payable. Neither the IRS nor any other taxing authority is now
asserting or, to the knowledge of the Company, threatening to assert any
deficiency or claim for additional Taxes, nor to the knowledge of the Company is
there any basis for any such assertion or claim. The Company and each of the
Company Subsidiaries have complied in all material respects with applicable IRS
backup withholding requirements and have filed all appropriate information
reporting returns for all Tax years for which the statute of limitations has not
closed.
.............. (b) Adequate provision for any Taxes due or to become due for the
Company or any of the Company Subsidiaries for any period or periods through and
including June 30, 1999, has been made and is reflected on the June 30, 1999
consolidated financial statements last filed by the Company as part of a
publicly available Regulatory Document and has been or will be made with respect
to periods ending after June 30, 1999.
..............Section 4.18. Environmental Matters. To the knowledge of the
Company, neither the Company nor any Company Subsidiary owns any properties
affected by toxic waste, radon gas, or other hazardous conditions or constructed
in part with the use of asbestos. Neither the Company nor any Company Subsidiary
has knowledge of, nor has the Company or any Company Subsidiary received written
notice from any Governmental Authority of, any conditions, activities,
practices, or incidents which are reasonably likely to interfere with or prevent
compliance or continued compliance by the Company or any Company Subsidiary with
hazardous substance laws or any regulation, order, decree, judgment, or
injunction, issued, entered, promulgated or approved thereunder, or which may
give rise to any legal liability on the part of the Company or any Company
Subsidiary, or otherwise form the basis of any claim, action, suit, proceeding,
hearing or investigation against or of the Company or any Company Subsidiary,
based on or related to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling, or the emission,
discharge, release, or threatened release into the environment, of any
pollutant, contaminant, or chemical, or industrial, toxic, or hazardous
substance or waste. There is no civil, criminal, or administrative claim,
action, suit, proceeding, hearing, or investigation pending or, to the knowledge
of the Company, threatened against the Company or any Company Subsidiary
relating in any way to such hazardous substance laws or any regulation, order,
decree, judgment or injunction issued, entered, promulgated or approved
thereunder. To the knowledge of the Company, none of the Company or the Company
Subsidiaries has made or participated in any loan to any Person who is subject
to any civil, criminal, or administrative claim, action, suit, proceeding,
hearing, or investigation relating in any way to such hazardous substance laws
or any regulation, order, decree, judgment, or injunction issued, entered,
promulgated or approved thereunder and relating to the property secured by such
loan.
..............Section 4.19. Loan Portfolio; Portfolio Management. (a) All
evidences of indebtedness reflected as assets in the consolidated financial
statements last filed by the Company as part of a publicly available Regulatory
Document or acquired since such date, are (except with respect to those assets
which are no longer assets of the Company or any Company Subsidiary) binding
obligations of the respective obligors named therein except as enforcement may
be limited by bankruptcy, insolvency, or other similar laws affecting the
enforcement of creditors rights generally, and except that the availability of
equitable remedies, including specific performance, is subject to the discretion
of the court before which any proceeding may be brought, and the payment of no
material amount thereof (either individually or in the aggregate with other
evidences of indebtedness) is subject to any defenses which have been threatened
or asserted against the Company or any Company Subsidiary. All such indebtedness
which is secured by an interest in real property is secured by a valid and
perfected mortgage lien having the priority specified in the loan documents. All
loans originated or purchased by the Company or any Company Subsidiaries were at
the time entered into and at all times since have been in compliance in all
material respects with all Applicable Laws. The Company and the Company
Subsidiaries administer their loan and investment portfolios in accordance with
all Applicable Laws and the terms of applicable instruments. The records of the
Company and the Company Subsidiaries regarding all loans outstanding on their
books are accurate in all material respects and the risk classification system
has been established in accordance with the requirements of the OTS.
.............. (b) The Company and First Savings have Previously Disclosed a
list, accurate and complete in all material respects, of the aggregate amounts
of loans, extensions of credit, and other assets of the Company and the Company
Subsidiaries that have been adversely designated, criticized, or classified as
of June 30, 1999, separated by category of classification or criticism (the
"Asset Classification"); and no amounts of loans, extensions of credit, or other
assets that have been adversely designated, classified or criticized as of the
date hereof by any representative of any Government Authority as "Special
Mention," "Substandard," "Doubtful," "Loss," or words of similar import are
excluded from the amounts disclosed in the Asset Classification, other than
amounts of loans, extensions of credit, or other assets that were charged off or
recovered by the Company or any of the Company Subsidiaries before the date
hereof.
..............Section 4.20. Real Estate Loans and Investments. Except for
properties acquired in settlement of loans, there are no facts, circumstances,
or contingencies known to the Company which exist which would require a material
reduction under GAAP in the present carrying value of any of the real estate
investments, joint ventures, construction loans, other investments, or other
loans of the Company or any Company Subsidiary (either individually or in the
aggregate with other loans and investments).
..............Section 4.21. Derivatives Contracts. (a) Neither the Company nor
any of the Company Subsidiaries is a party to or has agreed to enter into an
exchange-traded or over-the-counter swap, forward, future, option, cap, floor or
collar financial contract or any other Contract not included on the consolidated
balance sheet last filed by the Company as part of a publicly available
Regulatory Document which is a derivatives contract or owns securities that are
identified in Thrift Bulletin No. 13a as "complex securities," (including
various combinations thereof) (each, a "Derivatives Contract"), except for those
Derivatives Contracts Previously Disclosed, including a list, as applicable, of
any of the Company's or First Savings' assets pledged as security for a
Derivatives Contract.
.............. (b) All Derivative Contracts to which the Company or any Company
Subsidiary is a party or by which any of their properties or assets may be bound
were entered into in the ordinary course of business and in accordance with
prudent banking practice, based on industry-wide standards at the time, and with
counterparties believed by the Company to be financially responsible at the
time.
..............Section 4.22. Insurance. The Company and the Company Subsidiaries
have in effect insurance coverage with reputable insurers which, in respect of
amounts, types, and risks insured, is reasonably adequate for the business in
which the Company and the Company Subsidiaries are engaged. A schedule of all
insurance policies in effect as to the Company and the Company Subsidiaries (the
"Insurance Policies") has been Previously Disclosed (other than policies
pertaining to secured loans made in the ordinary course of business). All
Insurance Policies are in full force and effect, all premiums with respect
thereto covering all periods up to and including the date of this Agreement have
been paid, such premiums covering all periods from the date hereof up to and
including the Effective Date shall have been paid on or before the Effective
Date, to the extent then due and payable (other than retrospective premiums
which may be payable with respect to worker's compensation insurance policies,
adequate reserves for which are reflected in the Company's financial statements
last filed by the Company as part of a publicly available Regulatory Document).
The Insurance Policies are valid, outstanding, and enforceable in accordance
with their respective terms and will not in any way be affected by, or
terminated or lapsed solely by reason of, the transactions contemplated by this
Agreement. To the knowledge of the Company, neither the Company nor any Company
Subsidiary has been refused any insurance with respect to any material
properties, assets or operations, nor has any coverage been limited or
terminated by any insurance carrier to which it has applied for any such
insurance or with which it has carried insurance during the last three (3)
years.
..............Section 4.23. Tax Treatment. Neither the Company nor any of its
Affiliates has taken or agreed to take any action that or has failed to take any
action the result of which would (but without giving effect to any actions taken
or agreed to be taken by Bancorp or any of its Affiliates) prevent the Merger
from qualifying as a "reorganization" under Section 368(a) of the Code.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BANCORP AND THE BANK
..............Bancorp and the Bank jointly and severally represent and warrant
to the Company and First Savings, except as otherwise Previously Disclosed, as
follows:
..............Section 5.1. Organization, Good Standing, Authority, Insurance,
Etc. (a) Bancorp is a corporation organized, existing, and in good standing
under the laws of the State of Indiana, and is registered as a savings and loan
holding company with the OTS under the HOLA. The Bank is a federal savings
association. Each "subsidiary" of Bancorp within the meaning of Section
10(a)(1)(G) of HOLA (individually a "Bancorp Subsidiary" and collectively the
"Bancorp Subsidiaries") has been Previously Disclosed. Each of the Bancorp
Subsidiaries is organized, existing, and in good standing under the laws of the
respective jurisdiction under which it is organized as set forth in the Bancorp
Disclosure Schedule. Each of Bancorp and the Bancorp Subsidiaries has all
requisite corporate power and corporate authority and is qualified and licensed
to own, lease, and operate its properties and conduct its business as it is now
being conducted, except for such failure or failures to be so qualified or
licensed as would not, in the aggregate, have a Bancorp Material Adverse Effect.
Bancorp has made available to the Company a true, complete and correct copy of
the articles of incorporation, charter or other organizing documents and of the
bylaws of Bancorp and each Bancorp Subsidiary as in effect on the date of this
Agreement. Each of Bancorp and the Bancorp Subsidiaries is qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which qualification is necessary under Applicable Law, except to the extent
that any failures to so qualify would not, in the aggregate, have a Bancorp
Material Adverse Effect. The Bank is a member in good standing of the Federal
Home Loan Bank of Indianapolis, and all eligible accounts issued by the Bank are
insured by SAIF as administered by the FDIC to the maximum extent permitted
under Applicable Law, and all premiums and assessments required in connection
therewith have been paid by the Bank. The Bank is a "domestic building and loan
association" as defined in Section 7701(a)(19) of the Code, and is a "qualified
thrift lender" as defined in Section 10(m) of the HOLA.
.............. (b) The minute books of Bancorp and the Bancorp Subsidiaries
contain records of all meetings and other corporate actions held or taken of
their respective shareholders and Boards of Directors (including the committees
of such Boards) since January 1, 1996, which records are complete and accurate
in all material respects and have been made available to the Company.
..............Section 5.2. Capitalization. The authorized capital stock of
Bancorp consists of 7,000,000 shares of Bancorp Common Stock, of which 3,183,717
shares were issued and outstanding as of the date of this Agreement, and
5,000,000 shares of serial preferred stock, par value of $1.00 per share, of
which no shares were outstanding as of the date of this Agreement. As of the
date of this Agreement, except as Previously Disclosed, there were no shares of
Bancorp Common Stock reserved for issuance. All issued and outstanding shares of
Bancorp Common Stock are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. As of the date of this Agreement,
except as Previously Disclosed and as contemplated by this Agreement, there are
no outstanding Rights to purchase or acquire any capital stock of Bancorp and no
oral or written agreement, contract, arrangement, understanding, plan or
instrument of any kind to which Bancorp or any of its Affiliates is subject with
respect to the issuance, voting or sale of issued or unissued shares of the
capital stock of Bancorp. The shares of Bancorp Common Stock to be issued
pursuant to the Merger will be duly authorized and validly issued and, at the
Closing, all such shares will be fully paid, nonassessable and free of
preemptive rights, with no personal liability attaching to the ownership
thereof.
