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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger is dated as of February 1, 2007
(the
"Agreement"), by and between FSB Bank, a Michigan chartered
commercial bank
("FSB"), and Isabella Bank and Trust, a Michigan chartered
commercial bank
("IBT").
WHEREAS, the Board of Directors of each of FSB and IBT (i) has
determined
that this Agreement and the business combination and related
transactions
contemplated hereby are in the best interests of their respective
banks and
their sole shareholder and (ii) has determined that this Agreement
and the
transactions contemplated hereby are consistent with and in
furtherance of their
respective business strategies, and (iii) has approved this
Agreement at
meetings of each of such Boards of Directors;
WHEREAS, in accordance with the terms of this Agreement, FSB will
merge
with IBT with IBT as the surviving entity (the "Merger").
Concurrently, the
shares of FSB stock held by IBT Bancorp, Inc., the parent
corporation of FSB,
shall be cancelled;
WHEREAS, the parties currently intend that the Merger shall qualify
as a
reorganization within the meaning of Section 368(a) of the Internal
Revenue Code
of 1986, as amended (the "Code"); and
WHEREAS, simultaneously with the execution and delivery of this
Agreement,
IB&T Mortgage Company, a Michigan corporation and a wholly
owned subsidiary of
IBT ("IBT Mortgage") and FSB Mortgage Company, a Michigan
corporation and a
wholly owned subsidiary of FSB ("FSB Mortgage"), will enter into a
Plan of
Merger (the "Subsidiary Merger Agreement") providing for the merger
(the
"Subsidiary Merger") of FSB Mortgage with and into IBT Mortgage,
and it is
intended that the Subsidiary Merger be consummated immediately
following the
consummation of the Merger; and
WHEREAS, the parties desire to make certain representations,
warranties and
agreements in connection with the business transactions described
in this
Agreement and to prescribe certain conditions thereto.
NOW, THEREFORE, in consideration of the mutual covenants,
representations,
warranties and agreements herein contained, and of other good and
valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the
parties hereto agree as follows:
ARTICLE I - CERTAIN DEFINITIONS
1.1. Certain Definitions. As used in this Agreement, the following
terms
have the following meanings (unless the context otherwise requires,
references
to articles and sections refer to articles and sections of this
Agreement).
"Affiliates" means any Person who directly, or indirectly, through
one or
more intermediaries, controls, or is controlled by, or is under
common control
with, such Person and, without limiting the generality of the
foregoing,
includes any executive officer or director of such Person and any
Affiliates of
such executive officer or director.
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"Agreement" means this agreement, and any amendment hereto.
"Bank Regulator" shall mean any Federal or state banking regulatory
agency
with supervisory authority over FSB, IBT, or IBT Bancorp, Inc.
"Bureau" shall mean the Office of Financial and Insurance Services
of the
State of Michigan.
"Closing" shall have the meaning set forth in Section 2.2.
"Closing Date" shall have the meaning set forth in Section 2.2.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Effective Time" shall mean the date and time specified pursuant to
Section
2.2 hereof as the effective time of the Merger.
"FDIC" shall mean the Federal Deposit Insurance Corporation or
any
successor thereto.
"FRB" shall mean the Board of Governors of the Federal Reserve
System or
any successor thereto.
"FSB Common Stock" shall mean the common stock, par value $5.00 per
share,
of FSB.
"Governmental Entity" shall mean any Federal or state court,
administrative
agency or commission or other governmental authority or
instrumentality.
"Merger" shall mean the merger of FSB with and into IBT pursuant to
the
terms hereof.
"Michigan Banking Law" shall mean the Michigan Banking Code of
1999, as
amended, and the rules and regulations promulgated thereunder, as
amended, as
administered by the Bureau.
"Person" shall mean any individual, corporation, limited liability
company,
partnership, joint venture, association, trust "group" or
entity.
"Regulatory Approvals" means the approval of any Bank Regulator
that is
necessary in connection with the consummation of the Merger and the
related
transactions contemplated by this Agreement.
