SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to SS.240.14a-11(c) or SS.240.14a-12
CAMERON FINANCIAL CORPORATION
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
Cameron Financial Corporation common stock, par value $.01 per share
2) Aggregate number of securities to which transaction applies:
1,892,049 shares of common stock (plus outstanding options to acquire
185,130 shares of common stock).
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
$20.75 per share of Cameron Financial Corporation common stock, and
$20.75, less the exercise price, for underlying options to purchase
Cameron Financial Corporation common stock
4) Proposed maximum aggregate value of transaction
$40,449,412
5) Total fee paid:
$8,090
[X] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided b Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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CAMERON FINANCIAL CORPORATION
1304 North Walnut Street
Cameron, Missouri 64429
December 19, 2000
Dear Stockholder:
You are cordially invited to attend a special meeting of stockholders
of Cameron Financial Corporation, to be held in the Community Room of the
offices of The Cameron Savings & Loan Association, F.A. located at 1304 North
Walnut Street, Cameron, Missouri, on January 12, 2001, commencing at 9:00 a.m.,
local time.
At this important meeting, stockholders will be asked to consider and
vote upon a proposal to approve a merger agreement under which, among other
things, Cameron would enter into a merger that will result in it becoming a
wholly-owned subsidiary of Dickinson Financial Corporation. If this merger is
completed, you will receive a cash payment of $20.75 for each share of Cameron
common stock that you own, subject to adjustment in certain limited
circumstances. On October 6, 2000, which is the day the last trade occurred
before we announced the merger, Cameron common stock closed at $17.50 per share.
During the 52-week period immediately preceding that date, Cameron common stock
traded within a range having a low price of $10.50 per share and a high price of
$18.50 per share. Upon completion of the merger, you will no longer own any
common stock or have any ownership interest in Cameron, nor will you receive, as
a result of the merger, any capital stock of Dickinson or its subsidiaries.
In the merger, the exchange of your shares of Cameron common stock for
cash generally will cause you to recognize income for federal income tax
purposes and, possibly, state and local tax purposes. You should consult your
personal tax adviser for a full understanding of the tax consequences of the
merger to you.
Your board of directors believes that the merger is in the best
interests of Cameron's stockholders and unanimously recommends that you vote FOR
approval of the merger agreement. In reaching this conclusion, your board of
directors took into account the opinion of our financial adviser, William Blair
& Company, L. L. C., that the consideration to be received by Cameron's
stockholders in the merger is fair from a financial point of view. A copy of
this opinion, which sets forth the assumptions made, matters considered and
limitations on the review undertaken by Blair is provided as Appendix B.
At the meeting, you will be asked to approve and adopt the merger
agreement. A majority of the votes entitled to be cast at the meeting must vote
for approval and adoption of the merger agreement for the merger to be
completed. If the merger agreement is approved, and all other conditions
described in the merger agreement have been satisfied or waived, the merger is
expected to occur in the first quarter of 2001.
This proxy statement provides you with detailed information about the
proposed merger and provides the complete merger agreement as Appendix A. Please
read the enclosed materials carefully for a complete description of the merger.
As you do so, you should be aware that in this proxy statement we refer to
Cameron Financial Corporation as "Cameron", The Cameron Savings & Loan
Association, F.A. as "Cameron Savings" and Dickinson Financial Corporation as
"Dickinson".
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Page 2
Decembe 19, 2000
Your board of directors joins with me in urging you to attend the
meeting. Whether or not you plan to attend the meeting, however, please
complete, date, sign and return the enclosed proxy card promptly. A prepaid
return envelope is provided for this purpose. You may revoke your proxy at any
time before it is exercised and it will not be used if you attend the meeting
and prefer to vote in person. If the merger is consummated, stockholders will
receive instructions for surrendering their common stock certificates and a
letter of transmittal to be used for this purpose. You should not submit your
stock certificates to us until then.
PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN YOUR PROXY CARD IN THE
ENCLOSED ENVELOPE.
Sincerely,
/s/ Duane E. Kohlstaedt
Duane E. Kohlstaedt
President
This transaction has not been approved or disapproved by the Securities
and Exchange Commission, any state securities commission or the Federal Deposit
Insurance Corporation, nor have any of these bodies passed upon the fairness or
merits of such transaction or upon the accuracy or adequacy of the information
contained in this document. Any representation to the contrary is unlawful.
This document is dated December 19, 2000 and was first mailed to
stockholders on December 20, 2000.
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CAMERON FINANCIAL CORPORATION
1304 North Walnut Street
Cameron, Missouri 64429
(816) 632-2154
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 12, 2001
A special meeting of stockholders of Cameron Financial Corporation will
be held in the Community Room of the offices of The Cameron Savings & Loan
Association, F.A. located at 1304 North Walnut Street, Cameron, Missouri, on
January 12, 2001, commencing at 9:00 a.m., local time, and thereafter as it may
from time to time be adjourned, for the following purposes:
1. To consider and vote upon a proposal to approve and adopt the
Agreement and Plan of Merger dated as of October 6, 2000 by
and among Dickinson Financial Corporation, DFC Acquisition
Corporation Four and Cameron Financial Corporation, pursuant
to which DFC Acquisition Corporation Four will merge with and
into Cameron and each of the outstanding shares of Cameron
common stock will be converted into the right to receive
$20.75 in cash, subject to adjustment, as more fully described
in the accompanying proxy statement; and
2. To transact such other business as properly may come before
the meeting and any adjournment or adjournments thereof.
You can vote at the meeting if you owned Cameron common stock at the
close of business on the November 16, 2000 record date. A complete list of
stockholders entitled to vote at the meeting will be available at the main
office of Cameron during the ten days prior to the meeting and at the meeting.
As a stockholder of Cameron, you have the right to dissent from the
proposed merger and obtain an appraisal of the fair value of your shares of
Cameron common stock under applicable provisions of Delaware law. In order to
perfect dissenters' rights, you must not vote in favor of the merger and must
comply with the requirements of Delaware law. A copy of the Delaware statutory
provisions regarding dissenters' rights is provided as Appendix C to the
accompanying proxy statement and a summary of these provisions can be found
under the caption "Dissenters' Appraisal Rights" beginning on page 27.
By Order of the Board of Directors
/s/ Duane E. Kohlstaedt
Duane E. Kohlstaedt
President
Cameron, Missouri
December 19, 2000
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Important: The prompt return of proxies will save Cameron Financial Corporation
the expense of further requests for proxies to ensure a quorum at the meeting.
Please complete, sign and date the enclosed proxy and promptly mail it in the
enclosed envelope. You may revoke your proxy in the manner described in the
proxy statement at any time before it is voted.
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TABLE OF CONTENTS
QUESTIONS AND ANSWERS ABOUT THE PROPOSED MERGER.............................1
SUMMARY.....................................................................4
THE COMPANIES............................................................4
THE MEETING..............................................................4
THE MERGER...............................................................5
THE MERGER AGREEMENT.....................................................7
HISTORICAL CONSOLIDATED FINANCIAL DATA.....................................10
MARKET PRICE AND DIVIDEND DATA FOR CAMERON COMMON STOCK....................12
THE MEETING................................................................12
PLACE, DATE AND TIME....................................................12
PURPOSE OF THE MEETING..................................................12
WHO CAN VOTE AT THE MEETING.............................................12
ATTENDING THE MEETING...................................................13
VOTE REQUIRED...........................................................13
VOTING BY PROXY.........................................................13
PARTICIPANTS IN THE STOCK OWNERSHIP PLAN................................14
INDEPENDENT PUBLIC ACCOUNTANTS..........................................14
OWNERSHIP OF CAMERON COMMON STOCK.......................................14
THE MERGER.................................................................17
THE PARTIES TO THE MERGER...............................................17
OVERVIEW OF THE TRANSACTION.............................................17
WHAT YOU WILL RECEIVE IN THE MERGER.....................................17
SURRENDER OF CERTIFICATES...............................................18
TAXABLE TRANSACTION FOR CAMERON STOCKHOLDERS............................19
BACKGROUND OF THE MERGER................................................19
CAMERON'S REASONS FOR THE MERGER AND RECOMMENDATION OF THE BOARD OF
DIRECTORS...............................................................21
OPINION OF OUR FINANCIAL ADVISER........................................21
Stock Trading History................................................23
Comparable Market-Value Analysis.....................................23
Stand-Alone Discounted Cash Flow Analysis............................24
Comparable Transactions Analysis.....................................25
Control Discounted Cash Flow Analysis................................26
General ......................................................27
Blair's Engagements..................................................27
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DISSENTERS' APPRAISAL RIGHTS............................................27
INTERESTS OF CERTAIN PERSONS IN THE MERGER..............................30
Stock Ownership......................................................30
Payment for Restricted Stock.........................................30
Stock Option Plan....................................................31
Director Emeritus Agreements.........................................32
Employment and Change of Control Agreements..........................33
Severance Plan.......................................................33
Indemnification of Directors and Officers............................34
REGULATORY APPROVALS....................................................34
ACCOUNTING TREATMENT....................................................34
THE MERGER AGREEMENT.......................................................34
TERMS OF THE MERGER.....................................................34
WHEN THE MERGER WILL BE COMPLETED.......................................35
CONDITIONS TO THE MERGER................................................35
CONDUCT OF BUSINESS PENDING THE MERGER..................................36
COVENANTS OF CAMERON AND DICKINSON IN THE MERGER AGREEMENT..............38
Agreement Not To Solicit Other Offers................................38
Employee Matters.....................................................39
Indemnification......................................................39
Certain Other Covenants..............................................39
REPRESENTATIONS AND WARRANTIES IN THE MERGER AGREEMENT..................40
TERMINATION OF THE MERGER AGREEMENT.....................................40
EXPENSES AND TERMINATION FEE............................................41
CHANGING THE TERMS OF THE MERGER AGREEMENT..............................41
OTHER MATTERS..............................................................41
STOCKHOLDER PROPOSALS......................................................41
WHERE YOU CAN FIND MORE INFORMATION........................................42
APPENDIX A -- AGREEMENT AND PLAN OF MERGER.................................A-1
APPENDIX B -- OPINION OF WILLIAM BLAIR & COMPANY, L.L.C....................B-1
APPENDIX C -- SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW..........C-1
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QUESTIONS AND ANSWERS ABOUT THE PROPOSED MERGER
Q: WHY IS CAMERON PROPOSING TO MERGE?
A: Your board of directors believes that the proposed merger allows
stockholders of Cameron to realize greater value for their shares of
common stock than they could obtain if Cameron followed its existing
business plan, or considered other alternative strategies to maximize
stockholder value. Cameron and Dickinson share a commitment to
community banking, which emphasizes responsiveness to local markets and
the delivery of personalized services. We believe that the proposed
merger will provide customers and the local communities access to a
wider variety of quality products and services while continuing to
receive the high level of personal service they have come to expect.
Q: WHAT WILL I RECEIVE FOR MY SHARES OF CAMERON COMMON STOCK?
A: You will receive $20.75 in cash for each share of Cameron common stock
that you own at the time of the merger, which amount could be subject
to adjustment as explained below. See the discussion under the caption
"What You Will Receive in the Merger" beginning at page 17 for more
information.
Q: IS THE AMOUNT OF CASH TO BE RECEIVED FOR EACH SHARE OF COMMON STOCK
FAIR?
A: William Blair & Company, L. L. C. has delivered a written opinion to
Cameron's board of directors that the amount to be paid to Cameron
stockholders is fair from a financial point of view. See the discussion
under the caption "Opinion of Our Financial Adviser" beginning at page
21 for more information.
Q: CAN THE AMOUNT OF CASH THAT CAMERON STOCKHOLDERS RECEIVE IN THE MERGER
CHANGE ?
A: In connection with the merger, the per share consideration to be
received by Cameron stockholders in the merger will be subject to
adjustment in two circumstances:
o First, if the effective time of the merger occurs after
January 31, 2001, the per share cash consideration will be
increased by an amount equal to $0.0035 times the number of
days in the period between January 31, 2001 and the effective
time of the merger, or Cameron's net income per share during
that period, whichever is less.
o Second, if the adjusted stockholders' equity of Cameron as of
the close of business on the last business day immediately
prior to the effective time of the merger is less than
$40,000,000, the per share cash consideration will be reduced
by an amount determined by subtracting such adjusted
stockholders' equity from $40,000,000 and then dividing the
result by 2,099,179.
Q: WHAT CAN I DO IF I AM NOT SATISFIED WITH THE PAYMENT I WILL RECEIVE FOR
MY SHARES?
A: Under Delaware law, if you are not satisfied with the amount you are
receiving in the merger, you are legally entitled to have the value of
your shares judicially determined and to receive payment based on that
valuation. To exercise your dissenters' appraisal rights, you must
deliver a written objection to the merger to Cameron at or before the
meeting and must not vote in favor of the merger. Objections to the
merger should be addressed to Cameron at 1304 North Walnut Street,
Cameron, Missouri 64429, Attention: Corporate Secretary. If you do not
follow exactly the procedures specified under Delaware law, you will
lose your dissenters' appraisal rights. A copy of the dissenters'
appraisal rights provisions of Delaware law is provided as Appendix C
to this proxy statement. See the discussion under the caption
"Dissenters' Appraisal Rights" beginning at page 27 for more
information.
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Q: WHAT ARE THE TAX CONSEQUENCES OF THE MERGER TO CAMERON'S STOCKHOLDERS?
A: For United States federal income tax purposes, and perhaps for state
and local tax purposes, your exchange of shares of common stock for
cash generally will cause you to recognize a gain or loss measured by
the difference between the cash you receive in the merger and your tax
basis in the shares of common stock. See the discussion under the
caption "Taxable Transaction for Cameron Stockholders" beginning at
page 19 for more information.
The tax consequences of the merger to you will depend on your own
situation. You should consult with your tax advisers for a full
understanding of the tax consequences of the merger to you.
Q. WILL CAMERON BE ABLE TO PAY DIVIDENDS BEFORE THE COMPLETION OF THE
MERGER ?
A. Yes. Under the merger agreement, Cameron is permitted to pay normal
quarterly cash dividends, not to exceed $0.15 per share, during the
period from the October 6, 2000 date of the merger agreement until the
date that the merger becomes effective. Cameron is permitted to
accelerate payment of the first quarter 2001 dividend from January 2001
to a date that is not earlier than December 15, 2000 so long as
Cameron's adjusted stockholders' equity remains at least $40,000,000.
There can be no assurance that Cameron will pay any dividends during
the period prior to the merger.
Q. HOW WILL MANAGEMENT BENEFIT FROM THE MERGER?
A. Officers and directors of Cameron who have stock options and restricted
stock awards under Cameron's benefit plans will receive payments for
their awards based upon the merger price per share. Any unvested stock
options and restricted stock awards automatically will be deemed to be
vested and exercisable at the effective time of the merger. Under
Cameron's severance plan and agreements, Duane Kohlstaedt and other
salaried employees of Cameron will be entitled to the payment of
severance benefits if such person is terminated without cause within a
specified period after the effective time of the merger or such person
voluntarily leaves during that period due to certain changes in his or
her employment conditions or compensation. Directors, officers and
employees of Cameron also may receive other benefits from the merger.
See the discussion under the caption "Interests of Certain Persons in
the Merger" beginning at page 30 for more information.
Q. WHAT DO I NEED TO DO NOW?
A. After you have carefully read this proxy statement, indicate on your
proxy card how you want your shares of common stock to be voted. Then
sign, date and mail your proxy card in the enclosed prepaid return
envelope as soon as possible. This will enable your shares to be
represented and voted at the meeting.
Q. WHY IS MY VOTE IMPORTANT?
A. If you do not return your proxy card or vote in person at the meeting,
it will be more difficult for Cameron to obtain the necessary quorum to
hold the meeting. The merger agreement must be approved by a majority
of the votes eligible to be cast at the meeting.
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Q. IF MY SHARES ARE HELD IN STREET NAME BY MY BROKER, WILL MY BROKER
AUTOMATICALLY VOTE MY SHARES OF COMMON STOCK FOR ME?
A. No. Your broker will not be able to vote your shares of common stock
without instructions from you. You should instruct your broker how you
wish to vote your shares, following the directions your broker
provides.
Q WHAT IF I FAIL TO INSTRUCT MY BROKER?
A. If you fail to instruct your broker to vote your shares of common stock
and the broker submits an unvoted proxy, the submission of that unvoted
proxy will be the equivalent of voting against the merger.
Q. CAN I ATTEND THE MEETING AND VOTE MY SHARES OF COMMON STOCK IN PERSON?
A. Yes. All stockholders are invited to attend the meeting. Stockholders
of record can vote in person at the meeting. If a broker holds your
shares in street name, then you are not the stockholder of record and
you must ask your broker how you can vote at the meeting.
Q. CAN I CHANGE MY VOTE?
A. Yes. If you have not voted through your broker, there are three ways
you can change your vote after you have sent in your proxy card.
o First, you may send a written notice to the Corporate
Secretary of Cameron before your common stock has been voted
at the special meeting stating that you are revoking your
proxy.
o Second, you may complete a new proxy card and provide it to
the Corporate Secretary of Cameron before your common stock
has been voted at the special meeting. Any earlier proxy will
be revoked automatically.
o Third, you may attend the meeting and vote in person. Any
earlier proxy will be revoked. However, simply attending the
meeting without voting will not revoke your proxy. If you have
instructed your broker to vote your shares, you must follow
directions you receive from your broker to change your vote.
Q. SHOULD I SEND IN MY SHARE CERTIFICATES NOW?
A. No. You should not send in your common stock certificates at this time.
Instructions for exchanging common stock certificates will be sent to
you after the merger has been completed.
Q: WHEN DOES CAMERON EXPECT THE MERGER TO BE COMPLETED?
A: Cameron hopes to complete the merger in the first quarter of 2001. The
merger cannot occur unless Cameron's stockholders approve the merger by
a majority of the outstanding shares of common stock and all federal
regulatory approvals are received. See the discussion under the caption
"Conditions to the Merger" beginning at page 35 for more information.
Q: WHO CAN HELP ANSWER MY QUESTIONS?
A: If you have more questions about the merger, you should contact:
Cameron Financial Corporation
1304 North Walnut Street
Cameron, Missouri 64429
Attention: Duane E. Kohlstaedt, President
Telephone: (816) 632-2154
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SUMMARY
This brief summary highlights selected information contained in this proxy
statement. It does not contain all of the information that may be important to
you. To fully understand the merger, we urge you to carefully read the entire
proxy statement and the other documents to which we refer, including the merger
agreement. Cameron has attached the merger agreement to this proxy statement as
Appendix A. We encourage you to read the merger agreement because it is the
legal document that governs the merger.
THE COMPANIES
Dickinson Financial Corporation Dickinson, a Missouri corporation, is
1100 Main Street, Suite 350 headquartered in Kansas City, Missouri
Kansas City, Missouri 64105 and is the parent of Bank Midwest, N.A.,
Attention: Rick Smalley, President a national bank, and DFC Acquisition
(816) 472-5244 Corporation Four, a Delaware
corporation. Bank Midwest operates 49
branch offices in northern Missouri and
the Kansas City metropolitan area.
At September 30, 2000, Dickinson had
consolidated assets of $2.67 billion,
net loans receivable of $1.1 billion,
deposits of $1.81 billion and
stockholders' equity of $238.57 million.
Cameron Financial Corporation Cameron, a Delaware corporation, is
1304 North Walnut Street headquartered in Cameron, Missouri and
Cameron, Missouri 64429 is the parent of Cameron Savings, a
(816) 632-2154 federally chartered savings and loan
association.
At September 30, 2000, Cameron had
consolidated assets of $308.9 million,
net loans of $261.9 million, deposits of
$149.2 million and stockholders' equity
of $40.4 million. Cameron Savings was
organized in 1887. Cameron Savings
serves northwestern Missouri through its
main office in Cameron, Missouri, and
its branch offices in the Missouri
communities of Maryville, Mound City,
and Liberty.
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THE MEETING
Place, Date and Time (page 12) The meeting will be held on January 12,
2001, in the Community Room of the
offices of Cameron Savings located at
1304 North Walnut Street, Cameron,
Missouri, commencing at 9:00 a.m., local
time. Purpose of the Meeting (page 12)
At the meeting, you will be asked to:
o approve the merger agreement under
which Cameron will merge with a
wholly-owned subsidiary of
Dickinson; and
o transact any other business that may
properly come before the meeting.
Who Can Vote At the Meeting You can vote at the meeting of
(page 12) stockholders if you owned Cameron common
stock at the close of business on
November 16, 2000. You will be able to
cast one vote for each share of Cameron
common stock you owned at that time. As
of November 16, 2000, there were
1,914,049 shares of common stock
outstanding.
What Vote is Required for The merger agreement will be adopted if
Approval of the Merger the holders of at least a majority of
Agreement (page 13) the outstanding shares of Cameron common
stock vote for it. You can vote your
shares by attending the meeting and
voting in person or by completing and
mailing the enclosed proxy card. A
failure to vote, either by not returning
the enclosed proxy or by checking the
"abstain" box, will have the same effect
as a vote against the merger agreement.
THE MERGER
Overview of the Transaction We propose a merger in which DFC
(page 17) Acquisition Corporation Four, a
wholly-owned subsidiary of Dickinson,
will merge with and into Cameron.
Immediately after this merger, Cameron
Savings will merge with and into Bank
Midwest. As a result of these
transactions, Cameron will be a
wholly-owned subsidiary of Dickinson and
Cameron Savings will cease to exist.
However, Bank Midwest intends to operate
the offices of Cameron Savings as
branches of Bank Midwest, except that
Bank Midwest intends to consolidate
Cameron Savings' Maryville, Missouri
branch into Bank Midwest's main
Maryville branch. If the merger
agreement is not adopted, Cameron and
Dickinson will continue as separate
entities.
What You Will Receive for Your As a Cameron stockholder at the
Shares of Common Stock (page 18) effective time of the merger, each of
your shares of Cameron common stock
automatically will be converted into the
right to receive $20.75 in cash, subject
to adjustment under certain limited
circumstances. You will have to
surrender your Cameron stock
certificates to receive this cash
payment. Dickinson, or its exchange
agent, will send you written
instructions for surrendering your
certificates after we have completed the
merger. Do not send your stock
certificates at this time.
Cameron's common stock is quoted on the
Nasdaq National Market SM under the
symbol "CMRN". On October 6, 2000, which
is the day the last trade occurred
before we announced the merger, Cameron
common stock closed at $17.50 per share.
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Taxable Transaction For Cameron For United States federal income tax,
Stockholders (page 19) and possibly state and local tax,
purposes, your exchange of shares of
common stock for cash generally will
cause you to recognize a gain or loss
measured by the difference between the
cash you receive in the merger and your
tax basis in the shares of common stock.
The tax consequences of the merger to
you will depend on your own situation.
You should consult with your tax
advisers for a full understanding of the
tax consequences of the merger to you.
Our Financial Adviser Believes the William Blair & Company has delivered a
Merger is Fair to Our Stockholders written Consideration opinion to
(page 21) Cameron's board of directors that the
merger consideration is fair to holders
of Cameron common stock from a financial
point of view. We have provided a
summary of Blair's opinion on pages 21
through 27 and attached the opinion
letter as Appendix B of this proxy
statement. You should read Blair's
opinion completely, along with the
summary of the opinion set forth in this
proxy statement, to understand the
assumptions made, procedures followed,
matters considered, and limitations on
the review undertaken by Blair in
providing its opinion.
Recommendation to Stockholders The board of directors of Cameron
(page 21) believes that the merger is fair to you
and in your best interests and
unanimously recommends that you vote
"FOR" the adoption of the merger
agreement.
For a discussion of the circumstances
surrounding the merger and the factors
considered by Cameron's board of
directors in approving the merger
agreement, please see the discussion
under the caption "Background of the
Merger" beginning on page 19.
You Have Dissenter's Rights of Cameron stockholders have dissenters'
Appraisal in the Merger (page 27) rights of appraisal under Delaware law.
This means that if you are not satisfied
with the amount you would receive in the
merger, you are legally entitled to have
the value of your shares independently
determined and to receive payment based
on that valuation. If you want to
exercise dissenter's rights, you must
carefully follow the procedures
described at pages 27 through 29 of this
proxy statement and Appendix C.
Interests of Directors and Officers Some of our directors and officers have
in the Merger that Differ From Your interests in the merger that are
Interests (page 30) different from, or are in addition to,
their interests as stockholders of
Cameron. Our board of directors knew
about these additional interests, and
considered them, when they approved the
merger. These include:
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o the cancellation and
conversion of all outstanding
options to purchase Cameron
common stock, whether or not
vested or exercisable, into
the right to receive cash
equal to the value of the per
share merger consideration
minus the exercise price for
each option;
o the payment for restricted
shares of Cameron common stock
held by members of the board
and management of the same
merger consideration as all
other shares of Cameron common
stock;
o the possible payment of
severance benefits under
Cameron's severance plan and
agreements to Duane Kohlstaedt
and other salaried employees
of Cameron if such person is
terminated without cause
within a specified period
after the effective time of
the merger or such person
voluntarily leaves during that
period due to certain changes
in his or her employment
conditions or compensation;
o the acceleration of retirement
payments under Cameron
Savings' director emeritus
plan agreements; and
o provisions in the merger
agreement relating to
indemnification of directors
and officers of Cameron for
events occurring before the
merger.
Regulatory Approvals Needed to We cannot complete the merger unless it
Complete the Merger (page 34). is approved by the Board of Governors of
the Federal Reserve System and the
Office of the Comptroller of the
Currency. All of the required
applications or waiver requests have
been filed with these regulatory
authorities, as well as the required
notification to the Office of Thrift
Supervision. On October 30, 2000, the
Federal Reserve Board confirmed that it
will not require the filing of an
application. However, as of the date of
this proxy statement, the required OCC
approval has not been obtained. While we
do not know of any reason why we or
Dickinson would not be able to obtain
the necessary OCC approval in a timely
manner, we cannot be certain when or if
it will be obtained.
THE MERGER AGREEMENT
Conditions to Completing the The completion of the merger depends on
Merger (page 34) a number of conditions being met. In
addition to the parties complying with
the merger agreement, these conditions
include:
o approval of the merger
agreement by Cameron's
stockholders;
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<PAGE>
o approval of the merger by
regulatory authorities;
o the absence of any order,
decree, ruling, injunction or
legal restraint blocking the
merger or of government
proceedings trying to block
the merger; and
o the absence of any law or
regulation that makes the
merger illegal.
Where the law permits, we could decide
to complete the merger even though one
or more of these conditions has not been
met. We cannot be certain when or if the
conditions to the merger will be
satisfied or waived, or that the merger
will be completed.
Terminating the Merger Agreement We and Dickinson can agree at any time
(page 40) not to complete the merger, even if the
stockholders of Cameron have approved
it. Also, Cameron or Dickinson can
decide, without the consent of the
other, to terminate the merger agreement
if:
o the stockholders of Cameron do
not approve the merger;
o a required regulatory approval
is denied or a governmental
authority blocks the merger;
o we do not complete the merger
by April 30, 2001; or
o the other party makes a
misrepresentation, breaches a
warranty or fails to fulfill a
covenant that would have a
material adverse effect on the
party seeking to terminate the
merger agreement.
Cameron may terminate the merger
agreement if our board of directors
determines that it must accept a
superior offer from a third party in the
exercise of its fiduciary duties. In
addition, Dickinson may terminate the
merger agreement if Cameron's
stockholders have exercised dissenters'
rights with respect to more than 10% of
the outstanding shares of Cameron common
stock.
Termination Fees (page 41) If Cameron terminates the merger
agreement in order to accept a superior
offer and within 12 months Cameron or
Cameron Savings enters into a definitive
acquisition agreement with a third
party, then Cameron will pay to
Dickinson a termination fee of $500,000.
We May Amend the Terms of We can agree with Dickinson to amend the
the Merger (page 41) merger agreement. However, after
Cameron's stockholders approve the
merger agreement, no amendment may be
made that would violate applicable law
or would reduce or change the
consideration to be received by them in
the merger.
8
<PAGE>
HISTORICAL CONSOLIDATED FINANCIAL DATA
These tables show historical consolidated financial data for Cameron. The annual
historical financial condition and operating data are derived from Cameron's
consolidated financial statements audited by their independent accountants.
<TABLE>
<CAPTION>
At September 30,
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
(In thousands)
Selected Financial Condition Data:
----------------------------------
<S> <C> <C> <C> <C> <C>
Total assets $308,864 $261,553 $221,521 $212,504 $186,346
Loans receivable, net 261,867 221,909 184,605 176,790 154,444
Investment securities 23,304 18,543 16,309 13,882 18,310
Cash and cash equivalents 5,464 4,900 3,319 2,909 3,783
Certificates of deposit in other
financial institutions 840 1,200 4,400 7,600 2,500
Savings deposits 149,185 143,737 136,622 128,771 123,108
FHLB advances 112,836 71,101 37,250 35,250 12,250
Total stockholders' equity 40,386 40,624 43,473 44,667 46,815
<CAPTION>
Year ended September 30,
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
(In thousands, except share information)
Selected Operations Data:
-------------------------
<S> <C> <C> <C> <C> <C>
Total interest income $21,423 $17,643 $17,057 $15,989 $13,921
Total interest expense 13,225 9,992 9,404 8,179 6,679
------- ------- ------- ------- -------
Net interest income 8,198 7,651 7,653 7,810 7,242
Provision for loan losses 523 86 (76) 285 368
------- ------- ------- ------- -------
Net interest income after
provision for loan
losses 7,675 7,565 7,729 7,525 6,874
------- ------- ------- ------- -------
Loan fees and deposit
service charges 455 341 235 162 130
Gain (loss) on sales of
investment securities - 5 - - -
Other income 199 140 107 57 92
------- ------- ------- ------- -------
Total noninterest income 654 486 342 219 222
------- ------- ------- ------- -------
Total noninterest expense 5,194 4,909 4,390 3,670 3,772
------- ------- ------- ------- -------
Earnings before income taxes 3,135 3,142 3,681 4,074 3,324
Income taxes 1,034 1,205 1,384 1,564 1,214
------- ------- ------- ------- -------
Net earnings $2,101 $1,937 $2,297 $2,510 $2,110
------- ------- ------- ------- -------
Net earnings per share:
Basic $1.12 $0.95 $0.97 $0.99 $0.77
Diluted $1.12 0.95 0.95 0.98 0.77
</TABLE>
10
<PAGE>
HISTORICAL CONSOLIDATED FINANCIAL DATA - (Continued)
<TABLE>
<CAPTION>
At or for the year ended September 30,
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Selected Financial Ratios
and Other Data:
-------------------------
Performance ratios:
<S> <C> <C> <C> <C> <C>
Return on total assets (ratio of 0.74% 0.83% 1.05% 1.25% 1.20%
earnings to average total assets)
Return on equity (ratio of earnings
to average equity) 5.23 4.71 5.11 5.48 4.43
Interest rate spread (1):
Average during period 2.35 2.66 2.70 2.93 2.78
End of period 2.35 2.46 2.57 2.62 2.71
Net interest margin (2) 3.03 3.46 3.69 4.08 4.23
Dividend payout ratio 49.11 41.05 29.47 28.87 36.36
Ratio of noninterest expense
to average total assets 1.83 2.10 2.02 1.83 2.14
Ratio of noninterest income
to average total assets 0.23 0.21 0.16 0.11 0.13
Ratio of average interest-earning
assets to average interest-bearing 113.90 117.72 121.97 126.82 137.06
liabilities
Efficiency ratio (3) 58.68 60.37 54.91 45.71 50.54
Asset quality ratios:
Nonperforming loans to total
loans receivable at end of period 0.73 0.10 1.52 0.58 0.84
Allowance for loan losses to
nonperforming loans 102.76 628.24 48.50 139.04 91.54
Allowance for loan losses to
total loans receivable 0.75 0.65 0.74 0.81 0.77
Nonperforming assets to
total assets at end of period 0.68 0.10 1.42 0.56 0.83
Classified assets to total assets (4) 4.06 3.08 5.32 5.06 4.15
Ratio of net charge-offs to
average loans receivable 0.002 0.002 0.015 0.008 0.006
Capital ratios:
Equity to total assets at
end of period 13.08 15.53 19.59 21.03 25.12
Average equity to average assets 14.19 17.61 20.61 22.88 27.06
Other data:
Number of full-service offices 4 4 4 4 3
Number of loan production offices 0 0 0 1 1
Real estate loan originations
(in thousands) 79,574 123,603 105,220 95,088 92,606
</TABLE>
----------
(1) Interest rate spread represents the difference between weighted
average yield on interest earning assets and the weighted average rate
on interest-bearing liabilities.