.............Section 5.3. Ownership of Subsidiaries. All the outstanding shares
of the capital stock or other ownership interests in all of the Bancorp
Subsidiaries are validly issued, fully paid, nonassessable and owned
beneficially and of record by Bancorp or a Bancorp Subsidiary free and clear of
any Encumbrance. There are no outstanding Rights to purchase or acquire any
capital stock of any Bancorp Subsidiary and no oral or written agreement,
contract, arrangement, understanding, plan or instrument of any kind to which
Bancorp or any of its Affiliates is subject with respect to the issuance, voting
or sale of issued or unissued shares of the capital stock of any of the Bancorp
Subsidiaries. Neither Bancorp nor any Bancorp Subsidiary owns any of the capital
stock or other equity securities (including any Rights with respect to such
securities) of or profit participations in any Person or "company" (as defined
in Section 10(a)(1)(C) of the HOLA) other than the Federal Home Loan Bank of
Indianapolis and the Bancorp Subsidiaries.
..............Section 5.4. Financial Statements and Reports. For the past three
years, Bancorp and the Bancorp Subsidiaries have timely filed all Regulatory
Documents required to be filed by them, except to the extent that all failures
to so file, in the aggregate, would not have a Bancorp Material Adverse Effect;
and all such documents, as finally amended, complied in all material respects
with applicable requirements of Applicable Law and, as of their respective date
or the date as amended, did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Except to the extent stated therein, all financial
statements and schedules included in the documents referred to in the preceding
sentences (i) are in accordance with Bancorp's books and records and those of
any of the Bancorp Subsidiaries, which books and records are complete and
accurate in all material respects and have been maintained in all material
respects in accordance with Applicable Law, and (ii) present fairly the
consolidated financial position and the consolidated results of operations and
cash flows of Bancorp as of the dates and for the periods indicated in
accordance with GAAP consistently applied during the periods involved (except
for the omission of notes to unaudited statements, year-end adjustments to
interim results normal in nature and amount and changes in GAAP and except where
regulatory reporting requirements provide otherwise). The audited consolidated
financial statements of Bancorp as of September 30, 1998 and for the three years
then ended last filed by Bancorp as part of a publicly available Regulatory
Document disclose all liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise, whether due or to become due and regardless of when
asserted), as of their respective dates, of Bancorp and the Bancorp Subsidiaries
required to be reflected in such financial statements according to GAAP, other
than liabilities which are not, in the aggregate, material to Bancorp and the
Bancorp Subsidiaries, taken as a whole, and contain in the opinion of
management, adequate reserves for losses on loans and properties acquired in
settlement of loans, Taxes and all other material accrued liabilities and for
all reasonably anticipated material losses in accordance with GAAP, if any, as
of such date. Except for (i) those liabilities that are fully reflected or
reserved against on Bancorp's audited consolidated balance sheet last filed by
Bancorp as part of a publicly available Regulatory Document and (ii) liabilities
incurred in the ordinary course of business since the date of such audited
consolidated balance sheet and which would not have, individually or in the
aggregate, a Bancorp Material Adverse Effect, Bancorp has no liabilities or
obligations of any nature, whether absolute, accrued, contingent or otherwise
and whether due or to become due, which are or would be required by GAAP to be
shown on its consolidated balance sheet.
..............Section 5.5. Absence of Changes. (a) Except as disclosed in
publicly available Regulatory Documents filed by Bancorp prior to the date of
this Agreement, since September 30, 1998, there has been no event, occurrence,
development, fact, or set of circumstances of any nature existing or, to the
knowledge of Bancorp, threatened which, individually or in the aggregate, has
had or could reasonably be expected to have a Bancorp Material Adverse Effect.
............. (b) Except as Previously Disclosed, since September 30, 1998, each
of Bancorp and the Bancorp Subsidiaries has owned and operated its respective
assets, properties, and businesses in the ordinary course of business and
consistent with past practice.
..............Section 5.6. No Broker's or Finder's Fees. No agent, broker,
investment banker, Person, or firm acting on behalf or under authority of
Bancorp or any of the Bancorp Subsidiaries is or will be entitled to any
broker's or finder's fee or any other commission or similar fee directly or
indirectly in connection with the Merger, except Bancorp has engaged JMP
Financial, Inc., an investment banking firm, to provide financial advisory
services.
..............Section 5.7. Litigation and Other Proceedings. (a) Except for
matters which would not have, in the aggregate, a Bancorp Material Adverse
Effect, neither Bancorp nor any Bancorp Subsidiary is a defendant in, nor is any
of its property subject to, any pending, or, to the knowledge of Bancorp,
threatened claim, action, suit, investigation, or proceeding. There is no
judicial order, judgment, or decree to which any of Bancorp, the Bancorp
Subsidiaries or their respective properties is subject which has had or could
reasonably be expected to have a Bancorp Material Adverse Effect.
.............. (b) All pending claims, actions, suits, investigations, and
proceedings in which Bancorp or any Bancorp Subsidiary is a defendant and all
judicial orders, judgments, or decrees to which the Bancorp or any Bancorp
Subsidiary is subject have been Previously Disclosed.
..............Section 5.8. Compliance With Law. Bancorp and the Bancorp
Subsidiaries have been and are in compliance in all respects with all Applicable
Laws, except where such noncompliance would not have, in the aggregate, a
Bancorp Material Adverse Effect, and neither Bancorp nor any Bancorp Subsidiary
has received notice from any Governmental Authority of any material violation
of, and does not know of any material violations of, any Applicable Law.
..............Section 5.9. Corporate Actions. The Board of Directors of Bancorp
has authorized its officers to execute and deliver this Agreement and to take
all action necessary to consummate the Merger and the other transactions
contemplated hereby. Except for obtaining the requisite approval of the Bancorp
shareholders as contemplated hereby, all corporate authorization by the Board of
Directors of Bancorp required for the consummation of the Merger and the
transactions contemplated hereby has been obtained.
..............Section 5.10. Authority. Except as Previously Disclosed, the
execution, delivery and performance by Bancorp of its obligations under this
Agreement and the consummation thereby of the transactions contemplated hereby
do not, and will not, violate or conflict with any of the provisions of, or
constitute a breach or default (or an event which, with notice or lapse of time,
or both, would constitute a breach or default) under, terminate, give any Person
the right to terminate, modify or accelerate payment or performance under or
result in the creation of any Encumbrance upon any of the properties or assets
of Bancorp under (i) the articles of incorporation, charter, or by-laws of
Bancorp, the Bank, or any other Bancorp Subsidiary, (ii) subject to the
Governmental Approvals and the approval of Bancorp shareholders described below,
any Applicable Law to which Bancorp or any of the Bancorp Subsidiaries is
subject, or (iii) except, in each case, where such violation, conflict, breach,
default, termination (or right to terminate), modification, acceleration, or
Encumbrance would not, individually or in the aggregate, have a Bancorp Material
Adverse Effect, any Contract to which Bancorp or any of the Bancorp Subsidiaries
is a party or is subject or by which any of their properties or assets is bound
or affected. The parties acknowledge that the consummation of the Merger is
subject to various regulatory approvals. Bancorp has all requisite corporate
power and corporate authority to enter into this Agreement and to perform its
obligations hereunder. Other than the Governmental Approvals and the requisite
approval of Bancorp shareholders as contemplated hereby, no filings, notices,
approvals, or consents are required on behalf of Bancorp or any Bancorp
Subsidiary in connection with the consummation of the transactions contemplated
by this Agreement. Bancorp has no knowledge of any reason why the Governmental
Approvals cannot be obtained or granted on a timely basis. This Agreement
constitutes the valid and binding obligation of Bancorp and is enforceable in
accordance with its terms, except as enforceability may be limited by Applicable
Law relating to bankruptcy, insolvency or creditors' rights generally, the
rights of creditors of insured depository institutions, and general principles
of equity.
..............Section 5.11. Information Furnished; Registration Statement. (a)
To the knowledge of Bancorp, no statement contained in any schedule,
certificate, or other document furnished (whether prior to or subsequent to the
date of this Agreement) or to be furnished in writing by or on behalf of Bancorp
or any of its Affiliates to the Company pursuant to this Agreement contains or
will contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
.............. (b) None of the information provided by Bancorp or any Bancorp
Subsidiary for inclusion in the Registration Statement, at the time the
Registration Statement becomes effective or, in the case of the Proxy Statement,
at the date of mailing, will contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. Each of the Registration Statement and Proxy
Statement, except for such portions thereof that relate only to the Company or a
Company Subsidiary, will comply as to form in all material respects with the
provisions of the Securities Act and Exchange Act, as applicable.
..............Section 5.12. Property and Assets. Bancorp and the Bancorp
Subsidiaries have good and marketable title to all of their real property
reflected in the consolidated financial statements last filed by Bancorp as part
of a publicly available Regulatory Document or acquired subsequent thereto, free
and clear of all Encumbrances, except for (a) such items reflected in such
financial statements or in the notes thereto, (b) liens for current taxes not
yet delinquent, (c) customary title exceptions that have no material adverse
effect upon the current use of such property, (d) property sold or transferred
in the ordinary course of business consistent with past practice since the date
of such financial statements and (e) as otherwise Previously Disclosed. Bancorp
and the Bancorp Subsidiaries enjoy peaceful and undisturbed possession under all
material leases for the use of real property under which they are the lessee;
all of such leases are valid and binding and in full force and effect and
neither Bancorp nor any Bancorp Subsidiary is in default in any respect under
any such lease, except where such failure to be valid and binding and in full
force and effect, or where such default, would not have, in the aggregate, a
Bancorp Material Adverse Effect. No consent of the lessor of any material real
property or material personal property lease is required for consummation of the
Merger. There has been no physical loss, damage or destruction, whether or not
covered by insurance, affecting the real properties of Bancorp and the Bancorp
Subsidiaries since September 30, 1998, except such loss, damage or destruction
which would not have, in the aggregate, a Bancorp Material Adverse Effect. All
property and assets material to their businesses and currently used by Bancorp
and the Bancorp Subsidiaries are, in all material respects, in good operating
condition and repair, normal wear and tear excepted.
