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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Act of 1934
Date of Report (Date of earliest event reported) September 9, 1998
CALUMET BANCORP, INC.
(Exact name of registrant as specified in its charter)
____________________________
Delaware 0-19829 36-3785272
(State or other jurisdiction (Commission (I.R.S. Employee
of incorporation) File Number) Identification No.)
1350 E. Sibley Boulevard 60419
Dolton, Illinois (Zip Code)
Registrant's telephone number, including area code (708) 841-9010
Not Applicable
(Former name or former address, if changes since last year)
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SIGNATURE
Pursuant to the requirements of he Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CALUMET BANCORP, INC.
----------------------
(Registrant)
Date: September 17, 1998
/s/ John Garlanger
----------------------
John Garlanger
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Item 5 Other Events
On September 9, 1998, the Registrant's Board of Directors unanimously
approved an Agreement and Plan of Merger by and among the Registrant, FBOP
Corporation and FBOP Acquisition Corp. (the "Merger Agreement"). FBOP
Corporation is a closely held bank holding company headquartered in Oak Park,
Illinois. As of June 30, 1998 FBOP Corporation reported total assets of $3.3
billion and total deposits of $2.7 billion.
Under the terms of the merger FBOP Acquisition Corp., a wholly owned
subsidiary of FBOP Corporation will acquire for cash all of the outstanding
stock of Registrant for a purchase price of approximately $111.6 million less
Registrant's merger related expenses, or $32.00 per fully diluted share.
The transaction is expected to be completed during the first quarter of
1999 and is subject to the approval of the regulatory agencies and the
Registrant's shareholders to the satisfaction of certain normal contractual
closing conditions under the Merger Agreement.
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EXHIBIT TABLE
<TABLE>
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DESCRIPTION EXHIBIT NO.
- ----------- -----------
<S> <C>
Agreement and Plan of Merger
among Calumet Bancorp, Inc.,
FBOP Corporation and
FBOP Acquisition Corp. dated
as of September 9, 1998 1
Press Release Issued September 9, 1998 2
</TABLE>
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- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
AMONG
CALUMET BANCORP, INC.
FBOP CORPORATION
AND
FBOP ACQUISITION COMPANY
AS OF SEPTEMBER 9, 1998
- --------------------------------------------------------------------------------
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TABLE OF CONTENTS
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Page
<S> <C>
ARTICLE I.........................................................................................................2
MERGER...............................................................................................2
(a) Merger....................................................................................2
(b) Effective Time............................................................................2
(c) Effects of the Merger.....................................................................2
(d) Prior Approvals...........................................................................2
(e) Certificate of Incorporation..............................................................3
(f) Bylaws....................................................................................3
(g) Directors and Officers....................................................................3
(h) Additional Actions........................................................................3
(i) Conversion of Shares......................................................................3
(j) Total Merger Consideration................................................................5
(k) Surrender of Shares.......................................................................5
(l) Designation of Paying Agent; Investment of Funds..........................................5
(m) Transmittal Materials.....................................................................6
(n) Dissenting Shares.........................................................................6
(o) Termination of Paying Agent's Duties......................................................6
(p) Closing of Holding Company's Transfer Books...............................................7
(q) Employee Stock Options; Restricted Stock..................................................7
ARTICLE II........................................................................................................7
REPRESENTATIONS AND WARRANTIES OF HOLDING COMPANY....................................................7
(a) Organization and Standing of Holding Company..............................................7
(b) Organization and Standing of Savings Institution..........................................8
(c) Holding Company Subsidiaries..............................................................8
(d) Capitalization............................................................................8
(e) Authorization.............................................................................9
(f) Certificates of Incorporation and Bylaws..................................................9
(g) Consents and Approvals....................................................................9
(h) Defaults and Conflicts....................................................................9
(i) SEC Reports; Financial Statements........................................................10
(j) Regulatory Reports.......................................................................11
(k) Changes Since March 31, 1998.............................................................11
(l) Properties...............................................................................12
(i) Real Estate and Mortgages.....................................................12
(ii) Investments...................................................................12
(iii) Title to Property; Zoning.....................................................12
(m) Environmental Laws.......................................................................13
(n) Proprietary Rights.......................................................................13
(o) Agreements...............................................................................13
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(p) Litigation; Claims.......................................................................14
(q) Compliance with Laws.....................................................................14
(r) Taxes....................................................................................15
(s) Related Party Transactions...............................................................16
(t) Employee Benefit Plans...................................................................16
(u) Insurance................................................................................18
(v) Regulatory Filings.......................................................................18
(w) Deposits.................................................................................18
(x) Loans....................................................................................19
(y) Reserves.................................................................................20
(z) Agreements with Regulatory Agencies......................................................20
(aa) Information for Regulatory Approvals.....................................................20
(ab) Governmental Notices.....................................................................20
(ac) SEC Filings..............................................................................20
(ad) Finders and Investment Bankers...........................................................21
(ae) Third Party Discussions..................................................................21
(af) Disclosure...............................................................................21
(ag) Year 2000................................................................................21
(ah) Bonuses; Accrued Vacation................................................................21
ARTICLE III......................................................................................................22
REPRESENTATIONS AND WARRANTIES OF ACQUISITION AND FBOP..............................................22
(a) Organization of Acquisition and FBOP.....................................................22
(b) Authorization............................................................................22
(c) Consents and Approvals...................................................................22
(d) Defaults and Conflicts...................................................................23
(e) SEC Filings..............................................................................23
(f) Funds Available..........................................................................23
(g) Finders and Investment Bankers...........................................................23
(h) Governmental Notices.....................................................................23
(i) Articles; Bylaws.........................................................................23
(j) Access to Certain Information............................................................23
ARTICLE IV.......................................................................................................24
RIGHT TO INVESTIGATE................................................................................24
ARTICLE V........................................................................................................24
COVENANTS OF HOLDING COMPANY .......................................................................24
(a) Operation in Ordinary Course.............................................................24
(b) Exclusivity..............................................................................28
(c) Stockholder Meeting......................................................................28
(d) Consents.................................................................................29
(e) Reports..................................................................................29
(f) Notice...................................................................................29
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<TABLE>
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(g) Regulatory Matters.......................................................................29
(h) Schedules................................................................................29
(i) Supplemental Information.................................................................30
(j) Cooperation..............................................................................30
(k) Conditions Precedent.....................................................................30
(l) Best Efforts.............................................................................30
ARTICLE VI.......................................................................................................30
COVENANTS OF ACQUISITION AND FBOP...................................................................30
(a) Consents.................................................................................30
(b) Cooperation..............................................................................30
(c) Conditions Precedent.....................................................................30
(d) Best Efforts.............................................................................31
(e) Prompt Loan Review.......................................................................31
ARTICLE VII......................................................................................................31
CONDITIONS TO THE OBLIGATIONS OF ACQUISITION........................................................31
(a) Validity of Representation and Warranties................................................31
(b) Consents.................................................................................31
(c) Compliance with Covenants................................................................31
(d) Opinion of Counsel.......................................................................31
(e) Approval of Holding Company Stockholders.................................................31
(f) Dissenting Holding Company Shares........................................................32
(g) Resignations.............................................................................32
(h) Employment Matters.......................................................................32
(i) Adverse Changes..........................................................................32
(j) Effective Time...........................................................................32
(k) Stock Option Plans and Incentive Plans; Options..........................................32
ARTICLE VIII.....................................................................................................32
CONDITIONS TO THE OBLIGATIONS OF HOLDING COMPANY....................................................32
(a) Validity of Representations and Warranties...............................................33
(b) Consents.................................................................................33
(c) Compliance with Covenants................................................................33
(d) Opinion of Counsel.......................................................................33
(e) Fairness Opinion.........................................................................33
(f) Effective Time...........................................................................33
(g) Funds to Paying Agent....................................................................33
ARTICLE IX.......................................................................................................33
CONDITIONS APPLICABLE TO ACQUISITION, FBOP AND HOLDING COMPANY......................................33
(a) Governmental Approvals...................................................................33
(b) Injunction...............................................................................34
</TABLE>
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ARTICLE X........................................................................................................34
CLOSING AND CLOSING DOCUMENTS.......................................................................34
(a) Closing..................................................................................34
(b) Holding Company Closing Documents........................................................34
(c) Acquisition Closing Documents............................................................35
ARTICLE XI.......................................................................................................35
TERMINATION AND TERMINATION FEE.....................................................................35
(a) Termination..............................................................................35
(b) Termination Fee..........................................................................35
(c) Survival of Rights.......................................................................36
ARTICLE XII......................................................................................................36
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS...............................................36
ARTICLE XIII.....................................................................................................36
MISCELLANEOUS.......................................................................................36
(a) Payment of Expenses......................................................................36
(b) Entire Agreement.........................................................................36
(c) Modifications, Amendments and Waivers....................................................36
(d) Assignment...............................................................................37
(e) Schedules................................................................................37
(f) Press Releases...........................................................................37
(g) Notices..................................................................................37
</TABLE>
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is entered into as
of the 9th day of September 1998, by and among Calumet Bancorp, Inc., a savings
institution holding company organized under the laws of the State of Delaware
(the "Holding Company"), FBOP Corporation, a bank holding company organized
under the laws of the State of Illinois (AFBOP@) and FBOP Acquisition Company, a
corporation organized under the laws of the State of Delaware ("Acquisition").
Holding Company and Acquisition are sometimes referred to herein as the
"Constituent Corporations."
W I T N E S S E T H:
WHEREAS, Acquisition is a wholly-owned subsidiary of FBOP; and
WHEREAS, the parties desire that Holding Company be acquired by
Acquisition through the merger of Acquisition with and into Holding Company upon
the terms and conditions contained herein and in accordance with applicable laws
(the "Merger"); and
WHEREAS, the Board of Directors of Holding Company deems the Merger to
be advisable and in the best interests of Holding Company and its stockholders
and has adopted resolutions approving this Agreement and directing that this
Agreement be submitted for consideration at a meeting of its stockholders; and
WHEREAS, the Boards of Directors of FBOP and Acquisition deem the
Merger to be advisable and in the best interests of their respective
stockholders and each has adopted resolutions approving this Agreement; and
WHEREAS, as soon as practicable after the execution and delivery of
this Agreement, Calumet Federal Savings and Loan Association of Chicago, a
federally-chartered stock savings institution and wholly-owned subsidiary of
Holding Company (the "Savings Institution") and Regency Savings Bank, F.S.B., a
federally-chartered stock savings institution and wholly-owned subsidiary of
FBOP ("RSB," and sometimes referred to herein as the "Surviving Bank"), will
enter into a Bank Agreement and Plan of Merger (the "Bank Merger Agreement")
providing for the merger (the "Bank Merger"), of Savings Institution with and
into RSB, with the Bank Merger to be consummated immediately following the
consummation of the Merger (the Merger and the Bank Merger and the transactions
contemplated thereby are referred to herein as the "Transaction"); and
WHEREAS, concurrently with the execution and delivery of this Agreement
and as a condition and inducement to Acquisition's willingness to enter into
this Agreement, certain holders (Thaddeus Walczak and Carole J. Lewis) of shares
of common stock, $0.01 par value per share, of Holding Company (the "Common
Stock") are granting Acquisition irrevocable
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proxies, in the form attached hereto as Exhibit A (the "Proxies"), to vote such
shares of Common Stock;
NOW, THEREFORE, for and in consideration of the premises and the mutual
agreements, representations, warranties and covenants herein contained and in
the Proxies, for the purpose of prescribing the terms and conditions of the
Merger, the manner of converting the Common Stock of Holding Company into cash,
and such other details and provisions as are deemed desirable in connection with
the Merger, the parties, intending to be bound, hereby agree as follows:
ARTICLE I
MERGER
(a) Merger. In accordance with the provisions of this Agreement and the
Delaware General Corporation Law ("DGCL"), at the Effective Time (as herein
defined), Acquisition shall be merged with and into Holding Company and the
separate existence of Acquisition thereupon shall cease. Following the Merger,
Holding Company shall continue as the surviving corporation ("Surviving
Corporation"). At Acquisition's option, the Merger may be structured so that
Holding Company merges into another direct or indirect wholly-owned subsidiary
of FBOP (such entity, if any, to be included in the definition of
"Acquisition"); provided, however, that Acquisition shall assign to such entity,
and such entity shall assume, all rights and obligations of Acquisition under
this Agreement.
(b) Effective Time. As soon as practicable after the satisfaction or
waiver of the conditions set forth in Article X, the parties hereto will file a
certificate of merger (the "Certificate of Merger") with the Secretary of State
of Delaware and make all other filings or recordings required by the DGCL in
connection with the Merger. The Merger shall become effective at such time as
the Certificate of Merger is duly filed with the Secretary of State of Delaware,
or at such later time as is specified in the Certificate of Merger (the
"Effective Time").
(c) Effects of the Merger. The Merger shall have the effects set forth
in the DGCL. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the properties, rights, privileges, powers
and franchise of the Constituent Corporations shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Constituent
Corporations shall become the debts, liabilities and duties of the Surviving
Corporation.
(d) Prior Approvals. The parties hereto acknowledge that the requisite
approvals for the Transaction must be received from or notices must be given to
certain federal governmental bodies and agencies including, but not limited to:
(i) the Office of Thrift Supervision of the Department of the Treasury (the
"OTS"); (ii) the Federal Deposit Insurance
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Corporation (the "FDIC"); (iii) the Board of Governors of the Federal Reserve
System ("Federal Reserve Board"); and (iv) any other regulatory authorities
having jurisdiction, which approvals or notices shall be in form and substance
acceptable to FBOP and Acquisition in their sole discretion, reasonably
exercised, and not contain conditions that, individually or in the aggregate
could likely have or lead to a Material Adverse Effect (as hereinafter defined)
on FBOP, RSB or Acquisition (collectively, the governmental bodies and agencies
referred to in items (i)-(iv) above are referred to herein as the "Applicable
Governmental Authorities").