(2) Net interest margin represents net interest income as a percentage of
average interest-earning assets.
(3) The efficiency ratio represents total noninterest expense divided by
net interest income plus total noninterest income, excluding gain on
sale of investments.
(4) Includes assets designated as Special Mention.
11
<PAGE>
MARKET PRICE AND DIVIDEND DATA FOR CAMERON COMMON STOCK
Cameron's common stock is quoted on the National Market System of the
Nasdaq Stock Market under the symbol "CMRN". The following table shows the high
and low prices per share for Cameron common stock as reported on the Nasdaq
National Market SM and the cash dividends declared by Cameron for the periods
indicated.
Cameron Common Stock
High Low Dividends
---------- ---------- -----------
Fiscal 1999
Quarter ended December 31, 1998 17.1250 14.5000 0.070
Quarter ended March 31, 1999 16.000 13.500 0.070
Quarter ended June 30, 1999 14.1250 11.8750 0.125
Quarter ended September 30, 1999 14.3125 12.8750 0.125
Fiscal 2000
Quarter ended December 31, 1999 13.2500 12.1250 0.125
Quarter ended March 31, 2000 13.1250 10.500 0.150
Quarter ended June 30, 2000 15.8750 11.4375 0.150
Quarter ended September 30, 2000 18.5000 15.8125 0.150
Fiscal 2001
Quarter ending December 31, 2000
(through December 14, 2000) 20.5000 17.5000 0.150
On October 6, 2000, the last trading day prior to the public
announcement that Dickinson and Cameron had entered into the merger agreement,
the closing price of Cameron common stock was $17.50 per share. On December 14,
2000, which is the last practicable date prior to the printing of this proxy
statement, the closing price of Cameron common stock was $20.31 per share.
As of November 16, 2000, there were approximately 407 holders of record
of Cameron common stock. This number does not reflect the number of persons or
entities who may hold their common stock in nominee or "street" name through
brokerage firms.
THE MEETING
PLACE, DATE AND TIME
The meeting will be held in the Community Room of the offices of The
Cameron Savings & Loan Association, F.A. located at 1304 North Walnut Street,
Cameron, Missouri on January 12, 2001, commencing at 9:00 a.m., local time.
PURPOSE OF THE MEETING
The purpose of the meeting is to consider and vote on:
o the proposal to approve and adopt the merger agreement, the
merger and the other transactions contemplated by the merger
agreement; and
o the transaction of such other business as may properly come
before the meeting, including a proposal to adjourn or postpone
the meeting.
WHO CAN VOTE AT THE MEETING
You are entitled to vote your Cameron common stock if the records of
Cameron showed that you held your shares as of the close of business on November
16, 2000, which is the record date for the
12
<PAGE>
meeting. As of the close of business on that date, a total of 1,914,049 shares
of Cameron common stock were outstanding. Each share of common stock has one
vote.
ATTENDING THE MEETING
If you are a beneficial owner of common stock held by a broker, bank or
other nominee (commonly referred to as being held in "street" name), you will
need proof of ownership to be admitted to the meeting. A recent brokerage
statement or letter from a bank or broker are examples of proof of ownership. If
you want to vote your shares of common stock held in street name in person at
the meeting, you will have to get a written proxy in your name from the broker,
bank or other nominee who holds your shares.
VOTE REQUIRED
The meeting will be held if one-third of the outstanding shares of
common stock entitled to vote are represented at the meeting. If you return
valid proxy instructions or attend the meeting in person, your shares will be
counted for purposes of determining whether there is a quorum, even if you
abstain from voting. Broker non-votes also will be counted for purposes for
determining the existence of a quorum. A broker non-vote occurs when a broker,
bank or other nominee holding shares for a beneficial owner does not vote on a
particular proposal because the nominee does not have discretionary voting power
with respect to that item and has not received voting instructions from the
beneficial owner. Under applicable rules, brokers, banks and other nominees may
not exercise their voting discretion on the proposal to approve and adopt the
merger agreement and, for this reason, may not vote shares held for beneficial
owners without specific instructions from the beneficial owners.
The approval and adoption of the merger agreement will require the
affirmative vote of the holders of at least a majority of the outstanding shares
of common stock entitled to vote at the meeting. Failure to return a properly
executed proxy card or to vote in person will have the same effect as a vote
against the merger agreement. Abstentions and broker non-votes also will have
the same effect as a vote against the merger agreement.
The stockholders present at the meeting, in person or by proxy, may, by
a majority vote, vote to adjourn the meeting despite the absence of a quorum. If
a quorum is not obtained, or if fewer than a majority of shares of common stock
are voted in favor of approval and adoption of the merger agreement, it is
expected that the meeting will be adjourned to allow additional time for
obtaining additional proxies.
As of November 1, 2000, directors and executive officers of Cameron,
and persons closely associated with them, beneficially owned 132,609 shares of
Cameron common stock, not including shares that may be acquired upon the
exercise of stock options. This equals 6.93% of the outstanding shares of
Cameron common stock. As of the same date, Dickinson was the record owner of
22,000 shares of Cameron common stock, but none of Dickinson's directors and
executive officers was the record owner of any shares.
VOTING BY PROXY
This proxy statement is being sent to you by the board of directors of
Cameron for the purpose of requesting that you allow your shares of Cameron
common stock to be represented at the meeting by the persons named in the
enclosed proxy card. All shares of common stock represented at the meeting by
properly executed proxies will be voted in accordance with the instructions
indicated on the proxy card. If you sign and return a proxy card without giving
voting instructions, your shares will be voted as recommended by Cameron's board
of directors. The board recommends a vote "FOR" approval of the merger
agreement.
If any matters not described in this proxy statement are properly
presented at the meeting, the persons named in the proxy card will use their own
judgment to determine how to vote your shares. This includes a motion to adjourn
or postpone the meeting in order to solicit additional proxies. However, no
13
<PAGE>
proxy voted against the proposal to approve the merger agreement will be voted
in favor of an adjournment or postponement to solicit additional votes in favor
of the merger agreement. Cameron does not know of any other matters to be
presented at the meeting.
You may revoke your proxy at any time before the vote is taken at the
meeting. To revoke your proxy you must either notify the Secretary of Cameron in
writing before your common stock has been voted at the meeting, deliver later
proxy instructions, or attend the meeting and vote your shares in person.
Attendance at the meeting will not in itself constitute revocation of your
proxy.
If your Cameron common stock is held in street name, you will receive
instructions from your broker, bank or other nominee that you must follow in
order to have your shares voted. Your broker or bank may allow you to deliver
your voting instructions via the telephone or the Internet. Please see the
instruction form that accompanies this proxy statement.
Cameron will pay the cost of this proxy solicitation. In addition to
soliciting proxies by mail, directors, officers and employees of Cameron may
solicit proxies personally and by telephone. None of these persons will receive
additional or special compensation for soliciting proxies. Cameron will, upon
request, reimburse brokers, banks and other nominees for their expenses in
sending proxy materials to their customers who are beneficial owners and
obtaining their voting instructions.
PARTICIPANTS IN THE EMPLOYEE STOCK OWNERSHIP PLAN
If you participate in the Cameron Savings & Loan Association Employee
Stock Ownership Plan, the enclosed proxy card represents a voting instruction to
the trustee of the plan as to the number of shares in your plan account. Each
participant in the plan may direct the trustee as to the manner in which shares
of common stock allocated to the participant's plan account are to be voted.
Unallocated shares of common stock held by the plan and allocated shares for
which no voting instructions are received will be voted by the trustee in the
same proportion as shares for which the trustee has received voting
instructions, subject to the trustee's exercise of his fiduciary obligations.
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG LLP serves as Cameron's independent auditors. A representative of
KPMG is expected to be present at the meeting and will have an opportunity to
make a statement if he or she desires and will be available to respond to
appropriate questions.
OWNERSHIP OF CAMERON COMMON STOCK
The following table provides information as of November 1, 2000 with
respect to persons known to Cameron to be the beneficial owners of more than 5%
of Cameron's outstanding common stock. A person may be considered to own any
shares of common stock over which he or she has, directly or indirectly, sole or
shared voting or investing power.
<TABLE>
<CAPTION>
Number of Percent of Common
Name and Address Shares Owned(1) Stock Outstanding(1)
---------------- --------------- --------------------
<S> <C> <C>
The Cameron Savings & Loan Association, F.A. 208,692 10.90%
Employee Stock Ownership Plan
1304 North Walnut Street
Cameron, Missouri 64429 (2)
Wellington Management Company, LLP 148,500 7.76%
75 State Street
Boston, Massachusetts 02199-1807(3)
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Number of Percent of Common
Name and Address Shares Owned(1) Stock Outstanding(1)
---------------- --------------- --------------------
<S> <C> <C>
Dimensional Fund Advisors 108,300 5.66%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401(4)
Financial Edge Fund LP 114,500 5.98%
440 South LaSalle Street
One Financial Plaza, Suite 1021
Chicago, Illinois 60605(5)
All directors and executive officers as a group 201,668 10.17%
(9 persons) (6)
</TABLE>
--------------
(1) Beneficial ownership is determined in accordance with the rules of the
SEC which generally attribute beneficial ownership of securities to
persons who possess sole or shared voting power and/or investment power
with respect to those securities. Unless otherwise indicated, the
persons identified in this table have sole voting and investment power
with respect to all shares shown as beneficially owned by them.
Percentage ownership calculations are based on 1,914,049 shares of
common stock outstanding.
(2) The amount reported represents shares held by the Employee Stock
Ownership Plan, 143,669 of which have been allocated to accounts of
participants. First Bankers Trust of Quincy, Illinois, the trustee of
the Plan, may be deemed to beneficially own the shares held by the Plan
which have not been allocated to accounts of participants. Participants
in the Plan are entitled to instruct the trustee as to the voting of
shares allocated to their accounts under the Plan. Unallocated shares
held in the Plan's suspense account are voted by the trustee in the
same proportion as allocated shares voted by participants.
(3) As reported on Schedule 13G dated February 11, 2000.
(4) As reported on Schedule 13G dated February 3, 2000.
(5) As reported on Schedule 13D dated June 9, 2000.
(6) The amount reported includes shares held directly, as well as shares
held jointly with family members, shares held in retirement accounts,
shares held in a fiduciary capacity or by certain family members, with
respect to which shares the group members may be deemed to have sole or
shared voting and/or investment power. The amount reported includes
69,059 shares issuable upon the exercise of options granted under our
Stock Option Plan. The amount reported excludes options and awards
which do not vest within 60 days of November 1, 2000.
The following table provides information as of November 1, 2000 with
respect to shares of Cameron common stock that may be considered to be owned by:
o each director of Cameron,
o each executive officer of Cameron who either served as
Cameron's chief executive officer or who made in excess of
$100,000 (salary and bonus), in each case, during the fiscal
year ended September 30, 2000, and
o all directors and executive officers of Cameron as a group.
A person may be considered to own any shares of common stock over which he or
she has, directly or indirectly, sole or shared voting or investing power.
15
<PAGE>
<TABLE>
<CAPTION>
Percent of
Number of Common Stock
Name/Title Shares Owned(1) Outstanding(1)
------------------------------------------------ --------------- --------------
<S> <C> <C>
David G. Just, Director and former President and
Chief Executive Officer(2) 74,932 3.78%
William J. Heavner, Director 1,311 *
Harold D. Lee, Director(3) 20,350 1.03
Dennis E. Marshall, Director 1,300 *
Jon N. Crouch, Director(4) 32,589 1.64%
William F. Barker, Director(5) 13,380 *
Duane E. Kohlstaedt, President and Chief Executive
Officer(6) 1,777 *
All directors and executive officers
as a group (9 persons)(7) 201,668 10.17%
</TABLE>
-----------------------------
* Less than one percent.
(1) Unless otherwise indicated, the persons identified in this table have
sole voting and investment power with respect to all shares shown as
beneficially owned by them. Percentage ownership calculations are based
on 1,914,049 shares of common stock outstanding and the number of
shares issuable to such persons upon the exercise of outstanding stock
options.
(2) Mr. Just served as Cameron's Chief Executive Officer until March 1,
2000 and as Cameron's President until the October 13, 2000 date of his
retirement. The amount includes 200 shares held as custodian for family
members. Also includes 24,216 shares issuable upon the exercise of
options granted under our Stock Option Plan and 9,686 awards of shares
of restricted stock under our Recognition and Retention Plan.
(3) The amount includes 12,108 shares issuable upon the exercise of options
granted under our Stock Option Plan and 4,842 awards of shares of
restricted stock under our Recognition and Retention Plan.
(4) The amount includes 12,108 shares issuable upon the exercise of options
granted under our Stock Option Plan and 3,631 awards of shares of
restricted stock under our Recognition and Retention Plan.
(5) The amount includes 3,027 shares issuable upon the exercise of options
granted under our Stock Option Plan and 1,211 awards of shares of
restricted stock under our Recognition and Retention Plan.
(6) Mr. Kohlstaedt began serving as Cameron's Chief Executive Officer on
March 1, 2000 and as Cameron's President on October 14, 2000.
(7) The amount reported includes shares held directly, as well as shares
held jointly with family members, shares held in retirement accounts,
shares held in a fiduciary capacity or by certain family members, with
respect to which shares the group members may be deemed to have sole or
shared voting and/or investment power. The nine group members consist
of the seven persons identified in this table and two other executive
officers of Cameron. Of the 201,668 shares reported, 145,639 shares may
be deemed beneficially owned by the seven persons identified in this
table and the remaining 56,029 shares may be deemed beneficially owned
by the two other executive officers of Cameron. The amount reported
includes 69,059 shares issuable upon the exercise of options granted
under our Stock Option Plan. The amount reported excludes options and
awards which do not vest within 60 days of November 1, 2000.
16
<PAGE>
THE MERGER
The following discussion is qualified by reference to the merger
agreement which is attached as Appendix A to this proxy statement and
incorporated herein by reference. You are urged to read the merger agreement
carefully in its entirety. All information contained in this proxy statement
with respect to Dickinson and its subsidiaries has been supplied by Dickinson
for inclusion herein and has not been independently verified by Cameron.
THE PARTIES TO THE MERGER
Dickinson
Dickinson, a Missouri corporation, is headquartered in Kansas City,
Missouri and is the parent of Bank Midwest, N.A., a national bank, and DFC
Acquisition Corporation Four, a Delaware corporation. Bank Midwest operates 49
branch offices in northern Missouri and the Kansas City metropolitan area.
At September 30, 2000, Dickinson had consolidated assets of $2.67
billion, net loans receivable of $1.1 billion, deposits of $1.81 billion and
stockholders' equity of $238.57 million.
DFC Acquisition Corporation Four
DFC Acquisition Corporation Four, a Delaware corporation, is a wholly
owned subsidiary of Dickinson that was formed by Dickinson solely for the
purpose of effecting the merger with Cameron.
Cameron
Cameron, a Delaware corporation, is headquartered in Cameron, Missouri
and is the parent of Cameron Savings, a federally chartered savings and loan
association.
At September 30, 2000, Cameron had consolidated assets of $308.9
million, net loans of $261.9 million, deposits of $149.2 million and
stockholders' equity of $40.4 million.
Cameron Savings was organized in 1887. Cameron Savings serves
northwestern Missouri through its main office in Cameron, Missouri, and its
branch offices in the Missouri communities of Maryville, Mound City, and
Liberty.
OVERVIEW OF THE TRANSACTION
The board of directors of Cameron has unanimously approved the merger
agreement which provides that DFC Acquisition Corporation Four, a wholly-owned
subsidiary of Dickinson, will merge with and into Cameron. Immediately after
this merger, Cameron Savings will merge with and into Bank Midwest. At the
effective time of the merger, your shares of Cameron common stock will be
converted into the right to receive the cash payment described below. As a
result of these transactions, Cameron will be a wholly-owned subsidiary of
Dickinson and Cameron Savings will cease to exist. However, Dickinson has
advised that Bank Midwest intends to operate the offices of Cameron Savings as
branches of Bank Midwest, except that Bank Midwest intends to consolidate
Cameron Savings' Maryville, Missouri branch into Bank Midwest's main Maryville
branch. If the merger agreement is not adopted, Cameron and Dickinson will
continue as separate entities.
WHAT YOU WILL RECEIVE IN THE MERGER
Your shares of Cameron common stock will be converted into the right to
receive a cash payment of $20.75 per share, subject to adjustment as described
below. Upon completion of the merger you will no longer own any common stock or
have an interest in Cameron, nor will you receive, as a result of the merger,
any stock of Dickinson or Bank Midwest.
17
<PAGE>
The per share cash payment that Cameron stockholders would receive in
the merger for their shares of Cameron common stock will be subject to
adjustment in two circumstances:
o First, if the effective time of the merger occurs after
January 31, 2001, the per share cash payment will be increased
by an amount equal to $0.0035 times the number of days in the
period between January 31, 2001 and the effective time of the
merger, or Cameron's net income per share during that period,
whichever is less.
o Second, if Cameron's adjusted stockholders' equity, as defined
in the merger agreement, as of the close of business on the
last business day immediately prior to the effective time of
the merger is less than $40,000,000, the per share cash
payment will be reduced by an amount determined by subtracting
such adjusted stockholders' equity from $40,000,000 and then
dividing the result by 2,099,179.
SURRENDER OF CERTIFICATES
Within five business days after the completion of the merger, Dickinson
or an exchange agent designated by it, will mail to each stockholder a form of
transmittal letter with instructions on how to surrender certificates
representing shares of Cameron common stock for the cash merger consideration.
Please do not send in your Cameron stock certificates until you receive
the letter of transmittal and instructions from Dickinson or the exchange agent.
Do not return your stock certificates with the enclosed proxy.
After you mail the letter of transmittal and your Cameron stock
certificates in accordance with the instructions you will receive, a check in
the amount of cash that you are entitled to receive will be mailed to you. The
stock certificates you surrender will be canceled. You will not be entitled to
receive interest on any cash to be received in the merger.
In the event of a transfer of ownership of shares of common stock that
have not been registered in the transfer records of Cameron, a check for the
cash to be received in the merger may be issued to the person who holds such
shares of common stock if the certificate representing such shares of common
stock is presented to the exchange agent with documents that are sufficient in
the reasonable discretion of Dickinson and the exchange agent:
o to evidence and effect such transfer, and
o to evidence that all applicable stock transfer taxes have been
paid.
After the completion of the merger, there will be no further transfers of common
stock. Stock certificates presented for transfer after the completion of the
merger will be canceled and exchanged for the merger consideration.
If Dickinson retains an exchange agent for the merger, any portion of the cash
to be paid in the merger or the proceeds of any investments thereon that remains
unclaimed by the stockholders of Cameron for 12 months after the effective date
of the merger will be repaid by the exchange agent to Dickinson. If you have not
complied with the exchange procedures prior to 12 months after the merger, you
may only look to Dickinson for payment of the cash you are entitled to receive
in exchange for your shares of common stock and this payment will not include
any interest.
If your Cameron stock certificates have been lost, stolen or destroyed, you will
have to prove your ownership of these certificates and that they were lost,
stolen or destroyed before you receive any consideration for your shares.
Dickinson or the exchange agent will send you instructions on how to provide
evidence of ownership. You may be required to make an affidavit and post a bond
in an amount sufficient to protect Dickinson against claims related to your
common stock.
18
<PAGE>
TAXABLE TRANSACTION FOR CAMERON STOCKHOLDERS
The following is a discussion of the material federal income tax
consequences of the merger to certain holders of Cameron common stock. The
discussion is based upon the Internal Revenue Code (the "Code"), Treasury
Regulations, Internal Revenue Service rulings and judicial and administrative
decisions in effect as of the date of this proxy statement. This discussion
assumes that the common stock is generally held for investment. In addition,
this discussion does not address all of the tax consequences that may be
relevant to you in light of your particular circumstances or to Cameron
stockholders subject to special rules, such as foreign persons, financial
institutions, tax-exempt organizations, dealers in securities or foreign
currencies, insurance companies or employees who acquired the stock pursuant to
the exercise of employee stock options or other compensation arrangements.
The receipt of cash for Cameron common stock in connection with the
merger will be a taxable transaction for federal income tax purposes to
stockholders receiving such cash. You will recognize a gain or loss measured by
the difference between your tax basis for the common stock owned by you at the
time of the merger and the amount of cash you receive for your Cameron shares.
Your gain or loss will be a capital gain or loss if the common stock is a
capital asset to you. Under present law, long-term capital gain recognized by an
individual generally will be taxed at a maximum federal income tax rate of 20%.
The cash payments the holders of common stock will receive upon their
exchange of the common stock pursuant to the merger generally will be subject to
"backup withholding" for federal income tax purposes unless certain requirements
are met. Under federal law, the paying agent must withhold 31% of the cash
payments to holders of common stock to whom backup withholding applies. The
federal income tax withheld may be used by these persons to reduce their federal
income tax liability by the amount that is withheld. To avoid backup
withholding, a holder of common stock must provide the paying agent with his or
her taxpayer identification number and complete a form in which he or she
certifies that he or she has not been notified by the Internal Revenue Service
that he or she is subject to backup withholding as a result of a failure to
report interest and dividends. The taxpayer identification number of an
individual is his or her social security number.
Neither Dickinson nor Cameron has requested or will request a ruling
from the Internal Revenue Service as to any of the tax effects to Cameron's
stockholders of the transactions discussed in this proxy statement, and no
opinion of counsel has been or will be rendered to Cameron's stockholders with
respect to any of the tax effects of the merger to holders of common stock
The above summary of the material federal income tax consequences of
the merger is not intended as a substitute for careful tax planning on an
individual basis. In addition to the federal income tax consequences discussed
above, consummation of the merger may have significant state and local income
tax consequences that are not discussed in this proxy statement. Accordingly,
persons considering the merger are urged to consult their tax advisers with
specific reference to the effect of their own particular facts and circumstances
on the matters discussed in this proxy statement.
BACKGROUND OF THE MERGER
Effective March 31, 1995, Cameron became the holding company for
Cameron Savings upon its conversion from mutual form to stock ownership. As part
of the mutual-to-stock conversion, Cameron completed an initial public offering
of 3,026,928 shares of its common stock at $10.00 per share. The capital raised
exceeded Cameron's immediate needs and, after consideration of various
alternatives, Cameron decided to repurchase a portion of its stock. The first
stock repurchase program was announced during March 1996, and between March 1996
and April 2000, Cameron purchased 1,112,879 shares of its common stock,
representing more than 36% of the shares issued at conversion.
Since Cameron's inception, the board of directors has monitored the
rapid pace of consolidation in the financial services industry and the evolution
of the industry. On February 23, 2000, as part of its regular review of
Cameron's strategic alternatives, the Cameron board appointed a merger and
acquisition committee, with directors David G. Just, H. Dean Lee and William F.
Barker charged with the initial
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<PAGE>
responsibility of seeking the assistance of a financial adviser. At three
separate meetings during March, 2000, the Cameron board heard presentations from
three firms and on April 13, 2000 elected to engage William Blair & Company for
consulting and strategic planning advice.
On May 25, 2000, the merger and acquisition committee met with
representatives of Blair to review the strategic alternatives available. The
committee reviewed the alternatives with Cameron's board on May 30, 2000 and
recommended that the scope of the strategic alternatives should be initially
focused on a business combination with a larger financial institution. Cameron's
board, after careful review of the alternatives, authorized Blair to pursue a
strategic business combination for Cameron. As part of this process, the board
also authorized Blair to prepare a list of financial institutions to be
contacted to determine their interest in a possible business combination.
On June 29, 2000, the merger and acquisition committee met with
representatives of Blair to review the forms of a confidentiality and standstill
agreement and confidential descriptive memorandum to be provided to prospective
strategic merger partners. The committee also reviewed the list of financial
institutions to be contacted. On June 30, 2000, the committee recommended that
the board approve the confidentiality and standstill agreement, the confidential
descriptive memorandum, and the list of institutions to be contacted. The board
approved the documents and authorized Blair to proceed with contacting and
negotiating with potential strategic merger partners on behalf of Cameron.
Blair approached 22 institutions that it and Cameron considered to be
potential merger partners, including Dickinson. Several of those companies
including Dickinson, expressed an interest in a possible business combination
with Cameron. After further discussions with Blair and review of information
regarding Cameron, two of the companies stated a price range at which they would
be interested in acquiring Cameron, subject to satisfactory completion of a due
diligence review of Cameron's operations. Between August 2 and August 18, 2000,
the two financial institutions completed on-site due diligence. On August 24,
2000, Blair submitted final proposal instructions and copies of the proposed
definitive agreement to each of the parties that had conducted due diligence.
Blair representatives held discussions with each of the interested institutions
for the purpose of refining their offers and ascertaining whether a transaction
would be possible.
At a meeting of the Cameron board on September 18, 2000, Blair reviewed
with the board the process that had been conducted to identify and contact
potential merger partners and the results of discussions with the interested
parties. Blair reviewed with the Cameron board in detail the two expressions of
interest. The Cameron board concluded that the expression of interest by
Dickinson was more attractive, as Dickinson offered the highest value to Cameron
stockholders and appeared to be best positioned to complete the transaction. In
further deliberations, Stinson, Mag & Fizzell, P.C, as legal counsel for
Cameron, reviewed with the board its fiduciary duties to stockholders. Blair
also presented its analysis and stated it was prepared to deliver, upon
execution of a definitive merger agreement, a written opinion that the merger
consideration offered by Dickinson was fair, from a financial point of view, to
the stockholders of Cameron.
After discussing the terms of the proposal and the presentation by
Blair, the Cameron board determined that pursuing a transaction with Dickinson
on the terms proposed would be in the best interests of Cameron's stockholders.
The board then authorized its representatives to enter into discussions with
Dickinson for the purpose of negotiating a definitive merger agreement.
Following the September 18, 2000 board meeting, Cameron's legal counsel
and Dickinson negotiated the terms of the merger agreement. Over the next few
weeks, representatives of Cameron conducted a limited due diligence review of
Dickinson, and Dickinson completed its due diligence review of Cameron. The
parties worked to refine the pricing of the transaction. During this period, the
progress of the negotiations was reported to the members of the Cameron board by
the merger and acquisition committee.
A final draft of the merger agreement was provided to the Cameron board
on October 5, 2000. The Cameron board met with legal counsel to review the
contents of the merger agreement. Legal counsel
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<PAGE>
also reviewed with the board the course of negotiations and the results of due
diligence and presented a summary of the board's fiduciary duties in the context
of a sale of control of Cameron. After conclusion of the review and discussion,
a vote was taken and the Cameron board unanimously approved the merger agreement
and authorized Chairman Jon N. Crouch to execute the merger agreement and
related documents on behalf of Cameron.
CAMERON'S REASONS FOR THE MERGER AND RECOMMENDATION OF THE BOARD OF DIRECTORS
Cameron's board of directors unanimously approved the merger agreement
and recommends that Cameron stockholders vote "FOR" the approval of the merger
agreement. Cameron's board has determined that the merger and the merger
agreement are advisable and are fair to, and in the best interests of, Cameron
and its stockholders. In reaching this determination, the Cameron board
consulted with legal counsel as to its legal duties and the terms of the merger
agreement and with its financial adviser with respect to the financial aspects
and fairness of the transaction consideration. In arriving at its determination,
the Cameron board also considered a number of factors including, but not limited
to, the following, which include all material factors considered by the Cameron
board: o The results of the contacts and discussions between Cameron and Blair
and various third parties and the belief of the Cameron board that the merger
with Dickinson offered the best transaction available to Cameron and its
stockholders;
o Information concerning the businesses, earnings, operations,
financial condition and prospects of Cameron and Dickinson,
both individually and as combined;
o The financial advice rendered by Blair, as financial adviser
to Cameron, that the merger consideration is fair, from a
financial standpoint, to the Cameron stockholders (See
"Opinion of Our Financial Adviser" below);
o The terms of the merger agreement, including the taxable
nature of the cash to be paid to Cameron stockholders;
o The historical trading prices for Cameron common stock;
o The current and prospective economic, competitive and
regulatory environment facing Cameron, Dickinson and the
financial services industry;
o The results of the due diligence investigations of Dickinson,
including an assessment of Dickinson's ability to pay the
aggregate merger consideration and the likelihood of the
merger being approved by regulatory authorities; and
o Cameron's strategic alternatives to the merger, including the
continued operation of Cameron Savings as an independent
financial institution.
In reaching its determination to approve and recommend the merger, the Cameron
board did not assign any specific or relative weights to any of the foregoing
factors, and individual directors may have weighed factors differently.
OPINION OF OUR FINANCIAL ADVISER
William Blair & Company, L. L. C. has acted as financial adviser to
Cameron in connection with the merger. Cameron selected Blair based on its
experience, expertise, and familiarity with Cameron and its business. Blair has
been engaged in the investment-banking business since 1935 and continually
undertakes the valuation of investment securities in connection with public
offerings, private placements, business combinations, estate and gift tax
valuations, and similar transactions.
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<PAGE>
In connection with Blair's engagement, Cameron asked Blair to evaluate
the fairness of the merger consideration to Cameron's stockholders from a
financial point of view. At the September 18, 2000 meeting of the Cameron board
to evaluate the financial aspects of the merger, Blair orally informed the
Cameron board that Blair was prepared to deliver a written opinion as to the
fairness from a financial point of view of the merger consideration upon
execution of the merger agreement. On October 6, 2000, the date of the merger
agreement, Blair delivered its written opinion to the Cameron board that, as of
October 6, 2000, and based upon and subject to various matters set forth in its
opinion, the merger consideration was fair to Cameron's stockholders from a
financial point of view.
Cameron did not impose any limitations upon the scope of investigation
or procedures followed by Blair in connection with its opinion, nor did Cameron
give Blair any specific instructions in connection with its opinion. The merger
consideration was determined through arm's-length negotiations between Cameron
and Dickinson, although Blair advised Cameron during the merger negotiations.
We have attached Blair's opinion as Appendix B to this proxy statement
and incorporate it into this proxy statement by reference. You should read
Blair's opinion completely, along with the summary of the opinion set forth in
this proxy statement, to understand the assumptions made, procedures followed,
matters considered, and limitations of the review undertaken by Blair in
providing its opinion. Blair has given its consent to our use of its opinion as
an appendix to this proxy statement and to our references to Blair in the
summary of the opinion set forth in this proxy statement.
Blair's opinion was provided for the use and benefit of Cameron's board
of directors and addresses only the fairness of the merger consideration to
holders of Cameron common stock from a financial point of view. Blair's opinion
does not address the merits of Cameron's underlying decision to engage in the
merger nor does it constitute a recommendation to any stockholder as to how such
stockholder should vote with respect to the proposed merger. The summary of
Blair's opinion in this proxy statement is qualified in its entirety by
reference to the full text of the opinion.