..............Section 5.13. Agreements and Instruments. Except as Previously
Disclosed, neither Bancorp nor any Bancorp Subsidiary is a party to:
............. (a) any material Contract;
............. (b) any Contract relating to the borrowing of money by Bancorp or
any Bancorp Subsidiary or the guarantee by Bancorp or any Bancorp Subsidiary of
any such obligation (other than Federal Home Loan Bank advances with a maturity
of one year or less from the date hereof);
............. (c) any Contract to make loans or for the provision, purchase, or
sale of goods, services, or property between Bancorp or any Bancorp Subsidiary
and any director or officer of Bancorp or any Bancorp Subsidiary, or any member
of the immediate family or Affiliate of any of the foregoing (other than loans
or deposits made on an arms-length basis in the ordinary course of business);
............. (d) any Contract with or concerning any labor or employee
organization;
............. (e) any Contract between Bancorp or any Bancorp Subsidiary and any
Affiliate thereof (other than Contracts solely between Bancorp and a Bancorp
Subsidiary or solely between Bancorp Subsidiaries);
............. (f) any agreements, directives, orders, or similar arrangements
between or involving Bancorp or any Bancorp Subsidiary and any Governmental
Authority;
............. (g) any Contract with respect to the employment, retention, or
severance of any directors, officers, employees, or consultants;
............. (h) any Contract which materially restricts the conduct of any
line of business by Bancorp or any current or future Affiliates thereof; or
............. (i) any Contract pursuant to which Bancorp or any Bancorp
Subsidiary is or may become obligated to invest in or contribute capital to any
Bancorp Subsidiary.
..............Section 5.14. Material Contract Defaults. Neither Bancorp nor any
Bancorp Subsidiary nor, to the knowledge of Bancorp, the other party thereto is
in default in any respect under any Contract to which any of Bancorp or the
Bancorp Subsidiaries is a party or by which its respective assets, business, or
operations may be bound or affected or under which it or its respective assets,
business, or operations receives benefits, other than any such default or
defaults which would not have, in the aggregate, a Bancorp Material Adverse
Effect, and there has not occurred any event that, with the lapse of time or the
giving of notice or both, would constitute such a default. To the knowledge of
Bancorp, all material Contracts to which Bancorp or any of the Bancorp
Subsidiaries is a party are valid, binding, and in full force and effect.
..............Section 5.15. Tax Matters. (a) Bancorp, each of the Bancorp
Subsidiaries and any affiliated group (within the meaning of Section 1504(a) of
the Code) of which Bancorp or any of the Bancorp Subsidiaries is a member have
filed all Tax Returns required to be filed by them and have made timely payments
of all Taxes due and payable, whether disputed or not; and such Tax Returns are
true, correct, and complete in all material respects. Neither the IRS nor any
other taxing authority is now asserting or, to the knowledge of Bancorp,
threatening to assert any deficiency or claim for additional Taxes, nor to the
knowledge of Bancorp is there any basis for any such assertion or claim. Bancorp
and each of the Bancorp Subsidiaries have complied in all material respects with
applicable IRS backup withholding requirements and have filed all appropriate
information reporting returns for all Tax years for which the statute of
limitations has not closed. Bancorp and each Bancorp Subsidiary have complied
with all applicable state law sales and use Tax collection and reporting
requirements.
.............. (b) Adequate provision for any Taxes due or to become due for
Bancorp or any of the Bancorp Subsidiaries for any period or periods through and
including September 30, 1998, has been made and is reflected on the September
30, 1998 audited consolidated financial statements last filed by Bancorp as part
of a publicly available Regulatory Document and has been or will be made with
respect to periods ending after September 30, 1998.
..............Section 5.16. Environmental Matters. To the knowledge of Bancorp,
neither Bancorp nor any Bancorp Subsidiary owns or leases any properties
affected by toxic waste, radon gas, or other hazardous conditions or constructed
in part with the use of asbestos. Neither Bancorp nor any Bancorp Subsidiary has
knowledge of, nor has Bancorp or any Bancorp Subsidiary received written notice
from any Governmental Authority of, any conditions, activities, practices, or
incidents which are reasonably likely to interfere with or prevent compliance or
continued compliance by Bancorp or any Bancorp Subsidiary with hazardous
substance laws or any regulation, order, decree, judgment, or injunction,
issued, entered, promulgated or approved thereunder, or which may give rise to
any legal liability on the part of Bancorp or any Bancorp Subsidiary, or
otherwise form the basis of any claim, action, suit, proceeding, hearing, or
investigation against or of Bancorp or any Bancorp Subsidiary, based on or
related to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling, or the emission, discharge, release or
threatened release into the environment, of any pollutant, contaminant, or
chemical, or industrial, toxic, or hazardous substance or waste. There is no
civil, criminal, or administrative claim, action, suit, proceeding, hearing, or
investigation pending or, to the knowledge of Bancorp, threatened against
Bancorp or any Bancorp Subsidiary relating in any way to such hazardous
substance laws or any regulation, order, decree, judgment, or injunction issued,
entered, promulgated or approved thereunder. To the knowledge of Bancorp, none
of Bancorp or the Bancorp Subsidiaries has made or participated in any loan to
any Person who is subject to any civil, criminal, or administrative claim,
action, suit, proceeding, hearing, or investigation relating in any way to such
hazardous substance laws or any regulation, order, decree, judgment, or
injunction issued, entered, promulgated or approved thereunder and relating to
the property secured by such loan.
.............Section 5.17. Loan Portfolio; Portfolio Management. (a) All
evidences of indebtedness reflected as assets in the consolidated financial
statements last filed by Bancorp as part of a publicly available Regulatory
Document or acquired since such date, are (except with respect to those assets
which are no longer assets of Bancorp or any Bancorp Subsidiary) binding
obligations of the respective obligors named therein except as enforcement may
be limited by bankruptcy, insolvency, or other similar laws affecting the
enforcement of creditors rights generally, and except that the availability of
equitable remedies, including specific performance, is subject to the discretion
of the court before which any proceeding may be brought, and the payment of no
material amount thereof (either individually or in the aggregate with other
evidences of indebtedness) is subject to any defenses which have been threatened
or asserted against Bancorp or any Bancorp Subsidiary. All such indebtedness
which is secured by an interest in real property is secured by a valid and
perfected mortgage lien having the priority specified in the loan documents. All
loans originated or purchased by Bancorp or any Bancorp Subsidiaries were at the
time entered into and at all times since have been in compliance in all material
respects with all Applicable Laws. Bancorp and the Bancorp Subsidiaries
administer their loan and investment portfolios in accordance with all
Applicable Laws and the terms of applicable instruments. The records of Bancorp
and the Bancorp Subsidiaries regarding all loans outstanding on their books are
accurate in all material respects and the risk classification system has been
established in accordance with the requirements of the OTS.
.............. (b) Bancorp and the Bank have Previously Disclosed a list,
accurate and complete in all material respects, of the aggregate amounts of
loans, extensions of credit, and other assets of Bancorp and the Bancorp
Subsidiaries that have been adversely designated, criticized, or classified as
of September 30, 1998, separated by Asset Classification; and no amounts of
loans, extensions of credit, or other assets that have been adversely
designated, classified or criticized as of the date hereof by any representative
of any Government Authority as "Special Mention," "Substandard," "Doubtful,"
"Loss," or words of similar import are excluded from the amounts disclosed in
the Asset Classification, other than amounts of loans, extensions of credit, or
other assets that were charged off or recovered by Bancorp or any of the Bancorp
Subsidiaries before the date hereof.
..............Section 5.18. Real Estate Loans and Investments. Except for
properties acquired in settlement of loans, there are no facts, circumstances,
or contingencies known to Bancorp which exist which would require a material
reduction under GAAP in the present carrying value of any of the real estate
investments, joint ventures, construction loans, other investments, or other
loans of Bancorp or any Bancorp Subsidiary (either individually or in the
aggregate with other loans and investments).
..............Section 5.19. Derivatives Contracts. (a) Neither Bancorp nor any
of the Bancorp Subsidiaries is a party to or has agreed to enter into an
exchange-traded or over-the-counter Derivatives Contract or any other Contract
not included on the consolidated balance sheet last filed by Bancorp as part of
a publicly available Regulatory Document which is a Derivatives Contract, except
for those Derivatives Contracts Previously Disclosed, including a list, as
applicable, of any of Bancorp's or the Bank's assets pledged as security for a
Derivatives Contract.
.............. (b) All Derivative Contracts to which Bancorp or any Bancorp
Subsidiary is a party or by which any of their properties or assets may be bound
were entered into in the ordinary course of business and in accordance with
prudent banking practice, based on industry-wide standards at the time, and with
counterparties believed by Bancorp to be financially responsible at the time.
.............Section 5.20. Insurance. Bancorp and the Bancorp Subsidiaries have
in effect insurance coverage with reputable insurers which, in respect of
amounts, types, and risks insured, is reasonably adequate for the business in
which Bancorp and the Bancorp Subsidiaries are engaged. All Insurance Policies
are in full force and effect, The Insurance Policies are valid, outstanding, and
enforceable in accordance with their respective terms and will not in any way be
affected by, or terminated or lapsed solely by reason of, the transactions
contemplated by this Agreement. To the knowledge of Bancorp, neither Bancorp nor
any Bancorp Subsidiary has been refused any insurance with respect to any
material properties, assets or operations, nor has any coverage been limited or
terminated by any insurance carrier to which it has applied for any such
insurance or with which it has carried insurance during the last three (3)
years.
.............Section 5.21. Tax Treatment. Neither Bancorp nor any of its
Affiliates has taken or agreed to take any action that or has failed to take any
action the result of which would (but without giving effect to any actions taken
or agreed to be taken by the Company or any of its Affiliates) prevent the
Merger from qualifying as a "reorganization" under Section 368(a) of the Code.