(e) Certificate of Incorporation. The Certificate of Incorporation of
Holding Company in effect at the time of the Merger shall be the Certificate of
Incorporation of the Surviving Corporation, until thereafter amended as provided
thereunder and in the DGCL.
(f) Bylaws. The Bylaws of Holding Company in effect at the time of the
Merger shall be the Bylaws of the Surviving Corporation until altered, amended
or repealed, as provided thereunder and in the Certificate of Incorporation and
the DGCL.
(g) Directors and Officers. The directors and officers of Acquisition
at the time of the Merger shall be the directors and officers of the Surviving
Corporation, in each case to serve, in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation, until their successors
shall have been elected and shall qualify. If at the Effective Time a vacancy
shall exist on the Board of Directors or in any of the offices of the Surviving
Corporation, such vacancy may thereafter be filled in the manner provided by the
Bylaws of the Surviving Corporation.
(h) Additional Actions. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any further assignments
or assurances in law or any other acts are necessary or desirable (a) to best
perfect or confirm, of record or otherwise, in the Surviving Corporation, title
to and possession of any property or right of Acquisition acquired or to be
acquired by reason of, or as a result of, the Merger, or (b) otherwise to carry
out the purposes of this Agreement, Holding Company and its proper officers and
directors shall be deemed to have granted to the Surviving Corporation an
irrevocable power of attorney to execute and deliver all such proper deeds,
assignments and assurances in law and to do all acts necessary or proper to
vest, perfect or confirm title to and possession of such property or rights in
the Surviving Corporation are fully authorized in the name of Holding Company or
otherwise to take any and all such actions.
(i) Conversion of Shares. The manner and basis of converting and
exchanging the shares of Holding Company Common Stock, and the manner and basis
of making distributions, if any, to stockholders of Holding Company, shall be as
follows:
(i) Each share of Common Stock of Holding Company which is
issued and outstanding immediately prior to the Effective Time other
than Dissenting Shares (as defined below) shall, by virtue of the
Merger and without any action on the part of
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the holder thereof, at and after the Effective Time be converted into
the right to receive the "Per Share Merger Consideration."
"Per Share Merger Consideration" shall be equal to:
Aggregate Merger plus Aggregate minus Expenses
Consideration ---- Strike Price of -----
Options
divided by
---------------------------------------------------------------
outstanding shares of plus aggregate shares of
Common Stock ---- Common Stock subject to
Options
where,
Aggregate Merger
Consideration = $111,600,000 (subject to adjustment as set
forth in subpart (j) below).
Expenses = All third party fees and expenses incurred by
Holding Company and Savings Institution since
July 1, 1998 in connection with the
Transaction, including finders' and brokers'
fees, expenses for directors= and officers= tail
coverage, legal expenses and filing and
printing fees.
Aggregate Strike
Price of Options = The sum of the exercise price of each
outstanding Option (defined below).
(ii) At the Effective Time, Acquisition shall pay or cause to
be paid to each of the persons listed on Schedule 1(q) hereto, with
respect to the outstanding options for Holding Company Common Stock
(without regard to the expiration date thereof) (collectively, the
"Options") set forth opposite such person's name therein, an amount per
share of Common Stock subject to an Option equal to the excess of the
Per Share Merger Consideration over the exercise price per share of
such Option, as set forth on Schedule 1(q) (the "Cash Consideration Per
Option"). Concurrently with the payment of the Cash Consideration Per
Option, each holder of an Option shall deliver to Acquisition evidence
satisfactory to Acquisition of the cancellation of such Option. At the
Effective Time, each Option shall be canceled and retired and shall
cease to exist
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and shall be deemed to represent only the right to receive the Cash
Consideration Per Option. Payment of the Cash Consideration Per Option
in accordance with this Article I(i)(ii) shall be deemed to be full
satisfaction of all rights pertaining to the Options. All amounts
payable under this Article I(i)(ii) shall be subject to any required
withholding of taxes and shall be paid without interest.
(iii) Each share of Holding Company Common Stock, if any,
which is issued and held in the treasury of Holding Company, shall, by
virtue of the Merger, at the Effective Time, be retired and canceled,
and no cash or other consideration shall be issued with respect
thereto.
(iv) Each share of common stock, par value $1.00 per share, of
Acquisition issued and outstanding immediately prior to the Effective
Time shall be converted into and exchangeable for one share of common
stock, $0.01 par value per share, of the Surviving Corporation
("Surviving Corporation Common Stock").
(j) Total Merger Consideration. Notwithstanding the preceding subparts
of this Article, except to the extent payments made to holders of Dissenting
Shares exceed the Per Share Merger Consideration, in no event shall the total
cash consideration paid by Acquisition hereunder (the "Aggregate Merger
Consideration") exceed $111,600,000. To the extent that any of the Options are
exercised prior to the Closing, the Aggregate Merger Consideration shall be
increased by an amount equal to the exercise price of such Options.
(k) Surrender of Shares. As promptly as practicable after the Effective
Time, each holder of shares of Holding Company Common Stock shall, upon
presentation and surrender of the certificate or certificates therefor to the
Paying Agent (as defined below) for cancellation in accordance with the
transmittal materials described below, be entitled to receive in exchange
therefor a check or checks payable to such person representing the payment of
cash into which such holder's shares of Holding Company Common Stock have been
converted at the Effective Time. Each certificate which represented issued and
outstanding shares of Holding Company Common Stock immediately prior to the
Effective Time shall be deemed canceled at the Effective Time and shall
represent only the right to receive cash for each share represented by such
certificate. In no event shall the holder of any such surrendered certificates
be entitled to receive interest on any of the funds to be received in the
Merger.
(l) Designation of Paying Agent; Investment of Funds. Harris Trust and
Savings Bank shall act as paying agent hereunder ("Paying Agent"), and
Acquisition and FBOP shall make available to Paying Agent at the Effective Time
(i) an amount in cash equal to the product of the Per Share Merger Consideration
times the number of shares of Holding Company Common Stock outstanding
immediately prior to the Effective Time, which shall not include the number of
shares of Holding Company Common Stock held in Holding Company's treasury, less
the number of Holding Company Dissenting Shares whose holders have complied with
the provisions of Section 262 of the DGCL as described in subpart (n) below at
5
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or prior to the Effective Time and less any shares owned by Acquisition or any
other subsidiary or affiliate of Acquisition, and (ii) an amount in cash equal
to the aggregate Cash Consideration Per Option. The cash deposited with the
Paying Agent shall be invested by the Paying Agent as directed by Acquisition.
(m) Transmittal Materials. As promptly as practicable after the
Effective Time, but in any event within three business days following the
Effective Time, Acquisition shall send or cause to be sent to each former holder
of record of shares of Holding Company Common Stock transmittal materials for
use in surrendering their certificate or certificates in exchange for cash. The
letter of transmittal will contain instructions with respect to the surrender of
such certificates. Acquisition shall instruct record date holders of Holding
Company Common Stock who hold such shares for the account of others to provide
the respective beneficial holders of such shares instructions with respect to
the surrender of their shares.
(n) Dissenting Shares. Each outstanding share of Holding Company Common
Stock as to which a proper written objection to the Merger is filed in
accordance with Section 262 of the DGCL and which is not voted in favor of the
Merger shall not be converted into or represent a right to receive cash
hereunder unless and until the holder shall have failed to perfect or shall have
effectively withdrawn or lost his or her right to appraisal of and payment for
such shares of Common Stock under Section 262 of the DGCL, at which time such
shares of Common Stock shall be converted into a right to receive cash in the
same manner and subject to the same conditions as provided for other outstanding
shares of Common Stock in this Article. All such shares of Holding Company
Common Stock as to which such a written objection is so filed and which are not
voted in favor of the Merger, except any such shares of Holding Company Common
Stock the holder of which shall have effectively withdrawn or lost his or her
right to appraisal of and payment for such shares of Common Stock under the DGCL
are herein called "Dissenting Shares" and each holder is herein called a
"Dissenting Shareholder." Holding Company shall give Acquisition prompt notice
upon receipt by Holding Company of any such written objection to the Merger.
Holding Company agrees that prior to the Effective Time it will not, except with
the prior written consent of Acquisition, voluntarily make any payment with
respect to, or settle or offer to settle, any such objection. Each Dissenting
Shareholder who becomes entitled, pursuant to the provisions of the DGCL, to
payment for the fair cash value of his or her shares of Holding Company Common
Stock shall receive payment therefor from Acquisition as the Surviving
Corporation (but only after the amount thereof shall have been agreed upon or
finally determined pursuant to such provisions), and such shares of Common Stock
shall be retired and canceled.
(o) Termination of Paying Agent's Duties. Promptly following the date
which is twelve months after the Effective Time, the Paying Agent shall deliver
to FBOP all cash and other documents in its possession relating to the
transactions described in this Agreement, and the Paying Agent's duties shall
terminate. Thereafter, each holder of a certificate formerly representing shares
of Holding Company Common Stock who has not previously surrendered such
certificate may surrender such certificate to FBOP and (subject to applicable
abandoned
6
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property, escheat and similar laws) receive in exchange therefore the Per Share
Merger Consideration for each share of Holding Company Common Stock represented
by such certificate.
(p) Closing of Holding Company's Transfer Books. At the Effective Time,
the stock transfer records of Holding Company shall be closed and no transfer of
shares of Holding Company Common Stock shall thereafter be made.
(q) Employee Stock Options; Restricted Stock. Schedule 1(q) hereto
contains an accurate and complete list of all outstanding options and restricted
stock awards, including the name of the grantee, date of grant, number of shares
and exercise price.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF HOLDING COMPANY
Holding Company represents and warrants to Acquisition and FBOP as
follows:
(a) Organization and Standing of Holding Company. Holding Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Holding Company has the corporate power and authority
to own or lease all of its properties and assets and to carry on its business as
it is now being conducted, and is duly licensed or qualified to do business in
each jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary, except where the failure to be so
licensed or qualified would not have a Material Adverse Effect (as defined
below) on Holding Company and the Subsidiaries (defined below), taken as a
whole. Holding Company is duly registered as a savings and loan holding company
under the Home Owners' Loan Act, as amended ("HOLA"), and the regulations issued
thereunder. The Certificate of Incorporation and Bylaws of Holding Company,
copies of which have previously been made available to Acquisition, are true and
complete copies of such documents as in effect as of the date of this Agreement.
As used in this Agreement, the term "Material Adverse Effect" or "Material
Adverse Change" means with respect to any person, any effect or change that (i)
is material and adverse to the business, operations, results of operations,
assets, liabilities, investments, properties, condition (financial or
otherwise), affairs, prospects or other attributes of such person, or (ii)
materially impairs the ability of such person to perform its obligations under
this Agreement or consummate the Transaction; provided, however, that Material
Adverse Effect and Material Adverse Change shall not be deemed to include the
impact of (a) changes in banking and similar laws, or (b) changes in generally
accepted accounting principles or regulatory requirements applicable to banks
and savings institutions and their holding companies
7
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generally, or (c) circumstances affecting banks and savings institutions and
their holding companies generally.
(b) Organization and Standing of Savings Institution. Savings
Institution is a federally-chartered stock savings and loan association, duly
organized, validly existing, and in good standing under the laws of the United
States of America, and Savings Institution has the requisite corporate power and
authority to enter into the Bank Merger. Savings Institution is duly authorized
to conduct a savings and loan business, is a member of the Federal Home Loan
Bank of Chicago, and is duly authorized to operate each of its offices,
including branch offices (collectively, the main office and each branch
location are referred to herein as the "Branches"). Savings Institution
is a wholly-owned subsidiary of Holding Company.
(c) Holding Company Subsidiaries. Schedule 2(c) hereto sets forth a
list of all of Holding Company's direct and indirect subsidiaries (hereinafter
separately called a "Subsidiary" and collectively called the "Subsidiaries").
The Schedule sets forth the authorized capital stock, the number of shares duly
issued and outstanding, the number so owned by each shareholder of the
Subsidiary and the jurisdiction of incorporation of each Subsidiary. The shares
of capital stock of the Subsidiaries are validly issued, fully paid and
non-assessable (subject to statutory obligations of holders, if any), and are
owned free and clear of any liens, claims, charges or encumbrances. Except as
disclosed on such Schedule, neither Holding Company nor any of the Subsidiaries
has any investment in any subsidiary or any investment in any partnership, joint
venture, limited liability company or similar entity, all of which investments
are owned free and clear of any liens, claims, charges or encumbrances except as
disclosed thereon. Each of the Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has the corporate power to own or lease its properties and
carry on its business as now being conducted. Each of the Subsidiaries is duly
qualified or otherwise authorized to transact business as a foreign corporation
and is in good standing in every jurisdiction in which such qualification or
authorization is required by law to carry on its business as now being
conducted, except where the failure so to qualify or to be authorized would not
have a Material Adverse Effect on the assets, properties, business or financial
condition of Holding Company and the Subsidiaries, taken as a whole. Schedule
2(c) sets forth a true and correct description of the activities of each of the
Subsidiaries. No certificate of authority identified in such Schedule has been
revoked, restricted, suspended, limited or modified nor is any certificate of
authority the subject of, nor to the knowledge of Holding Company is there a
basis for, a proceeding for revocation, restriction, suspension, limitation or
modification.