"Surviving Corporation" shall have the meaning set forth in Section
2.1
hereof.
Other terms used herein are defined in the preamble and elsewhere
in this
Agreement.
ARTICLE II - THE MERGER
2.1. Merger. Subject to the terms and conditions of this Agreement,
at the
Effective Time, FSB shall merge with IBT, with IBT as the resulting
or surviving
banking corporation (the
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"Surviving Corporation"). As part of the Merger, each share of FSB
Common Stock
shall be cancelled pursuant to the terms of Article III hereof.
2.2. Closing; Effective Time. Subject to the satisfaction or waiver
of all
conditions to closing contained in Article VII hereof, the Closing
shall occur
no later than five (5) business days following the latest to occur
of (i) the
receipt of all required Regulatory Approvals, and the expiration of
any
applicable waiting periods, (ii) the approval of the Merger by the
sole
shareholder of FSB and IBT, or (iii) at such other date or time
upon which IBT
and FSB mutually agree (the "Closing"). The Merger shall be
effected by the
filing of a certificate of merger with the Bureau on the day of the
Closing (the
"Closing Date"), in accordance with Michigan Banking Law. The
"Effective Time"
means the date and time upon which the certificate of merger is
filed with the
Bureau, or as otherwise stated in the certificate of merger, in
accordance with
Michigan Banking Law.
2.3. Articles of Incorporation and Bylaws; Name. The Articles
of
Incorporation and Bylaws of IBT as in effect immediately prior to
the Effective
Time shall be the Articles of Incorporation and Bylaws of the
Surviving
Corporation, until thereafter amended as provided therein and by
applicable law.
The name of the Surviving Corporation shall be Isabella Bank and
Trust.
2.4. Directors and Officers of Surviving Corporation. The board
directors
of the Surviving Corporation shall consist of the incumbent
directors of IBT
immediately preceding the Effective Time, each to hold office in
accordance with
the Articles of Incorporation and Bylaws of the Surviving
Corporation. At the
Effective Time, IBT shall confirm by resolution of its Board of
Directors the
establishment of regional boards to preserve the institutional
knowledge of the
former Farmers State Bank of Breckenridge and the former Farwell
State Savings
Bank and to provide advice to the IBT Board of Directors about
business and
operations, community and customer needs in the market area,
regional economic
conditions and such other advisory responsibilities as determined
by the IBT
Board of Directors. The members of the regional boards shall
consist of those
individuals noted on Exhibit A. Regional board member compensation
shall be the
same as that provided prior to the Effective Time provided,
however, that IBT
may conduct periodic reviews of director compensation to assess
reasonableness
and consistency. The officers of the Surviving Corporation at the
Effective Time
shall be as set forth in Exhibit B.
2.5. Effects of the Merger. At and after the Effective Time, the
Merger
shall have the effects as set forth in the Michigan Banking Law,
including but
not limited to the Surviving Corporation assuming all of the
liabilities,
duties, obligations and rights of FSB under the Amended and
Restated Agreement
and Plan of Merger dated May 2, 2006 by and between Farmers State
Bank of
Breckenridge, The Farwell State Savings Bank and IBT Bancorp,
Inc.
2.6. Tax Consequences. It is intended that the Merger shall
constitute a
reorganization within the meaning of Section 368(a) of the Code and
that this
Agreement shall constitute a "plan of reorganization" as that term
is used in
Sections 354 and 361 of the Code. From and after the date of this
Agreement and
until the Closing, each party hereto shall use its reasonable best
efforts to
cause the Merger to qualify, and will not knowingly take any
action, cause any
action to be taken, fail to take any action or cause any action to
fail to be
taken which action or
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failure to act could prevent the Merger from qualifying as a
reorganization
under Section 368(a) of the Code other than is contemplated by this
Agreement.
Following the Closing, neither IBT nor FSB nor any of their
Affiliates shall
knowingly take any action, cause any action to be taken, fail to
take any action
or cause any action to fail to be taken, which action or failure to
act could
cause the Merger to fail to qualify as a reorganization under
Section 368(a) of
the Code.