ARTICLE VI
COVENANTS
..............Section 6.1. Conduct of Business by the Company. During the period
from the date of this Agreement and continuing through the Closing Date, except
as Previously Disclosed and except as expressly contemplated and permitted by
this Agreement or with the prior written consent of Bancorp (which consent shall
not be unreasonably withheld), the Company shall cause each of the Company and
the Company Subsidiaries to (a) carry on its business in the ordinary course
consistent with past practice; (b) use its reasonable best efforts to preserve
its present business organization and relationships; (c) use its reasonable best
efforts to keep available the present services of the Company's and the Company
Subsidiaries' employees; and (d) use its reasonable best efforts to preserve its
rights, franchises, goodwill, and relations with customers and others with whom
it conducts business. Without limiting the generality of the foregoing, except
as expressly contemplated and permitted by this Agreement, consented to in
writing by Bancorp or Previously Disclosed, the Company shall not, and the
Company shall not permit any of the Company Subsidiaries to, directly or
indirectly:
.............. (i) amend its articles/certificate of incorporation, charter, or
bylaws (or comparable governing instruments) or merge with or into or
consolidate with any other Person, subdivide, combine or in any way reclassify
any shares of its capital stock, or change in any manner the rights of its
outstanding capital stock;
.............. (ii) issue or sell or purchase any shares of its capital stock,
or issue or sell or purchase any option, warrant, convertible or exchangeable
security, right, subscription, call, unsatisfied pre-emptive right or other
agreement or right of any kind to purchase or otherwise acquire (including,
without limitation, by exchange or conversion) (each a "Right") any shares of
its capital stock (except that the Company may issue shares of Company Common
Stock upon (i) exercise of Company Options outstanding on the date of this
Agreement or (ii) as Previously Disclosed);
.............. (iv) waive any right of value to its business other than a
waiver, together with all other such waivers, that would not have a Company
Material Adverse Effect;
.............. (v) make any change in its accounting methods or practices for
Tax or accounting purposes or make any change in depreciation or amortization
policies or rates adopted by it for Tax or accounting purposes, except in each
case as required by GAAP or Applicable Law;
.............. (vi) materially change, or agree to change, any of its lending
activities, policies or practices, except as required by Applicable Law or by
any Governmental Authority;
.............. (vii) make any loan or advance to any of its Affiliates,
officers, directors, employees, consultants, agents, or other representatives
(other than travel advances made in the ordinary course of business consistent
with past practice), or make any other loan or advance otherwise than in the
ordinary course of business consistent with past practice;
.............. (viii) sell, offer to sell, abandon or make any other disposition
of any of its material assets, including selling or closing any branches; or
grant or suffer any Encumbrance on any of its material assets;
.............. (ix) except in the ordinary course of business consistent with
past practice, incur or assume, or agree to incur or assume, any liability or
obligation (whether or not currently due and payable) relating to its business
or any of its assets;
.............. (x) create, renew, amend, terminate or cancel, or take any other
action that may result in the creation, renewal, amendment, termination, or
cancellation of, any Contract with any of its Affiliates;
.............. (xi) declare, set aside or pay any dividends or declare or make
any other distributions of any kind on or in respect of its capital stock (other
than dividends from a Company Subsidiary to the Company or another Company
Subsidiary), or make any direct or indirect redemption, retirement, purchase, or
other acquisition of any shares of its capital stock or Rights, provided that
the Company may declare and pay its regular quarterly cash dividends on the
Company Common Stock of not more than $0.115 per share per quarterly period,
provided further that the parties agree that after the date of this Agreement,
each of Bancorp and the Company shall coordinate with the other the declaration
of any dividends in respects of Bancorp Common Stock and Company Common Stock
and the record dates and payment dates relating thereto, it being the intention
of the parties hereto that holders of Company Common Stock shall not receive two
dividends, or fail to receive one dividend, for any single calendar quarter with
respect to their shares of Company Common Stock and any shares of Bancorp Common
Stock any such holder receives in exchange therefore in the Merger;
.............. (xii) create, renew, amend, terminate or cancel, or take any
other action that may result in the creation, renewal, amendment, termination,
or cancellation of, any Contract, except in the ordinary course of business
consistent with past practice and as would not, in the aggregate, have a Company
Material Adverse Effect; enter into or amend any Contract pursuant to which it
agrees to indemnify any party on behalf of its business or pursuant to which it
agrees to refrain from competing with any party with respect to its business;
.............. (xiii) except as Previously Disclosed, adopt, amend, renew,
terminate or accelerate or vest benefits under any Company Employee Benefit Plan
or Benefit Arrangement or any other employee program, plan, agreement,
arrangement, or policy between the Company or a Company Subsidiary and one or
more of employees or directors of the Company or a Company Subsidiary, except as
required by Applicable Law;
.............. (xiv) commit any act or omission which constitutes a breach or
default under any Contract or license to which it is a party or by which it or
any of its properties or assets is bound except as would not have, in the
aggregate, a Company Material Adverse Effect;
.............. (xv) acquire in any manner, including by way of merger,
consolidation, or purchase of an equity interest or assets, any business or any
corporation, partnership, association, or other business organization or
division thereof (other than by way of foreclosures or acquisitions of control
in a bona fide fiduciary capacity or in satisfaction of debts previously
contracted in good faith, in each case in the ordinary and usual course of
business consistent with past practice);
.............. (xvi) increase the salary or wages of any employees of the
Company or of any Company Subsidiary; or pay any incentive, bonus, or similar
payments to employees or directors other than as required by the terms of any
Company Employee Benefit Plan or Benefit Arrangement in effect as of the date
hereof and Previously Disclosed;
.............. (xvii) purchase any debt securities or derivative securities that
are defined as "complex securities" under OTS Thrift Bulletin No. 13a dated
December 1, 1998 as revised or purchase any Derivatives Contracts;
.............. (xviii) make any investment which would cause First Savings to
not be a qualified thrift lender under Section 10(m) of the HOLA, or not to be a
"domestic building and loan association" as defined in Section 7701(a)(19) of
the Code;
.............. (xix) change its existing investment guidelines Previously
Disclosed, except as required by Applicable Law or any Governmental Authority,
or the manner in which its investment securities portfolio is classified or
reported;
.............. (xx) authorize or make capital expenditures in excess of
$100,000, individually, or $500,000, in the aggregate;
.............. (xxi) take any action that or fail to take any action the result
of which would (but without giving effect to any actions taken or agreed to be
taken by the Company or any of its Affiliates) prevent the Merger from
qualifying as a "reorganization" under Section 368(a) of the Code; or
............... (xxii) agree (by Contract or otherwise) to do any of the
foregoing.
.............Section 6.2. Maintenance of Records. Through the Closing Date, the
Company and the Company Subsidiaries will maintain their Records in the same
manner and with the same care that such Records have been maintained prior to
the execution of this Agreement.
.............Section 6.3. Salary and Benefits. (a) Bancorp shall, or shall cause
the appropriate Bancorp Subsidiary to, permit employees of the Company or any
Company Subsidiary who are employees with the Company or any Company Subsidiary
as of immediately prior to the Effective Time and become employees of Bancorp or
a Bancorp Subsidiary as of the Effective Time ("Transferred Employees") to
participate in the employee benefit plans, programs, and arrangements of Bancorp
or the Bancorp Subsidiaries, as applicable (the "Bancorp Plans"), on the same
terms as such plans and benefits are offered to similarly situated employees of
Bancorp or the Bancorp Subsidiaries, as applicable. Bancorp shall recognize, or
shall cause the appropriate Bancorp Subsidiary to recognize, each Transferred
Employee's service with the Company or any Company Subsidiary for purposes of
determining eligibility to participate in and vest under the Bancorp Plans, but
not for purposes of benefit accruals under any such plans and no such
Transferred Employees or dependents shall be subject to any uninsured waiting
periods or preexisting condition exclusions under any plan of Bancorp or the
Bank. Furthermore, benefit levels under the welfare plans sponsored by Bancorp
or the Bank shall be determined based upon prior service with the Company or any
Company Subsidiaries.
.............. (b) Bancorp shall, or shall cause the appropriate Bancorp
Subsidiary to, use its best efforts to employ employees of the Company or any
Company Subsidiary who are employees with the Company or any Company Subsidiary
as of immediately prior to the Effective Time on the same terms and conditions
as are offered to similarly situated employees of Bancorp or the Bancorp
Subsidiaries, as applicable; provided, however, that for a period of 12 months
after the Effective Time, salaries of Transferred Employees shall not be reduced
below the level of such salaries for such employees immediately prior to the
Effective Time.
.............. (c) Bancorp shall enter into a six-year employment contract with
Richard Gatton which shall contain such provisions as are customarily included
in such agreements with key management personnel. The employment contract also
shall include the provisions included in Exhibit B attached hereto.
.............. (d) Bancorp shall enter into a three-year employment contract
with Jeffrey Gatton which shall contain such provisions as are customarily
included in such agreements with key management personnel. The employment
contract also shall include the provisions included in Exhibit B attached
hereto.
.............. (e) Notwithstanding the foregoing, Bancorp shall, or shall cause
the appropriate Bancorp Subsidiary to, (A) provide severance benefits equal to
one week of pay for each year of service with the Company or a Company
Subsidiary (including any service as an employee of Bancorp or a Bancorp
Subsidiary) to Persons who (i) were employees of the Company or any Company
Subsidiary immediately prior to the Effective Time, (ii) are terminated without
cause as of or within 12 months after the Effective Time by Bancorp or a Bancorp
Subsidiary (but not upon termination by the employee or termination for cause by
Bancorp or a Bancorp Subsidiary), and (iii) are not otherwise entitled to any
severance benefits under any Contract as a result or in respect of such
termination, in the amounts as Previously Disclosed, which amounts, less
applicable withholding taxes, shall be paid upon the effectiveness of such
termination and (B) recognize and carry forward as of the Effective Time all
sick leave and vacation accrued by each Transferred Employee during the 12 month
period ending on (and including) the Closing Date under the respective policies
of Bancorp or the appropriate Bancorp Subsidiary (but (x) without giving effect
to any accrued benefits carried forward from any time prior to such 12-month
period under such Bancorp and Bancorp Subsidiary policies and (y) in no event
greater than such benefits as would accrue under such policies during one full
calendar year without giving effect to accrued benefits carried forward from
prior calendar years under such policies).
.............. (f) Further, Bancorp shall, or shall cause the appropriate
Bancorp Subsidiary to, perform after the Effective Time all of the obligations
of the Company or the appropriate Company Subsidiary under the terms of the
severance agreements existing as of the date hereof which are between the
Company or a Company Subsidiary, on the one hand, and management employees
(other than G. Richard Gatton) of the Company or a Company Subsidiary, on the
other hand, which have been Previously Disclosed and which by their terms
survive the Effective Time, provided, however, that the Company shall use its
best efforts to modify those agreements or replace them with agreements so that
no benefits are payable solely as a result of the Merger.