In arriving at its opinion, Blair, among other things:
o Reviewed certain of Cameron's publicly available financial
information as well as certain of Cameron's internal
management reports;
o Reviewed certain other publicly available information on each
of Cameron and Dickinson;
o Reviewed Cameron's management-prepared financial forecasts for
fiscal years 2000 and 2001;
o Discussed Cameron's historical and prospective business,
financial position, and financial performance with Cameron's
senior management;
o Reviewed historical market prices and trading activity in
Cameron common stock and compared the merger consideration to
selected historical market prices of Cameron common stock;
o Compared a recent market price for Cameron common stock and
the merger consideration to selected market pricing multiples
and ratios of certain other publicly traded companies Blair
deemed relevant;
o Performed discounted cash flow analyses of Cameron's common
stock on "stand-alone" and "control" bases and compared the
merger consideration to the imputed values yielded by these
analyses;
o Compared the merger consideration with the financial terms, to
the extent publicly available, of certain other
merger-and-acquisition transactions that Blair deemed
relevant;
o Participated in discussions and negotiations among
representatives of Cameron and Dickinson and their respective
advisers; and
o Reviewed the merger agreement and certain related documents.
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<PAGE>
In connection with its engagement, and at the request of the Cameron
board, Blair approached and held discussions with certain third parties to
solicit indications of interest in a possible transaction with Cameron. In
arriving at its opinion, Blair considered the nature, extent, and results of
these efforts on Cameron's behalf.
In rendering its opinion, Blair assumed and relied, without independent
verification, upon the accuracy and completeness of all the information examined
by or otherwise reviewed or discussed with Blair for purposes of its opinion
including without limitation the financial forecasts provided by Cameron's
senior management. Blair did not make or obtain an independent valuation or
appraisal of the assets, liabilities, or solvency of Cameron or Dickinson.
The following is a summary of the material financial analyses Blair
employed and summarized for the Cameron board in connection with the board's
September 18, 2000 evaluation of the financial aspects of the merger and Blair's
opinion. In the following analyses, for comparison purposes Blair
interchangeably uses the aggregate cash merger consideration of $40.9 million
and the cash merger consideration per fully diluted common share of $20.75, in
each case reflecting the effect of Cameron's issued and outstanding stock
options. Stock Trading History
Blair compared the merger consideration to Cameron's recent stock price
and related 52-week trading range. This examination showed that the $20.75 per
share cash merger consideration to be paid in the proposed merger was a 16.90%
premium over Cameron's closing market price per share of $17.75 on September 13,
2000. Blair presented a graph which showed that over the prior year, Cameron
common stock ranged in price from a low of $10.50 to a high of $18.50 per share,
noting that the proposed merger consideration was 97.62% and 12.16% above these
52-week low and high trading prices, respectively.
Blair noted in the stock price graph a significant increase in
Cameron's share price beginning in June 2000 and then examined the total-return
performance of Cameron common stock versus that of the Standard & Poor's 500
Index, the Standard & Poor's Small Cap Banks Index, and an index of the selected
comparable thrifts ("Comparable Index") identified in the "Comparable
Market-Value Analysis" described below, in each case over the three-year period
ended September 12, 2000. This graphical presentation also showed the marked
increase in Cameron's stock price beginning in June 2000. The graph showed that
over the three-year period, Cameron common stock underperformed relative to the
S&P Small Cap Banks Index by 6.5% (not annualized) and outperformed relative to
the Comparable Index by 15.8% (not annualized). Illustrating the unusually large
price increase in Cameron common stock beginning in June 2000, Blair noted that
Cameron's common stock underperformed the Comparable Index by over 12 percentage
points (not annualized) prior to May 31, 2000 and outperformed the Comparable
Index by over 40 percentage points (not annualized) subsequent to May 31, 2000.
Blair observed that the more-recent outperformance occurred during the time
period when two institutional investors were announcing or accumulating
positions in Cameron common stock in excess of 5% of Cameron's common stock
outstanding.
Comparable Market-Value Analysis
Blair compared selected pricing multiples and ratios implied by
Cameron's recent stock price and the merger consideration to corresponding
current trading-market multiples and ratios of comparable companies Blair deemed
relevant to Cameron.
Blair selected publicly traded thrift holding companies according to
the following criteria:
o Geographic emphasis on companies operating in Missouri and
rural, near-metropolitan, Midwestern markets;
o Market capitalization generally between $15 million and $50
million;
o Total assets generally between $150 million and $350 million;
and
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<PAGE>
o Excluding companies sufficiently large to be an acquirer of
Cameron and targets of pending merger-and-acquisition
transactions.
The table below lists the selected comparable companies.
<TABLE>
<CAPTION>
<S> <C>
CBES Bancorp, Inc., Excelsior Springs, MO LSB Financial Corp., Lafayette, IN
Citizens First Financial Corp., Bloomington, IL MFB Corp., Mishawaka, IN
First Bancshares, Inc., Mountain Grove, MO Northeast Indiana Bancorp, Huntington, IN
First Federal Bancorp, Zanesville, OH Pulaski Financial Corp., St. Louis, MO
North Central Bancshares Inc., Ft. Dodge, IA Southern Missouri Bancorp, Inc., Poplar Bluff, MO
FFW Corp., Wabash, IN Wells Financial Corp., Wells, MN
Guaranty Federal Bancshares, Inc., Springfield, MO Western Ohio Financial Corp., Springfield, OH
Landmark Bancshares, Dodge City, KS
</TABLE>
Blair calculated and presented the selected market pricing multiples
and ratios summarized below using market price data as of September 13, 2000,
and financial data as of the then-most-recently available financial statement
date, and for the twelve-month period then ended.
<TABLE>
<CAPTION>
Cameron Comparable Market Range Cameron
Current ----------------------------------- Merger
Stock Price Low Median High Consideration
------------------------------------------------- ---------------
Multiple of market price to:
<S> <C> <C> <C> <C> <C>
Reported earnings 16.0x 8.0x 9.7x 17.1x 19.4x
Tangible core earnings 16.1 7.5 9.7 15.8 19.4
Current-year estimated earnings 18.1 6.2 10.9 19.0 17.9
Capital-equivalent tangible core earnings 10.9 4.8 7.5 10.7 16.5
Ratio of market price to:
Book value 85.3% 69.5% 79.0% 93.0% 102.7%
Tangible book value 85.3 69.5 83.0 105.3 102.7
Capital-equivalent tangible book value 70.0 43.4 70.1 108.6 105.5
</TABLE>
In the preceding analysis, "tangible core earnings" excludes
intangible-asset amortization expense and non-recurring income and expense
items. "Estimated earnings" are those prepared by securities analysts following
each company. "Capital-equivalent" figures include adjustments to price,
tangible core earnings (based on an assumed earnings rate), and tangible book
value, in each case for the "excess" capital of each company relative to a 7%
tangible equity-to-assets ratio.
Stand-Alone Discounted Cash Flow Analysis
Blair compared the merger consideration to the imputed values yielded
by a discounted cash flow ("DCF") analysis Blair performed of Cameron on a
"stand-alone" basis, assuming Cameron would continue to operate as an
independent, publicly traded company. In preparing the DCF analysis, Blair
studied Cameron's historical and present earnings and growth patterns and then
projected income statements and balance sheets for a five-year period using a
series of assumptions pertaining to growth, interest margins, loan losses,
non-interest income and expenses, income taxes, and cash dividends. Blair also
assumed Cameron would repurchase 5% of its beginning common shares outstanding
each year over the projected five-year period. Prior to completion, Blair
reviewed and discussed the financial projections and underlying assumptions with
Cameron's management. To estimate projected net cash flows, Blair adjusted
projected earnings for certain non-cash expense items such as loan loss
provisions and certain stock-related benefit plans. Blair calculated the
terminal value (the value of cash flows following the five-year
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<PAGE>
projection period) based upon a growth-adjusted perpetuity of the fifth
projected year's estimated net cash flow. To estimate the present value of the
five years' estimated net cash flows and terminal value, Blair used a discount
rate of 13.5%. The DCF analysis, which Blair tested over a range of balance
sheet growth, net interest spread, loan-loss provision, discount rate, and
stock-repurchase assumptions, yielded imputed values for Cameron common stock
ranging from $14.21 to $19.11 per share with a midpoint of $16.43 per share,
compared to merger consideration of $20.75 per share.
Comparable Transactions Analysis
Blair compared selected pricing multiples and ratios implied by the
merger consideration to corresponding merger-and-acquisition pricing multiples
and ratios observed in transactions Blair deemed relevant to the merger.
Blair selected thrift-industry merger-and-acquisition transactions
according to the following criteria:
o Transactions announced in calendar years 1999 and 2000;
o Geographic emphasis on selling companies operating in Missouri
and other Midwestern markets;
o Total assets of seller generally between $100 million and $500
million; and
o Excluding "merger-of-equals" transactions.
The table below lists the selected comparable transactions.
<TABLE>
<CAPTION>
Buyer Seller
<S> <C>
Allegiant Bancorp, Inc., St. Louis, MO Equality Bancorp, Inc., St. Louis, MO
Old Kent Financial Corp., Grand Rapids, MI Home Bancorp, Fort Wayne, IN
Southern Michigan Bancorp Inc., Coldwater, MI Sturgis Bank & Trust Company, Sturgis, MI
BancFirst Ohio Corp., Zanesville, OH Milton Federal Financial Corp., West Milton, OH
Bank of Kentucky Financial Corp., Florence, KY Fort Thomas Financial Corp., Fort Thomas, KY
First Place Financial Corp., Warren, OH Ravenna Savings Bank, Ravenna, OH
Exchange National Bancshares Inc., Jefferson City, MO CNS Bancorp Inc., Jefferson City, MO
Peoples Building Loan & Savings Co., Lebanon, OH Harvest Home Financial Corp., Cheviot, OH
Camco Financial Corporation, Cambridge, OH Westwood Homestead Fin. Corp., Cincinnati, OH
Provident Financial Group Inc., Cincinnati, OH OHSL Financial Corp., Cincinnati, OH
North Central Bancorp, Norfolk, NE Columbus Financial Corporation, Columbus, NE
First Busey Corporation, Urbana, IL Eagle BancGroup, Inc., Bloomington, IL
Central Bancompany, Jefferson City, MO Fulton Bancorp Inc., Fulton, MO
Citizens Bancshares Company, Chillicothe, MO
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Buyer Seller
<S> <C>
Citizens Bancshares Company, Chillicothe, MO MBLA Financial Corp., Macon, MO
Oak Hill Financial Inc., Jackson, OH Towne Financial Corporation, Blue Ash, OH
Mahaska Investment Company, Oskaloosa, IA Midwest Bancshares, Inc., Burlington, IA
</TABLE>
Blair calculated and presented the selected pricing multiples and
ratios summarized below using financial data for Cameron and each acquired
company as of the most-recent financial-statement date available at the time the
transaction was announced, and for the twelve-month period then ended. Blair
used merger-and-acquisition transaction prices and related multiples and ratios
as of the respective announcement dates for each of the comparable transactions.
<TABLE>
<CAPTION>
Cameron
Comparable Transaction Range Merger
Low Median High Consideration
------- --------- -------- -------------
Multiple of transaction price to:
<S> <C> <C> <C> <C>
Reported earnings 12.9x 20.1x 31.0x 19.4x
Recurring earnings 15.8 25.9 35.5 19.4
Ratio of transaction price to:
Book value 104.1% 135.1% 202.2% 102.7%
Tangible book value 104.1 140.7 202.2 102.7
Capital-equivalent tangible book value 105.2 175.7 258.4 105.5
Transaction price premium over/(under)
market price:
One day before announcement 3.81% 26.89% 60.68% 16.90%
One month before announcement 22.27 32.84 51.49 18.57
Three months before announcement 13.77 32.06 68.51 45.61
One year before announcement (28.75) 9.29 42.86 46.95
</TABLE>
In the preceding analysis, "Capital-equivalent" figures include
adjustments to price and tangible book value, in each case for the "excess"
capital of each company relative to a 7% tangible equity-to-assets ratio.
Blair also compared the merger consideration to the imputed values
yielded by a DCF analysis of Cameron on a "control" basis, assuming certain
operational changes a hypothetical potential acquirer could undertake to improve
Cameron's financial performance. In this analysis, Blair employed the same
series of operating and discount-rate assumptions as for the "stand-alone" DCF
analysis outlined above, except that on a "control" basis a hypothetical
potential acquirer would: (i) reduce Cameron's "excess" capital to finance a
portion of a potential purchase price by liquidating certain earning assets;
(ii) reduce general and administrative expenses significantly over a two-year
period, and (iii) eliminate Cameron's stock-related benefits plans thereby
further reducing non-interest expenses. Blair assumed that reducing "excess"
capital would serve to increase the overall yield on the remaining earning
assets. As a transaction with Cameron would likely require an acquirer to employ
purchase accounting, Blair assumed that any resulting intangible assets
(including "goodwill") and related amortization would not affect: (i) an
acquirer's view of value or (ii) its ability to achieve regulatory approval of a
transaction. Blair noted the importance of the foregoing assumptions in light
of: (i) a perceived stock-market bias against the effects of purchase accounting
which could influence the decisions of publicly traded potential acquirers, and
(ii) the negative effect of purchase accounting on certain measures of capital
on which potential acquirers are regulated. The "control" DCF analysis, which
Blair tested over a range of balance sheet growth, net interest spread,
loan-loss provision, cost savings, and discount rate assumptions, yielded
imputed values for Cameron common stock ranging from $20.33 to $22.92 per share
with a midpoint of $21.50 per share, compared to merger consideration of $20.75
per share.
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<PAGE>
General
The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. Selecting
portions of the analyses or of the summary set forth above, without considering
the analyses as a whole, could create an incomplete view of the process
underlying Blair's opinion. In arriving at its fairness determination, Blair
considered the results of all such analyses. No company or transaction used in
the above analyses as a comparison is identical to Cameron or the merger. The
analyses were prepared solely for the purposes of Blair's opinion provided to
Cameron's board as to the fairness from a financial point of view of the merger
consideration to be received by the stockholders of Cameron pursuant to the
merger and do not purport to be appraisals or necessarily reflect the prices at
which businesses or securities actually may be sold. Analyses based upon
projections of future results are not necessarily indicative of actual future
results, which may be significantly more or less favorable than suggested by
such analyses. Because such analyses are inherently subject to uncertainty,
being based upon numerous factors or events beyond the control of the parties or
Blair, none of Cameron, Blair, or any other person assumes responsibility if
future results are materially different from those projected.
Blair's Engagements
Cameron retained Blair by an engagement letter agreement dated April
13, 2000 to render certain limited investment-banking services in connection
with Cameron's review of financial and strategic alternatives to maximize
long-term value for Cameron's stockholders. In connection with this engagement,
Cameron paid Blair a cash fee of $25,000, agreed to reimburse Blair's
out-of-pocket expenses, and agreed to indemnify Blair against certain
liabilities, including liabilities under securities laws.
Cameron retained Blair by engagement letter agreement dated May 30,
2000 to render certain investment-banking services in connection with a possible
business combination of Cameron with another party or a recapitalization of
Cameron or similar restructuring. In connection with this engagement, Cameron
paid Blair a cash fairness opinion fee of $100,000 and upon closing of the
merger will pay Blair a cash completion fee equal to 1.0% of transaction
consideration (as defined in the engagement letter), reduced by the fairness
opinion fee previously paid. Further, in the engagement letter Cameron agreed to
reimburse Blair for its out-of-pocket expenses reasonably incurred in connection
with its engagement and to indemnify Blair against certain liabilities,
including liabilities under securities laws.
DISSENTERS' APPRAISAL RIGHTS
Under Delaware law, if you do not wish to accept the cash payment
provided for in the merger agreement, you have the right to dissent from the
merger and to have an appraisal of the fair value of your shares conducted by
the Delaware Court of Chancery. Cameron stockholders electing to exercise
dissenters' appraisal rights must comply with the provisions of Section 262 of
the Delaware General Corporation Law in order to perfect their rights. Cameron
will require strict compliance with the statutory procedures. A copy of Section
262 is attached as Appendix C.
The following discussion is intended as a summary of the material
provisions of the Delaware statutory procedures required to be followed by a
Cameron stockholder in order to dissent from the merger and perfect dissenters'
appraisal rights. This summary, however, is not a complete statement of all
applicable requirements and is qualified in its entirety by reference to Section
262 of the Delaware General Corporation Law, the full text of which appears in
Appendix C of this proxy statement.
Section 262 requires that stockholders be notified at least 20 days
before the date of the meeting to vote on the merger for which dissenters'
appraisal rights will be available. A copy of Section 262 must be included with
that notice. This proxy statement constitutes Cameron's notice to its
stockholders of the availability of dissenters' appraisal rights in connection
with the merger in compliance with the requirements of Section 262. If you wish
to consider exercising your dissenters' appraisal rights you should carefully
review the text of Section 262 contained in Appendix C because if you do not
timely and properly comply with the requirements of Section 262, you will lose
your rights under Delaware law.
27
<PAGE>
If you elect to demand appraisal of your shares of Cameron common
stock, you must satisfy both of the following conditions:
1. You must deliver to Cameron a written demand for appraisal of
your shares of common stock before the vote with respect to
the merger is taken. This written demand for appraisal must be
in addition to and separate from any proxy or vote abstaining
from or against the merger. Voting against or failing to vote
for the merger by itself does not constitute a demand for
appraisal within the meaning of Section 262.
2. You must not vote in favor of the merger. An abstention or
failure to vote will satisfy this requirement, but a vote in
favor of the merger, by proxy or in person, will constitute a
waiver of your dissenters' appraisal rights in respect of the
shares of common stock so voted and will nullify any
previously filed written demands for appraisal.
If you fail to comply with either of these conditions and the merger is
completed, you will be entitled to receive the cash payment for your shares of
common stock as provided for in the merger agreement but will have no
dissenters' appraisal rights with respect to your shares of Cameron common
stock.
All demands for appraisal must reasonably inform Cameron of the
identity of the stockholder and the intention of the stockholder to demand
appraisal of his or her shares of common stock. The demand should be executed
by, or on behalf of, the record holder of the shares of common stock and must be
delivered to the following address prior to the time that the vote on the merger
is taken at the meeting:
Corporate Secretary
Cameron Financial Corporation
1304 North Walnut Street
Cameron, Missouri 64429
To be effective, a demand for appraisal by a holder of common stock
must be made by or in the name of such registered stockholder, fully and
correctly, as the stockholder's name appears on his or her stock certificate(s)
and cannot be made by the beneficial owner if he or she does not also hold the
shares of record. The beneficial holder must, in such cases, have the registered
owner submit the required demand in respect of such shares.
If shares of common stock are owned of record in a fiduciary capacity,
such as by a trustee, guardian or custodian, execution of a demand for appraisal
should be made in that capacity; and if the shares of common stock are owned of
record by more than one person, as in a joint tenancy or tenancy in common, the
demand should be executed by or for all joint owners. An authorized agent,
including one for two or more joint owners, may execute the demand for appraisal
for a stockholder of record; however, the agent must identify the record owner
or owners and expressly disclose the fact that, in executing the demand, he or
she is acting as agent for the record owner. A record owner, such as a broker,
who holds shares of common stock as a nominee for others, may exercise his or
her right of appraisal with respect to the shares of common stock held for one
or more beneficial owners, while not exercising this right for other beneficial
owners. In that case, the written demand should state the number of shares of
common stock as to which appraisal is sought. Where no number of shares of
common stock is expressly mentioned, the demand will be presumed to cover all
shares of common stock held in the name of such record owner.
If you hold your shares of common stock in a brokerage account or in
other nominee form and you wish to exercise appraisal rights, you should consult
with your broker or other nominee to determine the appropriate procedures for
the making of a demand for appraisal by such nominee. Similarly, if you
participate in the Cameron Savings & Loan Association Employee Stock Ownership
Plan and you wish to exercise appraisal rights, you should consult with the
trustee of the Stock Ownership Plan to determine the appropriate procedures for
the making of a demand for appraisal.
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<PAGE>
Section 262 provides that within 10 days after the effective date of
the merger, Dickinson must give written notice that the merger has become
effective to each Cameron stockholder who has properly filed a written demand
for appraisal and who did not vote in favor of the merger. Within 120 days after
the effective date of the merger, either Dickinson or any stockholder who has
complied with the requirements of Section 262 may file a petition in the
Delaware Court of Chancery demanding a determination of the fair value of the
shares held by all stockholders entitled to appraisal. Dickinson has advised us
that it does not presently intend to file such a petition in the event there are
dissenting stockholders and has no obligation to do so. Accordingly, your
failure to file such a petition within the period specified could nullify your
previously written demand for appraisal.
At any time within 60 days after the effective date of the merger, any
stockholder who has demanded an appraisal has the right to withdraw the demand
and to accept the cash payment specified by the merger agreement for his or her
shares of Cameron common stock. If a petition for appraisal is duly filed by a
stockholder and a copy of the petition is delivered to Dickinson, Dickinson will
be obligated within 20 days after receiving service of a copy of the petition to
provide the Chancery Court with a duly verified list containing the names and
addresses of all stockholders who have demanded an appraisal of their shares of
common stock. After notice to dissenting stockholders, the Chancery Court is
empowered to conduct a hearing upon the petition, to determine those
stockholders who have complied with Section 262 and who have become entitled to
the appraisal rights. The Chancery Court may require the stockholders who have
demanded payment for their shares to submit their stock certificates to the
Register in Chancery for notation on them of the pendency of the appraisal
proceedings; and if any stockholder fails to comply with this direction, the
Court may dismiss the proceedings as to such stockholder.
After determination of the stockholders entitled to appraisal of their
shares of Cameron common stock, the Chancery Court will appraise the shares,
determining their fair value exclusive of any element of value arising from the
accomplishment or expectation of the merger, together with a fair rate of
interest. When the value is determined, the Chancery Court will direct the
payment of this fair value, with interest accrued during the pendency of the
proceeding if the Chancery Court so determines, to the stockholders entitled to
receive the same, upon surrender by such holders of the certificates
representing such shares.
In determining fair value, the Chancery Court is required to take into
account all relevant factors. You should be aware that the fair value of the
shares of common stock as determined under Section 262 could be more, the same,
or less than the value that you are entitled to receive pursuant to the merger
agreement.
Costs of the appraisal proceeding may be imposed upon Dickinson and the
stockholders participating in the appraisal proceeding by the Chancery Court as
the Chancery Court deems equitable in the circumstances. Upon the application of
a stockholder, the Chancery Court may order all or a portion of the expenses
incurred by any stockholder in connection with the appraisal proceeding,
including, without limitation, reasonable attorneys' fees and the fees and
expenses of experts, to be charged pro rata against the value of all shares of
common stock entitled to appraisal.
After the effective date of the merger, any stockholder who demands
appraisal rights will not be entitled to vote shares of common stock subject to
such demand for any purpose or to receive payments of dividends or any other
distribution with respect to such shares of common stock, other than with
respect to payment as of a record date prior to the effective date of the
merger; however, if no petition for appraisal is filed within 120 days after the
effective date of the merger, or if such stockholder delivers a written
withdrawal of his or her demand for appraisal and an acceptance of the merger
within 60 days after the effective date of the merger, then the right of such
stockholder to appraisal will cease and such stockholder will be entitled to
receive the cash payment for shares of his or her common stock pursuant to the
merger agreement. Any withdrawal of a demand for appraisal made more than 60
days after the effective date of the merger may only be made with the written
approval of Dickinson and must, to be effective, be made within 120 days after
the effective date of the merger.
The requirements of Section 262 are technical and complex. Cameron
stockholders who may wish to dissent from the merger and pursue appraisal rights
should consult their legal advisers.
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<PAGE>
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Some of Cameron's directors and officers may have interests in the
merger that are in addition to, or different from, the interests of
stockholders. Cameron's board of directors was aware of these interests and
considered them in approving the merger agreement. Stock Ownership
Stock Ownership
The directors and executive officers of Cameron, together with their
affiliates, beneficially owned a total of 201,668 shares of common stock
(representing 10.17% of all outstanding shares of the common stock) as of
November 1, 2000. An additional 19,819 shares of unvested restricted stock had
been awarded to directors and executive officers as of that date. The directors
and executive officers will receive the same consideration in the merger for
their shares, including the unvested restricted stock, as the other Cameron
stockholders.
Payment for Restricted Stock
The directors and some officers of Cameron hold shares of restricted
stock that were granted to them under Cameron's recognition and retention plan.
Shares held under the plan are issued in the names of the persons to whom the
shares have been granted, but the plan restricts their ability to vote or
transfer the shares or to receive dividends until the shares are fully vested,
which occurs over a five year period from the date of grant. Except as
restricted by the plan, the holders have full rights of ownership. The merger
agreement provides that all shares of Cameron stock, including unvested
restricted stock, will receive the full merger consideration. Thus, entering
into a merger transaction at this time will confer upon the holders of
restricted stock the full benefits of ownership prior to the dates on which the
shares would otherwise become vested.
As of November 1, 2000, the directors and officers of Cameron had been
awarded a total of 19,819 shares of restricted stock that had not yet vested. Of
these shares of restricted stock, 10,160 shares would vest in January, 2001 if
the merger were not to occur. The following table reflects the number of
unvested shares of restricted stock awarded to each director and named officer
who has been awarded restricted stock and the value of the merger consideration
that each will receive in exchange for their shares, assuming a merger
consideration value of $20.75 per share.
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<PAGE>
<TABLE>
<CAPTION>
Total Merger
Number of Consideration Value
Unvested Shares for Unvested Shares
Name and Title of Restricted Stock of Restricted Stock
-------------- ------------------- -------------------
David G. Just, Director and former President and
<S> <C> <C>
Chief Executive Officer 2,421(1) $50,236
William J. Heavner, Director 7,534(2) $156,331
Harold D. Lee, Director 1,211(1) $25,128
Dennis E. Marshall, Director -- --
Jon N. Crouch, Director 1,211(1) $25,128
William F. Barker, Director 4,842(3) $100,472
Duane Kohlstaedt, President and Chief
Executive Officer -- --
All directors and executive officers
as a group (9 persons) 19,819(4) $411,245
</TABLE>
------------------
(1) All shares are scheduled to vest on January 29, 2001.
(2) 1,507 shares are scheduled to vest on January 24, 2001 and on each
January 24 thereafter through January 24, 2005.
(3) 1,210 shares are scheduled to vest on January 25, 2001 and on each
January 25 thereafter through January 25, 2004.
(4) 7,560 shares are scheduled to vest in January 2001 and the remaining
shares are scheduled to vest between that date and January 29, 2005.
Stock Option Plan
The merger agreement provides that each option to purchase shares of
common stock pursuant to Cameron's 1995 stock option and incentive plan that is
outstanding and unexercised on the date the merger is completed, whether or not
such option is then vested or exercisable, will automatically be deemed vested
and exercisable. Each such option will be converted on that date into the right
to receive in cash an amount equal to the difference between the per share
merger consideration and the exercise price of the option, multiplied by the
number of shares of common stock subject to the option. If the exercise price of
any option is greater than the per share merger consideration, such option will
be cancelled without any payment being made for it. As of November 1, 2000, the
directors and named officers of Cameron held options to purchase a total of
112,805 shares of common stock. The following table reflects the number of
vested and unvested options, the weighted average exercise price of the options,
and the amounts payable to each director and named officer upon cancellation of
their vested and unvested options based on $20.75 per share.
31
<PAGE>
<TABLE>
<CAPTION>
Weighted Amount Amount
Number of Number of Average Payable For Payable For
Vested Unvested Exercise Vested Unvested
Name Options Options Price Options Options
---- --------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
David G. Just, Director and
former President and Chief
Executive Officer 24,216 6,053(1) $14.5625 $149,837 $37,453
William J. Heavner, Director -- 15,134(2) 11.9398 -- 133,334
Harold D. Lee, Director 12,108 3,026(1) 14.5625 74,918 18,723
Dennis E. Marshall, Director -- -- -- -- --
Jon N. Crouch, Director 12,108 3,026(1) 14.5625 74,918 18,723
William F. Barker, Director 3,027 12,107(3) 14.5416 18,793 75,165
Duane Kohlstaedt, President
and Chief Executive Officer -- -- -- -- --
All directors and executive
officers as a group
(9 persons) 69,059 43,746(4) 14.2078 451,798 286,195
</TABLE>
---------------
(1) These unvested options are scheduled to vest on January 29, 2001.
(2) Mr. Heavener's options vest at the rate of 3,027 shares each year from
January 24, 2001 through January 24, 2005.
(3) Mr. Barker's options vest at the rate of 3,027 shares each year from
January 25, 2001 through January 25, 2004.
(4) Included in these unvested options are options for 22,559 shares that
are scheduled to vest in January, 2001.
Director Emeritus Agreements
In 1994 Cameron Savings established a policy of entering into director
emeritus agreements with its directors pursuant to which each director, upon
retirement, would be entitled to an annual retirement benefit equal to $500
multiplied by the director's years of service on the Cameron Savings' board of
directors, payable over a ten-year period. Upon termination following a change
in control of Cameron Savings, each director is entitled to a lump sum payment
equal to the amount which would otherwise be payable to the director over a
ten-year period. The agreements also provide for a death benefit equal to the
amount that would be paid to the director if he served continuously until age 72
and retired on that date. The obligations are funded with life insurance having
a cash value of approximately $1.2 million, which is slightly in excess of the
amount of the anticipated total liability to all active and retired directors.
The merger with Dickinson will constitute a change in control. The following
table sets forth the total payments to be made to each current director under
his director emeritus agreement upon consummation of the merger.
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<PAGE>
Total Director
Name Emeritus Payment
---- ----------------
David G. Just $170,000
William J. Heavner $75,000
Harold D. Lee $165,000
Dennis E. Marshall $120,000
Jon N. Crouch $100,000
William F. Barker $120,000
Employment and Change of Control Agreements
On February 29, 2000, Cameron entered into an employment agreement with
Duane Kohlstaedt in anticipation of his becoming chief executive officer of
Cameron and Cameron Savings. This agreement provides that in the event of a
change in control of Cameron, Mr. Kohlstaedt would be entitled to receive a
severance payment if he is terminated without cause or there is a material
change in his duties, compensation or certain other aspects of his employment
arrangement resulting in his resignation. The severance payment under this
agreement would be equal to 299% of his average annual compensation during the
three years (or shorter period if applicable) next prior to the change in
control. To the extent that any such payment would result in a "parachute
payment" for purposes of Section 280G of the Internal Revenue Code, the payment
would be reduced by the amount necessary to cause it not to be considered a
parachute payment. The transactions contemplated by the merger agreement would
constitute a change in control of Cameron. Following the consummation of the
merger, if Mr. Kohlstaedt becomes entitled to a severance payment under the
agreement, the total amount that he could receive under the agreement, prior to
any adjustment, would be approximately $216,508.
Cameron has also entered into change in control severance agreements
with Ronald W. Hill, Vice President and Treasurer, and Stephen D. Hayward, Vice
President. Each of these agreements provides that in the event of a change in
control of Cameron, the officer would be entitled to receive a severance payment
if he is terminated without cause or there is a material change in his duties,
compensation or certain other aspects of his employment arrangement resulting in
his resignation. The severance payment under Mr. Hill's agreement would be equal
to 200% of his base annual compensation, and the severance payment under Mr.
Hayward's agreement would be equal to 100% of his base annual compensation.
Following the consummation of the merger, if Mr. Hill or Mr. Hayward becomes
entitled to a severance payment under the agreement, the total amount that the
officer could receive under the agreement would be approximately $197,570 and
$84,728, respectively. In addition, Mr. Hill and Mr. Hayward each would continue
to receive life and health insurance benefits comparable to those presently
provided to them.
Severance Plan
At its October 5, 2000 meeting, Cameron's board adopted a
change-in-control severance plan. The plan entitles all salaried employees,
including officers, to a severance payment if the employee is terminated
involuntarily, other than for cause, within six months after a change in control
or the employee voluntarily leaves during that period due to certain changes in
his or her employment conditions or compensation. The plan is not applicable to
salaried employees who are covered by an agreement that explicitly addresses
compensation and benefits payable to them upon termination of their employment.