(d) Capitalization. The authorized capital stock of Holding Company
consists of 2,000,000 shares of Preferred Stock, $0.01 par value per share, none
of which has been issued, and 8,400,000 shares of Common Stock, par value $0.01
per share, of which 3,145,861 shares are issued and outstanding as of the date
hereof. All of the issued and outstanding shares of Holding Company Common Stock
have been validly issued and are fully paid and non-assessable (subject to
statutory obligations of holders, if any) and free of
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<PAGE> 14
preemptive rights. As of the date hereof, 405,103 shares of Holding Company
Common Stock were reserved for issuance upon exercise of outstanding Holding
Company stock options granted pursuant to Calumet Bancorp, Inc. 1991 Stock
Option Plan. Except for the options and shares specified above and as reflected
in Schedule 2(d), there is no contract, understanding, restriction or agreement,
including any voting trust or other agreement or understanding with respect to
the voting of any of the capital stock of Holding Company, or any convertible,
exchangeable or exercisable security, option, warrant, call, or commitment on
the part of Holding Company of any character relating to issued or unissued
shares of the capital stock of Holding Company.
(e) Authorization. The Board of Directors of Savings Institution has
adopted resolutions approving the Bank Merger Agreement and the Transaction and
has authorized the execution and delivery of the Bank Merger Agreement. The
Board of Directors of Holding Company has adopted resolutions approving the
Agreement and the Transaction and has authorized the execution and delivery of
the Agreement and has directed by resolution that the Agreement be submitted to
a vote of the holders of shares of Holding Company Common Stock taken at a
meeting called for the purpose of considering and acting upon this Agreement.
Holding Company has full power and authority to enter into this Agreement and,
upon appropriate consent of its stockholders in accordance with law, subject to
obtaining all required regulatory approvals, to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Holding Company and constitutes the valid and legally binding obligation of
Holding Company, enforceable against it in accordance with its terms, subject to
bankruptcy, receivership, insolvency, reorganization, moratorium or similar laws
affecting or relating to creditors rights generally and subject to general
principles of equity.
(f) Certificates of Incorporation and Bylaws. Holding Company has
delivered to FBOP true and complete copies of its and each of the Subsidiaries'
Certificates of Incorporation and Bylaws as in effect as of the date hereof, and
in the case of Savings Institution, has delivered true and complete copies of
Savings Institution's Federal Stock Charter and Bylaws.
(g) Consents and Approvals. Except for the consents and approvals of
the Applicable Governmental Authorities, no filing with, and no permit,
authorization, consent or approval of, any public body or authority is necessary
for the consummation by Holding Company of the transactions contemplated by this
Agreement and the Bank Merger Agreement.
(h) Defaults and Conflicts. Neither Holding Company, Savings
Institution or any other Subsidiary is or immediately prior to the Effective
Time will be in conflict with or default under its Certificate of Incorporation
(or similar organizational document) or Bylaws, or in default under any
indenture or under any material agreement or other material instrument to which
it is a party or by which it or any of its properties is bound or to which it is
subject.
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<PAGE> 15
Subject to the receipt of all consents and approvals contemplated by this
Agreement, neither the execution and delivery of this Agreement, the
consummation of the Transaction nor the fulfillment of and compliance with the
terms and provisions hereof, will (i) violate any judicial, administrative or
arbitral order, writ, award, judgment, injunction or decree involving Holding
Company, Savings Institution or any other Subsidiary, (ii) conflict with the
terms, conditions or provisions of the charter or Bylaws of Holding Company,
Savings Institution or any other Subsidiary, (iii) conflict with, result in a
breach of, constitute a default under or accelerate or permit the acceleration
of the performance required by, any indenture or any material agreement or other
material instrument to which Holding Company, Savings Institution or any other
Subsidiary is a party or by which Holding Company, Savings Institution or any
other Subsidiary is bound, (iv) result in the creation of any lien, charge or
encumbrance upon any of the assets of Holding Company, Savings Institution or
any other Subsidiary under any such agreement or instrument, or (v) terminate or
give any party thereto the right to terminate any such indenture, agreement or
instrument. Except as disclosed in Schedule 2(h) hereto, no consent of any third
party to any indenture or any material agreement or other material instrument to
which Holding Company, Savings Institution or any other Subsidiary is a party is
required in connection with the Transaction. Holding Company agrees that prior
to the Effective Time it will use its best efforts to obtain all required
consents to the Transaction of parties to any such indenture, agreement, or
other instrument which is material to the business.
(i) SEC Reports; Financial Statements. Holding Company has filed all
required forms, reports, registration statements and documents with the
Securities and Exchange Commission (the "SEC"), since December 31, 1993
(collectively, the "SEC Reports"), each of which, as of its respective date,
complied in all material respects with all applicable requirements of the
Securities Act of 1933, as amended (the "Securities Act") and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). As of their respective
dates, none of the SEC Reports, including, without limitation, any financial
statements or schedules included therein, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited
consolidated financial statements of Holding Company included in its Annual
Report on Form 10-K for the years ended December 31, 1995, 1996 and 1997, and
the unaudited consolidated interim financial statements included in its
Quarterly Report on Form 10-Q for the quarters ended March 31, 1998 and June 30,
1998, fairly present in conformity with generally accepted accounting principles
applied on a consistent basis (except as may be indicated therein or in the
notes thereto), the consolidated financial position of Holding Company and its
Subsidiaries as of the dates thereof and their consolidated statements of
operations, stockholders' equity, and cash flows for the periods then ended (in
the case of any unaudited interim financial statements, subject to (i) normal
year-end adjustments and (ii) standard limitations on the application of
generally accepted accounting principles).
Except as and to the extent reflected in the interim consolidated
statement of financial position of Holding Company and the Subsidiaries as of
June 30, 1998, and notes thereto (the
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<PAGE> 16
"June 30, 1998 Balance Sheet") or in Schedule 2(i) hereto, neither Holding
Company nor any Subsidiary had, as of June 30, 1998, any liability or obligation
(absolute, contingent or otherwise) except for contractual liabilities arising
in the ordinary course which are not required to be reflected in a balance sheet
prepared in accordance with generally accepted accounting principles. Except as
and to the extent disclosed in Schedule 2(i) hereto, neither Holding Company nor
any Subsidiary has incurred any liability or obligation (absolute, contingent or
otherwise) since June 30, 1998 other than in the ordinary course of business.
(j) Regulatory Reports. Holding Company and Savings Institution each
has filed all reports, notices and other statements, together with any
amendments required to be made with respect thereto, if any, that it was
required to file with the OTS, the FDIC, the Federal Home Loan Bank, and any
other governmental agency or authority with jurisdiction over Holding Company or
Savings Institution and each such report, notice and other statement, including
the financial statements, exhibits and schedules thereto, complied in all
material respects with the relevant statutes, rules and regulations enforced or
promulgated by the regulatory authority with which it was filed. Holding Company
has furnished to FBOP or Acquisition copies of all regulatory filings (and all
related correspondence) for Holding Company and Savings Institution for the
years ended December 31, 1995, 1996 and 1997 and the quarters ended March 31,
1998 and June 30, 1998, as filed with the OTS (the "Regulatory Reports"). The
Regulatory Reports, including, without limitation, the provisions made therein
for investments and the valuation thereof, and loan loss reserves, together with
the notes thereto, fairly present the financial position, assets, liabilities,
change in financial position, surplus and other funds of Holding Company and
Savings Institution as of the dates thereof and the results of its operations
for the periods indicated in conformity with regulatory accounting principles
prescribed or permitted by law or the rules and regulations of OTS, applied on a
consistent basis with prior periods, except as set forth therein. Each such
Regulatory Report was in compliance with applicable law and correct in every
material respect when filed and there were no material omissions therefrom.
Except for liabilities and obligations disclosed or provided for in the
Regulatory Reports, Savings Institution did not have, as of the respective dates
of each such Regulatory Reports, any liabilities or obligations (whether
absolute or contingent and whether due or to become due) except for contractual
liabilities arising in the ordinary course which are not required to be
reflected in regulatory financial statements. All books of account of Savings
Institution and each other Subsidiary fully and fairly disclose all the
transactions, properties, assets, investments, liabilities and obligations of
Savings Institution or the respective Subsidiary and all such books of account
are in the possession of Savings Institution or the respective Subsidiary and
are true and complete in all material respects.
(k) Changes Since March 31, 1998. Except as disclosed in Schedule 2(k)
hereto, since March 31, 1998 there has been no Material Adverse Change in the
assets, properties, business, financial condition or results of operations of
Holding Company and its Subsidiaries, taken as a whole; and neither Holding
Company, Savings Institution nor any other Subsidiary has, since March 31, 1998
(i) made any change in its authorized capital stock, (ii) issued any stock
options, warrants or other rights calling for the issue, transfer, sale or
delivery of its
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<PAGE> 17
capital stock or other securities, (iii) paid any stock dividend or made any
reclassification in respect of its outstanding shares of capital stock, (iv)
issued, transferred, sold or delivered any shares of its capital stock (or
securities convertible into or exchangeable, with or without additional
consideration, for such capital stock), (v) purchased or otherwise acquired for
consideration any outstanding shares of its capital stock, (vi) disposed of a
material portion of its assets, properties or business other than in the
ordinary course of business, or (vii) authorized or made any distribution to
Holding Company's stockholders of any assets of Holding Company, Savings
Institution or any other Subsidiary, by way of cash dividends or otherwise.
(l) Properties.
(i) Real Estate and Mortgages. Schedule 2(l)(i) hereto sets
forth a list and summary description of (a) all real property owned by
Holding Company or any Subsidiary and all buildings and other
structures located on such real property, (b) all leases, subleases or
other agreements under which Holding Company or any Subsidiary is the
lessor or lessee of any real property, (c) all unexpired options held
by Holding Company or any Subsidiary or contractual obligations on its
part to purchase or acquire any interest in real property, (d) all
unexpired options granted by Holding Company or any Subsidiary or
contractual obligations on its part to sell or dispose of any interest
in real property, and (e) all mortgages held by Holding Company or any
Subsidiary (other than as investment securities), identifying all such
mortgages, if any, for which deficiency notices have been issued or
that are otherwise not current. Except as disclosed in Schedule 2(l)(i)
hereto as of the date hereof such leases, subleases, options and other
agreements are in full force and effect and neither Holding Company nor
any Subsidiary has received any notice of any material default
thereunder.
(ii) Investments. The common stock, preferred stock, bonds,
and other investments owned by Holding Company or any Subsidiary as of
the date hereof are evidenced by appropriate written instruments and
certificates (except where in non-certificated form), and to the best
knowledge of Holding Company after due inquiry, are valid and genuine
in all material respects and enforceable in accordance with their terms
against all persons against whom they purport to create an obligation,
subject to bankruptcy, receivership, insolvency, reorganization,
moratorium, or other similar laws affecting or relating to creditors'
rights generally and subject to general principles of equity. All such
bonds, stocks, and other investments conform in all material respects
to the requirements of applicable laws and regulations. Except as
disclosed in Schedule 2(l)(ii) hereto, none of such investments is in
default on the payment of principal, interest or other required
distributions.
(iii) Title to Property; Zoning. Except as disclosed in
Schedule 2(l)(iii) hereto, Holding Company and each Subsidiary has good
and marketable title to all real properties reflected in Section
2(l)(i) and good and marketable title to all other assets
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<PAGE> 18
and properties shown as owned by it on Holding Company's June 30, 1998
Balance Sheet or acquired since that date (except properties disposed
of in the ordinary course of business subsequent to said date), in each
case free of all mortgages, liens, security interests, charges and
encumbrances of any nature whatsoever, other than liens for Taxes (as
defined below) not yet due and payable. All such real property complies
in all material respects with all applicable private agreements, zoning
requirements, Environmental Laws (defined below), and other
governmental laws and regulations relating thereto, and there are no
condemnation proceedings pending or, to the best knowledge of Holding
Company, threatened with respect to the Real Property.
(m) Environmental Laws. Except as disclosed in Schedule 2(m) hereto,
and to the best knowledge of Holding Company after due inquiry, but without the
requirement that Holding Company conduct a Phase I environmental review as part
of its due inquiry, Holding Company and each Subsidiary has conducted and is
conducting its business in compliance in all material respects with all
applicable federal, state, and local laws, regulations and requirements
currently in force relating to the protection of the environment ("Environmental
Laws"). There is no pending or, to the best knowledge of Holding Company,
threatened, civil or criminal litigation, written notice of violation, or
administrative proceeding relating to such Environmental Laws involving Holding
Company or any Subsidiary. There has not been and there is no condition existing
with respect to the release, emission, discharge or presence of hazardous
substances in connection with the business of Holding Company or any Subsidiary,
which condition could subject Holding Company or any Subsidiary to any
proceeding or remediation under such Environmental Laws or could otherwise have
a Material Adverse Effect on the assets, properties, business, financial
condition or results of operations of Holding Company or any Subsidiary. Holding
Company and each Subsidiary has received all approvals, consents, licenses, and
permits with respect to environmental matters necessary to carry on its business
substantially as currently conducted.
(n) Proprietary Rights. Schedule 2(n) hereto discloses all the
trademarks, trade names and service marks (and all registrations and
applications with respect thereto) (collectively the "Proprietary Rights") used
in the business of Holding Company or any Subsidiary. Except as otherwise
disclosed in such Schedule, either Holding Company or one of the Subsidiaries
owns or is duly authorized to use all of such Proprietary Rights. Such
Proprietary Rights as used by Holding Company or a Subsidiary in its business do
not violate or infringe upon the proprietary rights of any third party, and
there is no claim, action, proceeding or investigation pending or, to the best
of Holding Company's knowledge, threatened against Holding Company or any of the
Subsidiaries with respect to any such Proprietary Rights.