..............Section 6.4. Efforts of Parties to Close. During the period from
the date of this Agreement through the Closing Date, each party to this
Agreement shall take such actions as may be reasonably required to carry out the
provisions hereof and the transactions contemplated hereby and each party hereto
shall use its reasonable best efforts to fulfill or obtain the fulfillment of
the conditions precedent to the consummation of the Merger, including the
execution and delivery of any documents, certificates, instruments or other
papers that are reasonably required for the consummation of the transactions
contemplated hereby. During the period from the date of this Agreement and
continuing through the Closing, except as required by Applicable Law or with the
prior written consent of the other parties to this Agreement, no party to this
Agreement shall take any action which, or fail to take any action the failure of
which to be taken, would, or could reasonably be expected to, (a) result in any
of the representations and warranties set forth in this Agreement on the part of
the party taking or failing to take such action being or becoming untrue in any
material respect; (b) result in any conditions to the Closing set forth in
Article VII not being satisfied; or (c) adversely affect or materially delay the
receipt of any of the requisite regulatory approvals or the consummation of the
Merger.
..............Section 6.5. Confidentiality and Announcements. (a) Other than as
required by Applicable Law upon prior notice to the other parties (where
reasonably practicable), the Filing of a Form 8-K with respect to this Agreement
reasonably acceptable to both parties, or with the prior consent of the other
parties, none of Bancorp, the Company, the Bank, or First Savings shall, and
each of the foregoing shall cause each of its Affiliates and Representatives not
to, disclose to any Person the fact of execution and delivery hereof, any of the
contents hereof or any information with respect to the Merger or the other
transactions contemplated hereby, except that nothing herein shall prohibit any
party from providing any information to its regulatory authorities as required
by Applicable Law.
.............. (b) Subject to Section 6.7(a) and (b), the parties to this
Agreement shall agree with each other as to the form and substance of any press
release related to this Agreement or the transactions contemplated hereby and
shall consult each other as to the form and substance of other public
disclosures related hereto and thereto.
..............Section 6.6. Access; Certain Communications. Between the date of
this Agreement and the Closing Date, subject to any Applicable Laws relating to
the exchange of information:
.............. (a) The Company and the Company Subsidiaries shall afford to
Bancorp and its authorized agents and representatives reasonable access, upon
reasonable notice to an executive officer of the Company and during normal
business hours, to all Contracts, documents, and information of or relating to
the assets, liabilities, business, operations, personnel, and other aspects of
the business of the Company and the Company Subsidiaries. The Company and the
Company Subsidiaries shall cause their personnel, attorneys, and accountants to
provide assistance to Bancorp in Bancorp's investigation of matters relating to
the Merger, including allowing Bancorp and its authorized agents and
representatives access to their operating sites and facilities and cooperating
therewith in an effort to coordinate and facilitate the integration of Bancorp's
and the Company's computer systems in anticipation of consummation of the
Merger; provided, however, that Bancorp's investigation shall be conducted in a
manner which does not unreasonably interfere with the normal operations,
customers, and employee relations of the Company and the Company Subsidiaries;
provided further, however, that, in providing the foregoing access, the Company
shall not be required to jeopardize its attorney-client privilege (the Company
hereby agreeing to use all reasonable efforts to make appropriate alternative
disclosure arrangements in such circumstances).
.............. (b) Bancorp shall afford to the Company and its authorized agents
and representatives reasonable access, upon reasonable notice to an executive
officer of Bancorp and during normal business hours, to all Contracts,
documents, and information of or relating to the assets, liabilities, business,
operations, personnel, and other aspects of the business of Bancorp and the
Bancorp Subsidiaries. Bancorp shall cause its personnel, attorneys and
accountants to provide assistance to the Company in the Company's investigation
of matters relating to the Merger, including allowing the Company and its
authorized agents and representatives access to its operating sites and
facilities; provided, however, that the Company's investigation shall be
conducted in a manner which does not unreasonably interfere with Bancorp's
normal operations, customers, and employee relations; provided further, however,
that, in providing the foregoing access, Bancorp shall not be required to
jeopardize its attorney-client privilege (Bancorp hereby agreeing to use all
reasonable efforts to make appropriate alternative disclosure arrangements in
such circumstances).
.............. (c) The investigations of the parties pursuant to this Section
6.6 shall not affect any of the representations or warranties contained herein.
..............Section 6.7. Cooperation; Preparation of Documents. (a) The
parties to this Agreement shall cooperate with each other and use their
reasonable best efforts promptly to prepare and file all necessary
documentation, to effect all applications, notices, petitions, and filings, and
to obtain as promptly as practicable all permits, consents, approvals, waivers,
and authorizations of all third parties and Governmental Authorities which are
necessary or advisable to consummate the transactions contemplated by this
Agreement. If any required consent of or waiver by any third party (excluding
any Governmental Authority) is not obtained prior to the Closing, or if the
assignment of any Contract would be ineffective or would adversely affect any
material rights or benefits thereunder so that Bancorp would not in fact receive
all such rights and benefits, the parties hereto, each without cost, expense or
liability to the other, shall cooperate in good faith to seek, if possible, an
alternative arrangement to achieve the economic results intended. The parties to
this Agreement will have the right to review in advance, and will consult with
each other on, in each case subject to Applicable Laws relating to the exchange
of information, all the information relating to Bancorp, the Bancorp
Subsidiaries, the Company, or the Company Subsidiaries, as the case may be,
which appear in any filing made with, or written materials submitted to, any
third party or any Governmental Authority in connection with the transactions
contemplated by this Agreement; provided, however, that nothing contained herein
shall be deemed to provide any party to this Agreement with a right to review
any information provided to any Governmental Authority on a confidential basis
in connection with the transactions contemplated hereby. The parties to this
Agreement agree that they will consult with each other with respect to the
obtaining of all permits, consents, approvals, and authorizations of all third
parties and Governmental Authorities necessary or advisable to consummate the
transactions contemplated by this Agreement and each party will keep the others
apprised of the status of matters relating to completion of the transactions
contemplated herein. The party responsible for a filing as set forth above shall
promptly deliver to the other parties hereto evidence of the filing of all
applications, filings, registrations, and notifications relating thereto (except
for any confidential portions thereof), and any supplement, amendment, or item
of additional information in connection therewith (except for any confidential
portions thereof). The party responsible for a filing shall also promptly
deliver to the other parties hereto a copy of each material notice, order,
opinion, and other item of correspondence received by such filing party from any
Governmental Authority in respect of any such application (except for any
confidential portions thereof). In exercising the foregoing rights and
obligations, Bancorp, the Bancorp Subsidiaries, the Company, and the Company
Subsidiaries shall each act reasonably and as promptly as practicable.
.............. (b) Bancorp and the Company shall jointly prepare and file with
the SEC as soon as is reasonably practicable the Registration Statement (or the
equivalent in the form of preliminary proxy material). The parties hereto shall
use their reasonable best efforts (i) to cause the Registration Statement to
become effective, (ii) to maintain the effectiveness thereof through the
Effective Time, and (iii) to the extent any such party becomes aware of any
information contained or omitted from the Registration Statement which makes any
material statement contained therein false or misleading, to file the
information necessary to make such statements in the Registration Statement not
false or misleading. Bancorp also shall take such other reasonable actions
(other than qualifying to do business in any jurisdiction in which it is not so
qualified) required to be taken under any applicable state securities laws in
connection with the issuance of Bancorp Common Stock under the Registration
Statement as contemplated hereby. Bancorp and the Company shall use their
respective reasonable best efforts to mail at the earliest practicable date to
Bancorp shareholders and the Company shareholders, respectively, a Proxy
Statement, which shall include all information required under Applicable Law to
be furnished to Bancorp shareholders and Company shareholders, respectively, in
connection with the Merger and the transactions contemplated hereby and shall
include the recommendation of the Bancorp Board and of the Company Board in
favor of the Merger, this Agreement, and the transactions contemplated hereby;
provided, however, that the parties shall not be required to make such
recommendation if it reasonably determines in good faith not to so recommend
based upon the advice of counsel, which counsel or is otherwise reasonably
acceptable to the other party, to the effect that to so recommend would
constitute a violation of the Board's fiduciary duties under Applicable Law.
.............. (c) Each party to this Agreement shall, upon request, promptly
furnish each other with all information concerning themselves, Affiliates,
directors, officers, and stockholders and such other matters as may be
reasonably necessary or advisable in connection with any statement (including
the Registration Statement), filing, notice, or application made by or on behalf
of Bancorp, the Bank, the Company, or First Savings to any Governmental
Authority in connection with the transactions contemplated by this Agreement.
.............. (d) The parties to this Agreement shall promptly advise each
other upon receiving any communication from any Governmental Authority whose
consent or approval is required for consummation of the transactions
contemplated by this Agreement which causes such party to believe that there is
a reasonable likelihood that any requisite regulatory approval will not be
obtained or that the receipt of any such approval will be materially delayed.
..............Section 6.8. Notification of Certain Matters. (a) Each party to
this Agreement shall give prompt notice to the other parties of the occurrence,
or any known failure to occur, of any event or existence of any condition that
has caused or could reasonably be expected to cause any of its representations
or warranties contained in this Agreement to be untrue or inaccurate in any
material respect at any time after the date of this Agreement, up to and
including the Closing Date, and (ii) any failure on its part to comply with or
satisfy, in any material respect, any covenant, condition, or agreement to be
complied with or satisfied by it under this Agreement.
.............. (b) During the period from the date of this Agreement to the
Closing Date, each party will promptly notify the other party of any material
change in the conduct of its business or in the operation of its properties and
of any governmental complaints, investigations, or hearings (or communications
indicating that the same may be contemplated), or the institution or the threat
of significant litigation involving the party, and will keep each other fully
informed of such events.
.............. (c) Bancorp shall provide the Company with true, correct, and
complete copies of Bancorp's audited consolidated financial statements as of
September 30, 1999 and for the three years then ended promptly following
completion thereof, but in any event on or before the date such financial
statements are first filed with the SEC or any other Governmental Authority in
any Regulatory Document.