The amount of the payment under the plan would be equal to two weeks of base
salary plus one week of base salary for every year of service up to ten years
and one additional week of base salary for each two years of service above ten
years. The transactions contemplated by the merger agreement would constitute a
change in control.
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<PAGE>
Indemnification of Directors and Officers
Dickinson has agreed to indemnify and hold harmless each director and
officer of Cameron for a period of six years from liability and expenses arising
out of matters existing or occurring at or prior to the consummation of the
merger to the extent allowed under applicable law. This indemnification would
extend to liability arising out of the transactions contemplated by the merger
agreement.
REGULATORY APPROVALS
Completion of the merger and the bank merger are subject to prior
regulatory approval. The merger of Cameron with Dickinson is subject to the
approval of the Board of Governors of the Federal Reserve System under the Bank
Holding Company Act. Dickinson filed a request for a waiver of this application
requirement on October 20, 2000, and on October 30, 2000 the requested waiver
was obtained. The required notification to the Office of Thrift Supervision was
filed on October 26, 2000. The bank merger is subject to the prior approval of
the Office of the Comptroller of the Currency under the Bank Merger Act. In
reviewing applications under the Bank Merger Act, the OCC must consider, among
other factors, the financial and managerial resources and future prospects of
the existing and resulting institutions, and the convenience and needs of the
communities to be served. In addition, the OCC may not approve a transaction if
it will result in a monopoly or otherwise be anticompetitive. Bank Midwest, N.
A. filed an application for approval of the bank merger with the OCC on October
26, 2000. The application is now pending and action on that application is
expected to be forthcoming at or about the time of the meeting to vote on the
merger. We are not aware of any other regulatory approvals that are required for
completion of the merger, except as described above. Should any other approvals
be required, we presently contemplate that we or Dickinson would seek those
approvals. There can be no assurance that approval of the OCC or any other
approvals, if required, will be obtained.
The approval of any application merely implies the satisfaction of
regulatory criteria for approval, which does not include review of the merger
from the standpoint of the adequacy of the consideration received by Cameron
stockholders in exchange for their shares of Cameron common stock. Furthermore,
regulatory approvals do not constitute an endorsement or recommendation of the
merger.
ACCOUNTING TREATMENT
Dickinson will account for the merger under the purchase method of
accounting. This means that Dickinson and Cameron will be treated as one company
as of the date of the merger and Dickinson will record the fair value of
Cameron's assets and liabilities on its financial statements. Dickinson will
record the excess of its purchase price over the fair value of Cameron's
identifiable net assets as goodwill.
THE MERGER AGREEMENT
The following is a brief description of material provisions of the
merger agreement. It does not purport to be complete and it is qualified by
reference to the merger agreement itself, which is attached as Appendix A and
incorporated into this proxy statement by reference. You should refer to the
full text of the merger agreement for details about the terms and conditions of
the merger.
TERMS OF THE MERGER
The merger agreement provides for a business combination in which DFC
Acquisition Corporation Four, which is a newly formed wholly owned subsidiary of
Dickinson, will be merged into Cameron. This transaction will result in Cameron
becoming a wholly owned subsidiary of Dickinson.
The merger agreement further provides that once the merger of DFC
Acquisition Corporation Four into Cameron is complete, Cameron Savings will
merge into Bank Midwest. An agreement for this merger to occur has been entered
into. When it occurs, the assets and liabilities of Cameron Savings will become
assets and liabilities of Bank Midwest, and Cameron Savings will cease to exist.
34
<PAGE>
The merger agreement provides that the officers and directors of DFC
Acquisition Corporation Four before it is merged into Cameron are to be the
officers and directors of Cameron after the merger. The officers and directors
of Bank Midwest immediately prior to the bank merger are to continue as officers
and directors of Bank Midwest after the bank merger.
The merger will result, except as otherwise stated, in each outstanding
share, including restricted shares, of Cameron common stock being converted into
to the right to receive a cash payment in the amount of $20.75, subject to
adjustment under certain limited circumstances described under the caption "What
You Will Receive in the Merger" beginning on page 17. Shares of Cameron common
stock that are held directly or indirectly by Dickinson and shares held by
Cameron as treasury stock will be canceled and retired upon completion of the
merger and no payment will be made for them. The shares of common stock that are
to be canceled will not include shares held in a fiduciary capacity or in
satisfaction of a debt previously contracted. In addition, holders of common
stock for which dissenters' appraisal rights have been exercised will be
entitled only to the rights granted by Section 262 of the Delaware General
Corporation Law.
Each outstanding and unexercised option for the purchase of common
stock under the Stock Option Plan that is outstanding and unexercised and has
not expired at the time of the merger, whether or not it is vested, will be
converted to a right to receive a cash payment equal to the number of shares of
common stock subject to the option multiplied by the difference between $20.75
per share of common stock and the exercise price of the option.
WHEN THE MERGER WILL BE COMPLETED
The closing of the merger will take place not more than 30 days after
the satisfaction or waiver of all of the conditions to the merger contained in
the merger agreement, unless Dickinson and Cameron agree to another date. On the
date of the closing, a Certificate of Merger will be filed with the Delaware
Secretary of State. The merger will become effective at the time stated in the
Certificate of Merger. Immediately after the effective time of the merger of
Cameron into Dickinson, Cameron Savings will be merged into Bank Midwest.
Cameron expects to complete the merger in the first quarter of 2001.
However, Cameron cannot guarantee when or if the required approvals will be
obtained. Furthermore, either party may terminate the merger agreement if, among
other reasons, the merger has not been completed on or before April 30, 2001,
unless failure to complete the merger by that time is due to the breach of any
representation, warranty or covenant by the party seeking to terminate the
merger agreement.
CONDITIONS TO THE MERGER
The obligations of Dickinson and Cameron to complete the merger are
conditioned on the following:
o approval of the merger agreement by Cameron's stockholders;
Dickinson has advised that all necessary approvals of the
merger agreement by the respective stockholders of Dickinson
and DFC Acquisition Corporation Four already have been
obtained;
o receipt of all required regulatory approvals, consents and
waivers without any materially adverse conditions;
o no party to the merger being subject to any order, decree,
ruling or injunction that prohibits consummating the merger,
no governmental entity having instituted any proceeding for
the purpose of blocking the merger, and the absence of any
statute, rule or regulation that prohibits or restricts
completion of the merger; and
o the other party having performed in all material respects its
obligations under the merger agreement, the other party's
representations and warranties being true and correct as of
the date of the merger agreement and as of the closing date.
35
<PAGE>
The obligations of Dickinson to complete the merger also are
conditioned on Cameron having adjusted stockholders' equity of not less than
$39,500,000 and Dickinson having received customary legal opinions from
Cameron's counsel in form and substance reasonably acceptable to Dickinson. The
obligations of Cameron also are conditioned on Dickinson having sufficient cash
to pay the aggregate merger consideration. Dickinson has advised that the cash
needed for the payment of the aggregate merger consideration will be obtained
from available cash on hand and from cash dividends provided by one or more of
its banking subsidiaries. As a part of its due diligence investigations of
Dickinson, Cameron reviewed the audited financial statements of Dickinson and,
based on the amount and nature of Dickinson's consolidated assets and
stockholders' equity and Dickinson's historical annual earnings, Cameron made a
favorable assessment as to Dickinson's ability to pay the aggregate merger
consideration.
We cannot guarantee whether all of the conditions to the merger will be
satisfied or waived by the party permitted to do so. If the merger is not
completed on or before April 30, 2001, either party may terminate the merger
agreement by a vote of a majority of its board of directors.
CONDUCT OF BUSINESS PENDING THE MERGER
Dickinson and Cameron have each agreed that, until the completion of
the merger, each of them will, and will cause its subsidiaries to, use its
commercially reasonable efforts to:
o conduct its business in the regular, ordinary and usual course
consistent with past practice;
o maintain and preserve intact its business organization,
properties, leases, employees and advantageous business
relationships and retain the services of its officers and key
employees;
o take no action which would adversely affect or delay the
ability of Dickinson or Cameron to perform their respective
covenants and agreements on a timely basis under the merger
agreement; and
o take no action which would adversely affect or delay any
party's ability to obtain any necessary approvals, consents or
waivers of any governmental authority required for the
transactions contemplated by the merger agreement or which
would reasonably be expected to result in those approvals,
consents or waivers containing any material condition or
restriction.
Further, except as otherwise provided in the merger agreement, until the
completion of the merger, Cameron has agreed that, unless permitted to by
Dickinson, neither it nor its subsidiaries will:
o change its certificate of incorporation or bylaws;
o issue, deliver or sell any shares of its capital stock, or
securities or obligations convertible or exercisable for any
shares of its capital stock, other than shares issued upon the
exercise of outstanding stock options;
o issue, grant or sell any option, warrant, call, commitment,
stock appreciation right, right to purchase or agreement
relating to its authorized or issued capital stock, or change
the terms of any of its outstanding stock options or warrants;
o split, combine, reclassify or adjust any shares of its capital
stock or otherwise change its capitalization;
o make, declare or pay any cash or stock dividends or other
distributions on its capital stock, other than normal
quarterly cash dividends on its common stock of not more than
$0.15 per share and the accelerated payment of the first
quarter 2001 dividend from January 2001 to a date that is not
earlier than December 15, 2000 so long as Cameron's adjusted
stockholders equity remains at least $40,000,000;
o redeem, purchase or acquire any shares of its capital stock;
36
<PAGE>
o sell, transfer, assign, mortgage, encumber or dispose of any
of its material assets or cancel, release or assign any
indebtedness, other than in the ordinary course of business
consistent with past practice;
o increase the compensation or fringe benefits of any of its
employees or directors, other than general increases in
compensation for non-executive officer employees in the
ordinary course of business consistent with past practice;
o pay any pension or retirement allowance not required by any
existing plan or agreement to any employees or directors;
o become a party to, amend or commit to fund or otherwise
establish any trust or account related to any employee benefit
plan with or for the benefit of any employee or director;
o grant or award any stock options, or make any discretionary
contribution to any employee benefit plan;
o hire any employee with an annual total compensation payment in
excess of $35,000 or enter into any employment contract with
any employee;
o change its method of accounting, except as required by changes
in generally accepted accounting principles or as contemplated
by the merger agreement;
o settle any claim against it for money damages in excess of
$25,000 or agree to material restrictions on its operations;
o permit any lien, encumbrance or charge of any material effect
to attach to any assets of Cameron or Cameron Savings, other
than in the ordinary course of business consistent with past
practice;
o acquire or agree to acquire any business or assets of another
business that would be material to it, except in satisfaction
of debts previously contracted;
o extend or renew loans, or advance additional sums to a
borrower whose loans, in whole or in part, have been
classified or listed as special mention by any regulatory
authority or included on Cameron Savings' watch list, except
as contemplated by the merger agreement;
o make, renegotiate, renew, increase, extend, modify or purchase
any loan, lease, advance, credit enhancement or other
extension of credit, or make any such commitment, except in
conformance with existing lending practice in amounts not to
exceed $150,000 secured or $25,000 unsecured, with respect to
any individual borrower or loans as to which Cameron has a
binding obligation to make such loans as of the date of the
merger agreement;
o establish or commit to establish any new branch or other
office facilities or file any application to relocate or
terminate the operations of any banking office;
o make any investment either by purchase of securities,
contributions to capital, property transfers, or purchase of
any property or assets of any other individual or entity,
other than investments for its portfolio made in accordance
with the merger agreement;
o make any investment in any debt security (including
mortgage-backed and mortgage-related securities) except for
short- to intermediate-term U.S. government and U.S.
government agency securities, or securities of the Federal
Home Loan Bank, or materially restructure or change its
investment securities portfolio, through purchases, sales or
otherwise;
o enter into, renew, amend or terminate any contract or
agreement, or make any change in any of its leases or
contracts, other than with respect to those involving
aggregate payments of less than $50,000 per year over a term
of up to three years;
37
<PAGE>
o permit Cameron Savings to waive any material right or cancel
any material contract, lease, license, obligation or
commitment, other than in the ordinary course of business
consistent with past practice;
o incur any additional borrowings other than short-term (six
months or less) Federal Home Loan Bank borrowings and reverse
repurchase agreements consistent with past practice, or pledge
any of its assets to secure any borrowings other than in
connection with such borrowings and reverse repurchase
agreement or as required pursuant to the terms of borrowings
of Cameron or its subsidiaries in effect as of the date of the
merger agreement;
o make any capital expenditures in excess of $10,000 per
expenditure or $200,000 in the aggregate, other than pursuant
to prior binding commitments and other than expenditures
necessary to maintain existing assets in good repair or to
make payment of necessary taxes;
o elect any new executive officer or director;
o enter into any agreements or transactions with any officer,
director, stockholder or employee of Cameron or its affiliates
and subsidiaries in an amount of more than $5,000 individually
or $25,000 in the aggregate;
o organize, capitalize, lend to or otherwise invest in any
subsidiary;
o accept any deposits from any person on terms materially more
favorable in any respect than those available to the general
public in Cameron's market area, unless such deposits are
accepted in accordance with existing practice; and
o agree to take or make any commitment to take any of the
actions listed above.
See Article IV of the merger agreement, which is attached to this proxy
statement as Appendix A, for a more complete account of restrictions or the
conduct of business of Cameron pending the merger.
COVENANTS OF CAMERON AND DICKINSON IN THE MERGER AGREEMENT
Agreement Not To Solicit Other Offers
The merger agreement prohibits Cameron and Cameron Savings and their
officers, directors, employees, representatives, agents and affiliates from
initiating, soliciting, knowingly encouraging or facilitating any acquisition
proposal with a third party. An acquisition proposal includes the following:
o any merger, consolidation, share exchange, business
combination, recapitalization, liquidation, dissolution or
other similar transaction;
o any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of 25% or more of the assets of Cameron or Cameron
Savings, taken as a whole, in a single transaction or series
of transactions;
o any tender offer or exchange offer for 25% or more of the
outstanding shares of capital stock of Cameron or the filing
with the SEC of a registration statement for that purpose; and
o any public announcement of a proposal, plan or intention to do
any of the foregoing or any agreement to engage in any of the
foregoing.
Despite the agreement of Cameron not to solicit other acquisition
proposals, the board of directors of Cameron generally may furnish information
to or enter into discussions or negotiations with anyone who makes an
unsolicited, written, bona fide acquisition proposal that is a financially
superior proposal to the merger. A proposal of this nature is one about which
Cameron's board has concluded, after consulting with its financial advisers and
legal counsel, is superior to this merger from a financial point of view. Before
38
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Cameron enters into negotiations with a third party regarding a superior
proposal, it has to give reasonable notice to Dickinson and must obtain from the
third party an executed confidentiality agreement.
Employee Matters
Each person who is an employee of Cameron or its subsidiaries as of the
closing of the merger and whose employment is not specifically terminated at or
prior to closing will become an employee of the combined company or its
subsidiaries. Each of these continuing employees will be an employee at will.
All continuing employees who continue as employees of the combined
company after the merger will be eligible to participate in Dickinson's benefit
plans on the same basis as a new employee of Dickinson. Service with Cameron or
its subsidiaries will be treated as service with Dickinson for purposes of
satisfying any waiting periods, evidence of insurability requirements or the
application of any preexisting condition limitation with respect to any
Dickinson welfare benefit plan. Each continuing employee shall receive credit
for service with Cameron or its subsidiaries for purposes of any employee
benefit plans or computing vacation pay benefits.
Prior to December 15, 2000, Cameron will make a contribution of
$406,340.31 to Cameron's employee stock ownership plan for the fiscal year ended
September 30, 2000. In addition, Cameron will make an additional contribution
equal to the lesser of 25% of its eligible payroll under the plan or the maximum
contribution permitted by Section 415 of the Internal Revenue Code, in each case
covering the period from October 1, 2000 to the end of the day immediately
preceding the effective time of the merger. The total amount of these
contributions to the plan is not permitted to exceed the remaining unpaid loan
balance owed by the plan to Cameron. These contributions to the plan only will
be used by the plan to pay this loan balance. Any merger consideration received
by the plan that remains after this loan is repaid will be allocated to the
accounts of the plan participants as investment earnings. The plan then will be
terminated and distributions of the benefits under the plan will be made to the
participants in accordance with the provisions of the plan.
At its October 5, 2000 meeting, Cameron's board adopted a
change-in-control severance policy. The policy entitles all salaried employees,
including officers, to a severance payment if the employee is terminated
involuntarily, other than for cause, within six months after a change in control
or the employee voluntarily leaves during that period due to certain changes in
his or her employment conditions or compensation. The amount of the payment
would be equal to two weeks of base salary plus one week of base salary for
every year of service up to ten years and one additional week of base salary for
each two years of service above ten years. The transactions contemplated by the
merger agreement would constitute a change in control.
Indemnification
Dickinson has agreed to indemnify and hold harmless each director and
officer of Cameron against liability and expenses arising out of matters
existing or occurring at or before the consummation of the merger to the extent
allowed under applicable law.
Certain Other Covenants
The merger agreement also contains other agreements relating to the
conduct of the parties before consummation of the merger, including the
following:
o After all required regulatory and stockholder approvals have
been received, Cameron will cause Cameron Financial to revise
its loan, litigation and real estate valuation policies and
practices, and investment and asset/liability management
policies and practices to conform to those of Bank Midwest.
Cameron must first confirm that it is not aware of any fact
that would prevent the completion of the merger.
o Cameron will give Dickinson reasonable access during normal
business hours to its property, books, records and personnel
and furnish all information Dickinson may
39
<PAGE>
reasonably request. In addition, two representatives of
Dickinson will be permitted to observe the board of directors
meetings of Cameron and Cameron Savings.
o Dickinson, with the cooperation of Cameron, will submit all
necessary filings and applications with any governmental
entity, the approval of which is required to complete the
merger and related transactions, and will obtain any approval,
consent or waiver of any third party that is required in
connection with this transaction.
o Dickinson and Cameron will use all reasonable efforts to take
promptly all actions necessary, proper or advisable to
consummate the merger.
o Dickinson and Cameron will consult with each other regarding
any public statements about the merger and any filings with
any governmental entity or with any national securities
exchange.
o Cameron will take all actions necessary to convene a meeting
of its stockholders to vote on the merger agreement. The
Cameron board will recommend at its stockholder meeting that
the stockholders vote to approve the merger and will use its
reasonable best efforts to solicit stockholder approval.
o Dickinson and Cameron each will notify the other of any
contract defaults or other events which would reasonably be
likely to result in a material adverse effect on it.
REPRESENTATIONS AND WARRANTIES IN THE MERGER AGREEMENT
Both Dickinson and Cameron have made certain customary representations
and warranties to each other relating to their businesses in the merger
agreement. For information on these representations and warranties, please refer
to Article III of the merger agreement attached as Appendix A. The
representations and warranties must be true through the completion of the
merger. See "Conditions to the Merger" beginning on page 35.
TERMINATION OF THE MERGER AGREEMENT
The merger agreement may be terminated at or prior to the completion of
the merger, either before or after any requisite stockholder approval by:
o the mutual consent of Dickinson and Cameron in writing, if a
majority of the board of directors of each so determines;
o either party if a majority of its board of directors so
determines, in the event of a failure of the stockholders of
Cameron to approve the merger agreement;
o either party if a required regulatory approval, consent or
waiver is denied or any governmental entity prohibits the
merger or the other transactions;
o Dickinson if a required regulatory approval, consent or waiver
is made subject to conditions reasonably unacceptable to it;
o either party if a majority of its board of directors so
determines, in the event the merger is not consummated by
April 30, 2001, unless the failure to so consummate by such
time is due to a breach caused by the party seeking to
terminate;
o either party if the other party makes a misrepresentation,
breaches a warranty or fails to fulfill a covenant that is not
cured within a specified time and that would have a material
adverse effect on the party seeking to terminate;
o Cameron if its board of directors determines that it must
accept a superior offer from a third party in the exercise of
its fiduciary duties;
40
<PAGE>
o Dickinson, if Cameron's stockholders have exercised
dissenters' or appraisal rights with respect to more than 10%
of the outstanding shares of Cameron common stock by
delivering a written demand for appraisal of their shares to
Cameron prior to the meeting; or
o Dickinson, if there shall have been a material adverse change
in the condition of Cameron between the date of Dickinson's
initial due diligence and the closing date and Cameron fails
to cure such change within a specified time.
EXPENSES AND TERMINATION FEE
Each party will pay its own costs and expenses incurred in connection
with the merger.
If Cameron terminates the merger agreement in order to accept a
superior offer from a third party and within 12 months Cameron or Cameron
Savings enters into an agreement with that party to effect a merger,
consolidation, share exchange or similar transaction, then Cameron will pay to
Dickinson a termination fee of $500,000.
CHANGING THE TERMS OF THE MERGER AGREEMENT
Before the completion of the merger, we may agree in writing to amend
or modify any provision of the merger agreement and any provision of the merger
agreement may be waived by the party benefited by the provision. However, after
the vote by the stockholders of Cameron, no amendment or modification may be
made that would reduce the amount or change the kind of consideration to be
received by Cameron's stockholders under the terms of the merger or contravene
any provision of applicable law or the federal banking laws, rules and
regulations.
OTHER MATTERS
The board of directors is not aware of any business to come before the
meeting other than those matters described above in this proxy statement.
However, if any other matters should properly come before the meeting, it is
intended that proxies will be voted in accordance with the judgment of the
person or persons voting the proxies.
STOCKHOLDER PROPOSALS
Cameron will hold an annual meeting of stockholders in 2001 only if the
merger is not approved at the special meeting to which this proxy statement
pertains. If an annual meeting is held, any Cameron stockholder who intends to
present a proposal at the annual meeting must deliver the proposal to Cameron at
1304 North Walnut Street, Cameron, Missouri 64429, Attention: Corporate
Secretary, by the applicable deadline below:
o If the stockholder proposal is intended for inclusion in
Cameron's proxy materials for that meeting pursuant to Rule
14a-8 under the Securities Exchange Act of 1934, Cameron must
receive the proposal a reasonable period of time before
Cameron begins to print and mail its proxy materials. Such
proposal must also comply with the other requirements of the
proxy solicitation rules of the Securities and Exchange
Commission.
o Cameron's bylaws provide that in order for a stockholder to
make nominations for the election of directors or proposals
for business to be brought before the annual meeting, a
stockholder generally must deliver notice of such nominations
and/or proposals to the Secretary not less than 90 days prior
to the date of the annual meeting, subject to specified
exceptions. The notice also must include the information
specified in the bylaws.
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WHERE YOU CAN FIND MORE INFORMATION
Cameron is subject to the informational requirements of the Securities
Exchange Act of 1934 and files annual, quarterly and current reports, proxy
statements and other information with the SEC. You may read and copy any
reports, statements or other information that Cameron files at the SEC's public
reference room located at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the regional offices of the Commission located at Suite 1400,
Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661; and Suite
1300, 7 World Trade Center, New York, New York 10048. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
rooms. The public filings of Cameron also are available to the public from
commercial document retrieval services and at the internet website maintained by
the SEC at "http://www.sec.gov."
Cameron common stock is traded on the Nasdaq National Market SM under
the symbol "CMRN." Documents filed by Cameron can be inspected at the office of
the National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
--------------------------------------------------------------------------------
You should rely only on the information contained in this document to vote your
shares at the meeting. We have not authorized anyone to provide you with
information that is different from what is contained in this document. This
document is dated December 19, 2000. You should not assume that the information
contained in this document is accurate as of any date other than that date, and
neither the mailing of this document to stockholders of Cameron nor the payment
of the cash consideration in the merger shall create any implication to the
contrary.
--------------------------------------------------------------------------------
42
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APPENDIX A--AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER
DATED AS OF OCTOBER 6, 2000
BY AND AMONG
DICKINSON FINANCIAL CORPORATION,
DFC ACQUISITION CORPORATION FOUR
AND
CAMERON FINANCIAL CORPORATION
<PAGE>
<TABLE>
<CAPTION>
agreement and plan of merger
<S> <C>
Article I. THE MERGER.............................................................................A-1
Section 1.01 Structure of the Merger.........................................................A-1
Section 1.02 Status and Conversion of Shares in the Merger...................................A-1
Section 1.03 Exchange Procedures.............................................................A-2
Section 1.04 Stock Options; Restricted Stock.................................................A-4
Section 1.05 Directors and Officers of the Surviving Corporation at Effective Time...........A-4
Section 1.06 Certificate of Incorporation and Bylaws of the Surviving Corporation............A-4
Section 1.07 Dissenters' Rights..............................................................A-4
Section 1.08 Bank Merger.....................................................................A-4
Article II. STOCKHOLDERS' equity at Closing........................................................A-5
Section 2.01 ADJUSTED stockholders' equity...................................................A-5
Section 2.02 VALUATION OF ASSETS.............................................................A-5
Section 2.03 Valuation of Liabilities and special adjustments................................A-6
Article III. Representations and Warranties.........................................................A-6
Section 3.01 Disclosure Letters..............................................................A-6
Section 3.02 Standards.......................................................................A-6
Section 3.03 Representations and Warranties of Seller........................................A-7
Section 3.04 Representations and Warranties of Buyer........................................A-18
Article IV. Conduct Pending the Merger............................................................A-21
Section 4.01 Conduct of Seller's Business Prior to the Effective Time.......................A-21
Section 4.02 Forbearance by Seller..........................................................A-22
Section 4.03 Conduct of Buyer's Business Prior to the Effective Time........................A-25
Article V. Covenants.............................................................................A-25
Section 5.01 Acquisition Proposals..........................................................A-25
Section 5.02 Certain Policies and Actions of Seller.........................................A-26
Section 5.03 Access and Information.........................................................A-26
Section 5.04 Certain Filings, Consents and Arrangements.....................................A-27
Section 5.05 Additional Actions.............................................................A-28
Section 5.06 Publicity......................................................................A-28
Section 5.07 Stockholders Meeting...........................................................A-28
Section 5.08 Proxy Statement................................................................A-28
Section 5.09 Notification of Certain Matters................................................A-28
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Section 5.10 Employees......................................................................A-28
Section 5.11 Indemnification................................................................A-30
Section 5.12 Acquisition Sub................................................................A-31
Article VI. Conditions to Consummation............................................................A-31
Section 6.01 Conditions to Each Party's Obligations.........................................A-31
Section 6.02 Conditions to the Obligations of Buyer.........................................A-32
Section 6.03 Conditions to the Obligations of Seller........................................A-32
Article VII. Data Processing.......................................................................A-32
Section 7.01 Sample Data....................................................................A-32
Section 7.02 Information for Check Ordering.................................................A-32
Section 7.03 Installation of Data Circuits..................................................A-33
Article VIII. Termination.........................................................................A-33
Section 8.01 Termination....................................................................A-33
Section 8.02 Termination Fee................................................................A-34
Section 8.03 Effect of Termination..........................................................A-34
Article IX. Closing and Effective Time............................................................A-34
Section 9.01 Effective Time.................................................................A-34
Section 9.02 Deliveries at the Closing......................................................A-34
Article X. Certain Other Matters.................................................................A-34
Section 10.01 Certain Definitions; Interpretation............................................A-34
Section 10.02 Survival.......................................................................A-35
Section 10.03 Waiver; Amendment..............................................................A-35
Section 10.04 Counterparts...................................................................A-35
Section 10.05 Governing Law..................................................................A-35
Section 10.06 Expenses.......................................................................A-35
Section 10.07 Notices........................................................................A-35
Section 10.08 Entire Agreement, Etc..........................................................A-36
Section 10.09 Specific Performance...........................................................A-36
Section 10.10 Successors and Assigns; Assignment.............................................A-36
</TABLE>
Exhibit A Directors and Officers of Surviving Corporation.
Exhibit B Legal Opinion of Counsel to Seller.
Exhibit C Bank Merger Agreement.
ii
<PAGE>
AGREEMENT AND PLAN OF MERGER
This is an Agreement and Plan of Merger, dated as of the 6th day of
October, 2000 ("Agreement"), by and among DICKINSON FINANCIAL CORPORATION, a
Missouri corporation ("Buyer"), DFC ACQUISITION CORPORATION FOUR, a Delaware
corporation ("Acquisition Sub") and CAMERON FINANCIAL CORPORATION, a Delaware
corporation ("Seller").
Introductory Statement
The Board of Directors of each of Buyer and Seller (i) has determined
that this Agreement and the business combination and related transactions
contemplated hereby are in the best interests of Buyer and Seller, respectively,
and in the best interests of their respective stockholders and (ii) has
approved, at meetings of each of such Boards of Directors, this Agreement.
Buyer and Seller desire to make certain representations, warranties and
agreements in connection with the business combination and related transactions
provided for herein and to prescribe various conditions to such transactions.
Acquisition Sub has been organized as a new wholly-owned subsidiary of
Buyer to facilitate the business combination contemplated hereby.
In consideration of their mutual promises and obligations hereunder,
the parties hereto adopt and make this Agreement and prescribe the terms and
conditions hereof and the manner and basis of carrying it into effect, which
shall be as follows:
Article I. THE MERGER
Section 1.01 Structure of the Merger. At the Effective Time (as defined in
Section 9.01), Acquisition Sub will merge with and into Seller ("Merger"), with
Seller being the surviving corporation of the Merger (the "Surviving
Corporation"), pursuant to the provisions of, and with the effect provided in,
the Delaware General Corporation Law ("DGCL"). Upon consummation of the Merger,
the separate corporate existence of Acquisition Sub shall cease. Seller, as the
Surviving Corporation, shall continue to be governed by the laws of the State of
Delaware and its separate corporate existence, with all of its rights,
privileges, immunities, powers and franchises, shall continue unaffected by the
Merger. The name of the Surviving Corporation shall be Cameron Financial
Corporation. From and after the Effective Time, the Surviving Corporation shall
possess all of the properties and rights and be subject to all of the
liabilities and obligations of Acquisition Sub, all as more fully described in
the DGCL.
Section 1.02 Status and Conversion of Shares in the Merger.
a) Effect on Shares of Seller Common Stock. By virtue of the Merger,
automatically and without any action on the part of the holder thereof, each
share of common stock, par value $.01 per share, of Seller ("Seller Common
Stock") that is issued and outstanding at the Effective Time, other than
Excluded Shares (as defined below) and including Seller Restricted Stock held
pursuant to the Seller Restricted Stock Plan (as defined in Section 1.04b)),
shall be canceled and cease to be outstanding and shall be converted into and
become the right to receive a cash payment equal to $20.75; provided, however
that such per share amount shall be adjusted as follows, if applicable:
(i) if the Effective Time shall occur after January 31, 2001 an
additional amount equal to the lesser of (A) $.0035 times the number of
days which shall have elapsed between January 31, 2001 and the
Effective Time and (B) Seller's net income per share (based on
2,099,179 shares, including shares subject to option) during such
period shall be added to such per share amount and
<PAGE>
(ii) if the Adjusted Stockholders' Equity (as defined in Section 2.01
below) of Seller as of the close of business on the last business day
next prior to the Effective Time shall be less than $40,000,000, then
an amount determined by dividing the amount by which such Adjusted
Stockholders' Equity is less than $40,000,000 by 2,099,179 shall be
deducted from such per share amount and no interest factor or any
additional amount will be due.
(The amount so determined pursuant to this paragraph is referred to hereinafter
as the "Merger Consideration".) After the Effective Time, no dividends or other
distributions made or payable by Seller shall accrue for the benefit of or be
payable with respect to, any Seller Common Stock.