(o) Agreements. Except as set forth and described on Schedule 2(o)
hereto, neither Holding Company nor any Subsidiary is a party to nor is Holding
Company or any Subsidiary bound by any oral or written (i) contract for the
employment of any officer or employee, or contract with a former officer or
employee pursuant to which payments are required to be
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<PAGE> 19
made at any time following the date hereof, or contract with any labor union or
association representing any employee, (ii) stock ownership, profit-sharing,
bonus, deferred compensation, stock option, severance pay, pension, retirement
or similar plan or agreement, (iii) mortgage, indenture, note or installment
obligation the unpaid balance of which exceeds $25,000, or other instrument for
or relating to any borrowing of money by Holding Company or any of the
Subsidiaries, the unpaid balance of which exceeds $25,000, (iv) guaranty of any
obligation for borrowings or otherwise which in the aggregate exceed $25,000,
(v) agreement or arrangement for the sale or lease of any material amount of its
assets or part of its business other than in the ordinary course of business or
for the grant of preferential rights to purchase or lease any material amount of
its assets or part of its business, (vi) agreement or arrangement obligating it
to register any of its outstanding shares or other securities with the SEC,
(vii) agreement or arrangement with any officer or director of Holding Company,
any Subsidiary, or any other affiliate of Holding Company, or (viii) contract,
agreement or other instrument which is material to the assets, properties,
business, financial condition or results of operations of Holding Company or any
Subsidiary. True and correct copies of each such document described in (i) -
(viii) have been provided to FBOP or Acquisition. All contracts, plans,
mortgages, indentures, guaranties and other agreements disclosed in Schedule
2(o) hereto are in full force and effect as of the date hereof, and neither
Holding Company nor any Subsidiary or any other party thereto is in default in
any material respect as to any provision thereof and no event has occurred which
with the passage of time or the taking of any action, or both, would constitute
a default under any such contract agreement. No party thereto may terminate any
of such agreements by reason of the transactions contemplated by this Agreement
(other than change of control provisions in employment agreements).
(p) Litigation; Claims. Except as disclosed in Schedule 2(p) hereto,
there are no actions, suits, claims, investigations or proceedings pending,
settled since January 1, 1998, or to the best knowledge of Holding Company,
threatened, against or affecting Holding Company or any Subsidiary or its
properties or businesses, at law or in equity, or before any governmental or
administrative body or agency or before any arbitrator (i) which involve a claim
in excess of $50,000, or (ii) which alone or in the aggregate, could materially
and adversely affect the assets, properties, business, financial condition or
results of operations of Holding Company or any Subsidiary or the ability of
Holding Company or any Subsidiary to carry out the transactions contemplated in
this Agreement. Holding Company is not aware of any facts that would reasonably
afford a basis for any such actions, suits, claims, investigations or
proceedings. Except as may be disclosed on such Schedule, there are no
unresolved disputes under any contract to which Holding Company or any
Subsidiary is a party or by which Holding Company or any Subsidiary is bound
involving in the aggregate an amount in excess of $50,000. Neither Holding
Company nor any Subsidiary is in default with respect to any order, writ, award,
judgment, injunction or decree of any court, governmental or administrative body
or agency, or arbitrator applicable to it which could have a Material Adverse
Effect on the assets, properties, business, financial condition or results of
operations of Holding Company or any Subsidiary.
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<PAGE> 20
(q) Compliance with Laws. Holding Company and each of the Subsidiaries
has complied with all laws, regulations, opinions, orders, ordinances, judgments
or decrees of all governmental authorities (federal, state, local, foreign or
otherwise) applicable to its businesses, including without limitation, the FDIC
and OTS, except where the failure to have so complied would not, individually or
in the aggregate, have a material adverse effect on the assets, properties,
business, financial condition or results of operations of Holding Company or any
Subsidiary. Except as disclosed in Schedule 2(q) hereto, neither Holding Company
nor any Subsidiary has received any notification of any asserted failure by it
to comply with any of such laws.
(r) Taxes.
(i) Except as disclosed in Schedule 2(r) hereto: (a) all Tax
Returns (as defined below) required to be filed with the appropriate
taxing authorities have been filed by or on behalf of Holding Company
or any Subsidiary and all Taxes (as defined below) shown to be due on
such Tax Returns have been paid or provided for in full; (b) there are
no liens for Taxes upon the assets of Holding Company or any
Subsidiaries except statutory liens for Taxes not yet due; (c) there
are no outstanding deficiencies in respect of Taxes asserted or
threatened or assessments of Taxes made or threatened, nor any
administrative or judicial proceedings pending or threatened concerning
Taxes, with respect to Holding Company or any Subsidiary and any
deficiencies, assessments or proceedings shown in Holding Company
Schedule are being contested in good faith through appropriate
proceedings; (d) Holding Company has established on the financial
statements described in Section 2(i) of this Agreement reserves and
accruals adequate for the payment of all Taxes accruing with respect to
or payable by Holding Company and each Subsidiary for all periods
reflected therein; (e) there are no outstanding agreements or waivers
extending the statutory period of limitations applicable to any Tax
Returns required to be filed with respect to Holding Company or any
Subsidiary; and (f) Neither Holding Company nor any Subsidiary has
requested any extension of time within which to file any Tax Return,
which Tax Return has not been filed.
(ii) The appropriate income Tax Returns of Holding Company and
each Subsidiary have been examined by (a) the Internal Revenue Service
or the statute of limitations has expired for all periods up to and
including December 31, 1993, and (b) the taxing authorities of all of
the states disclosed in Schedule 2(c) or the statute of limitations has
expired for all periods up to and including December 31, 1993,
respectively, and there are no outstanding or unresolved proposed
adjustments.
(iii) Except as disclosed in Schedule 2(r)(iii) hereto, no
power of attorney has been granted by Holding Company or any Subsidiary
with respect to any matter relating to Taxes which is currently in
force.
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<PAGE> 21
(iv) The consummation of the transactions contemplated by this
Agreement will not give rise to any payments by Holding Company or any
Subsidiary which payments will not be deductible (in whole or in part)
by reason of Section 280G of the Internal Revenue Code (the "Code").
For purposes of this Agreement, the term "Taxes" shall mean all taxes,
charges, fees, levies or other assessments, including without limitation, all
net income, gross income, premium or privilege, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, license, withholding, payroll,
employment, excise, estimated, severance, stamp, occupation, property or other
taxes, customs duties, fees, assessments, or charges of any kind whatsoever,
together with any interest and any penalties, additions to tax or additional
amounts imposed by any governmental authority (domestic or foreign) upon Holding
Company or any Subsidiary and the term "Tax Returns" shall mean all returns,
declarations, reports, estimates, and statements, regarding Taxes, required to
be filed under United States federal, state, local or any foreign laws.
(s) Related Party Transactions. Except as disclosed in Schedule 2(s)
hereto, and other than transactions exclusively between or among Holding Company
and/or any of the Subsidiaries, neither Holding Company nor any Subsidiary has
made any loan to any director, officer or other affiliate of Holding Company or
a Subsidiary which remains outstanding nor has Holding Company or any Subsidiary
entered into any agreement, other than an agreement referred to in subpart (o)
hereof, for the purchase or sale of any property or services from or to any
director, officer or other affiliate of Holding Company or a Subsidiary.
(t) Employee Benefit Plans.
(i) Schedule 2(t)(i) hereto sets forth a true and complete
list of each employee benefit plan, as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")
and each other plan, arrangement and agreement providing employee
benefits (collectively the "Plans"), that covers current or former
employees of Holding Company or any Subsidiary or affiliate and is
presently maintained by Holding Company or any Subsidiary or any
affiliate thereof or by any trade or business, whether or not
incorporated (an "ERISA Affiliate"), which together with Holding
Company would be deemed a "single employer" within the meaning of
Section 4001 of ERISA. None of the Plans is a "multiemployer plan," as
defined in Section 3(37) of ERISA. Holding Company has delivered or
made available to FBOP or Acquisition: copies of all such Plans; any
related trust agreements, group annuity contracts, insurance policies
or other funding agreements or arrangements relating thereto; the most
recent determination letter, if any, from the Internal Revenue Service
with respect to each of the Plans which is subject to ERISA ("ERISA
Plans"); actuarial valuations, if applicable, for the most recent plan
year for which such valuations are available; the current summary plan
descriptions; and the annual return/report on Form 5500 and summary
annual reports for each of the Plans for each of the last three years.
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<PAGE> 22
(ii) Each of the ERISA Plans is in substantial compliance with
all applicable provisions of law, including the Code and ERISA. Neither
Holding Company nor any ERISA Affiliate currently maintains or sponsors
a defined benefit pension plan as defined in Section 414(j) of the Code
and neither Holding Company nor any ERISA Affiliate has ever maintained
or sponsored any such plan that could give rise to a liability against
Holding Company or any Subsidiary.
(iii) The written terms of each of the Plans, and any related
trust agreement, group annuity contract, insurance policy or other
funding arrangement are in substantial compliance with all applicable
laws including ERISA, the Code, and the Age Discrimination in
Employment Act, as applicable, and each of such Plans has been
administered in substantial compliance with such requirements.
(iv) Except with respect to income taxes on benefits paid or
provided, no income, excise or other tax or penalty (federal or state)
has been waived or excused, has been paid or is owed by any person
(including, but not limited to, any Plan, any Plan fiduciary, Holding
Company and ERISA Affiliates) with respect to the operations of, or any
transactions with respect to, any Plan. No action has been taken, nor
has there been any failure to take any action, nor is any action or
failure to take action contemplated, that would subject any person or
entity to any liability for any tax or penalty in connection with any
Plan. No reserve for any taxes or penalties has been established with
respect to any Plan, nor has any advice been given to any person with
respect to the need to establish such a reserve.
(v) There are no (A) actions, suits, arbitrations or claims
(other than routine claims for benefits), (B) legal, administrative or
other proceedings or governmental investigations or audits, or (C)
complaints to or by any governmental entity, which are pending,
anticipated or threatened, against the Plans or their assets.
(vi) The present value of the future cost to Holding Company
and ERISA Affiliates of post-retirement medical benefits that Holding
Company or any ERISA Affiliate is obligated to provide, calculated on
the basis of actuarial assumptions Holding Company considers reasonable
estimates of future experience and which have been provided to
Acquisition, does not exceed the amount specified in Schedule 2(t)(vi)
hereto.
(vii) Neither Holding Company nor any ERISA Affiliate, nor any
of the ERISA Plans, nor any trust created thereunder, nor any trustee
or administrator thereof has engaged in a transaction in connection
with which Holding Company or any ERISA Affiliate, any of the ERISA
Plans, any such trust, or any trustee or administrator thereof, or any
party dealing with the ERISA Plans or any such trust could be subject
to either a civil penalty assessed pursuant to Section 409 or 502(i) of
ERISA or a tax imposed pursuant to Section 4975 or 4976 of the Code.
Neither Holding Company nor
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<PAGE> 23
any ERISA Affiliate is, or, as a result of any actions, omissions,
occurrences or state of facts existing prior to the Effective Time,
may become liable for any tax imposed under Section 4978 of the Code.
(u) Insurance. All properties of Holding Company and each Subsidiary
are covered by valid and currently effective insurance policies issued in favor
of Holding Company or a Subsidiary and such insurance policies provide Holding
Company and its Subsidiaries with adequate coverage and limits for its
operations consistent with past practices. Schedule 2(u) hereto sets forth a
true and correct list of all insurance policies covering Holding Company and the
Subsidiaries. Holding Company or a Subsidiary is included as an insured party
under such policies or has full rights as a loss payee. No notice of
cancellation or termination has been received with respect to any such policy.
Such policies will not be terminable or cancelable by reason of this Agreement
and the consummation of the transactions contemplated hereby.
(v) Regulatory Filings. Holding Company has made available for
inspection by Acquisition all registrations, filings or submissions made by
Holding Company or any Subsidiary with any governmental or regulatory body and
delivered to Acquisition each and every annual and quarterly report filed with
or submitted to any governmental or regulatory body since December 31, 1993.
Holding Company and each Subsidiary has filed all reports, statements,
documents, registrations, filings or submissions required to be filed by it with
any governmental or regulatory body. All such registrations, filings and
submissions were in material compliance with applicable law when filed, and no
material deficiencies have been asserted by any such governmental or regulatory
body with respect to such registrations, filings and submissions that have not
been satisfied. Savings Institution duly has filed with appropriate governmental
and regulatory authorities, to the extent that filing of the same is required by
laws, rules or regulations, all annual and quarterly statements and other
statements, documents and reports required to be filed by it. All such
statements and filings are correct in all material respects as filed, and there
are no material omissions therefrom. All issues raised in such reports have been
resolved to the satisfaction of the issuer of such reports.
(w) Deposits. Schedule 2(w) hereto is a schedule of the aggregate
deposit accounts of Savings Institution, prepared as of the date indicated
thereon, listing by category and by Branch the amount of such deposits, together
with the amount of accrued but unpaid interest thereon (the "Deposits"). All
such Deposits are insured to the fullest permissible extent by the Savings
Association Insurance Fund ("SAIF") administered by the FDIC. All related
insurance premiums due and owing have been paid to the FDIC as of the date
hereof. Savings Institution has, and will have at the Effective Time, all rights
and full authority to transfer the Deposits pursuant to the Bank Merger without
restriction to the extent customary for a SAIF-insured institution.