.............. (d) The Company shall provide Bancorp with true, correct, and
complete copies of the Company's audited consolidated financial statements as of
June 30, 1999 and for the three years then ended promptly following completion
thereof, but in any event on or before the date such financial statements are
first filed with the SEC or any other Governmental Authority in any Regulatory
Document.
..............Section 6.9. Expenses. Except as otherwise expressly provided
herein, the parties hereto shall each bear their respective direct and indirect
expenses incurred in connection with the negotiation and preparation of this
Agreement and the consummation of the transactions contemplated hereby
(including all fees and expenses payable to or on behalf of financial advisors,
attorneys, accountants, and consultants).
..............Section 6.10. Third Party Proposals. None of the Company, any of
the Company Subsidiaries, any of the Affiliates of the foregoing or any
officers, directors, employees, representatives, or advisors of the foregoing
("Representatives") shall directly or indirectly solicit, encourage, or
facilitate inquiries or proposals, or enter into any definitive agreement, with
respect to, or initiate or participate in any negotiations or discussions with
any Person concerning, any acquisition or purchase of all or any material
portion of the assets of, or of any material equity interest in, the Company or
any of the Company Subsidiaries or any merger or business combination with or
involving the Company or any of the Company Subsidiaries other than as
contemplated by this Agreement (each, an "Acquisition Proposal") or furnish any
information regarding the Company or the Company Subsidiaries to any such
Person; provided, however, that the Board of Directors of the Company may, and
may authorize and permit its Representatives to, furnish or cause to be
furnished nonpublic information, subject to a binding confidentiality agreement
with the Company to such Person and may participate in such discussions and
negotiations directly or through its Representatives with such Person, if (i)
such Board of Directors has reasonably determined in good faith based upon the
written advice of counsel, which counsel is reasonably acceptable to Bancorp, to
the effect that the failure to provide such nonpublic information or participate
in such negotiations and discussions would constitute a violation of the Board's
fiduciary duties under Applicable Law and (ii) copies of all information so
furnished to such Person and the terms of such Person's Acquisition Proposal
(and any supplements or amendments thereto) are furnished promptly to Bancorp.
The Company, the Company Subsidiaries, and any of their respective Affiliates
and Representatives shall notify Bancorp immediately if any Acquisition Proposal
(including the terms thereof) is received by, any such information is requested
from, or any such negotiations or discussions are sought to be initiated with
any of the Company, the Company Subsidiaries, or any of the Affiliates or
Representatives of the foregoing. None of the Company, the Company Subsidiaries,
or any of their respective Affiliates and Representatives shall amend, modify,
waive or terminate, or otherwise release any Person from, any standstill,
confidentiality, or similar agreement or arrangement currently in effect with
respect to the Company or any of the Company Subsidiaries. Nothing contained in
this Agreement shall require the Company or the Company Board to take any action
or fail to take any action in violation of Applicable Laws.
.............Section 6.11. Stock Listing. Bancorp shall use its reasonable best
efforts to cause to be listed on the NASDAQ NMS, subject to official notice of
issuance, the shares of Bancorp Common Stock to be issued as Merger
Consideration.
..............Section 6.12. Integration; Conforming Entries. (a) The Company and
First Savings, prior to the Closing, shall (i) consult and cooperate with
Bancorp regarding the implementation as of the Effective Time of those policies,
procedures, and systems (including computer stems) established by Bancorp for
its governance and operations and for that of the Bancorp Subsidiaries and not
otherwise referenced in Sections 6.12(b) and 6.12(c), including, without
limitation, policies, procedures, and systems pertaining to the accounting,
asset/liability management, audit, credit, human resources, treasury, and legal
functions, and (ii) at the request of Bancorp, conform the Company's and the
Company Subsidiaries' existing policies, procedures and systems to Bancorp's
policies, procedures, and systems or, in the absence of any existing Company or
Company Subsidiary policy, procedure, or system regarding any function,
introduce Bancorp's policies, procedures, and systems in respect thereof, in
each case effective as of the Effective Time, unless to do so would cause the
Company or any of the Company's Subsidiaries to be in violation of any
Applicable Law.
.............. (b) Notwithstanding that the Company believes that the Company
and the Company Subsidiaries have established all reserves and taken all
provisions for possible loan losses required by GAAP and Applicable Laws, the
Company recognizes that Bancorp may have adopted different loan, accrual, and
reserve policies (including loan classifications and levels of reserves for
possible loan losses). From and after the date of this Agreement to the Closing,
Bancorp and the Company shall consult and cooperate with each other with respect
to conforming as of the Effective Time the loan, accrual, and reserve policies
of Company and the Company Subsidiaries to those policies of Bancorp, as
specified in each case in writing to the Company and the Company Subsidiaries.
.............. (c) Subject to Applicable Laws, the Company shall (i) establish
and take such reserves and accruals at such time as Bancorp shall reasonably
request to conform the Company's loan, accrual, and reserve policies to
Bancorp's policies, and (ii) establish and take such accruals, reserves, and
charges in order to implement such policies in respect of excess facilities and
equipment capacity, severance costs, litigation matters, write-off or write-down
of various assets, and other appropriate accounting adjustments, and to
recognize for financial accounting purposes such expenses of the Merger and
restructuring charges related to or to be incurred in connection therewith, in
each case at such times as are reasonably requested by Bancorp; provided,
however, that on the date such reserves, accruals, and charges are to be taken,
Bancorp shall certify to the Company that the conditions set forth in Sections
7.1, 7.2, and 7.3 have been satisfied or waived (except to the extent that any
waiting period associated therewith may then have commenced but not expired);
and provided further, however, that the Company shall not be required to take
any such action that is not consistent with GAAP and regulatory accounting
principles.
..............Section 6.13. Tax-Free Treatment. Each of the parties hereto shall
use its reasonable best efforts to cause the Merger to constitute a
"reorganization" under Section 368(a) of the Code.
..............Section 6.14. Agreements of Affiliates. The Company shall cause
each Person who may be at the Effective Time or was on the date hereof an
"affiliate" of the Company for purposes of Rule 145 under the Securities Act to
execute and deliver to the Company, no less than 45 days prior to the date of
the meeting of Company shareholders to approve the Merger, the written
undertakings in the form attached hereto as Exhibit A. On or prior to such
delivery date, the Company shall provide Bancorp with a letter specifying, to
its knowledge, all of the Persons who may be deemed to be "affiliates" of the
Company under the preceding sentence.
..............Section 6.15. Stockholder Approval. (a) Each of Bancorp and the
Company shall call a meeting of its shareholders to be held as soon as
practicable for the purpose of voting upon and approving the Merger, this
Agreement and the transactions contemplated hereby.
.............. (b) The Company Board shall submit for approval of Company
shareholders the matters to be voted upon in order to authorize the Merger and
hereby does and will recommend the Merger, this Agreement and the transactions
contemplated hereby to Company shareholders and will use its best efforts to
obtain any vote of Company shareholders that is necessary for the approval of
the Merger and the approval and adoption of this Agreement and consummation of
the transactions contemplated hereby, provided that Company shall have received
an opinion of Trident Securities, a Division of McDonald Investments, Inc., or
such other nationally recognized investment banking firm as is reasonably
acceptable to Bancorp and the Company, dated within five days of mailing of the
Proxy Statement to Company shareholders that the Exchange Ratio is fair to
Company shareholders from a financial point of view (Bancorp hereby agreeing
that the terms of this proviso are subject to the Company's using all reasonable
efforts to obtain such opinion from Trident Securities, a Division of McDonald
Investments, Inc. and, if not forthcoming therefrom within a reasonable period
of time following a request made therefor, to obtain such opinion from at least
one such other reasonably acceptable investment banking firm); provided further,
however, that the Company Board shall not be required to make such
recommendation if it reasonably determines in good faith not to so recommend
based upon the written advice of counsel, which counsel either is reasonably
acceptable to Bancorp, to the effect that to so recommend would constitute a
violation of the Board's fiduciary duties under Applicable Law.
.............. (c) The Bancorp Board shall submit for approval of Bancorp
shareholders the matters to be voted upon in order to authorize the Merger and
hereby does and will recommend the Merger, this Agreement and the transactions
contemplated hereby to Bancorp shareholders and will use its best efforts to
obtain any vote of Bancorp shareholders that is necessary for the approval of
the Merger and the approval and adoption of this Agreement and consummation of
the transactions contemplated hereby provided that Bancorp shall have received
an opinion of JMP Financial, Inc., or such other nationally recognized
investment banking firm as is reasonably acceptable to Bancorp and the Company,
dated within five days of mailing of the Proxy Statement to Bancorp shareholders
that the Exchange Ratio is fair to Bancorp shareholders from a financial point
of view (the Company hereby agreeing that the terms of this proviso are subject
to the Bancorp's using all reasonable efforts to obtain such opinion from JMP
Financial, Inc. and, if not forthcoming therefrom within a reasonable period of
time following a request made therefor, to obtain such opinion from at least one
such other reasonably acceptable investment banking firm); provided further,
however, that the Bancorp Board shall not be required to make such
recommendation if it reasonably determines in good faith not to so recommend
based upon the written advice of counsel, which counsel either is reasonably
acceptable to the Company, to the effect that to so recommend would constitute a
violation of the Board's fiduciary duties under Applicable Law.
...............Section 6.16. Indemnification. From and after the Effective Time,
Bancorp shall indemnify, defend and hold harmless, and advance expenses for, the
present and former officers and directors of the Company against all losses,
expenses, claims, damages or liabilities arising from any acts or omissions by
such person in his or her capacity as such occurring prior to the Effective
Time, including any of the foregoing arising out of the transactions
contemplated by this Agreement, to the fullest extent permitted or required
under the Articles of Incorporation and Bylaws of Bancorp, in each case, as in
effect on the date hereof. This Section shall be construed as an agreement as to
which the directors and officers of the Company and the Company Subsidiaries
referred to herein are intended to be third party beneficiaries and shall be
enforceable by such persons and their heirs and representatives.
..............Section 6.17. D&O Insurance. From and after the Effective Time,
Bancorp shall maintain in effect, for not less than three years, policies of
directors and officers liability insurance providing coverage with respect to
matters occurring prior to the Effective Time, which policies shall cover those
present and former officers and directors of the Company and the Company
Subsidiaries that are covered by and shall provide coverage that is no less
beneficial, in the aggregate, than those covered and that coverage provided by
the current policies of the Company; provided, however, that Bancorp shall not
be required to pay aggregate premiums for such insurance in excess of $50,000,
but in such case shall purchase as much coverage as possible for such amount.