"Excluded Shares" shall consist of (i) shares of Seller Common Stock as
to which the respective holders thereof have properly demanded appraisal rights
and have not failed to perfect, have not effectively withdrawn and have not lost
their rights to appraisal and payment pursuant to any applicable law providing
for dissenters' or appraisal rights (the "Dissenters' Shares"), (ii) shares held
directly or indirectly by Buyer (other than shares held in a fiduciary capacity
or in satisfaction of a debt previously contracted) and (iii) shares held by
Seller as treasury stock. After the Effective Time, no dividends or other
distributions made or payable by Seller shall accrue for the benefit of or be
payable with respect to, any Dissenters' Shares, and no interest shall accrue
with respect to payments due to holders of Dissenters' Shares, unless such
accruals are required by the DGCL. b) As of the Effective Time, each Excluded
Share, other than Dissenters' Shares, shall be canceled and retired and shall
cease to exist, and no exchange or payment shall be made with respect thereto.
In addition, no Dissenters' Shares shall be converted into the Merger
Consideration pursuant to this Section 1.02 but instead shall be treated in
accordance with the procedures set forth in Section 1.07 of this Agreement. c)
At and as of the Effective Time, each share of Acquisition Sub shall be
converted into one share of Common Stock , $.01 par value, of the Surviving
Corporation.
Section 1.03 Exchange Procedures.
a) Appropriate transmittal materials ("Letter of Transmittal") shall be
mailed by Buyer or Exchange Agent (as defined in Section 1.03c)) as soon as
reasonably practicable after the Effective Time, and in no event later than five
(5) business days thereafter, to each holder of record of Seller Common Stock,
other than holders of Excluded Shares, as of the Effective Time. A Letter of
Transmittal will be deemed properly completed by holders of Seller Common Stock
only if accompanied by certificates representing all shares of Seller Common
Stock to be converted thereby, except as provided in Section 1.03h) below.
b) At and after the Effective Time, each certificate ("Seller
Certificate") previously representing shares of Seller Common Stock (except as
specifically set forth in Section 1.02) shall represent only the right to
receive the Merger Consideration multiplied by the number of shares of Seller
Common Stock previously represented by the Seller Certificate.
c) Prior to the Effective Time, Buyer may select a bank or trust
company acceptable to Seller, which shall act as exchange agent ("Exchange
Agent") for the benefit of the holders of shares of Seller Common Stock, for
exchange in accordance with this Section 1.03. If Buyer elects not to select
such a bank or trust company as Exchange Agent, then Buyer shall be deemed to be
the Exchange Agent for all purposes under this Agreement. At the Effective Time,
Buyer shall transfer to the Exchange Agent, or set aside and hold in trust for
the benefit of the stockholders of Seller if Buyer is the Exchange Agent,
sufficient funds to pay the Merger Consideration to all stockholders of the
Seller.
d) The Letter of Transmittal (which shall be subject to the reasonable
approval of Seller and Buyer) shall (i) specify that delivery shall be effected,
and risk of loss of the Seller Certificates shall pass, only upon delivery of
the Seller
A-2
<PAGE>
Certificates to the Exchange Agent, (ii) specify that the shares of Seller
Common Stock have been canceled, that the consideration to be paid for such
shares shall be paid only upon delivery and surrender of such Seller
Certificates (except as provided in Section 1.03h) below), and that neither
dividends nor interest shall accrue on the cash consideration payable after the
Effective Time of the Merger, (iii) be in a form and contain any other
provisions as Buyer may reasonably determine, and (iv) include instructions for
use in effecting the surrender of the Seller Certificates in exchange for the
Merger Consideration. Upon the proper surrender of the Seller Certificates to
the Exchange Agent together with a properly completed and duly executed Letter
of Transmittal, the holder of such Seller Certificates shall be entitled to
receive in exchange therefor a check in the amount equal to the cash that such
holder has the right to receive pursuant to Section 1.02. As soon as
practicable, but no later than 10 business days following receipt of the
properly completed letter of Transmittal and any necessary accompanying
documentation, the Exchange Agent shall distribute the cash as provided herein.
If there is a transfer of ownership of any shares of Seller Common Stock not
registered in the transfer records of Seller the Merger Consideration shall be
issued to the transferee thereof if the Seller Certificates representing such
Seller Common Stock are presented to the Exchange Agent, accompanied by all
documents required, in the reasonable judgment of Buyer and the Exchange Agent,
(x) to evidence and effect such transfer and (y) to evidence that any applicable
stock transfer taxes have been paid.
e) From and after the Effective Time there shall be no transfers on the
stock transfer records of Seller of any shares of Seller Common Stock. If, after
the Effective Time, Seller Certificates are presented to Buyer, they shall be
exchanged for the Merger Consideration deliverable in respect thereof pursuant
to this Agreement in accordance with the procedures set forth in this Section
1.03.
f) If Buyer is not acting as Exchange Agent, any portion of the
aggregate amount of cash to be paid pursuant to Section 1.02 that remains
unclaimed by the stockholders of Seller for 12 months after the Effective Time
shall be repaid by the Exchange Agent to Buyer upon the written request of
Buyer. After such request is made, any stockholders of Seller who have not
theretofore complied with this Section 1.03 shall look only to Buyer for the
Merger Consideration deliverable in respect of each share of Seller Common Stock
such stockholder holds, as determined pursuant to Section 1.02 of this
Agreement, without any interest. If outstanding Seller Certificates are not
surrendered prior to the date on which such payments would otherwise escheat to
or become the property of any governmental unit or agency, the unclaimed items
shall, to the extent permitted by any abandoned property, escheat or other
applicable laws, become the property of Buyer (and, to the extent not in its
possession, shall be paid over to it), free and clear of all claims or interest
of any person previously entitled to such claims. Notwithstanding the foregoing,
neither the Exchange Agent nor any party to this Agreement (or any affiliate
thereof) shall be liable to any former holder of Seller Common Stock for any
amount delivered to a public official pursuant to applicable abandoned property,
escheat or similar laws.
g) Buyer and the Exchange Agent shall be entitled to rely upon Seller's
stock transfer books to establish the identity of those persons entitled to
receive the Merger Consideration, which books shall be conclusive with respect
thereto. In the event of a dispute with respect to ownership of stock
represented by any Seller Certificate, Buyer and the Exchange Agent shall be
entitled (i) to deposit any Merger Consideration represented thereby in escrow
with an independent third party and thereafter be relieved with respect to any
claims thereto, or at Buyer's option, or (ii) to file a suit in interpleader
against the competing parties, deposit the Merger Consideration due with respect
to the disputed Seller Certificate with a court of competent jurisdiction, and
thereafter be discharged from any responsibility to the competing parties.
A-3
<PAGE>
h) If any Seller Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming such Seller
Certificate to be lost, stolen or destroyed and, if required by the Exchange
Agent, the posting by such person of a bond in such amount as the Exchange Agent
may direct as indemnity against any claim that may be made against it with
respect to such Seller Certificate, the Exchange Agent will deliver in exchange
for such lost, stolen or destroyed Seller Certificate the Merger Consideration
deliverable in respect thereof pursuant to Section 1.02.
Section 1.04 Stock Options; Restricted Stock.
a) At the Effective Time, each option to acquire shares of Seller
Common Stock (a "Seller Option"), whether or not then vested, granted pursuant
to the Seller's Amended 1995 Stock Option Plan (the "Seller Option Plan") that
is then outstanding and unexercised shall be deemed vested and exercisable,
whether or not then exercisable, and shall be canceled and terminated and in
lieu thereof the holders of such options shall be paid by Seller or Seller S&L
in cash (from funds provided by Buyer if necessary) in an amount equal to the
product of (i) the number of shares of Seller Common Stock subject to such
unexercised option at the Effective Time and (ii) the amount by which the Merger
Consideration per share exceeds the exercise price per share of such option net
of any cash which must be withheld under federal and state income and employment
tax requirements. In the event that the exercise price of a Seller Option is
greater than the Merger Consideration, then at the Effective Time such Seller
Option shall be canceled without any payment made in exchange therefor. At the
Effective Time, the Seller Option Plan shall be deemed terminated.
b) Inasmuch as at the Effective Time, all shares of restricted Seller
Common Stock (the "Seller Restricted Stock"), held under the Seller's
Recognition and Retention Plan (the "Seller Restricted Stock Plan") are to be
canceled and the Merger Consideration in respect of such shares to be paid to
the holders thereof, the Seller Restricted Stock Plan shall be deemed terminated
as of the Effective Time.
Section 1.05 Directors and Officers of the Surviving Corporation at Effective
Time. At the Effective Time, the directors and officers of the Surviving
Corporation shall consist of the directors and officers of Acquisition Sub
serving immediately prior to the Effective Time (a list of which is attached
hereto as Exhibit A), each to hold office in accordance with the certificate of
incorporation and bylaws of the Surviving Corporation until their respective
successors are duly elected or appointed and qualified.
Section 1.06 Certificate of Incorporation and Bylaws of the Surviving
Corporation. The certificate of incorporation and bylaws of Seller in effect
immediately prior to the Effective Time shall be the certificate of
incorporation and bylaws of the Surviving Corporation from and after the
Effective Time until amended as provided by law.
Section 1.07 Dissenters' Rights.
a) Buyer shall pay for any Dissenters' Shares in accordance with
Section 262 of the DGCL providing for appraisal rights, and the holders thereof
shall not be entitled to receive any Merger Consideration; provided, that if
appraisal rights under such law with respect to any Dissenters' Shares shall
have been effectively withdrawn or lost, such shares will thereupon cease to be
treated as Dissenters' Shares and shall be converted into the right to receive
the Merger Consideration pursuant to Section 1.02.
b) Seller shall (i) give Buyer prompt written notice of the receipt of
any notice from a stockholder purporting to exercise any dissenters' rights,
(ii) not settle nor offer to settle any demand for payment without the prior
written consent of Buyer and (iii) not waive any failure to comply strictly with
any procedural requirements of Section 262 of the DGCL.
A-4
<PAGE>
Section 1.08 Bank Merger. Immediately following the Effective Time, Buyer
anticipates that Buyer will cause Seller S&L (as defined in Section 3.03a) to be
merged into Buyer Bank (as defined in Section 3.04a) pursuant to a Bank Merger
Agreement substantially in the form attached as Exhibit C with such changes as
Buyer may reasonably suggest. Concurrently with or at approximately the same
time as Buyer files applications with the regulatory authorities for the
necessary approvals for the Merger, Buyer will file applications for the
necessary approvals for the Bank Merger so that it may become effective shortly
after the Effective Time. Buyer Bank and Seller S&L shall enter into such Merger
Agreement and Seller agrees to cooperate with Buyer, and to use its power as the
sole stockholder of Seller S&L to cause Seller S&L to cooperate with Buyer in
any necessary preparations for the Bank Merger. Seller's and Seller S&L's
cooperation shall include but not be limited to board approvals of the Bank
Merger and the execution of merger documents; provided, however, that (i)
neither Seller nor Seller S&L shall be requested to do any act in violation of
any law or fiduciary duty; (ii) such Bank Merger shall not become effective
until after the Effective Time, (iii) there shall be no stockholder approval by
Seller or Seller S&L of the Bank Merger until after the Effective Time, and (iv)
such Bank Merger Agreement will automatically terminate in the event of the
termination of this Agreement prior to the Closing.
Article II. STOCKHOLDERS' equity at Closing
Section 2.01 ADJUSTED stockholders' equity. Seller agrees that Buyer's
obligation to consummate the Merger shall, at Buyer's option, be conditioned
upon the Stockholders' Equity of Seller, consolidated with all of its
Subsidiaries (as defined in Section 3.03a), at the close of business on the day
prior to the Effective Time being not less than $39,500,000 after taking into
account the adjustments described below ("Adjusted Stockholders' Equity"). Such
Adjusted Stockholders' Equity shall be determined according to generally
accepted accounting principles as they are applied to savings and loan
associations and savings and loan association holding companies and in a manner
consistent with Seller's past practices, with assets and liabilities valued as
follows: Section 2.02 VALUATION OF ASSETS.
Seller's assets shall be valued in the following manner:
a) Cash and Due. Cash items, cash equivalent items, federal funds sold,
and items in the process of collection shall be valued at their historical book
value on Seller's books, including accrued interest not over 90 days past due;
b) Loans. Loans shall be valued at their historical book values on
Seller S&L's books, plus accrued but unpaid interest which is not over 90 days
past due, less any dealer reserve, less any unearned discount, and less a loan
loss reserve equal to .75% of gross loans outstanding;
c) Investment Securities. Any investment securities classified by
Seller S&L as "Available for Sale" shall be valued at their fair market values,
determined by market quotations issued by a reputable source acceptable to both
parties no more than 10 days prior to the Effective Time, plus any accrued but
unpaid interest not over 90 days past due, and investment securities classified
by Seller S&L as "Held to Maturity" shall be valued at their historical book
values on Seller S&L's books, plus any accrued but unpaid interest not over 90
days past due;
d) Fixed Assets. Real and personal property shall be valued at
historical book value on Seller S&L's books, net of all depreciation and any
specific reserves; and
e) Other Assets. Other assets shall be valued at their historical book
values on Seller S&L's books, less any applicable depreciation as shown on
Seller S&L's books, and less any contra asset or liability accounts in the
nature of valuation or contingency reserves existing on Seller S&L's books with
respect to any such assets.
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Section 2.03 Valuation of Liabilities and special adjustments.
a) Deposit Liabilities. Deposit liabilities shall be valued at their
historical book values on Seller S&L's books, plus all accrued but unpaid
interest;
b) Expense Items. All items of expense shall be accrued through the
banking business day next preceding the Effective Time, based on the most
recently available billing, or based on estimates if no related prior billing is
available, and any expense estimates agreed between the parties shall be
considered final between the parties, regardless of the amount of the actual
billings, except in the event of a breach of a representation or warranty
contained herein; and
c) Other Liabilities. Other liabilities shall be valued at their
historical book value on Seller S&L's books, or in the case of contingent or
unliquidated liabilities at their reasonably estimated future cost in accordance
with GAAP (FASB 5) and consistent with past practices; provided, however, that
any contingent or unliquidated liabilities the reporting of which is not
required by GAAP and which were disclosed on Seller's Disclosure Letter
delivered to Buyer prior to the date hereof shall not be shown as liabilities.
d) Fees. Any fees due or paid to Seller's or Seller S&L's advisors,
agents, attorneys, accountants, brokers or finders (other than the fees owed to
William Blair & Company, L.L.C. for investment banking services) regarding this
transaction shall be treated as a liability and expense in computing such
Stockholders' Equity.
e) Other Adjustments. Any adjustments to assets or liabilities made
pursuant to Section 5.02 shall not be shown and there shall be no accrual for
payments to be made pursuant to Section 1.04 hereof or by reason of payments
which are to be made pursuant to the change in control provisions of Seller's
Director Emeritus Agreements to the extent that such payments exceed the normal
accrual for past service.
Article III. Representations and Warranties
Section 3.01 Disclosure Letters. Prior to the execution and delivery of this
Agreement, Seller and Buyer each shall have delivered to the other a letter
(each, its "Disclosure Letter") setting forth, among other things, facts,
circumstances and events the disclosure of which is required or appropriate in
relation to any or all of their respective representations and warranties (and
making specific reference to the section or subsection, as the case may be, of
this Agreement to which they relate); provided, that (a) no such fact,
circumstance or event is required to be set forth in the Disclosure Letter as an
exception to a representation or warranty if its absence is not reasonably
likely to result in the related representation or warranty being deemed untrue
or incorrect under the standards established by Section 3.02 except that
Seller's Disclosure Letter shall include any fact, circumstance or event having
a negative financial impact of $25,000 or greater regardless of whether or not
the standards established by Section 3.02 have been met and (b) the mere
inclusion of a fact, circumstance or event in a Disclosure Letter shall not be
deemed an admission by a party that such item represents a material exception or
that such item is reasonably likely to result in a Material Adverse Effect (as
defined in Section 3.02(b)). Section 3.02 Standards.
a) No representation or warranty of Seller or Buyer contained in
Section 3.03 or Section 3.04, respectively, shall be deemed untrue or incorrect,
and no party hereto shall be deemed to have breached a representation or
warranty, on account of the existence of any fact, circumstance or event unless,
as a direct or indirect consequence of such fact, circumstance or event,
individually or taken together with all other facts, circumstances or events
inconsistent with any paragraph of Section 3.03 or Section 3.04, as applicable,
there is reasonably likely to exist a Material Adverse Effect. Seller's
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representations, warranties and covenants contained in this Agreement shall not
be deemed to be untrue or breached as a result of effects arising solely from
actions taken pursuant to this Agreement or in compliance with a written request
of Buyer. b) As used in this Agreement, the term "Material Adverse Effect" means
an effect which is material and adverse to the business, financial condition or
results of operations of Seller and its Subsidiaries (as defined in Section
3.03a) or Buyer and its Subsidiaries, as the context may dictate, taken as a
whole; provided, however, that any such effect resulting from any (i) changes in
laws, rules or regulations or GAAP or regulatory accounting requirements or
interpretations thereof that apply to either Buyer and its Subsidiaries or
Seller and its Subsidiaries, as the case may be, or to similarly situated
financial and/or depository institutions or (ii) changes in economic conditions
affecting financial institutions generally, including but not limited to,
changes in the general level of market interest rates and/or deposit rates,
shall not be considered in determining if a Material Adverse Effect has
occurred.
c) For purposes of this Agreement, "knowledge" shall mean, with respect
to a party hereto, actual knowledge of any of the members of the Board of
Directors of that party, any officer of that party with the title ranking not
less than vice president, or any in-house general counsel of such party.
Section 3.03 Representations and Warranties of Seller. Subject to Section 3.01
and Section 3.02, Seller represents and warrants to Buyer that, except as
disclosed in Seller's Disclosure Letter:
a) Organization.
Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and is registered as a savings
and loan holding company under the Home Owners' Loan Act, as amended ("HOLA").
The Cameron Savings & Loan Association F.A. ("Seller S&L") is a stock savings
association duly organized, validly existing and in good standing under the laws
of the United States of America and is a wholly-owned Subsidiary (as defined
below) of Seller. Each Subsidiary of Seller, other than Seller S&L, is a
corporation, limited liability company or partnership duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization. Each of Seller and its Subsidiaries has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted. As used in this Agreement,
unless the context requires otherwise, the term "Subsidiary" when used with
respect to any party means any corporation or other organization, whether
incorporated or unincorporated, which is consolidated with such party for
financial reporting purposes or which is owned or controlled, directly or
indirectly, by such party through a sufficient number of shares or other
evidence of ownership of such corporation or other organization to have the
power to elect a majority of the board of directors or otherwise to control such
corporation or other organization.
Seller and each of its Subsidiaries has the requisite corporate power
and authority and is duly qualified to do business and is in good standing in
each jurisdiction in which the nature of its organization, business or the
ownership or leasing of its properties makes such qualification necessary.
Seller's Disclosure Letter sets forth all of Seller's Subsidiaries and
all entities (whether corporations, partnerships or similar organizations),
including the corresponding percentage ownership, in which Seller owns, directly
or indirectly, 5% or more of the ownership interests as of the date of this
Agreement and indicates for each of Seller's Subsidiaries, as of such date, its
jurisdiction of organization and the jurisdiction(s) wherein it is qualified to
do business. All such Subsidiaries and ownership interests are in compliance
with all applicable laws, rules and regulations relating to direct investments
in equity ownership interests. Seller owns, either directly or indirectly
through Seller S&L, both the legal title to and all beneficial interests in all
of the outstanding capital stock of each of its Subsidiaries. No Subsidiary of
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Seller other than Seller S&L is an "insured depository institution" as defined
in the Federal Deposit Insurance Act, as amended ("FDIA"), and the applicable
regulations thereunder. All of the shares of capital stock of Seller's
Subsidiaries, including Seller S&L, are fully paid, nonassessable and not
subject to any preemptive rights and are owned by Seller or a Subsidiary of
Seller free and clear of any claims, liens, encumbrances or restrictions (other
than those imposed by applicable federal and state securities laws), except for
the shares of Seller S&L pledged as collateral under the loan agreement with
Commerce Bank as set forth in Seller's Disclosure Letter, and there are no
agreements or understandings with respect to the voting or disposition of any
such shares.
The deposits of Seller S&L are insured by the Savings Association
Insurance Fund of the Federal Deposit Insurance Corporation ("FDIC") to the
extent provided in the FDIA.
b) Capital Structure.
The authorized capital stock of Seller consists of 10,000,000 shares of
Seller Common Stock, par value $.01 per share, and 2,000,000 shares of preferred
stock, par value $.01 per share. As of the date of this Agreement (A) 3,026,928
shares of Seller Common Stock had been issued, of which 1,914,049 were issued
and outstanding, (B) no shares of Seller preferred stock were issued and
outstanding, (C) no shares of Seller Common Stock were reserved for issuance,
except that 185,130 shares of Seller Common Stock were reserved for issuance
pursuant to the Seller Option Plan, (D) no shares of Seller preferred stock were
reserved for issuance and (E) 1,112,879 shares of Seller Common Stock were held
by Seller in its treasury or by its Subsidiaries. The authorized capital stock
of Seller S&L consists of 10,000,000 shares of common stock, par value $.01 per
share, and 2,000,000 shares of preferred stock. As of the date of this
Agreement, 3,026,928 shares of such common stock were outstanding, no shares of
such preferred stock were outstanding and all outstanding shares of such common
stock were, and as of the Effective Time will be, owned both legally and
beneficially by Seller. All outstanding shares of capital stock of Seller are
duly authorized and validly issued, fully paid and nonassessable and not subject
to any preemptive rights and, with respect to shares of Seller held by Seller in
its treasury or by its Subsidiaries and shares of Seller S&L, are free and clear
of all liens, claims, encumbrances or restrictions (other than those imposed by
applicable federal and state securities laws), and there are no agreements or
understandings with respect to the voting or disposition of any such shares.
Seller's Disclosure Letter sets forth a complete and accurate list of all
outstanding options to purchase Seller Common Stock that have been granted
pursuant to the Seller Option Plan, including the names of the optionees, dates
of grant, exercise prices, dates of vesting, dates of termination and shares
subject to each grant.
No bonds, debentures, notes or other indebtedness having the right to
vote on any matters on which stockholders may vote of Seller are issued or
outstanding.
As of the date of this Agreement, except for options granted pursuant
to the Seller Option Plan, neither Seller nor any of its Subsidiaries has or is
bound by any outstanding subscriptions, options, warrants, calls, rights,
convertible securities, commitments or agreements of any character obligating
Seller or any of its Subsidiaries to issue, deliver or sell, or cause to be
issued, delivered or sold, any additional shares of capital stock of Seller or
any of its Subsidiaries or obligating Seller or any of its Subsidiaries to
grant, extend or enter into any such option, warrant, call, right, convertible
security, commitment or agreement. As of the date hereof, there are no
outstanding contractual obligations of Seller or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any shares of capital stock of Seller or
any of its Subsidiaries.
c) Authority. Seller has all requisite corporate power and authority to
enter into this Agreement, and, subject to approval of this Agreement by the
requisite vote of Seller's stockholders and receipt of all required regulatory
or governmental approvals, to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and, subject to the approval of
this Agreement by Seller's stockholders, the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate
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actions on the part of Seller. This Agreement has been duly and validly executed
and delivered by Seller and constitutes a valid and binding obligation of
Seller, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general principles of equity,
whether applied in a court of law or a court of equity.
d) Stockholder Approval; Fairness Opinion. The affirmative vote of a
majority of the outstanding shares of Seller Common Stock entitled to vote on
this Agreement is the only vote of the stockholders of Seller required for
approval of this Agreement and the consummation of the Merger and the related
transactions contemplated hereby. Seller has received the written opinion of
William Blair & Company, L.L.C. to the effect that, as of the date hereof, the
Merger Consideration to be received by Seller's stockholders (other than Buyer)
is fair, from a financial point of view, to such stockholders.
e) No Violations; Consents. The execution, delivery and performance of
this Agreement by Seller does not, and the consummation of the transactions
contemplated hereby will not, constitute (i) assuming receipt of all Requisite
Regulatory Approvals (as defined in Section 3.04d)) and requisite stockholder
approvals, a breach or violation of, or a default under, any law, rule or
regulation or any judgment, decree, order, governmental permit or license to
which Seller or any of its Subsidiaries (or any of their respective properties)
is subject, (ii) a breach or violation of, or a default under, the certificate
of incorporation or bylaws of Seller or the similar organizational documents of
any of its Subsidiaries or (iii) a breach or violation of, or a default under
(or an event which, with due notice or lapse of time or both, would constitute a
default under), or result in the termination of, accelerate the performance
required by, or result in the creation of any lien, pledge, security interest,
charge or other encumbrance upon any of the properties or assets of Seller or
any of its Subsidiaries under, any of the terms, conditions or provisions of any
note, bond, indenture, deed of trust, loan agreement or other agreement,
instrument or obligation to which Seller or any of its Subsidiaries is a party,
or to which any of their respective properties or assets may be subject. The
consummation by Seller of the transactions contemplated hereby will not require
any approval, consent or waiver under any such law, rule, regulation, judgment,
decree, order, governmental permit or license or the approval, consent or waiver
of any other party to any such agreement, or instrument, other than (v) the
approval of the holders of a majority of the outstanding shares of Seller Common
Stock entitled to vote thereon, (x) the approval of Seller as the sole
stockholder of Seller S&L, (y) the consent of the Office of Thrift Supervision
("OTS"), and (z) the consent of any regulatory agency having jurisdiction over
Buyer. As of the date hereof, the executive officers of Seller know of no reason
pertaining to Seller why any of the approvals referred to in this Section 3.03e)
should not be obtained without the imposition of any material condition or
restriction described in the last sentence of Section 6.01(b).
f) Reports and Financial Statements.
Seller and each of its Subsidiaries have each timely filed all material
reports, registrations and statements, together with any amendments required to
be made with respect thereto, that they were required to file with (a) the FDIC,
(b) the OTS, (c) the National Association of Securities Dealers, Inc. ("NASD"),
(d) the Missouri Department of Insurance, and (e) the Securities and Exchange
Commission ("SEC") (collectively, "Seller's Reports") and, to Seller's
knowledge, have paid all fees and assessments due and payable in connection
therewith. As of their respective dates, none of Seller's Reports contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements made therein, in light
of the circumstances under which they were made, not misleading. All of Seller's
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Reports filed with the SEC complied in all material respects with the applicable
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the rules and regulations of the SEC promulgated thereunder.
Each of the financial statements of Seller included in Seller's Reports
complied as to form, as of their respective dates of filing with the SEC, in all
material respects with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto and have been prepared in
accordance with GAAP applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto or, in the case of the
unaudited financial statements, as permitted by the SEC). Each of the
consolidated statements of condition contained or incorporated by reference in
Seller's Reports (including in each case any related notes and schedules) and
each of the consolidated statements of operations, consolidated statements of
cash flows and consolidated statements of changes in stockholders' equity,
contained or incorporated by reference in Seller's Reports (including in each
case any related notes and schedules) fairly presented (a) the financial
position of the entity or entities to which it relates as of its date and (b)
the results of operations, stockholders' equity and cash flows, as the case may
be, of the entity or entities to which it relates for the periods set forth
therein (subject, in the case of unaudited interim statements, to normal
year-end adjustments that are not material in amount or effect).
g) Absence of Certain Changes or Events. Except as disclosed in
Seller's Reports filed on or prior to the date of this Agreement or in Seller's
Disclosure Letter, since September 30, 1999 (i) Seller and its Subsidiaries have
not incurred any liability, either accrued, alleged, contingent or disputed,
except in the ordinary course of their business consistent with past practice
and except for the engagement letter agreements with William Blair & Company,
L.L.C. set forth in Seller's Disclosure Letter, (ii) Seller and its Subsidiaries
have conducted their respective businesses only in the ordinary and usual course
of such businesses consistent with their past practices, and (iii) there has not
been any other event, change or occurrence or continuance of any circumstance
which has had, or is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect with respect to Seller and its
Subsidiaries. To the knowledge of Seller, there are no impending termination,
expiration, or loss of contracts, franchises, licenses, permits or other assets
that, individually or in the aggregate, are reasonably likely to have a Material
Adverse Effect on Seller.
h) Absence of Claims. No litigation, controversy, claim, action, suit
or other legal, administrative or arbitration proceeding before any court,
governmental agency or arbitrator is pending against Seller or any of its
Subsidiaries and, to the knowledge of Seller, no such litigation, controversy,
claim, action, suit or proceeding has been threatened or asserted in either case
which is reasonably likely to have a Material Adverse Effect with respect to
Seller or its Subsidiaries, or the transactions contemplated by this Agreement,
or upon the ability of Seller to perform its obligations under this Agreement.
i) Absence of Regulatory Actions. Except as set forth in Seller's
Disclosure Letter, neither Seller nor any of its Subsidiaries has been a party
to any cease and desist order, written agreement or memorandum of understanding
with, or any commitment letter or similar undertaking to, or has been subject to
any action, proceeding, order or directive by, or has been a recipient of any
extraordinary supervisory letter from any federal or state governmental
authority charged with the supervision or regulation of depository institutions
or depository institution holding companies or engaged in the insurance of bank
and/or savings and loan deposits ("Government Regulators"), or has adopted any
board resolutions at the request of any Government Regulator, or has been
advised by any Government Regulator that it is contemplating issuing or
requesting (or is considering the appropriateness of issuing or requesting) any
such action, proceeding, order, directive, written agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter, board
resolutions or similar undertaking.
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j) Taxes. All federal, state, local and foreign tax returns required to
be filed by or on behalf of Seller or any of its Subsidiaries have been timely
filed or requests for extensions have been timely filed and any such extension
shall have been granted and not have expired, and all such filed returns are
complete and accurate in all material respects. All taxes shown on such returns,
all taxes required to be shown on returns for which extensions have been granted
and all other taxes required to be paid by Seller or any of its Subsidiaries
have been paid in full or adequate provision has been made for any such taxes on
Seller's balance sheet (in accordance with GAAP). For purposes of this Section
3.03j), the term "taxes" shall include all income, franchise, gross receipts,
real and personal property, real property transfer and gains, wage and
employment taxes. As of the date of this Agreement, there is no audit
examination, deficiency assessment, tax investigation or refund litigation with
respect to any taxes of Seller or any of its Subsidiaries, and no claim has been
made by any authority in a jurisdiction where Seller or any of its Subsidiaries
do not file tax returns that Seller or any such Subsidiary is subject to
taxation in that jurisdiction. All taxes, interest, additions and penalties due
with respect to completed and settled examinations or concluded litigation
relating to Seller or any of its Subsidiaries have been paid in full or adequate
provision has been made for any such taxes on Seller's balance sheet (in
accordance with GAAP). Seller and each of its Subsidiaries have not executed an
extension or waiver of any statute of limitations on the assessment or
collection of any material tax due that is currently in effect. Seller and each
of its Subsidiaries has withheld and paid all taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third party, and Seller
and each of its Subsidiaries has timely complied with all applicable information
reporting requirements under Part III, Subchapter A of Chapter 61 of the IRC and
similar applicable state and local information reporting requirements. Adequate
provision for any taxes due or to become due for Seller or any of its
Subsidiaries for the period or periods reflected on Seller's most recent
financial statements has been made and is reflected on such Seller financial
statements. Deferred Taxes of Seller and its Subsidiaries have been provided for
in accordance with GAAP. To the knowledge of Seller, there is no item of
deferred taxable income which will become taxable due to the consummation of the
Merger or the Bank Merger that is reasonably likely to have a Material Adverse
Effect on Seller or its Subsidiaries, other than as disclosed in Seller's
Disclosure Letter.
k) Agreements.