2.7. Possible Alternative Structures. Notwithstanding anything to
the
contrary contained in this Agreement and subject to the
satisfaction of the
conditions set forth in Article VII, prior to the Effective Time,
IBT shall,
with the consent of FSB, which will not be unreasonably withheld,
be entitled to
revise the structure of the Merger described in Section 2.1 hereof
provided that
(i) there are no adverse Federal or state income tax consequences
to FSB, IBT or
IBT Bancorp, Inc., as a result of the modification; and (ii) such
modification
will not delay materially or jeopardize receipt of any required
Regulatory
Approvals or other consents and approvals relating to the
consummation of the
Merger. The parties hereto agree to appropriately amend this
Agreement and any
related documents in order to reflect any such revised
structure.
ARTICLE III - IBT AND FSB SHARES
3.1. At the Effective Time, by virtue of the Merger and without any
action
on the part of IBT, FSB or the holder of the shares of FSB common
stock or IBT
common stock, the Merger shall be effected in accordance with the
following
terms:
(a) Each share of IBT common stock that is issued and
outstanding
immediately prior to the Effective Time shall remain issued and
outstanding
following the Effective Time and shall be unchanged by the
Merger.
(b) All shares of FSB common stock that is issued and
outstanding
immediately prior to the Effective Time, shall cease to exist, and
the
certificates for such shares shall be canceled as promptly as
practicable
thereafter, and no payment or distribution shall be made in
consideration
therefor.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF FSB
4.1. Representations and Warranties of FSB. FSB represents and
warrants to
IBT that the statements contained in this Article IV are correct as
of the date
of this Agreement, except as to any representation or warranty
which
specifically relates to an earlier date.
(a) Organization, Standing and Power. FSB is a Michigan
chartered
commercial bank duly organized, validly existing and in good
standing under the
laws of the State of Michigan. FSB has all requisite power and
authority to own,
lease and operate its properties and to carry on its business as
now being
conducted. The deposits of FSB are insured by the FDIC to the
fullest extent
permitted by law, and all premiums and assessments required to be
paid in
connection therewith have been paid when due.
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(b) Capital Structure.
(i) The authorized capital stock of FSB consists of 160,000
shares of FSB Common Stock, of which 160,000 shares are
outstanding, validly
issued, fully paid and nonassessable (except for assessments by the
Bureau
pursuant to Section 3807 of the Michigan Banking Code of 1999) and
free of
preemptive rights.
(ii) IBT Bancorp, Inc. owns all the outstanding shares of the
capital stock of FSB.
(c) Authority.
(i) FSB has full corporate power and authority to execute and
deliver this Agreement and, subject to the receipt of the required
Regulatory
Approvals, and the approval of this Agreement by FSB's sole
shareholder, to
consummate the transactions contemplated hereby. The execution and
delivery of
this Agreement by FSB and the completion by FSB of the transactions
contemplated
hereby, up to and including the Merger, have been duly and validly
approved by
the Board of Directors of FSB. This Agreement has been duly and
validly executed
and delivered by FSB, and subject to approval by the sole
shareholder of FSB and
receipt of the Regulatory Approvals, constitutes the valid and
binding
obligation of FSB, enforceable against FSB in accordance with its
terms, subject
to applicable bankruptcy, insolvency and similar laws affecting
creditors'
rights generally, and subject, as to enforceability, to general
principles of
equity.
(ii) (A) The execution and delivery of this Agreement by FSB,
(B)
subject to receipt of Regulatory Approvals, and FSB's and IBT's
compliance with
any conditions contained therein, and subject to the receipt of the
approval of
the sole shareholder of FSB and IBT, the consummation of the
transactions
contemplated hereby, and (C) compliance by FSB with any of the
terms or
provisions hereof will not (i) conflict with or result in a breach
of any
provision of the Articles of Incorporation or Bylaws of FSB; (ii)
violate any
statute, code, ordinance, rule, regulation, judgment, order, writ,
decree or
injunction applicable to FSB or any of its properties
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