As of the date hereof, with respect to the Deposits:
(i) Subject to items returned without payment in full ("Return
Items") and immaterial bookkeeping errors, all interest accrued or
accruing on the Deposits has
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<PAGE> 24
been properly credited thereto, and properly reflected on Savings
Institution's books of account and Savings Institution is not in
default in the payment of any thereof;
(ii) Subject to Return Items and immaterial bookkeeping
errors, Savings Institution has timely paid and performed all of its
indebtedness, obligations and liabilities relating to the Deposits as
and when the same have become due and payable, and the Deposits include
none which is in default or exists by virtue of a default by Savings
Institution;
(iii) Subject to immaterial bookkeeping errors, Savings
Institution has administered all of the Deposits in accordance with
good and sound financial practices and procedures, and has properly
made all appropriate credits and debits thereto, has delivered to its
customers on a regular basis, statements adequately and accurately
reflecting the amount, date and nature of such credit and debit; in the
event a question, complaint or objection by any depositors with respect
to any of the Deposits has occurred, Savings Institution has promptly
and properly reviewed and responded and taken corrective action, in
accordance with good and sound financial practice; and to the best
knowledge of Holding Company after due inquiry, Savings Institution is
not liable to any depositors for any shortages, or for any errors, acts
or omissions by Savings Institution that in the aggregate would exceed
$5,000.
(x) Loans.
(i) All loans of Savings Institution (the "Loans") and loan
commitments extended by Savings Institution and any extensions,
renewals or continuations of such Loans and loan commitments were made
in accordance with customary lending standards of federal savings
institutions in the ordinary course of business. The Loans are
evidenced by appropriate and sufficient documentation based upon
customary and ordinary past practices for federal savings institutions.
(ii) All documents and instruments which evidence the Loans
are in all material respects legal and enforceable in accordance with
the terms thereof, except as may be limited by bankruptcy, insolvency,
moratorium or other laws affecting creditors generally or by the
exercise of judicial discretion, and authorized under applicable
federal and state laws and regulations. For purposes of the foregoing
sentence, it is agreed and understood that the phrase "enforceable in
accordance with the terms thereof" shall not mean that the borrower has
the financial ability to pay a loan or that the collateral is
sufficient in value to result in payment of the loan secured thereby.
(iii) Each security agreement, deed of trust, mortgage or
equivalent document securing a Loan creates a valid security interest
in the property described therein.
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(iv) To the best knowledge of Holding Company, after diligent
inquiry, the maker or obligor of each Loan has no valid defense to the
payment in full of the Loan.
(v) Except for participations purchased or sold by the Savings
Institution or loans pledged to the Federal Home Loan Bank and fully
described at Schedule 2(x) hereto, the note evidencing each Loan and
the collateral documents securing each Loan have not been assigned or
pledged, the Savings Institution has good and marketable title thereto,
and the Savings Institution is the sole owner and holder of each note
evidencing a Loan and each collateral document securing such Loan, and
except as fully described at Schedule 2(x), each Loan and each
collateral document securing a Loan is free and clear of any and all
prior liens, claims, encumbrances, participation interests, equities,
pledges, charges or security interests of any nature.
(y) Reserves. The loan loss reserves of Savings Institution, as set
forth on the June 30, 1998 financial statements have been computed in accordance
with generally accepted methods and principles consistently applied and, in all
cases, have been properly computed in all material respects and in management's
opinion are adequate under applicable requirements of law and generally accepted
accounting standards to provide for possible losses on Loans outstanding.
(z) Agreements with Regulatory Agencies. Except as set forth in
Schedule 2(z) hereto, neither Holding Company nor any of its Subsidiaries is
subject to any cease-and-desist or other order issued by, or is a party to any
written agreement, consent agreement or memorandum of understanding (each a
"Regulatory Agreement"), with any regulatory agency or other government entity
that restricts in any respect the conduct of its business or that relates to its
capital adequacy, its credit policies or its management, nor has Holding Company
or any of its Subsidiaries been notified by any regulatory agency or other
governmental entity that it is considering issuing or requesting any Regulatory
Agreement. Except as set forth in Schedule 2(z) hereto, no regulatory agency has
initiated any investigation or proceeding into the business or operations of
Holding Company or any of its Subsidiaries.
(aa) Information for Regulatory Approvals. The information furnished or
to be furnished by Holding Company or Savings Institution in any regulatory
application filed by Holding Company, Savings Institution, FBOP or Acquisition
in connection with the Transaction, will be true and complete in all material
respects as of the date so furnished.
(ab) Governmental Notices. Neither Holding Company nor Savings
Institution has received notice from any federal, state, or other governmental
agency indicating that such agency would oppose or not grant or issue its
consent or approval, if requested, with respect to the Transaction. To the best
knowledge of Holding Company, there are no facts that could reasonably be
expected to have an adverse effect on the ability of Holding Company or Savings
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Institution to obtain all requisite regulatory consents or to perform their
respective obligations under this Agreement and in connection with the
Transaction.
(ac) SEC Filings. None of the information contained in the proxy
statement to be mailed to the stockholders of Holding Company in connection with
the Merger or in any amendments thereof or supplements thereto (the "Proxy
Statement") will, at the time of (i) the first mailing thereof, and (ii) the
meeting of stockholders to be held in connection with the Merger, 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 were made, not misleading.
(ad) Finders and Investment Bankers. Neither Holding Company nor any
Subsidiary has retained any broker, finder or other agent or incurred any
liability for any brokerage fees, commissions or finders' fees with respect to
the Transaction except for Holding Company's retention of ABN AMRO Chicago
Corporation (n/k/a ABN AMRO Incorporated) pursuant to the terms of its agreement
dated February 5, 1998, as extended through September 30, 1998.
(ae) Third Party Discussions. Other than pursuant to this Agreement,
Holding Company is not currently negotiating or discussing with any third party
a possible sale or merger of Holding Company or any Subsidiary or a substantial
portion of any of their assets or business.
(af) Disclosure. No representation or warranty of Holding Company and
no statement or information relating to Holding Company or any Subsidiary or
their respective businesses or properties contained in (i) this Agreement
(including the Schedules hereto), or (ii) in any certificate furnished or to be
furnished to FBOP or Acquisition pursuant to this Agreement contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements made herein or therein, in light
of the circumstances in which they were made, not misleading.
(ag) Year 2000. Holding Company, Savings Institution and the other
Subsidiaries have developed and are actively executing a plan and implementation
strategy that adequately addresses the calendar year 2000 so that none of such
parties will experience invalid or incorrect results or abnormal software or
hardware operation related to calendar year 2000. Such plan includes the
creation of software systems which include calendar year 2000 date conversion
and compatibility capabilities, including, but not limited to, date data century
recognition, same century and multiple century formula and date value
calculations, and user interface data values that reflect the appropriate year.
A copy of such plan has been provided to FBOP. Holding Company, Savings
Institution and the other Subsidiaries are proceeding in accordance with the
implementation schedule under such plan.
(ah) Bonuses; Accrued Vacation. Bonuses paid or payable by the Holding
Company, Savings Institution and the other Subsidiaries during or for the fiscal
year ended December 31,
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1998 shall not exceed $550,000 in the aggregate, and liabilities for accrued
vacation, if any, for employees of any of Holding Company, Savings Institution
and any other Subsidiary shall not, at December 31, 1998, exceed $125,000 in the
aggregate. No bonuses shall be paid by Holding Company, Savings Institution or
any Subsidiary prior to January 1, 1999.
(ai) Change in Control Payments. The following sets forth a list of all
payments due to officers and employees of Holding Company, Savings Institution
or any Subsidiary under any employment, severance or other agreement as a result
of the Transaction:
Name Amount
---- ------
Thaddeus Walczak $1,366,578
Carole Lewis 782,096
John Garlanger 417,732
Darryl Erlandson 242,428
Susan Linkus 66,977
Lorraine Straka 89,345
Jean Adams 36,831
Deborah Cattoni 63,702
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ACQUISITION AND FBOP
FBOP and Acquisition each represent and warrant to Holding Company as
follows:
(a) Organization of Acquisition and FBOP. Acquisition is a corporation
duly organized, validly existing and in good standing under the laws of
Delaware. Acquisition is a wholly-owned subsidiary of FBOP. FBOP is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Illinois.
(b) Authorization. The Boards of Directors of FBOP and Acquisition have
adopted resolutions approving the Agreement and the Transaction and have
authorized the execution and delivery of this Agreement. Acquisition and FBOP
have full power and authority to enter into this Agreement and, subject to
obtaining all required regulatory approvals, to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Acquisition and FBOP and constitutes the valid and legally binding obligation of
Acquisition and FBOP, enforceable against them in accordance with its terms,
subject to bankruptcy, receivership, insolvency, reorganization, moratorium or
similar laws affecting or relating to creditors rights generally and subject to
general principles of equity.
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(c) Consents and Approvals. Except for consents and approvals of the
Applicable Governmental Authorities, no filing with, and no permit,
authorization, consent or approval of, any public body or authority is necessary
for the consummation by Acquisition and FBOP of the transactions contemplated by
this Agreement.
(d) Defaults and Conflicts. Subject to the receipt of all consents and
approvals contemplated by this Agreement, the execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby or the
fulfillment of and compliance with the terms and provisions hereof will not (i)
violate any judicial or administrative order, writ, award, judgment, injunction
or decree involving Acquisition or FBOP or (ii) conflict with any of the terms,
conditions or provisions of the charter or bylaws of Acquisition or FBOP. No
consent of any third party to any indenture or any material agreement or other
material instrument to which Acquisition or FBOP is a party is required in
connection with the Transaction.
(e) SEC Filings. None of the information supplied or to be supplied by
Acquisition or FBOP in writing expressly for inclusion in the Proxy Statement
will, at the time of (i) the first mailing thereof and (ii) the meeting of
stockholders to be held in connection with the Merger, 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 were made, not misleading.
(f) Funds Available. Acquisition and FBOP have or will have available
to them sufficient funds to perform all of their obligations pursuant to the
Merger.
(g) Finders and Investment Bankers. FBOP and Acquisition will be
responsible for any of their respective brokerage fees, commissions or finders'
fees with respect to the Transaction.
(h) Governmental Notices. Neither FBOP nor Acquisition has received any
notice from any federal, state, or other governmental agency indicating that
such agency would oppose or not grant or issue its consent or approval, if
requested, with respect to the Transaction. To the best knowledge of Acquisition
and FBOP, there are no facts that could reasonably be expected to have an
adverse effect on the ability of Acquisition or FBOP to obtain all requisite
regulatory consents or to perform their respective obligations under this
Agreement.
(i) Articles; Bylaws. FBOP will deliver to Holding Company true and
complete copies of its Articles of Incorporation and Bylaws as in effect as of
the date hereof.
(j) Access to Certain Information. For a period of 14 days from the
date hereof, FBOP shall make available to Holding Company (i) FBOP's
consolidated financial statements and RSB's financial statements for the year
ended December 31, 1997 and the quarters ended
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March 31, 1998 and June 30, 1998, (ii) the CRA Statements and filings for FBOP
and its subsidiary financial institutions, including RSB, (iii) FBOP=s and RSB=s
year 2000 compliance plan, and (iv) to the extent permitted by applicable laws
and regulations, the most recent regulatory examination reports for RSB and
FBOP.
ARTICLE IV
RIGHT TO INVESTIGATE
Holding Company shall afford (during regular business hours) to the
officers and authorized representatives of Acquisition and FBOP free and full
access to the offices, properties, books, contracts, commitments and records of
Holding Company in order that FBOP and Acquisition may have full opportunity to
make such investigations as they shall desire of the affairs of Holding Company,
Savings Institution and the other Subsidiaries. The officers of Holding Company
shall furnish Acquisition and FBOP with such additional financial and operating
data and other information as to the assets, properties and business of Holding
Company, Savings Institution and the other Subsidiaries as Acquisition or FBOP
shall from time to time reasonably request; provided that such requested data
and information may be presented in the format maintained by Holding Company in
the normal course of its business. Holding Company, Savings Institution and the
Subsidiaries shall consent to the review by the officers and authorized
representatives of Acquisition or FBOP of the reports and working papers of
Holding Company's independent auditors (upon reasonable advance notice) and to
discussions by the officers and authorized representatives of Acquisition or
FBOP with parties with which Holding Company, Savings Institution and the other
Subsidiaries have business relationships.
ARTICLE V
COVENANTS OF HOLDING COMPANY
(a) Operation in Ordinary Course. From the date hereof to the Effective
Time, each of Holding Company, Savings Institution and the other Subsidiaries
shall: (a) not engage in any transaction except in the ordinary course of
business and shall conduct its business consistent with past practices; (b)
maintain the Branches in a condition substantially the same as on the date of
this Agreement, reasonable wear and use excepted; (c) maintain its books of
accounts and records in the usual, regular and ordinary manner; and (d) duly
maintain compliance in all material respects with all laws, regulatory
requirements and agreements to which it is subject or by which it is bound.
Without limiting the generality of the foregoing, prior to the Effective Time,
Holding Company, Savings Institution and other Subsidiaries shall not, without
the prior written consent of FBOP or Acquisition:
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(1) fail to maintain its tangible property and assets in their
present state of repair, order and condition, reasonable wear and tear and
damage by fire or other casualty excepted;
(2) fail to maintain its books, accounts and records in
accordance with generally accepted accounting principles consistently applied;
(3) fail to comply in all material respects with all
applicable laws and regulations;
(4) make, renew or modify the terms (including, but not
limited to, any release or substitution of collateral, change of the interest
rate, or release or substitution of any guarantor) of any loan, letter of credit
or other extension of credit, or commitment to make a loan, in excess of
$500,000, provided, however, that loans that are secured by secondary market
qualified mortgages on single-family dwellings shall be permitted under this
subsection;
(5) except for the terminations of benefit agreements listed
on Schedule 5(a)(5) hereto, enter into, adopt, amend or terminate any bonus,
profit sharing, compensation, termination, stock option, stock appreciation
right, restricted stock, performance unit, pension, retirement, deferred
compensation, employment, severance or other employee benefit agreements,
trusts, plans, funds or other arrangements for the benefit or welfare of any
director, officer or employee;
(6) authorize or enter into any employee contract or
employment agreement, grant any pay raise or increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay any
benefit not required by an existing plan or arrangement or authorize or enter
into any contract, agreement, commitment or arrangement to do any of the
foregoing; provided however, that pay raises to employees pursuant to regularly
scheduled reviews in the ordinary course of business not to exceed 5% of any
such employee's current salary shall not be prohibited hereunder; and provided
further that the bonuses set forth on Schedule 5(a)(6) hereto may be paid after
January 1, 1999 to the persons indicated on such Schedule and that nothing
contained in this subparagraph (6) shall restrict the hiring of non-officer,
clerical or teller employees whose compensation does not exceed $20,000 per
year.