Except (w) for arrangements made in the ordinary course of business,
(x) as set forth in Seller's Disclosure Letter, (y) as disclosed in Seller's
Reports filed on or prior to the date of this Agreement, or (z) as contemplated
by this Agreement, Seller and its Subsidiaries are not bound by any material
contract (as defined in Item 601 (b)(10) of Regulation S-K promulgated by the
SEC) to be performed after the date hereof that has not been filed with or
incorporated by reference in Seller's Reports. Except (1) as disclosed in
Seller's Disclosure Letter, (2) as disclosed in Seller's Reports filed on or
prior to the date of this Agreement, or (3) as contemplated by this Agreement,
neither Seller nor any of its Subsidiaries is a party to an oral or written or,
to Seller's knowledge, an oral (A) consulting agreement (including data
processing and software programming contracts) not terminable on 60 days' or
less notice, (B) agreement with any present or former director, officer or
employee of Seller or any of its Subsidiaries the benefits of which are
contingent, or the terms of which are materially altered, upon the occurrence of
a transaction involving Seller or any of its Subsidiaries of the nature
contemplated by this Agreement, (C) agreement with respect to any employee or
director of Seller or any of its Subsidiaries providing any term of employment
or compensation guarantee extending for a period longer than 60 days, (D)
agreement or plan, including any stock option plan, phantom stock or stock
appreciation rights plan, restricted stock plan or stock purchase plan, any of
the benefits of which will be increased, or the vesting or payment of the
benefits of which will be accelerated, by the occurrence of any of the
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transactions contemplated by this Agreement or the value of any of the benefits
of which will be calculated on the basis of any of the transactions contemplated
by this Agreement or (E) agreement containing covenants that limit the ability
of Seller or any of its Subsidiaries to compete in any line of business or with
any person, or that involve any restriction on the geographic area in which, or
method by which, Seller (including any successor thereof) or any of its
Subsidiaries may carry on its business (other than as may be required by law or
any regulatory agency);
Neither Seller nor any of its Subsidiaries is in default under or is in
violation of any provision of any note, bond, indenture, mortgage, deed of
trust, loan agreement, lease or other agreement to which it is a party or by
which it is bound or to which any of its respective properties or assets is
subject; and,
Seller and each of its Subsidiaries owns or possesses valid and binding
licenses and other rights to use without payment all patents, copyrights, trade
secrets, trade names, service marks and trademarks used in its businesses, and
neither Seller nor any of its Subsidiaries has received any notice of conflict
with respect thereto that asserts the right of others. Each of Seller and its
Subsidiaries has performed all the obligations required to be performed by it
and are not in default under any contract, agreement, arrangement or commitment
relating to any of the foregoing.
Seller's Disclosure Letter contains a summary description of all
leases, commitments, contracts, licenses, maintenance agreements and other
agreements of Seller and its Subsidiaries involving a liability or obligation of
Seller in excess of $10,000 per annum, and a true and complete list of all
letters of credit, guarantees, indemnity agreements and all commitments to loan
or discount or issue a letter of credit which would aggregate in excess of
$10,000 to any person, firm or corporation.
l) Labor Matters. Neither Seller nor any of its Subsidiaries is or, to
Seller's knowledge, has ever been a party to, or is or, to Seller's knowledge,
has ever been bound by, any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization with respect
to its employees, nor is Seller or any of its Subsidiaries the subject of any
proceeding asserting that it has committed an unfair labor practice or seeking
to compel it or any such Subsidiary to bargain with any labor organization as to
wages and conditions of employment nor, to Seller's knowledge, has any such
proceeding been threatened, nor, to Seller's knowledge, is there any strike,
other labor dispute or organizational effort involving Seller or any of its
Subsidiaries pending or threatened.
m) Employee Benefit Plans. Seller's Disclosure Letter contains a
complete and accurate list of all written and, to Seller's knowledge, oral
pension, retirement, stock option, stock purchase, stock ownership, savings,
stock appreciation right, profit sharing, deferred compensation, consulting,
bonus, group insurance, severance and other benefit plans, funds, contracts,
agreements and arrangements, including, but not limited to, "employee benefit
plans," as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), incentive and welfare policies, contracts,
plans and arrangements and all trust agreements related thereto with respect to
any present or former directors, officers or other employees of Seller or any of
its Subsidiaries, cafeteria or section 125 plans, fringe benefit plans including
but not limited to automobiles, sabbaticals, clubs or any item considered a
fringe benefit within the meaning of IRC ss. 32 (hereinafter collectively
referred to as the "Seller Employee Plans"). All of the Seller Employee Plans
comply in all material respects with all applicable requirements of ERISA, the
IRC and other applicable laws; with respect to the Seller Employee Plans, to the
knowledge of Seller, no event has occurred that would subject Seller or any of
its Subsidiaries to a material liability under ERISA, the IRC or any other
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applicable law; there has occurred no "prohibited transaction" (as defined in
Section 406 of ERISA or Section 4975 of the IRC) which is reasonably likely to
result in the imposition of any penalties or taxes under Section 502(i) of ERISA
or Section 4975 of the IRC upon Seller or any of its Subsidiaries; and all
required contributions to the Seller Employee Plans through the date hereof have
been made. Neither Seller nor any of its Subsidiaries has provided, or is
required to provide, security to any Seller pension plan or to any
single-employer plan of an ERISA Affiliate (as defined under Section 4001(b)(l)
of ERISA or Section 414 of the IRC) pursuant to Section 401(a)(29) of the IRC.
Neither Seller, its Subsidiaries, nor any ERISA Affiliate has contributed to any
"multiemployer plan," as defined in Section 3(37) of ERISA, on or after
September 26, 1980. Seller does not maintain any plan that is subject to Title
IV of ERISA, and has not terminated any such plan within the past five (5)
years. Each Seller Employee Plan that is an "employee pension benefit plan" (as
defined in Section 3(2) of ERISA) and which is intended to be qualified under
Section 401(a) of the IRC (a "Seller Qualified Plan") has received a favorable
determination letter from the Internal Revenue Service ("IRS"), and Seller and
its Subsidiaries are not aware of any circumstances likely to result in
revocation of any such favorable determination letter. There is no pending or,
to Seller's knowledge, threatened litigation, administrative action or
proceeding relating to any Seller Employee Plan. There has been no announcement
or commitment by Seller or any of its Subsidiaries to create an additional
Seller Employee Plan, or to amend any Seller Employee Plan, except for
amendments required by applicable law which do not materially increase the cost
of such Seller Employee Plan; and, except as specifically identified in Seller's
Disclosure Letter, Seller and its Subsidiaries do not have any obligations for
post-retirement or post-employment benefits under any Seller Employee Plan that
cannot be amended or terminated upon 60 days' notice or less without incurring
any liability thereunder, except for coverage required by Part 6 of Title I of
ERISA or Section 4980B of the IRC, or similar state laws, the cost of which is
borne by the insured individuals. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby will not result in
any payment or series of payments by Buyer, Seller or any of their Subsidiaries
to any person which is an "excess parachute payment" (as defined in Section 280G
of the IRC). All payments made by Buyer, Seller or any of their Subsidiaries to
any employee under a Seller Employee Plan will be fully tax-deductible as
employment compensation to Buyer, Seller, or one of their Subsidiaries. To the
best knowledge of Seller, no breach of a fiduciary duty under ERISA ss.404 or
ss.405 has occurred and with respect to which any outstanding liability to any
participant or any excise tax or liability exists or will exist as of the
Effective Time with respect to any of the Seller Employee Plans. Each of the
Seller Employee Plans which is a group health plan within the meaning of IRC
ss.5000(b)(1) is in compliance with the continuation of health care coverage
requirements contained in IRC ss.4980B and ERISA ss.601 et seq. A list of
participants or beneficiaries who have elected continuation coverage in
accordance with such laws is provided in Seller's Disclosure Letter. With
respect to each Seller Employee Plan, Seller has supplied to Buyer a true and
correct copy of (A) the annual report on the applicable form of the Form 5500
series filed with the IRS for the three most recent plan years, if required to
be filed, (B) such Seller Employee Plan, including amendments thereto, (C) each
trust agreement, insurance contract or other funding arrangement relating to
such Seller Employee Plan, including amendments thereto, (D) the most recent
summary plan description and summary of material modifications thereto for such
Seller Employee Plan, if the Seller Employee Plan is subject to Title I of
ERISA, (E) the most recent actuarial report or valuation if such Seller Employee
Plan is a Seller pension plan and any subsequent changes to the actuarial
assumptions contained therein, and (F) the most recent determination letter
issued by the IRS if such Seller Employee Plan is a Seller Qualified Plan. With
respect to Seller's ESOP, Seller also has supplied Buyer a true and correct copy
of (A) the latest financial statement of the ESOP including a list of assets,
(B) a schedule of stock purchases by the ESOP, including seller, valuation and
number of shares, (C) a schedule of stock contributions to the ESOP, (D) a list
of the most recent ESOP distributions including participant name and amount, and
(E) a schedule of the most recent contribution allocation including participant
name, compensation and share of contribution.
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n) Title to Assets. Seller's Disclosure Letter contains a complete and
accurate list of all real property owned or leased by Seller or any of its
Subsidiaries, including all properties of Seller or any of its Subsidiaries
classified as "Real Estate Owned" or words of similar import (the "Real
Property") and except as disclosed in Seller's Disclosure Letter, title to all
of such real properties is insured for an amount not less than the book value of
all such real properties on Seller's or its Subsidiaries' books under an owner's
title insurance policy issued by a title insurance company authorized to do
business in the state where the property is located. Seller and each of its
Subsidiaries have good and marketable title to their respective properties and
assets (including any intellectual property asset such as any trademark, service
mark, trade name or copyright) and property acquired in a judicial foreclosure
proceeding or by way of a deed in lieu of foreclosure or similar transfer in
each case free and clear of any liens, security interests, encumbrances,
mortgages, pledges, restrictions, charges or rights or interests of others,
except pledges to secure deposits and other liens incurred in the ordinary
course of business. Each lease for real or personal property pursuant to which
Seller or any of its Subsidiaries is lessee or lessor is valid and in full force
and effect and neither Seller nor any of its Subsidiaries, nor any other party
to any such lease is in default or in violation of any provisions of any such
lease. All material tangible properties of Seller and each of its Subsidiaries
are in a good state of maintenance and repair, conform with all applicable
ordinances, regulations and zoning laws, are considered by Seller to be adequate
for the current business of Seller and its Subsidiaries and improvements on real
property owned or leased by Seller are located wholly within the boundaries of
the property owned or leased by Seller or its Subsidiaries. There are no unpaid
charges, debts, liabilities, claims or obligations arising from the
construction, ownership or operation of the banking premises of Seller S&L which
would give rise to any mechanics' liens against any such real estate or any part
thereof, or for which Seller or Seller S&L would be responsible, except for i)
liens imposed by law and incurred in the ordinary course of business for
obligations not yet due to carriers, warehousemen, laborers, materialmen and the
like, but only to the extent the obligation giving rise to the lien is included
as a liability on Seller's books and records and ii) such minor encumbrances, if
any, as do not materially detract from the value of, or materially interfere
with the present use of, such properties, and which minor encumbrances do not
render the title to such property unmarketable.
o) Compliance with Laws. Seller and each of its Subsidiaries has all
permits, licenses, certificates of authority, orders and approvals of and has
made all filings, applications and registrations with, all federal, state, local
and foreign governmental or regulatory bodies (each, a "Governmental Entity")
that are required in order to operate its material assets and to permit it to
carry on its business as it is presently conducted; all such permits, licenses,
certificates of authority, orders and approvals are in full force and effect,
and, to the knowledge of Seller, no suspension or cancellation of any of them is
threatened. Since the date of its incorporation, the corporate affairs of Seller
have not been conducted in violation in any material respect of any law,
ordinance, regulation, order, writ, rule, decree or approval of any Governmental
Entity. Neither Seller nor any of its Subsidiaries is in material violation of,
is, to the knowledge of Seller, under investigation with respect to any material
violation of, or has been given notice or been charged with any material
violation of, any law, ordinance, regulation, order, writ, rule, decree or
condition to approval of any Governmental Entity.
p) Fees. Other than investment banking services performed for Seller by
William Blair & Company, L.L.C., neither Seller nor any of its Subsidiaries, nor
any of their respective officers, directors, employees or agents, has employed
any broker or finder or incurred any liability for any financial advisory' fees,
brokerage fees, commissions or finder's fees, and no broker or finder has acted
directly or indirectly for Seller or any of its Subsidiaries in connection with
this Agreement or the transactions contemplated hereby. Seller has provided
Buyer with a true and correct copy of the contract between Seller and William
Blair & Company, L.L.C.
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q) Environmental Matters. There is no suit, claim, action, demand,
executive or administrative order, directive, investigation or proceeding
pending or, to the knowledge of Seller, threatened before any court,
governmental agency or board or other forum against Seller or any of its
Subsidiaries for alleged noncompliance (including by any predecessor) with, or
liability under, any Environmental Law (as defined below) or relating to the
presence of or release into the environment of any Hazardous Material (as
defined below), whether or not occurring at or on a site owned, leased or
operated by it or any of its Subsidiaries. To Seller's knowledge, the properties
currently owned or operated by Seller or any of its Subsidiaries (including,
without limitation, soil, groundwater or surface water on, under or adjacent to
the properties, and buildings thereon) are not contaminated with and do not
otherwise contain any Hazardous Material other than as permitted under
applicable Environmental Law. Neither Seller nor any of its Subsidiaries has
received any notice, demand letter, executive or administrative order,
directive, request or other communication (written or oral) for information from
any federal, state, local or foreign governmental entity or any third party
indicating that it may be in violation of, or liable under, any Environmental
Law. To Seller's knowledge, there are no underground storage tanks on, in or
under any properties owned or operated by Seller or any of its Subsidiaries and
no underground storage tanks have been closed or removed from any properties
owned or operated by Seller or any of its Subsidiaries. To Seller's knowledge,
during the period of Seller's or any of its Subsidiaries' ownership or operation
of any of their respective current properties, there has been no contamination
by or release of Hazardous Materials in, on, under or affecting such properties.
To Seller's knowledge, prior to the period of Seller's or any of its
Subsidiaries' ownership or operation of any of their respective current
properties, there was no contamination by or release of Hazardous Material in,
on, under or affecting such properties.
"Environmental Law" means (i) any federal, state or local law, statute,
ordinance, rule, regulation, code, license, permit, authorization, approval,
consent, legal doctrine, order, directive, executive or administrative order,
judgment, decree, injunction, legal requirement or agreement with any
Governmental Entity relating to (A) the protection, preservation or restoration
of the environment (which includes, without limitation, air, water vapor,
surface water, groundwater, drinking water supply, structures, soil, surface
land, subsurface land, plant and animal life or any other natural resource), or
to human health or safety as it relates to Hazardous Materials, or (B) the
exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or disposal
of, Hazardous Materials, in each case as amended and as now in effect,
including, without limitation, (i) the Federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act of 1986, the Federal Water Pollution Control Act of 1972,
the Federal Clean Air Act, the Federal Clean Water Act, the Federal Resource
Conservation and Recovery Act of 1976 (including, but not limited to, the
Hazardous and Solid Waste Amendments thereto and Subtitle I relating to
underground storage tanks), the Federal Solid Waste Disposal and the Federal
Toxic Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide
Act, the Federal Occupational Safety and Health Act of 1970 as it relates to
Hazardous Materials, the Federal Hazardous Substances Transportation Act, the
Emergency Planning and Community Right-To-Know Act, the Safe Drinking Water Act,
the Endangered Species Act, the National Environmental Policy Act, the Rivers
and Harbors Appropriation Act or any so-called "Superfund" or "Superlien" law,
each as amended and as now or hereafter in effect, and (ii) any common law or
equitable doctrine (including, without limitation, injunctive relief and tort
doctrines such as negligence, nuisance, trespass and strict liability) that may
impose liability or obligations for injuries or damages due to, or threatened as
a result of the presence of or exposure to any Hazardous Material.
"Hazardous Material" means any substance (whether solid, liquid or gas)
which is or could be detrimental to the environment, currently or hereafter
listed, defined, designated or classified as hazardous, toxic, radioactive or
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dangerous, or otherwise regulated under any Environmental Law, whether by type
or by quantity, including any substance containing any such substance as a
component. Hazardous Material includes, without limitation, any toxic waste,
pollutant, contaminant, hazardous substance, toxic substance, hazardous waste,
special waste, industrial substance, oil or petroleum, or any derivative or
by-product thereof, radon, radioactive material, asbestos, asbestos-containing
material, urea formaldehyde foam insulation, lead and polychlorinated biphenyl.
r) Loan Portfolio; Allowance; Asset Quality.
With respect to each loan owned by Seller or its Subsidiaries in whole
or in part, (A) the note and the related security documents are each legal,
valid and binding obligations of the maker or obligor thereof, enforceable
against such maker or obligor in accordance with their terms, without valid
set-offs or counterclaims and (B) the note and the related security documents,
copies of which are included in the loan files, are true and correct copies of
the documents they purport to be and have not been suspended, amended, modified,
canceled or otherwise changed except as otherwise disclosed by documents in the
applicable loan file. To the knowledge of Seller (x) all notes, evidences of
indebtedness and agreements for the payment of money and all related documents,
instruments, papers and other security agreements of Seller S&L applicable
thereto, are bona fide, are genuine as to signatures of all makers, endorsers
and guarantors, and were given for valid consideration; (y) all collateral
securing such indebtedness existed at the disbursement of the funds which
created the indebtedness; and (z) except as may be disclosed in the books and
records of Seller S&L relating to its loans, Seller S&L has made no affirmative
or negative oral or written commitments which would materially impair the
enforcement of any of Seller S&L's loans.
The allowance for loan losses reflected in Seller's statement of
financial condition at September 30, 1999, was, and the allowance for loan
losses shown on the balance sheets in Seller's Reports for periods ending after
September 30, 1999, was or will be, in the opinion of Seller's management,
adequate to provide for losses inherent in Seller's loan portfolio.
s) Deposits. None of the deposits of Seller or any of its Subsidiaries
is a "brokered" deposit.
t) Anti-takeover Provisions Inapplicable. Seller and its Subsidiaries
have taken all actions required to exempt Seller, Buyer, Acquisition Sub, the
Agreement and the Merger from Section 203 of the DGCL.
u) Charter Provisions. Seller and its Subsidiaries have taken all
action so that the entering into of this Agreement and the consummation of the
Merger and the other transactions contemplated by this Agreement (including the
Bank Merger) do not and will not result in the grant of any rights to any person
under the Certificate of Incorporation, bylaws, or other governing instruments
of Seller or any of its Subsidiaries or restrict or impair the ability of Buyer
or any of its Subsidiaries or Affiliates to vote, or otherwise to exercise the
rights of a stockholder with respect to, shares of Seller or any of its
Subsidiaries that may be directly or indirectly acquired or controlled by it.
v) Material Interests of Certain Persons; Transactions with Insiders.
No officer or director or 5% stockholder of Seller, or any "associate" (as such
term is defined in Rule 12b-2 promulgated under the Exchange Act) of any such
officer or director or stockholder, has any material interest in any material
contract or property (real or personal), tangible or intangible, used in or
pertaining to the business of Seller or any of its Subsidiaries. Seller's
Disclosure Letter describes all transactions in which any current officer or
director, or any Affiliate or Subsidiary thereof, directly or indirectly, has
borrowed from, loaned to, supplied or provided goods or services to, purchased
assets from, sold assets to, or done business in any manner with Seller or
Seller S&L or is a party to any agreement with Seller or Seller S&L, and all
transactions known to management in which any current 5% stockholder or employee
of Seller or Seller S&L, or any Affiliate or Subsidiary thereof, directly or
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indirectly, has borrowed from, loaned to, supplied or provided goods or services
to, purchased assets from, sold assets to, or done business in any manner with
Seller or Seller S&L or is a party to any agreement with Seller or Seller S&L.
w) Insurance. Seller's Disclosure Letter contains a complete list of
all insurance policies of Seller and its Subsidiaries presently in effect. In
the opinion of Seller's management, Seller and its Subsidiaries are presently
insured for amounts deemed reasonable by management against such risks as
companies engaged in a similar business would, in accordance with good business
practice, customarily be insured. All of the insurance policies and bonds
maintained by Seller and its Subsidiaries are in full force and effect, Seller
and its Subsidiaries are not in default thereunder and all material claims
thereunder have been filed in due and timely fashion. Seller and its
Subsidiaries have received no notice from any insurance carrier that (i) any
insurance will be canceled or that coverage thereunder will be reduced or
eliminated, or (ii) premium costs with respect to any policies of insurance will
be substantially increased.
x) Investment Securities; Derivatives.
Except for investments in Federal Home Loan Bank ("FHLB") Stock,
pledges to secure FHLB borrowings, pledges to secure deposits and reverse
repurchase agreements entered into in arms-length transactions pursuant to
normal commercial terms and conditions and entered into in the ordinary course
of business and restrictions that exist for securities to be classified as "held
to maturity," none of the investment securities held by Seller or any of its
Subsidiaries as of the date of this Agreement is, or will be at Closing, subject
to any restriction (contractual or statutory) that would materially impair the
ability of the entity holding such investment freely to dispose of such
investment at any time.
Except (x) as set forth in Seller's Disclosure Letter, (y) as disclosed
in Seller's Reports filed on or prior to the date of this Agreement, or (z) for
adjustable-rate mortgage loans and adjustable-rate advances, neither Seller nor
any of its Subsidiaries is a party to or has agreed to enter into an
exchange-traded or over-the-counter equity, interest rate, foreign exchange or
other swap, forward, future, option, cap, floor or collar or any other contract
that is a derivative contract (including various combinations thereof) or owns
securities that (A) are referred to generically as "structured notes," "high
risk mortgage derivatives," "capped floating rate notes" or "capped floating
rate mortgage derivatives" or (B) are likely to have changes in value as a
result of interest or exchange rate changes that significantly exceed normal
changes in value attributable to interest or exchange rate changes.
y) Credit Card Issuing Agreement. Neither Seller nor Seller S&L has any
credit card agreement which would prevent Buyer from soliciting Seller S&L's
customers to accept a credit card issued by or on behalf of Buyer or an
Affiliate of Buyer.
z) Indemnification. Except (i) as provided in the certificate of
incorporation or bylaws of Seller and the similar governing documents of its
Subsidiaries, or (ii) as set forth in Seller's Disclosure Letter, neither Seller
nor any Subsidiary is a party to any indemnification agreement with any of its
present or former directors, officers, employees, agents or other persons who
serve or served in any other capacity with any other enterprise at the request
of Seller and, to the knowledge of Seller, there are no claims for which any
such person would be entitled to indemnification under the organization
certificate of incorporation or bylaws of Seller or the similar governing
documents of any of its Subsidiaries, under any applicable law or regulation or
under any indemnification agreement.
aa) Books and Records. The books and records of Seller and its
Subsidiaries on a consolidated basis have been, and are being, maintained in
accordance with applicable legal and accounting requirements and reflect in all
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material respects the substance of events and transactions that should be
included therein.
bb) Corporate Documents. Complete and correct copies of the certificate
of incorporation, bylaws and similar governing documents of Seller and each of
Seller's Subsidiaries, as in effect as of the date of this Agreement, have
previously been delivered to Buyer. The minute books of Seller and each of
Seller's Subsidiaries constitute a complete and correct record of all actions
taken by their respective boards of directors (and each committee thereof) and
their stockholders.
cc) Community Reinvestment Act Compliance. Seller S&L is in material
compliance with the applicable provisions of the Community Reinvestment Act, as
amended (the "CRA"), and the regulations promulgated thereunder, and, as of its
most recent CRA examination, Seller S&L has a CRA rating of satisfactory or
better. To Seller's knowledge, there is no fact or circumstance or set of facts
or circumstances that would cause Seller S&L to fail to comply with such
provisions or cause the CRA rating of Seller S&L to fall below satisfactory. dd)
Conduct of Business Since Due Diligence. Since the date of information provided
to Buyer during Buyer's due diligence:
Ordinary Course. The business and affairs of Seller and Seller S&L have
been conducted and carried on only in the ordinary and regular course consistent
with its past practices.
Articles and Bylaws. There has been no change, amendment or other
modification made in the Articles of Incorporation or Bylaws of Seller or Seller
S&L.
Employment Benefits. There has been no increase or other change made in
the rate or nature of compensation, including wages, salaries, bonuses and
benefits under Seller's employee plans, which has been paid, or will be paid or
payable by Seller or Seller S&L to any officer, employee, stockholder or
director of Seller S&L, other than customary year-end increases and bonuses
consistent with Seller or Seller S&L's past practices. No additional stock
options or rights to receive any stock have been granted or allocated to any
employees.
Casualty Loss. Seller S&L has not sustained or incurred any loss or
damage, whether or not insured against, on account of fire, flood, accident or
other calamity which has materially interfered with or affected, or may
materially interfere with or affect, the operation of its properties, assets or
liabilities of Seller S&L.
Accounting Methods. There has been no material change in any method of
accounting or accounting practice of Seller or Seller S&L.
Waiver of Rights. Seller S&L has not waived any rights, the result of
which, individually or in the aggregate, would have a Material Adverse Effect on
its financial condition. Section 3.04 Representations and Warranties of Buyer.
Subject to Section 3.01 and Section 3.02, Buyer represents and warrants to
Seller that:
a) Organization.
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Missouri and is registered as a bank
holding company under the Bank Holding Company Act, as amended ("BHCA"). Bank
Midwest, N.A. ("Buyer Bank") is a bank duly organized, validly existing and in
good standing under the laws of the United States of America and is a Subsidiary
of Buyer. Each Subsidiary of Buyer other than Buyer Bank is a national bank or
corporation, duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization. Each of Buyer and its
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Subsidiaries has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted.
Acquisition Sub will be a corporation, duly organized, validly existing
and in good standing under the laws of Delaware, all of the outstanding capital
stock of which will be prior to the Effective Time, owned directly or indirectly
by Buyer free and clear of any lien, charge or other encumbrance. From and after
its incorporation, Acquisition Sub will not engage in any activities other than
in connection with or as contemplated by this Agreement. Acquisition Sub will
have prior to the Effective Time, all corporate power and authority to
consummate the transactions contemplated hereunder and carry out all of its
obligations with respect to such transactions. The consummation of the
transactions contemplated hereby will have been prior to the Closing, duly and
validly authorized by all necessary corporate action in respect thereof on the
part of Acquisition Sub.
Buyer and each of its Subsidiaries has the requisite corporate power
and authority and is duly qualified to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification necessary.
b) Authority. Buyer has all requisite corporate power and authority to
enter into this Agreement and, subject to receipt of all Requisite Regulatory
Approvals (as defined in Section 3.04d) below), to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by the Board of Directors of Buyer. This Agreement has been duly and validly
executed and delivered by Buyer and constitutes a valid and binding obligation
of Buyer, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general principles of equity,
whether applied in a court of law or a court of equity.
c) Corporate Action. The execution, delivery and performance of this
Agreement and consummation of the transactions contemplated herein, including
the Merger, have been duly and validly authorized by all necessary corporate
action in respect thereof on the part of Buyer, including shareholder approval,
if applicable.
d) No Violations; Consents. The execution, delivery and performance of
this Agreement by Buyer does not, and the consummation of the transactions
contemplated hereby will not, constitute (i) assuming receipt of all Requisite
Regulatory Approvals, a breach or violation of, or a default under, any law,
rule or regulation or any judgment, decree, order, governmental permit or
license to which Buyer or any of its Subsidiaries (or any of their respective
properties) is subject, (ii) a breach or violation of, or a default under, the
certificate of incorporation or bylaws of Buyer or the similar organizational
documents of any of its Subsidiaries or (iii) a breach or violation of, or a
default under (or an event which, with due notice or lapse of time or both,
would constitute a default under), or result in the termination of, accelerate
the performance required by, or result in the creation of any lien, pledge,
security interest, charge or other encumbrance upon any of the properties or
assets of Buyer or any of its Subsidiaries under, any of the terms, conditions
or provisions of any note, bond, indenture, deed of trust, loan agreement or
other agreement, instrument or obligation to which Buyer or any of its
Subsidiaries is a party, or to which any of their respective properties or
assets may be subject. The consummation by Buyer of the transactions
contemplated hereby will not require any approval, consent or waiver under any
such law, rule, regulation, judgment, decree, order, governmental permit or
license or the approval, consent or waiver of any other party to any such
agreement, or instrument, other than (x) the approval of Buyer as the sole
shareholder of Acquisition Sub and (y) the approval of the Board of Governors of
the Federal Reserve System ("FRB') under the BHCA and (z) approval of the Office
of the Comptroller of the Currency ("OCC") of the Related Mergers (collectively,
the "Requisite Regulatory Approvals"). As of the date hereof, the executive
officers of Buyer know of no reason pertaining to Buyer why any of the approvals
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referred to in this Section 3.04d) should not be obtained without undue delay or
the imposition of any material condition or restriction described in the last
sentence of Section 6.01d).
e) Reports and Financial Statements.
Buyer and each of its Subsidiaries have each timely filed all material
reports and financial statements, together with any amendments required to be
made with respect thereto, that they were required to file with (a) the FDIC,
(b) the FRB, and (c) the Comptroller of the Currency, (collectively, "Buyer's
Reports") and, to Buyer's knowledge, have paid all taxes and assessments due and
payable in connection therewith. As of their respective dates, none of Buyer's
Reports contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.
Each of the financial statements of Buyer included in Buyer's Reports
has been prepared in all material respects in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto or, in the case of the unaudited financial statements, as
permitted by appropriate regulatory authorities). Each of the consolidated
statements of condition contained or incorporated by reference in Buyer's
Reports (including in each case any related notes and schedules) and each of the
consolidated statements of operations, contained or incorporated by reference in
Buyer's Reports (including in each case any related notes and schedules) fairly
presented (A) the financial position of the entity or entities to which it
relates as of its date and (B) the results of operations, stockholders' equity
and cash flows, as the case may be, of the entity or entities to which it
relates for the periods set forth therein (subject in the case of unaudited
interim statements, to normal year-end adjustments that are not material in
amount or effect), in each case in accordance with GAAP, except as may be noted
therein.
f) Absence of Certain Changes or Events. Except as disclosed in Buyer's
Reports filed on or prior to the date of this Agreement, no event has occurred
or circumstances arisen which has had or might reasonably be expected to have a
Material Adverse Effect with respect to Buyer and its Subsidiaries.
g) Absence of Claims. No litigation, proceeding, controversy, claim,
action or suit or other legal administrative or arbitration proceeding before
any court, governmental agency or arbitrator is pending or has been threatened
against Buyer or any of its Subsidiaries that would reasonably be expected to
prevent or adversely affect or which seeks to prohibit the consummation of the
transactions contemplated by this Agreement or which would have a Material
Adverse Effect with respect to Buyer and its Subsidiaries taken as a whole.
h) Absence of Regulatory Actions. Neither Buyer nor any of its
Subsidiaries is a party to any cease and desist order, written agreement or
memorandum of understanding with, or any commitment letter or similar written
undertaking to, or is subject to any action, proceeding, order or directive by,
or is a recipient of any extraordinary supervisory letter from any Government
Regulator, or has adopted any board resolutions at the request of any Government
Regulator, nor has it been advised by any Governmental Regulator that it is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such action, proceeding, order, directive, written
agreement, memorandum of understanding, extraordinary supervisory letter,
commitment letter, board resolutions or similar written undertaking.
i) Compliance with Laws. Buyer and each of its Subsidiaries have all
permits, licenses, certificates of authority, orders and approvals of, and have
made all filings, applications and registrations with, all Governmental Entities
that are required in order to permit them to carry on their business as it is
presently conducted; all such permits, licenses, certificates of authority,
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orders and approvals are in full force and effect, and to the best knowledge of
Buyer no suspension or cancellation of any of them is threatened. Since the date
of its incorporation, the corporate affairs of Buyer have not been conducted in
violation in any material respect of any law, ordinance, regulation, order,
writ, rule, decree or approval of any Governmental Entity. Neither Buyer nor any
of its Subsidiaries is in material violation of, is, to the knowledge of Buyer,
under investigation with respect to any material violation of, or has been given
notice or been charged with any material violation of, any law, ordinance,
regulation, order, writ, rule, decree or condition to approval of any
Governmental Entity.
j) Fees. Neither Buyer nor any of its Subsidiaries, nor any of their respective
officers, directors, employees or agents, has employed any broker or finder or
incurred any liability for any financial advisory fees, brokerage fees,
commissions or finder's fees, and no broker or finder has acted directly or
indirectly for Buyer or any of its Subsidiaries in connection with this
Agreement or the transactions contemplated hereby. k) Availability of Funds.