..............Section 6.18. Environmental Reports. Bancorp, at its expense, may
order within thirty (30) days of the Agreement a reputable environmental firm
selected by Bancorp (the "Environmental Firm") to perform a phase one
environmental investigation and/or asbestos survey on (i) each parcel of Company
real estate ("Company Property") owned or leased by, (ii) each office and
premise used as a facility ("Facility Property") by, and (iii) each property
that serves as security for any Company real estate loan having an original
principal balance greater than $500,000 made by, the Company or any Company
Subsidiary (collectively, clauses (i), (ii) and (iii), the "Current Property");
provided, however, that Bancorp shall use reasonable efforts to cause the
Environmental Firm to complete any such investigation or survey as soon as
reasonably practicable, but not later than sixty (60) days after the date
hereof. In addition, Bancorp, at its expense, may cause the Environmental Firm
to perform a phase one environmental examination and/or asbestos survey on any
Company Property or Facility Property acquired, leased or used by the Company or
any of the Company Subsidiaries after the date hereof (together with the Current
Property, the "Company Property"); provided, however, that Bancorp shall use
reasonable efforts to cause the Environmental Firm to complete any such
investigation or survey as soon as reasonably practicable, but not later than
fifteen (15) days after being notified by the Company of the acquisition, lease,
or commencement of use of such Company Property or Facility Property. If a phase
one report provided by the Environmental Firm recommends that a phase two
environmental survey be performed with respect to any parcel of the Company
Property, then Bancorp, at its expense, may cause the Environmental Firm to
perform a phase two environmental investigation of such Company Property;
provided, however, that Bancorp shall use reasonable efforts to cause the
Environmental Firm to complete any such phase two investigation as soon as
reasonably practicable, but not later than forty-five (45) days after the date
that such phase one report is received by Bancorp. Should the cost of taking all
remedial or other corrective actions and measures (i) required by Applicable Law
or (ii) recommended by the Environmental Firm in such phase one or phase two
report or reports in light of potentially serious life, health, or safety
concerns, in the aggregate, exceed the sum of $250,000, as reasonably estimated
by the Environmental Firm, or if the cost of such actions or measures cannot be
so reasonably estimated by the Environmental Firm to be such amounts or less
with any reasonable degree of certainty, Bancorp shall have the right pursuant
to Section 8.1(a)(vi) hereof, for a period of fifteen (15) Business Days
following receipt of such estimate or indication that the cost of such actions
and measures cannot be so reasonably estimated, to terminate this Agreement.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
..............Section 7.1. Mutual Conditions. The obligations of each party to
this Agreement to consummate the Merger shall be subject to the following
conditions:
.............. (a) No statute, rule, regulation, order, injunction, decree, or
other Applicable Law shall have been enacted, entered, issued, promulgated or
enforced by any Governmental Authority which prohibits, restricts or makes
illegal consummation of the Merger pursuant hereto (an "Injunction") and which
remains in effect; and no proceeding initiated by any Governmental Authority
seeking an Injunction shall be pending;
.............. (b) All consents, waivers, authorizations, and approvals required
from all Governmental Authorities to consummate Merger shall have been obtained
and shall remain in full force and effect and all waiting periods under
Applicable Law in respect thereof shall have expired or terminated;
.............. (c) The Merger, this Agreement, and the transactions contemplated
hereby shall have been approved by the Bancorp shareholders and the Company
shareholders, in each case, in the manner required by Applicable Law;
.............. (d) The SEC shall have declared the Registration Statement
effective; and on the Closing Date and at the Effective Time, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been initiated or then
threatened by the SEC;
.............. (e) The shares of Bancorp Common Stock, if any, to be issued as
Merger Consideration in the Merger shall have been approved for listing on the
NASDAQ NMS, subject to official notice of issuance;
............. (g) Bancorp and the Company shall have received an opinion of
Manatt, Phelps & Phillips, LLP, or of such other reasonably qualified Person as
Bancorp and the Company shall reasonably determine, in form and substance
reasonably acceptable to Bancorp and the Company, dated the Closing Date,
substantially to the effect that, on the basis of facts, representations and
assumptions set forth in such opinion which are consistent with the state of
facts existing at the Effective Time, (i) the Merger should constitute a
"reorganization" within the meaning of Section 368(a) of the Code and (ii) no
gain or loss should be recognized by Company shareholders who receive solely
Bancorp Common Stock in exchange for shares of Company Common Stock pursuant to
the Merger (except with respect to cash received in lieu of a fractional share
interest in Bancorp Common Stock). In rendering such opinion, counsel may
require and rely upon representations contained in certificates of officers of
the Company, Bancorp, and others.
..............Section 7.2. Conditions to Bancorp's Obligations. The obligations
of Bancorp to consummate the Merger shall be subject to the following
conditions:
.............. (a) The representations and warranties of the Company set forth
in this Agreement shall be true and correct in all material respects as of the
date of this Agreement and (except to the extent such representation and
warranty speaks as of an earlier date) as of the Closing Date as though made on
and as of the Closing Date;
.............. (b) Each of the Company and the Company Subsidiaries shall have
performed and complied in all material respects with each agreement, covenant,
obligation, and condition required by this Agreement to be performed or complied
with by it at or prior to the Closing Date;
.............. (c) The Company shall have delivered to Bancorp a certificate,
dated as of the Closing Date, signed on behalf of the Company by its Chief
Executive Officer and Chief Financial Officer, confirming the satisfaction of
the conditions contained in paragraphs (a) and (b) of this Section 7.2;
.............. (d) Bancorp, at its expense, shall have received from Crowe,
Chizek and Company LLP letters dated the date of mailing the Prospectus and the
date of the Closing to the effect that: (i) with respect to the Company they are
independent accountants within the meaning of the Securities Act and the
Exchange Act, (ii) it is their opinion that the audited consolidated financial
statements of the Company included in or incorporated by reference into the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and Exchange Act, (iii) on the
basis of such procedures as are set forth therein but without performing an
examination in accordance with generally accepted auditing standards nothing has
come to their attention which would cause them to believe that (A) any unaudited
interim financial statements appearing in the Prospectus do not comply as to
form in all material respects with the applicable accounting requirements of the
Securities Act and Exchange Act; (B) said financial statements are not stated on
a basis substantially consistent with that of the audited financial statements;
(C) (1) at the date of the latest available consolidated financial statements of
the Company and at a specific date not more than five (5) Business Days prior to
the date of each such letter there has been, except as specified in such letter,
any increase in the outstanding capital stock, or indebtedness for borrowed
money of the Company (other than deposits and Federal Home Loan Bank advances
with a maturity of one year or less) or any decrease in the shareholders' equity
thereof as compared with amounts shown in the latest statement of financial
condition included in the Prospectus, or (2) for the period from the date of the
latest audited financial statements of the Company included in or incorporated
by reference into the Prospectus to a specific date not more than five (5)
Business Days prior to the date of each such letter, there were, except as
specified in such letter, any decreases, as compared with the corresponding
period in the preceding year, in consolidated net income for the Company
excluding expenses associated with the Merger or any increase, as compared with
the corresponding period in the preceding year, in the provision for loan losses
for the Company, (iv) they have performed certain specific procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature included in the Prospectus and requested by
Bancorp and agreed upon by such accountants, which is expressed in dollars (or
percentages obtained from such dollar amounts) and obtained from accounting
records which are subject to the internal controls of the Company's accounting
system or which has been derived directly from such accounting records by
analysis or computation is in agreement with such records or computations made
therefrom (excluding any questions of legal interpretation), and (v) on the
basis of such procedures as are set forth in such letter, nothing came to their
attention with respect to the Company which would cause them to believe that the
pro forma financial statements had not been properly compiled on the pro forma
basis described therein; and
.............. (e) Each Person who may be at the Effective Time or was on the
date of this Agreement an "affiliate" of the Company for purposes of Rule 145
under the Securities Act shall have executed and delivered to the Company, at
least 45 days prior to the date of the meeting of the Company shareholders to
approve the Merger, the written undertakings in the form attached hereto as
Exhibit A.
..............Section 7.3. Conditions to the Company's Obligations. The
obligations of the Company to consummate the Merger shall be subject to the
following conditions:
.............. (a) The representations and warranties of Bancorp set forth in
this Agreement shall be true and correct in all material respects as of the date
of this Agreement and (except to the extent such representation and warranty
speaks as of an earlier date) as of the Closing Date as though made on and as of
the Closing Date;
.............. (b) Each of Bancorp and the Bancorp Subsidiaries shall have
performed and complied in all material respects with each agreement, covenant,
obligation, and condition required by this Agreement to be performed or complied
with by it at or prior to the Closing Date; and
............. (c) Bancorp shall have delivered to Bancorp and the Company a
certificate, dated as of the Closing Date, signed on behalf of Bancorp by its
Chief Executive Officer and Chief Financial Officer, confirming the satisfaction
of the conditions contained in paragraphs (a) and (b) of this Section 7.3.
ARTICLE VIII
TERMINATION
..............Section 8.1. Termination. (a) This Agreement may be terminated at
any time prior to the Effective Time, whether before or after approval and
adoption of this Agreement by the Bancorp shareholders or the Company
shareholders, as follows:
.............. (i) by written consent of the parties hereto;
.............. (ii) by Bancorp or the Company if a condition to the terminating
party's obligation to close set forth in Article VII cannot be satisfied prior
to the date set forth in Section 8.1(a)(iv) below unless caused by the breach of
any covenant or agreement under this Agreement (x) by Bancorp or the Bank, in
the case of a termination by the Company, or (y) by the Company or First
Savings, in the case of termination by Bancorp;
.............. (iii) by Bancorp or the Company (provided that none of the
terminating party or any of its Affiliates is not then in material breach of any
representation, warranty, covenant, or other agreement contained herein) if
there shall have been a material breach of any of the covenants or agreements or
any of the representations or warranties set forth in this Agreement on the part
of Bancorp or the Bank, in the case of a termination by the Company, or on the
part of the Company or First Savings, in the case of a termination by Bancorp,
which breach is not cured within thirty (30) days following written notice given
by the terminating party to the party committing such breach, or, by its nature,
cannot be cured prior to the date set forth in Section 8.1(a)(iv) below, and
which breach would entitle the terminating party to not consummate the Merger
pursuant to Article VII;
.............. (iv) by Bancorp or the Company, if the Closing has not occurred
on or before March 31, 2000 (provided that the right to terminate this Agreement
under this Section 8.1(a)(iv) shall not be available to any party whose failure
or whose Affiliate's failure to perform any covenant of obligation under this
Agreement has been the cause of or resulted in the failure of the Merger to
occur on or before such date);
.............. (v) by Bancorp if the Company Board shall withdraw, modify or
change in a manner adverse to Bancorp its recommendation with respect to the
Merger, this Agreement, or the transactions contemplated hereby, or by the
Company if the Bancorp Board shall withdraw, modify or change in a manner
adverse to the Company its recommendation with respect to the Merger, this
Agreement, or the transactions contemplated hereby;
.............. (vi) by Bancorp pursuant to and in accordance with the provision
of the last sentence of Section 6.18.