(7) authorize or enter into or amend, modify or supplement any
material contract;
(8) authorize or enter into any contract or commitment
(excluding all loans and loan commitments) which provides for the receipt or
payment of amounts, in the aggregate, in excess of $25,000;
(9) sell, transfer, convey, assign or otherwise dispose of any
of its assets or properties, or authorize any of the foregoing, or sell loans in
bulk other than up to $1,000,000
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per month of residential mortgage loans sold in the ordinary course of business
pursuant to existing and on-going commitments;
(10) authorize or make any expenditures for assets in excess
of $25,000 for any item or series of similar items, or lease or encumber any
assets outside the ordinary course of business;
(11) authorize or make any amendment to its charter or bylaws;
(12) fail to keep in force all insurance policies presently in
effect, including insurance of deposit accounts with the FDIC;
(13) do any act which, or omit to do any act the omission of
which, will cause a breach of any contract, commitment or obligation;
(14) make any borrowing, incur any debt (other than (i)
deposits in the ordinary course of business and consistent with past practice
and (ii) overnight borrowings from the Federal Home Loan Bank consistent with
past practices), or assume, guarantee, endorse (except for the negotiation or
collection of negotiable instruments in the ordinary course of business and
consistent with past practice) or otherwise become liable (whether directly,
contingently or otherwise) for the obligations of any other person, or make any
payment or repayment in respect of any indebtedness (other than deposits and
accrued expenses in the ordinary course of business and consistent with past
practice);
(15) fail to maintain deposit rates substantially in accord
with the average of the prevailing rates of competing financial institutions,
provided that in no event will Savings Institution accept any deposits for which
the interest rate payable thereon exceeds by more than .50 percent the average
interest rate being paid on similar deposits by savings banks and savings and
loan associations in the local Chicago area market, based upon periodic surveys
to be conducted by Holding Company in good faith;
(16) waive, release or cancel any claims in excess of $25,000
against third parties or debts in excess of $25,000 owing to it, or any rights
which have any value in excess of $25,000; provided, however, that the release
of the property to a municipality described on Schedule 5(a)(16) shall be
permitted;
(17) make any changes in its accounting systems, policies,
principles or practices;
(18) enter into, authorize, or permit any transaction, except
as now existing and disclosed to Acquisition or FBOP, with any affiliate of
Holding Company or any Subsidiary;
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(19) make any capital contribution to any person or purchase
or invest in any securities issued by any person other than securities which are
issued or guaranteed by the United States government or an agency thereof having
a maturity of more than twelve (12) months from the date of purchase;
(20) sell any investment securities;
(21) enter into, amend or renew any data processing service
contract;
(22) change or amend its schedules and policies relating to
service charges or service fees;
(23) enter into loan transactions except those in accordance
with sound credit practices and only on terms and conditions which are not
materially more favorable than those available to the borrower from competitive
sources in transactions in the ordinary course of business;
(24) fail to use its best efforts to (i) preserve the present
business organizations intact, (ii) keep available the services of its present
officers and employees or (iii) preserve its present relationships with persons
having business dealings with it;
(25) fail to maintain, consistent with its past practices, a
reserve for possible loan and lease losses which is adequate under the
requirements of generally accepted accounting principles to provide for possible
losses, net of recoveries relating to loans previously charged off, on loans
outstanding (including, without limitation, accrued interest receivable);
(26) make any change in any lease of real property;
(27) fail to file in a timely manner all required filings with
all proper regulatory authorities and fail to cause such filings to be true and
correct in all material respects;
(28) foreclose upon or take deed or title to any commercial
real estate without first conducting a Phase I environmental assessment of the
property; or foreclose upon such commercial real estate if such environmental
assessment indicates the presence of hazardous material in amounts that, if such
foreclosure were to occur, would be reasonably likely to result in a material
adverse effect on Savings Institution;
(29) amend or modify any of its promotional, deposit account
or account loan practices, other than amendments or modifications in the
ordinary course of business;
(30) (i) make any change in its authorized capital stock, (ii)
issue any stock options, or issue any warrants, or other rights calling for the
issue, transfer, sale or delivery of
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its capital stock or other securities, (iii) pay any stock dividend or make any
reclassification in respect of its outstanding shares of capital stock, (iv)
except for the issuance of Common Stock upon exercise of any Options, issue,
sell, exchange or deliver any shares of its capital stock (or securities
convertible into or exchangeable, with or without additional consideration, for
such capital stock), (v) purchase or otherwise acquire for consideration any
outstanding shares of its capital stock, or (vi) declare, pay or set apart in
respect of its capital stock any dividends or other distributions or payments;
or
(31) fail to sell any 15-year or 30-year fixed rate
residential mortgage loans in the secondary market that are made by the Savings
Institution after the date hereof; provided, however, the foregoing shall not
apply to (i) mortgage loans under the First Time Home Buyers program set forth
on Schedule 5(a)(31), and (ii) certain mortgage loans in preliminary processing
as of the date hereof, not to exceed approximately $17,400,000 in the aggregate,
likewise set forth on Schedule 5(a)(31); and further provided that FBOP shall
respond promptly to requests for other consents under this sub-paragraph.
For purposes of this Article V(a), FBOP and Acquisition shall
be deemed to have consented to any action described in (1) - (31) above if the
chief financial officer of FBOP shall have received a written request for
consent to any action described in (1)-(31) above, which request describes in
sufficient detail the proposed action, and FBOP shall have failed to respond to
such request within three (3) business days of FBOP's receipt of such request.
(b) Exclusivity. Except as may be required by any regulatory authority,
or except to the extent required by fiduciary obligations under applicable law
in reliance upon the written opinion of outside counsel, neither Holding
Company, Savings Institution, nor any other Subsidiary or any of their
respective directors, officers, employees, representatives, agents or Affiliates
(as defined below) shall, directly or indirectly, solicit, initiate, encourage
or respond favorably to inquiries or proposals from, or provide any confidential
information or access to Savings Institution's or Holding Company's premises to,
or participate in any discussions or negotiations with, any person (other than
Acquisition and FBOP and their directors, officers, employees, representatives
and agents) concerning (i) any merger, sale of assets not in the ordinary course
of business, acquisition, business combination, change of control or other
similar transaction involving Holding Company or Savings Institution, or (ii)
any purchase or other acquisition by any person of any shares of capital stock
of Holding Company or Savings Institution, or (iii) any issuance by Holding
Company or Savings Institution of any shares of its capital stock. Holding
Company will promptly advise FBOP or Acquisition of, and communicate to FBOP or
Acquisition the terms and conditions of (and the identity of the person making),
any such inquiry or proposal received, and will promptly furnish FBOP or
Acquisition with copies of any documents received and summaries of any other
communications with respect thereto. Holding Company will cease any such
existing activities, discussions or negotiations with any person conducted
heretofore with respect to any of the foregoing.
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As used in this Agreement, the term "Affiliate" shall mean, with
respect to any specified person, (1) any other person which, directly or
indirectly, owns or controls, is under common ownership or control with, or is
owned or controlled by, such specified person, (2) any other person which is a
director, officer or partner or is, directly or indirectly, the beneficial owner
of 5 percent or more of any class of equity securities, of the specified person
or a person described in clause (1) of this paragraph, (3) another person of
which the specified person is a director, officer or partner or is, directly or
indirectly, the beneficial owner of 5 percent or more of any class of equity
securities, (4) another person in which the specified person has a substantial
beneficial interest or as to which the specified person serves as trustee or in
a similar capacity, or (5) any relative or spouse of the specified person or any
of the foregoing persons, any relative of such spouse or any spouse of any such
relative.
(c) Stockholder Meeting. Holding Company shall take all steps necessary
to duly call, give notice of, convene and hold a meeting of its stockholders to
be held as soon as is practicable for the purpose of voting upon the approval of
the Merger and this Agreement. Holding Company will, through its Board of
Directors, use its best efforts to obtain stockholder approval and will
recommend to its stockholders approval of this Agreement and the transactions
contemplated hereby and such other matters as may be submitted to its
stockholders in connection with this Agreement. As soon as practicable, Holding
Company shall prepare and cause to be filed with the SEC the related proxy
material and shall use its best efforts to obtain clearance by the SEC for the
mailing of such material to Holding Company stockholders. FBOP or Acquisition
shall have the right to review the proxy material prior to filing with the SEC.
(d) Consents. Holding Company shall, and shall cause the Savings
Institution to, as soon as practicable, prepare or cause to be prepared and make
all filings required to be made by either of them, if any, with Applicable
Governmental Authorities and shall use its best efforts to obtain all consents,
waivers, approvals, authorizations, rulings or orders from all governmental or
regulatory bodies or other entities and furnish true, correct and complete
copies of each thereof to FBOP or Acquisition.
(e) Reports. Promptly after filing with the applicable authorities,
Holding Company shall provide to FBOP or Acquisition copies of: (i) all reports
filed with the SEC, including its Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998, which shall conform to the requirements for SEC Reports
specified in Article II(i) above; and (ii) its Regulatory Reports, which shall
conform to the requirements for Regulatory Reports specified in Article II(j)
and (v) above.
(f) Notice. Holding Company shall give prompt notice to FBOP or
Acquisition of (i) any notice of, or other communication relating to, a default
or event which with notice or lapse of time or both would become a default,
received by Holding Company or any Subsidiary subsequent to the date of this
Agreement and prior to the Effective Time, under its charter or bylaws or any
indenture, or material instrument or agreement, to which Holding Company or
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any Subsidiary is a party, by which it or any of its properties is bound or to
which it or any of its properties is subject, (ii) any notice or other
communication from any third party alleging that the consent of such third party
is or may be required in connection with the transactions contemplated hereby
and (iii) any matter which, if it had occurred prior to the date hereof, would
have been required to be included on the Schedules hereto.
(g) Regulatory Matters. Holding Company shall, from the date hereof
through the Effective Time, keep FBOP and Acquisition advised with respect to
any and all regulatory matters or proceedings affecting Holding Company or
Savings Institution and shall promptly forward to FBOP or Acquisition copies of
all correspondence, notices, orders, memoranda or other written material
received from any regulatory agency (to the extent permitted by law) and shall
provide FBOP and Acquisition full access to its regulatory files to the extent
permitted by law.
(h) Schedules. Within 14 days of the date hereof, Holding Company will
deliver to FBOP each of the Schedules to this Agreement, which Schedules will be
attached hereto and made a part hereof, and which Schedules will be in form and
substance acceptable to FBOP in its sole discretion, pursuant to such format and
presentation as Holding Company and FBOP shall mutually agree.
(i) Supplemental Information; Disclosure Supplements. From time to time
prior to the Effective Time, Holding Company will promptly disclose in writing
to FBOP and Acquisition any matter hereafter arising which, if existing,
occurring or known at the date of this Agreement would have been required to be
disclosed or which would render inaccurate any of the representations,
warranties or statements set forth in this Agreement. From time to time prior to
the Effective Time, Holding Company will promptly supplement or amend the
Schedules delivered in connection with the execution of this Agreement to
reflect any matter which, if existing, occurring or known at the date of this
Agreement, would have been required to be set forth or described in such
Schedule or which is necessary to correct any information in such Schedule that
has been rendered inaccurate thereby.
(j) Cooperation. Holding Company and its Subsidiaries shall execute
such documents and other papers, provide such information, and take such further
actions as may be reasonably requested by FBOP or Acquisition to carry out the
provisions hereof and to consummate the Transaction.
(k) Conditions Precedent. Holding Company and the Subsidiaries shall
use their commercially reasonable best efforts to cause all of the conditions
precedent to the consummation of the Transaction applicable to them to be met.
(l) Best Efforts. Holding Company and the Subsidiaries shall use their
commercially reasonable best efforts to take or cause to be taken all actions
necessary, proper or advisable to consummate the Merger on a prompt basis.
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ARTICLE VI
COVENANTS OF ACQUISITION AND FBOP
(a) Consents. Acquisition and FBOP shall, as soon as practicable,
prepare and make all necessary filings with all Applicable Governmental
Authorities and shall use their best efforts to obtain all consents, waivers,
approvals, authorizations, rulings or orders from all governmental or regulatory
bodies or other entities and furnish true, correct and complete copies of each
to Holding Company.
(b) Cooperation. Acquisition and FBOP shall execute such documents and
other papers, provide such information, and take such further actions as may be
reasonably requested by Holding Company to carry out the provisions hereof and
to consummate the transactions contemplated hereby.
(c) Conditions Precedent. Acquisition and FBOP shall use their
commercially reasonable best efforts to cause all of the conditions precedent to
the consummation of the Transaction applicable to each to be met.
(d) Best Efforts. Acquisition and FBOP will use their commercially
reasonable best efforts to take or cause to be taken all actions necessary,
proper or advisable to consummate the Merger on a prompt basis.
(e) Prompt Review. In connection with the prior written approval of
FBOP or Acquisition required under Article V(a) above, Acquisition and FBOP will
use their reasonable best efforts to review promptly all proposals and requests
submitted to them in writing and to inform Holding Company of their decision in
a timely manner.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF ACQUISITION AND FBOP
The obligations of Acquisition and FBOP under this Agreement to cause
this Agreement to become effective and have the transactions contemplated hereby
be consummated are, at their option, subject to the conditions that:
(a) Validity of Representation and Warranties. The representations and
warranties of Holding Company herein contained shall be true and correct when
made and, in addition, shall be true and correct on and at the Effective Time
with the same force and effect as though made on and at the Effective Time.