Buyer will have sufficient funds available to carry out its obligations under
this Agreement.
Article IV. Conduct Pending the Merger
Section 4.01 Conduct of Seller's Business Prior to the Effective Time. Except as
contemplated by this Agreement, during the period from the date of this
Agreement to the Effective Time, Seller shall, and shall cause its Subsidiaries
to, use its commercially reasonable efforts to (i) conduct its business in the
regular, ordinary and usual course consistent with past practice and in
accordance with sound banking practices, (ii) maintain and preserve intact its
business organization, properties, leases, employees, goodwill of its customers,
and advantageous business relationships and retain the services of its officers
and key employees, (iii) take no action which would adversely affect or delay
the ability of Seller or Buyer to perform their respective covenants and
agreements on a timely basis under this Agreement, (iv) take no action which
would adversely affect or delay the ability of Seller or Buyer to obtain any
necessary approvals, consents or waivers of any governmental authority required
for the transactions contemplated hereby (including the Bank Merger) or which
would reasonably be expected to result in any such approvals, consents or
waivers containing any material condition or restriction, and (v) take no action
that results in or is reasonably likely to have a Material Adverse Effect on
Seller. Without limiting the foregoing covenants, unless the prior written
consent of Buyer shall have been obtained, and except as otherwise expressly
contemplated in this Agreement, Seller shall, and shall cause each of its
Subsidiaries to:
a) Board Observers. Permit, at any time after the execution of this
Agreement, two representatives of Buyer to attend Seller's and Seller S&L's
board of directors' meetings and all Board committee meetings as observers only
and shall give Buyer notice of all such meetings concurrently with the giving of
notice to other directors and committee members; provided, however, that such
observers will not be entitled to attend the portions of any meetings that
relate to any deliberation of the transactions contemplated by this Agreement or
meetings with attorneys on other matters who recommend that such observers not
be present in order to preserve the attorney-client privilege.
b) Loan Policies. Reserve against, place on non-accrual, and charge off
loans and other assets as losses are recognized or future losses become
apparent, in accordance with Seller S&L's past practices, which Seller warrants
and represents are in compliance in all material respects with all applicable
laws and regulations and have not been criticized in any past examinations or
audits, while maintaining a loan loss reserve of at least .75% of total loans
outstanding;
c) Tax Returns. Prepare, execute and file, on or before the due date
thereof if prior to the Effective Time, all federal, state and local tax returns
required of Seller or Seller S&L with respect to its operations for any period
ending before the Effective Time and will pay the appropriate tax.
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d) Customer Notice. Assist Buyer in drafting and preparing for mailing
a notice, the form and content of which shall be established by mutual agreement
of Buyer and Seller, to all Seller S&L's deposit and loan customers, notifying
them of the sale of Seller S&L to Buyer. The notice shall be mailed by Buyer
after all Requisite Regulatory Approvals and Stockholders Approvals have been
obtained but no later than thirtieth day prior to the date agreed upon by Buyer
and Seller pursuant to Section 7.01 for the data processing conversion.
e) Copies of Reports. Furnish to Buyer, until the Effective Time, true
and complete copies of the following information within five days after
preparation or receipt:
Monthly financial statements prepared with respect to Seller and Seller
S&L;
Daily statements of Seller S&L beginning on the date of the final
regulatory approval of the transactions contemplated by this Agreement and
continuing through the Effective Time;
Seller S&L's Reports of Condition and Income to regulatory authorities
at the close of business of each calendar quarter;
Seller S&L's internal watch and problem loan reports;
Any and all board reports prepared for the use of Seller S&L's board of
directors or any board committee (other than those portions of any report which
pertain to this Agreement or is privileged information);
Any reports submitted to Seller S&L by independent certified public
accountants in connection with an examination of Seller S&L's financial
statements;
Notice of all actions, suits, and proceedings before any court or
governmental department, commission, board, bureau, agency, or instrumentality
affecting Seller or Seller S&L which, if determined adversely, could have a
Material Adverse Effect on the financial condition, properties, or operations of
Seller or Seller S&L;
Any notices or communications received from any savings and loan
regulatory body with respect to the affairs or operations of Seller or Seller
S&L; and
Any additional information reasonably requested by Buyer for completion
of any applications for regulatory approval of the transactions contemplated by
this Agreement.
f) Liquidation Account. Cause Seller S&L to establish and maintain on
its books a true and complete record of those deposit accounts, including names
of depositors, which would have liquidation rights by reason of the conversion
of Seller S&L from mutual to stock form of organization.
Section 4.02 Forbearance by Seller. Without limiting the covenants set forth in
Section 4.01 hereof, except as otherwise provided in this Agreement and except
to the extent required by law or regulation or any Governmental Entity, during
the period from the date of this Agreement to the Effective Time, Seller shall
not, and shall not permit any of its Subsidiaries to, without the prior consent
of Buyer, which consent shall not be unreasonably withheld:
a) unless required by applicable law or regulation or regulatory
directive, change any provisions of the certificate of incorporation or bylaws
of Seller or the similar governing documents of its Subsidiaries;
b) authorize, issue, deliver or sell any shares of its capital stock or
any securities or obligations convertible or exercisable for any shares of its
capital stock or change the terms of any of its outstanding stock options or
warrants or issue, grant or sell any option, warrant, call, commitment, stock
appreciation right, right to purchase or agreement of any character relating to
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the authorized or issued capital stock of Seller except pursuant to the exercise
of stock options or warrants outstanding as of the date of this Agreement, or
split, combine, reclassify or adjust any shares of its capital stock or
otherwise change its capitalization;
c) make, declare or pay any cash or stock dividend or make any other
distribution on, or directly or indirectly redeem, purchase or otherwise
acquire, any shares of its capital stock or any securities or obligations
convertible into or exchangeable for any shares of its capital stock, provided,
however, that Seller may pay normal quarterly cash dividends of not more than $
.15 per share of Seller Common Stock and, in the case of Seller's 1st Quarter
dividend, payable in January, 2001, Seller may accelerate payment to a date not
earlier than December 15, 2000, provided that after giving effect thereto the
Adjusted Stockholders' Equity of Seller will not be less than $40,000,000.
Subject to applicable regulatory restrictions, if any, Seller S&L may pay a cash
dividend that is, in the aggregate, sufficient to fund any dividend by Seller
permitted hereunder;
d) other than for fair value in the ordinary course of business
consistent with past practice, (i) acquire or sell, transfer, assign, mortgage,
encumber or otherwise dispose of any material properties, leases, assets or
other rights or agreements to any individual, corporation or other entity other
than a direct or indirect wholly owned Subsidiary of Seller or (ii) cancel,
release or assign any indebtedness of any such individual, corporation or other
entity or (iii) permit Seller S&L to waive any material right or cancel any
material contract, lease, license, obligation or commitment, or permit any lien,
encumbrance or charge of any material effect to attach to any of Seller's or
Seller S&L's assets;
e) except to the extent required by law or as specifically provided for
elsewhere herein increase in any manner the compensation or fringe benefits of
any of its employees or directors, other than general increases in compensation
for non-executive officer employees in the ordinary course of business
consistent with past practice; pay any pension or retirement allowance not
required by any existing plan or agreement to any employees or directors, or
become a party to, amend or commit itself to fund or otherwise establish any
trust or account related to any Seller Employee Plan (as defined in Section
3.03m)) with or for the benefit of any employee or director; grant or award any
stock options; make any discretionary contribution to any Seller Employee Plan;
hire any employee with an annual total compensation payment in excess of
$35,000; or enter into or amend any employment contract with any employee;
f) except as contemplated by Section 5.02, change its methods of
accounting, tax or systems of internal accounting controls, as in effect at
September 30, 1999, except as required by changes in GAAP with the concurrence
of Seller's independent auditors;
g) commence any litigation other than in the ordinary course of
business, settle any claim, action or proceeding involving any liability of
Seller or any of its Subsidiaries for money damages in excess of $25,000 or
impose material restrictions upon the operations of Seller or any of its
Subsidiaries;
h) acquire or agree to acquire, by merging or consolidating with, or by
purchasing a substantial equity interest in or a substantial portion of the
assets of, or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof or otherwise
acquire or agree to acquire any assets, in each case which are material,
individually or in the aggregate, to Seller, except in satisfaction of debts
previously contracted;
i) establish or commit to the establishment of any new branch or other
office facilities or file any application to relocate or terminate the operation
of any banking office;
j) other than investments for Seller's portfolio made in accordance
with Section 4.02k), make any investment either by purchase of stock or
securities, contributions to capital, property transfers, or purchase of any
property or assets of any other individual, corporation or other entity;
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k) make any investment in any debt security, including mortgage-backed
and mortgage-related securities, or materially restructure or change its
investment securities portfolio, through purchases, sales or otherwise;
provided, however, that Seller shall be permitted to invest in the following
securities with final maturities not greater than six months: U.S. government
and U.S. government agency securities, or securities of the FHLB;
l) enter into, renew, amend or terminate any contract or agreement, or
make any change in any of its leases or contracts, other than with respect to
those involving aggregate payments of less than, or the provision of goods or
services with a market value of less than, $50,000 per annum over a term not
exceeding three years and other than contracts or agreements covered by Section
4.02o);
m) make, renegotiate, renew, increase, extend, modify or purchase any
loan, lease (credit equivalent), advance, credit enhancement or other extension
of credit, or make any commitment in respect of any of the foregoing, except (i)
in conformity with existing safe and sound lending and pricing practices; (ii)
loans or advances as to which Seller has a binding obligation to make such loan
or advances as of the date hereof; and (iii) with respect to any loan or
additional advance resulting in an aggregate indebtedness to any individual
borrower of $150,000 or more secured or $25,000 or more unsecured, unless such
loan has been approved in a loan committee or Board meeting of which an
authorized representative of Buyer was given at least 24 hours written notice or
oral notification and at which such representative did not object, provided,
however, that renewals (or extensions) of loans of no more than six months, or
one year in the case of construction loans that have been outstanding one year
or less, may be made at the time such loans are due for renewal, if consistent
with past practices, notwithstanding such objection if the Board of Directors or
Loan and Discount Committee determines after taking into account such objection
that such renewal is necessary to protect Seller S&L's interest and such loan is
current, is not a classified asset and is not on Seller S&L's watch list;
n) except as provided in subparagraph 4.02m, extend or renew loans, or
advance additional sums to a borrower whose loans, in whole or in part, have
been classified or listed as special mention by any regulatory authority or
included on Seller S&L's watch list unless such extension, renewal or advance
shall have been approved in advance by the Board of Directors of Seller S&L or
Seller S&L's Loan and Discount Committee, and only if such extension, renewal or
advance was found by such Board or Committee to be necessary in order to protect
Seller S&L's interests and in accordance with sound banking practices at a loan
committee or Board meeting of which Buyer was given at least 24 hours written
notice or oral notification and at which such representative did not object;
o) incur any additional borrowings other than purchases of Federal
Funds or short-term (six months or less) FHLB borrowings and reverse repurchase
agreements at reasonable market interest rates consistent with past practice, or
pledge any of its assets to secure any borrowings other than as required
pursuant to the terms of borrowings of Seller or any Subsidiary in effect at the
date hereof or in connection with borrowings or reverse repurchase agreements
permitted hereunder;
p) accept any deposits from any person on terms materially more
favorable in any respect than those available to the general public in Seller's
market area, unless such deposits are accepted in accordance with a safe and
sound program or practice in existence at Seller S&L prior to the date of this
Agreement;
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q) establish or impose a schedule of service charges or fees which
applies charges either substantially more or substantially less than similar
service charges and fees charged by other banks in Seller's market areas;
r) make any capital expenditures in excess of $10,000 per expenditure,
or $200,000 in the aggregate, other than pursuant to binding commitments
existing on the date hereof disclosed in the Seller Disclosure Schedule and
other than expenditures necessary to maintain existing assets in good repair or
to make payment of necessary taxes;
s) organize, capitalize, lend to or otherwise invest in any Subsidiary;
t) elect to any senior executive office any person who is not a member
of the senior executive officer team of Seller as of the date of this Agreement
or elect to the Board of Directors of Seller any person who is not a member of
the Board of Directors of Seller as of the date of this Agreement;
u) enter into any agreements or transactions after the date of this
Agreement with any officer, director, stockholder or employee of Seller or
Seller S&L, or any Affiliate or Subsidiary thereof, directly or indirectly, in
an amount of $5,000 or more in each case or $25,000 in the aggregate; or
v) agree or make any commitment to take any action that is prohibited
by this Section 4.02.
In the event that Buyer does not respond in writing to Seller within
three (3) business days of receipt by Buyer of a written request for Seller to
engage in any of the actions for which Buyer's prior written consent is required
pursuant to this Section 4.02., Buyer shall be deemed to have denied such
action. Any request by Seller or response thereto by Buyer shall be made in
accordance with the notice provisions of Section 11, and shall note that it is a
request pursuant to this Section 4 and shall state that a failure to respond
within three (3) business days shall constitute denial of the request.
Section 4.03 Conduct of Buyer's Business Prior to the Effective Time. Except as
expressly provided in this Agreement, during the period from the date of this
Agreement to the Effective Time, Buyer shall, and shall cause its Subsidiaries
to, use its commercially reasonable efforts to (i) conduct its business in the
regular, ordinary and usual course consistent with past practice; (ii) maintain
and preserve intact its business organization, properties, leases, employees and
advantageous business relationships; (iii) take no action which would materially
adversely affect or delay the ability of Seller or Buyer to perform their
respective covenants and agreements on a timely basis under this Agreement and
(iv) take no action which would adversely affect or delay the ability of Seller
or Buyer to obtain any necessary approvals, consents or waivers of any
governmental authority required for the transactions contemplated hereby or
which would reasonably be expected to result in any such approvals, consents or
waivers containing any material condition or restriction.
Article V. Covenants
Section 5.01 Acquisition Proposals. From and after the date hereof until the
termination of this Agreement, neither Seller nor Seller S&L, nor any of their
respective officers, directors, employees, representatives, agents or affiliates
(including, without limitation, any investment banker, attorney or accountant
retained by Seller or any of its Subsidiaries), will, directly or indirectly,
initiate, solicit or knowingly encourage (including by way of furnishing
non-public information or assistance), or facilitate knowingly, any inquiries or
the making of any proposal that constitutes, or may reasonably be expected to
lead to, any Acquisition Proposal (as defined below), or enter into or maintain
or continue discussions or negotiate with any person or entity in furtherance of
such inquiries or to obtain an Acquisition Proposal or agree to or endorse any
Acquisition Proposal, or authorize or permit any of its officers, directors or
employees or any of its subsidiaries or any investment banker, financial
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advisor, attorney, accountant or other representative retained by any of its
Subsidiaries to take any such action; provided, however, that nothing contained
in this Section 5.01 shall prohibit the Board of Directors of Seller from (i)
furnishing information to, or entering into discussions or negotiations with
any, person or entity that makes an unsolicited written, bona fide proposal to
acquire Seller pursuant to a merger, consolidation, share exchange, business
combination, tender or exchange offer or other similar transaction, if, and only
to the extent that the Board of Directors of Seller concludes in good faith,
after consultation with its financial advisors and legal counsel and taking into
account, among other things, all legal, financial, regulatory and other aspects
of such Acquisition Proposal, and the nature of the person making the
Acquisition Proposal, that such proposal, would, if consummated, result in a
transaction that is more favorable to its stockholders (in their capacities as
stockholders), from a financial point of view, than the transactions
contemplated by this Agreement and is reasonably capable of being completed (a
"Superior Proposal") and prior to furnishing such information to, or entering
into discussions or negotiations with, such person or entity, Seller (x)
provides reasonable notice to Buyer to the effect that it is furnishing
information to, or entering into discussions or negotiations with, such person
or entity and (y) receives from such person or entity an executed
confidentiality agreement in reasonably customary form; (ii) complying with Rule
14e-2 promulgated under the Exchange Act with regard to a tender or exchange
offer; or (iii) failing to make or withdrawing or modifying its recommendation,
or (iv) entering into an agreement with respect to a Superior Proposal. For
purposes of this Agreement, "Acquisition Proposal" shall mean any of the
following (other than the transactions contemplated hereunder) involving Seller
or any of its Subsidiaries: (i) any merger, consolidation, share exchange,
business combination, recapitalization, liquidation, dissolution, or other
similar transaction; (ii) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition of 25% or more of the assets of Seller or Seller S&L, taken
as a whole, in a single transaction or series of transactions; (iii) any tender
offer or exchange offer for 25% or more of the outstanding shares of capital
stock of Seller or the filing of a registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), in connection therewith; or (iv)
any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing.
Section 5.02 Certain Policies and Actions of Seller.
a) At the request of Buyer, Seller shall use reasonable efforts to
cause Seller S&L to modify and change its loan, litigation and real estate
valuation policies and practices (including loan classifications and levels of
reserves) and investment and asset/liability management policies and practices
after the date on which all Requisite Regulatory Approvals and stockholder
approvals are received, and after receipt of written confirmation from Buyer
that it is not aware of any fact or circumstance that would prevent completion
of the Merger, and prior to the Effective Time so as to be consistent on a
mutually satisfactory basis with those of Buyer Bank; provided, however, that
Seller shall not be required to take such action more than 30 days prior to the
Effective Time; and provided, further, that such policies and procedures are not
prohibited by GAAP or any applicable laws and regulations or, in the view of the
Board of Directors of Seller S&L not in the best interests of Seller S&L.
b) Seller's representations, warranties and covenants contained in this
Agreement shall not be deemed to be untrue or breached in any respect for any
purpose as a consequence of any modifications or changes undertaken solely on
account of this Section 5.02. Buyer agrees to hold harmless, indemnify and
defend Seller and its Subsidiaries, and their respective directors, officers and
employees, for any loss, claim, liability or other damage caused by or resulting
from compliance with this Section 5.02.
Section 5.03 Access and Information. Upon reasonable notice, Seller shall (and
shall cause its Subsidiaries to) afford to Buyer and its representatives
(including, without limitation, directors, officers and employees of Buyer and
its affiliates and counsel, accountants and other professionals retained by
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Buyer) such reasonable access during normal business hours throughout the period
prior to the Effective Time to the books, records (including, without
limitation, tax returns and work papers of independent auditors), contracts,
properties, personnel, advisors and to such other information relating to Seller
and its Subsidiaries as Buyer may reasonably request and shall permit Buyer and
its authorized representatives to make such copies thereof as they may
reasonably request; provided, however, that no investigation pursuant to this
Section 5.03 shall affect or be deemed to modify any representation or warranty
made herein. In furtherance, and not in limitation of the foregoing, Seller
shall make available to Buyer all information necessary or appropriate for the
preparation and filing of all real property and real estate transfer tax returns
and reports required by reason of the Merger. Upon reasonable notice, Buyer
shall (and shall cause its Subsidiaries to) provide to Seller and its
representatives (including, without limitation, directors, officers and
employees of Seller and its affiliates and counsel, accountants and other
professionals retained by Seller) such books, records and such other information
relating to Buyer and its Subsidiaries as Seller may reasonably request, but
only to the extent such access and information is reasonably required for the
preparation of Seller's Fairness Opinion, for Seller to determine Buyer's
ability to perform its obligations under this Agreement or for inclusion in the
Proxy Statement to be mailed to Seller's stockholders. Buyer and Seller will
not, and will cause their respective representatives not to, use any information
obtained pursuant to this Section 5.03 for any purpose unrelated to the
consummation of the transactions contemplated by this Agreement. Subject to the
requirements of applicable law, Buyer and Seller will keep confidential, and
will cause their respective representatives to keep confidential, all
information and documents obtained pursuant to this Section 5.03 unless such
information (i) was already known to such party or an affiliate of such party,
other than pursuant to a confidentiality agreement or other confidential
relationship, (ii) becomes available to such party or an affiliate of such party
from other sources not known by such party to be bound by a confidentiality
agreement or other obligation of secrecy, (iii) is disclosed with the prior
written approval of the other party or (iv) is or becomes readily ascertainable
from published information or trade sources. In the event that this Agreement is
terminated or the transactions contemplated by this Agreement shall otherwise
fail to be consummated, each party shall promptly cause all copies of documents
or extracts thereof containing information and data as to another party hereto
(or an affiliate of any party hereto) to be returned to the party that furnished
the same.
Section 5.04 Certain Filings, Consents and Arrangements. Except as
otherwise specifically designated to Seller by this Section, Buyer shall as soon
as practicable and in cooperation with Seller (and in any event within 30 days
after the date hereof) make, or cause to be made, any filings and applications
and provide any notices required to be filed or provided in order to obtain all
approvals, consents and waivers of Governmental Entities and third parties
necessary or appropriate for the consummation of the transactions contemplated
hereby. Buyer shall provide Seller and its counsel with copies of the public
portion of all filings, applications and notices submitted to any Governmental
Entity at the time of filing, provided, however, that Buyer shall provide Seller
and its counsel with a reasonable opportunity to review any such filings
requiring the signature of Seller or Seller S&L in advance of filing. Seller
shall as soon as practicable and in cooperation with Buyer (and in any event
within 15 days after Buyer's filings with Government Entities) make, or cause to
be made, any filings and applications and provide any notices required to be
filed or provided in order to obtain all approvals, consents and waivers of the
Office of Thrift Supervision which are required to effect the transactions
contemplated by this Agreement, such applications to be filed at Seller's
expense. Seller shall provide Buyer with copies of any such filings,
applications and notices filed with the Office of Thrift Supervision at the time
of filing. Buyer and Seller agree that time is of the essence in pursuing the
Requisite Regulatory Approvals.
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Section 5.05 Additional Actions. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use all commercially reasonable
efforts to take promptly, or cause to be taken promptly, all actions and to do
promptly, or cause to be done promptly, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement, including the Merger, as
expeditiously as possible, including using efforts to obtain all necessary
actions or non-actions, extensions, waivers, consents and approvals from all
applicable Governmental Entities, effecting all necessary registrations,
applications and filings (including, without limitation, filings under any
applicable state securities laws) and obtaining any required contractual
consents and regulatory approvals.
Section 5.06 Publicity. Seller and Buyer shall consult with each other in
issuing any press releases or otherwise making public statements with respect to
the Merger and any other transaction contemplated hereby and in making any
filings with any Governmental Entity or with any national securities exchange or
the NASD with respect thereto.
Section 5.07 Stockholders Meeting. Seller shall take all action necessary, in
accordance with applicable law and its Certificate of Incorporation and Bylaws,
to convene a meeting of its stockholders ("Stockholder Meeting") as promptly as
practicable for the purpose of considering and voting on approval and adoption
of this Agreement, the Merger and the other transactions provided for in this
Agreement. Except as otherwise provided in Section 5.01, the Board of Directors
of Seller shall (a) recommend at its Stockholder Meeting that the stockholders
vote in favor of and approve the transactions provided for in this Agreement and
(b) use its commercially reasonable efforts to solicit such approvals. Seller
may employ professional proxy solicitors to assist in contacting stockholders in
connection with soliciting favorable votes on the Merger.
Section 5.08 Proxy Statement. For the purposes of holding the Seller
Stockholders Meeting, Seller shall prepare a proxy statement satisfying in all
material respects all applicable requirements of the Exchange Act, and the rules
and regulations thereunder. Buyer agrees to provide for inclusion in such proxy
statement all information reasonably necessary to satisfy the requirements of
the Exchange Act and the rules and regulations thereunder and such information
shall not contain any untrue statement of a material fact or omit to state any
material fact required to be stated in such proxy statement with respect to
Buyer or its Subsidiaries or to make the statements therein with respect to
Buyer or its Subsidiaries not misleading.
Section 5.09 Notification of Certain Matters. Each party shall give prompt
notice to the other of: (a) any event or notice of, or other communication
relating to, a default or event that, with notice or lapse of time or both,
would become a default, received by it or any of its Subsidiaries subsequent to
the date of this Agreement and prior to the Effective Time, under any contract
material to the financial condition, properties, businesses or results of
operations of each party and its Subsidiaries taken as a whole to which each
party or any Subsidiary is a party or is subject; and (b) any event, condition,
change or occurrence which individually or in the aggregate has, or which, so
far as reasonably can be foreseen at the time of its occurrence, is reasonably
likely to result in a Material Adverse Effect with respect to such party and its
Subsidiaries taken as a whole, each of Seller and Buyer shall give prompt notice
to the other party of 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 any of the transactions contemplated by this Agreement.
Section 5.10 Employees.
a) All persons who are employees of Seller or any of its Subsidiaries
immediately prior to the Effective Time and whose employment is not specifically
terminated at or prior to the Effective Time (a "Continuing Employee") shall, at
the Effective Time, remain employees of the Surviving Corporation or any of its
Subsidiaries. All of the Continuing Employees shall be employed at the will of
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Buyer and no contractual right to employment shall inure to such employees
because of this Agreement. At any time after the receipt of the Requisite
Regulatory Approvals and Stockholder approval for the transactions contemplated
by this Agreement, or by mutual consent prior thereto, Seller shall (i) allow
Buyer to conduct interviews with the existing employees of Seller and Seller S&L
and to communicate with the employees regarding the terms of their employment
which will be in effect on or after the Effective Time and (ii) allow Buyer to
conduct training sessions for employees of Seller and its Subsidiaries at
Buyer's or Seller S&L's facilities. All such training sessions shall be
scheduled so as to have minimal impact upon the employees' performance of their
normal daily duties.
b) Immediately following the Effective Time, each Continuing Employee
shall be eligible to participate in Buyer's benefit plans on the same basis as a
new employee of Buyer (it being understood that inclusion of Continuing
Employees in Buyer's benefit plans may occur at different times with respect to
different plans). Service with Seller or its Subsidiaries shall be treated as
service with Buyer for purposes of satisfying any waiting periods, evidence of
insurability requirements, or the application of any preexisting condition
limitation with respect to any Buyer "welfare benefit plan", as defined in
Section 3(1) of ERISA. Each Continuing Employee shall receive credit for service
with Seller or its Subsidiaries for purposes of any employee benefit plans or
computing vacation pay benefits.
c) At or immediately prior to the Effective Time, Seller shall cash out
or sell for the amount of the cash surrender value of existing life insurance
policies owned by Seller, other than any policies Buyer shall request Seller to
retain.
d) Seller shall not encourage the further exercise of any Seller
Options and shall advise optionees as to the payments to which they will be
entitled hereunder.
e) Prior to December 15, 2000, Seller shall make to the Seller Employee
Stock ownership Plan ("ESOP") a contribution of $406,340.31, which shall be
allocated for the plan year for the fiscal year ended September 30, 2000. Seller
shall also be permitted to make a contribution equal to the lesser of 25% of
eligible payroll as determined pursuant to such plan or the maximum contribution
permitted by Section 415 of the Internal Revenue Code ("IRC") in each case
covering the period from October 1, 2000 to the close of business on the day
prior to the Effective time. Seller represents and warrants that no
contributions made pursuant to this paragraph will exceed the limitations of
Section 415 of the IRC. However, (i) the amount of the contributions made
pursuant to the preceding two sentences shall be used by the ESOP only to make
payments on the then remaining unpaid loan balance owed by the ESOP only to
Seller, and (ii) the amount of the foregoing contributions shall in no event
exceed the then remaining unpaid loan balance.
f) Prior to the Effective Time, the Seller ESOP shall be amended to
state that any Merger Consideration remaining after repayment of the loan
between Seller and the ESOP shall be allocated as investment earnings of the
ESOP to the ESOP accounts of employees of Seller or any of its Subsidiaries who
are ESOP participants and beneficiaries (the "ESOP Participants") in accordance
with the terms of the ESOP as amended with respect to such termination and as in
effect on the Effective Time. All ESOP Participants shall fully vest and have a
nonforfeitable interest in their accounts under the ESOP determined as of the
Effective Time. As soon as practicable after the Effective Time, any loan
between Seller and the ESOP shall be repaid in full from the Merger
Consideration received by the ESOP for unallocated shares of Seller Common Stock
held by the ESOP upon the conversion of such shares into cash pursuant to this
Agreement. As soon as reasonably practicable after the ESOP loan has been
repaid, Buyer shall terminate the ESOP and shall file an application for
determination with the Internal Revenue Service ("IRS") as to the tax qualified
status of the ESOP upon its termination under Section 401(a) and 4975(e)(7) of
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the IRC (the "Determination Letter"). As soon as reasonably practicable after
the receipt of a favorable Determination Letter from the IRS, Buyer shall
instruct the ESOP Trustee to make distributions of the benefits under the ESOP
to the ESOP Participants in accordance with the provisions of the ESOP.
g) Buyer agrees to honor the Cameron Financial Corporation Severance
Plan, a copy of which is attached to Seller's Disclosure Letter. Section 5.11
Indemnification. Unless prohibited by law or regulation in effect at the time a
Claim (as defined below) is pending and except as provided in Section 5.11a)
below, from the Effective Time through six (6) years after the Effective Time,
Buyer (and any successor) agrees to indemnify each director, officer and
employee of Seller and Seller S&L serving in such capacities as of the date of
this Agreement (each, an "Indemnified Party"), from and against Indemnified
Payments and Indemnified Expenses (as both terms are defined below) incurred in
connection with Claims brought against any Indemnified Party, arising out of
matters existing or occurring at or prior to the Effective Time (including the
transactions contemplated by this Agreement), whether asserted or claimed prior
to, at or after the Effective Time, provided that in the case of any Claims
asserted prior to the Effective Time Buyer has been notified of such Claims
prior to Closing. Buyer further agrees, subject to applicable regulatory
restrictions, to advance any reasonable Indemnified Expenses to such Indemnified
Party as they are from time to time incurred provided that the Indemnified Party
to whom expenses are being advanced provides a written undertaking to repay such
expenses if it is ultimately determined that such person is not entitled to
Indemnification.
As used herein, the foregoing terms have the following meanings:
A "Claim" is any threatened, pending or completed action, suit,
investigation or proceeding (whether civil, criminal, administrative or
investigative) which relates to services rendered prior to the Effective Time by
an Indemnified Party on behalf of Seller or its Subsidiaries.
"Indemnified payments" shall mean judgments, fines and amounts paid in
settlement of Claims.