.............. (b) The termination of this Agreement shall be effectuated by the
delivery by the party terminating this Agreement to the other party of a written
notice of such termination. If this Agreement terminates pursuant to this
Section 8.1, it shall become null and void and have no further force or effect,
except as provided in Section 8.2.
..............Section 8.2. Survival After Termination. If this Agreement is
terminated in accordance with Section 8.1 hereof and the transactions
contemplated hereby are not consummated, this Agreement shall become void and of
no further force and effect, without any liability on the part of any party
hereto, except for the provisions of Sections 6.5 and 6.9. Notwithstanding the
foregoing, nothing in this Section 8.2 shall relieve any party to this Agreement
of liability for a willful breach of any provision of this Agreement.
..............Section 8.3. Termination Fee. If, prior to the Effective Time,
this Agreement is terminated by the Company and within 12 months of the date of
termination, the Company agrees to be acquired by, merged, or otherwise combined
with any third party, in consideration for Bancorp's expenditure of time and
money in connection with the drafting of this Agreement and the actions of
Bancorp connected hereto, the Company shall pay Bancorp the amount of $250,000.
ARTICLE IX
MISCELLANEOUS
..............Section 9.1. Amendments; Waiver. This Agreement may be amended by
the parties hereto, by action taken by or on behalf of their respective Boards
of Directors, at any time before or after approval of this Agreement by the
Bancorp shareholders or Company shareholders; provided, however, that after any
such approval by the Bancorp shareholders or Company shareholders, no such
amendment shall be made which under Applicable Law would require further
approval or authorization by the Bancorp shareholders or Company shareholders,
without obtaining such further approval or authorization. Notwithstanding the
foregoing, this Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto. Any agreement on the part of any
party to waive (i) any inaccuracies in the representations and warranties
contained herein made by any other party or in any document, certificate or
writing delivered pursuant hereto by any other party, or (ii) compliance with
any of the agreements, covenants, or conditions contained herein, shall be valid
only if set forth in an instrument in writing signed on behalf of such party. No
such waiver shall constitute a waiver of, or estoppel with respect to, any
subsequent or other inaccuracy, breach, or failure to strictly comply with the
provisions of this Agreement. The failure of any party at any time or times to
enforce or require performance of any provision hereof shall in no way operate
as a waiver or affect the right of such party at a later time to enforce the
same.
..............Section 9.2. Entire Agreement. This Agreement (including
Disclosure Schedules, Annexes, Exhibits, certificates, lists and documents
referred to herein, and any documents executed by the parties simultaneously
herewith or pursuant hereto,) constitute the entire agreement of the parties
hereto and supersede all prior agreements and understandings, written and oral,
among the parties with respect to the subject matter hereof.
..............Section 9.3. Non-Survival of Representations, Warranties and
Agreements. No investigation by the parties hereto made heretofore or hereafter
shall affect the representations and warranties of the parties which are
contained herein and each such representation and warranty shall survive such
investigation. The representations, warranties, covenants, and agreements of the
parties contained herein shall not survive the Effective Time, except for those
covenants and agreements which by their terms contemplate performance after the
Effective Time.
..............Section 9.4. Interpretation. When a reference is made in this
Agreement to Sections, Annexes, Exhibits, or Disclosure Schedules, such
reference shall be to a Section of or Annex or Exhibit or Disclosure Schedule to
this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." The phrases "the date
of this Agreement," "the date hereof" and terms of similar import, unless the
context otherwise requires, shall be deemed to refer to the date set forth in
the first paragraph of this Agreement.
..............Section 9.5. Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable in any
jurisdiction, the provision shall be interpreted to be only so broad as is
enforceable in that jurisdiction.
..............Section 9.6. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given (a) upon delivery in
person, (b) upon transmission by telecopy (with written confirmation), (c) upon
receipt if mailed by registered or certified mail (return receipt requested), or
(d) on the business date after being delivered to a reputable overnight delivery
service, in each case, to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
If to Bancorp or the Bank:
Peoples Bancorp
212 West 7th Street
Auburn, Indiana 46706
Attention: Mr. Maurice F. Winkler, III, President
and Chief Operating Officer
Telecopy:
With a copy to:
Barnes & Thornburg
11 South Meridian Street
Indianapolis, Indiana 46204
Attention: Claudia Swhier, Esq.
Telecopy: 317-231-7433
If to the Company or First Savings:
Three Rivers Financial Corporation
123 Portage Avenue
Three Rivers, Michigan 49093
Attention: Mr. G. Richard Gatton, President and Chief Executive Officer
Telecopy:
With copies to:
Manatt, Phelps & Phillips, LLP 1501 M Street, N.W.
Suite 700
Washington, D.C. 20005
Attention: Edward L. Lublin, Esq.
Telecopy: 202-463-4394
..............Section 9.7. Binding Effect; Persons Benefiting; No Assignment.
Subject to the last sentence of this Section 9.7, this Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Except for the provisions of Sections 6.16 and
6.17, nothing in this Agreement is intended or shall be construed to confer upon
any Person other than the parties hereto and their respective successors and
permitted assigns any right, remedy, or claim under or by reason of their
Agreement or any part hereof or to create any third party beneficiaries. This
Agreement may not be assigned by any of the parties hereto without the prior
written consent of each of the other parties hereto.
..............Section 9.8. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same agreement, it being
understood that all of the parties need not sign the same counterpart.
..............Section 9.9. Governing Law. This agreement, the legal relations
between the parties and the adjudication and the enforcement thereof, shall be
governed by and interpreted and construed in accordance with the substantive
laws of the State of Indiana, without regard to applicable choice of law
provisions thereof.
..............Section 9.10. Specific Performance. The parties hereto each
acknowledge that, in view of the uniqueness of its business and the transactions
contemplated by this Agreement, each party would not have an adequate remedy at
law for money damages in the event that the covenants to be performed hereunder
have not been performed in accordance with their terms, and therefore agree that
the other parties shall be entitled to specific enforcement of the terms hereof
in addition to any other equitable remedy to which such parties may be entitled.
..............Section 9.11. WAIVER OF JURY TRIAL. THE PARTIES TO THIS AGREEMENT
AGREE TO WAIVE ANY RIGHT TO A JURY TRIAL AS TO ALL DISPUTES HEREUNDER.
..............IN WITNESS WHEREOF the parties have hereunto caused this Agreement
to be duly executed as of the date first above written.
PEOPLES BANCORP
By:
Name:
Title:
THREE RIVERS FINANCIAL CORPORATION
By:
Name:
Title:
<PAGE>
NEWS RELEASE Exhibit 20 For Additional Information, contact:
Peoples Bancorp Three Rivers Financial Corp.
Roger J. Wertenberger, Chairman G. Richard Gatton, President
Maurice F. Winkler III, President (616) 279-5117
(219) 925-2500
PEOPLES BANCORP AND THREE RIVERS FINANCIAL CORP.
ANNOUNCE SIGNING OF MERGER AGREEMENT
AUBURN, INDIANA and THREE RIVERS, MICHIGAN -- SEPTEMBER 21, 1999 --
Peoples Bancorp (NASDAQ: PFDC), headquartered in Auburn, Indiana, and Three
Rivers Financial Corp. (AMEX: THR), headquartered in Three Rivers, Michigan,
jointly announced today that they have signed a definitive agreement providing
for the merger of Three Rivers Financial Corp., a $101 million savings and loan
holding company, with and into Peoples Bancorp, a $317 million savings and loan
holding company.
Under the terms of the agreement, each shareholder of Three Rivers
Financial Corp. would receive in a tax-free exchange 1.08 shares of Peoples
Bancorp common stock for each share of Three Rivers common stock owned by such
shareholder. Based on the closing price of Peoples Bancorp on September 20, 1999
($17), the transaction is valued at $18.36 per share and has an aggregate value
of approximately $14.4 million (assuming the exercise of all outstanding stock
options). Three Rivers= common stock closed on the AMEX on September 20, 1999,
at $11 per share.
The proposed merger is subject to the approval of the shareholders of
Peoples Bancorp and of Three Rivers, and of the Office of Thrift Supervision,
receipt of fairness opinions, and other customary conditions. The parties
contemplate that the merger will become effective during the first quarter of
2000.
Following the completion of the transaction, G. Richard Gatton,
president of Three Rivers Financial Corp., and one other director of Three
Rivers, will join the Board of Directors of Peoples Bancorp. Three Rivers=
savings association subsidiary will retain its name and separate identity.
AThe merger with Three Rivers represents an expansion of Peoples
Bancorp=s operations into southwestern Michigan,@ said Roger Wertenberger,
Peoples Bancorp=s chairman of the board. AWe are excited by this increase in our
market penetration and our ability to offer our services to new customers.
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Three Rivers= President, G. Richard Gatton, said, when announcing the
combination, AThe joining of Three Rivers with Peoples Bancorp will allow us to
increase our number of banking locations and to offer a broader array of
products and services to our customers. This transaction also allows us to
retain banking decision-making here in Three Rivers. We are excited about the
opportunities presented by this partnership, and we feel it is in the best
interests of our shareholders, customers and employees, as well as the
communities we serve.
Three Rivers Financial Corp. is the holding company for First Savings
Bank, A Federal Savings Bank. First Savings Bank conducts its banking business
from its main office in Three Rivers, Michigan, and from five full service
branch offices in Three Rivers, Schoolcraft, and Union in Michigan and Howe and
Middlebury in Indiana.
Upon completion of the merger, Peoples Bancorp, an Auburn-based savings
and loan holding company, will have total assets of approximately $418 million
and will operate two savings association subsidiaries with a total of 14 banking
offices in northeastern Indiana and southwestern Michigan.