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<PAGE> 37
(b) Consents. All required consents, waivers, approvals, authorizations
or orders in connection with the Transaction shall have been obtained by Holding
Company and copies of the same shall have been delivered to Acquisition and
FBOP.
(c) Compliance with Covenants; Schedules. Holding Company shall have
performed in all material respects all obligations and agreements and complied
in all material respects with all covenants and conditions contained in this
Agreement to be performed and complied with by it at or prior to the Effective
Time. The Schedules and information disclosed to FBOP pursuant to Articles V(h)
and V(i) hereof shall be in form and substance acceptable to FBOP in its sole
discretion and shall not, in the case of Schedules provided pursuant to Article
V(i), be materially different from the Schedules provided to FBOP pursuant to
Article V(h).
(d) Opinion of Counsel. Acquisition shall have received the opinion of
Kemp & Grzelakowski, Ltd., counsel for Holding Company, specified in Article
X(b)(ii).
(e) Approval of Holding Company Stockholders. This Agreement shall have
been approved and adopted at a duly called meeting of the stockholders of
Holding Company Common Stock by at least a majority of the issued and
outstanding shares of Holding Company Common Stock entitled to vote thereon.
(f) Dissenting Holding Company Shares. The holders of not more than 10%
of the issued and outstanding shares of Holding Company Common Stock at the
Effective Time shall have delivered written notice of intent to demand payment
of the fair value of their shares of Holding Company Common Stock pursuant to
Section 262 of the DGCL.
(g) Resignations. The directors of Holding Company, Savings Institution
and the Subsidiaries shall have tendered their resignations in writing,
effective on the Effective Time.
(h) Employment Matters. FBOP and Acquisition shall have received from
Holding Company an amendment to the employment/severance agreement of Thaddeus
Walczak which will provide for deferral of any amounts payable in excess of
$1,000,000 for a period of up to 3 months following the Closing, with interest
to be paid on any such deferred amounts at the rate of 8% per annum.
(i) Adverse Changes. From March 31, 1998 to the Effective Time, there
shall not have been any Material Adverse Change in the business, operations,
results of operations, assets, liabilities, investments, properties, condition
(financial or otherwise), affairs, prospects or other attributes of Holding
Company or Savings Institution, taken as a whole, but not including Material
Adverse Changes which result solely from FBOP=s unreasonable failure to consent
under Article V(a).
(j) Effective Time. The Effective Time shall be no later than 5:00 P.M.
Central Time on April 30, 1999.
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<PAGE> 38
(k) Stock Option Plans and Incentive Plans; Options. Acquisition shall
have received evidence satisfactory to it that, upon payment of the Cash
Consideration Per Option, each Option shall have been canceled, and any other
options or warrants for Common Stock and all related plans have been cancelled.
(l) Transition Agreement. FBOP shall have entered into mutually
acceptable agreements with Thaddeus Walczak and Carole Lewis, which agreements
will provide that for a period of up to two (2) years following the Closing,
each will assist FBOP in agreed upon areas of the business, and which will
provide for such compensation and/or reimbursement of approved expenses incurred
by them, together with such other terms and conditions, as are mutually
acceptable to all parties.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF HOLDING COMPANY
The obligations of Holding Company under this Agreement to cause this
Agreement to become effective and have the transactions contemplated hereby be
consummated are, at its option, subject to the conditions that:
(a) Validity of Representations and Warranties. The representations and
warranties of Acquisition and FBOP herein contained shall have been true and
correct when made and, in addition, shall be true and correct on and at the
Effective Time with the same force and effect as though made on and at the
Effective Time.
(b) Consents. All consents, waivers, approvals, authorizations or
orders required to be obtained by Acquisition and FBOP shall have been obtained
and copies of the same shall have been delivered to Holding Company.
(c) Compliance with Covenants. Acquisition and FBOP shall have
performed all obligations and agreements and complied with all covenants and
conditions contained in this Agreement to be performed and complied with by them
at or prior to the Effective Time.
(d) Opinion of Counsel. Holding Company shall have received the opinion
of Lord, Bissell & Brook, counsel for Acquisition, specified in Article
X(c)(ii).
(e) Fairness Opinion. Holding Company shall have received an opinion
from ABN AMRO Incorporated dated as of the date of this Agreement to the effect
that, in its opinion, the consideration to be paid to the shareholders of
Holding Company hereunder is fair to such shareholders from a financial point of
view.
33
<PAGE> 39
(f) Effective Time. The Effective Time shall be no later than 5:00
P.M. Central Time on April 30, 1999.
(g) Funds to Paying Agent. FBOP or Acquisition shall have made
available to the Paying Agent the funds as described at Article I(l) hereof.
ARTICLE IX
CONDITIONS APPLICABLE TO ACQUISITION, FBOP AND HOLDING COMPANY
The obligations of Acquisition, FBOP and Holding Company under this
Agreement to cause this Agreement to become effective and have the transactions
contemplated hereby be consummated are subject to the following terms and
conditions:
(a) Governmental Approvals. To the extent required by applicable law or
regulation, the OTS, the Federal Reserve Board, the FDIC and/or such other state
or federal agencies whose approval of the Transaction and the other transactions
contemplated by this Agreement is so required, shall have approved or authorized
the Transaction and all of the transactions contemplated by this Agreement in
form and under terms acceptable to FBOP and Acquisition in their sole
discretion. All other statutory or regulatory requirements for the valid
consummation of the Transaction shall have been satisfied and all other required
governmental consents and approvals shall have been obtained.
(b) Injunction. The consummation of the Merger shall not have been
restrained, enjoined or prohibited by any court or governmental authority of
competent jurisdiction. No material litigation or administrative proceeding
shall be pending or threatened as of the Effective Time seeking to restrain,
enjoin or prohibit the consummation of this Agreement, the Merger or the
Transaction.
ARTICLE X
CLOSING AND CLOSING DOCUMENTS
(a) Closing. The closing ("Closing") under this Agreement shall be held
at the offices of Lord, Bissell & Brook in Chicago, Illinois, as promptly as
practicable after the fulfillment or waiver of all the terms and conditions
contained in Articles VII, VIII, IX and X of this Agreement, or at such other
place and time as shall be mutually agreeable to the parties. The required
number of fully executed and verified copies of the Certificate of Merger shall
be filed immediately after the Closing with the Secretary of State of Delaware.
(b) Holding Company Closing Documents. At the Closing, Holding
Company shall deliver, or cause to be delivered, to FBOP and Acquisition:
34
<PAGE> 40
(i) A certificate of Holding Company, signed by its
President, which shall confirm the compliance by Holding Company with
its covenants and agreements contained in this Agreement and the
accuracy of the representations and warranties made by Holding Company
in this Agreement at and as of the Effective Time as if made at such
time and as contemplated by this Agreement.
(ii) The opinion of Kemp & Grzelakowski, Ltd., counsel for
Holding Company, dated the Effective Time, and in form and substance
satisfactory to FBOP and Acquisition.
(iii) A certificate of Holding Company's inspector of
elections as to the vote taken at the meeting of the holders of shares
of Holding Company Common Stock with respect to this Agreement and as
to the holders of shares of Holding Company Common Stock that shall
have demanded payment of the fair value of their shares of Holding
Company Common Stock pursuant to the DGCL.
(iv) Written resignations, effective the Effective Time, of
all of the directors of Holding Company and the Subsidiaries.
(v) Certificate of Incorporation and Certificate of Good
Standing of Holding Company each certified by the Secretary of State of
Delaware within ten (10) days prior to the Closing.
(c) Acquisition Closing Documents. At the Closing, Acquisition
shall deliver, or cause to be delivered, to Holding Company:
(i) A Certificate of Acquisition, signed by its President
or Vice President, which shall confirm the compliance by Acquisition
with its covenants and agreements contained in this Agreement and the
accuracy of the representations and warranties made by it in this
Agreement at and as of the Effective Time as if made at such time and
as contemplated by this Agreement.
(ii) The opinion of Lord, Bissell & Brook, counsel for
Acquisition, dated the Effective Time, and in form and substance
satisfactory to Holding Company.
ARTICLE XI
TERMINATION AND TERMINATION FEE
(a) Termination. This Agreement and the Transaction may be
terminated at any time prior to the filing of the Certificate of Merger with the
Secretary of State of Delaware, whether before or after action by the
stockholders of Holding Company as contemplated by
35
<PAGE> 41
Article V(k) of this Agreement and without further approval by the outstanding
stockholders of Holding Company (i) by mutual written consent of the Boards of
Directors of Acquisition and Holding Company, (ii) by action of the Board of
Directors of Acquisition in the event of a failure of a condition set forth in
Article VII of this Agreement as of the time such condition is required
hereunder to be fulfilled, (iii) by action of the Board of Directors of Holding
Company in the event of failure of a condition set forth in Article VIII of this
Agreement as of the time such condition is required hereunder to be fulfilled,
or (iv) by action of the Board of Directors of either Acquisition or Holding
Company in the event of a failure of a condition set forth in Article IX of this
Agreement as of the time such condition is required hereunder to be fulfilled.
(b) Termination Fee. If Holding Company and Acquisition fail to
consummate the Merger and (i) Holding Company or Savings Institution enters into
a letter of intent, commitment letter or other written agreement with a third
party regarding a merger, consolidation, sale of assets or other similar
transaction involving Holding Company or Savings Institution within twelve (12)
months following the termination of the Merger, and (ii) Holding Company shall
not have terminated this Agreement by reason of paragraphs (a)(i)(iii) or
(a)(i)(iv) above, and (iii) Acquisition shall not have terminated this Agreement
by reason of paragraph (a)(i)(i) above, Holding Company shall, upon execution of
any such letter or agreement, promptly pay Eleven Million Dollars ($11,000,000)
to FBOP, and Holding Company shall have no further liability or obligation to
FBOP or Acquisition with respect to this Agreement.
(c) Survival of Rights. Except as otherwise provided in paragraph (b)
above, nothing in this Article XI or in this Agreement shall be construed as
limiting the rights of any party in the event of a breach by any party of this
Agreement.
ARTICLE XII
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
Except for the agreements set forth in Articles I, II(ad), V(j),
VII(g), VII(h), XI, XII, XIII(a), XIII(f) and XIII(g), no representations,
warranties or agreements shall survive beyond the Effective Time.
ARTICLE XIII
MISCELLANEOUS
(a) Payment of Expenses. Whether or not the Merger shall be
consummated, each party hereto shall pay its own expenses incident to preparing
for, entering into and carrying out this Agreement and incident to the
consummation of the Merger and the Transaction.
36
<PAGE> 42
(b) Entire Agreement. This Agreement (together with the Schedules and
Exhibits hereto and the documents referred to herein) contains, and is intended
as, a complete statement of all of the terms of the arrangements between the
parties with respect to the matters provided for herein, and supersedes any
previous agreements and understandings between the parties with respect to those
matters.
(c) Modifications, Amendments and Waivers. At any time prior to the
Effective Time, the parties hereto may, by written agreement, (a) extend the
time for the performance of any of the obligations or other acts of the parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained in this Agreement or in any document delivered pursuant hereto, (c)
waive compliance with any of the covenants or agreements contained in this
Agreement, or (d) make any other modification of this Agreement approved by the
respective Boards of Directors of the parties hereto. This Agreement shall not
be altered or otherwise amended except pursuant to an instrument in writing
executed and delivered on behalf of each of the parties hereto. For the
convenience of the parties hereto, this Agreement may be executed in any number
of counterparts, and each such counterpart shall be deemed to be an original
instrument, and all such counterparts shall together constitute the same
agreement.
(d) Assignment; Governing Law. Except as provided in Article I(a)
hereto, this Agreement shall not be assignable by any of the parties hereto and
shall be construed in accordance with the laws of the State of Illinois.
(e) Schedules. All information set forth in the Schedules hereto
shall be deemed a representation and warranty of Holding Company as to the
accuracy and completeness of such information.
(f) Press Releases. Except as may otherwise be required by law, no
publicity release or announcement concerning this Agreement or the transactions
contemplated hereby shall be made prior to the Effective Time without advance
approval thereof by Holding Company and FBOP. Holding Company and FBOP will
cooperate with each other in the development and distribution of all news
releases and other public information disclosures with respect to this
Agreement, the Transaction or any of the transactions contemplated hereby or
thereby.
(g) Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, overnight
express service or confirmed facsimile transmission as follows:
37
<PAGE> 43
If to Holding Company: Calumet Bancorp, Inc.
1350 E. Sibley Blvd.
Dolton, Illinois 60419
Attn: Thaddeus Walczak
With a copy to: Kemp & Grzelakowsi, Ltd.
1900 Spring Road
Suite 500
Oak Brook, Illinois 60521-1495
Attn: James J. Kemp
If to FBOP or Acquisition: FBOP Corporation
11 West Madison Street
Oak Park, IL 60302
Attn: President
With a copy to: Lord, Bissell & Brook
115 S. LaSalle Street
Chicago, IL 60603
Attn: Edward C. Fitzpatrick
(h) Attorneys' Fees. If any action at law or in equity, including an
action for declaratory relief is brought to enforce or interpret the provisions
of this Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees from the other party, which fees shall be in addition to any
other relief which may be awarded.
38
<PAGE> 44
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first above written.
CALUMET BANCORP, INC.