"Indemnified expenses" shall mean all costs and expenses (including but
not limited to attorneys' fees) actually and reasonably incurred by an
Indemnified Party in connection with defending against such Claims.
a) Buyer shall not be required to indemnify any Indemnified Party from
and against Indemnified expenses and/or Indemnified payments if i) a final
non-appealable order is entered by a court or administrative tribunal having
jurisdiction pursuant to a Claim brought by a person other than the Office of
Thrift Supervision ("OTS") that such Indemnified Party's conduct was knowingly
fraudulent, deliberately dishonest, or willful misconduct and the Claim giving
rise to the entry of such order was brought by a third party; or ii) a final
non-appealable order is issued by an administrative tribunal or court having
jurisdiction pursuant to a Claim brought by the OTS or a settlement agreement is
entered into between the Indemnified Party and the OTS: x) imposing a civil
money penalty against the Indemnified Party; y) removing the Indemnified Party
from office or prohibiting such person from participating in the conduct of
Buyer; or z) directing the Indemnified Party to cease and desist taking any of
the actions set forth in Section 8(b) of the Federal Deposit Insurance Act (12
U.S.C. ss. 1818(b)).
b) Any Indemnified Party wishing to claim indemnification under Section
5.11, must (i) upon learning of any such Claim, promptly notify Buyer thereof
and provide to Buyer copies of all written materials related to the Claim and
any other information related to such Claim; (ii) consent to the defense of any
such Claim by competent counsel chosen by Buyer; and (iii) cooperate in the
defense of any such matter by offering testimony and by complying with all
reasonable requests made by Buyer or by counsel hired by Buyer. Buyer shall not
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be liable for any settlement effected by an Indemnified Party without its prior
written consent, which consent may not be withheld unless such settlement is
unreasonable in light of such Claims against, or defenses available to, such
Indemnified Party. If Buyer assumes the defense of any such Claim pursuant to
this Section 5.11b), Buyer shall not be liable to such Indemnified Party for any
legal expenses of additional counsel subsequently incurred by such Indemnified
Party in connection with the defense thereof. If Buyer does not elect to assume
such defense within thirty days from the date Buyer receives notice of the
Claim, the Indemnified Party may retain counsel satisfactory to such Indemnified
Party, and Buyer shall remain responsible for the reasonable fees and expenses
of such counsel as set forth above.
c) Buyer shall pay all reasonable Costs, including attorneys' fees and
expenses, that may be incurred by any Indemnified Party in successfully
enforcing the indemnity and other obligations provided for in this Section 5.11
to the fullest extent permitted by law. The rights of each Indemnified Party
under this paragraph (c) shall be in addition to any other right of
indemnification under this Section 5.11.
d) If Buyer or any of its successors or assigns (i) consolidates with
or merges into any other person or entity and shall not be the continuing or
surviving corporation or entity of such consolidation or merger or (ii)
transfers or conveys all or substantially all of its properties and assets to
any person or entity, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of Buyer
assume the obligations set forth in this Section 5.11.
e) The provisions of this Section 5.11 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and the heirs,
executors, and administrators of such Indemnified Party. Section 5.12
Acquisition Sub. Prior to the Effective Time, Buyer will take any and all
necessary action to cause (i) Acquisition Sub to become a direct wholly-owned
subsidiary of Buyer and (ii) the directors and the stockholder of Acquisition
Sub to approve the transactions contemplated by this Agreement. Article VI.
Conditions to Consummation Section 6.01 Conditions to Each Party's Obligations.
The respective obligations of each party to effect the Merger and any other
transactions contemplated by this Agreement shall be subject to the satisfaction
of the following conditions:
a) This Agreement shall have been approved by the requisite vote of
Seller's stockholders in accordance with applicable laws and regulations.
b) The Requisite Regulatory Approvals, the consent of the OTS and any
other required waivers with respect to this Agreement and the transactions
contemplated hereby shall have been obtained and shall remain in full force and
effect, and all statutory waiting periods shall have expired; and all other
consents, waivers and approvals of any third parties which are necessary to
permit the consummation of the Merger and the other transactions contemplated
hereby shall have been obtained or made except for those the failure to obtain
would not have a Material Adverse Effect (i) on Seller and its Subsidiaries
taken as a whole or (ii) on Buyer and its Subsidiaries taken as a whole. No such
approval or consent shall have imposed any condition or requirement that would
so materially and adversely impact the economic or business benefits to Buyer or
Seller of the transactions contemplated hereby that, had such condition or
requirement been known, such party would not, in its reasonable judgment, have
entered into this Agreement.
c) No party hereto shall be subject to any order, decree, ruling or
injunction of a court or agency of competent jurisdiction which enjoins or
prohibits the consummation of the Merger or any other transactions contemplated
by this Agreement and no Governmental Entity shall have instituted any
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proceeding for the purpose of enjoining or prohibiting the consummation of the
Merger or any transactions contemplated by this Agreement.
d) No statute, rule or regulation shall have been enacted, entered,
promulgated, interpreted, applied or enforced by any governmental authority
which prohibits, restricts or makes illegal consummation of the Merger or any
other transactions contemplated by this Agreement.
Section 6.02 Conditions to the Obligations of Buyer. The obligations of Buyer to
effect the Merger and any other transactions contemplated by this Agreement
shall be further subject to the satisfaction of the following additional
conditions:
a) The obligations of Seller required to be performed by it at or prior
to the Closing pursuant to the terms of this Agreement shall have been duly
performed and complied with in all material respects and the representations and
warranties of Seller contained in this Agreement shall be true and correct,
subject to Section 3.01 and Section 3.02, as of the date of this Agreement and
as of the Effective Time as though made at and as of the Effective Time (except
as to any representation or warranty which specifically relates to an earlier
date), and Buyer shall have received a certificate to the foregoing effect
signed by the president and the chief financial officer of Seller.
b) Buyer shall have received the opinion of counsel of Seller with
respect to those matters set forth on Exhibit B hereto in form and substance
reasonably satisfactory to Buyer. c) Seller's Adjusted Stockholders' Equity
shall be not less than $39,500,000.
Section 6.03 Conditions to the Obligations of Seller. The obligations of Seller
to effect the Merger, and any other transactions contemplated by this Agreement
shall be further subject to the satisfaction of the following additional
conditions:
a) The obligations of Buyer required to be performed by it at or prior
to the Closing pursuant to the terms of this Agreement shall have been duly
performed and complied with in all material respects and the representations and
warranties of Buyer contained in this Agreement shall be true and correct,
subject to Section 3.01 and Section 3.02, as of the date of this Agreement and
as of the Effective Time as though made at and as of the Effective Time (except
as to any representation or warranty which specifically relates to an earlier
date), and Seller shall have received a certificate to the foregoing effect
signed by the president and the chief financial officer of Buyer.
b) Buyer shall have demonstrated to the satisfaction of the Seller that
Buyer has set aside sufficient cash to pay the aggregate Merger Consideration
and the amounts payable to holders of stock options and unvested restricted
shares.
Article VII. Data Processing
Section 7.01 Sample Data. Seller shall provide to Buyer, a machine-readable data
tape of all of Seller S&L's loan and deposit accounts, together with a written
description of the file, record, and field data types and formats, to allow
Buyer to prepare for a data processing conversion, at a date prior to Closing
agreed upon between Buyer and Seller. The data tape shall include summary
interest accrual and payment information for the current year to date, except
that the name and address information may, at Seller's option, be encoded in
such a way that the actual identities of Seller S&L's customers cannot be
determined.
Section 7.02 Information for Check Ordering. After receipt of the Requisite
Regulatory Approvals of the transactions contemplated by this Agreement, Seller
shall provide to Buyer a machine-readable data tape of all of Seller S&L's
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deposits, including all customer name and address information, to enable Buyer
to begin ordering checks, deposit slips, and other transaction items for use by
its customers.
Section 7.03 Installation of Data Circuits. After the effective date of this
Agreement, Seller shall cause Seller S&L to give Buyer reasonable access to
Seller S&L's locations during normal business hours for the purposes of
installing and testing data circuits and data processing equipment, provided
that the location, installation, and testing of said circuits and equipment
shall not be permitted to disrupt Seller S&L's normal daily functions and
operation. In the event that this Agreement is terminated without consummation
of the planned transactions, Buyer shall remove its data processing equipment
and circuits within 30 days after the termination and shall repair promptly any
damage done to Seller S&L's property during the installation or removal, all at
Buyer's sole expense. Article VIII. Termination Section 8.01 Termination. This
Agreement may be terminated, and the Merger abandoned, at or prior to the
Effective Time, either before or after any requisite stockholder approval:
a) by the mutual consent of Buyer and Seller in a written instrument,
if the Board of Directors of each so determines by vote of a majority of the
members of its entire Board; or
b) by Buyer or Seller, if its Board of Directors so determines by vote
of a majority of the members of its entire Board, in the event of the failure of
the stockholders of Seller to approve the Agreement at the Stockholder Meeting;
or
c) by Buyer or Seller, by written notice to the other party, if either
(i) any approval, consent or waiver of a governmental agency required to permit
consummation of the transactions contemplated hereby shall have been
unappealably denied or (ii) any governmental authority of competent jurisdiction
shall have issued a final, unappealable order enjoining or otherwise prohibiting
consummation of the transactions contemplated by this Agreement; or
d) by Buyer or Seller, if its Board of Directors so determines by vote
of a majority of the members of its entire Board, in the event that the Merger
is not consummated by April 30, 2001, unless the failure to so consummate by
such time is due to the material breach of any representation, warranty or
covenant contained in this Agreement by the party seeking to terminate; or
e) by Buyer or Seller (provided that the party seeking termination is
not then in material breach of any representation, warranty, covenant or other
agreement contained herein), in the event of (i) a failure to perform or comply
by the other party with any covenant or agreement of such other party contained
in this Agreement, which failure or non-compliance is material in the context of
the transactions contemplated by this Agreement, or (ii) subject to Section
3.02a), any inaccuracies, omissions or breach in the representations,
warranties, covenants or agreements of the other party contained in this
Agreement the circumstances as to which either individually or in the aggregate
have, or reasonably could be expected to have, a Material Adverse Effect on such
other party; in either case which has not been or cannot be cured within 30
calendar days after written notice thereof is given by the party seeking to
terminate to such other party; or
f) by Seller, if the Board of Directors of Seller reasonably determines
by vote of a majority of the members of its entire Board that an Acquisition
Proposal is a Superior Proposal.
g) by Buyer, if more than 10% of Seller's stockholders exercise
dissenters' or appraisal rights under applicable law by delivering a written
demand for appraisal of their shares to Seller prior to the stockholders vote on
the Merger.
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h) by Buyer, if there shall have been a change in the condition of
Seller between the date of Buyer's initial due diligence and the closing date
which constitutes a Material Adverse Effect and Buyer shall have given written
notice thereof to the Seller and within 30 days thereafter Seller shall have
failed to cure such change. Buyer shall be entitled to a final due diligence
review, on site, at Seller S&L's locations, during the last five days prior to
the Effective Time, solely for the purpose of confirming that there have been no
changes since the date of Buyer's initial due diligence having a Material
Adverse Effect in the condition of Seller.
i) by Buyer, if the Requisite Regulatory Approvals are subject to
conditions reasonably unacceptable to Buyer.
Section 8.02 Termination Fee. In the event that Seller terminates this Agreement
pursuant to Section 8.01f) and, within 12 months after the termination of this
Agreement, Seller or Seller S&L enters into a definitive agreement with the
person that made the Superior Proposal then Seller shall, within 10 business
days following written demand by Buyer, pay to Buyer $500,000.
Section 8.03 Effect of Termination. In the event of termination of this
Agreement by either Buyer or Seller prior to the consummation of the Merger as
provided in Section 8.01, this Agreement shall forthwith become void and have no
effect except (i) the obligations of the parties under Section 5.03 (with
respect to confidentiality and the return of information), Section 8.02 and
Section 10.06 shall survive any termination of this Agreement and (ii) that
notwithstanding anything to the contrary contained in this Agreement, no party
shall be relieved or released from any liabilities or damages arising out of its
willful breach of any provision of this Agreement.
Article IX. Closing and Effective Time
Section 9.01 Effective Time. The closing of the transactions contemplated hereby
("Closing") shall take place at the offices of Buyer, unless another place is
agreed to by Buyer and Seller, on a date agreed to by Buyer and Seller ("Closing
Date") that is no later than 30 days following the date on which the expiration
of the last applicable waiting period in connection with notices to and
approvals of governmental authorities shall occur and all conditions to the
consummation of this Agreement are satisfied or waived, or on such other date as
may be agreed to by the parties. Prior to the Closing Date, Acquisition Sub and
Seller shall execute a Certificate of Merger in accordance with all appropriate
legal requirements, which shall be filed as required by law on the Closing Date,
and the Merger provided for therein shall become effective on the date and at
the time the Certificate of Merger reflecting the Merger shall become effective
with the Secretary of the State of Delaware (the "Effective Time").
Section 9.02 Deliveries at the Closing. Subject to the provisions of Article VI
and Article VIII, on the Closing Date there shall be delivered to Buyer and
Seller the documents and instruments required to be delivered under Article VI.
Article X. Certain Other Matters
Section 10.01 Certain Definitions; Interpretation. As used in this Agreement,
the following terms shall have the meanings indicated:
"Affiliate" means any person (a) which directly or indirectly controls,
or is controlled by, or is under common control with any other person or any
Subsidiary of that other person; (b) which directly or beneficially owns or
controls 5% or more of any class of voting stock of another person or any
Subsidiary of that other person; or (c) of which 5% or more of any class of
voting stock is owned directly or beneficially by any other person or any
Subsidiary of that other person.
"Person" includes an individual, corporation, limited liability
company, partnership, association, trust or unincorporated organization.
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When a reference is made in this Agreement to Sections, Exhibits or
Schedules, such reference shall be to a Section of, Exhibit or Schedule to, this
Agreement unless otherwise indicated the table of contents and headings
contained in this Agreement are for ease of reference only and shall not affect
the meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation." Any singular term in this Agreement
shall be deemed to include the plural, and any plural term the singular. Any
reference to gender in this Agreement shall be deemed to include any other
gender.
Section 10.02 Survival. Only those agreements and covenants of the parties that
are by their terms applicable in whole or in part after the Effective Time,
including Section 5.03, Section 5.10 and Section 5.11 of this Agreement, shall
survive the Effective Time. All other representations, warranties, agreements
and covenants shall be deemed to be conditions of the Agreement and shall not
survive the Effective Time. Section 10.03 Waiver; Amendment. Prior to the
Effective Time, any provision of this Agreement may be (i) waived in writing by
the party benefited by the provision or (ii) amended or modified at any time by
an agreement in writing between the parties hereto except that, after the vote
by the stockholders of Seller, no amendment or modification may be made that
would reduce the amount or alter or change the kind of consideration to be
received by holders of Seller Common Stock or contravene any provision of the
DGCL or the federal banking laws, rules and regulations.
Section 10.04 Counterparts. This Agreement may be executed in counterparts each
of which shall be deemed to constitute an original, but all of which together
shall constitute one and the same instrument. Section 10.05 Governing Law. This
Agreement shall be governed by, and interpreted in accordance with, the laws of
the State of Delaware, without regard to conflicts of laws principles.
Section 10.06 Expenses. Each party hereto will bear all expenses incurred by it
in connection with this Agreement and the transactions contemplated hereby.
Section 10.07 Notices. All notices, requests, acknowledgments and other
communications hereunder to a party shall be in writing and shall be deemed to
have been duly given when delivered by hand, overnight courier or facsimile
transmission (confirmed in writing) to such party at its address or facsimile
number set forth below or such other address or facsimile transmission as such
party may specify by notice (in accordance with this provision) to the other
party hereto.
If to Seller, to:
Cameron Financial Corporation
1304 North Walnut, P.O. Box 555
Cameron, Missouri 64429
Fax (816) 632-2157
With copies to:
Stinson, Mag & Fizzell, P.C.
1201 Walnut St., Suite 2800
Kansas City, Missouri 64106
Attn: John Granda, Esq.
Fax (816) 691-3495
If to Buyer, to:
Rick L. Smalley, Co-CEO and President
Dickinson Financial Corporation
1100 Main Street, Suite 350
Kansas City, Missouri 64105
Fax (816) 472-5211
<PAGE>
and
David M. Seymour, Co-CEO
Dickinson Financial Corporation
1100 Main Street, Suite 350
Kansas City, Missouri 64105
Fax (816) 472-5211
With copies to:
Amy Dickinson Holewinski, Esq.
Dickinson Financial Corporation
1100 Main Street, Suite 350
Kansas City, Missouri 64105
Fax (816) 472-5211
Section 10.08 Entire Agreement, Etc. This Agreement, together with the
Disclosure Letters, represents the entire understanding of the parties hereto
with reference to the transactions contemplated hereby and supersedes any and
all other oral or written agreements heretofore made. All terms and provisions
of this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. Except for Sections
5.10 and 5.11 which confer rights on the parties described therein, nothing in
this Agreement is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
Section 10.09 Specific Performance. Buyer and Seller agree that the franchise
value of Seller S&L represents a unique asset and that the failure of either
party to perform the terms of this Agreement would cause irreparable harm for
which monetary damages would be totally inadequate. Therefore, either party
shall be entitled to specific performance of the terms of this Agreement.
Nothing contained in this Agreement, however, shall be deemed as granting to
Buyer control over Seller or Seller S&L prior to the Effective Time. Until the
Requisite Regulatory Approvals and Seller's Stockholders Approvals have been
received, a breach of this Agreement by either party may be remedied only by an
action for money damages.
Section 10.10 Successors and Assigns; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that this Agreement may not be
assigned by either party hereto without the written consent of the other party.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
DICKINSON FINANCIAL CORPORATION
By: /s/ Rick L. Smalley
-------------------
Name: Rick L. Smalley
Title: President
CAMERON FINANCIAL CORPORATION
By: /s/ Jon N. Crouch
------------------
Name: Jon. N. Crouch
President
DFC ACQUISITION CORPORATION FOUR
By: /s/ Amy Dickinson Holewinski
----------------------------
Name: Amy Dickinson Holewinski
President
<PAGE>
APPENDIX B--OPINION OF WILLIAM BLAIR & COMPANY, L.L.C.
October 6, 2000
Board of Directors
Cameron Financial Corporation
1304 North Walnut
Cameron, MO 64429
Members of the Board:
You have requested our opinion as to the fairness, from a financial
point of view, to the holders of the outstanding shares of common stock (other
than Dickinson Financial Corporation) (collectively the "Stockholders") of
Cameron Financial Corporation ( "Cameron") of the $20.75 per share in cash,
subject to the adjustments set forth in the Agreement (defined hereafter), (the
"Merger Consideration") proposed to be paid to the Stockholders pursuant to the
Agreement and Plan of Merger dated as of October 6, 2000 (the "Agreement") by
and among Dickinson Financial Corporation ("DFC"), DFC Acquisition Corporation
Four ("Merger Sub") and Cameron. Pursuant to the terms of and subject to the
conditions set forth in the Agreement, Cameron will be merged into Merger Sub
(the "Merger") and each share of common stock of Cameron, $0.01 par value per
share, will be converted into the right to receive the Merger Consideration upon
consummation of the Merger.
We are familiar with Cameron, having provided certain
investment-banking services to Cameron from time to time, including our Review
of Financial and Strategic Alternatives dated May 25, 2000.
In connection with our review of the proposed Merger and the
preparation of our opinion herein, we have examined: (a) the Agreement; (b)
certain of Cameron's publicly available financial information as well as certain
of Cameron's internal management reports; (c) Cameron's management-prepared
financial forecasts for fiscal years 2000 and 2001 (the "Forecasts"); (d) recent
and historical market prices and trading activity in Cameron common stock; (e)
recent market and financial information of certain other publicly traded
companies Blair deemed relevant; (f) information regarding publicly available
financial terms of certain other merger-and-acquisition transactions Blair
deemed relevant; and (g) certain other publicly available information on each of
Cameron and DFC. We have also held discussions with members of the senior
management of Cameron to discuss the foregoing, have considered other matters
which we have deemed relevant to our inquiry and have taken into account such
accepted financial and investment-banking procedures and considerations as we
have deemed relevant. In connection with our engagement, we were requested to
approach, and held discussions with, third parties to solicit indications of
interest in a possible acquisition of Cameron.
In rendering our opinion, we have assumed and relied, without
independent verification, upon the accuracy and completeness of all the
information examined by or otherwise reviewed or discussed with us for purposes
of this opinion including without limitation the Forecasts provided by senior
management. We have not made or obtained an independent valuation or appraisal
of the assets, liabilities or solvency of Cameron or DFC. We have assumed that
all of the financial data, including the Forecasts, provided by Cameron and
examined by us have been reasonably prepared on bases reflecting the best
currently available estimates and judgments of the senior management of Cameron.
In that regard, we have assumed, with your consent, that (i) the Forecasts will
be achieved in the amounts and at the times contemplated thereby and (ii) all
material assets and liabilities (contingent or otherwise) of Cameron are as set
forth in Cameron's financial statements or other information made available to
us. We express no opinion with respect to the Forecasts or the estimates and
judgments on which they are based. Our opinion herein is based upon economic,
market, financial and other conditions existing on, and other information
disclosed to us as of, the date of this letter. It should be understood that,
although subsequent developments may affect this opinion, we do not have any
obligation to update, revise or reaffirm this opinion. We have relied as to all
legal matters on advice of counsel to Cameron, and have assumed that the Merger
will be
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consummated on the terms described in the Agreement, without any waiver of any
material terms or conditions by Cameron.
William Blair & Company, L.L.C. has been engaged in the
investment-banking business since 1935. We continually undertake the valuation
of investment securities in connection with public offerings, private
placements, business combinations, estate and gift tax valuations and similar
transactions. In the ordinary course of our business, we may from time to time
trade the securities of Cameron for our own account and for the accounts of
customers, and accordingly may at any time hold a long or short position in such
securities. We have acted as the investment banker to Cameron in connection with
the Merger and will receive a fee from Cameron for our services, a significant
portion of which is contingent upon consummation of the Merger. In addition,
Cameron has agreed to indemnify us against certain liabilities arising out of
our engagement.
Our investment-banking services and our opinion were provided for the
use and benefit of Cameron's Board of Directors in connection with its
consideration of the transaction contemplated by the Agreement. Our opinion is
limited to the fairness, from a financial point of view, to the stockholders of
Cameron of the Merger Consideration in connection with the Merger, and we do not
address the merits of the underlying decision by Cameron to engage in the Merger
and this opinion does not constitute a recommendation to any stockholder as to
how such stockholder should vote with respect to the proposed Merger. It is
understood that this letter may not be disclosed or otherwise referred to
without prior written consent, except that the opinion may be included in its
entirety in a proxy statement mailed to the Stockholders by Cameron with respect
to the Merger.
Based upon and subject to the foregoing, it is our opinion as
investment bankers that, as of the date hereof, the Merger Consideration is
fair, from a financial point of view, to the Stockholders other than DFC.
Very truly yours,
/s/ William Blair & Company, L.L.C.
-----------------------------------
WILLIAM BLAIR & COMPANY, L.L.C.
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APPENDIX C-- SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW
TEXT OF SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW
262 APPRAISAL RIGHTS. - (a) Any stockholder of a corporation of this
State who holds shares of stock on the date of the making of a demand pursuant
to subsection (d) of this section with respect to such shares, who continuously
holds such shares through the effective date of the merger or consolidation, who
has otherwise complied with subsection (d) of this section and who has neither
voted in favor of the merger or consolidation nor consented thereto in writing
pursuant to Section 228 of this title shall be entitled to an appraisal by the
Court of Chancery of the fair value of the stockholder's shares of stock under
the circumstances described in subsections (b) and (c) of this section. As used
in this section, the word "stockholder" means a holder of record of stock in a
stock corporation and also a member of record of a nonstock corporation; the
words "stock" and "share" mean and include what is ordinarily meant by those
words and also membership or membership interest of a member of a nonstock
corporation; and the words "depository receipt" mean a receipt or other
instrument issued by a depository representing an interest in one or more
shares, or fractions thereof, solely of stock of a corporation, which stock is
deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to Section 251 (other than a merger effected pursuant to
Section 251(g) of this title), Section 252, Section 254, Section 257, Section
258, Section 263 or Section 264 of this title:
(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which stock,
or depository receipts in respect thereof, at the record date fixed to determine
the stockholders entitled to receive notice of and to vote at the meeting of
stockholders to act upon the agreement of merger or consolidation, were either
(I) listed on a national securities exchange or designated as a national market
system security on an interdealer quotation system by the National Association
of Securities Dealers, Inc. or (ii) held of record by more than 2,000 holders;
and further provided that no appraisal rights shall be available for any shares
of stock of the constituent corporation surviving a merger if the merger did not
require for its approval the vote of the stockholders of the surviving
corporation as provided in subsection (f) of Section 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series of
stock of a constituent corporation if the holders thereof are required by the
terms of an agreement of merger or consolidation pursuant to Sections 251, 252,
254, 257, 258, 263 and 264 of this title to accept for such stock anything
except:
a. Shares of stock of the corporation surviving or resulting from such
merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts in
respect thereof, which shares of stock (or depository receipts in respect
thereof) or depository receipts at the effective date of the merger or
consolidation will be either listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or held of record
by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a. and b. of this paragraph; or
d. Any combination of the shares of stock, depository receipts and cash
in lieu of fractional shares or fractional depository receipts described in the
foregoing subparagraphs a., b. and c. of this paragraph.
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(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under Section 253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall be
available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation
that appraisal rights under this section shall be available for the shares of
any class or series of its stock as a result of an amendment to its certificate
of incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a meeting of
stockholders, the corporation, not less than 20 days prior to the meeting, shall
notify each of its stockholders who was such on the record date for such meeting
with respect to shares for which appraisal rights are available pursuant to
subsections (b) or (c) hereof that appraisal rights are available for any or all
of the shares of the constituent corporations, and shall include in such notice
a copy of this section. Each stockholder electing to demand the appraisal of his
shares shall deliver to the corporation, before the taking of the vote on the
merger or consolidation, a written demand for appraisal of his shares. Such
demand will be sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends thereby to demand
the appraisal of his shares. A proxy or vote against the merger or consolidation
shall not constitute such a demand. A stockholder electing to take such action
must do so by a separate written demand as herein provided. Within 10 days after
the effective date of such merger or consolidation, the surviving or resulting
corporation shall notify each stockholder of each constituent corporation who
has complied with this subsection and has not voted in favor of or consented to
the merger or consolidation of the date that the merger or consolidation has
become effective; or
(2) If the merger or consolidation was approved pursuant to Section 228
or Section 253 of this title, each constituent corporation, either before the
effective date of the merger or consolidation or within ten days thereafter,
shall notify each of the holders of any class or series of stock of such
constituent corporation who are entitled to appraisal rights of the approval of
the merger or consolidation and that appraisal rights are available for any or
all shares of such class or series of stock of such constituent corporation, and
shall include in such notice a copy of this section; provided that, if the
notice is given on or after the effective date of the merger or consolidation,
such notice shall be given by the surviving or resulting corporation to all such
holders of any class or series of stock of a constituent corporation that are
entitled to appraisal rights. Such notice may, and, if given on or after the
effective date of the merger or consolidation, shall, also notify such
stockholders of the effective date of the merger or consolidation. Any
stockholder entitled to appraisal rights may, within 20 days after the date of
mailing of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the appraisal of
such holder's shares. If such notice did not notify stockholders of the
effective date of the merger or consolidation, either (I) each such constituent
corporation shall send a second notice before the effective date of the merger
or consolidation notifying each of the holders of any class or series of stock
of such constituent corporation that are entitled to appraisal rights of the
effective date of the merger or consolidation or (ii) the surviving or resulting
corporation shall send such a second notice to all such holders on or within 10
days after such effective date; provided, however, that if such second notice is
sent more than 20 days following the sending of the first notice, such second
notice need only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in accordance with this
subsection. An affidavit of the secretary or assistant secretary or of the
transfer agent of the corporation that is required to give either notice that
such notice has been given shall, in the absence of fraud, be prima facie
evidence of the facts stated therein. For purposes of determining the
stockholders entitled to receive either notice, each constituent corporation may
fix, in advance, a record date that shall be not more than 10 days prior to the
date the notice is given, provided, that if the notice is given on or after the
effective date of the merger or
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consolidation, the record date shall be such effective date. If no record date
is fixed and the notice is given prior to the effective date, the record date
shall be the close of business on the day next preceding the day on which the
notice is given.
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who has
complied with subsections (a) and (d) hereof and who is otherwise entitled to
appraisal rights, may file a petition in the Court of Chancery demanding a
determination of the value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any stockholder shall have the right to
withdraw his demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the merger
or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not voted
in favor of the merger or consolidation and with respect to which demands for
appraisal have been received and the aggregate number of holders of such shares.
Such written statement shall be mailed to the stockholder within 10 days after
his written request for such a statement is received by the surviving or
resulting corporation or within 10 days after expiration of the period for
delivery of demands for appraisal under subsection (d) hereof, whichever is
later.
(f) Upon the filing of any such petition by a stockholder, service of a
copy thereof shall be made upon the surviving or resulting corporation, which
shall within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the addresses
therein stated. Such notice shall also be given by 1 or more publications at
least 1 week before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington, Delaware or such publication as
the Court deems advisable. The forms of the notices by mail and by publication
shall be approved by the Court, and the costs thereof shall be borne by the
surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.
(h) After determining the stockholders entitled to an appraisal, the
Court shall appraise the shares, determining their fair value exclusive of any
element of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has submitted his
certificates of stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally determined that he is
not entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or
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compound, as the Court may direct. Payment shall be so made to each such
stockholder, in the case of holders of uncertificated stock forthwith, and the
case of holders of shares represented by certificates upon the surrender to the
corporation of the certificates representing such stock. The Court's decree may
be enforced as other decrees in the Court of Chancery may be enforced, whether
such surviving or resulting corporation be a corporation of this State or of any
state.
(j) The costs of the proceeding may be determined by the Court and
taxed upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation,
no stockholder who has demanded his appraisal rights as provided in subsection
(d) of this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation); provided,
however, that if no petition for an appraisal shall be filed within the time
provided in subsection (e) of this section, or if such stockholder shall deliver
to the surviving or resulting corporation a written withdrawal of his demand for
an appraisal and an acceptance of the merger or consolidation, either within 60
days after the effective date of the merger or consolidation as provided in
subsection (e) of this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal shall cease.
Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery
shall be dismissed as to any stockholder without the approval of the Court, and
such approval may be conditioned upon such terms as the Court deems just.
(l) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.
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PROXY
CAMERON FINANCIAL CORPORATION
SPECIAL MEETING OF STOCKHOLDERS
------------------------------------
January 12, 2001
------------------------------------
The undersigned hereby appoints Dennis E. Marshall and Duane E. Kohlstaedt with
full powers of substitution, as attorneys and proxies for the undersigned, to
vote all shares of common stock of Cameron Financial Corporation which the
undersigned is entitled to vote at a special meeting of stockholders, to be held
in the Community Room of the offices of The Cameron Savings & Loan Association,
F.A. located at 1304 North Walnut Street, Cameron, Missouri, on January 12,
2001, commencing at 9:00 a.m., local time, and at any and all adjournments
thereof, as follows:
1. To approve the adoption of the Agreement and Plan of Merger dated October
6, 2000 between Dickinson Financial Corporation, DFC Acquisition
Corporation Four and Cameron Financial Corporation.
FOR AGAINST ABSTAIN
[_] [_] [_]
2. In their discretion, upon such other matters as may properly come before
the meeting, including a proposal to adjourn or postpone the meeting for
the purpose of soliciting additional proxies in favor of Proposal 1.
FOR AGAINST ABSTAIN
[_] [_] [_]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ADOPTION OF THE MERGER
AGREEMENT.
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THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE PROPOSITION STATED. THIS PROXY CARD WILL ALSO BE
USED TO PROVIDE VOTING INSTRUCTIONS TO THE TRUSTEE FOR ANY SHARES OF COMMON
STOCK OF CAMERON FINANCIAL CORPORATION ALLOCATED TO PARTICIPANTS UNDER THE
CAMERON SAVINGS & LOAN ASSOCIATION EMPLOYEE STOCK OWNERSHIP PLAN. IF ANY OTHER
BUSINESS IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED AS DIRECTED BY A
MAJORITY OF THE BOARD OF DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS
KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
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<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the meeting or at any
adjournment thereof and after notification to the Secretary of Cameron Financial
Corporation at the meeting of the stockholder's decision to terminate this
proxy, then the power of said attorneys and proxies shall be deemed terminated
and of no further force and effect.
The undersigned acknowledges receipt from Cameron Financial Corporation prior to
the execution of this proxy of notice of the meeting, and proxy statement dated
December 19, 2000.
Dated: ________________, 200__
------------------------------
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SIGNATURE(S) OF STOCKHOLDER(S)
Please sign exactly as your name appears on this proxy card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
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PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