Attest:
By: /s/ Thaddeus Walczak
- ---------------------------- -------------------------------------------
Name: Thaddeus Walczak
Title: Chairman and Chief Executive Officer
FBOP ACQUISITION COMPANY
Attest:
/s/ Edward C. Fitzpatrick By: /s/
- ---------------------------- -------------------------------------------
Name:
-----------------------------------------
Title: Vice President
----------------------------------------
FBOP CORPORATION
Attest:
/s/ Edward C. Fitzpatrick By: /s/ Michael E. Kelly
- ---------------------------- -------------------------------------------
Name: Michael E. Kelly
-----------------------------------------
Title: Chairman
----------------------------------------
39
<PAGE> 45
EXHIBIT A
IRREVOCABLE PROXY
This IRREVOCABLE PROXY ("Proxy") is dated as of September 9, 1998 by
and among FBOP Corporation, an Illinois corporation ("Buyer"), FBOP Acquisition
Company, a Delaware corporation and a wholly-owned subsidiary of Buyer
("Acquisition") and each of the stockholders of Calumet Bancorp, Inc. named on
the signature page(s) hereto (individually, the "Stockholder" and collectively
the "Stockholders").
WHEREAS, each of the Stockholders owns the number of shares of common
stock, par value $0.01 per share ("Common Stock"), of Calumet Bancorp, Inc.
(the "Holding Company") set forth opposite such Stockholder's name on Schedule
A hereto;
WHEREAS, concurrently herewith, the Holding Company, Buyer and
Acquisition have entered into a Merger Agreement, dated the date hereof (the
"Merger Agreement"), pursuant to which and subject to the terms and conditions
thereof (i) Acquisition shall be merged (the "Merger") with and into the
Holding Company with the Holding Company as the surviving corporation (the
"Surviving Corporation"), (ii) each share of Common Stock shall be converted
into the right to receive the Per Share Merger Consideration (as defined in the
Merger Agreement), and (iii) each share of common stock, par value $1.00 per
share, of Acquisition shall be converted into and become one share of common
stock, par value $0.01 per share, of the Surviving Corporation;
WHEREAS, the consummation of the Merger is subject to the approval by
holders of a majority of all outstanding shares of Common Stock entitled to
vote thereon;
WHEREAS, the Board of Directors of the Holding Company has deemed the
consummation of the Merger to be in the best interests of the Holding Company
and its stockholders;
WHEREAS, Buyer and Acquisition are not willing to enter into the Merger
Agreement without the prior agreement by each of the Stockholders listed on
Schedule A hereto to vote in favor of the Merger and the Merger Agreement as
provided herein;
NOW THEREFORE, in consideration of and premised upon the various
representations, warranties, covenants and other agreements and undertakings of
Buyer, Acquisition and the Stockholders contained in this Agreement, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
<PAGE> 46
ARTICLE I
PROXY
SECTION 1.01. Irrevocable Proxy. Stockholder hereby irrevocably appoints
Buyer, until termination of the Merger Agreement, as the Stockholder's attorney
and proxy, with full power of substitution, to vote, and otherwise act (by
written consent or otherwise) with respect to the shares of Common Stock
which the Stockholder is entitled to vote at any meeting of the stockholders of
the Holding Company (whether annual or special and whether or not an adjourned
or postponed meeting) or consent in lieu of any such meeting or otherwise, in
such manner as Buyer or its substitute shall, in its sole discretion, deem
proper with respect to the following matters: (i) any proposal for the adoption
or approval of the Merger and the Merger Agreement; (ii) any proposal relating
to (A) the sale of stock or assets of the Holding Company or any of its
subsidiaries or any interest therein OTHER THAN AS contemplated by the merger
agreement, (B) the merger, consolidation or other combination of the Holding
Company or any of its subsidiaries with any person, other than as contemplated
by the Merger Agreement, (C) the liquidation, dissolution or reorganization of
the Holding Company or any of its subsidiaries, or (D) any other action or
agreement that would result in a breach of any covenant, representation,
warranty or any other obligation or agreement of the Holding Company or any of
its subsidiaries under the Merger Agreement or which could result in any of the
conditions to Buyer and Acquisition's obligations under the Merger Agreement
not being fulfilled; and (iii) as otherwise necessary or appropriate to enable
the Holding Company, Buyer and Acquisition to consummate the transactions
contemplated by the Merger Agreement. THIS PROXY AND POWER OF ATTORNEY IS
IRREVOCABLE AND COUPLED WITH AN INTEREST. Each Stockholder hereby revokes all
other proxies and powers of attorney with respect to the shares of Common Stock
owned by the Stockholder which the Stockholder may have heretofore appointed or
granted (other than a proxy to vote in accordance with Section 1.01 hereof),
and no subsequent proxy or power of attorney shall be given or written consent
executed (and if given or executed, shall not be effective) by the Stockholder
with respect thereto (other than in accordance with Section 1.01 hereof). All
authority herein conferred or agreed to be conferred shall survive the death,
incapacity, bankruptcy or liquidation of the Stockholder and any obligation of
the Stockholder under this Agreement shall be binding upon its heirs,
representatives, assigns and successors.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder hereby represents and warrants to Buyer as follows:
SECTION 2.01. Authority. The Stockholder has all requisite power and
authority to enter into this Agreement and to perform its obligations
hereunder. This Proxy has been duly authorized, executed and delivered by the
Stockholder and, assuming this Proxy constitutes a valid and binding obligation
of the other parties hereto, constitutes a legal, valid and binding
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<PAGE> 47
obligation of the Stockholder, enforceable against the Stockholder in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by: (i) applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws from time to time in
effect affecting generally the enforcement of creditors' rights and remedies;
and (ii) general principles of equity, including, without limitation,
principles of reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in equity or at law).
SECTION 2.02. No Conflict. The execution and delivery of this Proxy by the
Stockholder and performance of such Stockholder's obligations hereunder do not:
(i) conflict with or violate any laws applicable to the Stockholder or by which
the shares of Common Stock of the Stockholder are bound or affected; or (ii)
result in any breach of or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance on any of the shares of Common Stock of
the stockholder pursuant to, any note, bond, mortgage, indenture, contract,
lease, license, permit, franchise or other instrument or obligation to which
the Stockholder is a party or by which the Stockholder or the shares of Common
Stock of the Stockholder are bound or affected.
SECTION 2.03. Title to the Shares. As of the date hereof, the Stockholder
is the record and beneficial owner of the number of shares of Common Stock set
forth opposite the Stockholder's name on the signature page hereto. Such shares
of Common Stock are all of such shares as are owned, either of record or
beneficially, by the Stockholder. The Stockholder owns all the shares of Common
Stock set forth opposite the Stockholder's name on the signature page hereto
free and clear of all security interests, liens, claims, pledges, options,
rights of first refusal, contracts, limitations on the Stockholder's voting
rights, charges and other encumbrances of any nature whatsoever. Except as
provided in this Proxy, the Stockholder has not appointed or granted (and will
not, after the date hereof, appoint or grant) any proxy, which appointment or
grant is still effective, with respect to the shares set forth opposite the
Stockholder's name on the signature page hereto, other than in accordance with
Section 1.01 hereof.
ARTICLE III
COVENANTS OF THE STOCKHOLDERS
SECTION 3.01. No Disposition or Encumbrance of Shares. Each Stockholder
hereby covenants and agrees that, except as contemplated by this Proxy, the
Stockholder shall not, and shall not offer or agree to, sell, transfer, tender,
assign, hypothecate or otherwise dispose of, grant a proxy (other than the
irrevocable proxy granted herein) or power of attorney with respect to, create
or permit to exist any security interest, lien, claim, pledge, option, right of
first refusal, contract, limitation on the Stockholder's voting rights, charge
or other encumbrance of any nature whatsoever with respect to, the
Stockholder's shares of Common Stock, or directly or indirectly, initiate,
solicit or encourage any person to take actions which could reasonably be
expected to lead to the occurrence of
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<PAGE> 48
any of the foregoing; provided, however that if the Stockholder is currently
serving as a director or officer of the Holding Company, the Stockholder,
acting in such capacities, shall not be precluded from taking any such action
or any action precluded by Section 3.02, based upon the advice of counsel, that
his or her fiduciary duties to the Holding Company obligate the Stockholder to
do so.
SECTION 3.02. No Negotiations. Each Stockholder shall not, and shall not
permit any of its subsidiaries, affiliates, representatives, agents or any
other person acting for or on behalf of such Stockholder to, solicit, entertain
offers from, negotiate with, or in any manner discuss, encourage, recommend or
agree to any proposal relating to (a) the sale of the stock or assets of the
Holding Company or any of its subsidiaries or any interest therein, (b) the
merger, consolidation or other combination of the Holding Company or any of its
subsidiaries with any person, or (c) the liquidation, dissolution or
reorganization of the Holding Company or any of its subsidiaries, except as
specifically contemplated by the Merger Agreement. Without limiting the
generality of the foregoing, the Stockholder shall not, and shall not permit
any of its subsidiaries, affiliates, representatives, agents or any other
person acting for or on behalf of the Stockholder to, furnish or cause to be
furnished any information with respect to the Holding Company or any of its
subsidiaries to any person (other than the Buyer and its employees and agents
and other than as required by law). If the Stockholder or any of its
subsidiaries, affiliates, representatives, agents or any other person acting
for or on behalf of the Stockholder receives from any person any offer,
proposal or informational request that may be subject to this Section, the
Stockholder shall promptly advise such person, by written notice, of the terms
of this Section and shall promptly deliver a copy of such notice to the Buyer.
Nothing herein shall, to the extent not prohibited by the Merger Agreement,
prohibit any Stockholder who is an officer of the Holding Company from acting
in his or her capacity as such, or who is a director of the Holding Company
from participating in meetings of the Board or Committees thereof.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Termination. This Proxy shall remain in effect until the
first to occur of (i) the Closing Date, or (ii) the termination of the Merger
Agreement; provided, however, that the provisions set forth in Section 4.03
shall survive the Closing (as defined in the Merger Agreement).
SECTION 4.02. Definitions. Any terms used but not defined herein shall
have the meanings ascribed to them in the Merger Agreement.
SECTION 4.03. Further Assurances. The Stockholders will execute and
deliver all such further documents and instruments and take all such further
action as may reasonably be necessary in order to consummate the transactions
contemplated hereby, including, without limitation, the transactions
contemplated by the Merger Agreement.
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<PAGE> 49
SECTION 4.04. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Proxy was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
SECTION 4.05. Entire Agreement. This Proxy constitutes the entire
agreement between the Stockholders and the Buyer with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, between the Buyer and the Stockholders with respect to the
subject matter hereof
SECTION 4.06. Amendment. This Proxy may not be amended, altered or
modified except by a written instrument executed by the respective parties
hereto; provided that the agreement of the other Stockholders shall not be
required to amend, alter or modify the Proxy of any Stockholder.
SECTION 4.07. Severabilitv. If any term or other provision of this Proxy
is invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Proxy shall
nevertheless remain in full force and effect so long as the economic or legal
substance of this Proxy is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Proxy so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that
the terms of this Proxy remain as originally contemplated to the fullest extent
possible.
SECTION 4.08. Governing Law. This Proxy shall be construed and interpreted
according to the internal laws of the State of Illinois.
SECTION 4.09. Counterparts. This Proxy may be executed in any number of
counterparts, each of which shall be deemed an original and each of which shall
constitute one and the same instrument.
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<PAGE> 50
IN WITNESS WHEREOF, the Stockholders have duly executed this Proxy as of
the date first above written.
STOCKHOLDERS:
Number of Shares of
Common Stock owned:
-------- ----------------------------------
Print Name: Thaddeus Walczak
-----------------------
Number of Shares of
Common Stock owned:
-------- ----------------------------------
Print Name: Carole Lewis
-----------------------
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<PAGE> 51
AGREED TO AND ACCEPTED:
FBOP CORPORATION
By:
---------------------------
Name:
------------------------
Title:
-----------------------
FBOP ACQUISITION COMPANY
By:
---------------------------
Name:
------------------------
Title:
-----------------------
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<PAGE> 52
SCHEDULE A
Stockholder # of shares %*
================================================================================
Thaddeus Walczak
Carole Lewis
Total
* Based on % outstanding of at , 1998
-------- -----
<PAGE> 1
FOR IMMEDIATE RELEASE
CALUMET BANCORP, INC. PLANS TO MERGER WITH FBOP CORPORATION
DOLTON, IL (September 9, 1998) -- Calumet Bancorp, Inc. (NASDQ/NMS:CBCI),
announced today that a definitive agreement has been signed pursuant to which
FBOP Corporation will acquire, for cash, all of the outstanding stock of
Calumet in a transaction valued at approximately $111.6 million, or $32.00 per
fully diluted share, after deducting Calumet's merger-related expenses.
The transaction is expected to be completed during the first quarter of 1999,
and is subject to the approvals of regulatory agencies and Calumet's
shareholders, and to the satisfaction of certain normal contractual closing
conditions.
As of June 30, 1998, Calumet Bancorp, Inc. reported total assets of $492.0
million, total deposits of $349.1 million, stockholders' equity of $87.3
million, and a fully diluted book value of $25.44 per share. Calumet Bancorp,
Inc. is the holding company of Calumet Federal Savings and Loan Association of
Chicago, which operates five financial services offices -- Dolton, Lansing,
Sauk Village and two in southeastern Chicago.
FBOP Corporation is a closely held bank holding company headquartered in Oak
Park, Illinois. As of June 30, 1998, FBOP reported total assets of $3.3
billion and total deposits of $2.7 billion. Upon completion of the merger,
FBOP will operate 19 banking offices in Illinois, 17 in California, and 3 in
Texas, with consolidated assets of approximately $3.7 billion.
For more information:
Calumet Bancorp, Inc. FBOP Corporation
John Garlanger, Senior Vice President Barbara Kilian, Vice President
(708) 841-9010 (708) 445-3260
